Encouraging Business Partners in CSR Efforts

At the Daiwa House Group, we look at our suppliers as business partners out to complete the same job. The fact that we can offer customer-satisfying quality owes to a vast supply chain of material and equipment manufacturers, installers, aftercare service providers, and other supporting businesses. Demands from institutional investors and NGOs regarding corporate environmental and social initiatives have expanded from the non-consolidated to consolidated level, and as far as supply chain management. International rules and securities exchange guidelines also require Group CSR procurement efforts and enhanced information disclosure. We are entering an age where competitive superiority can be gained by satisfying social requirements, including human rights considerations, while at the same time offering good quality/ pricing.

The Daiwa House Group strives to comply with the“Regulations for Construction Work Contracting” of the Construction Industry Act and to conclude fair contracts. We also transact business with business partners who are protected under the subcontracting law in the full spirit of the law. Through the use of ICT and other technologies, we are building management systems for reliable and effective CSR procurement. As our business rapidly expands internationally, the Daiwa House Group works to achieve a sustainable society through promoting CSR procurement with its business partners.

CSR Procurement Guidelines

Our CSR Procurement Guidelines establish 7 principles that underline the social and environmental responsibilities we expect of our business partners in a “Business Partner Code of Conduct.” They expand off this code to more articulately define 20 social and environmental requirements for our business partners under our “Corporate Activity Guidelines.”

Fundamentally, the code is straightforward and tuned to the times. For example, the “compliance” principle places the onus on business partners to act ethically and lawfully. Where the code lists “considerations for occupational safety and health,” business partners are expected to concern themselves with health and safety by preventing industrial accidents, attentively managing sanitation and hygiene, and preparing for unforeseeable events like natural disasters. “Fair business activities” aims to keep business operations free of graft and to prevent corruption. Moreover, the code’s call for business partners to “respect human rights” is a strong denouncement of forced labor, child labor, harassment, and the infringement of human rights, etc.

The Partners Book, which is in line with the “Business Partner Code of Conduct” and the “Corporate Activity Guidelines” is provided to all employees of business partners for educational and training purposes. Besides all of this, we have “Guidelines for Products” that specify our control policy with regards to chemical substances contained in construction materials and biodiversity in timber procurement – two areas that bring a high level of risk to our supply chains but can be audited and traced well upstream. While the “Business Partner Code of Conduct” espouses broad universal values that underscore public interest in reasonable work hours, minimum wage and other issues, the “Guidelines on Corporate Activity and Products” are business tools that we flexibly revise in line with social demand.

Application of the CSR Procurement Guidelines

When contracting with new business partners, we explain to them the purpose of our “CSR Procurement Guidelines” and have them submit a letter of consent that they will honor the guidelines. These guidelines clearly prohibit the recent social issues of child labor, forced labor, and harassment, and encourage not only the Daiwa House Group, but business partners as well to show consideration for human rights on the corporate level.

As part and parcel to doing business with us, we require business partners to analyze and report the chemical substances found in the parts and materials we purchase from them for use in single-family houses and low-rise rental housing. We use our “Chemical Substance Management Guidelines [Basics]” (Guidelines for Products) for this. With all other parts and materials we purchase as well, we require business partners to honor our guidelines by way of information briefings, design documents, etc.

At the same time, every year since fiscal 2011, we have audited timber suppliers as per our “Biodiversity Guideline [Timber Procurement]. These audits determine if the Group is procuring timber logged in a way that illegally violates the rights of indigenous people. They are required to verify the legality and sustainability of timber they procured and are instructed to make improvements highlighted in audit results.

Beginning in fiscal 2017, we started monitoring compliance with our “CSR Procurement Guidelines” by having our business partners conduct self-assessments. In fiscal 2021, there were no reports of human rights infringements prohibited in our CSR Procurement Guidelines.

CSR Procurement Guidelines

(1) Business Partner Code of Conduct
Seven principles concerning social & environmental responsibility
1) Establish a relationship of trust with customers
2) Secure legal compliance
3) Considerations for occupational safety and health
4) Fair business activities
5) Environmental conservation
6) "Co-creating a Brighter Future" with local communities and
7) Respect for human rights
(2) Corporate Activity Guidelines
Twenty specific requirements concerning social & environmental responsibility
(3) Guidelines for Products
Standards for social & environmental responsibility concerning construction materials and other products that our business partners procure, and delivery to Daiwa House Industry, consisting of the two guidelines below:
1) Chemical Substance Management Guidelines [Basics]
2) Biodiversity Guidelines [Wood Procurement]

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