Our Approach

At LIXIL, supply chain management forms part of the foundation of our Impact Strategy. We are committed to responsible procurement and ensuring a stable supply of products. Stemming from this belief, we base our procurement on the Ten Principles of the United Nations Global Compact (UNGC) in the four areas of human rights, labor, environment, and anti-corruption. We focus on building sound partnerships with global suppliers to carry out procurement activities in alignment with the UNGC principles, as well as our Procurement Principles and our Global Policy on Third Party Compliance for Suppliers.

The LIXIL Code of Conduct also outlines the ethical behavior that is required of all employees and officers, including prohibition of bribery. Based on the LIXIL Human Rights Principles, we strive to ensure that our business partners and suppliers uphold the human rights within their own organization. We clearly state our expectation that suppliers also support the principles set out in our Human Rights Principles and adopt similar policies. Furthermore, we distribute the Supplier Code of Conduct in multiple languages, expecting that suppliers respect human rights, comply with international labor standards, protect the environment, and engage in fair business practices.
In FYE2023, we revised the Code of Conduct to strengthen our risk management system by adding stipulations related to human rights, labor and the environment, and by clearly outlining the reporting hotline for violations and other concerns.
It now outlines the expectation that both direct suppliers and their upstream suppliers adhere to the same standards.

Additionally, we established Green Procurement Guidelines outlining our policy and standards for procuring parts and materials with minimal adverse impact. We ask suppliers to understand and support our environmental initiatives and procurement activities under these guidelines, in collaboration with our environmental management department.

The Role of Suppliers in LIXIL's Green Procurement Initiatives

① Establishment of Environmental Management System
② Abidance by Environmental Compliance
③ Thorough Management of Chemical Substances
④ Reduction of Greenhouse Gas Emissions
⑤ Conservation of Water Resources
⑥ Promotion of Resource Recycling
⑦ Conservation of Biodiversity

We continuously review our procurement practices and policies to meet the expectations of society and respond to changes in our supply chain.
We ensure that revisions to the Procurement Principles remain consistent with the Supplier Code of Conduct and Green Procurement Guidelines, which set clear expectations for supplier action on sustainability issues.

In Japan, we endorsed the objectives of the Council on Promoting Partnership Building for the Future, an initiative led by the Cabinet Office and the Small and Medium Enterprise Agency under the Ministry of Economy, Trade and Industry, and issued a Declaration for Building Partnerships in line with this initiative. We ensure that all employees and business partners are aware of this declaration, through which we aim to build a sustainable, mutually beneficial relationship throughout the supply chain. Following guidelines set by the Japan Fair Trade Commission and other government agencies, we also established our Policy on Arrangements for Appropriate Transaction Prices in January 2024 to share with our business partners and throughout the company. LIXIL is committed to ensuring the proper implementation of the policy through ongoing monitoring.

Human Rights >
LIXIL Procurement Principles (A new page will open) PDF: 46KB >
Supplier Code of Conduct (A new page will open) PDF: 116KB >
Green Procurement Guidelines (A new page will open) PDF: 137KB >
Declaration for Building Partnerships (Updated February 2025) (Japanese only, a new page will open) PDF: 165KB >
Policy on Arrangements for Appropriate Transaction Prices (Japanese only, a new page will open) PDF: 418KB >

Management Framework for Responsible Procurement

Working With New Suppliers

LIXIL established the supplier assessment criteria to select new suppliers. This criteria covers quality, cost, delivery, technical capabilities, and supply stability, as well as environmental and social factors including sustainable resource use, chemical management, human rights, and occupational safety. We also conduct compliance risk assessment to review each supplier’s approach to preventing bribery, managing labor, ensuring health and safety, and respecting human rights. The depth of the review depends on the initial risk level, which we determine based on the nature of the business (e.g. products and services, characteristics, industry and geographic locations). We provide new suppliers with our Supplier Code of Conduct and expect their agreement before starting business.

Before starting business with new suppliers, we share our Supplier Code of Conduct and require them to accept and follow the Code. We then evaluate their products before proceeding with any business relationship.

LIXIL introduced the third-party assessment platform Integrity Next* in Europe to comply with the German Supply Chain Act (GSCA), which took effect in January 2023. Supplier selection in Europe includes human rights and environmental due diligence. We require suppliers to meet our minimum requirements for contracting. LIXIL continues to use the same system after forming business relationships to monitor suppliers’ progress on sustainability issues. The platform also helps us identify, assess, and reduce direct and indirect adverse impacts on human rights and the environment across the supply chain.

* Integrity Next (A new page will open) >

A comprehensive risk management system aligned with the guidelines published by the Federal Office for Economic Affairs and Export Control in Germany to comply with the requirements of the GSCA.

Working With Existing Suppliers

In Japan, we hold annual meetings for major suppliers to explain our Procurement Principles, Supplier Code of Conduct, and supply chain management strategy. We also present awards to outstanding suppliers at these meetings.

FYE2025 Annual Meeting for Suppliers (Including 500 online participants)

• Number of participating companies: 766
• Number of awarded companies: 12

Important suppliers identified through the process below receive priority in procurement surveys, monitoring, and remediation support.

Identifying Important Suppliers

LIXIL identifies important suppliers according to the process outlined below, based on: (1) whether the supplier provides critical components or products, the difficulty of sourcing substitutes, and the monetary scale of transactions; and (2) whether the supplier handles items with high human rights, environmental, or product-specific risks.

Addressing High-Risk Areas

LIXIL identified wood as a raw material with a high risk of inflicting negative impacts on human rights and the environment. We take steps to prevent and mitigate those risks, determining high-risk areas based on the types of risks listed below.

The Impact Strategy Committee approves these areas after review by the Human Rights Due Diligence Task Force and other relevant departments.

• Human rights risks: Forced labor, child labor, low wages, excessive working hours, occupational health and safety issues
• Environmental risks: Impact on climate change, water resources, and ecosystems
• Legal risks: Domestic and international regulatory trends related to specific materials and human rights due diligence
• Business risks: Purchase value, relevance to key products

We added a new category to the supplier identification process in FYE2024. This category update checks for potential human rights, environmental, and product-specific risks. In FYE2025, we enhanced our criteria for identifying key suppliers by incorporating new elements to verify activities including product-specific risks that may pose a high risk to human rights or the environment. As part of this initiative, we decided to conduct due diligence on timber suppliers. In FYE2026, we will conduct comprehensive due diligence to identify and assess specific risks associated with these suppliers. Looking ahead, we plan to expand similar due diligence to other raw materials considered to have a high risk of negative impacts on human rights and the environment.

Avoiding and reducing impacts on natural capital and biodiversity >

Responsible Procurement Survey, Remediation, and Support

LIXIL identifies supply chain risks by conducting responsible procurement surveys and monitoring subsequent progress. Survey results form part of the basis for selecting suppliers or determining whether to continue business with an existing partner.

Details of the process are outlined below.

1) Select suppliers to be surveyed based on the transaction value and other factors in the previous year.

2) Conduct a responsible procurement survey for selected suppliers, covering CSR management, fair business, human rights, labor, occupational health and safety, conservation of the global environment, and contribution to the community.

3) Compile survey results and identify suppliers with substandard conformity rates as high-risk suppliers.

4) Manage high-risk suppliers individually for improvement.

Responsible Procurement Survey Results

Scope: Suppliers across LIXIL Corporation and our subsidiaries

Japan: Procurement at operating sites in Japan

Overseas: Procurement at operating sites outside Japan

* Scope under review; not yet finalized

Supplier Engagement

LIXIL provides our global suppliers with a variety of information to address issues and risks identified by the responsible procurement survey. We also offer ongoing support through dialogues conducted via onsite visits and online interviews.

Furthermore, we put particular emphasis on providing support that encourages action, including advising on sustainability-related disclosure and communication, while taking into account the initiatives taken by the supplier.

Number of Suppliers Visited and Interviewed Online in FYE2025

• Japan: 8
• Overseas: 21

Reducing CO₂ Emissions in the Supply Chain

We surveyed suppliers that account for the top 80% of our total procurement volume linked to CO₂ emissions, both in and outside Japan. The survey aimed to assess the status of CO₂ emissions data collection and target setting among suppliers.

We use the results of this survey to support our suppliers in their efforts to reduce their CO₂ emissions.

Learn more about Reducing CO₂ Emissions from Procurement >

Training Our Buyers

Our employees in procurement departments select suppliers and conduct purchasing in compliance with our Procurement Principles and Global Policy on Third Party Compliance for Suppliers. These employees play an important role in addressing sustainability issues in our supply chain.

We also provide purchasing compliance training led by members of the headquarters procurement department to buyers at operating sites globally three times a year. At least one of these training sessions is focused on human rights.

In addition, to provide more hands-on training, personnel from the headquarters procurement department visit suppliers with local buyers to provide necessary support as part of our company-wide effort to engage in responsible procurement.

Examples of topics for procurement compliance training

• Japanese Government Guidelines on Respecting Human Rights in Responsible Supply Chains
• Best practices for respecting human rights by leading Japanese companies
• Preventing forced labor
• Revisions to the Implementing Order of the Subcontract Act and our Policy on Arrangements for Appropriate Transaction Prices

Concern-Raising System (whistleblower system)

We receive reports of potential compliance violations involving LIXIL from external stakeholders, including material suppliers and service providers, through the LIXIL Compliance Hotline – Speak Up!, which is available online in 15 languages. In Japan, we also established a contact point via an external law firm. We accept anonymous reporting through either channel. This system allows LIXIL to mitigate and remedy risks using reports received through these channels.

LIXIL Compliance Hotline – Speak Up! (A new page will open) >
Submit information via an external law firm (Japanese only, a new page will open) >