CSR assessment (document inspection)
In addition to striving to achieve an understanding and dissemination of Murata's procurement policies and guidelines, each year the suppliers implement a self-assessment using a checklist for the purpose of recognizing CSR risks and initiating improvements. With the enactment of the Guidelines, the checklist questions have also been revised, and a survey of 154 important suppliers was carried out during fiscal 2020. As a result, we collected surveys from 100% of the suppliers who were asked to participate in the survey, and no critical risks were found in any of the suppliers. Furthermore, while slight risks were found in two companies, the corrections are already complete.
*Suppliers with an evaluation of B or C rank and below in an assessment of "labor (including human rights)," "safety and health," "environment," "ethics," "control systems," "procurement BCP," and "information security."
CSR procurement concerning environmental issues
In order to respond to environmental issues that are deepening in various locations around the world, material selection and procurement which consider the global environment are essential. Based on the Procurement Code of Conduct, Murata promotes preferential procurement from suppliers who are actively addressing environmental problems.
When conducting new business, we ask that our partners address global environmental problems such as climate change and environmental pollution based on the "Murata Group Supply Chain CSR Procurement Guidelines." Moreover, in addition to asking to verify the certification status of suppliers under environmental management systems (ISO 14001, etc.), we audit the state of chemical substance control at the manufacturing sites to determine whether we can do business with a supplier. After we have started doing business with a supplier, we ask them to periodically fill out the CSR Checklist and continuously verify the status of initiatives for environmental problems and the results of improvement at suppliers.
Murata participates as a member of JEITA (Japan Electronics and Information Technology Industries Association) and as a founding member of JAMP (Joint Article Management Promotion-consortium), whose purpose is "to appropriately manage the information on chemical substances contained in an article and to establish and disseminate a system to smoothly disclose and transmit the information through the companies in the supply chain." We are actively cooperating with industry organizations on issues that are difficult to solve as an individual company such as creating industry-wide frameworks.
Link: JAMP (Joint Article Management Promotion-consortium)
Link: Member List
Link: JEITA (Japan Electronics and Information Technology Industries Association)
Link: JEITA Members
In order to reduce the environmental load of products, "green procurement" is required to procure materials with a low environmental load. At Murata, we ask for the understanding and cooperation of suppliers in putting environmental management into practice.
Link: Green procurement
Promotion of responsible mineral procurement
Responsible mineral procurement response policy
Address as part of CSR procurement activities based on the Murata Manufacturing CSR charter
Build a management system for target minerals included in Murata products which complies with "OECD Due Diligence Guidance"
Utilize the system above and continuously strive to use lower risk materials to prevent the funding of armed groups, protect human rights, promote fair trade, and promote responsible procurement of minerals used by the company in the company's supply chain for minerals such as gold/tin/tantalum/tungsten/cobalt/mica, etc. or refrain from engaging in procurement from companies which fall under Annex II risks* for conflict and human rights violations, etc. in conflict-affected and high-risk areas (CAHRAs)
Closely cooperate with industry organizations to carry out rational and efficient surveys based on global standards in good faith
Share information regarding minerals obtained through the supply chain with partner companies as soon as possible
*Annex II risks
Human rights violations (child labor, etc.) relating to the mining, transport, and trade of minerals
Direct or indirect support for non-governmental armed groups
Illegal acts by public or private security forces (protection money)
Corruption or falsification of mineral origin
Nonpayment of taxes to the government, fees, and mining right fees (tax evasion)
Murata regards this as part of its corporate social responsibility (CSR) and conducts surveys in compliance with global standards and provides information based on its response policy.
Furthermore, as an internal framework, the CSR Management Committee, chaired by the President, shares information with top management on activities, progress, and any issues regarding responsible mineral procurement, and makes any resulting decisions.
We have established a response policy to promote responsible mineral procurement and are building a system to manage whether there are any Annex II risks in CAHRAs (Conflict-Affected and High-Risk Areas)*1 for target minerals included in our products. In order to identify smelters and refiners in the supply chain, we conduct surveys in compliance with the RMAP*2 (smelter auditing program promoted by RMI) industry-standard and evaluations in accordance with internal standards. In the event that we are using high risk smelters and refiners, we communicate the details of those risks and advance initiatives aimed at improvement. In response to requests from our customers for our supply chain information, based on surveyed results we are also providing information on cobalt using the CRT (Cobalt Reporting Template) in addition to the CMRT (Conflict Minerals Reporting Template) published by the RMI (Responsible Minerals Initiative)*3.
Efforts for compliance with 5-Step framework of OECD Due Diligence Guidance
In order to reduce the Annex II risks of human rights violations in CAHRAs, such as human rights violations for 3TG and cobalt in our products, Murata is committed to the following initiatives in compliance with the OECD Due Diligence Guidance.
5-Step Framework for OECD Due Diligence Guidance
Step 1: Establish strong company management systems
- Murata has established a Responsible Minerals Sourcing Policy and a system to manage any Annex II risks in CAHRAs for the minerals contained in our products.
- Responsible minerals sourcing initiatives and issues are regularly shared with top management in the CSR Management Committee for decision making.
- We make our policies known through our website and other media, and we ask our suppliers to agree with us on initiatives based on Murata’s policies.
- To identify smelters/refiners in the supply chain, we conduct surveys based on industry standards (RMAP) for domestic and international suppliers.
- Every year, we send our suppliers an invitation to the JEITA’s*4 annual Responsible Minerals Sourcing Inquiry Briefings and invite them to attend workshops on the latest industry trends and current issues.
Step 2: Identify and assess risks in the supply chain
- We regularly conduct smelter/refiner surveys using the CMRT and CRT issued by the RMI.
- We require our suppliers to use smelters/refineries that have been certified under the audit program of a third-party institution.
- Our surveys include confirmation of 3TG and cobalt content, confirmation of country of origin, and identification of smelters/refiners.
- We conduct risk assessments in accordance with internal standards on the smelter/refiner information reported by our suppliers and the management system for responsible minerals sourcing.
- For identified smelter/refiners, we review RMI audit reports, websites, and other sources of information that may lead to risk as needed.
Step 3: Design and implement a strategy to respond to identified risks
- Suppliers are asked to work for human rights and to reduce conflict risk in accordance with Murata’s responsible mineral procurement policy. If we use high-risk smelters/refiners, we communicate the details of the risks and discuss appropriate measures for improvement with our suppliers.
- If a company’s relationship with an Annex II risk, such as a relationship with armed forces or human rights violations, is identified, we will consider suspending the transaction.
Step 4: Carry out independent third-party audit of smelter/refiner’s due diligence practices
- As a member of the RMI and the JEITA Responsible Minerals Trade Working Group, Murata works at the industry level to address issues that are difficult for individual companies to resolve.
For example, we provide speakers at industry-sponsored explanatory meetings and encourage smelters/refiners who do not participate in RMAP to undergo the validation process.
Step 5: Report annually on supply chain due diligence
- Reports on Murata’s actions in responsible minerals sourcing are published on the website and in a consolidated report.
Current recognition and issues
At Murata, we also regularly conduct surveys of our suppliers to check for any changes in the provided information. In previous conflict mineral surveys, we confirmed that our mainstay products such as multilayer ceramic capacitors, inductors, thermistors, and piezoelectric components are already conflict-free. In the fiscal 2020 survey of conflict minerals, we carried out a survey of 200 major suppliers handling 3TG and achieved a 100% response rate to identify 310 smelters. Moreover, in the cobalt survey of 104 companies, we achieved an 83% response rate to identify 45 refineries. We have confirmed that 77% of suppliers overall are conformant with RMAP.
Through this most recent survey, Murata broadly recognizes three issues and believe that it is important to advance initiatives to address them.
Issue (1) Improving the procurement rate from RMAP-conformant smelters and refineries:
Suppliers are requested to build control systems and implement risk evaluations to use RMAP-conformant smelters and refineries. At the current time, we have not reached a 100% rate of RMAP conformant, and it is difficult to guarantee that all of our products are not contributing to Annex II risks.
With respect to suppliers who report the use of non-RMAP-conformant smelters and refineries, Murata does not unilaterally demand that they be excluded from the supply chain but rather shares the current issues and consults with the supplier to reach a solution while advancing improvement activities.
Issue (2) Initiative to reach a 100% response rate in the cobalt survey:
Because the cobalt survey is not a legally required response, it is difficult for it to be treated as a priority issue that should be undertaken by the suppliers, and in some cases they do not cooperate with the survey.
We will continue to request their understanding and cooperation with the survey by sending letters, etc. to the suppliers to encourage the disclosure of smelters and refineries.
Issue (3) Handling new minerals other than 3TG and cobalt with risks that are a matter of concern:
In recent years, inquiries from customers have been increasing regarding whether CSR risks also exist for minerals other than 3TG and cobalt. Murata carries out risk evaluations based on the industry standard RMAP assessment, but there is no method for performing a risk assessment for new minerals that RMAP does not support, and it is difficult to guarantee the safety of such minerals.
Starting from last year, mica was added to the list of minerals managed by RMI. At the current time, the use of mica has not been confirmed in the company's products. However, this will be addressed by verifying its usage in our products with respect to the expansion and growing risk of target minerals such as lithium, copper, lead, nickel, and zinc, etc. going forward. We will also work more closely with our customers, suppliers, and industry personnel to ensure transparency in the supply chain, and we will continue to engage in CSR procurement that takes the human rights problem and other risks into account.
Initiative to address issues through industry actions
Murata is also a member company of the JEITA "Responsible Minerals Trade Working Group" and RMI. We are proactively working on issues that are difficult to solve as an individual company, such as creating industry-wide frameworks as a member of industry organizations.
Because the cobalt survey has only just started, there are a large number of smelters/refineries which are not RMAP-conformant compared to 3TG.
As a member of the JEITA "Smelter Support Team"*5, we carry out activities to encourage smelters and refiners that do not participate in RMAP to undergo the validation process.
We participate as a lecturer in the "Responsible Minerals Sourcing Inquiry Briefings" hosted by JEITA and share the latest information with suppliers and many other companies through these briefings to educate and enlighten them so as to deepen their understanding of the importance of this initiative.
Regarding worries about the risks of new minerals, we are clarifying the problems, proposing mechanisms, and engaging in other active debates at the JEITA working group to make proposals to RMI so that RMAP support may proceed in an efficient manner.