Supply Chain Sustainability

Introduction

Page 1
Who is the Supply Chain Sustainability Unit?

Tom Lake is VP over

North American
North American
Procurement Division
Purchasing which has
3 Divisions.

Page 2
Who is the Supply Chain Sustainability Unit?

North American
Procurement Division
Supply Chain
Sustainability is a
Unit in Planning
Dept.

Page 3
Supply Chain Sustainability Primary Responsibilities
Sustainability is a foundational element of any company. The Honda Supply Chain is an integral part of this business, and reflects on all of the
partners both upstream and downstream. It is important to evaluate business practices to ensure adherence to common, globally embraced principles.

Conflict Minerals Conflict Minerals

Substance Request Substance Substance Due Date
of Concern July of Concern of Concern Nov.
Request Due Date Request
As Needed As Needed As Needed
GHG GHG SSA SSA Due
Request Due Date Request Date
June July Nov. Dec.

Apr May Jun Jul Aug Sept Oct Nov Dec

Supplier Sustainability Assessment (SSA) November – December (Approx a 2 Month Turnaround)

Email: Honda_NA_Purch_Sustainability@hna.honda.com
Substance of Concern (SoC)
Regulatory As Needed (Requests Made Once Mass Production Drawings are Released)
Email: SoC_Admin@hna.honda.com
Green House Gas (GHG)
Approx. June - July (One Month Turnaround)
Email: GHG_admin@hna.honda.com
Conflict Minerals (CM) Regulatory July – November (Approx 5 Month Turnaround)
Email: Conflict_minerals@hna.honda.com
Supplier Sustainability Assessment is a self assessment that is Suppliers must establish a structure for collecting, calculating and
performed to identify a supplier’s strengths and needs. This information reporting Green House Gas data. Honda will request that suppliers
is shared with Honda to identify training opportunities to strengthen our submit this data annually. Suppliers will have a Honda established
teams’ sustainability characteristics reduction target and need to promote activities internally to reduce
greenhouse gas emissions.
Dodd-Frank Wall Street Reform Act became effective in November
Each supplier must assure, through their supply chain, the management
2012. Mandates public disclosure by certain companies if conflict
of chemical substances, and guarantee that parts and materials do not
minerals are “necessary to the functionality or production of” a product
contain any chemical substances prohibited under laws and regulations.
that they “manufacture” or that they “contract to manufacture”
Quantity of Suppliers Impacted
Quantity of N. A. Suppliers Reporting
1500 All Suppliers

HTA

1200 HPE
HAI
HACI
900 CH All Suppliers

AHSP
All Suppliers
600 All Suppliers >&1M spend
>&1M spend with exceptions

NAP 93ki
300 Additional
92ki suppliers
91ki every year
90ki
88ki
0
Conflict Minerals Substance of Concern Sustainability Greenhouse Gas
Assessment

Page 5
 Supplier Sustainability
Assessment (SSA)
SSA SSA Due
Request Date
Nov. Dec.

Apr May Jun Jul Aug Sept Oct Nov Dec

Supplier Sustainability Assessment (SSA) November – December (Approximately 2 Month)

Email: Honda_NA_Purch_Sustainability@hna.honda.com

Supplier Sustainability Assessment is a self-assessment that is performed to identify a

supplier’s strengths and needs. This information is shared with Honda to identify
training opportunities to strengthen sustainability characteristics
SSA provides Benchmarking Information

1. Serves as a self assessment that outlines

supplier’s own operations in a way that
communicates strengths and opportunities.

2. Provides Honda with an evaluation of their

supply base in order to create sustainability
plans and training for improvements.

3. Honda’s prestigious Sustainability Award is

chosen upon SSA evaluation and Gemba
follow-up activity from top performing suppliers.
Suppliers Required to Complete Industry standard SSA

Human Rights 5 questions Diversity 17 questions

Environment 21 questions Health & Safety 8 questions

Compliance & Ethics 9 questions General 7 questions

Honda Corp Governance 25 questions

 Substance of Concern (SoC)
Substance Substance Substance Substance
of Concern of Concern of Concern of Concern
Request Due Date Request Request
As Needed As Needed As Needed As Needed

Apr May Jun Jul Aug Sept Oct Nov Dec

Substance of Concern (SoC) Regulatory As Needed (Requests Made Once Mass Production
Email: SoC_Admin@hna.honda.com Drawings are Released)

Each supplier must assure, through their supply chain, the management of
chemical substances, and guarantee that parts and materials do not contain any
chemical substances prohibited under laws and regulations.
Global Hazardous Material Regulations
Japan Canada
EU （27 countries）
• Chemical Control Law • Mercury ban
・76/769/EEC: absorbed into REACH
(28 substances + HBCDD proposal) • PFOS
・ELV Directive（4 subst.）
• JAMA voluntary （4 ELV substances） • Chemical Substance Act
・RoHS Directive（6 subst）
Korea • VOC in vehicle cabin • BNST
・National laws
• ELV (4 substances) • E.C. regulating many more
・Battery Directive
• REACH (No. 1907/2006) • RoHS (6 substances)
• Others TBD • REACH

India Taiwan
・ELV Law （4R & 2R） ・ELV voluntary（4 substances）

Thailand USA
・Green Standard • State laws: Mercury、PBDE
(Voluntary regulation)
• CA: Prop.65（Carcinogenic sub）,
China
Vietnam • CA RoHS
• ELV law（6 substances proposal） • CA Green Chemistry
・RoHS
• RoHS law（6substances） • WA: Copper in brakes
• VOC in vehicle VOC cabin (GB/T) • Conflict Minerals
• China REACH (under review) • Deca BDE Regulation
• ODS: Ozone Depleting Substances

World wide: Asbestos, PoPs (Stockholm Convention)

Due Diligence Documents Required
•HM Green Purchasing Guideline
(Global Purchasing policy including chemical substance
mgmt.)

•N.A. Purchase Sales Agreement (PSA)

(Contractual agreement between Honda & Supplier)

•N.A. Supplier SoC Manual

(Explains Honda’s expectations)

•Honda Chemical Substance Mgmt. Std. (HCSMS)

(Explains all prohibited and/or regulated chemicals)

•One Time Supplier Substance of Concern Declaration

(Supplier signs stating they will follow HCSMS)

• HES A3035, A3060 and A3065

A3035: Material symbols for resin and rubber parts
A3060: Indication methods conforming to Honda
Chemical Substance Management Std. (4R)
A3065: Indication methods conforming to Honda
Chemical Substance Management Std. (2R/PP)
(If mark is on drawing, supplier must comply w/HCSMS)

•International Material Data System (IMDS)

(Data entry & compliance within external system)
Documents on HondaWeb

The HondaWeb
has all
documents
suppliers need
for SoC success
NAP Standard Schedule for IMDS Data Collection

• 100% of all parts and materials for North America must be

submitted to Honda through a global system called
IMDS (International Material Data System)
• Suppliers must use IMDS ID #95110 when sending data to NA
• Used by all OEMS
 Greenhouse Gas (GHG)

GHG GHG
Request Due Date
June July

Apr May Jun Jul Aug Sept Oct Nov Dec

Green House Gas (GHG)

Approx. June - July (One Month Turnaround)
Email: GHG_admin@hna.honda.com

Suppliers must establish a structure for collecting, calculating and reporting Green House Gas data. Honda will request that
suppliers submit this data annually. Suppliers will have a Honda established reduction target and need to promote activities
internally to reduce greenhouse gas emissions.
Greenhouse Gas Effect:

Greenhouse Gases prevent the natural release of infrared radiation;

sending it back to Earth’s surface.
N.A. GHG All Supplier Roll-out Plan

Total # of Suppliers 88 123 209 288 443

Additional Suppliers 35 86 79 155

100%
Percentages and
97%
supplier quantities
based on Fiscal 90%
Year Spend Data.

Cut off at $1M of 78%

spend 74%

443 Total
Suppliers

Data Collection 2008 Base 2014 2015 2016 2017

Plan for Suppliers Reporting GHG Emissions

 N.A. suppliers are currently achieving 2020 target
Honda N.A. GHG: Plan vs. Actual
400
Metric Tonnes of C02e Normalized per $1M of Spend

350 336.2 332.9 329.2

300

257.6
250

200 179.4
169.3
161.9

150

100

50

0
85ki 87ki 89ki 90ki 91ki 92ki 93ki 94ki 95ki 96ki 97ki 98ki
2008 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Collection Plan Collection Estimated to 100% Actual

N.A. is on target to achieve the -10% (-1%/yr)

Emissions Reduction by 2020
 Conflict Minerals (CM)
Conflict Minerals Conflict Minerals
Request Due Date
July Nov.

Apr May Jun Jul Aug Sept Oct Nov Dec

Conflict Minerals (CM)

Regulatory July – November (Approx 5 Month Turnaround)
Email: Conflict_minerals@hna.honda.com

Dodd-Frank Wall Street Reform Act became effective in November 2012. Mandates public disclosure by certain
companies if conflict minerals are “necessary to the functionality or production of” a product that they
“manufacture” or that they “contract to manufacture”

Page 18
What are Conflict Minerals?
• Conflict Minerals (also referred to as
3TG) to be reported Countries covered under the
• Tin Dodd-Frank Act
• Tantalum
• Tungsten
• Gold
• The US Congress passed the Dodd-
Frank Wall Street Reform and
Consumer Protection Act on July 21,
2010.
• The intent of the law is to deter
violence and human rights violations
in the DRC and neighboring
countries funded by the trade of
Conflict Minerals through increased
transparency of publically traded Collect from 100% of suppliers
companies’ sourcing practices.
*The following information was developed by
N.A. Purchasing, Honda North America, and it does not constitute legal advice. You should review the applicable laws and
regulations relating to conflict minerals reporting requirements with your own legal counsel.
 The SCS Unit also serves as the
window to the NA supply chain for:

Governance
Compliance &
Ethics
Health & Safety
Contact Information
Responsible Associates:
Scott_Morris@hna.honda.com Manager
Alissa_Yakali@hna.honda.com Staff Administrator
Kristan_Coy@hna.honda.com Coordinator

Specific Mailboxes:
Soc_Admin@hna.honda.com
Ghg_admin@hna.honda.com
Conflict_minerals@hna.honda.com
Honda_NA_Purch_Sustainability@hna.honda.com
Thank You!

Questions?