In seeking to be a company that continually fulfills its social responsibility throughout the value
chain, Hitachi strictly adheres to laws and regulations and acts in a moral and fair manner with all its
business partners.

Promoting CSR Procurement
Creating and Sharing Procurement Policies
We base our procurement activities on the Hitachi Guidelines
for Procurement Activities, while sharing global supply chain
issues within the Group. All Group companies follow theseguidelines. The guidelines were created in line with the United
Nations Global Compact and include the elimination ofdiscrimination in employment and occupation, the rejection of
all forms of child and forced labor, and environmental protection
activities. Suppliers are selected strictly in accordance withthe Hitachi Guidelines for Procurement Activities.
A fully revised version of the Hitachi Group CSR Procurement
Guidelines was released in fiscal 2016. This revision incorporates
the provisions of the Hitachi Group Codes of Conduct andalso makes references to version 5.1 of the Responsible
Business Alliance (RBA, formerly called EICC) Code of Conduct,
promulgated in January 2016. To ensure that the guidelines’
provisions are strictly followed, we distribute the Guidelines

to the approximately 30,000 suppliers of Hitachi business
units and Group companies, from whom we request
acknowledgment of suppliers’ understanding in writing. Tier 1
suppliers are further asked to confirm that tier 2 suppliers also
follow the provisions in the guidelines.
We plan to revise these guidelines regularly in the future toensure that they always reflect the demands of global society
regarding corporate supply chain management.
Guidelines for Procurement Activities:
http://www.hitachi.com/procurement/policy/__icsFiles/afieldfile/2018/06/07/
guidelines.pdf
CSR/Green Procurement:
http://www.hitachi.com/procurement/csr/green/index.html

Implementation of CSR Monitoring and Audits
To monitor how well Hitachi’s CSR supply chain management
philosophy has been adopted by our suppliers, since fiscal
2007 we have asked key suppliers to conduct CSR Monitoring(self-checks) using the JEITA Supply Chain CSR Deployment
Guidebook and detailed checklists. After collecting and analyzing
the results, we 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 2017, we asked 131 suppliers inside and outside
Japan to conduct CSR Monitoring and received survey replies
from them. From fiscal 2017, all checklists were fully updated inaccordance with the revisions made to the Hitachi Group CSR
Procurement Guidelines. Based on the results of the survey, we
have identified problematic labor-related trends, and we will
promote measures to address such issues going forward.
Since July 2012, Hitachi, Ltd. has been auditing themanufacturing bases of its and Group companies’ suppliers inChina and the rest of Asia. In fiscal 2017, we conducted CSR
audits of 18 suppliers. Our audits are based on the international
SA8000 certification standard developed by Social

Accountability International (SAI), an American CSR evaluation
institution. An RBA-recognized auditor checks suppliers’ CSR
initiatives from the perspectives of labor and human rights,
health and safety, the environment, and ethics. No major
infringements were found at the 18 suppliers audited in fiscal
2017, but some small areas needing improvement werenoted, such as overtime work exceeding stipulated rules(14 suppliers), failure to conduct periodic inspections ofmachinery and equipment (12), and insufficient managementof hazardous waste (7). The relevant suppliers were requested
to submit improvement action plans, and Hitachi, Ltd.,
together with Group companies, will work with and advise thesuppliers until they complete the planned improvements.
We hope to contribute to the development ofsustainable consumption and production
patterns within society by addressing societal
issues within our value chain.

Number of CSR Audits
Fiscal 201520companies

Fiscal 201620companies

Fiscal 201718

companies(total of 106 companies since fiscal 2012)37

Foundation for Value Creation

Engaging in Responsible Procurement

Respect for Human Rights
Human Rights Due Diligence in Procurement
Our pledge under the Hitachi Group Human Rights Policy is todevelop human rights due diligence mechanisms andimplement them on an ongoing basis. Based on the results ofthe pilot programs undertaken with certain entities in fiscal
2014 across six countries in the ASEAN region under thispolicy, we have formulated a set of written guidelines for
implementing human rights due diligence in collaboration with
the US-based NPO Shift*.
In fiscal 2015, we initiated human rights due diligence inthe procurement divisions, whose activities are at risk ofnegatively impacting the human rights of workers in the supply
chain and local communities. In fiscal 2017, we completely
revised the questions on the check sheet used in supplier
CSR monitoring (self-checks) to better grasp the issues
related to workers’ rights at suppliers, as well as health andsafety and the environment. We also visited one of oursuppliers in Malaysia with members of the US nonprofit
organization BSR (Business for Social Responsibility) to conduct
an assessment on migrant workers, who are socially vulnerable
and often said to be exploited by forced labor. The assessment
was based on interviews with managers of human resources
and production divisions, recruitment agencies, and migrantworkers, along with inspection of the factories and dormitories.

Fiscal 2016 also saw the launch of human rights due
diligence for human resources divisions at Hitachi. The
operations in those divisions touch on many issues connected
to human rights for employees, including working hours,
employee treatment, and health and safety. Human rights
risks for employees were assessed and prioritized, andmitigation strategies were explored. They also investigatedgrievance mechanisms, analyzing existing procedures andexploring ideas for improvement. Going forward, Hitachi willfurther promote human resources initiatives by its business
units and Group companies.
Since fiscal 2014, Representative Executive Officer,President, and CEO Toshiaki Higashihara has sent an annual
human rights message on Human Rights Day (December 10).
In fiscal 2017, this was distributed via email to executives andemployees at Hitachi, Ltd. and Group companies worldwide.
* John Ruggie, former Special Representative of the Secretary-General on
business and human rights, founded this NPO with the team that drafted theUN Guiding Principles on Business and Human Rights.
Hitachi Group Human Rights Policy:
http://www.hitachi.com/sustainability/renew/pdf/human_rights_policy.pdf

Response to the Conflict Minerals Issue
The policy for procurement departments of Hitachi has always
been and will continue to be to ensure that procurement
activities do not result or aid in conflicts within the same
region and that the armed groups described above do notbenefit from those activities, while continuing responsible
procurement activities of minerals that are not related to theconflicts in the region based on local laws. At the same time,
we will continue to support the practice of due diligencebased on the “OECD Due Diligence Guidance for Responsible
Supply Chains of Minerals from Conflict-Affected and High-RiskAreas” among companies. With these in mind, Hitachi Groupwould like to request all of our suppliers to utilize the Conflict

Minerals Reporting Template developed by RBA/GeSI tocontinue checking the country of origin and supply chain ofminerals, and also to procure from the CFS (Conflict FreeSmelter)* listed within.
* A list of smelters who have been identified as “not being involved in the conflictwithin the same region” by the Responsible Minerals Initiative (RMI), an organization that was founded by the RBA/GeSI, which is a group that aims to solve
the conflict minerals problem.
Hitachi Group Conflict Minerals Procurement Policy:
http://www.hitachi.co.jp/procurement/csr/__icsFiles/afieldfile/2018/06/07/
CM_PP_RE_E.pdf

Respect for human rights is the foundation of all 17 SDGs. In working toachieve such goals, it is important that we mitigate any negative impacts
related to human rights caused by our business activities throughout thevalue chain.

Distributed CEO’s human rights message to
Fiscal 2015

Approx.
38

148,000 people

Fiscal 2016

Approx.

156,000 people

Fiscal 2017

Approx.

178,000 people