Sony is committed to fulfilling its responsibility to society as a corporate citizen, including managing its supply chain in a responsible manner. To achieve this goal, Sony is working with its business partners, suppliers and subcontractors to help ensure that they adhere to the same high standards as Sony in the areas of human rights, labor conditions, health and safety, and environmental protection.

Sony's expectations of its suppliers include compliance with laws, regulations and social standards and an environmental program.

Given the global nature of its suppliers, Sony has led the industry by introducing our own global standards for management of chemical substances, called "Management regulations for environment-related substances to be controlled which are included in parts and materials" (SS-00259). Sony has also established the Green Partner Environmental Quality Approval Program for Sony suppliers. Sony maintains a common global quality standard for parts by purchasing electronic parts only from suppliers who have passed an audit and have been certified as Green Partners.

Stakeholders' interests have risen sharply in companies' overall responsibility for their products, including such issues as human rights, labor conditions and environmental protection of OEM/ODM companies and parts suppliers. In response, we established the Sony Supplier Code of Conduct, which is based on the Electronic Industry Citizenship Coalition (EICC) Code of Conduct and is centered on the premise that since suppliers are engaged in the manufacture of Sony products, they should adhere to the Code and address such issues, and thus comply with Sony's standards.

Sony's basic procurement contract with material suppliers lays down observing related laws and regulations and the Sony Supplier 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 Supplier Code of Conduct, or not exhibit an appropriate level of cooperation to studies and audits. In the event that a violation of the Sony Supplier Code of Conduct is reported by a third party and a violation be 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.

Supply chain 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 and Web-based system, as well as the skills development programs for suppliers, necessary to create a framework for ensuring the code is upheld. As of May 2012, the EICC consisted of 68 participating companies from Europe, the Americas and Asia. Members include manufacturers, 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. The EICC continues to address a number of crucial issues. As part of this effort, Sony is participating in Environmental Sustainability working group of the coalition that promotes the awareness and reporting of CO2 emissions.

Principal EICC Activities

• 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
• Work groups relating particular subjects
• Environmental Sustainability work group
• Extractive work group
• Asia Program

Sony's head office division, CSR, procurement operations and manufacturing operations groups, are mainly promoting supply chain management in CSR initiative, in cooperation with other head office-related groups, business groups and manufacturing sites. The head office's 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 implementation to suppliers, ensuring that suppliers comply with the Sony Supplier Code of Conduct by requesting compliance to the code, conducting necessary studies and audits, analyzing the results thereof and implementing necessary measures.

In 2005, Sony established the Sony Supplier Code of Conduct, based on industry best practices as highlighted in the EICC Code of Conduct, to ensure that suppliers understand Sony's expectations in more detail and that the code is observed by suppliers of products and materials around the world.

As part of its effort to assess supplier compliance with the Sony Supplier Code of Conduct, Sony has introduced assessment questionnaires and explanatory meetings for its approximately 1,200* suppliers worldwide. Sony continues to support efforts for suppliers to conduct their business in a socially responsible manner by conducting assessments and further inquires of follow-up measures.

As of March 31, 2011, assessments had been conducted in all but a few of areas where Sony has suppliers and Sony had received the results of assessments from almost all of its suppliers worldwide. The results of these assessments indicate several overall trends, including that organizational development, i.e., the establishment of labor and ethical management systems, remains at a transitional stage. Sony will continue to support the efforts of suppliers to improve their activities.

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 a comparatively substantial number of non-conformance issues in the categories of labor and ethical management systems, health and safety, and labor.

With the aim of developing a framework for promoting effective supply chain management, the EICC holds discussions periodically with NGOs, socially responsible investors and other stakeholders, in which Sony is also participating. Such discussions were held, in Mexico, the United States, Switzerland, Mainland China and the Netherlands.