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Environmental Management

Green Procurement

Green Procurement

Daikin Group Requests that Worldwide Suppliers Abide by Green Procurement Guidelines

The Daikin Group established its Green Procurement Guidelines in fiscal 2000 and requires suppliers in Japan and overseas to abide by these in the procurement of materials and parts used in manufacturing.

We mark suppliers on environmental protection activities using a green procurement checklist. In addition, the ErP Directive obligates manufacturers of energy-using and energy-related products (ErP) to reduce their energy consumption. To comply with this directive, Daikin's green procurement survey for suppliers determines energy-induced CO2.

We are discussing individual measures that will remedy the particular problems of suppliers, and those who get a perfect score on the survey are evaluated as 'green suppliers'.

In March 2015, we published the eighth edition of the Green Procurement Guidelines, which reflects the latest environmental laws and adds prohibited chemical substances to the list of designated chemical substances. We will continue to revise these guidelines to reflect changing environmental laws and situations.

Calls for Improvement and Guidance at Overseas Bases

We hold meetings for suppliers to explain the importance of green procurement in order to further raise the green procurement rate. At divisions in Japan and at bases overseas, we are striving to make green procurement a firmly rooted part of doing business.

In fiscal 2015, we held explanatory meetings for local staff and started green procurement at Cri-Tech Inc., a subsidiary of Daikin America, Inc. In addition, Goodman Manufacturing Company, L.P., Daikin’s air conditioner base in North America, carried out a green procurement survey at suppliers that work with Goodman Manufacturing Company, L.P., DAIKIN APPLIED AMERICAS INC., and AAF International, and compiled the results of the surveys.

In Thailand, China, and Europe, suppliers evaluated at a rank of “B” or lower were requested to make improvements and were given guidance in doing so. As a result of these efforts, the green procurement rate in fiscal 2015 was 65%.

The requirements for green procurement have been gradually increasing to include items such as banned chemical substances and protection of biodiversity and water resources, and every year surveys are becoming increasingly strict. Although there are cases in which the green procurement rate, which shows the results of survey, goes down, rather than focus only on such numbers, we believe that it is more important to ensure that surveys lead to suppliers improving based on the latest edition of the green procurement checklist. We will continue holding explanatory meetings at overseas bases and aim to raise the green procurement rate in regions where it is low.

Green Procurement Rate (All world regions)

Green Procurement Rate (All world regions)

Staff at Daikin America, Inc. attended green procurement explanatory meetingsStaff at Daikin America, Inc. attended green procurement explanatory meetings

Green Procurement Rate by Region (%)

Japan China Thailand Other countries in Asia and Oceania Europe North America All regions
FY2011 96 91 98 87 81 3 84
FY2012 99 92 98 90 83 36 89
FY2013 95 96 98 84 86 38 84
FY2014 94 97 98 76 91 39 78
FY2015 96 95 95 65 93 38 65
Green procurement rate =

Value of goods procured from suppliers
who meet our assessment criteria

Value of all goods procured

Overview of Green Procurement Guidelines, 8th Edition

Essential conditions for suppliers’ management

  • Environmental Management System
    We request our suppliers to structure environmental management system to obtain ISO 14001 certification.
  • Compliance
  • Promotion of voluntary activities of improving environment energy conservation, waste reduction, and improvement of transport means.
  • Provision of information

Essential conditions for products

  • Chemical substance management
    1. Restriction on use of chemical substances
    2. Cooperation to investigation of chemical substances
    3. Voluntary reduction of substances ranked to reduce, and the implementation of adequate management procedures of them
  • Packaging materials
  • When designing work is involved, eco-friendly design must be employed.
  • Biodiversity
  • Protecting water resources
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Compliance with Restrictions on Toxic Chemicals

Establishing Standards for Managing Chemical Substances in Products

The Daikin Group has a list of SVHC (substance of very high concern) based on the RoHS Directive*1 and the REACH Regulation*2 regarding chemicals contained in products. These are stated in our Green Procurement Guidelines, which we require our suppliers to abide by.

In July 2015, the requirements for purchasing goods requiring chemical substances management (ASB040004K) were revised, with banned substances added and threshold management strengthened. The newly added banned substances are four kinds of phthalate ester*3, and BNST (Benzenamine, N-phenyl-, reaction products with styrene and 2,4,4-trimethylpentene)*4. In July 2016, the requirements for purchasing goods (ASB040004L) was revised, with EU biocide rules newly added.

*1 The RoHS Directive (Restriction of Hazardous Substances Directive) is a regulation in the EU prohibiting the use of certain hazardous substances in electrical and electronic equipment.

*2 The REACH Regulation on chemical substances went into effect in Europe in June 2007. REACH obligates companies manufacturing or importing at least 1 ton of chemical substances a year in the EU to register with EU authorities. REACH covers almost all chemicals on the market in the EU.

*3 As of March 31, 2015, under the EU Directive EU2015/863, four kinds of phthalate ester were added as controlled substances. These will be restricted under the directive from July 22, 2019, but the Daikin Group will cease using them in production starting on January 1, 2019.

*4 As of March 14, 2015, BNST (Benzenamine, N-phenyl-, reaction products with styrene and 2,4,4-trimethylpentene) is prohibited under the Canadian Environmental Protection Act.

Specified Chemical Substance List (for products)

Control levels Substance name
Prohibited

Cadmium and cadmium compounds
Chromium VI compounds
Lead and lead compounds
Mercury and mercury compounds
Tributyl tin oxide (TBTO)
Tributyl tins (TBTs) compounds *1
Triphenyl tins (TPTs) compounds *1
Dibutyltin compounds (DBTs) *1
Dioctyltin compounds (DOTs) *1
Polybrominated biphenyls (PBBs)
Polybrominated diphenyl ethers (PBDEs)
Deca-Bromodiphenylether (Deca-BDE) *2
Polychlorinated biphenyls (PCBs)
Polychlorinated terphenyls (PCTs) *2
Polychloronated napthalenes (C1=>3)
Short chain chlorinated paraffins
Perfluorooctane sulfonate (PFOSs) *3
F gas (HFC, PFC, SF6) *4
Asbestos
Azocolourants and azodyes which form certain aromatic amines *5
Ozone depleting substances (other than HCFCs) *6
Radioactive substances
Phenol,2-(2H-benzotriazol-2-yl)-4,6-bis(1,1-dimethylethyl) *2
Dimethly fumarate (DMF) *7
HBCD (Hecabromocyclododecane)
PFOA (Perfuluorooctane acid)
BNST (Benzenamine, N-phenyl-, reaction products with styrene and 2,4,4-trimethylpentene)*11
Polycyclic aromatic hydrocarbons (PAHs)*12

Scheduled Prohibition DEHP, DBP, BBP, DIBP
Reduced Polyvinyl chloride (PVC) *8
Ozone depleting substances (only HCFCs)
Managed

Beryllium oxide (BeO) *2
Phthalates (DINP, DIDP, DNOP) *2
Perchlorates *2
Nickel and nickel compounds *9
Brominated flame retardants (other than PBBs, PBDEs, or HBCD)
Formaldehyde *2
EU REACH Regulation (SVHC: substances of very high concern) group (Prohibited materials specified by this guideline are excluded) *10

*1 The use of TBTs and TPTs is prohibited as of July 2010. The use of DBTs is prohibited as of January 2012 (January 2015 for certain substances). The use of DOTs is prohibited as of January 2012. However, only "Commodities that touch the skin" and "Two-component normal temperature silicone modules" will be prohibited.

*2 Materials added to JIG representation material (July 2009).
Added to the EU Directive EU2015/863 as controlled substances, these will be restricted under the directive from July 22, 2019.

*3 The use of PFOSs is prohibited as of May 2009 under the POPs Agreement. Prohibited as of April 2010 under Japan's Law Concerning the Evaluation of Chemical Substances (except for applications in semiconductors, etching, and business photographic film).

*4 The use of F gas (HFC, PFC, etc) is prohibited in one-component foams (except when required to meet national safety standards). (Banned in the EU starting in July 2008.) The use of F gas (HFC, PFC, etc.) is permitted for refrigerants.

*5 Limited to applications in azo dyes and pigments which constitute the specific amines defined by the German Consumer Goods Ordinance and which come into contact with the human body for long hours.

*6 The use of HCFC for the production of foams shall be prohibited, and the use as refrigerants for Japan and EU models shall also be prohibited.

*7 Use prohibited as of May 2009 (formerly used as a fungicide in leather products and furniture before being prohibited in the EU).

*8 There are fewer substances that can be used as PVC substitutes.

*9 In cases in which the nickel comes into contact with the human body for long hours.

*10 All SVHC (substances of very high concern) added in future shall be managed. Postscripts do not need to be added in future.

*11 The Prohibition of Certain Toxic Substances Regulations, prohibited the manufacture, use, sale, offer for sale or import of certain toxic substances including BNST and products containing these substances in Canada from March 14, 2015.

*12 Rubber or plastic components that come into direct as well as prolonged or short-term repetitive contact with the human skin or the oral cavity shall not contain more than 1 mg/kg (0.0001 % by weight of this component) of any of the PAHs.

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