Promoting Sustainability with Materials Manufacturers and Production Contractors

Self-Checks Based on the Lion Group Supplier CSR Guidelines

To advance responsible procurement activities, each year Lion asks that the materials manufacturers and production contractors it works with implement self-checks based on the Lion Group Supplier CSR Guidelines.* In this way, we are promoting the creation of frameworks throughout the supply chain to avoid risk related to human rights, labor practices, the environment, fair operating practices, consumer issues and compliance.
Since 2014, we have moved the self-checks entirely online, enabling suppliers to respond more efficiently. We also provide suppliers with feedback based on the self-check results. The result of these efforts is a system that continuously advances CSR procurement.
In 2018, Lion Corporation Korea, an overseas Group company in South Korea, requested self-checks from its 162 business partners, achieving a response rate of 75.3%.
In 2020, Qingdao Lion, a Group company in China, also requested self-checks from its 68 suppliers (of which, 14 were also covered by Lion’s self-check request), achieving a response rate of 100%.
We will continue to promote sustainability initiatives with our business partners.

* Lion Group Supplier CSR Guidelines and Glossary

The Lion Group Supplier CSR Guidelines comprise 21 guidelines under the following five categories.

  1. Human Rights/Labor Practices
  2. The Environment
  3. Fair Operating Practices
  4. Consumer Issues
  5. Compliance
Timeline of Sustainable and Responsible Procurement Initiatives
2005 Instituted the Basic Policy Regarding Purchasing and implemented appropriate procurement of raw materials and products.
2008 Established the Procurement Principles, which clarify our social and environmental considerations. Conducted a questionnaire survey for domestic and overseas raw material manufacturers and production contractors about their corporate activities regarding legal compliance, product service quality and safety, environmental considerations, labor practices and human rights, and fair trade.
2013 Amended the Procurement Principles and clarified our stance of considering legal compliance, environmental conservation and respect for human rights when selecting business partners. Instituted the Lion Group Supplier CSR Guidelines, which specify the sustainability initiatives we expect from raw material manufacturers and production contractors and asked our business partners to conduct self-checks of their sustainability initiatives.
2014 Introduced an online CSR self-check system.
2018 Lion Corporation Korea, an overseas Group company in South Korea, requested self-checks from its business partners, expanding the number of countries in which the Group implements self-checks.
2019 Established the LION Human Rights Policy and LION Anti-Bribery Principles to clarify our stance on initiatives for sustainable and responsible procurement.
Established the Sustainable Material Procurement Policy to advance initiatives aimed at the sustainable procurement of palm oil derivatives and pulp and paper products, which are key raw materials for the Lion Group.

The Lion Group does business with suppliers who have implemented self-checks based on the Lion Group Supplier CSR Guidelines.

PDCA Cycle for Supplier Sustainability Self-Checks

PDCA Cycle for Supplier Sustainability Self-Checks

In order to ensure that our suppliers understand the importance of addressing sustainability-related issues, we include a section explaining the situation surrounding sustainability in our self-check request form. The self-check employs a three-step checking standard for each initiative and a detailed glossary.

Supplier Sustainability Self-Check Results (2019)

Supplier Sustainability Self-Check Results (2019)

Number of Suppliers Evaluated and Response Rate
Suppliers Response Rate
2017 625 99%
2018 610 98%
2019 585 99%
2020 target - 100%

Results Summary

  • The response rate in 2019 was 99%, and the average score, on a scale of 1 to 3 points, was 2.72, confirming that sustainability measures are being implemented throughout the supply chain.
  • We are currently requesting cooperation from the two suppliers who did not respond.

Key Suppliers

Lion considers suppliers from whom it purchases substantial amounts of raw materials and suppliers that cannot be readily replaced to be key suppliers. We monitor the sustainability initiatives of key suppliers on an ongoing basis. Specifically, we define key suppliers as those that provide 80% or more (on a purchase price basis) of a given material used by Lion and suppliers those that are necessary to Lion’s ability to stably supply products to the market.

Key Suppliers
Number of key suppliers Portion of all primary suppliers that are key suppliers Portion of purchasing that is from key suppliers (monetary basis, among all primary suppliers)
2017 90 14.4% 80%
2018 90 14.8% 87%
2019 90 15.4% 80%

High-Risk Suppliers

After receiving the self-checks, Lion confirms whether or not suppliers are meeting the standards it has set for its key sustainability items. Suppliers with low scores are designated as high-risk suppliers.

Selecting New Suppliers

Before doing business with a new supplier, Lion requires the company to perform a self-check based on the Lion Group Supplier CSR Guidelines to confirm that the company meets the standards it has set for its key sustainability items.

Joined Sedex, the Supplier Ethical Data Exchange

Sedex

Headquartered in the United Kingdom, Sedex is a not-for-profit organization that provides the world’s largest platform for managing and sharing ethical supply chain data, with the aim of establishing ethical and responsible business practices in global supply chains. Lion joined Sedex as an AB member at the end of 2019 in order to further reduce social and environmental risk in its purchasing. Going forward, we will continue to reinforce and enhance supplier management and risk management.

Employee Training on Sustainable Procurement

Lion provides sustainable procurement training to every purchasing department employee who is involved in buying. We also hold study groups to help employees obtain certification under the Certified Procurement Professional (CPP) system offered by the Japan Management Association.* Participants not only learn buying operation management and gain practical knowledge, they learn about the importance of procurement that takes into account the environment, ethics, safety and hygiene, human rights and other such factors as well as about working with suppliers.
When selecting suppliers and setting pricing and other terms, we always enter into agreements through negotiations rooted in fairness and transparency. We thoroughly enforce compliance with the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors through such means as training for Purchasing Headquarters employees.
In response to growing calls for CSR procurement, going forward, we will advance human resource development, including proactively sending employees to seminars related to purchasing and procurement.

* CPP: A qualification for persons involved in corporate purchasing and procurement indicating that the holder has acquired specialized knowledge in the field of purchasing and procurement.

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