Honoring the “Supply Chain CSR Action Guidelines” in our Lumber Business
?Sojitz Wood Procurement Policy?
Based on the “Sojitz Group Supply Chain CSR Action Guidelines,” Sojitz set a “Wood Procurement Policy” for responsible wood procurement in September 2015.
In February 2021, Sojitz established a new qualitative target to be achieved by FY2025.
Wood Procurement Policy
In honoring the Sojitz Group Statement, we are committed to do our best to cooperate with business partners to procure wood in line with the following policies, based on the Sojitz Group CSR Action Guidelines for Supply Chains.
- 1. Legality
We will not handle wood obtained through illegal logging.
- 2. Environmental Consideration
We will not handle wood obtained through logging methods which are detrimental to high conservation value forests.
- 3. Social Consideration
In view of logging’s potential to adversely impact human rights, we will seek to mitigate any negative impact associated with wood procurement.
This policy covers all roundwood; sawnwood and wood-based panels; paper manufacturing materials such as wood chips, particles, and pulp; paper products; and woody biomass handled by Sojitz and its consolidated subsidiaries (hereafter, “wood.”)
We selected and and conducted a targeted survey of wood that makes up over 80% of our total purchased wood supply in terms of monetary value, using criteria including the supplier country’s risk level1, the amount of wood purchased in terms of monetary value, and suppliers’ compliance with Sojitz policies, from among Sojitz Group’s approximately 1,500 wood-related suppliers. The survey conducted in the 2020 fiscal year found that of the surveyed wood supply, 70% was imported wood, and 30% was produced domestically. We take an approach to surveying that accounts for the unique characteristics of both the import and domestic industries.
- *1：Our country risk evaluation adopts the Corruption Perceptions Index made available by each year by Transparency International, an international, non-governmental organization working to prevent corruption around the world. This index ranks countries individually by comparing levels of corruption among public servants and politicians.
Under the supervision of WWF Japan(*2), the wood selected for survey was checked for 1) traceability to its country of origin, and 2) suitability of forest management (whether the forest is subject to environmentally/socially-conscious forest management).
- *2：We have adopted use of WWF Japan’s “Responsible Purchasing Checklist for Forest Products” to confirm 1) wood traceability in the country of origin and 2) suitability of forest management. We also invited WWF to hold a briefing session in FY2015 to explain how to confirm whether forests with high conservational value in terms of biodiversity are being appropriately protected, as well as how to define human rights issues. Sojitz's lumber-related departments and subsidiaries attended the lecture.
Furthermore, we referred to advice from WWF Japan in establishing the targets below.
1) Wood was evaluated for traceability back to the place of origin and 2) suitability of forest management, after which it was sorted into one of the following four levels.
- Level A：Wood confirmed to be certified wood (*3) or which is subject to strict management equivalent to that of certified wood.
- Level B：Wood which has not been certified, but for which we have verified both traceability and suitability of forest management (i.e. that the forest is subject to environmentally/socially conscious forest management)
- Level C：Traceable wood
- Level D：Wood lacking traceabilit
- *3：Wood certified under FSC?, PEFC, etc. FSC?-certified wood is given the highest score.
1）FY2020 Targets & Results
Sojitz Group will ensure that 100% of the wood we handle is traceable (reduce wood classified as Level D to 0%) by FY2020.
We achieved our goal (reduce Level D wood to 0%) in FY2018 and successfully maintained 100% traceability for the following three years.
Efforts Taken to Improve
- ?Conducted traceability surveys before initiating trade with new suppliers in countries with high country risk
- ?Promoted the use of eco-friendly wood products to consumers
- ?Conducted on-site due diligence for suppliers with any matters of concern
（For reference: Sojitz Corporation’s FSC? license code is FSC-C009917）
2）Establishing a New Target
Target for FY2025
Building upon our successful completion of the FY2020 goal, Sojitz has established the following target for FY2025.
Sojitz Group will ensure that by FY2025, 100% of the wood we handle is
either certified wood (Level A), or wood that has not been certified,
but that we have verified as being procured through
environmentally-conscious methods (Level B).
Initiatives to Achieve Our Goal
- ?Increase quantity of certified wood handled by Sojitz Group
- ?Encourage business partners to obtain wood certification
- ?Promote the use of eco-friendly wood products to consumers
Qualitative Progress and Sojitz’s New Target
*4：We have narrowed our evaluation criteria for Level A wood each year. For the FY2020 survey, we limited the category to only wood that has been officially certified. (Of the total amount of Level A and B wood, Level A wood made up 18% in the FY2020 survey.) We will use this criteria for our FY2025 target as well.
Portions of past survey results have been modified in line with stricter evaluation criteria.
- * Levels A through D were determined based on evaluations conducted by Sojitz using WWF Japan’s “Responsible Purchasing Checklist for Forest Products.” Percentages in the above table were calculated by dividing the cost of procured (imported) wood in each level by the total cost of all imported wood included in the survey.? The FY2020 survey is calculated from the amount of procured wood in the FY2018.
In order to increase the objectivity of our calculations, Sojitz has acquired third-party assurance from KPMG AZSA Sustainability Co., Ltd. (KPMG) with the scope outlined as below since FY2020. The data assured by KPMG is marked with star ("☆”) in the data table above.
- Scope of Third-party Assurance
- KPMG provides assurance as to whether the results of the survey conducted in fiscal 2020 on procured (imported) wood described above are prepared, in all material respects, in accordance with the criteria established by Sojitz, based on the evaluation conducted by Sojitz using WWF Japan’s “Responsible Purchasing Checklist for Forest Products.
KPMG takes the evaluation conducted by Sojitz as given with no consideration of the validity of the evaluation (Levels A through D).
Approach to Domestically-Produced Wood
We recognize that domestically-produced wood requires awareness of a different set of issues than imported wood, such as labor safety at logging sites and regional resource recycling. As we continue to encourage both our domestic and international suppliers to be aware of social and environmental issues, we are also working to develop distinct approaches for imported wood and domestic wood in order to address each individually.
Placing an emphasis on the recycling of resources in regions where wood is harvested, we will build community-based forestry through discussions with our stakeholders as we work to address these issues.