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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 contains information on the presence or absence of environmental management systems, chemical substances management, and other data.

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 ISO 14001 certification, or acquire third-party certification for their environmental management system.)
  • Compliance
  • Promotion of voluntary activities of improving environment including energy conservation, waste reduction, and improvement of transport means.
  • Provision of information (on CO2 emissions, etc.)

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

Green Procurement Guidelines (Supply Chain Management)

Targets and Achievements

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

Our goal is to require compliance with the Green Procurement Guidelines by 100% of our suppliers inside and outside of Japan. 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 2021, 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.

We launched green procurement in South America in 2016. In fiscal 2021, at a total of five bases in Malaysia, Singapore, India, the Middle East, and the United States we held briefings to boost the green procurement rate. In regions where green procurement has been established, such as Europe and China, 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= Value of goods procured from suppliers who meet our assessment criteria / Value of all goods procured

Targets and Achievements of Green Procurement

Quantitative indicator Target Progress Target fiscal year
FY2019 FY2020 FY2021
Percentage of suppliers requested to carry out initiatives based on the guidelines Request all suppliers to carry out CSR initiatives based on the Supply Chain CSR Promotion Guidelines 100% 100% 100% 2025
Number of green procurement surveys conducted Conduct green procurement surveys of more than 1,500 primary suppliers inside and outside of Japan (accounting for 80% of total procurement value) 143 companies in Japan and 511 companies overseas 449 companies in Japan and 487 companies overseas Around 600 companies in Japan and around 700 companies overseas 2025

Green Procurement Rate (%)

  FY2017 FY2018 FY2019 FY2020 FY2021
Japan 92 90 93 95 95
Outside Japan 78 79 77 77 78
Entire Group 76 80 80 80 80

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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