Supply Chain Management Sustainability

To build a sound supply chain, the Group collaborates with suppliers in initiatives to improve product quality and address issues in human rights, the environment, and safety. Since FY 2025, we publicly disclose the list of production factories among our primary suppliers that manufacture our products, with the aim of increasing supply chain transparency and fulfilling our social responsibilities.

We only begin transactions after confirming that all documents have been received and that the supplier is found to be conforming through an SAQ. In FY 2024, we started dealing with 78 new suppliers (54 factories, 21 management companies, and 3 material companies).

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 SAQ 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.

SAQ Implementation

The Group sends SAQ 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 FY2024, 408 companies were subject to SAQ, and responses were collected from 407 companies in total.

In FY 2023, we expanded the scope of SAQ 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 ofSAQ to score and manage the promotion status of CSR at suppliers. As the FY 2024 audit results show, the status of “Environment” initiatives at suppliers is 74%, 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 SAQ, 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 2024, “items of concern” were identified at 125 suppliers. These identifications have decreased from the previous year, and increasing awareness of risks presents an opportunity to promote voluntary corrective actions.

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 2024, we conducted on-site audits at 215 manufacturing factories, comprising initial audits at 32 companies and renewal audits at 183 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. Furthermore, in FY 2024, we conducted follow-up on-site visits primarily to suppliers subject to corrective action plans to verify the status of their corrective measures. At the same time, we ensured they understood that failure to address particularly high risk items by the next visit could result in the suspension of transactions. Creating these opportunities for direct dialogue became a chance for both the Group and our suppliers to deepen mutual understanding.

The main issues identified in FY 2024 include “Safety and Hygiene” at 54% (e.g. no safety devices installed on sewing machines, no risk assessment of work safety) and “Labor and Human Rights at 31% (e.g. exceeding legal working hours, lack of enrollment in social insurance system), with these two items accounting for 85% of the total. Additionally, among the identified issues, for identifications of management items classified as Zero Tolerance (high risk of non-compliance) and Critical (requiring immediate corrective action), which we deem particularly high risk, there were zero cases of Zero Tolerance and 198 cases of Critical in FY 2024. For Critical issues, corrective actions were verified through corrective action plans.

Additionally, we conducted follow-up visits to four factories deemed high risk due to Critical issues and confirmed corrective actions that could not be fully conveyed in writing which fostered mutual understanding.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.

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, etc.) under the one roof. Our representative directors and general managers of each business division also participate, and on the first day, we present our management and business policies. On the second day, we build partnerships through communication, such as by actually using Goldwin products while trekking or trying marine sports.

In FY 2024, 42 representatives from 28 suppliers participated in the summit. First, in addition to learning our company’s policies, they learned about the initiatives under the Group’s Comprehensive Partnership Agreement with the town Taketomi in the Yaeyama District of Okinawa Prefecture, as well as the rich natural environment, unique traditional culture, and its preservation. On the second day, they went out into nature and experienced activities like trekking, kayaking, and cycling.

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.

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 2024, like in the previous year, we distributed periodically updated explanation videos focusing on this period’s revisions to 476 continuing suppliers (as of April 2024), including manufacturing factories, trading companies, production management companies, and raw material-related companies. Additionally, we conducted Restricted Substance Management Briefings in person for eight major business partners and CSR Audit Review Meetings (including Goldwin audit evaluation briefings) for another eight companies were not a part of the restricted substances management briefings.

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.

The Group provides regular education to internal persons in charge of procurement to enhance our CSR framework for the supply chain.

In FY 2024, we conducted study sessions on restricted substance management regulations for employees in business divisions and the Procurement Department, aiming to restructure our restricted substance management system. We conducted a total of 11 sessions at our business locations in Tokyo and Toyama, with approximately 500 participants.

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.