Amid growing demands in the international community for human rights initiatives, in 2021 Panasonic Holdings joined the RBA, a global organization that promotes social responsibility, and is developing initiatives to strengthen CSR procurement in its supply chain.

As part of those initiatives, we are distributing the Supply Chain CSR Promotion Guidelines to all tier 1 suppliers and requesting that they not only check contracts and agreements but also conduct regular self-assessments. The assessment results are classified into three ranks, A, B, and C, in ascending order according to risk. The precondition for starting transactions with a new supplier is an evaluation of B rank or higher in the CSR assessment. In fiscal 2025, we had 351 tier 1 suppliers conduct self-assessments, and of the 351 companies, 307 (87%) were ranked A, 39 (11%) were ranked B, and the remaining five companies had yet to submit a self-assessment result sheet. For B-ranked suppliers, our Procurement Department works together with them to promote risk reduction by implementing improvement activities aimed at strengthening the CSR management system. In the event that a supplier receives a C rank, we will review our transactions with them. In fiscal 2024, we also joined the Global Battery Alliance (GBA), an international battery industry initiative with more than 150 member companies, governments, and international organizations. We will accelerate our efforts to collaborate with member companies and organizations toward the initiative’s goal of establishing a sustainable and responsible battery value chain by 2030.

To realize responsible procurement activities, we believe that it is essential to educate and train our personnel who are in charge of procurement and who come into contact with our suppliers on a daily basis. There are CSR Level 1 and CSR Level 2 systems according to the degree of proficiency in CSR, with 4% of the personnel acquiring Level 1 and 53% acquiring Level 2 in fiscal 2025. With the goal of all procurement personnel acquiring Level 2 or higher, we promote education and training by creating an annual course plan. We are also conducting e-learning sessions for all domestic employees to promote their understanding of CSR compliance and prevention of legal violations in purchasing operations.

As stipulated in our regulations, we conduct an audit before commencing a new transaction with a material supplier. Based on the audit results, if necessary, we provide support that will lead to improvements in, for example, the management level of our suppliers with regard to the control methods for processes, chemical substances and health and safety. We also hold a Partners’ Meeting once a year to further strengthen cooperative relationships with suppliers by understanding our management policy. In fiscal 2025, 490 people from 253 companies participated.

With regard to its suppliers, the Panasonic Group performs risk mapping based on the risk indicators of international organizations and the impact the risks would have on business. We began on-site CSR audits with regard to our suppliers that we have identified as “high risk” in cooperation with an external organization, which include items related to human rights, labour, health and safety, since fiscal 2024. We are conducting and ongoing these audits our company only since fiscal 2025. During the fiscal year, we also conducted on-site CSR audits of 40 suppliers in Japan and overseas. Going forward, we will promote human rights due diligence, including the identification and countermeasures of supply chain risks, by conducting on-site CSR audits.