Materiality
Supply Chain Management

Mizuno acknowledges the crucial role of supply chain management, and in light of this, we have instituted the "Mizuno CSR Procurement Code of Conduct". We are implementing CSR procurement activities that strictly adhere to this code. After obtaining understanding from our domestic and international suppliers, we persist in conducting CSR audits. These audits ensure not only compliance with laws and regulations but also adherence to standards pertaining to human rights, working conditions, safety, hygiene, and environmental preservation. In the event of any issues, we are committed to undertaking necessary corrections.

We seek to supply better sports products through cooperation with a variety of outside organizations. Our products, including sports shoes, sportswear, and golf clubs, are manufactured in our own factories and subcontracted factories. Major subcontracted factories are located in Japan, China, South Korea, Taiwan, Indonesia, Vietnam, Thailand, the Philippines, Myanmar, and Cambodia.

We believe that evaluation of suppliers before the commencement of business is important to ensure CSR procurement. To this end, we have established a system for a CSR evaluation of new suppliers before the commencement of business based on the Mizuno CSR Procurement Regulations and have evaluated major new candidate supplier factories in terms of human rights, labor practices, and the environment before commencing production. Before conducting an audit for a CSR evaluation before the commencement of business, we present new candidate supplier factories with three documents – the Mizuno Code of Conduct for Suppliers, the Mizuno CSR Pledge Statement, and the Mizuno CSR Self-Assessment Check List – and ask for a signature on the CSR Pledge Statement.
In addition, we hold a briefing session using the Mizuno Group CSR Procurement Guidelines, which explain our CSR procurement policy, to seek their understanding of CSR procurement before an audit. For factories that do not reach Evaluation B (Evaluation:80–89) in an audit, which is requisite to commence business, we send a corrective action plan and report created based on the CSR audit report. Subsequently, we discuss with them about the content of the corrective action plan, provide corrective guidance and, in some cases, visit the relevant factories. To ensure CSR procurement, we do not start business until we confirm that they meet the conditions required by us through these corrective actions.

For CSR audits of suppliers doing business with us, we conduct regular monitoring (CSR audits on a three-year cycle) of compliance with the Mizuno Code of Conduct for Suppliers based on the Mizuno CSR Procurement Regulations, targeting more than 150 factories that serve as our major suppliers. In FY 2022, 57 factories (56 Tier 1 factories, 9 in Japan, 47 abroad and 1 Tier 2 factory) were audited.
Since a CSR audit consists of on-site audits, document audits, and employee interviews, it is usually conducted by multiple auditors over one to several days. To check the compliance status of suppliers, a globally common monitoring sheet based on ISO 26000 is used. The audit items on the monitoring sheet are classified into three categories – "critical," "major," and "general" depending on the degree of importance and urgency. If the item requirements are met, the points set for each category are aggregated and quantified for evaluation.

We are advancing efforts to understand the status of human rights, labor, and environmental impacts at Tier 1 suppliers that have a direct relationship with us and to take corrective action as needed as our top priority initiatives.

For Tier 2 and Tier 3 suppliers that do not have direct transactions with us but deliver parts and materials to our subcontracted factories, we are also proceeding with efforts, focusing on areas with high risk of significant human rights and labor issues and environmental impacts. Since FY 2017, we have begun to grasp the current status of Tier 2 and Tier 3 suppliers that perform plating of iron heads for golf clubs, dyeing of textile materials, and leather tanning for baseball gloves and shoes, which are considered to be high risk.

Currently, in Southeast Asia, where many of our subcontracted factories are located, environmental problems and labor-management disputes are more likely to occur than ever before due to the rapid economic growth of the region. Under such circumstances of social changes, it is difficult to resolve fundamental human rights, labor, and environmental issues simply by correcting non-conformities identified in CSR audits. Accordingly, we need to focus on capacity building (capacity improvement) of factories as activities other than CSR auditing in the future.
In FY 2022, externally, we presented at JP-MIRAI, ESG seminars of client companies, and events of the Japan Bar Association, introducing Mizuno’s CSR activities and an overview of CSR procurement management. Internally, as part of the Human Resources and General Affairs Department’s education programs (for all employees, new employees, overseas trainees, and newly appointed managers), we explained the importance of corporate engagement in human rights issues and explained the mechanism of CSR procurement to overseas subsidiaries such as Mizuno Europe, Mizuno USA, Mizuno Korea, and domestic subsidiary Senoh Corporation, thereby promoting enlightenment activities to our employees both domestically and abroad, including related companies.

Although CSR audits can ascertain the situation at the time of the audit, they cannot constantly monitor the factories. In order to guarantee access to relief and to detect potential problems in the supply chain at an early stage, we are considering the introduction of a "grievance mechanism", which is regarded as an effective means to supplement CSR audits. We continue to gather information, such as selecting organizations to which we outsource operations, and continue our deliberations.

According to the World Report on Child Labor (Child labor: Global estimates 2020, trends and the road forward), the number of children engaged in child labor increased by 8.4 million since 2016, reaching 160 million worldwide at the beginning of 2020. This constitutes roughly 10% of the world’s children, with 63 million girls and 97 million boys involved. This represents the first increase since the International Labour Organization (ILO) published global estimates 20 years ago.

Our sports goods, such as apparel and shoes, are manufactured in the Asia-Pacific region where workers’ wages are relatively low. Recent trends show an increase in child labor in Sub-Saharan Africa, while child labor in the Asia-Pacific region continues to decrease. However, due to the impact of COVID-19 related poverty, it is estimated that child labor could increase by an additional 8.9 million by the end of 2022, over half of the anticipated increase being children aged between 5 and 11. Therefore, we believe that enhanced monitoring for child labor is necessary in the Asia-Pacific region where many of our manufacturing subcontractors are located.

According to Principle 5 of the UN Global Compact, child labor constitutes a form of exploitation that infringes on human rights, recognized and defined by international agreements. The international community and most governments have set the abolition of child labor as their policy. We have clearly stated in our Mizuno Code of Ethics that we do not engage in child labor. Furthermore, in the "Mizuno CSR Procurement Code of Conduct", we require suppliers to respect the ILO’s "Minimum Age Convention" (No. 138) and "Convention on the Immediate Action for the Prohibition and Elimination of the Worst Forms of Child Labor" (No. 182). We also use the "World Governance Indicators" as a criterion for identifying countries and regions where there is a high risk of child labor and determining which countries require audits.
We regard child labor as one of the most critical audit items. If we find child labor during a CSR audit, we will immediately consider a response and take appropriate action promptly. At the same time, we understand that the occurrence of child labor is deeply related to societal backgrounds such as poverty. Therefore, rather than just recommending rectification, we also investigate the root causes of child labor and consider solutions together with the factories.

In the audits conducted in FY 2022, there were no cases of child labor. However, there was a case in a factory in China that employed three young workers (16-18 years old) without obtaining registration for young workers from the local labor administration bureau and without conducting health examinations. We urged this factory to create a corrective plan based on the audit results, and corrections have already been completed.

According to the ILO report on modern slavery (Global Estimates of Modern Slavery: Forced Labor and Forced Marriage 2017), there were 40 million modern slaves and 25 million forced laborers worldwide in 2016. By region, the Asia-Pacific region had the highest number of such people, with 4 persons per 1,000 people. Accordingly, we need to monitor modern slavery and forced labor as well as child labor in the Asia-Pacific region.

In Japan, many factories in labor-intensive industries, such as apparel sewing, employ foreign workers through the foreign technical intern training program. We procure products from such subcontracted factories located in Japan.

Principle Four of the UN Global Compact defines forced or compulsory labor as "any work or service that is exacted from any person under the menace of any penalty, and for which that person has not offered himself or herself voluntarily." There has recently been widespread concern that foreign technical intern trainees working in Japan are not treated appropriately from the perspectives of human rights and working conditions. To contribute to eliminating the practice of forced labor, Mizuno has designated factories that employ foreign technical intern trainees to undergo CSR audits conducted directly by its CSR procurement staff.

In FY 2022, there were no instances of non-compliance corresponding to forced labor in Japan. Overseas, we discovered violations of laws and unfair treatment towards immigrant workers at a factory in Thailand during an audit and took corrective measures.

Please click here for the actual conditions of audited factories that employ foreign technical intern trainees.

With the globalization of business, the supply chain is also being globalized. Since procurement from new suppliers is expected to increase further in the future, we will continuously make sure to conduct a CSR evaluation of new suppliers before the commencement of business.

Regular monitoring through CSR procurement audits is fundamental, but correcting the problems identified in the audits is crucial. We will continue to promote correction through dialogue with our suppliers.