Efforts for procurement

The products procured in a construction project are massive and various. The sites to extract raw material and their processing are also wide-ranging in Japan and abroad due to globalization. Therefore, we promote [making efforts for fair and free competition and appropriate transaction] as our procurement policy. This is because we work on value creation to solve the challenges on the environment in a value chain or society by considering the magnitude of the impact on the global environment and areas and by setting not only a price and quality, but also the efforts to address the requests from environmental challenges or society, as the items for selection. The procurement stage includes the following items. Our company is characterized by what it regards as its stakeholders as follows: not only stockholders and employees, but also the earth and the future related to matters such as warming, biodiversity, and circulation/circular economy in addition to users of buildings, people working at places to extract raw material, factories, construction sites, and people in neighboring areas. Please confirm the breakdown of the segment of the sales volume per development area.

In particular, our company considers the following products and services as essential: (i) renewable energy products in terms of contribution in [service and operation/maintenance], (ii) wood products in terms of the magnitude of impact on the “extraction and transportation of raw materials,” and (iii) third-party-certified products in terms of the magnitude of impact of the “extraction and transportation of raw materials,” “factories,” and “distribution/transportation.” The products and services that our company procures annually amount to 304,300 million yen (for FY 2022), and we will contribute to the shift change of the market by working on this field. In addition, our company organizes “Zenyu-kai” with about 600 main companies among the subcontracting companies that cooperate with us in construction work at construction sites. Zenyu-kai holds a safety environmental meeting on a regular basis in addition to a general meeting and develops action policies on safety activities. Furthermore, at 12 branches throughout the country, they hold general branch assemblies, safety conventions or the like, conduct voluntary safety management such as the operation of the safety environmental meeting, and exchange opinions with our company, thereby making efforts to improve not only safety (S) but also quality (Q), delivery, process (D), morale (M), and environment (E).

In FY 2022, our company procured products and services amounting to 106.5 billion yen from about 500 companies.

Under the corporate conduct charter, having established specific details for procurement business and a management system as the "procurement code" in 2008, we are conducting activities. The transactions exceeding a specified amount are approved by top management after they have been checked by 20 persons, who are posted to the Procurement Department, which was established independent of Divisions, to confirm the fair selection of a trade partner. Also, a database describing the content of a transaction is established and managed by the Procurement Department. After being organized by the department, it is reported to top management. For the existing trade partners, not only "quality," "process," and "safety," but also "efforts for the environment" are evaluated by using the assessment database for civil engineering outsourcing at the time of transaction completion. For new trade partners, matters such as the following are incorporated into the evaluation items of the "application form for trading participation," which is submitted at the time of new transaction: "Efforts for human rights, labor, and competition," "efforts for social contribution," "efforts for environment," and "efforts for information safety." Activities are promoted to solve the challenges in each process.

We also incorporated “efforts for human rights, labor, and competition,” “efforts for philanthropy,” “efforts for the environment,” and “efforts for information safety” into the continuous evaluation for business partners. We conducted a continuous evaluation for 170 suppliers in FY 2022.

Visiting the factories of main suppliers for inspection, the personnel of the Procurement Department confirm the actual places and efforts made for matters such as quality, human rights, labor, social contribution, and environment. Also, at that time, the policy for green procurement (promotion of the Environmental Product Declaration, etc.) is transmitted directly to the supplier's people in charge of the site, such as the plant manager.

The "MAEDA green procurement rule" was established in 2012, and the excerpted version was published outside the company as the "MAEDA green procurement guideline." We request our trade partners "to collect digital environmental data," "to recommend the acquisition of the environmental management standards, etc.," and "to recommend superior companies to its internal commendation system." Selecting 30 items, including the Environmental Product Declaration, as the green procurement summary items, we are promoting adoption and totaling the results (material flow).

We are working on renewable energy as a business operator involved in the upstream and downstream of business as well. For products, such as wood products, on the other hand, we go to suppliers to collect the information on the raw material extraction sites and to confirm whether the land is being used considering the environment. For the reduction of the environmental impact of the "extraction of raw material," "processing," and "distribution/transportation," we are also making efforts to understand the environmental impact in a life cycle through the efforts for the third-party certified products.

In FY 2022, our personnel of the Procurement Department conducted monitoring at eighteen domestic and overseas plants of suppliers. The monitoring is implemented from the viewpoint of efforts for the environment, human rights, and labor, not to mention quality and quantity of production.

For 11 of 30 items for which green procurement is totaled, numerical goals are maintained. The green procurement rate for FY 2022 was 54% compared with the target value of 55%.

The calculation of Scope 3 is carried out to calculate and report the greenhouse effect gas emissions in a value chain [See the following figure.] Matters related to procurement include "Category 1: Purchased products and services," and "Category 4: Transportation and delivery (upstream.)" In FY 2022, the emissions of “purchased products and services” amounted to 586,000 t-CO₂ and “transportation and delivery (upstream)” to 4,500 t-CO₂.

For a low carbon (decarbonizing) society, the cost reduction of renewable energy has become a challenge. Therefore, we make use of our strength as a construction company expanding its business throughout Japan and the know-how as a construction company having experience with renewable energy projects as a business operator; we are promoting the central purchasing of photovoltaic power generation and wind power generation and the proper competition including overseas products. We are making efforts from the perspective of not only cost, but also the entire project, such as the generation efficiency after completion. In FY 2022, we procured products of approximately 17 KW, contributing to the increase in renewable energy.

For a natural symbiotic society, it is required to maintain forests while appropriately using them; it is desired to expand the use of wood as construction materials. Our company is promoting the use of Japanese timber and thinned timber. We conducted a hearing for raw material sampling sites of imported wood and for efforts for the interpretation and observance of legislation to confirm its legitimacy. We are also responding to hearings for wood legitimacy from ordering parties. We procured 452 m³ of Japanese timber in FY 2022.

For a recycling society, we consolidate into one company the suppliers of particleboard (products that have recycled woody waste, etc.) used for floor materials of a multiple dwelling house, etc. and the commissioning processing destination of wood waste in the Kanto area. In FY 2022, we conducted business with this trade partner for the purchase of 200 t of particleboard and the processing commissioning of 762 t of woody waste, corresponding to a raw material rate of 380% of procured materials. In other words, all of the main raw materials of the products procured by our company were covered by recycling of the waste discharged by our company.

Environmental Product Declaration (EPD): Environmental Product Declaration applies to products for which the environmental impact of a product during its lifetime is calculated and that is certified by a third party. We procured EPD-certified products of 2 billion yen in total in FY 2022.

A Cradle to Cradle certified product means an international certification system aiming at the realization of not only the safety of a product, but also a recycle production society that is sustainable and recyclable in line with natural circulation, in which the material, water, and energy resources are used efficiently and without waste, and waste is not generated during production and use and after use.

We made efforts for procurement at the ICI lab, which is reported in a special edition.
The "Exchange," one of four facilities that constitute the "ICI lab," obtained the highest-ranked third-party certificate, "five stars" and "ZEB" of the Building-Housing Energy-efficiency Labeling System (BELS) certification system (March 2018) and the S ranked evaluation/certification, which is the highest in the Comprehensive Assessment System for Built Environment Efficiency (CASBEE) (September 2018.) In addition, the members of the Design, Construction, and Procurement Departments, and the technology research center (present ICI General Center) worked together, obtaining the first platinum certification, which is the highest certification of the international building environmental performance evaluation system "LEED V4 BD + C New Construction" in Japan.
The credit of LEED V4 related to procurement includes "Building Product Disclosure and Optimization - Environmental Product Declarations." The intention is to recommend the products disclosing environmental information in a life cycle. It is such that if you adopt EPD certified products of five companies and 20 products or more for buildings, you can obtain the credit. As a result of having investigated EPD certified products, it turned out that the products that could be purchased in Japan were less than 20 products, and it was difficult to obtain the credit. Therefore, our company selected EPD certified products as the green procurement items of our company. Repeating discussions with 50 or more building material manufacturers with transactions, we requested them to obtain a new EPD certification. As a result, 11 companies expressed cooperation, and 19 products newly obtained the EPD certification (See the products surrounded by a red frame in the following figure.) In addition to 7 companies and 10 products, for which certification has already been obtained, the EPD certified products of 18 companies and 29 products (18% of the amount of money of adopted products on a cost base) are adopted at the Exchange of ICI lab.

Reference link: ICI General Center

* ICI stands for Incubation × Cultivation × Innovation

We have issues to address such as the response to the rise in prices due to the situation in Ukraine, etc. However, in FY2022, we have been continuously exploring the possibility of crossing the boundary between waste materials and resources, together with our suppliers, toward the realization of a circular economy which is demanded from inside and outside, in accordance with the principle, “We contribute to the realization of a decarbonized society and a circular economy” in the MAEDA Corporate Conduct Charter which was revised on April 1, 2020 and in view of its standardization by ISO being under study.

As an Integrated Infrastructure Service Company, we have implemented technologies, but not only that, we will search for possibilities of contribution as a platform leader.