Supply Chain Management Sustainability
Basic Concept
As the supply chain expands around the world today, striving to realize a sustainable society throughout it beyond the scope of a company’s own group is an important social responsibility. The Goldwin Group established the Goldwin Group Procurement Policy, which positions mutual benefit with suppliers at its foundation, to promote sustainable and responsible procurement that takes the environment, society, and human rights into consideration with high ethical standards.
Goldwin Group Procurement Policy
Goldwin Group (hereinafter referred to as “The Group”) aims to realize a sustainable society through our business activities based on our corporate philosophy “to realize a fulfilling and healthy lifestyle through sports”.
With coexistence and co-prosperity with our suppliers as the basis, we established the Goldwin Group Procurement Policy in order to promote sustainable and responsible procurement which considers the environment, society and human rights with high ethical standards.
1.Considerations for the environment, society and human rights
- To achieve prosperity in harmony with nature, we provide environmentally friendly products and services based on The Group’s “Basic Principles of Environmental Protection” and “Goldwin’s Environmental Policies”.
- We respect human rights of employees and local communities in accordance with the “Goldwin Group Policy on Human Rights”.
- With continuous improvements, we promote procurements with respect to working environment and occupational health and safety.
- Through our corporate activities, we live in harmony with local communities and promote social contribution.
- We ensure traceability of materials and processes within procurement.
- Considering the impact on society, we purchase raw materials that are not involved in conflicts or crimes.
- We respect The Five Freedoms for Animals and use materials that are treated ethically.
2.Ensuring transparency and fairness
- We conduct our procurement with integrity, respecting not only the laws and regulations of each country, but also the international code of conduct and ethics.
- When selecting suppliers, in addition to ensuring quality, cost, and delivery, activities regarding the environment, society and human rights are evaluated fairly and impartially to promote honest transactions.
- We manage confidential and personal information obtained through procurement securely. We will not conduct procurements that infringe intellectual property of third parties.
3.Ensuring quality and safety
- To provide valuable products and services, we will work with suppliers to maintain and improve the quality and safety.
Goldwin Group Supplier Code of Conduct
The Group established the Goldwin Group Supplier Code of Conduct as a set of fundamental principles for suppliers to be followed when conducting transactions with the Group and seeks their understanding of and compliance with the Code. In fiscal 2023, we revised the Code to clarify the conduct norms that all suppliers are required to follow (including labor and human rights, the environment, and safety and hygiene) as well as management structures (including management systems, grievance mechanisms, and disclosures). In fiscal 2024, we will continue to seek the understanding of suppliers regarding the revised Code, re-request that suppliers sign memoranda of consent, and contribute to the development of a sustainable society by conducting supply chain management that emphasizes transparency.
| Category | Main Items | |
|---|---|---|
| 1 | Corporate Governance | Create structures to fulfill social responsibilities and achieve business continuity as a company |
| 2 | Legal Compliance | In addition to complying with relevant laws and regulations, conduct business ethically |
| 3 | Labor and Human Rights | Comply with the Goldwin Group Policy on Human Rights and comply with prohibitions of child labor and forced labor and other requirements |
| 4 | Safety and Hygiene | Maintain environments where employees can work in a safe, hygienic, and healthy manner |
| 5 | Environment | Collaborate in accordance with the Group’s environmental strategy and strive to minimize environmental impacts |
| 6 | Fair Corporate Activities | Do not engage in illegal acts and conduct corporate activities based on fair and free competition |
| 7 | Responsible Procurement | Conduct procurement with consideration for human rights, the environment, and animal welfare and endeavor to ensure traceability |
| 8 | Communities | Reduce negative impacts on local communities and work toward the development of local communities |
| 9 | Monitoring Compliance | Cooperate with retention of records and audits to confirm the status of compliance with the Code of Conduct; if any instances of nonconformity are discovered, work to correct them |
| 10 | Product Quality and Safety | Comply with the Goldwin Products Quality Standard to produce safe and secure products; when problems occur, respond appropriately |
Promotion Framework and Person Responsible
We have built a supply chain management system led by the Sourcing Department and Quality Assurance Department, with the Executive General Manager of the Sourcing Headquarters having responsibility. We maintain communications with suppliers in Japan and overseas, and ask for their understanding and cooperation with our company policies in the presence of product and material procurement personnel. Activities are reported to the Sustainability Committee and the Executive Management Meeting, with oversight and guidance received from the Board of Directors through the Executive Management Meeting.
Goldwin’s Supply Chain
We conduct direct and indirect procurement activities with a wide range of suppliers inside and outside Japan.
We take a broad view of our supply chain as encompassing primary suppliers that deliver finished products to our Group and secondary and subsequent suppliers that supply materials, chemical substances and raw materials for our products through primary suppliers.
Primary suppliers comprise manufacturing factories for our products and trading companies and production management companies involved in the manufacturing. Along with quality guidance and other direct communication, we have also started conducting on-site audits of manufacturing factories since FY 2021. Approximately 90% of these manufacturing factories (on an order value basis) are located outside Japan.
Secondary suppliers refer to materials manufacturers that manufacture materials (fabrics, auxiliary materials, etc.) after raw materials procurement, dyeing, and other processing, as well as trading companies.
We require that our primary suppliers and main secondary suppliers sign a memorandum of understanding for the Code of Conduct for Goldwin Group Suppliers and the Goldwin Group Restricted Substance Management Regulations. We have signed a memorandum of understanding with suppliers with whom we had transactions in FY 2023 and conducted desktop audits on them.
Selection of New Suppliers
Prior to beginning transactions between the Goldwin Group and new suppliers, we ensure that they meet all of our standards, including the Code of Conduct for Goldwin Group Suppliers and the Goldwin Group Restricted Substance Management Regulations. We only begin transactions after confirming that all documents have been received and that the supplier is found to be conforming through a desktop audit. In FY 2023, we started dealing with 110 new suppliers.
Documents required prior to entering a supplier contract
- Memorandum of understanding for the Code of Conduct for Goldwin Suppliers
- Corporate data sheet
- Company confirmation documents (business license, factory registry, etc.)
- Desktop audit report
- List of affiliated companies and subcontractors
- Memorandum of understanding for the Goldwin Restricted Substance Management Regulations
- Hazardous materials management survey
CSR-Based Procurement
To build a healthy supply chain, improve product quality, and strengthen initiatives for human rights, the environment, and safety, etc. we ask suppliers to update the necessary paperwork each year. Since FY 2021, we have been conducting desktop audits and on-site audits by third-party auditors to monitor compliance with the legal, social, and ethical requirements defined in the Goldwin Group Supplier Code of Conduct.
Desktop Audits
The Group sends desktop audits to suppliers simultaneously once a year, asking them to check the promotion status of their own CSR activities. The Group then checks the results of the responses, and any suppliers whose responses indicate a risk are asked to make improvements on a case-by-case basis. In FY 2023, 442 companies were subject to desktop audits, and responses were collected from 438 companies in total.
Desktop audit details
- Corporate Governance
- Legal Compliance
- Labor and Human Rights
- Safety and Hygiene
- Environment
- Responsible Procurement
- Monitoring Compliance
- Product Quality and Safety
In FY 2023, we expanded the scope of desktop audits to include not only manufacturing factories, but also management companies and trading companies of primary suppliers, as well as some major materials companies that are secondary suppliers. In addition, in conjunction with the revision of the Goldwin Group Supplier Code of Conduct in FY 2023, we also updated the content of desktop audits to score and manage the promotion status of CSR at suppliers. As the FY 2023 audit results show, the status of “Environment” initiatives at suppliers is 68%, indicating that there are more issues involving the environment to be addressed than in other categories. Based on these results, we will strengthen our cooperation to promote CSR activities at suppliers.
In addition to managing the exhaustive promotion status of CSR activities, we have also defined high-risk categories separately for desktop audits, and based on the results of responses, “items of concern” are fed back to suppliers. For the “items of concern,” we primarily made requests for improvement and monitored progress by communicating individually with relevant suppliers. In FY 2023, “items of concern” were identified at 202 suppliers. Many of these items were related to “Labor and Human Rights,” is defined as a high-risk theme, and we will continue to focus on addressing them in cooperation with suppliers.
438 companies
351 cases
On-site Audits
The Group requests suppliers to conduct social responsibility audits and on-site audits. As part of our company’s standards, we require suppliers to comply with international audit programs such as SMETA and BSCI and some manufacturing factories to undergo on-site inspections by our employees.
In FY 2023, we conducted on-site audits at 244 manufacturing factories, comprising initial audits at 113 companies and renewal audits at 131 companies, and we requested corrective actions for all issues identified. If the content of an issue was deemed to be of high priority, we requested the submission of a corrective action plan and completed implementation up to the confirmation of the status of the corrective action after the audit.
The main issues include “Safety and Hygiene” at 57% (e.g. no safety devices installed on sewing machines, no risk assessment of work safety) and “Labor and Human Rights at 26% (e.g. exceeding legal working hours, lack of enrollment in social insurance system), with these two items accounting for more than 80% of the total. In addition, 40 of the above companies are deemed to be suppliers of high risk. Among them, suppliers that “do not meet the regional minimum wage” or “do not consistently keep work attendance” are considered particularly high risk, so we have asked them to submit a corrective action plan and confirmed that they have taken corrective measures. Specifically, we are investigating the causes, taking measures to address the issues raised (e.g. paying shortfalls in wages at a later date), and presenting measures to prevent recurrence, etc.
From the next fiscal year onwards, we will continue to conduct on-site audits at all manufacturing factories and confirm the status of corrective actions for issues, leading to continuous improvement of the factory management CSR framework.
Communication with Suppliers
Our business would not be possible without the cooperation of suppliers that produce products and deliver products and materials to us. We broadly share our principles for promoting sustainability through business activities with our supply chain, and focus on communication with suppliers on an individual basis to build a cooperative framework based on mutual trust.
Goldwin Supplier Summit
Once every two years, Goldwin hosts a two-day supplier summit—a meeting that brings together its major suppliers (trading companies, materials manufacturers) under the one roof. Our representative directors and general managers of each business division also participate, and on the first day, they present our management and business policies. On the second day, we venture out into nature in an effort to build partnerships through communication, such as by actually using Goldwin products while trekking or trying marine sports.
In FY 2022, 38 representatives from 29 suppliers participated in the summit. First, they visited the “PLAY EARTH PARK” event being held at Fugan Unga Kansui Park, Toyama Prefecture, before attending a meeting at our Toyama Office. On the next day, the summit moved to Tateyama, where participants experienced hiking and other activities.
Engagement with Suppliers
In addition to the Goldwin Supplier Summit, we actively provide opportunities for exchanging opinions as a form of engagement with suppliers. We ask both suppliers in Japan and overseas for their opinions on our initiatives to share awareness and deepen mutual understanding. In addition, our staff visit supplier factories that are deemed to require support in the course of audits to confirm conditions that are difficult to ascertain from reports and provide guidance on improvement measures.
FY 2023 performance
- Respective awareness sharing and exchange of opinions with major trading companies and management companies that manage manufacturing factories: 8 companies
- Respective awareness sharing and exchange of opinions with small- and medium-sized management companies that manage manufacturing factories: 5 companies
- Audit review of managed factories with major trading companies (sharing results and countermeasures): 2 companies
- Post-audit follow-up visits to major factories in Vietnam (sharing issues and confirming corrective action status): 5 companies
- Human rights due diligence on factories with foreign technical intern trainees (suggestion to share the burden of recruitment fees): 5 companies, 1 organization
Briefings for Business Partners
Goldwin holds briefing sessions for its suppliers on its CSR framework for the supply chain. In the briefing, suppliers are asked for their understanding and compliance with the Code of Conduct for Goldwin Suppliers, and we explain the background and specific revisions to the Code, as well as practical aspects of the paperwork that needs to be submitted.
In FY 2023, we formulated a Procurement Policy, updated the Code of Conduct for Goldwin Suppliers, and revised the desktop audit questions accordingly, so at the briefing session, we explained the key points of the update and reiterated our Group’s approach to building a sustainable supply chain. The briefing was conducted in the form of a video distributed to 465 companies from manufacturing factories, trading companies, production management companies, and materials-related companies. Specifically, we distributed a video outlining these revisions in June 2023, and in January 2024, we distributed another video about the Goldwin Group Policy on Human Rights, Goldwin’s Environmental Policies, Procurement Policy, Supplier Code of Conduct, and desktop audit checklist. We encourage suppliers to watch these videos, and we are also working to improve the understanding at some factories with the cooperation of trading companies and production management companies.
Meetings with Main Suppliers (Trading Companies)
Goldwin holds separate regular monthly meetings with each of its major suppliers (trading companies). The meetings are a place to exchange information on quality, cost, delivery schedules, and other matters as well as to discuss issues that arise from time to time and resolve them together. Engaging in communication helps deepen our cooperation and build better partnerships.
Internal Education
The Group provides regular education to internal persons in charge of procurement to enhance our CSR framework for the supply chain.
In FY 2023, we distributed training videos mainly to inform employees about the revised initiatives and policies and encouraged understanding and awareness of CSR in supply chains among our employees. We also held an engagement seminar for 600 employees in related departments.
We will continue to carefully explain the Code of Conduct for Goldwin Group Suppliers, its content, and approaches for promoting the current system, and share information so that we can respond appropriately when performing our role as a point of contact with suppliers.
Subcontract Act Training
Internal training is regularly provided on the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors (Subcontract Act), which is a law that helps ensure that transactions are fair. In addition to explaining things like the purpose of the Subcontract Act, as well as relevant conditions and obligations of procuring companies, we discuss information that is required on order forms to ensure compliance with the act when company employees place orders.
Future Issues
The Goldwin Group will continue to deepen collaborations with suppliers to fulfill its social responsibility through the entire supply chain.
From FY 2024 and onward, we will continue to promote responsible procurement activities by reinforcing engagement with suppliers and enhancing internal education. In particular, we will create more opportunities and further the training of investigators to provide detailed explanations to suppliers through face-to -face meetings. We will continue to work toward building a highly transparent supply chain while seeking the understanding and cooperation of our suppliers.