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 basic procurement and business partner selection policies 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. In these standards, our basic procurement and business partner selection policies 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
- 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 relationships of cooperation and trust with our suppliers, and 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 Program
Nintendo has established a CSR Procurement Policy and response structure to carry out due diligence throughout the supply chain.
CSR Procurement Policy
With our basic procurement policy, Nintendo is committed to complying with laws, regulations, and social standards as well as to advancing human rights and global environmental considerations throughout all of our procurement activities. We also work with our business partners to gain their understanding of and cooperation with these policies. To facilitate these efforts, 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.
Nintendo places great importance on the respect for human rights and includes this as the first item in our 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.
The Nintendo Human Rights Policy, which we established in September 2018 based on the United Nations Guiding Principles on Business and Human Rights, 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.
- *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 |
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| 2. Ensuring occupational health and safety |
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| 3. Practicing corporate ethics and fair trade |
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| 4. Maintaining the global environment |
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| 5. Product safety guarantee and quality assurance |
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| 6. Complete information management |
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| 7. Establishing crisis management systems |
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| 8. Contributing to the community |
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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 in the division in charge of procurement also receive education on CSR procurement and work together with our production partners to promote CSR procurement activities.
Coordination in the CSR Procurement Working Group
Nintendo has established the CSR Procurement Working Group which, in addition to the Nintendo Co., Ltd. (Japan) CSR Coordination Team, includes employees in charge of CSR at our subsidiaries outside Japan, staff from our procurement departments in different countries and members from other related teams. In the working group, we share information related to CSR procurement activities in the various regions and discuss our approach to these initiatives.
Nintendo’s Supply Chain Due Diligence
Nintendo carries out supply chain due diligence in order to assess environmental and human rights risks and work to reduce them. As part of these efforts, to understand how CSR is being promoted by our production partners, we ensure their awareness of the Nintendo CSR Procurement Guidelines, confirm the state of CSR through written surveys, conduct interviews and on-site visits to understand the current status, and follow up to make improvements.
- Production Partner Evaluation and Selection 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 our first-tier suppliers to disseminate the Guidelines to and request the same compliance from second-tier suppliers and further upstream.
Confirmation by Written Survey
Nintendo conducts a written Business Status Survey and Factory Status Survey once a year to confirm the level of CSR promotion at our production partners.
In the Business Status Survey, we verify business conditions and other items such as the following. All first-tier suppliers respond to this survey.
- Compliance of first-tier suppliers with the Nintendo CSR Procurement Guidelines
- First-tier suppliers’ confirmation of second-tier supplier compliance with the Nintendo CSR Procurement Guidelines or equivalent standards
The Factory Status Survey checks the status of CSR procurement of our production partners at a factory level. The survey includes items related to human rights, such as whether management and checks are implemented to prevent forced labor, child labor and discrimination, as well as questions covering working hours, wages, and health and safety topics including the protection of pregnant and nursing workers and young workers. We also confirm that there is an internal reporting mechanism that allows workers to file complaints.
Interviews and On-site Visits to Understand Current Status
The division in charge of procurement at Nintendo conducts CSR Factory Verifications of our production partners selected on the basis of their responses to the Business Status Survey and Factory Status Survey, business criticality, changes in the business environment and other such factors. To further enhance the transparency of our CSR procurement, a third-party firm also carries out audits of our main production partners selected based on the business relationship status and other factors.
CSR Factory Verifications and third-party audits confirm the actual situation at production sites with regard to the items covered in the CSR Procurement Guidelines, such as the respect for human rights, labor contracts, prohibition of discrimination, child labor and forced labor, compliance with legal wages, management of working hours, and health and safety of worksites. During a CSR Factory Verification, we hold video conferences with our production partners after reviewing answers to a questionnaire provided in advance about various CSR topics. Following this, as a general principle, we visit the sites ourselves to confirm the situation directly. By checking the state of production sites and dormitories, wages, working hours, and various other items via sampling through the video conferences and on-site visits, we work to fully understand the actual conditions at each production site.
CSR Factory Verifications go beyond understanding the situation at each site by creating important opportunities to deepen mutual understanding about CSR through dialogues with our production partners.
During third-party audits, auditors review relevant documents and perform a sampling check to verify wages, working hours and other items. Auditors also confirm that the human rights of workers are being respected through interviews with managers and workers employed at the production sites in their native language and observation of production sites and dormitories.
Follow-Up for Improvement
We share the topics identified by the CSR Factory Verifications and third-party audits with our production partners and request corrective actions based on the follow-up guidelines for each item that needs to be improved. The corrective actions taken are then confirmed by either visiting the site or through a video conference.
For example, issues indicated by our CSR Factory Verifications and third-party auditing have included occupational health and safety and labor issues. Occupational health and safety issues included inadequate emergency and evacuation exit signs, insufficient emergency lighting and fire extinguishers, and fire alarm buttons installed in places that are difficult to access. From a labor perspective, the reviews also noted long overtime. During our on-site follow-up verifications, we have confirmed improvements that meet our expectations to the fire extinguishers, emergency lighting and other installations mentioned above. Also, in addition to checking via the follow-up verification process, we are continuing to confirm the status of working hours through other means of communication to ensure that the issue is properly addressed. The responsible parties in our division in charge of procurement make the final decision about whether to continue business with a production partner based on the results of various written surveys, video conferences, CSR Factory Verifications, and third-party audits carried out as part of our supply chain due diligence. If serious CSR issues, such as those involving human rights or the environment, are discovered, we will require that the issue or issues be addressed, and the responsible parties at Nintendo may make the final decision to cease business with a production partner if our requirements are not met. In FY 2024, we did not identify any serious issues through our supply chain due diligence efforts that would lead to ceasing business with a production partner.
CSR Procurement Program Improvements
We continuously improve our CSR procurement program through initiatives such as the following.
- Review of the partner evaluation procedure (including a revision of the Factory Status Survey to strengthen risk assessment)
- Continuous improvements to CSR Factory Verifications and third-party auditing methods
- Continuous training for employees who conduct the CSR Factory Verifications (including a certification program for the relevant representatives)
- Strengthening of follow-up process (including revisions to follow-up criteria)
- Re-evaluation of the supply chain
- Revision of the Nintendo CSR Procurement Guidelines