Nintendo’s CSR Procurement
Nintendo employs a fabless production model for our main products, including gaming systems and accessories, which means that we do not own the facilities that manufacture those products. We work with our numerous production partners*1 in Japan and around the world to improve quality and technical capability, ensure safety and achieve production efficiency.
Nintendo also has established the basic procurement policy and Business Partner Selection Policy to promote production that complies with laws, regulations and social standards, while taking into account human rights and the global environment. We have also created these policies to build trust with our business partners so that we can fulfill our social responsibilities collaboratively.
Advancing CSR activities throughout our entire supply chain is a way for Nintendo to not only improve the working environment for those employed at the production sites, but to also lead to worker retention and enhanced productivity. This provides a foundation for the production of high-quality products, is connected to environmental considerations, and, ultimately, leads to more smiles for our consumers and everyone Nintendo touches. We continue to work together with our production partners on the promotion of CSR activities, with a focus on communication and mutual understanding.
- *1 Production partners
- Business partners involved in the production of Nintendo products, including first-tier suppliers with whom we contract directly, as well as upstream factories subcontracted for product assembly and our component suppliers.
Basic Procurement Philosophy
Nintendo has formulated Procurement Standards both to clarify procurement criteria and to work on various areas such as improvements in product quality. Within these standards, our basic procurement policy and business partner selection policy are defined as follows:
Basic Procurement Policy
- Conduct procurement by providing an equal opportunity to all suppliers, both inside and outside Japan, based on fair evaluations
- Strive to give careful consideration to human rights and the global environment in all procurement activities, while complying with laws and social standards
- Purchase suitable goods at fair prices from production partners that are in good standing and that provide appropriate delivery times
- Work to build cooperation and mutual trust with our suppliers to fulfill our corporate social responsibility together through procurement
- Comply with the Nintendo Responsible Mineral Procurement Policy in the procurement of products and component parts
Business Partner Selection Policy
When selecting suppliers or extending existing transactions for the procurement of products and components, priority will be given to companies that satisfy the following criteria:
- Comply with laws and social standards, with an emphasis on human rights and environmental considerations
- Engage in sound business operations
- Meet appropriate standards for quality, price and delivery times
- Possess the capability to provide stable supply and to adapt flexibly to fluctuations in supply and demand
- Possess advanced technological capabilities that contribute to Nintendo products
- Have strong information management systems in place
- Are capable of resuming supply as quickly as possible, even in the event of a disaster or other unforeseen event
CSR Procurement Policy
With our basic procurement policy, throughout all of our procurement-related activities, Nintendo is committed to complying with laws, regulations and social standards, as well as to advancing the consideration of human rights and the global environment. Under this policy, we also work with our business partners for their understanding of and cooperation with our policies and, to facilitate this, we have established the Nintendo CSR Procurement Guidelines and promote CSR procurement activities.
The division in charge of procurement created the Nintendo CSR Procurement Guidelines (in Japanese, English and Chinese) to further ensure that we fulfill our social responsibility throughout the supply chain, with an emphasis on deepening mutual understanding and building trust with our production partners.
These Guidelines, created with the advice of external specialists, adopt the standards of the Responsible Business Alliance (RBA) *2. 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.
- *2 Responsible Business Alliance (RBA)
- An organization that promotes the creation of a safe working environment, treatment of workers with respect and dignity, and sustainability improvements in the electronics industry.
Nintendo CSR Procurement Guidelines
|Guideline Sections||Examples of Section Contents|
|1. Promoting respect for and compliance with human rights||
|2. Ensuring occupational health and safety||
|3. Practicing corporate ethics and fair trade||
|4. Maintaining the global environment||
|5. Product safety guarantee and quality assurance||
|6. Complete information management||
|7. Establishing crisis management systems||
|8. Contributing to the community||
Respect for Human Rights
Nintendo places great importance on respect for human rights and includes this as the first item in our CSR Procurement Guidelines. We prohibit 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 require remediation and to discontinue the manufacturing or procurement relationship if the situation is not remedied.
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, CSR Factory Verifications 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 mitigate risk in our procurement activities by engaging in necessary communication and confirmation with our business partners as appropriate.
CSR Procurement Management Structure
At Nintendo, 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. This team and division also report on the progress of these activities to executive management and discuss what measures to take to reduce the risks related to CSR procurement.
Employees of our division in charge of procurement keep these Guidelines in mind as they conduct their procurement activities. We also continue to conduct seminars and other educational opportunities with outside experts to deepen our understanding of CSR procurement.
Coordination in the CSR Procurement Working Group
The Nintendo group 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.
CSR Procurement System
In deciding to start new business relationships or continue existing ones with partners, Nintendo not only verifies factors such as their financial situation, but also evaluates these companies based on their CSR procurement policies and philosophy.
We evaluate and select our production partners based on the following process:
Distribute and Ensure Awareness of Guidelines With Production Partners
We distribute the Nintendo CSR Procurement Guidelines to all first-tier suppliers and enter into basic business agreements that include a section on compliance with the Guidelines. We also require first-tier suppliers to disseminate these Guidelines on our behalf to second-tier suppliers and beyond, and to require their compliance.
Confirmation by Written Survey
We require all first-tier suppliers to report annually on their CSR efforts, as well as on their operation status, using the Business Status Survey. This ensures that we are aware of the CSR promotion status of our production partners. We receive 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 or equivalent standards with their own production partners, and that this information is made known to their workers.
Additionally, to understand the status of CSR promotion at each factory of our production partners, 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.
CSR Factory Verifications
Nintendo has been continuously conducting CSR Factory Verifications since FY 2008, where representatives from our division in charge of procurement visit production partners selected on the basis of their responses to the Business Status Survey, business criticality and any changes in the environment or other factors. During these verifications, we examine relevant documents and inspect the production sites 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 CSR Factory Verifications, we requested improvements related to long overtime hours, consecutive workdays 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 had been made in these areas. The CSR Factory Verifications not only serve to help us understand the current situation, but they also offer a valuable opportunity to encourage a deeper understanding of the Nintendo CSR Procurement Guidelines, and to foster mutual understanding through direct conversation about our production partners' thoughts on CSR activities.
In FY 2021, as in FY 2020, we remained unable to visit factories due to the impact of COVID-19, but we worked to understand the status of CSR activities through communication efforts such as holding more video conferences with our production partners. We also verified the CSR activities of 39 factories by creating the CSR Factory Verification Survey (68 items, 195 questions), which incorporated details checked by Nintendo during on-site inspections. We are continuously promoting these activities even during the spread of COVID-19.
In addition to the CSR Factory Verifications described above, 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, third-party auditors make visits to certain major production partners, who are selected on the basis of prior CSR Factory Verifications, past third-party audit records, our business transactions and other such factors. 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 in areas including 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.
In consideration of the impact of COVID-19, we began implementing remote audits with our FY 2020 audit cycle. We have also continued to conduct audits remotely for the FY 2021 cycle.
Follow-Up for Improvement
We share the risks identified through the CSR Factory Verifications and third-party audits with our production partners and ask them to make improvements regarding essential matters. We cooperate with our production partners to make these improvements and verify them via on-site inspections.
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 the CSR Factory Verification procedures (including the creation of a manual)
- Continuous training of members who conduct the CSR Factory Verifications (including a certification program for the relevant representatives)
- Strengthening of the follow-up process (including a revision of the follow-up criteria)
- Re-evaluation of the supply chain
- Revision of the Nintendo CSR Procurement Guidelines