Procurement
Basic Approach and Policy
The Olympus Group aims to strengthen supply chain management (SCM) within the context of business continuity and sustainable value creation. In June 2021, we replaced our procurement policy with a supply chain policy in line with our ESG (environment, society, and governance) initiatives. This shift aims to foster sound and fair transactions and contribute to the sustainable development of society.
To reinforce our commitment, we established the Olympus Group Green Procurement Standards, which outlines our environmentally conscious approach to procurement. Since then, we have actively disclosed our basic stance on the supply chain both internally and externally through our website and training sessions, while strengthening compliance with laws, regulations, and social norms.
In 2023, we introduced the Olympus Global Third Party Code, which replaced the previous "Expectations of Suppliers." This code serves as a globally uniform guideline for third parties, including suppliers, detailing the fundamental values, principles, and standards of behavior expected by Olympus. The code emphasizes compliance with laws, regulations, and social norms, including respect for human rights, elimination of antisocial forces, prohibition of corruption and bribery, promotion of fair and lawful transactions, and consideration for the environment. When selecting new suppliers, we rigorously review their adherence to social norms and environmental issues as part of our screening criteria.
Based on these principles for procurement activities, the Olympus Group strives to create and strengthen good relationships with our suppliers through fair, just, and transparent transactions.
Olympus Global Third Party Code
System, Mechanisms and Initiatives
Sharing Business Strategies and Supply Chain Policy
We share the Olympus Global Third Party Code in writing with our suppliers globally and ask them to comply with laws and regulations, social norms, and environmental considerations.
Our Global Procurement ESG strategy consists of three materiality topics as part of the focus area of Responsible Supply Chain:
1. Improve supply chain risk mitigation and resilience by implementing a multitier supply chain risk monitoring solution.
2. Enhance social (human rights) commitment in SCM: This includes requesting adherence with the Olympus Global Third Party Code as well as monitoring ESG risks in our supply chain.
3. Environmental Supplier Management: We will begin creating a baseline of CO2 emissions from our suppliers, as well as asking suppliers to set science- based targets for our Science Based Targets initiative (SBTi1) certification.
Supplier Survey and Improvement Activities
Until FY2023, Olympus had conducted annual web-based surveys of our major suppliers around the world with whom we have ongoing business in Japan. In FY2024, in collaboration with a leading risk solution provider, we have remade and upgraded it to two new and more comprehensive assessments: ISO compliant BCP assessment and ESG assessment.
Before the end of FY2024, we launched the online BCP assessment to around 1,100 suppliers globally. As soon as FY2025 began, we also launched the ESG assessment to the same suppliers. In the latter half of FY2025, we will analyze the responses and identify high-risk suppliers based on assessments for risk mitigation.
Response to Conflict Minerals
One of the effects of the continuing civil war in the Democratic Republic of the Congo (DRC) has been the use of minerals, including tantalum, tin, tungsten, and gold, mined in the DRC and neighboring countries to raise funds for armed groups. For many years, this practice has resulted in human rights violations, including child labor, sexual violence, and environmental damage. In July 2010 the United States sought to cut off this supply of funds to armed groups by introducing an amendment to its financial regulation law defining these four substances as conflict minerals. Companies listed in the United States that use conflict minerals are now required to submit reports to the US Securities and Exchange Commission (SEC). Other moves by international organizations, governments, NGOs, and industry organizations to solve this problem include the publication of the Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas by the Organization for Economic Cooperation and Development (OECD).
The Olympus Group upholds international efforts to resolve the problem of conflict minerals. On behalf of the Olympus Group, Olympus participates in a committee established by the Responsible Minerals Trade Working Group of the Japan Electronics and Information Technology Industries Association (JEITA). Working together with suppliers, such as by discussing the conflict minerals at the Supply Chain Policy Meeting, we ensure transparency in our supply chains and continue the procurement of parts and materials that does not cause human rights violations.
Education for Compliance with the Subcontract Act
Olympus regards the Subcontract Act as one of the most important applicable laws, and we engage in a wide range of activities to ensure compliance.
In FY2024, which ended March 31, 2024, Olympus implemented the "Declaration of Partnership Building" to build even better relationships with suppliers.
As part of efforts to ensure compliance with the Subcontract Act, the Company-wide Subcontract Act Promotion Committee has taken the lead in providing e-learning on the Act to all employees of Olympus and Group companies in Japan, with a 95% participation rate.
In addition, specialized training on the Act is provided to each functional department according to the nature of their respective operations. Two hundred fourteen employees from the procurement department and 2,661 employees from development departments have participated in the training to deepen their understanding of the Act.
We will continue to provide company-wide training to ensure thorough compliance with the Act.