Communication Steps with Business Partners
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“We always act with integrity and sincerity, and fulfill our responsibilities to society.” This is one of the thoughts and actions we place importance on in our Corporate Philosophy. As one of our key sustainability initiatives linked to this philosophy, we are promoting the establishment of sustainable procurement activities that take into consideration social issues such as the environment and human rights.
Our supply chain is extensive, and there are a variety of potential risks at each stage. We are committed to working with our business partners to mitigate these risks and fulfill our responsibility to society. In FY2018, we established the Isetan Mitsukoshi Group Human Rights Policy and the Isetan Mitsukoshi Group Procurement Policy. In January 2022, we launched a supply chain working group to discuss how we can contribute to solving social issues in the supply chain.
In FY2023, we have been implementing the following initiatives toward the realization of sustainable procurement activities.
We revised both policies in April 2023 in order to further promote respect for human rights and sustainable procurement throughout our supply chain. In the revision, we updated statements on social issues to be addressed by the Group in light of changing social trends, in addition to references to international norms and domestic and international guidelines.
Isetan Mitsukoshi Group Human Rights Policy
Isetan Mitsukoshi Group Procurement Policy
In April 2023, we revised the Isetan Mitsukoshi Group Human Rights Policy and the Isetan Mitsukoshi Group Procurement Policy. On this occasion, we updated statements on social issues to be addressed by the Group in light of changing social trends, in addition to references to international norms and domestic and international guidelines. In addition, in June 2023, we established the Isetan Mitsukoshi Group Code of Conduct for Suppliers, which we ask all of our business partners and suppliers to understand and put into practice.
All of these requested items are equally important and have been addressed by our Group in cooperation with our business partners. In particular, we have indicated that more attention needs to be paid to the recent growing social demand for consideration of human rights and the environment.
We conducted training through e-learning to ensure that employees understand the importance of supply chain management and the content of the updated policies. The training materials explain the reasons why responsible procurement is required and the importance of employees recognizing that this is something which concerns them. As of September 2023, more than 9,000 people across the Group have taken the training and are putting it into practice in their work.
In addition, we held a study session on communication with business partners for buyers at the Isetan Shinjuku Main Store and Mitsukoshi Nihombashi Main Store. It included a workshop with more practical content that simulates actual dialogues so that employees involved in procurement can have correct knowledge and communicate appropriately and effectively with business partners.
Study session for buyersA major characteristic of our Group’s supply chain, which is centered on the department store business, is that it is supported by an extremely large number of business partners in a wide variety of industries. In order to gain the understanding and cooperation of our business partners, we communicate with them through the following means.
To elicit the understanding and participation of our business partners, we have sent the Isetan Mitsukoshi Group Code of Conduct for Suppliers and an explanatory edition to approximately 6,000 companies, mainly those involved in the department store business, the main business of our Group.
Once a year, we hold a briefing session for our major business partners to report on our initiatives and ask for their understanding and cooperation with our policies. In FY2023, this session was held in September and was attended by approximately 600 companies.
We conduct periodic surveys to monitor the degree of infiltration of our Group’s policies and the situation at our business partners. Through these surveys, we are able to grasp the status of the entire supply chain, including potential risks.
Buyers engage in dialogue on supply chain issues, mainly with the business partners of the Isetan Shinjuku Main Store and Mitsukoshi Nihombashi Main Store, to share information and exchange opinions on risks and issues in procurement activities. As of October 2023, we had engaged in dialogue with 198 companies.
With the establishment of the Isetan Mitsukoshi Group Code of Conduct for Suppliers, part of my work is to inform business partners of the content. In doing so, I am now more aware than ever of my responsibility as someone in charge of purchasing and procuring products, and of the breadth of vision and perspective that is required of me. I would like to continue to deepen my understanding of our business partners so that we can further develop our business with them. Currently, I am holding dialogues with several of our business partners in order to ensure their understanding of our policies and to confirm the status of their initiatives. While our daily business discussions are mainly related to customer satisfaction and mutual sales improvement, such as sales policies and promotion plans, this dialogue allowed me to hear about supply chain management and the policies of each company, which gave me a glimpse into a new aspect of our business partners.
At one business partner, 80% of employees bring their own bottles to work, and the company’s vending machines do not stock plastic bottles, showing that environmentally conscious behavior has become a habit in their day-to-day activities. Another company has a system in place to encourage individual self-directed growth, whereby employees who acquire company-designated certifications receive an additional monthly stipend. I was inspired by these systems and programs that I felt I could relate to, and wish they existed in our company. Going forward, I will continue to build more cooperative relationships with our business partners through dialogue, and conduct procurement activities that earn the trust of our customers and stakeholders.
In the construction and interior and housing environment business, the main businesses of Isetan Mitsukoshi Property Design Ltd., we are creating added value through cooperation with a large number of business partners. In the construction industry, despite recent calls for sustainability, individual companies, including ourselves, have yet to make concrete progress in this area, and we also see the improvement of the working environment, including occupational health and safety, as a challenge. In the construction industry, we believe that among environmental and human rights risks, particular attention needs to be paid to the following three points: (1) ensuring occupational health and safety, (2) correcting long working hours, and (3) protecting the human rights of foreign workers in the context of labor shortages. In the face of a shortage of human resources, we will strive to properly identify where human rights risks lie in the supply chain and develop measures accordingly, which will not only enhance our corporate value, but will also make us more attractive and active as an industry.
On this occasion, we sent the Isetan Mitsukoshi Group Code of Conduct for Suppliers to approximately 700 business partners. In addition, at the annual general meeting of the Health and Safety Cooperative Association, in which around 100 business partners participate for the purposes of eradicating workplace accidents and promoting environmental conservation activities, the president himself explains the content of the Isetan Mitsukoshi Group Code of Conduct for Suppliers and seeks to gain the understanding of business partners. Currently, as the next step, we are continuing to deepen mutual understanding through dialogue meetings with individual business partners. The response from business partners has been very positive, and we can clearly sense that the momentum for solving social issues is growing in the industry as a whole, triggered by the initiatives we have proposed.
Health and Safety Cooperative Association meeting in progressThe Isetan Mitsukoshi Group has endorsed the purpose of the Declaration of Partnership Building* scheme, which calls for businesses to establish new partnerships by promoting collaboration and coexistence with business partners and value-creating entities. In line with this, in August 2022, we issued our own Declaration of Partnership Building. By listing individual items based on our procurement and human rights policies, we have set out an even clearer commitment to cooperate and enjoy a prosperous coexistence with our business partners and other entities. We will continue to build relationships of trust with our business partners through fair and equitable transactions, aiming to realize a sustainable society and a prosperous future while striking a balance between social value and economic value.
*Declaration of Partnership Building, an initiative of the Council on Promoting Partnership Building for Cultivating the Future, whose members include the Chairman of Keidanren, the Chairman of JCCI, the Chairman of RENGO, and relevant ministers (Cabinet Office, METI, MHLW, MAFF, and MLIT)
In 2022, we translated the Isetan Mitsukoshi Group Procurement Policy into Chinese and English and sent it to about 1,400 business partner companies and groups in two countries (four bases). In 2023, we distributed the revised and newly established Isetan Mitsukoshi Group Human Rights Policy, Isetan Mitsukoshi Group Procurement Policy, and Isetan Mitsukoshi Group Code of Conduct for Suppliers to employees at 26 overseas branches, asking each one of them to put the policies into practice. At some stores, we also translate Japanese training materials and provide training to local employees. In the future, we will explore the possibility of conducting questionnaires and dialogues to understand the status of implementation and issues at our business partners.
The Isetan Mitsukoshi Group practices human rights due diligence as part of its efforts to promote management that respects human rights.
With the cooperation of many of our business partners, we monitor the entire supply chain and assess potential risks. We then educate employees on how to prevent and mitigate these risks, and request that our business partners do the same. With regard to grievance mechanism , we have established a hotline that extends to employees of our business partners who work in stores. In the future, we will consider establishing a consultation service open to the supply chain, with the aim of creating a system that makes it easier for individuals whose rights have been violated to raise their voices, and to ensure we respond appropriately to the consultations we receive.
Human rights due diligence is not something that is done once and that is the end of it. Rather, it is an important process that must be conducted repeatedly and on an ongoing basis. We will continue to improve the accuracy of our efforts in cooperation with our business partners, and promote initiatives to realize a sustainable supply chain.
The department store business, the core of our group, offers a wide variety of products and services. Just counting the business partners that we deal with directly, our Group is supported by roughly 20,000 companies. When we conducted a questionnaire survey on procurement in 2021, we found that issues surrounding human rights at these companies were not uniform due to the variety of industries, business fields, and sizes of the companies we work with. As part of the Isetan Mitsukoshi Group’s human rights due diligence process, we have made communication with stakeholders the most important point. As part of our efforts, in FY2022 we held individual dialogues with 34 business partners regarding sustainable supply chains, unraveled potential risks, and examined what we should do as a Group. Many of our business partners are aware of the importance of human rights and environmental considerations, but are struggling to find concrete ways to address these issues. Therefore, in June 2023, we issued the Code of Conduct for Suppliers and an explanatory edition in the hope that it will help our business partners in their efforts to promote human rights and environmental considerations. The explanatory edition is intended to help companies create their own rules by providing explanations of terminology and introducing administrative and industry guidelines that they should refer to.
Our raison d’être is to touch the hearts of all stakeholders. With the establishment of these policies, we feel that we are we are touching the hearts and minds of not only our employees but also our business partners and suppliers by establishing the Code of Conduct for Suppliers and engaging in dialogue. As a Group whose core business is in the department store sector, we believe that sustainability means continuing to provide products and services that our customers can identify with and feel comfortable with. In our annual customer survey, which we have conducted since 2013, we received feedback on customers’ high expectations regarding the quality and safety of our products. For this reason, it is imperative that we continue to engage in responsible procurement. In order to continue to meet the expectations of our customers, we are committed to responsible procurement in a manner characteristic of our Group.
