Basic Policy on Sustainable Procurement

In order to offer our customers high-quality products and services, Suntory Group recognizes the importance of promoting sustainability throughout our entire supply chain. This means to give due consideration to the environment and society, as well as to safety and reliability.
In 2011, to promote sustainability in procurement, we established the Suntory Group Basic Policy on Sustainable Procurement consisting of 6 main pillars—legal compliance, human rights and labor standards, quality, environment, information security, and coexistence with society—that address global issues such as child labor, forced labor, freedom of association and collective bargaining, working hours, and the guarantee of minimum wages. To advance sustainability in collaboration with our business partners, we communicate with them to ensure awareness and seek their understanding.
To avoid our purchasing practices negatively effecting the human rights of our suppliers’ workers, we agree on estimated lead times with our suppliers and share our payment terms in advance. We also implement the necessary mechanisms and procedures so that payments are executed according to the timeframe agreed upon with the supplier.
Furthermore, if we identify high human rights risk in one particular ingredient, we review our purchasing practices and strive to reduce the risk. For example, in some of our business units we switch to sustainable-certified palm oil in order to minimize human rights and environmental risks.
Suntory Group has been working toward a target of zero deforestation across its key forest-risk commodities by the end of 2025. Through these efforts, we have identified challenges in the upstream supply chain, and to address them, we have begun verifying traceability back to the production origin using digital and other technologies, and building a new risk-assessment framework in collaboration with our suppliers. Going forward, we will use the results of this verification to roll out effective due diligence.

Partner Guidelines

We have established the Suntory Group Partner Guidelines to realize sustainable procurement throughout the value chain based on the Suntory Group Basic Policy on Sustainable Procurement, since we regard our suppliers and other business partners as sharing the same ethical values, respecting human rights, and seeking to protect the environment. These guidelines put in place the specific compliance items required in each field, from human rights and legal compliance to the environment, for Suntory Group suppliers and other business partners in Japan and overseas. These guidelines are to confirm that the same ethical values are shared between Suntory Group and our business partners. Compliance with our human rights commitments is a prerequisite for engaging in a business relationship with us, and we require both new and current partners to sign these guidelines. If severe human rights violations that contravene the law are discovered, and communication reveals a lack of willingness from the business partner to improve, this may lead to the termination of the contract. We are promoting joint efforts with suppliers for compliance, such as sharing the Partner Guidelines at guideline meetings or sharing related information through Sedex. In addition, in terms of human rights commitments, we request our partners to cascade down their own commitments to their suppliers.

Suntory Group Partner Guidelines PDF

Promoting Green Procurement

Green procurement is selecting items and services that consider the environment, such as by not including hazardous substances or using resources efficiently, when selecting ingredients, materials and equipment to purchase.
Suntory Group has established the Suntory Group Green Procurement Standard (revised in 2011) based on the Suntory Group Basic Policy on Sustainable Procurement and promotes procurement activities to lower environmental impacts in cooperation with each business partner.

Global Sustainability Committee

Suntory Group has established a system for promoting environmental management centered on the Global Sustainability Committee (GSC). Under the supervision of the Chief Sustainability Officer, GSC formulates strategies related to the material issues outlined in the Suntory Group Sustainability Vision. GSC also oversees the progress of these strategies and analyzes the business risks and growth opportunities, reporting to the Board of Directors on a quarterly basis.

For more information on the Global Sustainability Committee, see Environmental Management.

Supply Chain-related Human Rights Due Diligence

Suntory Group has established the Basic Policy on Sustainable Procurement, and in collaboration with our business partners, promotes initiatives to respect human rights throughout the supply chain.
In 2019, we joined Sedex, the world’s largest ethical information sharing platform for suppliers. We request that our suppliers join Sedex and share information, including participation in SAQs*, to enable us to identify issues, if any.

• *
  Self-Assessment Questionnaires

For more information on supply chain risk assessment, see Respect for Human Rights.

Collaboration with Suppliers

Suntory Group is promoting pioneering initiatives in collaboration with diverse partners to reduce GHG emissions and address environmental and social challenges, such as human rights, throughout the value chain.

Initiative to Procure Malting Barley Produced through Regenerative Agriculture

To reduce GHG emissions originating in raw ingredients, Suntory Group is collaborating with malt supplier Muntons, agricultural consulting firm Future Food Solutions, and barley farmers, and implementing a range of initiatives in a project to procure barley for malting produced through regenerative agriculture^*1 in the United Kingdom.
Through agricultural approaches such as the use of cover crops^*2 and no-till farming, the project hopes to reduce GHG emissions from agriculture by 50% within 5 years compared to conventional approaches, while regenerating soil biodiversity, enhancing soil fertility, reducing chemical fertilizer and pesticide use, and using water more effectively.

• *1
  Agricultural methods that focus on enhancing soil fertility by regenerating its ecosystem to make crop production sustainable.
• *2
  Cover crops that can enhance soil fertility by supplying organic matter to the soil, preventing erosion, etc.

Collaboration with Green Tea Production Area

In order to promote the sustainable procurement of tea leaves used for green tea beverages, Suntory Group has launched a long-term initiative in collaboration with a tea production area.
Collaborating with Kuma Regional Agricultural Cooperative (JA Kuma), we have succeeded in reducing GHG emissions by more than 30%*compared to the conventional method by introducing a nature-positive process in the tea leaf production process at JA Kuma.
We will continue to pursue high-quality tea production and contribute to the continuation of tea production in the region and the training of successors in tea farming.

• *
  Emissions per unit production weight in the production of green tea raw ingredients in the process from leaves to Aracha tea.

Promoting Sustainable Procurement in Upstream Supply Chain for Coffee

Guatemala

Suntory Group is supporting Guatemala coffee export company UNEX in promoting their “farmer aid” program aimed at helping coffee farmers tackle different environmental and social challenges and strengthen the sustainability of the coffee beans they produce. The program is based on 4 pillars: health, education, sustainability, and climate change. In 2022, Suntory Group financially supported this program in 2 ways:

(1) Childcare Center in Alotenango

This childcare center is open during school holidays (from October to January) and is used as a free education and recreation place for coffee farmer’s children. It serves the dual purpose of minimizing the risk of child labor by taking care of the children during harvesting season. The center also provides medical services to both children and their parents.

(2) Coffee Farmer Training in Santa Barbara

We are supporting the current sustainable practices of the farm via training, which benefits small producers to strengthen their coffee production and improve their families livelihood. We also empower women through farming practice training in order to contribute to a better livelihood for them and their families. Through the farmer aid sponsorship, we are able to create positive impact on approximately 300 families, including children, in Guatemala.

Brazil

In order to expand our human rights due diligence efforts to upper tiers of our supply chain, we are formalizing a partnership with ITOCHU and their local partner in Brazil, Sucafina, to start a pilot program to assess and support coffee farmers in the Cerrado region of Brazil.
The pilot leverages Sucafina’s responsible sourcing program, IMPACT, and is founded on 5 main pillars: carbon emissions, deforestation, human rights, living income, and regenerative agriculture. IMPACT standard verification ensures compliance with 80 social, environmental, and economic standards modelled on the Global Coffee Platform’s Coffee Sustainability Reference Code, with independent audits done every 3 years. Regarding human rights, IMPACT has key indicators such as health and wellbeing, forced labor, child labor, freedom of association, grievance, working hours, discrimination and land rights. Going forward, we will monitor and improve the working conditions of the targeted farms during the initial 3 years of this pilot.

For more information, visit the Sucafina website.

Uganda

To promote environmental (GHG reduction, etc.) and human rights due diligence activities for coffee farmers in Africa, Suntory Group participated in a pilot program to evaluate and support coffee farmers in Uganda. The program, which included an examination of local conditions, was conducted by MC Agri Alliance and Olam, a Singapore-based general agricultural trading company.
This pilot program utilizes Olam’s AtSource sustainable procurement program to evaluate and support farmer activities to give farming guidance for enhanced livelihoods, plant trees to reduce GHG emissions and prevent deforestation, provide guidance on efficient fuel use, and improve farmers’ livelihood infrastructure.
Farmers targeted by the program have virtually no gas, electricity, or water supply infrastructure, living instead by storing rainwater and burning wood. The project is providing infrastructure to support farmers’ livelihood income through agricultural guidance on how to plant crops in addition to coffee that are self-sufficient and have high cash value, including bananas, soybeans, cotton, sesame, and corn, as well as improving the sanitary conditions for rainwater by installing water purification filters in order to provide safe water. Moreover, the labor involved in making firewood and cooking is not only a significant burden for women but also leads to GHG emissions and deforestation. As a measure to mitigate these impacts, we provide cooking stoves. We also conducted interviews regarding educational and medical structures for children, who make up the majority of farmers. We were able to verify that, while such school infrastructure as classrooms with desks and chairs is progressively improving, some schools lack textbooks and computers, and efforts to expand medical facilities face challenges.
AtSource conducts third-party audits to evaluate support initiatives and their effectiveness. This ongoing monitoring makes possible continuous initiatives to help target farmers.

• 
• 
• 

Engagement with Local Coffee Farm to Improve Community Resilience

Suntory Group procures a portion of its coffee beans, from Fazenda Bau, which is a specialty coffee farm in Minas Gerais, Brazil, as we aim for the highest quality and sustainable supply of coffee beans. Fazenda Bau has acquired international sustainable certifications, and their thorough quality management and workplace environment are highly praised.

Fazenda Bau has been engaging in a wide range of activities to promote sustainability, turning their attention to labor practices and the labor environment, conducting efforts such as courses on the health and safety of employees, as well as courses about motivation and human relationships in the workplace, among other initiatives. Environmental conservation activities such as separating trash and comprehensive management of the water intake as well as tree planting initiatives show their awareness regarding their impact on the environment. In addition, Fazenda Bau has been engaging in a support project at a neighboring school since 2011 with the purpose of contributing to the local community.

• 
• 
• 

Joint Research for Controlling Orange Diseases

Suntory Group is participating in a joint research by France’s CIRAD on controlling orange diseases, with a focus on citrus greening disease, considered to be one factor in declining orange yields.
Citrus greening is a bacterial disease that infects citrus fruits such as oranges. It causes a deterioration in fruit quality, including shape and taste. Orange harvests have been steadily declining in recent years, with citrus greening disease said to be one of the reasons. This joint research is taking place over a six-year period from 2024 and involves developing and cultivating orange varieties with improved resistance to citrus greening disease. Verification of adaptability will be done sequentially in Spain, Brazil, and other countries.

Supplier Engagement and Educational Activities

Suntory Group strives to promote sustainable procurement together with all of its business partners in the supply chain. In addition to providing education to our employees, we hold annual policy briefings for our major business partners, such as raw materials suppliers, contract manufacturers, and logistics partners. We are promoting better awareness and support for sustainability initiatives within each company or in cooperation with Suntory Group by introducing Suntory Group initiatives and providing questionnaires.