CSR Report > CSR Report 2015 - Q & A > Business Partner Relations

CSR Report


Business Partner Relations

What is Nintendo's approach to business partner relations?

We place great importance on building strong relationships with all of our business partners. Through these relationships, we are able to offer the best products and services to our consumers.


What is the fabless production model?

Fabless is derived from "fabrication-less," meaning "without fabrication facilities." At Nintendo, we do not own the production factories that manufacture our products. All production processes are outsourced to external suppliers and production factories (production partners). We regularly visit our production partners' manufacturing sites to check the quality, safety, working conditions and efficiency of their production processes.


What is CSR procurement?

CSR procurement is the practice of requiring production partners to comply with not only environmental protection and safety rules (as specified in our Green Procurement Specifications) but also with certain social responsibility principles (as specified in the Nintendo CSR Procurement Guidelines).


How does Nintendo verify its production partners' performance on sustainability and ethical sourcing?

We share the Nintendo CSR Procurement Guidelines, which include specific requirements on sustainability, ethical sourcing and employee relations, with all of our production partners. We also ask our production partners to submit a Business Status Survey annually, which includes sections on their performance relating to sustainability and ethical sourcing.

Furthermore, we conduct on-site inspections at production sites based on Business Status Survey results, to confirm the compliance with our Guidelines. In addition to our own on-site inspections, we have incorporated an independent third-party monitoring process since fiscal year 2013 to increase transparency with our production partners and ensure our CSR Procurement Guidelines are being followed.

On-Site Inspections

FY 2008 7 companies (5 new)
FY 2009 14 companies (7 new)
FY 2010 13 companies (5 new)
FY 2011 9 companies (2 new)
FY 2012 13 companies (7 new)
FY 2013 11 companies (6 new)
FY 2014 14 companies (6 new)


What is Nintendo's approach on the Conflict Minerals issue?

It has become a global concern that the use of minerals from conflict-affected regions, which are often a financial source of armed groups, means that as a result, companies could be playing a role in conflicts. In the U.S., Section 1502 of the Dodd-Frank Act, effective January 2013, requires U.S. listed companies to disclose whether any of the four conflict minerals (gold, tantalum, tin and tungsten), which are extracted from the Democratic Republic of the Congo or its adjoining countries (collectively the "Covered Countries") to be used as a financial source of armed groups, are used in their products, and if so, to disclose, among other matters, the measures taken to exercise due diligence on the sourcing of those minerals.

Although Nintendo is not subject to the law since we are not publicly listed in the U.S., Nintendo has a policy banning the use of conflict minerals from the Covered Countries that benefit armed groups in any of our products, and has carried out the following activities in this regard.

Nintendo's Progress

FY 2011 We revised Nintendo CSR Procurement Guidelines (Ver.1), and incorporated and received consent on a provision on non-use of conflict minerals from each production partner. In addition, our Manufacturing Division allocated time to explain the conflict minerals issue and Nintendo's policy on conflict minerals during its production partner on-site inspections.
FY 2012 Led by the section in charge of CSR promotion, established an internal structure to address the conflict minerals issue, and conducted a conflict minerals survey of production partners to ascertain progress made on their supply chain investigation and to grasp whether policies on conflict minerals had been established.
FY 2013 Nintendo reorganized its internal structure and newly established a cross-functional conflict minerals team, consisting of members from CSR promotion, legal, procurement and manufacturing in order to enhance Nintendo's approach on conflict minerals.
We used the internationally recognized CFSI*1 Conflict Minerals Reporting Template to conduct our supply chain survey.
Moreover, we reviewed all results to ensure that there were no inconsistencies and no questions remained unanswered, and carried out follow-up requests with production partners when necessary. We also used the CFS (Conflict-Free Smelter) *2 list to verify smelters and refiners in our survey.
We sent feedback to production partners according to their individual survey results, and asked for their continuous cooperation with Nintendo's efforts based on our risk assessment of their status.
In addition to conducting the supply chain survey, we worked with an external expert to interview our priority production partners and further examine both the progress made on their supply chain investigations and the challenges they currently faced.

FY 2014 Progress

Our cross-functional team continued to advance conflict minerals efforts in fiscal year 2014. We updated the Nintendo CSR Procurement Guidelines to include our policy on conflict minerals, and added language that requires production partners to cooperate with our supply chain investigation, using a reporting template developed by CFSI, and to put into place a conflict minerals policy of their own. At the July 2014 Green Procurement briefing, we again used this time to explain Nintendo's policy on conflict minerals and request production partners to participate in our supply chain investigation.

We achieved a 100 percent response rate for our fiscal year 2014 investigation, which uses the CFSI Conflict Minerals Reporting Template, and as in the past, we reviewed all results and carried out follow-up requests when necessary.

According to the results, Nintendo's supply chain consists of 355 smelters and refiners, including some that have not yet been identified by CFSI. We compared them against the list of smelters and refiners prepared by CFSI to ascertain the status of each mineral. As a result, from the smelters and refiners reported, 247 were on the CFSI Standard Smelter List, and among them 168 were certified as conflict free by CFSI.

Number of Smelters and Refiners on the CFSI Standard Smelter List

  Gold Tantalum Tin Tungsten Total
Smelters and Refiners 106 38 69 34 247
Conflict-Free Smelters 65 38 35 30 168

*Reference document: The CFS list prepared by CFSI as of May 2015

In addition, to promote further efficiency in our investigation, we carried out a risk assessment of our production partners' supply chain survey results and their overall importance to Nintendo's business. We also worked with an external expert to interview selected production partners to further examine the progress made on their supply chain investigations, the challenges they currently faced and their overall CSR initiatives.

The results of our conflict minerals survey and interviews with suppliers have been reported to Nintendo's Executive Management Committee. Nintendo will continue to refrain from using any minerals involved in conflict in our products, and we will further refine our conflict minerals investigation process.

Led by our cross-functional conflict minerals team that includes members of top management, we will continue to advance our efforts on conflict minerals challenges based on these surveys and interviews, and will move toward identifying conflict-free components/parts in Nintendo products. We will also continue to refer to the OECD Due Diligence Guidance on conflict minerals*3 to make improvements and put measures in place to reduce risks in our supply chain. Specifically, to promote increased understanding of our efforts toward the conflict minerals issue, we will use on-site inspections and interviews to communicate with our production partners and urge them to improve the accuracy of their supply chain investigation and set a conflict minerals policy.

*1 CFSI: Conflict-Free Sourcing Initiative
Founded by Electronic Industry Citizenship Coalition (www.eiccoalition.org) and Global e-Sustainability Initiative (www.gesi.org) in 2008 in order to develop tools and resources such as the Conflict Minerals Reporting Template.

*2 CFS: Conflict-Free Smelter
Smelters or refiners that have no relationship with the conflict in the Covered Countries and have been found to be compliant with the Conflict-Free Smelter program assessment protocols established by CFSI.

*3 OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas
This Guidance provides recommendations for responsible minerals supply chain management concerning conflict-affected or high-risk regions.


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