Supply Chain Management (Labor)
Improving labor environments in the supply chain will encourage job retention and result in higher quality products and services, which will bring a smile to the faces of stakeholders, foremost of which are customers. The Bandai Namco Group is working to safeguard human rights and improve the labor environment across the entire supply chain.
Initiatives for Labor Environments in the Supply Chain
Implement human rights due diligence
The Bandai Namco Group recognizes that its business activities could potentially affect human rights. We recognize our responsibility to respect the human rights of all stakeholders, including employees, their families, and business partners. Toward this end, we promote an understanding of human rights across the entire supply chain, take steps to prevent the emergence of human rights issues, and work to resolve issues that have already been identified.
Previously, we implemented risk management for each business segment, but in the future, in order to identify, prevent, and mitigate negative impacts on human rights related to the Group's business activities, we will build a human rights due diligence mechanism and continuously manage risks using a risk-based approach. In fiscal 2022, we engaged a third party to conduct human rights due diligence covering our main businesses. This third party identified high potential human rights risks in the manufacturing sector in East and Southeast Asia among the Group's businesses.
Conduct supplier surveys based on the Code of Conduct, etc.
Bandai Namco Group companies conduct audits and interviews of contract manufacturers and other suppliers as required to check for deficiencies in labor environment. When necessary, Group companies provide instructions to suppliers for improvement.
Bandai, the business management company of the Toys and Hobby Business, and important Group company Bandai Spirits (both wholly-owned subsidiaries) either conduct Bandai Factory Audits (BFA), which combine quality audits and Code of Conduct (CoC) audits or conduct Sedex Members Ethical Trade Audits (SMETA) or audits based on CoC items in third-party CoC standards such as the International Council of Toy Industries (ICTI), at all overseas final packaging plants that produce products for the Japanese domestic market (approximately 270 companies in fiscal 2022).
The basic policy for BFAs is the Bandai COC Declaration, which calls for strict observance of standards concerning forced labor, child labor, working hours, wages and allowances, punitive action, and discrimination. Audits are conducted in accordance with our original BFA manual. Bandai Spirits conducts audits of factories that have not been certified based on BFAs or third-party standards in accordance with its own Bandai Spirits Minimum Requirements Audit Report to confirm human rights requirements.
In addition, Bandai (Shenzhen), which handles production management for core products for Europe and North America, is conducting transactions with plants that have received certification under the ICTI Ethical Toy Program, which is ICTI’s unified standard for toy manufacturers and includes prohibitions on forced labor, human trafficking, and child labor (looking at factories with which Bandai (Shenzhen) implemented transactions in fiscal 2021, all primary factories for products for Europe and North America had received certification). Furthermore, we hold supplier conferences to share information with business partners and work together to comply with laws and regulations, including the prevention of forced labor and the eradication of modern slavery, and to improve the working environment.
Bandai Namco Amusement (a wholly-owned subsidiary), the business management company of the Amusement Business, does business only with suppliers for which it has confirmed the absence of illegal acts in the areas of forced labor, child labor, working hours, wages and allowances, punitive action, discrimination, and environmental protection, before engaging in transactions. Also, for plants that assemble arcade game products with which we initiate a new business relationship, we conduct interviews on confirmation items including the working environment. We also conduct audits of new and existing factories that we do business with as necessary (in fiscal 2022, we conducted two audits for existing factories).
Recognize suppliers using the Bandai Supplier Awards
Bandai hosts the annual Supplier Conference to share information on a number of topics including the production environment as well as requirements in terms of human rights and labor standards. We use this venue to actively disseminate and share information with suppliers and to host the Bandai Supplier Awards recognizing suppliers who clear the performance indicators set by Bandai at a high level. We ask suppliers that receive an award to lead presentations for other suppliers in an effort to share know-how with frontline operations. Through such opportunities, we are working closely with suppliers to ensure legal compliance and improvements in their labor environments.
Initiatives for raising awareness of human rights
Believing that executive management’s understanding is vital to strengthening human rights measures in the Group, we hold study sessions on human rights for directors of Bandai Namco Holdings. We also hold seminars and e-learning on topics, such as sustainability, work-life balance, the LGBT community, and disabilities, for employees to raise awareness of human rights and foster a culture of sustainability within the Group.
