Procurement Activities

At the Canon Marketing Japan Group (hereafter, the "Canon MJ Group"), we widely disclose our Procurement Basic Policy, which is aimed at ensuring stable purchases at appropriate prices while complying with procurement-related laws and regulations and giving consideration to protecting the environment, so that our suppliers understand our basic stance in procurement activities and so that we can build good relationships with them. In addition, through procurement-related initiatives, we will do what we uniquely can do to help solve social issues and build a sustainable society, together with each one of our suppliers.

The Canon MJ Group undertakes sustainable procurement activities via its supply chain, aiming to improve social productivity and enrich people's lives. We ask our suppliers to take the following initiatives:

At the Canon MJ Group, we have established the Canon MJ Group Procurement Regulations as an initiative to ensure that transactions are appropriate and fair. These Regulations stipulate that appropriate actions should be taken by keeping in mind equal, fair trade, environmental considerations, and compliance with procurement-related laws and regulations.
In addition , we have set up a department dedicated to controlling the procurement divisions of the overall Canon MJ Group in a cross-sectoral manner by providing training on procurement-related laws, regulations, and rules and by monitoring the legal compliance status.
To facilitate sustainable procurement activities, we provide the employees of procurement divisions with buyer training for raising their awareness of legal compliance based on the above Canon MJ Group Procurement Regulations. In the training, guidance is given so that trainees will also be concerned with social issues, including issues involving human rights and labor. The training is provided to all employees who have been newly assigned to procurement divisions. It is also provided to existing members of the divisions on an ongoing basis, with the aim of developing human resources who are capable of implementing responsible procurement activities.
We conduct risk assessment before starting business with a new supplier. When starting business with a new supplier, we sign a Basic Business Agreement with them in addition to presenting the Requests to Suppliers. Thus, we make sure that they "deal in a fair, faithful manner by strictly refraining from engaging in acts against corporate ethics and acts which undermine public trust, not to mention complying with laws." After starting business, we conduct a regular survey of a wide range of initiatives taken by the supplier, including environmental and social initiatives, and provide feedback on the results of evaluation to the supplier. If we confirm a case where the Requests to Suppliers are not met or where any stipulations of the Basic Business Agreement have been violated, we ask the supplier to take remedial actions and provide them with guidance and support as necessary. Where we have judged that remedy is difficult, we consider terminating transactions with the supplier.

The Canon MJ Group is working to eliminate hazardous chemical substances in accordance with the Global Canon Green Procurement Standards^*, which were formulated by the Canon Group.
^*In these standards, Canon has stipulated what it requires of suppliers in green procurement activities, which it implements as a part of activities for protecting the global environment. Suppliers must comply with the requirements to do business with Canon.
To new business partners, we give explanations about the Global Canon Green Procurement Standards and confirm that they have established product chemical management systems in accordance with the above Standards. We also conduct surveys of raw materials, parts, and secondary materials of products manufactured under contract to check for environmentally hazardous substances, thus confirming that the Global Canon Green Procurement Standards are observed.
When we revise the Global Canon Green Procurement Standards, we inform suppliers of the contents of the revision. Every other year, we confirm that product chemical management systems established by our suppliers are operated appropriately and that they comply with the Global Canon Green Procurement Standards on an ongoing basis by appropriately conducting surveys of raw materials, parts, and secondary materials of products manufactured under contract.
To ensure that the Global Canon Green Procurement Standards are understood and observed, we hold study sessions for procurement divisions of the Canon MJ Group and remind them of the Standards via our internal intranet.

At the Canon MJ Group, we conduct mineral surveys (address the issue of conflict minerals)^* responsibly under the basic policy adopted by the Canon Group.
Business enterprises are required to avoid use of materials supplied by business operators with high human rights and environmental risks from conflict regions because the non-use of such materials is regarded as part of corporate social responsibility. We request our suppliers to cooperate with us in tracking the sources of minerals used in products and avoiding the use of conflict minerals, so that customers can use Canon products with peace of mind.
^*Some of the minerals mined in and around the Democratic Republic of the Congo in Africa are called "conflict minerals" because they are widely distributed via a global supply chain to finance local militant forces. Concerns over conflict minerals have been growing globally. For example, the United States has established laws that require its listed companies to disclose information about their use of conflict minerals and other information. Further , in 2020, we expanded the regions covered by the survey to conflict regions and high-risk regions all over the world and began to procure minerals in accordance with the OECD Guidance, considering the impact of the EU conflict minerals regulations.

To achieve a responsible supply chain, we conduct questionnaires for major suppliers with the aim of reducing the environmental impact and preventing/mitigating human rights violations, and gaining insight into the actual state of affairs of the initiatives suppliers are carrying out.
Going forward, we will engage with each supplier as necessary based on the results of the questionnaire.