Introduction

SocialManagement

Social Innovation

Environmental

SocialGovernance

Assurance

Hitachi Sustainability Report 2023

108

Responsible Procurement

Human Capital
Diversity, Equity and Inclusion

Basic Concept

Human Rights

We believe that placing sustainability at the core of our business throughout our value chain will lead to mutual prosperity for procurement partners and the Hitachi Group. To this end, we

Responsible Procurement

pursue sustainable procurement by identifying and mitigating procurement risks associated with the globalization of our business as far in advance as possible. These risks include humanrights violations and greenhouse gas emissions by procurement partners in the supply chain.

	Executive Summary
Responsible Procurement
Quality and Customer Satisfaction

Topic

Social Contribution Activities

Overview

To ensure sustainable procurement, Hitachi engages in procurement activities in accordance with the Hitachi Group Global Procurement Code, which represents

Social Datathe highest level of business standards in our procurement activities and the Hitachi Group Sustainable Procurement Guideline, which is a code of conduct
Responsible
Procurement

toward procurement partners. We pursue the adoption of Hitachi Group sustainable procurement policies among procurement partners by communicating the
Sustainable Procurement Guideline and holding sustainability procurement seminars in each region, conveying our aim for mutual prosperity.
Additionally, to strengthen risk management and engagement with procurement partners, the Hitachi Group evaluates and analyzes the state of sustainability
initiatives by procurement partners, conducting audits as necessary.
We also work with procurement partners to achieve carbon neutrality throughout the value chain.

Note: Hitachi normally refers to suppliers (including vendors or providers) as procurement partners who build business together on an equal footing.

Introduction

SocialHuman Capital
Diversity, Equity and Inclusion
Human Rights

Responsible Procurement
Executive Summary

Responsible Procurement

Management

Social Innovation

SocialEnvironmental

Governance

Assurance

Hitachi Sustainability Report 2023

109

Responsible Procurement
Basic Procurement Policy
Approach

PolicyHitachi Group Sustainable Procurement Guidelines

Sustainable Procurement Conference. This conference,https://www.hitachi.com/procurement/csr/EN_HG_SPG.pdf

attended by the heads of the procurement divisions at

GRI 2-6/2-23

Business Units (BUs) and major Group companies addresses

We believe that putting sustainability at the core of our business throughout our value chain will lead to mutual prosperity
for procurement partners and the Hitachi Group. To achieve
this goal, we pursue sustainable procurement, identifying andcompanywide procurement initiatives related to overall sus-

Sustainable Procurement Management
Framework
Structure

GRI 2-13/2-24/3-3

Policytainability, including environment and human rights by developing strategies for sustainable procurement activities and by
sharing best practices across our organization.

Quality and Customer Satisfaction

mitigating procurement risks associated with the globalization

Social Contribution Activitiesof business as far ahead as possible. These risks include

Hitachi established the Sustainable Procurement Office withinto the Senior Executive Committee on key procurement strat-

Social Data

human rights violations and greenhouse gas emissions in thethe Value Integration Division (an organization reporting directly

egies and on sustainable procurement activities. Each year,

supply chain.

to the President & CEO). The Sustainable Procurement Office

the division reports on priority procurement measures to theWe established the Hitachi Group Global Procurement

is responsible for procurement activities at our head office, andAudit Committee, which consists of members of the Board of

Code to guide our procurement activities. These standards

it plays a central role in deliberating and deciding various poli-

Directors. These reports include matters identified andrepresent the highest level of business standards with which wecies related to sustainable procurement.

addressed in the previous year, and feedback from the Audit

comply. This code calls on the Hitachi Group and procurement

Policies and initiatives adopted are communicated in detailpartners to give due consideration to human rights, labor prac-throughout the Hitachi Group by means of meetings including

tices, safety, ethics, quality, and security in the supply chain.
We also established the Hitachi Group Sustainable
Procurement Guidelines, which are a code of conduct for

Hitachi, Ltd. Headquarters

Audit Committee

Report/deliberate Hitachi Group
activities policies/strategies/
initiatives/results

BUs/Group Companies

Senior Executive Committee

labor, health and safety, environment, business ethics, management system, product quality and safety, and preventionof personal and confidential information leakage. We also use

Value Integration Division
Sustainable Procurement Officethese guidelines as a communication tool to inform procurement partners about Hitachi Group initiatives and share ourSustainable Procurement Conference

policies and initiatives related to sustainability. We aim to

BU Procurement
Meetings

Regional
Procurement

Category Strategic
ConferenceGroup Procurement
Strategy Meetingdevelop sustainable business and society together with procurement partners by promoting procurement activities thatadhere to this code.
Sustainable Procurement
https://www.hitachi.com/procurement/csr/index.html

Note: Hitachi normally refers to suppliers (including vendors or providers) as procurement partners who build business together on an equal footing.

Business Locations andFactories in Japan,
Overseas

Share activities policies/strategies/initiatives ineach BU/Group company

Activity outcome
monitoring

informs procurement partners of our requirements for compliance. Guideline content falls into seven major categories:

Committee is reflected in activities in the following year.

Procurement Management Organizational Structure

procurement partners.
The Hitachi Group Sustainable Procurement Guidelines,

In addition, the Value Integration Division reports regularly

Instruct/communicate
Hitachi Group activities
policies/strategies/
initiatives

Report on activities

Introduction

SocialHuman Capital
Diversity, Equity and Inclusion
Human Rights

Responsible Procurement
Executive Summary

Responsible Procurement
Quality and Customer Satisfaction

Management

Social Innovation

Sustainable Procurement Conference

Environmental

Details

Southeast Asia

In Southeast Asia, we presented an overview of the
Hitachi Group Sustainable Procurement Policy andstrategy, our status regarding EcoVadis*1 adoption,
sustainability audits and energy management to approximately 200 procurement partners.

as to provide practical support. This conference is open
to all procurement division members, including theApproximately 500 people participated in fiscal 2022.

China

In China, we discussed Hitachi Group Sustainable
Procurement Policy and strategy, providing examples ofsustainable activities to approximately 230 procurement
partners.

India

We covered Hitachi Group Sustainable Procurement
Policy and strategy, and results of sustainability audits in
India to approximately 90 procurement partners.

The conference provides an opportunity to develop ahuman rights due diligence process, gain a better

Social Contribution Activities

understanding of the status of Scope 1, 2, andSocial Data

upstream Scope 3 efforts toward carbon neutrality, andActivities

GRI 2-25/308-2/414-2

Working to Strengthen Engagement With
Procurement Partners• Raising Awareness of the Hitachi Group Sustainable
Procurement Guidelines
Hitachi provides sustainable procurement guidelines in four
languages (Japanese, English, Chinese, and Thai) and distrib-

In fiscal 2022, we conducted sustainability assessments of
1,374 procurement partners (in 48 countries) across the
Hitachi Group.
We use the information obtained from these evaluations
to identify companies requiring corrective action, to discussand monitor improvement methods, and to select and conduct sustainability audits.
We will continue to work with more procurement partners
and expand the number of our partners evaluated by
EcoVadis assessment.

• Procurement Website Content Expansion

Hitachi conducts sustainability audits of the manufacturing

Hitachi upgraded its procurement website for external use in fiscal

bases of our global procurement partners on a regular basis.

2022, adding more contents related to sustainable procurement.

We use external evaluation organizations to conduct the

The website provides to external stakeholders including procure-audits. Sustainability audits consist of document reviews,

ment partners, information on sustainable procurement in aemployee interviews, and facility inspections to monitor sus-

detailed, systematic, and straight-forward manner.

tainability initiatives at procurement partners from the per-*1 EcoVadis: A sustainability assessment service platform to evaluate companies
comprehensively across four areas: environment, labor and human rights,
ethics, and sustainable procurement

Procurement Website

spectives of labor and human rights, health and safety, theenvironment, and ethics.
In fiscal 2022, we conducted sustainability audits on
128*2 procurement partners, which we selected based on

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

Regional Distribution of Audits in FY2022

utes these guidelines to approximately 30,000 procurement(15 countries, 128 companies in total)

partners. We conduct sustainable procurement information

Procurement Partner Sustainability Assessments

sessions and other means to communicate matters with

With the purpose of strengthening risk management andwhich we expect procurement partners to comply.

engagement with procurement partners, Hitachi evaluates
and analyzes the state of sustainability initiatives among pro-• Regional Sustainability Procurement Seminars

efforts based on a checklist covering four areas: environment,

Sustainability Audits and Monitoring

share the latest internal efforts toward carbon neutrality.

Sustainable Procurement

110

Hitachi Sustainability Report 2023

Assurancelabor and human rights, ethics, and sustainable procurement.

nies’ understanding of sustainable procurement, as wellheads of procurement divisions at all global locations.

GovernanceRegionSince fiscal 2022, the Sustainable Procurement
Conference is held to improve BU and Group compa-

Socialcurement partners through surveys.

Mexico,Thailand,4

Poland,We invite our procurement partners in Southeast Asia, China,

Starting in fiscal 2022, we adopted the EcoVadis third-

and India to the Regional Sustainability Procurement Seminar

party evaluation platform for monitoring and evaluating theUS,to address social issues proactively together with our procure-sustainability performance of our procurement partners. We

Turkey,ment partners. Approximately 520 procurement partners partic-

perform assessments regarding procurement partners who

ipated in the fiscal 2022 seminar. We strive to communicate therepresent a large portion of our procurement and who are

Hitachi Group Sustainable Procurement Policy to each region.

important to our business strategy. We confirm sustainability

Note: Hitachi normally refers to suppliers (including vendors or providers) as procurement partners who build business together on an equal footing.

4

Vietnam,4

Others,13

China,

6

8
8
India,

Brazil,16

Others: Egypt, Columbia, Saudi Arabia, Bulgaria, Indonesia, Korea

1747

Introduction

SocialHuman Capital
Diversity, Equity and Inclusion
Human Rights

Responsible Procurement
Executive Summary

Management

Social Innovation

Environmental

procurement volume and responses to written surveys. For
any matters identified during the audit, we explain the details

Governance

Hitachi Global Compliance Hotline
https://secure.ethicspoint.eu/domain/media/en/gui/109107/index.html
P.145 Hitachi Global Compliance Hotline

to our procurement partners and request improvements.
*1 Internal auditors conduct audits at certain Group companies*2 Including the number of companies audited by Hitachi Energy beginning fiscal
2022

Hitachi Sustainability Report 2023

111

Internal Education and Training for Procurement
Divisions
Hitachi provides training by position to procurement personnel
responsible for sustainable procurement practices.

Internal Training

Specifically, we offer e-learning on sustainable procurement
to encourage a complete understanding of various policies

Training

Examples of Matters Identified

Assurance

in Japan and overseas, raising awareness across divisions

Examples of Matters Identified for Improvement
Category

Socialthat include Sustainable Procurement Guidelines, Green

Hitachi conducts a variety of training and education programs

Procurement Guidelines, and Responsible Mineral Procurementon sustainable procurement globally to further its internal

Policy. Content also covers important sustainability initiatives

understanding of sustainable procurement.

such as carbon neutrality and human rights due diligence.

Responsible Procurement

Labor and humanrightsEmployee overtime hours not properly managed

Quality and Customer Satisfaction

Occupational
health and safety

Emergency exits and emergency lights are notadequately maintained

Environment

Environmental impact assessments not properly
conducted.

Internal Training through Conferences in FY2022

to newly appointed managers. In fiscal 2022, approximately

EthicsEmployees not trained on fair trade

Region2,800 employees completed this course.

Social Contribution Activities
Social Data

We provide the same training on sustainable procurement

For procurement partners whose audit results indicate a highrisk, we consider training to support improvement, online

GlobalAll Locations

Highlighted our efforts to establish a human rights due
diligence process and to become carbon neutral. We
also cover internal initiatives on advanced sustainableprocurement.

ThailandCommunicated best practices on the Hitachi Group’s
long-term environmental goals, solutions for decarbonization, optimal energy procurement in Thailand, etc.

The UnitedStatesExplanation of the Hitachi Group Sustainable
Procurement Policy; sharing and discussions of bestpractices among Hitachi Group companies.

EuropeExchanged information on sustainable procurement
policies and strategies, our efforts toward carbon neutrality, environmentally friendly raw materials, etc.

monitoring of improvements, and in-person follow-up audits.

Procurement Partner Hotline
In order to promote honest and fair dealings with procurement
partners, Hitachi accepts consultations and reports from all
stakeholders, including procurement partners, on all matters
involving potential misconduct, such as violations of laws andregulations and the Hitachi Group Business Ethics and Codesof Conduct. We established the Hitachi Global Compliance

Details

Encouraging Procurement Partners to
Reduce Their Environmental Footprint
Activities

GRI 308-2

To create sustainable societies, Hitachi pursues its own environmental initiatives under the long-term environmental target,
Hitachi Environmental Innovation 2050. This target calls forthe creation of decarbonized societies, resource-efficientsocieties, and societies harmonized with nature.
At the same time, Hitachi businesses cover a broad

Hotline as a help desk, and we publicize the help desk andrange of business domains. Our procurement is supported byprocedures on our website. The hotline is accessible 24/7

many procurement partners from whom we source various

online or via telephone.

products and parts. We maintain our initiatives to reduce
environmental impact through consistent requests to comply

Implementation Status of Sustainability Procurement Activities (FY2022)

Sustainability
Procurement Seminars

Approx.

520

unit: companies

with relevant guidelines.
In particular, we set a target to achieve carbon neutrality

Sustainability Assessments

Sustainability Audits

by fiscal 2050 through our value chain as we pursue our goal

1,374

128

of creating decarbonized societies. To this end, we encourage*1*1 Includes the number of companies audited by Hitachi Energy beginning FY2022
Note: Hitachi normally refers to suppliers (including vendors or providers) as procurement partners who build business together on an equal footing.

collaboration and cooperation with procurement partners on
initiatives upstream in the value chain.

Introduction

SocialHuman Capital
Diversity, Equity and Inclusion

Management

Social Innovation

Environmental

SocialGovernance

Sharing Our Green Procurement Guidelines andRelated Initiative

we recommend using chemSHERPA*1 CI/AI, a standardized

We distribute the Green Procurement Guidelines that define ourformat for communicating information on chemical sub-basic position on procuring environmentally friendly parts andstances in products throughout the supply chain.

In order to calculate CO2 emission of Scope 3 Category 1,

products as well as our requirements of procurement partners.

Purchased Goods and Services, in the value chain upstream,

Responsible Procurement

we use the spend basis method to cover entire group pro-environmental management and recommend obtaining envi-

curement activities and also reflect the primary data obtainedronmental certificates. They also address environmental con-from procurement partners into the calculation in part. We

servation reducing the impact of products supplied to Hitachi,

ensure that the primary data collection from procurement

such as conserving resources and energy, recycling, manag-

partners are through our engagement and utilize a third-party

ing chemical substances in products, and appropriate disclo-

Responsible Procurement
Quality and Customer Satisfaction
Social Contribution Activities
Social Data

112

Efforts Toward Carbon Neutrality in the
Value Chain Upstream• CO2 Emissions Measurement in the Value Chain
Upstream

Human Rights

Executive Summary

Hitachi Sustainability Report 2023

Assurancesustainability evaluation platform, EcoVadis.

The guidelines set out requirements, such as establishingsures of related information.

To address the issue of chemical substances in products,*1 chemSHERPA: Developed by the Japanese Ministry of Economy, Trade andIndustry to facilitate the management of chemical substances in products bycreating a standardized format throughout the supply chain. The c­ hemSHERPA-­CI
standard is applicable to chemical substances contained in chemical products
and chemSHERPA-AI to those contained in molded products.

Green Procurement Guidelines
https://www.hitachi.com/environment/library/pdf/green_en.pdf
Green Procurement Guidelines Annex
https://www.hitachi.com/environment/library/pdf/green_annex_en.pdf

P.027 Environmental Vision
P.027 Hitachi Environmental Innovation 2050

• CO2 Emissions Reduction Efforts Upstream in the
Value Chain
In fiscal 2022, we selected 21 companies as environmental
advanced partners in the context of Scope 3 Category 1,­explained above, in order to promote the CO2 reduction activitiesof our procurement partners. These 21 partners represent com-

Received the Highest Rating for CDP Supplier Engagement
Hitachi, Ltd. was recognized for its efforts to create net-zero societies, including the reduction of CO2 emissions
throughout its supply chain. In March 2023, the CDP, an international NGO working in the environmental sector,
selected the company as a Supplier Engagement Leader, which is their highest rating for supplier engagement.
P.020 External Assessments Related to ESG

panies most proactive in addressing climate change and are also
important to Hitachi’s business activities. These companies represent a cross-section of sizes and are located in multiple countries and regions, covering a wide range of industries, including
raw materials, components, and equipment. We held discussions

Strengthening Global Partnerships
GRI 204-1

Activities

with these environmental advanced partners regarding CO2

With the worldwide expansion of Hitachi’s business, our pro-emissions reductions over a period of several months to establish

curement partners have become increasingly globalized as

an understanding of CO2 reduction measures and calculation

well. We now deal with some 30,000 procurement partners inmethods. Information obtained through these dialogues will beover 60 countries. Accordingly, we appoint procurement offi-

analyzed and used for future CO2 reduction activities.

cers to oversee procurement activities locally in main regions

In addition, all new aluminum ingots (AL≥99.7%, standard(China, other Asian countries, Europe, and the Americas) inblock) procured for domestic use beginning in fiscal 2023 willorder to encourage procurement from locally based partners

be, in principle, manufactured using hydroelectric power gen-in line with the principle of promoting local production for local

eration to contribute to reduced CO2 emissions. In this way,consumption. These officers carry out activities including

we incorporate and give consideration to environmentally

sustainability monitoring, sustainability audits, and sustainable

friendly procurement, including product materials that utilize

procurement seminars for procurement partners in theirrenewable energy, new technologies, and recycled materials.

respective regions to strengthen sustainable procurement.

Note: Hitachi normally refers to suppliers (including vendors or providers) as procurement partners who build business together on an equal footing.

Ratio of Local Procurement of Materials for
Main Regions (FY2022)

Asia

China

(excluding
China and Japan)

93

85

%

Europe

83

%

%

The
Americas74%Introduction

SocialSocial Innovation

Environmental

SocialGovernance

Response to the Conflict Mineral Issue
PolicyHuman CapitalManagement

Structure

Hitachi Sustainability Report 2023

Assurance

113

requested. We carry out supply chain investigations with the
GRI 2-27

Activities

In fiscal 2013, Hitachi formulated a Conflict Minerals

Hitachi Group’s Policy for Responsible Supply Chain of Minerals

cooperation of the relevant BUs’ and Group companies’
sales, procurement, and Sustainability divisions. In addition,
Hitachi, Ltd. is a member of the Japan Electronics andDiversity, Equity and Inclusion

Procurement Policy, declaring our stance and commitments

Human Rights

regarding conflict minerals. The policy was revised in fiscal

Responsible Procurement

2016 to lay out explicit measures to be implemented to

System and Initiatives

group addresses the issues of conflict minerals with otherensure responsible procurement. Expanding the scope ofSales divisions, business groups, manufacturing sites, pro-members of the association. In June 2022, the working

corporate responsibilities for the procurement of minerals is acurement divisions, and other divisions within individual BUsgroup held an online information session targeted at person-

global trend, Companies are increasingly expected to address

and Group companies work together to respond to investiga-

nel in charge of investigating conflict minerals at companies

Quality and Customer Satisfaction

broader overall risks to human rights beyond the risk of beingtion requests and inquiries relating to conflict minerals. We

and organizations that face common issues related toSocial Contribution Activities

complicit in conflicts, and recognize responsibilities that

also strive to grasp developments in conflict mineral-related

responsible minerals. The working group explained the back-Social Dataextend beyond the countries adjoining the Democraticlaws and regulations in each country and region and what

ground behind responsible minerals to 2,500 people from

Republic of the Congo to a wider area where the risks areglobal society demands of enterprises, and work to share

1,500 companies.

high. In consideration of these developments, we revised thisinformation within the Group.

Information Technology Industries Association (JEITA)’s
Responsible Minerals Trade Working Group. This working

policy to formulate the Hitachi Group’s policy for Responsible

P.017 Industry Leadership and Policy Recommendations

Each BU and Group company investigates its use of

Supply Chain of Minerals in fiscal 2021.

conflict minerals and reports the results to customers when

Implementing Procurement BCP Initiatives
Hitachi’s Conflict Minerals Response Framework

Sustainability
division

Sustainability
relateddivisions

Coordination
Procurement
divisions

Approach

Individual BUs/
Group companies

Headquarters

SupportResponsible Procurement

Headquarters
Individual BUs/
Group companies

Activities

We work to enhance procurement-related business continuity
plans (BCPs) across Group companies worldwide to ensure

Customers

Raising awareness/
information provision• Understand customer
needs

Sales divisions• Grasp national
regulatory trends• Grasp global trends
Information
sharing

SupportExecutive Summary

https://www.hitachi.com/procurement/csr/EN_HG_RSCM.pdf

Information
sharing

Contacts in business groups/manufacturing andsales sites (technical divisions, etc.)
Quality Assurance divisions/Design and R&D divisions*2

Coordination

Raising awareness/
information provision

Sustainable
Procurement
Council• Grasp national
regulatory trends• Grasp global trends• Check specifications• Check for presence of
3TG*1

Procurement divisions
Consultation

Procurement
partners A

Procurement
partners B• Procurement partner
investigation• Raising awareness amongprocurement partners

Procurement
partners C

Supply chain due diligence by individual BUs/Group companies*1 3TG: Collective term for four commonly used conflict minerals: tin, tantalum, tungsten, and gold.
*2 May differ depending on BU or Group company
Note: Hitachi normally refers to suppliers (including vendors or providers) as procurement partners who build business together on an equal footing.

that significant incidents*1 do not disrupt our business orseriously impact the society.
*1 Events such as natural disasters (including major earthquakes) serious enoughto disrupt businessP.153 Procurement BCPs Initiatives