Supply Chain Management

Supply Chain Management

ZOZO Group aims to conduct its business with full consideration for the impact on the environment and society through co-creation and collaboration with brands that have stores on ZOZOTOWN and suppliers that form the supply chain. To achieve this, procurement policies are established for suppliers, and regular surveys and dialogues are conducted with them. Through these efforts, we strive to realize our sustainability statement, "Fashion Connects and Leads us to a Sustainable Future."
Basic Environmental Policy
Basic Human Rights Policy

ZOZO Sustainability Procurement Policy

ZOZO Group has formulated ZOZO Sustainability Procurement Policy for all of its business partners in order to realize its Sustainability Statement, "Fashion Connects and Leads us to a Sustainable Future." This policy is based on the OECD Guidelines for Multinational Enterprises, the United Nations Global Compact (UNGC), and UN Guiding Principles on Business and Human Rights, while also considering our materialities and formulating it based on the Japanese laws and regulations where our head office is located.

Compliance with Laws and Ordinances
We comply with all laws and ordinances applicable to the jurisdictions in which the company operates. We also ensure conduct in accordance with international and industry norms.

Human Rights
We respect internationally recognized human rights throughout the supply chain.  In particular, based on the ILO Declaration on Fundamental Principles and Rights at Work, we respect the freedom of association, prohibit child labor and forced labor, and aim to eliminate all discrimination and harassment in employment and the workplace. In addition, when we identify that it has caused or contributed to an adverse impact on human rights, we will remedy the adversely affected person through appropriate and proper procedures.

Labor practices
We protect the rights of workers by paying appropriate wages and benefits, providing welfare benefits, and entering into labor contracts in accordance with international norms and the laws and regulations of the jurisdictions in which we conduct business. In accordance with international norms and laws and regulations in the jurisdictions in which we conduct business, we give consideration to the work environment, health, and safety of all employees involved in our business, including the elimination of excessive labor. We respect diverse individuality and values, and realize a fair and inclusive work environment and business partner relationships.

Human Capital and Human Resource Development
We actively support the formation and improvement of human capital in order to enhance the employability of our employees into the future.

Environment
Wel give consideration to climate change, ecosystems and natural capital, and environmental sustainability, including hazardous chemical substances, throughout our business, based on international norms and laws and regulations in the jurisdictions in which we conduct business.

Anti-Corruption
We do not offer, promise, give or demand bribes or other unjust benefits, directly or indirectly, for the purpose of acquiring or maintaining commercial transactions or other unjust benefits.

Information Security
We strictly manage and protect personal information of our company, customers and third parties. We establish a system for strictly managing and protecting information acquired in business, and do not leak it to third parties without permission. We develop and implement measures to prevent computer viruses, other network risks, threats and to prevent their impact from expanding.

Safety and Security
We take all reasonable actions to ensure the quality and reliability of the products and services we provide. We will act in accordance with fair business, sales and advertising practices in our relationships with consumers.

Business Continuity Plan
We build a system that prevents major social impacts by continuing our business operations even in the event of natural disasters or other emergencies or major changes in the social environment.

Fair trade
We comply with fair trade laws, such as the competition law and the subcontracting law, in accordance with international norms and the laws of the jurisdictions in which we conduct business. We do not engage in any transaction that infringes the intellectual property rights or other rights of any third party. We have no relationship with antisocial forces, and we reject any unreasonable demands.

• ZOZO Sustainability Procurement Policy is approved by the Board of Directors on April 21, 2023
• Revisions and eliminations of this policy will be made by our Board of Directors
• The following are covered
  Environment: greenhouse gas emissions, energy consumption, water resource conservation, biodiversity conservation, land conservation, prevention of deforestation, prevention of pollution, waste reduction, resource recycling
  Anti-Corruption: conflict of interest

Supply Chain Due Diligence

Aligned with the United Nations Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises, our group has established a comprehensive supply chain due diligence process. We have conducted risk assessment across our supply chain to identify, prevent, and reduce ESG risks.

Process

Step 1: Establishment of Policy
・Establishment of a Basic Human Rights Policy
・Establishment of a  Basic Environmental Policy
・Establishment of a ZOZO Basic Policy on Anti-Corruption
・Establishment of a ZOZO Sustainability Procurement Policy

Step 2: Assessment
・Develop assessment items with advice from ESG experts.
・Conduct assessments to identify potential and actual ESG risks in the supply chain
・Perform ESG impact assessments to analyze and evaluate the impact of identified ESG risks.
・Mapping of ESG risks

Step 3: Action
・Implementation of corrective actions
・Implementation of measures to prevent and mitigate ESG risks
・Monitoring of implementation status and effectiveness of measures to prevent and mitigate ESG risks

Step 4: Communication
・Disclosure in reports and on the corporate website
・Implementation of ESG-related education and training

ESG Risk Identification and Assessment

Key themes in assessment

Targeted Segments

*1 Percentage of Gross Merchandise Value on ZOZOTOWN
*2 Percentage of transactions by companies other than those handling ZOZOTOWN brands

Main assessment results

As part of our supply chain due diligence, we conduct risk assessments to identify ESG risks associated with our business partners. As a result, no incidents of human rights violations or compliance violations were identified. Additionally, we identified high risk suppliers and are actively engaging in risk prevention and improvement efforts.

Themes addressed by our business partners

Themes for future consideration

Implementation of Measures to Prevent and Mitigate ESG Risks

Since May 2021, we have been holding human rights study sessions by inviting experts to provide education to employees, business partners, and suppliers. Through these efforts, we aim to deepen understanding of human rights issues together with our business partners and suppliers, and promote corporate activities that respect human rights.

Utilizing EcoVadis to strengthen collaboration with business partners

We utilize EcoVadis, which evaluates the sustainability of companies in more than 180 countries using its own evaluation criteria, and share the results of our evaluation with our business partners as appropriate. Through these initiatives, we intend to contribute to increasing the transparency and responsibility of the entire supply chain.