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Updated on May 12, 2016

Responsible Sourcing and CSR in Supply Chain Management

Sony is committed to conducting its operations in a socially and environmentally responsible manner and to sourcing from suppliers that share its values. Accordingly, in order to enable positive change in its supply chain, Sony works closely with its suppliers and subcontractors to address human rights, labor, health and safety, and environmental protection issues related to the procurement of raw materials and components.
  • Basic Structure of the Supply Chain

Policy for CSR in the Supply Chain

Compliance with "Sony Group Code of Conduct" in Business
In May 2003, Sony adopted the Sony Group Code of Conduct, which stipulates the basic standards to be maintained by all directors, officers and employees of the Sony Group in order to emphasize and further strengthen corporate governance, business ethics and compliance systems throughout the Sony Group. The code includes basic policies concerning dealings with suppliers, categorized under such headings as "Fair Procurement" and "Gifts and Entertainment," with which all personnel in the Sony Group are required to comply.

Managing Chemical Substances in Procurement
Given the global nature of its suppliers, Sony has led the industry by introducing its own global standards for management of certain chemical substances contained in products or parts, called Management Regulations for Environment-related Substances to be Controlled which are Included in Parts and Materials (SS-00259). To implement this standard, Sony has established the Green Partner Environmental Quality Approval Program for supplier qualification. Only suppliers that comply with Sony's standards for management of chemical substances qualify for certification as "Green Partners." By procuring parts and products only from certified suppliers, Sony realizes consistent chemical substance management globally.

<< Please refer to the following page for information on other procurement activities: >>
Participation in the Electronic Industry Citizenship Coalition (EICC)
Supply chains overlap considerably in the electronics industry, with multiple manufacturers of finished products sharing the same subcontractors and parts suppliers. Accordingly, there are fears that the introduction of independent, company-specific standards for socially responsible management will cause confusion and constitute a significant burden on companies in the supply chain. With the aim of improving processes in the electronics industry supply chain, Sony, as one of the member companies, participated in the establishment of the Electronic Industry Citizenship Coalition (EICC) in 2004. The EICC formulated a basic code of conduct based on industry best practices and is working to develop the tools, Web-based systems, and skills development programs for suppliers, needed to create a framework for ensuring the code is upheld. As of March 2015, the EICC consisted of over 100 participating companies from Europe, the Americas and Asia, and members include manufacturers and OEM companies. In cooperation with the Global e-Sustainability Initiative (GeSI) Supply Chain Working Group, consisting mainly of the European telecoms sector and other electronics industry organizations, the EICC is currently promoting social responsibility across the global supply chain.
  • EICC
  • Formulation and revision of the EICC Code of Conduct
  • Development of common implementation tools
  • Risk assessment tool (a tool designed to help companies identify areas of risk and prioritize activities)
  • Supplier self-assessment questionnaire (a self-administered survey for suppliers to provide information on their CSR efforts and management systems)
  • Audits
  • Standardization of audit procedures
  • Identification of qualified third-party firms to conduct audits
  • Development and administration of a Web-based system
  • A Web-based information system for collecting, managing and analyzing CSR data provided by individual suppliers
  • Education and training
  • Stakeholder engagement
  • Working groups related to particular subjects
  • Environmental sustainability working group
  • Extractive working group
  • Asia Program
  • EICC Framework
Adoption of and Compliance with the Sony Supply Chain Code of Conduct
In recent years, stakeholders have become increasingly concerned about manufacturers' general responsibilities in relation to products, including issues related to human rights, labor conditions, health and safety, and environmental protection at the production sites of outsourcing partners and parts suppliers. Recognizing that partner firms are involved in the production of Sony products, and seeing the importance of addressing various issues in conformance with a framework that would meet Sony's own standards, in 2005 Sony established the Sony Supplier Code of Conduct, based on industry best practices as highlighted in the EICC Code of Conduct.
In line with subsequent changes to the EICC Code of Conduct, Sony made an amendment to its own code, including adding a reference to the conflict minerals reporting requirements set forth in Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was passed by the U.S. government in 2010. The updated second edition of the Sony Supplier Code of Conduct was published in 2012. Also, Sony has participated in the EICC (Electronic Industry Citizenship Coalition) since the EICC was established in 2004 and has continuously taken approaches for compliance with the industry standard EICC Code of Conduct at all of its own electronics manufacturing sites. To enhance its CSR management in the supply chain, in January, 2016 Sony has established the Sony Supply Chain Code of Conduct, where the EICC Code of Conduct is adopted as this Code, for the manufacturing process at both our own electronics manufacturing sites and those of its suppliers.

Sony's basic procurement contract with material suppliers lays down observing related laws and regulations and the Sony Supply Chain Code of Conduct. Sony requests all potential new suppliers to comply with the Code, as well as to conduct assessments as a part of requirements of a preliminary examination.

It is Sony's basic policy to reconsider its business relationship with the supplier in the event that an existing supplier is confirmed to have committed a major violation of the Sony Supply Chain Code of Conduct or is not exhibiting an appropriate level of cooperation with studies and audits. In the event that a violation of the Sony Supply Chain Code of Conduct is reported by a third party and a violation is confirmed, Sony will ask the supplier to take corrective actions and report back on the progress. If the violation has been committed by a secondary supplier, Sony will work in cooperation with the relevant primary supplier to urge corrective action.

Sony Corporation has also installed a hotline for suppliers to report compliance violations on the part of Sony Group company employees or executives. Appropriate actions are taken in response to such reports once veracity has been confirmed.

Sony's Structure for Promoting Supply Chain Management

At Sony, CSR, Procurement and Production groups take the lead in promoting responsible sourcing activities in cooperation with other related head office divisions, business groups and relevant functions at manufacturing sites. The CSR group keeps abreast of external trends and communicates with stakeholders, drawing on both to formulate company-wide basic supply chain management policies. The procurement group is responsible for overall implementation of responsible sourcing policies by ensuring that suppliers comply with the Sony Supply Chain Code of Conduct and conducting necessary studies and audits of suppliers, analyzing the results thereof and implementing necessary measures.

Monitoring Activities and Follow-up Measures to Ensure Compliance with the Sony Supply Chain Code of Conduct

Supplier Assessments

Sony established the Sony Supply Chain Code of Conduct to ensure that suppliers understand Sony's expectations in more detail. Suppliers of products and materials to Sony around the world are required to observe this code.

As part of its effort to ascertain supplier compliance with the Sony Supply Chain Code of Conduct, Sony conducts assessments worldwide. To this end, Sony uses the concept of risk appraisal to determine risks associated with the country and region in which each supplier is based, as well as risks associated with the scale, status and nature of the supplier's business, and tailors its assessment to the supplier's risk level.

Based on the results of these assessments, Sony evaluates the degree to which suppliers are complying with the Sony Supply Chain Code of Conduct and whether violations have occurred at each of the suppliers' factories. As part of its risk appraisals, Sony conducts onsite inspections of suppliers it deems to be subject to risks in order to confirm how their factories are being managed.

For example, if suppliers employ students, Sony directly visits their factories to check whether any workers are younger than the legal age limit in that country, and to confirm whether the health and safety of younger workers are being affected by their jobs due to long working hours, working night shifts, and other factors. Likewise, if suppliers employ foreign workers, Sony confirms whether such workers are subject to forced labor, whether dormitory facilities provided to those workers meet international standards, and whether the working environment is clean and safe. By inspecting factories and providing direction in this way, Sony ensures that suppliers are making every effort to fulfill their social responsibilities.

Since fiscal 2014, Sony has conducted assessments of all of its new suppliers. Overall, the assessments showed that management systems covering labor, ethics, and other key issues had been established and were making progress toward completion. Sony intends to provide support to these suppliers so that they can continue making improvements.
Ongoing Communication with Primary Suppliers of Products and Materials

Acting through the department responsible for administration of the Sony Supply Chain Code of Conduct, Sony engages in ongoing communication with its primary suppliers of products and materials. This facilitates the exchange of information concerning the progress of suppliers' CSR initiatives and their efforts to ensure that secondary suppliers comply with such initiatives, and also enables Sony to provide support for efforts to improve CSR across the entire supply chain.

Additionally, Sony requires its primary suppliers of products and materials to conduct regular self-assessments. For suppliers shown by such self-assessments to have a high risk of violation, Sony conducts EICC audits in several areas : labor practices, ethics, safety and health, environment and management system. Sony also follows up on recommendations for remedial actions implemented as a result of these audits.
Third-Party EICC Audits

The EICC has also established a framework for third-party supplier audits based on the EICC Code of Conduct. This framework encompasses the certification of third-party auditors, as well as the provision of necessary auditing tools, including manuals and audit checklists. These audits focused on suppliers in regions where member companies consider the risk of violation to be high. Sony's suppliers have also undergone audits based on EICC standards through the EICC's shared audit program. The results of these audits identified non-conformance issues in the categories of labor and ethical management systems, health and safety, and labor.

In cases where violations of the Sony Supply Chain Code of Conduct are reported via external sources, such as NGOs or media reports, Sony cooperates with the supplier in question to confirm the facts of the case expeditiously and objectively. Specifically, Sony may request that the supplier's manufacturing site undergo a third-party EICC audit. If the originally reported facts are confirmed, Sony ensures remedial action is taken and, if necessary, provides additional support for the supplier's efforts to improve its performance in the form of follow-up audits to confirm the progress of initiatives. In cases where violations are reported at a secondary supplier, Sony works with the primary supplier to ensure that remedial action is carried out.

Stakeholder Engagement

With the aim of developing a basic framework for promoting effective supply chain management, the EICC holds discussions periodically with NGOs, socially responsible investors and other stakeholders. Sony participates in these discussions and takes into account the views of a diverse range of stakeholders. Such discussions are held regularly in Asia, the United States and Europe.
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