Activities to Promote Sustainable Procurement

Supplier Surveys and Improvement Activities

Kirin Holdings aims to achieve "sustainable procurement" by having suppliers conduct activities based on the Kirin Group Sustainable Supplier Code.
We conduct supplier surveys on a regular basis to check the status of initiatives against the Kirin Group Sustainable Supplier Code and to identify issues in the supply chain. For suppliers that are identified as high risk as a result of the survey, we directly interview them about the status of their initiatives and provide advice on how to improve them. Some of the suppliers have already formulated human rights policies. In the future, in addition to the supplier survey, we will utilize Sedex's self-assessment questionnaire tool to strengthen the management of sustainable procurement risks in the supply chain.

Survey Results

The results of the questionnaire survey for each company are as follows. As a result of the survey, we will interview those suppliers who are judged to be at high risk individually and encourage them to improve their efforts.

Japan Beer and Spirits Business and Japan Non-alcoholic Beverages Business

In fiscal 2019, Kirin Brewery Company, Limited, Kirin Beverage Company, Limited, and Mercian Corporation adopted the Sustainable Procurement Self-assessment Questionnaire developed by Global Compact Network Japan (GCNJ), which it now administers to suppliers, replacing a proprietary survey.
In fiscal 2022, we received responses from 387 of the 393 companies that made requests (accounting for approximately 90% of the total as procurement value). The results of the survey confirmed that improvements were made in many areas compared to the previous survey. In the areas of quality, safety, and information security, the company continues to make progress in achieving a high level of commitment. In addition, we found that the practice of human rights and environmental initiatives, which had been an issue in the past, is on an improving trend. These results are fed back to suppliers by the person in charge of each item, and are used in the selection of suppliers as evaluation items in the supplier evaluation conducted once a year.

Risk assessment using the Sedex SAQ

Utilization in Oceania Alcoholic Beverages Business

Lion preceded the Kirin Group and as part of its responsible sourcing program, Lion continues to require its high-priority suppliers to complete the Supplier Ethical Data Exchange (Sedex) Self-Assessment. By the end of 2020, more than 95% of our high-priority suppliers had been assessed for risk using this questionnaire, and by the end of 2021, we had achieved our CSV commitment goal of 100%.

Respect for Human Rights in the Supply Chain

In order to promote initiatives for further respect for human rights based on the "Group Materiality Matrix (GMM)," which was reevaluated at the start of the new medium-term management plan, we held a dialogue on human rights with external experts, focusing on human rights in the supply chain, and exchanged opinions on past and future initiatives. The dialogue was held to exchange opinions on past and future initiatives. 

Human Rights Risk Assessment and Action Plan for Major Agricultural Procurement Products

In February 2018, the Kirin Group established the Kirin Group Human Rights Policy in accordance with the United Nations Guiding Principles on Business and Human Rights ("Guiding Principles")*, a global standard. In line with the Guiding Principles and the Kirin Group Human Rights Policy, we are promoting human rights due diligence, an initiative to identify, prevent, and mitigate negative human rights impacts related to the Kirin Group's business. The issue has been positioned as one of the most important issues. Focusing on high-risk areas, the Group as a whole will further promote initiatives in this area in the future.

As a main initiative, we conduct Human rights impact assessments targeting countries that have been relatively high-risk based on the results of country-specific human rights risk assessments.

In 2022, we have conducted a social audit on the Sri Lankan tea supply chain through a third-party audit organization. The results of the assessment showed both good practices and issues requiring improvement. Of the items assessed, good practices were found to be in place in management, Environmental, Safety and Health (EHS), and first aid. On the other hand, issues were found in some areas such as work rules, labor contracts, and wages. Based on our response policy, we worked collaboratively with our primary and secondary suppliers to address the issues. In November 2023, audit personnel from Kirin's procurement department conducted a follow-up on-site audit and confirmed that the issues had been resolved. To prevent recurrence, we will establish a monitoring system through our primary supplier and conduct regular checks. .

In 2023, we have conducted a social audit on the Argentine grape juice supply chain through a third-party audit organization. Although there were some recommendations regarding documentation and supplier management systems, no significant non-compliance was found. Good practices were found in quality management systems and environmental certification efforts. For the identified issues, we have started communication by sharing the audit report with the primary supplier to conduct fact-checking and have formulated response policies for improvement. Regarding supplier management systems, improvements are already in progress.

In 2024, we conducted an on-site audit by a third-party auditor within the Brazilian sugarcane supply chain. No significant non-compliance was found.　Good practices were found such as establishment of policies and management systems, systematic equipment maintenance, and waste segregation.　However, several issues were found concerning fire safety and chemical management. We have set priorities and requested improvements through our primary supplier.

The progress of the above initiatives will be disclosed in a timely manner on our company's website.

Supply Chain Human Rights Asessment

Response policy for on-site audits of human right due diligence for suppliers

Human rights impact assessment of the Brazilian Sugarcane supply chain (December 2024)

Human rights impact assessment of the Argentine Grape juice supply chain(February 2024)

Human rights impact assessment of the Sri Lankan Tea supply chain(February 2024)

Human rights impact assessment of the Sri Lankan Tea supply chain(May 2023)

Risk assessment of major agricultural products and processed agricultural products procured by the Kirin Group

Following the enactment of the Kirin Group Sustainable Procurement Policy and the Kirin Group Sustainable Supplier Code in April 2021, we once again conducted a risk assessment of agricultural products and processed agricultural products procured by the Kirin Group. We identified agricultural products and processed agricultural products with high human rights risks, with advice from Business for Social Responsibility™ (BSR), a specialist external organization, and used the Sedex assessment tool to evaluate the risks based on two axes: human rights risks in the country of procurement and the degree of impact on our business. Prioritization was done.
 
The procured products evaluated were malt (barley), hops, black tea leaves, green tea leaves, coffee beans, grapes, sugar, corn, soybeans, grapefruit juice, and lemon juice. As a future initiative, we plan to conduct human rights due diligence on agricultural products and processed agricultural products in the order in which they are evaluated as having relatively high risk through the assessment.

Responding to the UK Modern Slavery Act and the Australian Modern Slavery Act

In addition to its alcoholic beverage business in Oceania, Lion also operates in the United Kingdom. Lion has formulated a statement on compliance with the Modern Slavery Act in Australia and the United Kingdom, and is taking appropriate measures to address human rights issues in its supply chain.

Grievance mechanism

Collaborating with Suppliers

Working with suppliers, we are identifying supply chains that can respond quickly to natural disasters, political and geopolitical risks, information security, environmental issues, human rights issues, and other risks. In response to the recent spread of the new coronavirus, we are working to enhance sustainability by visualizing and improving our supply chain, going back to the manufacturing sites (plants and farms).

Approaches to the Environment

In accordance with the Kirin Group Environmental Vision 2050 and the Kirin Group Environmental Policy, we are working with suppliers to address issues related to climate change, water resources, biological resources, and containers and packaging.

Actions regarding climate change

Actions regarding water resources

Water is not only a basic raw material for the Kirin Group, but also an essential resource for the growth of the agricultural products used as raw materials. 2014 and 2017 surveys estimated the water consumption of agricultural products used as raw materials upstream in the value chain, and we will promote appropriate measures to address water risks.

Actions regarding biological resources

Actions regarding containers and packaging

Partnerships with farms

In order to strengthen the sustainability of raw material production, the Kirin Group is helping to resolve issues and build the capacity of farms and farmers who produce raw materials for core products such as tea leaves, coffee beans, hops and grapes.

Tea Farms

Coffee farms

Using the knowledge we have gained from supporting tea farms in Sri Lanka to obtain certification, we began supporting coffee farms in Vietnam to obtain Rainforest Alliance certification in 2020. As of the end of 2021, about 700 small farms have started training for certification.

Hop farms

Vineyards

Supplier Briefings / Training Sessions

The Kirin Group holds regular briefing/training sessions for suppliers to deepen their understanding of the human rights issues, labor standards and other social issues that we ask them to comply with in our Supplier Code of Conduct.
In addition to explaining the Kirin Group's policies (Compliance Guidelines, Human Rights Policy, Quality Policy, etc.) and initiatives that form the basis of the Supplier Code of Conduct, the briefings/training sessions focus on human rights　and t　environment issues hat require a deeper understanding by introducing specific examples.
In terms of suppliers who are judged to be at high risk as a result of the supplier questionnaire survey conducted by each operating company, we interview them individually about the status of their efforts and support their capacity building by sharing examples of other companies and proposing specific improvement measures.

Japan Beer and Spirits Business and Japan Non-alcoholic Beverages Business

Pharmaceuticals Business

Kyowa Kirin provides opportunities for suppliers to deepen their understanding of CSR procurement, such as CSR procurement briefing sessions and supply chain exchange sessions, where information is exchanged regarding issues and solutions across the entire supply chain.

Education for Procurement Department Staff and Purchasing Requesters

We conduct the following activities to implement procurement activities in line with our sustainable procurement policy.

Compliance Training

We have prepared a guidebook for procurement department staff and purchasing requesters, and conduct compliance and other training on a regular basis.

Sustainable Supply Chain Training

Training sessions on human rights and environmental issues in the supply chain are held twice a year for all department members.

Acquisition of the Certified Procurement Professional (CPP) certification

We are improving our procurement knowledge, including sustainable procurement, by acquiring the Procurement Professional Qualification (CPP) sponsored by the Japan Management Association.