Supply Chain Management : Structure

MC’s supply chain management initiatives are overseen by the Corporate Functional Officer (CSEO). The Sustainability Department plans and formulates the policies and initiatives which is reported to the Executive Committee and the Board of Directors following deliberations by the Sustainability Committee.

With sustainable supply chain management in mind, MC has identified products with higher environmental and social risk (“products to be monitored”) , with advice from external advisors. MC conducts annual human rights and environmental due diligence on the supply chains (the "Sustainable Supply Chain Survey") of suppliers of these “products to be monitored” to assess the level of compliance with the Mitsubishi Corporation Policy for Sustainable Supply Chain Management.

In identifying the commodities to be surveyed, MC referred to various international supply chain management declarations and international norms such as the UN Guiding Principles on Business and Human Rights, and prioritized them in terms of the following regarding potential impact to stakeholders: 1. Severity (scale of risk, their scope, and how remediable they might be) and 2. Likelihood (situation in each country, industry, and region of procurement).

MC asks suppliers of these "products to be monitored" certain questions that take into account the specific issues and risks of the products handled by each supplier, with a focus on aspects including “existence of policies,” “compliance with laws and regulations,” “prevention of forced labor, child labor, and discrimination towards workers,” “respect of the rights of employees to organize,” “environmental protection,” and “information disclosure.”

In addition, we receive responses from suppliers subject to the human rights and environmental due diligence to ensure its effectiveness, and look to correct or improve any issues identified. MC employs a system to identify suppliers that may have issues or that require specific action based on the results of responses to the survey. Following this, MC considers and decides whether additional surveys or on-site inspections are necessary. Furthermore, in order to improve the convenience and accessibility of the survey for suppliers, MC has built a web-based system and conducts the surveys through this online system.

In April 2024, MC conducted its annual survey of 870 suppliers from around 50 countries and regions for FY2023 transactions, where we have taken steps to correct or improve any issues identified. MC also conducted interviews with management and employees of certain suppliers to gain an understanding of actual conditions and exchanged information to help improve those situations.

MC choose “products to be monitored” from all of its business products based on various international supply chain management declarations and international norms such as the UN Guiding Principles on Business and Human Rights and prioritizes them in terms of the following regarding potential impact to stakeholders: 1. Severity (scale of risk, their scope, and how remediable they might be) and 2. Likelihood (situation in each country, industry, and region of procurement). In addition, when significant environmental and social risks materialize through our business activities in the future, MC will consider investigating the target products without undergoing the above process.

The number of suppliers and the details of the survey are as follows. MC also conducted visits to certain suppliers to confirm the status of their activities. As a result of the survey, suppliers to be visited are selected from those where certain questions on the four issues (based on the ILO Core Labor Standards, etc.), are determined to have been answered insufficiently, or where best practices have been implemented.

Please check the link below for data on number of target suppliers.

Please check the link below for data on number of survey Results.

For new suppliers, the Mitsubishi Corporation Policy for Sustainable Supply Chain Management is published and shared on our website. MC also ensures in our contracts with suppliers^* that they comply with the Basic Policy. In cases such as when a supplier violates the Basic Policy, MC can request the supplier to take corrective measures, and if such measures are not taken, the contract can be terminated. In addition, MC conducts the Sustainable Supply Chain Survey in order to better understand the status of compliance with the Basic Policy.

Together with periodically receiving confirmation of support for the Mitsubishi Corporation Policy for Sustainable Supply Chain Management, MC conducts regular surveys of its suppliers to continuously monitor the status of their compliance with this policy. Furthermore, MC visits suppliers to confirm the status of their activities when necessary. MC continuously monitors existing suppliers to identify those that pose a high degree of environmental and social risk in line with this policy, for the purpose of verifying the appropriateness of current initiatives. Going forward, MC will incorporate the results of this reevaluation process into its supply chain management, with the goal of ensuring more effective supplier surveys.

In FY2024, a representative from MC’s Sustainability Department was accompanied by Toyo Reizo Co., Ltd. (Toyo Reizo), a MC Group company, on its visit to a supplier from which Toyo Reizo procures frozen tuna. During this visit, MC conducted an interview with the captain of a vessel owned by the supplier and discussed our views with the supplier.

Key challenges faced by the seafood industry include the conservation of marine ecosystems to ensure the sustainable use of seafood resources and the protection of workers’ human rights. As part of efforts to address these challenges, MC and Toyo Reizo utilized our original checklist, developed in collaboration with a third-party organization, to conduct interviews with vessel captains. The discussion focused on environmental aspects (e.g., catch volume) and social aspects (e.g., labor management and health and safety practices).

We learned about the vessel owner’s initiatives such as crew assignments and training programs thoughtfully designed to prevent discrimination and harassment based on crew members’ religious backgrounds and native language, improved accessibility to sanitation facilities and drinking water, and fishing training to crew members aimed at conserving marine ecosystems. Furthermore, through an onboard inspection, MC and Toyo Reizo were able to verify that these initiatives were being properly implemented.

MC also engaged in dialogue regarding MC’s sustainability initiatives, including our fundamental approach to respecting human rights, and helped deepen understanding of the importance of sustainability and our activities in this field. As part of this discussion, we explained the structural challenges faced by crew members aboard distant-water longline tuna fishing vessels, who may remain at sea for extended periods and therefore may have limited access to remedy in the event of a human rights violation. To address this, we requested to put up a grievance mechanism poster (including a QR code link) on vessels.

This supplier visit provided MC with valuable insights into human rights due diligence which MC could apply to other product categories. MC remains committed to working closely with MC Group companies and suppliers to ensure the development of a sustainable supply chain.

In the event that MC confirms, through additional surveys or on-site inspections, points that should be corrected or improved in relation to the Basic Policy, in addition to requesting the relevant supplier to take corrective measures, MC also provides guidance and assistance as necessary. If MC determines that a resolution is unlikely, even after providing continuous guidance and assistance, MC will review its business relationship with the relevant supplier.

In September 2023, MC held a “Business and Human Rights” seminar for global suppliers who are subject to the Sustainable Supply Chain Survey in order to strengthen communication and engagement with suppliers. Details are described below.