CSR Report > CSR Report2018 - Working With Our Business Partners

CSR Report

Working With Our Business Partners / 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 Business Partners

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

CSR Priority Area

 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 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 for those involved 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 respecting the human rights of workers and prohibiting the use of inappropriate materials, commonly known as conflict minerals*2.

*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.
*2 Conflict Minerals
Conflict minerals are the gold, tantalum, tin and tungsten extracted from the conflict-affected regions of the Democratic Republic of the Congo or its adjoining countries that are used as a financial source for armed groups or rebel forces who commit inhumane acts such as massacres, pillaging, and sexual assault in the region.
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 Conflict Minerals 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) Sound business operations
  3. (3) Quality, price and delivery time are of an appropriate standard
  4. (4) Capable of providing stable supply and adapting to fluctuations in demand
  5. (5) Possess advanced technological capabilities that contribute to Nintendo products
  6. (6) Sound information management system
  7. (7) Capable of providing 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., that 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 to discuss necessary actions to mitigate CSR procurement activity related risks.

Fiscal Year 2017 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 supplier by requiring them to report on the 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 2017, we carried out on-site inspections at the facilities of 22 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 view on 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. To advance these collaborations, CSR procurement, which takes into account issues such as the working environments at the factories of each company, is a vitally important element. 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 three 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 employment 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 the 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 2017, 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.

Fiscal Year 2017 CSR Procurement Improvements

  • Revision of the partner-evaluation procedure (including a revision of the Business Status Survey to strengthen risk assessment)
  • Continuous improvements to on-site inspection procedures
  • 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 review of the follow-up criteria)
  • Supply chain re-evaluation
CSR Procurement Process
Share Guidelines With Production Partners
Nintendo CSR Procurement Guidelines
Confirmation by Written Survey
Business Status Survey
Conflict Minerals Survey
On-Site Visits to Understand Current Status
On-Site Inspections
Third-Party Audits
Conflict Minerals 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 inappropriate payoffs or receipts
  • ・Prohibition of abuse of dominant bargaining position
  • ・Prohibition of acts that restrict competition
  • ・The appropriate management of exports
  • ・Non-use of conflict minerals
  • ・The building of a management system of compliance
  • ・Prevention and early detection of illegal actions and misconduct
  • ・Respect for intellectual property

4.Maintaining the global environment

  • ・Environmental management system
  • ・Minimizing the environmental impact
  • ・Advancing Nintendo Green Procurement Compliance

5.Product safety guarantee and quality assurance

  • ・Quality assurance system
  • ・The guarantee of product safety

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
  • ・The creation of a business continuity plan

8.Contributing to the community

  • ・Contributions to the 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 are increasing each year regarding the resolution of supply chain issues. 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 Conflict Minerals

 It has become a global concern that companies using minerals from conflict-affected regions could be playing a role in the conflicts by financing armed groups. In the U.S., Section 1502 of the Dodd-Frank Act, effective January 2013, requires companies listed in the U.S. disclose the use of any of the four conflict minerals (tin, tantalum, tungsten and gold) which are extracted from the Democratic Republic of the Congo or its adjoining countries and become a funding source for armed groups, are used in those companies' products, and if so, those companies must 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., since 2011 Nintendo has implemented and advanced conflict minerals initiatives, with a clear policy on the non-use of conflict minerals in our products to realize the responsible sourcing of raw materials and to cut off financial sources for armed groups.

Nintendo Conflict Minerals Policy

Nintendo is committed to socially responsible procurement practices and works closely with production partners to ensure that as a basic policy, conflict minerals; tin, tantalum, tungsten and gold that are mined in the Democratic Republic of the Congo or its adjoining countries and become a funding source for armed groups associated with environmental destruction and human rights violations, are not used in Nintendo products.

  1. 1. We investigate the supply chain of materials used in our products.
  2. 2. We ensure a clear understanding of the Nintendo Conflict Minerals Policy with production partners through distribution of the Nintendo CSR Procurement Guidelines, training and education and visits to factories and corporate offices and require them to conduct business accordingly.
  3. 3. We require production partners to establish a policy that prohibits the use of conflict minerals in their respective supply chains.
  4. 4. We require production partners to use a validated supply chain once a conflict-free supply chain is established through initiatives such as the EICC-GeSI*3 Conflict-Free Smelter program.
*3
In October 2017, EICC became the Responsible Business Alliance (RBA), CFSI became Responsible Minerals Initiative (RMI)*4 and the Conflict-Free Smelter Program became Responsible Minerals Assurance Process (RMAP).
*4 RMI: Responsible Minerals Initiative
An initiative founded by the Responsible Business Alliance and Global e-Sustainability Initiative in order to promote efforts for eliminating conflict minerals by developing inspection tools concerning conflict minerals.

http://www.responsiblemineralsinitiative.org/

Conflict Minerals 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 Conflict Minerals Policy. The results of our surveys and interviews with production partners have been reported to the management of Nintendo Co., Ltd., who will use this information to define steps to further reduce the risk of using conflict minerals that support armed groups.

Conflict Minerals Supply Chain and Investigation

 Nintendo products contain electronic parts and circuits in which tin, tantalum, tungsten and gold are used. Approximately 70 production 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. 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 339 smelters and refiners (including some that have not been identified as smelters and refiners by RMI). We compared these smelters and these smelters and refiners against the RMI smelter lists to analyze the certification status of each mineral. As a result, 320 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.

Handling Survey Results and Improvements

 The results of our surveys and interviews with production partners have been reported to the management of Nintendo Co., Ltd., who will use this information to define steps to further reduce the risk of using conflict minerals that support armed groups. 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 147 43 84 46 320
RMAP Conformant Smelters and Refiners*5
(Including standard smelters and refiners on the Active list*6)
101 42 72 41 256
*5 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.
*6 Active list
The list of smelters and refiners that have committed to undergo an RMAP audit or are participating in one of the cross-recognized certification programs.

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 provided 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

 To expand our consumer base, we must cooperate with our sales partners in effectively conveying the appeal of our products to consumers around the world. Nintendo continues to build these relationships and encourages open communication with its sales partners.

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 selling them.
 In addition to these sessions twice a year in the lead up to the sales seasons, we hold other small-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 experience playing with each product.
 Many sales partners attended these sessions in fiscal year 2017, 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 session

Page Top