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Environmental Management

Green Procurement

Environmental Management

Basic Policy

Daikin Group Requests that Worldwide Suppliers Abide by Green Procurement Guidelines

Daikin established its Green Procurement Guidelines in fiscal 2000 and requires suppliers from which it procures materials in Japan and overseas to abide by these guidelines to place a priority on the procurement of materials and parts used in manufacturing that reduce environmental burdens.

In implementing these guidelines, we evaluate suppliers on environmental protection activities using a green procurement inspection list. This inspection list also ascertains the presence or absence of environmental management systems and chemical substances management while recording CO2 emissions. It also includes criteria such as biodiversity and water resource protection.

Overview of Green Procurement Guidelines

Essential conditions for suppliers' management

  • Environmental Management System
    (We request our suppliers to either structure environmental management system to obtain ISO14001 certification, or acquire third-party certification for their environmental management system.)
  • 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. Adoption of chemSHERPA
    4. 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

Green Procurement Guidelines (Supply Chain Management)

Targets and Achievements

Implementing Improvement and Guidance at Overseas Bases, Increasing Green Procurement Rate

Supplier procurement rate scores of 82 points or more on the green procurement inspection list are set as the green procurement rate, which we promote globally with the aim of 100% compliance. The supplier procurement rate corresponds to suppliers inside and outside of Japan accounting for 80% of total procurement value. In fiscal 2019, the Group green procurement rate was 80%.

We attempt to increase the green procurement rate in each region through briefings and other events aimed at facilitating an understanding of the importance of green procurement among suppliers. In fiscal 2019, briefings were held at 11 bases in China and the U.S.

We launched green procurement in South America in 2016. In Thailand, China and Europe, where green procurement has been established, we ask suppliers below a certain standard to make improvements and provide guidance to assist them. Supporting improvements in supplier environmental activities enables us to continue doing business with them.

Green Procurement Rate by Region (%)*

FY2015 FY2016 FY2017 FY2018 FY2019
Japan 96 91 92 90 93
China 95 96 92 90 93
Thailand 95 95 97 97 97
Other countries in Asia and Oceania 65 58 84 80 74
Europe 93 93 95 95 97
North America 38 30 30 32 32
South America - 97 94 100 100
All regions 65 74 76 80 80
Green procurement rate= Value of goods procured from suppliers who meet our assessment criteria / Value of all goods procured

Compliance with Restrictions on Toxic Chemicals

Establishing Standards for Managing Chemical Substances in Products

The Daikin Group maintains a list 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.

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.
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.

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