CSR Procurement

Basic Approach to Procurement

Driven by the importance we attach to the discharge of social responsibility throughout the overall supply chain including the suppliers to us, we have set out the Sumitomo Dainippon Pharma CSR Procurement Ethics.
Consistent with the Procurement Ethics, we continually work to achieve "full compliance", "fair and equitable deals", "rational supplier selection" and "mutual growth." In the same spirit, we promote stable and safe procurement and achieve CSR procurement together with our suppliers so as to make stable supply of our high-quality pharmaceutical products to the patients.

Basic Approach to Procurement

Ethics in procurement

1Balanced and fair transactions with our business partners
We will enter into and maintain transparent transactions, while striving to always create business opportunities with new business partners based on balanced, fair and free competition.
We will enter into transactions by observing mutual benefit and establishing trustful relationships.
2Reasonable selection of suppliers
In the selecting suppliers, we will base determinations on economic rationality, with comprehensive consideration of suppliers' management base stability, quality, price, supply stability, technical development, environmental stance, etc.
We will not enter into a reciprocal transaction for the direct purpose of selling Sumitomo Dainippon Pharma's products and services
3Mutual evolution
Through sound transactions with business partners, we will strive for mutual evolution while deepening mutual understanding.
4Thorough compliance with laws and regulations and protection of confidentiality
We will prevent the illegal or otherwise inappropriate acquisition or leaking of confidential and proprietary information of Sumitomo Dainippon Pharma and business partners, while complying with the letter and spirit of all relevant laws, rules and regulations.

CSR-Based Procurement

(1)Business partner selection criteria for evaluating CSR activities at partner companies

In determining whether to partner with companies for the first time, we evaluate businesses according to the standards outlined in the criteria for selecting new business partners. These criteria provide standards for selecting new business partners on the basis of their CSR activities in the areas of compliance, trustworthy business activities, social contribution, information management, respect for human rights, and environmental protection and considerations. We also conduct regular evaluations of the companies with whom we already have a standing business relationship, inspecting their plants, paying visits, and conducting interviews.

(2)Stable and secure procurement

We implement ongoing and systematic measures to prevent disruptions in the supply of raw materials. These measures include using multiple suppliers, investigating the use of alternative materials, and stockpiling of inventory. In fiscal 2014, we began developing concrete measures for some 20 raw material items that are used in multiple products, in addition to measures that we had already been implementing for each product. These measures also extend outside the Company to encompass the business continuity planning of manufacturers and suppliers.

We are also rapidly expanding procurement from overseas sources. In order to prevent problems before they occur and guarantee stable supplies, we focus on building up stronger trusting relationships with overseas business partners based on trust by swiftly responding to signs of trouble, and also fostering smooth communication and trustworthy procurement activities with them. We will continue to build optimal global procurement systems and enhance the skills of our entire procurement-department team.

(3)Compliance education and training

Monthly procurement-department meetings held at Sumitomo Dainippon Pharma provide opportunities to share information and educate employees on compliance with relevant social norms and laws, including the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors and the Customs Act. In addition, we strive to appropriately respond to all inquiries and inspections by authorities, implement continuous procurement activities based on balanced, fair, and free competition, and exert effective internal controls on procurement issues.

Moreover, in order to bolstering compliance Company-wide, our procurement-department team has led internal seminars for relevant departments on the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors and the Customs Act
Prior to the consumption tax hike coming into effect in April 2014, the procurement-department conducted a departmental seminar on the Act on Special Measures Concerning Consumption Tax, and prepared information posters to stress corporate compliance.

(4)Green procurement

We strive to firmly integrate Sumitomo Dainippon Pharma's Green Procurement Guidelines at all levels of the Company. In FY 2015, green procurement accounted for 86.3% of all office supplies.

Global CSR-Based Procurement

Each year, Sumitomo Dainippon Pharma does business with more than 1,000 partner companies. For these business partners, the procurement-department represents the key contact at Sumitomo Dainippon Pharma, and the conduct of this department will determine how the entire Company is judged. Recognizing this, we strive to put into practice full compliance and CSR procurement based on our "Declaration of Conduct" and Procurement Ethics.

Our entire procurement divisions are well aware that CSR procurement is crucial not only within Japan, but everywhere else around the world. It is essential to our stakeholders and is also part of the global social responsibilities that societies around the world demand of Sumitomo Dainippon Pharma.

Check here for "Global CSR-Based Procurement"