Value Chain Responsibilities
Achieving a Sustainable Value Chain
We are deeply involved in social infrastructures in areas where risks can affect society as a whole. We acknowledge our responsibility tominimize the impact of such risks. Also, the global expansion of our value chain means that we come into direct contact with diverse work
environments, business customs and practices in a variety of countries and regions. Accordingly, we need to make a conscious effort toconduct business in a manner that respects the human rights of all people involved. Furthermore, we are reinforcing business continuity plans(BCPs) and tightening our information security to ensure a stable supply of our products and services and to prevent threats to our networks
that could severely disrupt business operations.
We also recognize that human rights are an important management priority. We work to ensure respect for the human rights of all of ourstakeholders, including employees and individuals throughout our supply chain, in all countries and regions in which we conduct business. At
the same time, we are quickly implementing and promoting detailed CSR production policies at all Group companies, as we procure
products and services from suppliers and partners in a variety of countries and regions around the globe.

Procurement BCPs Policies and Framework

Framework

To minimize heavily impact from disasters, the procurement divisions

CSR supply chain management and green procurement policies andin business units and key Group companies have createdinitiatives are discussed within Hitachi’s Value Chain Integration Division,

procurement BCPs that (1) standardize and use generic parts to makewhich is headed by the chief procurement officer (CPO) and reports

procurement as flexible as possible; (2) cultivate multiple suppliers;

directly to the president of Hitachi, Ltd. Policies and initiatives adopted(3) distribute production across several locations; (4) budget inventory

after this discussion are shared throughout the Group through the Hitachi

strategically; and (5) consider substitute products.

Group CSR/BCP Procurement Committee, which includes members

To see whether or not procurement BCPs would be effective, we
held desktop exercises to discuss in a group what should be done

from business units and CSR/BCP Procurement Committees at key
Group companies.

during and after a disaster, making further improvements as a result.
In fiscal 2018, all major Group business sites with production lines

Implementation of CSR Monitoring (Self-Checks)(approximately 210 sites in total) took steps to maintain andTo monitor how well Hitachi’s CSR supply chain management

strengthen the procurement BCPs they had created by the previous

philosophy has been adopted by our suppliers, since fiscal 2007 we

fiscal year, thereby contributing to the continuation of Hitachi’s global

have asked key suppliers to conduct CSR Monitoring (self-checks)

operations.

using the JEITA Supply Chain CSR Deployment Guidebook anddetailed checklists. After collecting and analyzing the results, we

CSR Procurement Policies and Framework
Creating and Sharing Procurement Policies
We base our procurement activities on the Hitachi Guidelines for
Procurement Activities, while sharing global supply chain issues within theGroup. All Group companies follow these guidelines. The guidelines werecreated in line with the United Nations Global Compact and include theelimination of discrimination in employment and occupation, the rejectionof all forms of child and forced labor, and environmental protection
activities.To ensure that the Hitachi Group CSR Procurement Guidelines’
provisions are strictly followed, we distribute to the approximately 30,000
suppliers of Hitachi business units and Group companies, from whom werequest acknowledgment of suppliers’ understanding in writing. Tier 1
suppliers are further asked to confirm that tier 2 suppliers also follow theprovisions in the guidelines. To procure parts and materials manufactured
with reduced environmental impact, so that suppliers help to protect theenvironment, we led the industry in developing Green ProcurementGuidelines. These define our basic position on procuring parts andproducts that do not have a negative impact on the global environment,
as well as our requirements of suppliers, so that we can work together topromote green procurement.

provide feedback for the business operations related to the suppliers,
and then work with those involved in the operations to resolve issues
related to the suppliers. In fiscal 2018 we asked 345 suppliers insideand outside Japan to conduct CSR monitoring (self-checks) andreceived survey replies from them.

Implementation of CSR Audits
Since July 2012, Hitachi, Ltd. has been auditing the manufacturingbases of its and Group companies’ suppliers in China and the restof Asia.
In fiscal 2018, we conducted CSR and environment audits of 24
suppliers in China. For these audits, we engaged external evaluatorssuch as the experienced CSR auditing company Intertek Certification.*
No major infringements were found at the suppliers audited, butsome small areas needing improvement were noted. The relevant
suppliers were requested to submit improvement action plans, andHitachi, Ltd., together with Group companies, will work with andadvise the suppliers until they complete the planned improvements.
* Intertek Certification: With a presence in over 100 countries across the globe, the Intertek Group provides awide array of certification services in every industrial field.

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A Business Foundation that Supports Sustainable Growth

Human Rights Due Diligence in Procurement

Response to the Conflict Minerals Issue

Basic Policy

Hitachi released a Conflict Minerals Procurement Policy in September

Hitachi believes that respecting human rights is our responsibility as a2013. Our Request to Our Suppliers, based on this policy, is publishedglobal company and indispensable in conducting business. To thison our website as a clear statement of our position.

end, in May 2013 we formulated the Hitachi Group Human Rights

Based on these policies, each Hitachi business unit and GroupPolicy. In this policy, we clarify our understanding of human rights ascompany investigate its use of conflict minerals and reports the results

being, at a minimum, those outlined in the International Bill of Humanto customers when requested.

Rights and the International Labour Organization’s Declaration on
Fundamental Principles and Rights at Work. This policy shapes

Hitachi Group Conflict Minerals Procurement Policy:

Hitachi’s approach to meeting the responsibility to respect human

https://www.hitachi.com/procurement/csr/csr/index.html

rights, including implementing human rights due diligence * in line with
the UN Guiding Principles on Business and Human Rights, providing
appropriate education to employees, adhering to laws and regulations
in all the regions and countries where we operate, and seeking ways tohonor the principles of international human rights when faced withconflicts between internationally recognized human rights standardsand national laws.
* Human rights due diligence: An ongoing process to identify and assess potential and actual human rights
negative impacts, take appropriate action to prevent or mitigate potential impacts, track the effectiveness ofactions to address impacts and communicating externally.

Hitachi Group Codes of Conduct
https://www.hitachi.com/about/corporate/conduct/index.html
Hitachi Group Human Rights Policy
https://www.hitachi.com/sustainability/renew/pdf/human_rights_
policy.pdf

Starting in fiscal 2015, the Hitachi Group Procurement Division began
implementing human rights due diligence based on the Hitachi Group
Human Rights Policy. In fiscal 2017, we incorporated the results ofhuman rights due diligence into the revision of our CSR procurement
guidelines for suppliers while also thoroughly revising the questions on
the check sheet used in supplier CSR monitoring (self-checks), tobetter grasp the issues.
Addressing the Risks of Child and Forced Labor
The Hitachi Group Codes of Conduct clearly express Hitachi’s firm
stance against the use of child labor or forced labor along our supplychain. Hitachi’s CSR procurement guidelines for suppliers also clearly
forbid the use of child labor or forced labor, as part of our efforts toraise awareness all along the supply chain.
In fiscal 2018 we assessed the risks of forced labor at about 100
offices of Hitachi Group companies located in seven Southeast Asian
countries (Indonesia, Malaysia, Myanmar, the Philippines, Singapore,
Thailand, and Vietnam). The assessment was conducted with thecooperation of Verité Southeast Asia (VSEA), an internationally active
nonprofit organization, using a checklist for suppliers revised in fiscal
2017 based on the Responsible Business Alliance (RBA) Code ofConduct, formerly the Electronic Industry Citizenship Coalition (EICC).

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Hitachi Integrated Report 2019