Sustainable Procurement Activity Results (FY 2023)

Responsible Procurement Surveys

We have conducted a survey targeting our key suppliers [1] using a Responsible Procurement Check Sheet since fiscal 2014.
The survey references the Responsible Business Alliance (RBA) Code of Conduct and the Japan Electronics and Information Technology Industries Association (JEITA)'s "Guidelines for Responsible Business Conduct." It aims to confirm the status of initiatives related to sustainable procurement as defined in the KDDI Group Sustainable and Responsible Procurement Guidelines, which include human rights and labor, safety and health, environment, fair and ethical trade, quality and safety, information security, and contribution to society. Through this survey, we make sure of sharing the KDDI Sustainable and Responsible Procurement Policy and other necessary information with suppliers.
Since fiscal 2023, we have adopted EcoVadis [2] and use independent third-party verification to evaluate our sustainability initiatives.
Additionally, we have started operating a common Self-Assessment Questionnaire, created jointly with NIPPON TELEGRAPH AND TELEPHONE CORPORATION and SoftBank Corp., establishing a unified set of questions and evaluation criteria. Furthermore, we request that our suppliers extend the same initiatives to their supply chains (secondary and beyond for the KDDI Group) through these questions, ensuring that the entire supply chain engages in these efforts.
The survey conducted with KDDI Group's key primary suppliers achieved a high response rate of 95% against a target collection rate of 90%, aiding in understanding the supply chain situation and analyzing risks. Additionally, we issue feedback sheets to all respondents, including scores and corrective comments.

  1. [1]Key suppliers: We select primary suppliers (excluding secondary suppliers) accounting for around 90% of total order value, those handling critical products and services, irreplaceable suppliers, those meeting sustainability requirements (environmental, social, and governance), and suppliers with specific risk concerns related to products, countries, or sectors.
  2. [2]A global sustainability assessment platform composed of four parts: "environment," "labor practices and human rights," "ethics," and "sustainable materials procurement."
Summary of Implementation Number of Companies
Companies to Request Around 90% of KDDI Group's purchases [3]
Number of Companies Requested 150
  1. [3]The number of tier-1 suppliers of the KDDI Group is approximately 2,500 companies (excluding our affiliated companies)
Item FY2023 KPI FY2023 (reference) FY2022 (reference) FY2021
Questionnaire response rate over 90% 95% 97% 98%
Feedback Rate for Questionnaires 100% 100% 100% -
Questionnaire type Number of companies Ratio
EcoVadis 77 51%
Common SAQ for the 3 Telecommunications Companies 73 49%
Industry Business Number of companies Ratio
Service Industry Temporary staffing, consulting, advertising, etc. 67 45%
Information and Communication Software, SI, etc. 26 17%
Manufacturing Terminals, base stations, electronic equipment, etc. 28 19%
Construction Base station construction, telecommunications construction, etc. 29 19%

EcoVadis

Since fiscal 2023, the KDDI Group has adopted the third-party evaluation platform EcoVadis to assess the sustainability initiatives of our key suppliers. Through EcoVadis' global standard assessments, we evaluate their efforts based on four categories: "environment," "labor practices and human rights," "ethics," and "sustainable materials procurement."
Approximately 51% of the suppliers targeted by our survey have undergone EcoVadis assessment. The assessment results indicated that the average scores of these companies in all four categories met the EcoVadis standards, affirming that their sustainability promotion systems are well established.
Additionally, by having our suppliers undergo EcoVadis assessments, they can compare their progress in sustainability initiatives with industry peers and others, enabling us to provide support for corrective actions.
Going forward, we will continue to promote EcoVadis, expanding transparent and fair sustainability assessments to enhance risk management and further engagement across the entire supply chain.

Common SAQ for the Three Telecommunications Companies

Survey Items

The common SAQ for the three telecommunications companies consists of 12 questions, divided into parts including human rights, such as respect for human rights and securing workers' rights (covering the technical intern trainees' program and child labor), environmental aspects, such as CO2 reduction plans and waste management, and supplier management, such as conducting surveys and audits of the supply chain (secondary and beyond for KDDI). For suppliers with risk concerns who do not meet the benchmark, we implement corrective measures, including detailed checks through on-site investigations and conducting interviews, as well as providing support through improvement proposals.

Theme Number of questions Sample questions
Compliance with Laws and Regulations and Respect for International Norms 4 Confirmation of company policies and regulations regarding compliance with laws and international norms
Human rights and labor 13 Respect for human rights and securing workers' rights, the reality of child labor, and consideration for working hours
Health and Safety 9 The process of identifying, assessing, and addressing hazardous locations, emergency reporting and evacuation, and the presence or absence of occupational accidents, etc.
Environment 12 Obtaining environmental initiative certifications, calculating GHG emissions, reducing environmental impact, water management, effective use of resources, and waste management, etc.
Fair Trade/Ethics 20 Anti-corruption, proper disclosure, fair business practices, protection of informants, responsible mineral sourcing, etc.
Quality and Safety 7 Traceability management, presence or absence of violations, etc.
Information Security 8 Protection of personal information, prevention of confidential information leakage, and procedures for defending against cyber-attacks, etc.
Business Continuity Planning 2 Formulating responses to large-scale disasters, terrorism, and widespread infectious diseases
Establishment of Management System 1 Explanation to stakeholders regarding the identification of transaction risks and efforts to mitigate them
Supplier Management 2 Conducting surveys, on-site inspections, and audits of secondary suppliers
Development of Complaint Handling Mechanisms 5 Establishment of a complaint-handling office, informing stakeholders, and protection of whistleblowers, etc.
Disclosure of Initiative Status 1 Status of initiatives related to sustainability and sustainable procurement

Report on Survey Results

The average score for each item from the suppliers who responded to the common SAQ for the three telecommunications companies was 71 points. High scores were achieved particularly in areas such as "Human Rights and Labor," "Fair Trade," and "Information Security." However, some suppliers need support in the "Environment" category. We will continue to request corrective actions and provide improvement support through dialogue and the provision of educational content.

Rank Total score Ratio Definition
Group A 80 - 100 33% Excellent efforts are being made.
Group B 58 - 80 41% General efforts are being made.
Group C 0 - 57 26% Some efforts are insufficient.

Exchanging Opinions and Conducting Interviews with Suppliers

For suppliers deemed to have insufficient sustainability systems or initiatives based on the survey results, we provide feedback on the survey findings and conduct on-site investigations, as well as face-to-face or web-based hearings. This helps us understand the actual status of their initiatives and confirm transaction risks. Additionally, we conduct on-site investigations and provide improvement proposals through third-party audits. The results of the hearings with the suppliers we engaged with revealed that there were no critical risks requiring immediate termination of transactions. If improvements and corrective actions are not made within a specified period, we will consider terminating the transaction. (In fiscal 2023, no contracts with suppliers were terminated.)

Item FY2023 KPI FY2023 (reference) FY2022 (reference) FY2021
Number of Companies Interviewed
(on-site third-party audits by auditing firms, on-site investigations, and interviews conducted by our company)		 over 50 63 33 5
Improvement Proposal Completion Rate 100% 100% 100% -

Initiatives for Improvement

To promote sustainable procurement activities across the entire supply chain, we regularly monitor the response and improvement status of suppliers who have been requested to make improvements through surveys and interviews. We share KDDI's expertise in sustainability activities and collaborate with our suppliers to enhance sustainability. Through communication with our suppliers, we strive to provide ongoing support for continuous improvement.
Starting from fiscal 2024, we will support more concrete improvement activities by referring to the "Sustainability Handbook" and the "Handbook for Visualizing GHG Emissions," which were created and issued in collaboration with NIPPON TELEGRAPH AND TELEPHONE CORPORATION and SoftBank Corp.

Improvement Proposal

Based on the survey results for fiscal 2023, we conducted interviews with business partners identified as needing improvement and made the following representative improvement proposals.

Theme Main items of Opinion Exchange Number of Improvement Proposals Improvement Proposal Completion Rate
Human Rights Regarding internal policies and regulations related to human rights 7 100%
Establishment of a complaint reporting office 7 100%
Conducting human rights due diligence 3 100%
Disclosure of sustainability information on our website 8 100%
Environment Calculation and external disclosure of carbon dioxide emissions 7 100%
Legal Compliance Establishing an internal education system for legal compliance 3 100%

Improvement Support

Based on the survey results from fiscal 2022, we conducted interviews and provided improvement suggestions to our business partners in fiscal 2023. As a result of monitoring these efforts, the following improvements were observed.

Theme Improvement Proposals, Support Details Number of Improvement Support Cases Improvement Completion Rate
Human Rights Regarding internal policies and regulations related to human rights 1 100%
Disclosure of sustainability information on our website 1 100%
Conducting human rights due diligence 1 100%
Environment Calculation and external disclosure of carbon dioxide emissions 1 100%
SBT certification application 1 100%
Legal Compliance Establishing an internal education system for legal compliance 1 100%
Information Security Promotion of training and education on general information security 1 100%

On third-party verification of the number of suppliers

The following indicators are subject to third-party verification.

  • Total number of primary suppliers
  • Total number of significant primary suppliers
  • Percentage of total expenditure on significant primary suppliers
  • Number of significant non-primary suppliers
  • Number of significant suppliers (primary and non-primary)
  • Total number of suppliers assessed at desktops or on-site
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