HMM has established a supply chain evaluation system and management policy in the environmental, social,
and governance areas to build a sustainable supply chain and manage ESG-related risks across all suppliers.
In line with our advanced supply chain ESG decision-making framework, we reassess the scope and standards of supply chain ESG management.
Since 2024, we have extended the scope of management to support more systemic supply chain management.
Supply Chain ESG Risk Management
Supply Chain ESG Risk Management
To manage supply chain ESG risks, HMM conducts supplier risk assessments twice a year – a preliminary risk assessment and
a follow-up risk assessment. The combined results of both assessments are used to assign ratings to each supplier, which
informs our strategic supplier management to drive sustainable procurement.
Supplier Risk Management
Preliminary risk assessment
(supplier evaluation)
(supplier evaluation)
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Supplier risk assessment led by the Purchasing Execution Office
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Initially select potential suppliers based on the purchasing policy and guidelines
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Review suppliers for quality, pricing, delivery capabilities and financial soundness
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Suppliers failing to meet the criteria may be subject to improvement measures or deferred from transactions
Follow-up risk assessment
(ESG evaluation)
(ESG evaluation)
-
Supplier ESG evaluations led by the Purchasing Management Office
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Evaluate based on environment, labor & human rights, health and safety, and ethics/anticorruption/fair competition
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Take stock of supplier ESG status and performance
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Confirm ESG risks deemed in need of improvement or to be high risks
Supplier Rating Criteria
Preliminary risk assessment
(supplier evaluation)
Follow-up risk assessment
(ESG evaluation)
Supplier Rating
Supplier ESG Evaluation
Supplier ESG Evaluation
Supplier ESG Evaluation Categories
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Environment
-
Labor and
human rights -
Health and safety
-
Sustainable
procurement -
Supply chain
management -
Information security
-
Social impact
-
Ethics/anti-corruption/
fair competition
Supplier ESG Due Diligence
Supplier ESG Due Diligence
HMM conducts ESG due diligence to assess suppliers’ ESG management practices, and is expanding the scope of such due
diligence based on purchasing categories. We comprehensively analyze supplier risk assessment results to identify target
suppliers – those with a high likelihood of both continued transactions and potential ESG risks. From this group of suppliers,
we select targets of due diligence. The due diligence process provides an opportunity to share each other’s ESG management
practices and offer ESG training primarily on such topics as environment, climate change, health and safety management, and
ethical management. Following due diligence, we notify suppliers of the findings and provide feedback including preventive
and corrective actions.
Supply Chain Due Diligence ESG Training
Environmental
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Climate change
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Alternative fuel strategy
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Net zero strategy
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Biodiversity protection
Social
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Health and safety management
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Human rights protection
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Sustainable procurement
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Information security
Governance
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Anti-corruption
-
Fair competition
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Conflict of interest
-
Ethical management