Interest in corporate initiatives related to human rights and the environment grows with each passing year, and associated risks can profoundly impact corporate management. As such, we find ourselves in an era where awareness of such risks is vital for both companies and their supply chains. Corporations are being called upon to engage in activities that show consideration for human rights and the environment from the moment a product or service is sent out from the producer until it reaches the consumer. And as related legislation continues to be enacted in Europe and elsewhere, Japan is also witnessing increasingly stringent societal demands that make it imperative for companies to take the initiative in identifying and mitigating risks on a regular basis. The NEC Group, which has suppliers worldwide, is working tirelessly to do just that by engaging in activities that can be likened to a never-ending journey. In this edition of NEC Stories, we will introduce some of the initiatives undertaken by those assigned to oversee this journey.

Working together with suppliers as partners for achieving mutual growth

What are companies doing to promote sustainability within their supply chains? The approaches taken vary from company to company. NEC works with over 10,000 suppliers, including small- and medium-sized companies, spanning broad-ranging business scales and activities.

Working alongside the buyers who regularly negotiate with suppliers over price, quality, and delivery dates in cooperation with business divisions is NEC's Supply Chain Sustainability Management Group. This group has assumed the role of taking a step back to assess the business as a whole, identify any human rights or environmental risks associated with NEC's suppliers, and proactively take whatever actions are necessary to mitigate those risks. The first step in promoting this is ensuring suppliers understand the basic policies and guidelines stipulated for them.

Leading this group is Taira Akiyama, who described their activities, saying, "Our key focus is to support our suppliers' human rights and environmental initiatives, and to elevate one another by engaging in collaboration and co-creation."

As demand for such initiatives intensifies worldwide, what gives NEC an advantage? According to Ren Hashizume, who is also a member of this group, it is the fact that NEC has "a system for following up on issues where there is a lack of understanding on both sides rather than making unilateral requests in writing." The group is also coming up with innovative ways to actively involve suppliers by making onsite visits and providing more opportunities for in-person question-and-answer sessions, such as workshops.

Next, let's take a closer look at what exactly this group is doing.

In-person follow-ups and onsite visits: Meeting face to face with suppliers

In-person seminars are one of the innovative ideas this group has come up with. In the fiscal year ended March 2025, NEC held four in-depth, in-person seminars on the theme of reducing CO₂ emissions. These seminars made it possible to resolve questions right then and there, with the understanding and promotion of CO₂ reduction activities facilitated through close, two-way communication.

At the CO₂ Emissions Calculation Workshop held in January 2025, members from within the company possessing specialized expertise also provided support, inviting participating suppliers to ask questions if there was anything they didn't understand. Participants manually calculated CO₂ emissions while members of NEC thoughtfully responded to any questions raised.

The seminars were well-received by participants, one of whom said, "I had no idea how to reduce CO₂ emissions, so this was an excellent learning experience."

The group also focuses on making onsite visits to perform audits in which they carry out detailed reviews to ensure that every employee in the supply chain can work with peace of mind from perspectives such as human rights and occupational safety and health.

In December 2024, Hashizume and other group member traveled to the city of Kikugawa in Shizuoka Prefecture, located near the center of Japan and facing the Pacific Ocean. There he visited Wako Industry Co., Ltd., a company that manufactures parts supplied to the NEC Group. During this audit on human rights and occupational safety, the group exhaustively performed checks to ascertain whether any violations were occurring, as well as carefully reviewed the handling of wages, etc., the safety of production facilities, living conditions in employee dormitories, and more.

Embracing initiatives like this is also worthwhile for suppliers because it boosts their credibility, thus strengthening their competitiveness at home and abroad.

Raising awareness within the NEC Group to keep pace with change: Updating our own initiatives

It is also crucial to provide information to internal procurement specialists.

One external expert specializing in business and human rights who was invited to speak at an internal seminar stressed that the key to future initiatives will be "NEC's ability to continue updating its initiatives to keep pace with ever-changing and evolving global trends and required compliance levels." Leaders involved in the NEC Group's procurement activities were invited to participate in this seminar where they had the opportunity to not only learn the latest information on business and human rights, including new laws, regulations, and risks, but also exchange opinions and views. Noritaka Taguma, NEC's Chief Supply Chain Officer (CSCO) (*as of March 2025) and a participant in this seminar, shared his own goal for the company, saying, "I want us to comply efficiently and at a high level so that NEC can be called the best company in Japan."

NEC has declared its Purpose as "creating the social values of safety, security, fairness and efficiency to promote a more sustainable world where everyone has the chance to reach their full potential." However, the products and services used to create these social values cannot be realized by NEC alone. Collaboration with suppliers is vital.

Speaking to this point, NEC's Akiyama says, "The sustainability activities being carried out across our supply chain are a never-ending journey. We are being called upon to address a wide array of issues in accordance with the demands of society and the times. I would like to see NEC stay one step ahead as it takes the lead in this area to create social value."

NEC has amassed extensive knowledge as a result of its journey thus far and is focused on sharing this know-how externally based on its "client zero" approach, through which NEC aims to transform society by positioning itself as its first client. The company is also committed to spearheading efforts to get communities involved as it aims to realize a sustainable society.

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