Sustainable Procurement Management

Basic approach

The Fuji Oil Group has a vision to “contribute to the society by creating the future of delicious and healthy foods.” Building a responsible supply chain is essential for realizing this vision.
We view suppliers as key partners for addressing environmental and social issues in the supply chain. By promoting environmental conservation, respect for human rights, fair business practice, risk management and other initiatives in cooperation with our suppliers, we aim to achieve sustainable growth for all three of us: suppliers, the Group and society.
In April 2021, we published the Fuji Oil Group Supplier Code of Conduct as a high-level policy that precedes existing policies and guidelines that apply to specific companies and raw materials. Our goal in publishing this policy was to communicate to all suppliers a comprehensive approach to procurement that applies to the entire Group. For Group companies in Japan, we revised the CSR Procurement Guidelines formulated in 2012 and published the third edition in November 2021.
For specific raw materials, in 2016 and 2018 we published the Responsible Palm Oil Sourcing Policy and the Responsible Cocoa Beans Sourcing Policy, respectively. In 2020, we set medium- to long-term goals and KPIs for sustainable procurement of palm oil and cocoa beans. And in June 2021, we published the Responsible Soybeans and Soy Products Sourcing Policy and the Responsible Shea Kernels Sourcing Policy, and set medium- to long-term goals and KPIs for sustainable procurement of soybeans and shea kernels.

Management system

The Chief Strategy Officer (CSO) oversees the sustainable procurement of our main raw materials — palm oil, cocoa and soybeans — and the strategic raw material, shea kernels. We established a system for sustainable procurement at the business divisions headed by the CSO, and carry out measures in line with the roadmap for each raw material.
The Sustainability Committee,^*1 an advisory body to the Board of Directors, monitors the progress and results of initiatives as a material ESG issue.^*2

• *1 Follow the link below to learn more about the Sustainability Committee.

  https://www.fujioilholdings.com/en/sustainability/sustainability_management/

• *2 Follow the link below to learn more about material ESG issues.

  https://www.fujioilholdings.com/en/sustainability/materiality/

Goals / Results

Commitments to sustainable procurement

We set medium- to long-term goals and KPIs for the sustainable procurement of palm oil and cocoa in June 2020 and of soybeans and shea kernels in June 2021.

• *1 Traceability to plantation
• *2 An oils and fats manufacturer wholly owned by the Fuji Oil Group
• *3 Roundtable on Sustainable Palm Oil
• *4 We plan to plant a variety of shade tree saplings, totaling one million trees over a 10-year period from 2021 through 2030.
• *5 The International Labour Organization (ILO) Convention No. 182, known as the Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, prohibits hazardous work that may harm the health, safety, or morals of children. This includes the sale and trafficking of children, debt bondage, forced or compulsory labor, prostitution and pornography, illegal activities such as crime, and recruitment of children for use in armed conflict.
• *6 Child Labour Monitoring & Remediation System
• *7 Round Table on Responsible Soy Association
• *8 We plan to plant mainly shea tree saplings at a pace of 6,000 trees per year starting in 2021.
• *9 Our KPIs for years 2021, 2022 and 2023 are 10%, 15% and 20%, respectively.
• *10 We plan to use shea kernel meal, a byproduct of oil production, and other raw materials as non-fossil fuels.
• *11 Our current non-fossil fuel rate as of 2021 is 75%.

Sustainable procurement information by raw material

Follow the links below to learn more about the Fuji Oil Group’s sustainable procurement initiatives for our main raw materials — palm oil, cocoa, and soybeans — and our strategic raw material, shea kernels.

• Sustainable Procurement of Palm Oil

  https://www.fujioilholdings.com/en/sustainability/palm_oil/

• Sustainable Procurement of Cocoa

  https://www.fujioilholdings.com/en/sustainability/cocoa/

• Sustainable Procurement of Soybeans

  https://www.fujioilholdings.com/en/sustainability/soy/

• Sustainable Procurement of Shea Kernels

  https://www.fujioilholdings.com/en/sustainability/shea_kernel/

Engagement with suppliers

Suppliers are Fuji Oil Group’s key partners in creating a sustainable society as described by the Sustainable Development Goals (SDGs). Through co-creation with our suppliers, we aim for sustainable growth of all three parties: suppliers, the Group and the whole society. This approach is also stipulated in the Fuji Oil Group Supplier Code of Conduct formulated and published in April 2021. We ask our suppliers in all countries and regions where we do business to comply with the Code and follow other applicable procurement policies of the Group. At the end of June 2022, we have received the signature of about 64% of our suppliers. We expect to receive signatures from all suppliers during FY2022. Going forward, the Group will continue to walk in step with suppliers who have agreed to work with us toward realizing a sustainable society. For suppliers who have not yet submitted, we will keep reaching out to get their alignment.

Cooperation with suppliers in Japan

In FY2021, we revised and published the third edition of the CSR Procurement Guidelines under the high-level policy of the Fuji Oil Group Supplier Code of Conduct, with the aim of making more concrete requests to suppliers to Group companies in Japan. The main points of revision are on items to deepen engagement with suppliers and to encourage action from suppliers themselves that are not only for the safety of procured raw materials but are also in line with ESG approach. To promote constant and active dialogues with suppliers through these guidelines, we conduct supplier questionnaires in order to ensure that the products and services procured by the Group are sourced in a way that takes compliance, human rights and the environment into consideration, and has clear lines of responsibilities.
Moreover, in FY2021, we focused on efficient logistics initiatives that address the shortage of drivers at various companies, which is one of the major issues in procurement logistics. In particular, we moved toward pallet delivery, which reduces the burden of unloading. After assessing conditions of the unloading work performed by drivers during delivery, we consulted with suppliers and made suggestions, such as the use of rentals if using their company pallets is difficult. This led to shorter cargo handling time and lower burden on drivers.