Together with Suppliers



In line with its Purchasing Policy, the TOTO Group cooperates with suppliers in procuring raw materials and parts in a sustainable manner. In recent years, overseas suppliers have accounted for nearly 20% of our procurement expenses.

TOTO Group Purchasing Policy

The TOTO Group fulfills its corporate responsibility in all aspects of business management, the environment and society, and carries out balanced activities with the aim of achieving sustainable development of businesses, society and the Earth.
Through fair and equitable purchasing and in cooperation with suppliers, the TOTO Group continues to offer valuable products and services for customers.

Promoting CSR Procurement Together with Suppliers

PDCA Cycle for Supply Chain Management

PDCA Cycle for Supply Chain Management
The TOTO Group aims at being an existence that contribute widely and continuously to society and the environment under its Corporate Philosophy. For this purpose, we endeavor to create value for stakeholders, while trying to integrate company management and CSR and leveraging its strength. Risks we face are becoming more and more complex in keeping pace with the globalization of supply chains. The TOTO Group considers that execution of CSR not only by the Company but also by the whole supply chain at a high level is necessary in order to take ethical actions, which are effective for society and the environment. Therefore, we are committed to engaging in CSR activities with our suppliers.

We continuously endeavor to improve the level of activities by focusing on explanation of our policy to suppliers, questionnaire surveys, and on-site audits and taking international guidelines on human rights, labor, and the environment into consideration. Especially for critical suppliers and suppliers with high sustainability risk, we increase the chance of visiting and monitoring suppliers, provide education and support to help them understand the necessity of CSR initiatives, and endeavor to improve the level of initiatives in CSR procurement across the whole supply chain.

Categorization of Critical Suppliers
The TOTO Group categorizes suppliers into critical suppliers, considering the volume of business and importance or irreplaceability of the parts or raw materials they supply.

Categorization of Suppliers with High Sustainability Risk
The TOTO Group categorizes suppliers into suppliers with high sustainability risk, considering the degree of impact of the natural raw materials they supply on the environment and biodiversity or human rights and labor.

Structural rate of procurement expenses

Working With Suppliers

Supplier Code of Conduct

The TOTO Group understand that ethical, social and environmental conduct only works when both (or all) parties in a supply chain work together to uphold, support and maintain high standards to meet applicable legal and regulatory requirement.
We have created Supplier Code of Conduct to clarify the requirements our suppliers must comply with when doing business with the TOTO Group.

Guidelines for Green Procurement

Based on the TOTO Group Global Environment Policy, the TOTO Group promotes the reduction of environmental loads in all processes of its corporate activities in order to reduce the environmental loads at all our companies.
In our procurement activities we will continue to contribute to the achievement of a sustainable society in cooperation with our suppliers by protecting the global environment and biodiversity and reducing the environmental loads in the entire supply chain.
In putting it into practice, we have established the Green Procurement Guidelines with the concept of the initiative and the content we would like to ask our suppliers.

Achieving Compliance Item Standards

Transactions with suppliers should take place via fair and honest purchasing activities to build a system in which not only quality, cost and delivery date are considered, but corporate social responsibility is upheld in human rights, labor, sanitation and environmental precautions. These conditions must be ensured before transactions execute and are a condition that must be met in order to execute a transaction that achieve compliance item standards.

Responding to Disasters and Other Risks

To strengthen response to natural disasters in recent years, the presence of effects must be assessed immediately when a risk occurs and a system in which response measures can be implemented must be formulated with the cooperation of suppliers.
  1. Assess parts items and manufacturing sites
  2. Set up an office to manage information flows when the supplier chain is broken
  3. Run simulations of emergency measures

Parts and Raw Materials Procurement

Japanese suppliers

TOTO Group implements ongoing assessment and evaluation of CSR activities on the part of our suppliers.
We set requirements and achievement standards for suppliers in Japan who provide us with parts and raw materials used in our products. These must be achieved to make transactions. For fiscal year 2015, we revised the assessment by adding questions about human rights and labor and items to be observed. And we conducted assessment targeting all suppliers over the past three years from 2015 to 2017. For suppliers who have not fulfilled the compliance items, we asked them to carry out improvement activities. Consequently, all suppliers in Japan have achieved our standards.

Target : Achievement rate of compliance with the TOTO standards 100%

Assessment items for suppliers

  • 1.Human rights/labor
    • (1) Prohibition of inhumane labor conditions and discrimination
    • (2) Wages and working hours
    • (3) Building constructive labor-management relations
  • 2.Safety/health
    • (1) Employee health management
    • (2) Workplace/facility safety measures
    • (3) Appropriate measures during emergencies and labor accidents
  • 3.Environment
    • (1) Chemical substances management
    • (2) Environmental preservation
  • 4.Information security
    • (1) Security measures against computer network threats
    • (2) Authentication system
  • 5.Supplier management
    • (1) Development at own company suppliers
  • 6.Fairness/ethical conduct
    • (1) Adherence to laws and regulations, prevention of misconduct, early detection system
    • (2) Prohibition of abuse of a superior bargaining position
  • 7.Quality
    • (1) Quality control
    • (2) Quality complaints
  • 8.Social contributions
    • (1) Contributions to local community and society

Result of questionnaire survey

Evaluation index FY2016 FY2017 FY2018
Number of suppliers who have participated in the assessment survey 217 154 196
Accumulated assessment inmplementation rate*1 38% 65% 100%
Achievement rate of compliance with the TOTO standards*2 100% 100% 100%

*1 Accumulated assessment implementation rate : Accumulated implementation rate by fiscal year when a assessment survey was conducted targeting all suppliers (listed companies and suppliers with whom we plan to discontinue business relationships excluded)
*2 Achievement rate of compliance with the TOTO standards:Rate of suppliers who have cleared standards for compliance items determined by the TOTO Group among all suppliers (includes completion of corrective actions).

Policy Briefing Session for Suppliers

Policy briefing session for suppliers
Policy briefing session for suppliers
To encourage two-way communication with suppliers and deepen trust, we hold policy briefing sessions. These sessions were held at all Business Divisions in fiscal year 2018 to not only communicate TOTO purchasing policies, but to share production information and explain the importance of CSR as well. Recognition was given and commendations presented to suppliers who contributed to cost reductions, strictly adhered to delivery dates or improved quality.
Participants tell us that this event is conducive in the sense that they can learn about how the TOTO Group handles CSR, and share their peers' attitude toward it and cases that show how they work on it. We build relationships with suppliers for mutual benefit and we pledge to continue to improve efforts in the entire TOTO Group supply chain.

Results of Policy Briefings for fiscal 2018

Overseas suppliers

Discussion with overseas suppliers
Discussion with overseas suppliers
By procuring raw materials and parts from local suppliers, our overseas Group companies are furthering the localization of procurement and conducting community-based procurement activities. We are also actively promoting to CSR procurement.We continue conducting assessment with critical suppliers and remain updated regarding the facts.
In addition, we are striving to raise suppliers' understanding of the importance of CSR while also pushing the level of their engagement upward. There are differences in language, culture, religion, laws and other such factors, but TOTO aims to deepen mutual understanding and operate in harmonious coexistence by pursuing activities suited to the conditions in each country concerned.
In FY 2017, we started to conduct a revised assessment that includes questions meeting overseas laws and regulations and social rules, and we finished the assessment for all our critical suppliers during the two years of FY 2017 and FY 2018.
In 2019, standards have been unified on a global basis. Evaluations are extended to all suppliers who provide raw materials and parts to be used in our products, and investigations are conducted once every three years.
Our target is completing evaluation of all Tier-1 suppliers on a global basis by 2021.

Target :Achievement rate of compliance with the TOTO standards

Result of CSR Assessment Survey for our Critical Suppliers

Monitoring of Local Suppliers

Our overseas group companies promote critical suppliers' CSR monitoring through company visits.
Example of monitoring (TOTO Vietnam)
In 2017, we conducted a CSR monitoring of 16 critical suppliers on-site in Vietnam, and confirmed that they met the standards that TOTO designated through the interviews mainly on CSR assessment items such as human rights, safety and health, environment, fairness and ethical conduct, and quality. We will continue the CSR procurement activities with suppliers.

Procurement Respecting Biodiversity

The TOTO Group positions global environmental preservation as a priority issue. We conduct our business activities with strong environmental awareness and make efforts to preserve biodiversity and achieve sustainable use of resources to help create a sustainable society with our efforts and through our suppliers.

Sustainable Raw Material Procurement Standards were established in 2010. The procurement of earth and stone raw materials and wood materials, from which our staple products are made, is regarded as an critical issue to consider. In addition to human rights, labor and compliance, we take into consideration the effects on the environment and ecosystem in the places where our raw materials are produced, as we pursue the appropriate balance between the sustainable use of resources and stable procurement and push forward with CSR procurement in cooperation with suppliers.

Earth and Stone Raw Materials

For earth and stone raw materials used for plants in Japan, we confirm the legality and sustainability at all mines through assessment or the results of informational interviews via trading companies, including whether TOTO-designated standards concerning reforestation or restoration of areas where mining has ended and measures to prevent pollution of rivers and lakes from mining or tailings are being met.
We visit mines or resource production sites as needed to confirm conditions and confirmed that all mines met our standards.

Survey result

Mines targeted: Covers domestic suppliers up until FY2016.From FY2017,covers both domestic and overseas suppliers.
Evaluation index FY2016 FY2017 FY2018 Target FY2018 Actual
Survey coverage rate* 100% 100% 100% 100%
Achievement rate of compliance with the TOTO standards 100% 100% 100% 100%

*Survey coverage rate: Percentage of mines surveyed against all mines that the ceramic sanitary ware plants purchase stone materials from.

Assessment items for Mines

  • 0. Mining certificate
    • (1) Mining rights
    • (2) Safety production permit
  • 1. Human rights/labor
    • (1) Prohibition of inhumane work and discrimination
    • (2) Wages and working hours
    • (3) Building good relationship between management and labor
  • 2. Health and safety
    • (1) Health and safety measures at workplaces and facilities
    • (2) Measures to prevent mine collapses and cave-ins
    • (3) Explosives/chemical management etc.
  • 3. Environment
    • (1) Reforestation plans
    • (2) Pollution-control measures for rivers and lakes
    • (3) Administrative guidance, etc.
  • 4. Fair trade and ethics
    • (1) Compliance, preventing misconduct and early detection
    • (2) Preventing abuse of superior bargaining position
  • 5. Quality
    • (1) Quality management
    • (2) Quality complaints
  • 6. Social contribution
    • (1) Contributing to the community and society

Initiatives for keeping rivers clean

Wood Materials
A settling reservoir
As an initiative for keeping rivers clean, TOTO also monitors
sedimentation reservoirs to ensure that the clear water
above the sediment is discharged into the river.

Build a reservoir and release the clear water sitting above the sediment into the river

Reforestation after mining activity has ceased

Reforestation after mining activity has ceased
Mining site
We conduct tree-planting activities in completed mine areas to regenerate forests.

Wood Materials

Illegal logging and excessive logging of forests is a major cause of loss of forests, leading to loss of biodiversity. The TOTO Group has set a target for the percentage of legal and recycled materials used against wood-based materials used in plants and verifies its results.

FY2018 Target : Composition of Legal materials + recycled materials 100%

The results of legality of wood-based materials used in FY 2018 showed that 98% were legal wood-based materials and 2% were recycled materials. We also confirmed that the rate of use of legal wood-based materials were 100%.Going forward, we will continue endeavoring to improve the ratio of legal wood-based materials and recycled resources.

Conservation of biodiversity

Use ratio of legal wood-based materials and recycled materials in products

Type of wood used FY2016 FY2017 FY2018
Legal wood-based materials Forest certified materials 89% 97% 97%
Materials certified through an accrediting agency system 1% 1% 1%
Recycled materials 9% 2% 2%
Others 1% 0% 0%