Sustainable Supply Chains
Behind the services and products that we offer our customers are supply chains that cover everything from the procurement of raw materials and components to sales. In order to realize a sustainable society, it is essential to tackle related challenges not only in our direct operations, but also across our entire value chain, and that includes supply chains.
To ensure that we and our suppliers share a common understanding of what sustainability means, Rakuten has established its Sustainable Procurement Instruction and Sustainable Procurement Code of Conduct for Suppliers, which define the behaviors that we expect from respectively our employees and our suppliers in terms of corporate ethics, compliance and environmental protection. Addressing such issues in supply chains is complex and requires long-term commitment, which we share with our partners.
Rakuten's Supply Chains
Rakuten offers more than 70 services and a variety of products across a diverse range of industries, domestically and internationally: internet services such as e-commerce, travel and digital content; fintech (financial) services such as credit cards, banking, securities trading, e-money and smartphone app payments; mobile carrier services; professional sports team management and more. These products are delivered to customers through a number of processes, including raw material production, product assembly and programming.
Rakuten procures tangible assets such as raw materials, parts and equipment, as well as intangible assets like software, systems and digital content necessary to service development and maintenance, in addition to services such as staffing and consulting. All of these essential activities take place on a daily basis, and the Rakuten Group Sustainable Procurement Instruction covers them all.
Sustainable Procurement Instruction Implementation
Whenever entering into an agreement with a new supplier, Rakuten screens for compliance, quality and information security management.
The Sustainable Procurement Instruction supplements these screening processes with a particular focus on human rights and environmental protection. Considering the large number of suppliers who support the provision of our over 70 services, the Instruction is implemented progressively, starting in 2021 with our Mobile business, which holds strategic importance and relatively high human rights and environmental risks.
We are now expanding to other Rakuten Group businesses and overseas operations to implement and manage sustainable procurement activities throughout the Rakuten Ecosystem.
Raising Awareness of the Sustainable Procurement Instruction
To promote awareness and understanding of the Sustainable Procurement Instruction, we hold online briefings for our suppliers.
Some of our services have also elected to further build on the Instruction by developing more detailed procurement guidelines which address the specificities of their industry and help suppliers put the Instruction into practice. Suppliers are asked to sign a written pledge and comply with these guidelines, which are incorporated into outsourcing contracts.
We also believe that it is critical for Rakuten employees to have a functional understanding of the Instruction, so related e-learning training is conducted regularly. Since all of our employees have the potential to be involved in procurement and purchasing activities in their daily work, the training is designed to be suitable for all employees.
Supplier Surveys and Monitoring
Through the following steps, Rakuten aims to identify and resolve issues in the supply chain, checking the status of supplier initiatives in high-priority businesses and working to prevent problems before they occur.
Initiatives at Rakuten Kobo
Rakuten Kobo was one of the first Group services to engage in sustainable procurement activities. Sustainability is taken into consideration in the manufacturing process of its products, namely its e-readers and related accessories, including device covers. Specifically, Rakuten Kobo has adopted a Supplier Code of Ethics which covers sustainability-related aspects, including respect for workers' human rights and impact on the environment. All suppliers are expected to agree to and sign the Code. In addition, Rakuten Kobo visits suppliers annually to check compliance status and plan improvements.
Initiatives at Rakuten Mobile
In 2021, Rakuten Mobile, one of our key businesses, held a briefing for critical suppliers selected according to the type of products they manufacture and their transaction amounts. In addition to explaining our Sustainable Procurement Instruction and the Rakuten Mobile Sustainable Procurement Guidelines, the briefing also shared information about social trends surrounding sustainable procurement and emphasized the importance of implementing sustainability in all aspects of business activities. After the briefing, participating suppliers were asked to sign a pledge to confirm their understanding and commit to complying with the content of the guidelines.
A Self-Answer Questionnaire (SAQ) was then sent to suppliers of high importance and responses were obtained from all targeted locations. We provided feedback based on the SAQ results to suggest areas of improvement to suppliers. On-site audits were conducted for some suppliers based on their SAQ results in order to confirm how they address issues covered in the SAQ. We will continue to support our suppliers in their efforts to achieve more sustainable operations through monitoring of improvement plans and implementation status.
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Working with Partners
To create a sustainable supply chain, we believe it is essential to solve issues through partnerships in addition to Rakuten's efforts. Rakuten is a member of the Global Alliance for Sustainable Supply Chain (ASSC), an NGO that promotes sustainable supply chains.
Rakuten Group has established a Supplier Hotline as a consultation service for our suppliers. It can be used to report any violation or potential violation of the Rakuten Group Sustainable Procurement Instruction by Rakuten executives, employees or related parties. For more information, click here.