CSR Report > CSR Report 2021 - 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 can provide our consumers with better products, working to create beneficial relationships with our production partners, our development partners and our logistics 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

 The division in charge of procurement created the Nintendo CSR Procurement Guidelines (in Japanese and English, with a Chinese-language version added in August 2019) to ensure that we fulfill our social responsibility throughout the supply chain, with an emphasis on deepening mutual understanding and trust with our production partners.
 These Guidelines, created with the advice of external specialists, adopt the standards of the Responsible Business Alliance (RBA). They provide specific guidance based on relevant international laws, regulations, and standards that address topics such as human rights, sustainability and ethical procurement, including the prohibition of forced labor, respect for workers' rights and occupational health and safety.
 We distribute these Guidelines to all first-tier suppliers and require their formal agreement. We also ask our first-tier suppliers to disseminate these Guidelines on our behalf to their own suppliers, and to obtain their compliance. The basic contract with our first-tier suppliers also includes a clause where they must agree to comply with the Guidelines.
 Employees of our Procurement Department keep these Guidelines in mind as they conduct their procurement activities. We also continue to hold seminars by outside experts to deepen our understanding of CSR procurement.
 Nintendo CSR Procurement Guidelines are incorporated into our Procurement Policy and Business Partner Selection Policy, as follows.

*1 Production partners
Business partners involved in the production of Nintendo products, including first-tier suppliers that directly contract with us, factories to which the product assembly is outsourced, and parts suppliers.
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

Production Partner Evaluation and Selection Process

Partner Evaluation Process

Partner Evaluation ProcessPartner Evaluation Process

CSR Procurement Management Structure

 At Nintendo Co., Ltd. (Japan), the CSR Coordination Team and the division in charge of procurement work together to follow external trends and communicate with stakeholders, as they work on CSR procurement. The management of Nintendo Co., Ltd. (Japan) receives reports on the progress of these activities, and they discuss what measures to take to reduce the risks related to CSR procurement.

Coordination in the CSR Procurement Working Group

 Nintendo established the CSR Procurement Working Group to globally share information related to each country's CSR procurement activities in the supply chain. This working group brings together representatives of the Nintendo group from all around the world, each sharing the status of their CSR procurement activities, as well as discussing initiatives for the group as a whole.

Activities Implemented in FY 2020

Written Surveys

 We require all first-tier suppliers to report annually on their CSR efforts as well as their management status, using the Business Status Survey. This ensures that we are aware of the CSR promotion status of our production partners. We have received these reports from all first-tier suppliers.
 In the Business Status Survey, we also confirm that our production partners appropriately share the Nintendo CSR Procurement Guidelines with their own production partners, and that this information is also made known to their workers.
 Additionally, to understand the status of CSR promotion at each of our production partners' factories, we ask them to report on the status of CSR efforts at the factory level, using the Factory Status Survey.
 The Factory Status Survey includes items related to human rights, such as whether management systems and checks are in place to prevent forced labor, child labor and discrimination. It also asks about working hours, wages, protection of pregnant women and young workers and other health and safety questions. We also check that there is an internal reporting mechanism that allows workers to file complaints.

On-Site Inspections

 We have conducted on-site visits continuously since 2008, in which a Nintendo representative visits production partners selected on the basis of their responses to the Business Status Survey, business criticality and any changes in the environment. At these site visits, we examine relevant documents and inspect the production site and dormitories. Sampling checks are conducted for the respect of human rights, labor contracts, prohibition of discrimination, child labor and forced labor, compliance with legal wages, management of working hours, health and safety of the work site and dissemination of this information to the workers. We thus aim to understand the true state of the production sites as well as what improvements have been made.
 In past on-site inspections, we requested improvements related to long overtime hours, consecutive work days and inadequate evacuation routes and facilities (orientation of emergency exit doors and marking of emergency exits). We confirmed in subsequent follow-up visits that improvements have been made in these areas. The on-site inspections not only serve to help us understand the current situation, but they also offer a valuable opportunity to deepen our partners' understanding of the Nintendo CSR Procurement Guidelines, and to foster mutual understanding by talking directly about our stance on our production partners' CSR activities.
 In FY 2020, although the effects of COVID-19 made it necessary for us to postpone on-site inspections, we worked to understand the status of CSR activities through various communication methods, such as increasing the frequency of video conferencing with production partners.

Third-Party Audits

 In addition to on-site inspections, we conduct third-party audits, focusing on further improving the transparency of our CSR procurement. With emphasis on the human rights and labor management aspects of the Nintendo CSR Procurement Guidelines, we make visits to certain major production partners, who are selected on the basis of prior on-site inspections, third-party audits and our business transactions. During third-party audits, the auditors interview managers and workers employed at the production site in their native language, review relevant documents and inspect production facilities and dormitories. The team uses a sampling method to validate compliance on respect for human rights, employment contracts, prohibition of discrimination, child labor and forced labor, compliance with legal minimum wages, management of working hours and the health and safety of the work site.
 Considering the impact of COVID-19 in fiscal year 2020, we made preparations to conduct audits remotely in place of on-site visits. In spring of 2021, we were able to conduct these audits and ascertain site conditions.

Dealing With Known Risks

 Of the risks identified through our on-site inspections and third-party audits, we share the items that need improvement with our production partners, and ask them to correct these issues. We also work with our production partners to take 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 System
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 On-Site Inspections and Third-Party Audit Results
Improvement 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 human rights
  • Prohibition of discrimination
  • Prohibition of child/forced labor
  • Comply with related laws (decent wages, working hours, right to organize)

2.Ensuring occupational health and safety

  • Comply with health and safety-related laws
  • Prevent work-related accidents
  • Create 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 export management
  • Responsible mineral procurement
  • Build a management system
  • Prevention and early detection of illegal actions and misconduct
  • Respect for intellectual property

4.Maintaining the global environment

  • Create an environmental management system
  • Minimizing the environmental impact
  • Advance Nintendo Green Procurement

5.Product safety guarantee and quality assurance

  • Establish a quality management system
  • Guarantee product safety

6.Complete information management

  • Establish an information management system
  • Prevent disclosure of confidential client and third-party information

7.Establishing crisis management systems

  • Establish a risk management system
  • Create a Business Continuity Plan (BCP)

8.Contributing to the community

  • Contribute to local communities

Prohibition of Forced Labor

 Nintendo prohibits the use of forced labor, child labor, prison labor, slave labor, human trafficking and other forms of involuntary labor in all parts of our supply chain. In the event that forced labor were to be discovered, our policy is to discontinue the manufacturing or procurement relationship.
 In September 2018, we established the Nintendo Human Rights Policy based on the United Nations Guiding Principles on Business and Human Rights.
 The Nintendo Human Rights Policy applies to everyone employed by Nintendo, and also stipulates that we will continuously encourage our business partners to take socially responsible actions in the supply chain.
 No situation has been found by our due diligence processes (including written surveys, on-site inspections, and third-party audits) which would constitute a violation of human rights or forced labor.
 Going forward, we will continue to pay careful attention to external trends, including applicable laws and regulations, and work to appropriately mitigate risk in our procurement activities by engaging in necessary communication and confirmation with our business partners.

Responsible Mineral Procurement

 Nintendo takes the following steps with regards to social responsibility to ensure the non-use of minerals in our products that are a financial source of armed groups associated with environmental destruction and human rights violations, as well as minerals mined in connection with environmental destruction or human rights violations.

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*2, etc.) 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.

https://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. (Japan), who use this information in deliberating Nintendo's responsible mineral procurement practices.

Responsible Mineral Procurement Survey

 Electronic parts and electronic circuits are used in Nintendo products that contain tin, tantalum, tungsten, and gold. Nintendo conducts a survey of all our business partners who supply parts that contain these minerals.
 We started using our own format in 2012 for these surveys. In 2014, we adopted the international standard Conflict Minerals Reporting Template, and this is being used to investigate the supply chain upstream from our first-tier suppliers. The response rate to the written survey has been 100%, and we have conducted risk analysis and evaluation on all responses received, implementing status surveys based on these results.
 In FY 2020, to improve survey accuracy, we requested the cooperation of 19 business partners who, in our FY 2019 survey, used smelters or refiners that were not Conformant Smelters (smelters and refiners who passed the RMI audit).
 Nintendo will continue to carry out due diligence in our Responsible Mineral Procurement Survey. If there is a business partner who uses a smelter that is not a Conformant Smelter for an applicable mineral, we ask that they investigate their upstream supply chain, and have the smelter participate in the RMAP (Responsible Minerals Assurance Process) audit program. In the unlikely event that a problematic mineral is found, we will take measures to avoid its use, such as changing the procurement source.
 We are also conducting investigations for cobalt, an important mineral used in lithium-ion batteries. Concerns about child labor and poor working conditions have been raised for mining sites in the Democratic Republic of Congo, the world's largest source of cobalt. Since FY 2019, we have been investigating the distribution process in the cobalt supply chain using the cobalt template created by RMI, to try to better understand the current situation.

Responses and Improvements Based on Inspection Results

 The results of the responsible mineral procurement investigations and the fact-finding survey are reported to the management of Nintendo Co., Ltd. (Japan), who discuss what to do to achieve responsible mineral procurement. We also continuously follow up with production partners after conducting fact-finding surveys.

Number of Smelters and Refiners Identified in the RMI Standard Smelter List

Please scroll horizontally to look at table below.

  Gold Tantalum Tin Tungsten Cobalt Total
Standard Smelter 109 38 64 44 11 266
Of these, Conformant Smelters
(smelters and refiners that have passed the RMI audit)*4
(Active list*5 including Standard Smelters)
109 38 64 44 11 266
*4 Conformant Smelters (smelters and refiners that have passed the RMI audit)
Smelters and refiners recognized as having no relation to conflicts in the Democratic Republic of the Congo or neighboring countries, based on compliance with the RMI-led conflict-free smelter program evaluation protocol.
*5 Active list
A list of smelters and refiners who are in the process of being audited by RMI or other certification programs.