Encouraging Business Partners in CSR Efforts

At the Daiwa House Group, we look at our suppliers as business partners out to complete the same job. The fact that we can offer customer-satisfying quality owes to a vast supply chain of material and equipment manufacturers, installers, aftercare service providers, and other supporting businesses. Demands from institutional investors and NGOs regarding corporate environmental and social initiatives have expanded from the non-consolidated to consolidated level, and as far as supply chain management. International rules and securities exchange guidelines also require Group CSR procurement efforts and enhanced information disclosure. We are entering an age where competitive superiority can be gained by satisfying social requirements, including human rights considerations, while at the same time offering good quality/ pricing.

The Daiwa House Group strives to comply with the“Regulations for Construction Work Contracting” of the Construction Industry Act and to conclude fair contracts. We also transact business with business partners who are protected under the subcontracting law in the full spirit of the law. Through the use of ICT and other technologies, we are building management systems for reliable and effective CSR procurement. As our business rapidly expands internationally, the Daiwa House Group works to achieve a sustainable society through promoting CSR procurement with its business partners.

Supply Chain Sustainability Guidelines

At the Daiwa House Group, we established the CSR Procurement Guidelines in 2015 for the purpose of promoting CSR procurement with our business partners. In April 2023, in response to recent changes in the social landscape, we reviewed the guidelines and reformulated them as the Supply Chain Sustainability Guidelines.

The new guidelines establish 7 principles that underline the social and environmental responsibilities we expect of our business partners in a “Business Partner Code of Conduct” and expand off this code to more articulately define social and environmental requirements for our business partners under our “Corporate Activity Guidelines.” In addition, the “Guidelines on Products” present standards for social and environmental responsibilities concerning construction materials and other products that our business partners procure and deliver to Daiwa House Industry.

As part and parcel to doing business with us, we require business partners to analyze and report the chemical substances found in the parts and materials we purchase from them for use in single-family houses and low-rise rental housing. We use our “Chemical Substance Management Guidelines [Basics]” (Guidelines on Products) for this. With all other parts and materials we purchase as well, we require business partners to honor our guidelines by way of information briefings, design documents, etc. At the same time, every year since fiscal 2011, we have audited timber suppliers as per our “Biodiversity Guidelines [Timber Procurement].” These audits determine if the Group is procuring timber logged in a way that illegally violates the rights of indigenous people. They are required to verify the legality and sustainability of timber they procured and are instructed to make improvements highlighted in audit results.

Application of the Supply Chain Sustainability Guidelines

At the Daiwa House Group, when contracting with new business partners, we explain to them the purpose of our “Supply Chain Sustainability Guidelines” and have them submit a letter of consent that they will honor the guidelines. We also work to ensure procurement is congruent with the guidelines and apply the PDCA cycle to drive improvements. In addition, the “Partners Book,” which is in line with the “Business Partner Code of Conduct” and the “Corporate Activity Guidelines” is provided to all employees of business partners for educational and training purposes.

We have regularly monitored compliance with the Supply Chain Sustainability Guidelines (formerly the CSR Procurement Guidelines) by having our business partners fill out a questionnaire called the “Self-assessment” every year since fiscal 2017.

Supply Chain Sustainability Guidelines