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.
The TOTO Group implements CSR activities together with all our suppliers. These activities are performed by mainly policy briefing sessions conducted for suppliers, and conducting surveys and on site audits while taking industry and other circumstances into consideration. For our overseas business sites in particular, with the aim of deeper mutual understanding and mutual growth with suppliers, we promote CSR activities that are in line with the conditions of each country while complying with its relevant local laws, regulations and practices. In addition, we actively hold briefing sessions and also monitor suppliers through company visits, while also striving to enlighten them on the necessity of CSR initiatives and support their endeavors. Within the TOTO Group, important suppliers are specified with consideration given to the amount of expenses for the procurement and supply of major parts in an effort to develop a procurement control system. We strive to improve our commitment to CSR procurement throughout our supply chain.
Raw materials and components suppliers in Japan
Raw materials and components suppliers overseas
A Request to All Our Suppliers
We ask all suppliers that trade with us to comply with the following terms. Our suppliers are also requested to require their suppliers to set and follow similar rules.
Do not illegally employ children or foreign workers.
Avoid ignoring workers' will and do not coerce their labor.
Observe minimum wage regulations and other laws concerning wages.
Make sure to provide a safe and clean work environment and be mindful of employees' health.
Permit employees to unionize.
Permit group negotiation and consultations with labor unions
Do not exhibit prejudice based on race, sex or any other reason.
Engage in efforts to conserve resources and reduce waste.
Do not illegally dispose of waste.
Preserve the environment, such as through energy conservation.
Prioritize the procurement of components and raw materials with small environmental load (green procurement).
Procure raw materials in such a way that considers the effects of the local environment and biological diversity.
Do not violate local commercial customs or legal ordinances.
Avoid actions that prevent fair and free competition, such as engaging in cartels or bid rigging.
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.
Assess parts items and manufacturing sites
Set up an office to manage information flows when the supplier chain is broken
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 questionnaire by adding questions about human rights and labor and items to be observed. This revisions have made it possible to evaluate CSR activities from a greater number of perspectives. Suppliers who do not meet TOTO requirement items were advised to implement improvements that enabled them to meet the standards of all our domestic Japanese suppliers.
Questionnaire items for suppliers
(1) Prohibition of inhumane labor conditions and discrimination
(2) Wages and working hours
(3) Building constructive labor-management relations
(1) Employee health management
(2) Workplace/facility safety measures
(3) Appropriate measures during emergencies and labor accidents
(1) Chemical substances management
(2) Environmental preservation
(1) Security measures against computer network threats
(2) Authentication system
(1) Development at own company suppliers
(1) Adherence to laws and regulations, prevention of misconduct, early detection system
(2) Prohibition of abuse of a superior bargaining position
(1) Quality control
(2) Quality complaints
(1) Contributions to local community and society
Result of questionnaire survey
Ratio of transaction amount*
Achievement rate of compliance items
We have conducted a review of the survey along with the fiscal 2015 questionnaire revision.
*Ratio of transaction amount: Ratio of total amount of transaction of suppliers that took questionnaire survey (excluding listed companies) to all transaction amount.
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 2016 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.
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 migrating to CSR procurement.We continue conducting questionnaires with important suppliers and remain updated regarding the facts. In fiscal 2016, we reviewed the questions in accordance with overseas laws and social rules. The questionnaire form will be revised in fiscal 2017. 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.
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 important 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.
For earth and stone raw materials used for plants in Japan, we confirm the legality and sustainability at all mines through
questionnaires 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 coverage rate*
Achievement rate of compliance items
*Survey coverage rate: Percentage of mines surveyed against all mines which ceramic sanitary ware plants in Japan purchase
stone materials from
Questionnaire 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.
(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
(1) Quality management
(2) Quality complaints
6. Social contribution
(1) Contributing to the community and society
Initiatives for keeping rivers clean
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
We conduct tree-planting activities in completed mine areas to regenerate forests.
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 in Japan and verifies its results.
The results of legality of wood-based materials used in fiscal 2016 showed that 90% were legal wood-based materials, 9% were recycled materials, with the remaining 1% classified as "other” (being surveyed) . Of the legal wood-based materials, 89% had forest certification and 1% were certified through an accrediting agency system. Going forward, we will continue endeavoring to improve the ratio of legal wood-based materials and recycled resources.