CSR Report > CSR Report2019 - Putting Smiles on the Faces of Our Supply Chain

CSR Report

Putting Smiles on the Faces of Our Supply Chain / We strive to create an environment that provides our consumers with better products, and therefore we create beneficial relationships with our production partners, development partners and sales partners.

Putting Smiles on the Faces of Our Supply Chain

We strive to create an environment that provides our consumers with better products, and therefore we create beneficial relationships with our production partners, development partners and sales partners.

Working With Our Production Partners

Working With Our Production Partners

 Nintendo employs a fabless production model, meaning we do not own the facilities that manufacture our products. We work with our numerous production partners*1 in Japan and around the world to improve the quality and technical capability, ensure safety and achieve efficiency of our products.
 Advancing CSR activities throughout our entire supply chain is a way for Nintendo to not only improve the working environment for those employed at our production sites, but also leads to improved retention rates and productivity. This provides a foundation for the production of high-quality products and, ultimately, leads to more consumer smiles. We continue to work together with our production partners on the promotion of CSR activities, with a focus on communication and mutual understanding.

CSR Procurement Policy

 With an emphasis on building trust and deepening mutual understanding, Nintendo implements procurement activities based on the Nintendo Procurement Policy and Nintendo Production Partner Selection Policy. To provide a specific guide regarding the adoption of socially responsible procurement practices throughout our supply chain, the division responsible for procurement activities has established the CSR procurement policy based on these policies and summarized it in the Nintendo CSR Procurement Guidelines, which is distributed to suppliers. We distribute these guidelines to all first-tier suppliers, who are required to formally agree to them.
 We also have incorporated provisions regarding compliance with these guidelines into the Basic Partner Agreement and obtain agreement from all first-tier suppliers for future transactions. In addition, we also ask our first-tier suppliers to notify upstream suppliers about our guidelines on our behalf.
 These specific guidelines are based on relevant laws and international standards that focus on topics such as respecting the human rights of workers and workplace health and safety.

*1 Production Partners
Business partners involved in the production of Nintendo products, including first-tier suppliers directly contracted with Nintendo, and cooperative factories upstream from those business partners, to which Nintendo outsources product assembly, and the suppliers of component parts and materials.
Nintendo Procurement Policy
  1. (1) Provide all production partners, both domestic and overseas, with equal opportunities and fair evaluations
  2. (2) Conduct procurement activities that comply with laws and social norms, with an emphasis on human rights and global environmental considerations
  3. (3) Purchase goods from validated production partners that are in good standing at fair prices and that provide appropriate delivery times
  4. (4) Collaborate with production partners to build mutual trust and fulfill corporate social responsibility goals through procurement practices
  5. (5) Comply with the Nintendo Responsible Mineral Procurement Policy in the procurement of products and component parts
Nintendo Production Partner Selection Policy

When selecting production partners and continuous transactions for the procurement of products and component parts, priority shall be given to companies that satisfy the following criteria:

  1. (1) Comply with laws and social norms, with an emphasis on human rights and environmental considerations
  2. (2) Engage in sound business operations
  3. (3) Quality, price and delivery time meet appropriate standards
  4. (4) Possess the capability to provide stable supply and to adapt flexibly to fluctuations in demand
  5. (5) Possess advanced technological capabilities that contribute to Nintendo products
  6. (6) Maintain sound information management systems
  7. (7) Possess the capability to provide continuous supply in the event of unexpected events such as natural disasters

CSR Procurement Management Structure

 A cross-functional team, consisting of members responsible for CSR promotion and procurement at Nintendo Co., Ltd., works together to understand external trends and communicate with stakeholders. The team reports as appropriate to the management of Nintendo Co., Ltd., regarding progress on CSR procurement activities and to discuss necessary actions to mitigate associated risks.

Fiscal Year 2018 Initiatives

Written Survey

 To grasp the CSR promotion progress of production partners, Nintendo requires all first-tier suppliers to report annually on the status of their management and CSR efforts by way of a Business Status Survey. In addition, we strive to understand the CSR efforts at each factory of our first-tier suppliers by requiring them to report on factory-level operation status.

On-Site Inspections

 Based on factors such as the content of the Business Status Survey, the importance of the business transaction, and social and environmental changes, we evaluate responses and have deployed personnel to conduct on-site inspections of selected production partners since 2008 to ascertain the current on-site situation and improvement status.
 In fiscal year 2018, we carried out on-site inspections at the facilities of 19 production partners and requested improvements deemed necessary in areas such as young worker protection and improving visibility of fire extinguishers and emergency evacuation routes. While the main purpose of these inspections is to give us a first-hand look at on-site conditions, they also provide a valuable opportunity to clearly communicate our views regarding CSR and the Nintendo CSR Procurement Guidelines requirements directly to our production partners.

Employee Comment

Naotake Hashimoto

Naotake Hashimoto

Procurement Department

Nintendo (Hong Kong) Limited

Aiming for CSR Procurement Activities That Are Unique to Nintendo

 We work together with production partners around the globe to produce Nintendo products. CSR procurement, which takes into account issues such as the working environments at the factories of each company, is a vitally important element in advancing these collaborations. Although it goes without saying that the rights of workers must be respected, when the working environment is inadequate, worker retention rates fall and, as a result, quality and production efficiency also falters.
 At Nintendo (Hong Kong) Limited, where I work, we are responsible for a portion of the parts procurement. We interact with many production partners, and their sizes, corporate cultures and approaches to CSR vary. This is why we believe that visiting the factories and directly sharing the Nintendo approach with people on-site is important to understand Nintendo's approach to CSR procurement, and we have the opportunity to hear their thoughts as well.
 I have been privileged to visit many factories, and an understanding of Nintendo's approach and the importance of CSR has led to those companies initiating their own CSR efforts. I believe that as a result, it has led to putting smiles on the faces of everyone Nintendo touches. I hope to continue contributing to this style of CSR procurement that is unique to Nintendo.

On-Site Inspection Process Overview

On-Site Inspection Process Overview

Third-Party Audits

 In addition to the on-site inspections, we adopt a third-party auditing process to enhance our CSR procurement transparency. We place an emphasis on human rights and labor practices, as stipulated in the Nintendo CSR Procurement Guidelines, and we selected two major production partners for auditing on the basis of past on-site inspections and third-party audits results, as well as the business transaction status. During third-party audits, the auditors interviewed managers and workers employed at the production site in their native language, reviewed relevant documents, and inspected production facilities and dormitories. The team used a sampling method to validate compliance on respect for human rights, employment contracts, prohibition of child labor and forced labor, legal minimum wages, management of working hours, and workplace health and safety.

Addressing Identified Risk

 From the risks identified through our on-site inspections and third-party audits, we report any matters requiring improvement to our production partners and request corrective action. In fiscal year 2018, we identified risks in areas such as labor management and practices, and health and safety. We are working with these production partners to implement corrective action.

CSR Procurement System Improvements

  • Revision of the partner-evaluation procedure (including a revision of the Factory Status Survey to strengthen risk assessment)
  • Continuous improvements to on-site inspection procedures (including the creation of a manual)
  • Continuous training of new members who conduct on-site inspections (including a certification program for employees performing on-site inspections)
  • Strengthening the follow-up process (including a revision of the follow-up criteria)
  • Supply chain re-evaluation
  • Revision of the Nintendo CSR Procurement Guidelines
CSR Procurement Process
Share Guidelines With Production Partners
Nintendo CSR Procurement Guidelines
Confirmation by Written Survey
Business Status Survey
Factory Status Survey
Responsible Mineral Procurement Written Survey
On-Site Visits to Understand Current Status
On-Site Inspections
Third-Party Audits
Responsible Mineral Procurement Interviews
Continuous Improvement
Feedback on Results of On-Site Inspections/Third-Party Audits
Corrective Action Plan Review
Follow-Up On-Site Inspections
Nintendo CSR Procurement Guidelines
Guideline Sections Examples of Section Contents

1.Promoting respect for and compliance with human rights

  • Respect for human rights
  • Prohibition of discrimination
  • Prohibition of child/forced labor
  • Compliance with related laws (decent wages, working hours, right to organize)

2.Ensuring occupational health and safety

  • Compliance with health and safety-related laws
  • Prevention of work-related accidents
  • Creation of a safe, clean workplace environment
  • Protection of young workers

3.Practicing corporate ethics and fair trade

  • Prohibition of bribery and inappropriate payoffs or receipts
  • Prohibition of abuse of dominant bargaining position
  • Prohibition of acts that restrict competition
  • Appropriate management of exports
  • Responsible mineral procurement
  • Building of a management system for compliance
  • Prevention and early detection of illegal actions and misconduct
  • Respect for intellectual property

4.Maintaining the global environment

  • Building environmental management systems
  • Minimizing environmental impact
  • Advancing Nintendo Green Procurement Compliance

5.Product safety guarantee and quality assurance

  • Quality assurance system
  • Product safety assurance

6.Complete information management

  • Information management
  • Prevention of disclosure of confidential client and third-party information

7.Establishing crisis management systems

  • Risk evaluation and risk management
  • Creation of a business continuity plan

8.Contributing to the community

  • Contributions to local communities

Message From an External Specialist

Hidemi Tomita

Hidemi Tomita

Director

Lloyd's Register Japan K.K.

Nintendo's CSR Procurement

 A common method in CSR procurement is to use audits that focus on issues raised by third parties. Nintendo's on-site inspections, however, increase mutual understanding because internally qualified employees from procurement at Nintendo are able to directly share Nintendo's approach to CSR with production partners. It is unique in that they work to create partnerships that enable more sustainable procurement. At the same time, third-party audits are conducted in parallel, which from the perspective of accountability to external stakeholders enables objectivity, as well supplementing each management method.
 Stakeholder expectations regarding the resolution of supply chain issues are increasing each year. Going forward, as involvement with production partners evolves with the needs of the times, I expect to see initiatives that are unique to Nintendo that mitigate supply chain risks and bring smiles to the faces of workers in their supply chain.
 Nintendo has a wide-ranging supply chain, and a risk assessment of supply chains beyond those for video game system production partners has been conducted. I believe that Nintendo's next key issue is to implement specific steps regarding identified risks.

Nintendo's Approach to Responsible Mineral Procurement

 Nintendo has a fundamental policy of the non-use of certain minerals in our products. These minerals, as specified in the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, include those extracted in the Democratic Republic of Congo (DRC) and its surrounding countries that become a source of finances for organizations associated with human rights violations, environmental destruction, and the inhumane use of military force (tin, tantalum, tungsten, and gold), as well as those from regions where human rights violations and other risks are high (referred to below as "minerals from conflict-affected and high-risk areas"). With the support of our production partners, we undertake the following initiatives from a position of social responsibility.
  Nintendo exercises responsible raw material procurement and has established a clear policy for the non-use of minerals in our products that become a source of finances for organizations associated with human rights violations, environmental destruction, and the inhumane use of military force (including tin, tantalum, tungsten, and gold), as well as those from regions where human rights violations and other risks are high. We aim for responsible mineral procurement with regards to our production partners by including in our contracts a clause for compliance with the CSR Procurement Guidelines, which were drafted in consideration of the OECD Guidance.

Nintendo Responsible Mineral Procurement Policy

Nintendo is committed to socially responsible raw material procurement practices and works closely with production partners to ensure that as a basic policy, minerals (including tin, tantalum, tungsten, gold, and cobalt, etc.*2) that become a source of finances for organizations associated with human rights violations such as child labor, environmental destruction, and the inhumane use of military force, are not used in Nintendo products.
 The Nintendo CSR Procurement Guidelines include the following initiatives:

  1. 1. We investigate the supply chain of minerals used in our products, referring to guidelines such as the Organisation for Economic Co-operation and Development's "OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas".
  2. 2. We incorporate in our supplier contracts a section on compliance with the Nintendo CSR Procurement Guidelines, taking this and other opportunities to ensure that all production partners have a clear understanding of Nintendo's policies and our requirement that they conduct business in accordance with these policies.
  3. 3. We require production partners to establish a policy that prohibits the use of minerals from conflict-affected and high-risk areas in their respective supply chains.
  4. 4. We make use of validated supply chains and proactively apply procurement methods that support the elimination of the aforementioned minerals sourced from conflict-affected and high-risk areas in our supply chain. We do this in collaboration with our production partners and use industry best practices, such as RMI (Responsible Minerals Initiative)*3 RMAP (Responsible Minerals Assurance Process) and other programs, as they are developed.
*2
Minerals from areas designated as conflict-affected and high-risk in the "OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas", as well as those determined by Nintendo to pose a high risk from the viewpoint of social responsibility.
*3 RMI: Responsible Minerals Initiative
An initiative founded by the Responsible Business Alliance and Global e-Sustainability Initiative in order to promote efforts toward eliminating conflict-free minerals by developing inspection tools concerning conflict minerals.

http://www.responsiblemineralsinitiative.org/

Responsible Mineral Procurement Management Structure

 A cross-functional investigation team consisting of members from areas such as CSR promotion and procurement drive this initiative according to the Nintendo Responsible Mineral Procurement Policy. The results of our written surveys and interviews with production partners are reported to the management of Nintendo Co., Ltd., who use this information in deliberating Nintendo's responsible minerals procurement practices.

Responsible Mineral Supply Chain and Investigation

 Nintendo products contain electronic parts and circuits in which tin, tantalum, tungsten and gold are used. Approximately 70 first-tier partners supply parts that constitute these products. Since 2013, we have used the internationally recognized Conflict Minerals Reporting Template to conduct our supply chain survey with the cooperation of our first-tier suppliers to identify and assess risk regarding conflict minerals that become a source of finances for organizations associated with the inhumane use of military force. When inconsistencies or omissions are found in responses from production partners, we require them to correct any issues and resubmit their survey response. The response rate to the written survey is 100 percent.
 According to our investigation, Nintendo's supply chain consists of 323 smelters and refiners (including some that have not been identified as smelters and refiners by RMI). We compared these smelters and refiners against the RMI smelter lists to analyze the certification status of each mineral. As a result, 319 of the smelters and refiners reported were on the RMI Standard Smelter List, and among them, 256 were certified as RMAP Conformant Smelters and Refiners. We assessed the results and conducted direct interviews with high-risk production partners to accurately understand the situation and aim for mutual understanding.
 Furthermore, in fiscal year 2018 we conducted a pilot survey for cobalt, an important mineral used in lithium ion batteries. Strong concerns have been expressed regarding child labor and inferior working environments in the mines of the Democratic Republic of Congo, which is known to have the largest deposits of cobalt in the world. Using the RMI Cobalt Reporting Template, we began a survey of distribution processes in our cobalt supply chain in fiscal year 2018 and we are working hard to fully understand the present conditions.

Handling Survey Results and Improvements

 The results of our written surveys and interviews with production partners regarding conflict minerals have been reported to the management of Nintendo Co., Ltd., who are using this information to define steps that should be taken with respect to responsible minerals procurement. In addition, we continue to follow up with production partners that are interviewed.

Number of Smelters and Refiners on the RMI Standard Smelter List

Please scroll horizontally to look at table below.

  Gold Tantalum Tin Tungsten Total
Standard Smelters and Refiners 148 42 84 45 319
RMAP Conformant Smelters and Refiners*4
(Including standard smelters and refiners on the Active list*5)
104 40 73 39 256
*4 RMAP Conformant Smelters and Refiners
Smelters or refiners that have no relationship with the conflict in the Covered Countries and have been found to be compliant with the RMAP assessment protocols established by RMI.
*5 Active list
The list of smelters and refiners that have committed to undergo a certification audit for CFS or another certification program.

Working With Our Development Partners

Working With Our Development Partners

 Nintendo develops game systems and software both independently and in collaboration with a wide range of development partners. We identified the key essentials in designing attractive products with our development partners as the following: sharing values regarding collaborative product development, maintaining mutual respect for the roles and abilities of those involved, and creating a strong sense of appreciation for the contribution of each individual in the process.

Development Partner Comment

Naoya Yamoto

Naoya Yamoto

Customer Project Manager

NVIDIA Corporation

 We at NVIDIA provide a customized Tegra processor to be used as the Nintendo Switch system's main processor. We worked with Nintendo for over two years on everything from the Nintendo Switch hardware design, system design, system software to a new gaming API (application program interface) and game engine.
 I think the most important part of our collaboration with Nintendo was that our relationship was based on mutual trust.
 A variety of issues deriving from differences in corporate culture and development processes tend to surface during development projects, but with Nintendo we were able to act rapidly and resolve any issues by having managers or engineers from each side discuss them and work together, and treat each other as true partners when sharing any necessary technological information.
 We hope to continue to further improve our technology so that we can contribute to the creation of new gaming experiences.

Working With Our Sales Partners

Working With Our Sales Partners

 Cooperation with our sales partners is essential in conveying the appeal of our products to every person possible, enabling everyone to enjoy them. We therefore work on actively communicating with our sales partners to build relationships of trust.

New Product Information Sessions for Sales Partners

 Nintendo Co., Ltd. holds new product information sessions for sales partners to help them understand the products' characteristics and appeal before engaging in purchasing and sales.
 In addition to these sessions held twice a year in the lead up to competitive sales seasons, we hold other small-to-medium sized sessions as needed when product information is released so that our sales representatives can provide our sales partners with detailed explanations about the products, and our sales partners can gain hands-on experience with each product.
 Many sales partners have attended these sessions, which provided valuable opportunities for candid exchanges of opinions.
 Our overseas subsidiaries also create various opportunities to share the appeal of new products with their respective sales partners. For example, to help sales partners better understand our products, Nintendo of America and Nintendo Australia have a space at their headquarters where partners can come to try new products at any time.

New Product Information Sessions for Sales Partners

New Product Information Sessions for Sales Partners

New product information session

Environmentally Conscious Business Activities

Environmentally Conscious Business Activities

 Nintendo employs a fabless production model, in which we outsource all of our production processes, such as product manufacturing and assembly, to domestic and overseas production partners. As a result, Nintendo's environmental efforts focus mainly on its business processes, through which we advance our initiatives to conserve energy and make more effective use of resources.

Energy-Saving Activities

 Whenever a new office is designed and built for Nintendo, we take into account environmental considerations to the greatest possible extent, such as incorporating eco-friendly air conditioning and lighting into our facilities.
 Nintendo Co., Ltd.'s Development Center, which opened for business in June 2014, incorporates eco-friendly technology such as a high-efficiency air conditioning system, solar and wind power generation, and a system to reuse rainwater. It achieved the S Rank, the highest rank awarded under CASBEE Kyoto*6, a green building rating system.
 The Nintendo of America headquarters, which was completed in April 2010, was awarded the U.S. Green Building Council's LEED*7 Gold certification. Our other overseas subsidiaries are also encouraged to take positive steps by using renewable energy for their offices and promoting clean commuting.

*6 CASBEE Kyoto
CASBEE Kyoto is a system of original standards defined by Kyoto City to embody its goals for environmental considerations in construction. It is based on the Comprehensive Assessment System for Built Environment Efficiency (CASBEE), a common standard throughout Japan for prioritizing and reviewing items which enable proper evaluation and guidance of environmentally friendly construction.
*7 LEED: Leadership in Energy and Environmental Design
LEED is a system that comprehensively evaluates the environmental quality of a building's design, construction, operations and maintenance solutions.

Nintendo of Europe GmbH (Germany)

Reducing CO2 Emissions

 Nintendo of Europe has a strong focus on reducing its CO2 emissions, and converted the electricity supply contract for its headquarters to renewable energy in fiscal year 2012. In fiscal year 2013, Nintendo of Europe converted all of the new warehousing facilities it began using to renewable energy sources, and has achieved zero CO2 emissions at all of the buildings it uses.
 In other energy-saving efforts, lights were replaced with models that are 25 to 30 percent more energy efficient than conventional models and an automatic adjustable lighting system was installed. Nintendo of Europe also focused on raising the energy awareness of employees by providing information via the intranet and monitoring for unnecessary power consumption.
 In addition, Nintendo of Europe has been working continuously on reducing CO2¬†emissions from its car fleet.

CO2 emissions

CO2 emissions

* Nintendo Benelux's Belgium office (in fiscal year 2009) and Nintendo of Europe (in fiscal year 2012) converted their office electricity supply to natural, renewable energies such as solar, hydro, wind, etc. Therefore, their electricity energy consumption is excluded from this calculation.
* Excludes information for Nintendo of Europe's UK branch for fiscal year 2016.
* The aggregation scope for fiscal year 2017 and 2018 is Nintendo Co., Ltd., Nintendo of America, Nintendo of Europe and Nintendo Australia.

Promoting Waste Reduction and Recycling

 We recognize the importance of resources, and work hard both to minimize the production of waste and to effectively utilize resources by thoroughly separating all waste products. We also strive for effective resource utilization. At each of its offices, Nintendo Co., Ltd. has established a system for proper waste management and disposal, including recycling, and has appointed a supervisor to oversee the organizational system at each location.
 Similar systems for proper waste management and disposal have also been put into place at our overseas subsidiaries. Efforts such as partial digitization of workflows promote waste output by reducing paper consumption.

Amount of Waste

* Excludes information for Nintendo of Europe's Italy branch.
* From fiscal year 2014, the total amount of waste from Nintendo Co., Ltd. only includes the ISO14001 certification scope.
* Excludes information for Nintendo of Europe's UK branch for fiscal year 2016.
* The aggregation scope for fiscal year 2017 and 2018 is Nintendo Co., Ltd., Nintendo of America, Nintendo of Europe and Nintendo Australia.

Reducing Water Use

 Nintendo recognizes that water shortages are a serious issue in various regions around the world, and that water will become an even more precious resource in the years to come. With this in mind, we have taken steps to reduce our water usage, including installing water-conserving equipment and using septic systems that reuse stored rainwater for toilets or landscape irrigation.

Water Usage

* Excludes information for Nintendo of Europe's Italy branch.
* Excludes information for Nintendo of Europe's UK branch for fiscal year 2016.
* The aggregation scope for fiscal year 2017 and 2018 is Nintendo Co., Ltd., Nintendo of America, Nintendo of Europe and Nintendo Australia.

Employee Comment

Makoto Wakae

Makoto Wakae

(Environment Management Officer)
General Affairs Department

Nintendo Co., Ltd.

Environmental Activities in the Office

 Since Nintendo Co., Ltd. received ISO 14001 certification for its environmental management system in 2013, our environmental philosophy has centered on leaving a better environment for the next generation of smiles. Environmental conservation activities have subsequently occurred at the organizational level.
 Our particular focus for conservation activities in the office, in which all employees can participate, has been to set measurable numeric goals for reducing paper use, waste and electricity use. This has yielded more active participation. In fiscal year 2017, these activities resulted in good business awards from both Kyoto Prefecture and Kyoto City, recognizing our planned systems for reduction of business waste based on global warming countermeasures.
 Environment conservation activities are critical for the creation of a sustainable society and are one of the important activities we engage in to put smiles on the faces of everyone Nintendo touches. Moving forward, all employees will continue their involvement in corporate activities that consider the environment.

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