The information in this Statement has been approved by the Board of Directors of Hitachi Energy Ltd (herein after referred as Hitachi Energy) and relates to the period April 01, 2023, to March 31, 2024 (hereinafter referred to as the Reporting Period). The scope of markets included in this Statement covers our operations worldwide, including those of our direct and indirect subsidiaries.
| Section 1 | |||
| About Hitachi Energy | |||
| 1 | Hitachi Energy is a global technology leader that is advancing a sustainable energy future for all. We serve customers in the utility, industry and infrastructure sectors with innovative solutions and services across the value chain. Together with customers and partners, we pioneer technologies and enable the digital transformation required to accelerate the energy transition towards a carbon-neutral future. We are advancing the world's energy system to become more sustainable, flexible and secure whilst balancing social, environmental and economic value. Hitachi Energy has a proven track record and unparalleled installed base in more than 140 countries. We integrate more than 150 GW of HVDC links into the power system, helping our customers enable more wind and solar. Headquartered in Switzerland, we employ more than 45,000 people in 60 countries and generate business volumes of over $13 billion USD. | ||
| 2 | To prepare this statement Hitachi Energy undertook a detailed assessment of its operations and supply chain, and its performance against the commitments made in its 2022-2023 statement. Hitachi Energy is proud of the steps it has taken to combat modern slavery and remains committed to further improving its business practices in this area. Continuing to improve the way Hitachi Energy assesses and addresses the risk of modern slavery remains an important focus area for the business. |
||
| Hitachi Energy’s commitment to combatting modern slavery | |||
| 3 | Hitachi Energy remains committed to ensuring there is transparency in its business and in its approach to managing modern slavery throughout its supply chains. This commitment is reflected in its governance, policies, code of conduct, and business practices (both internally and within its value chain) and compliance with its framework and initiatives. Hitachi Energy fully acknowledges its responsibility to respect human rights as set out in applicable laws, including but not limited to the UK Modern Slavery Act 2015, the Australian Modern Slavery Act 2018 and the International Bill of Human Rights, and reinforces its commitment to implementing the United Nations Guiding Principles on Business and Human Rights, the Universal Declaration of Human Rights, the OECD Guidelines for Multinational Enterprises, the ILO Core Conventions on Labor Standards, the ILO Minimum Age Convention No. 138 and the Worst Forms of Child Labor Convention No. 182. This is further emphasised in Hitachi Energy’s sustainability strategic plan which draws upon the United Nations Sustainability Development Goals (SDGs). This strategy is based around Hitachi Energy’s three DNA strands of Planet, People, and Principles whereby each pillar has corresponding top targets that drive Hitachi Energy’s business to contribute to social, environmental, and economic value. | ||
| 4 | Hitachi Energy’s comprehensive human rights framework demonstrates its commitment to respecting all internationally recognised human rights within and across its business activities and value chain. Hitachi Energy’s human rights framework and related programs openly commits to respecting human rights, including non-discrimination, the prohibition of child labour, prohibition of forced labour, and prohibition of modern slavery. Hitachi Energy actively supports safe working conditions, nonretaliation, freedom of association, and the right to engage in collective bargaining. | ||
| 5 | For the past years Hitachi Energy has been recognised worldwide and within its industry by Bureau Veritas for its Anti-Bribery Management System. In January 2023, Hitachi Energy obtained ISO 37001 Anti-Bribery Management System Certification. The standard is now implemented in 12 countries, covering 164 sites. Hitachi Energy contributes to various organisations and initiatives related to integrity, sustainability, and health, safety, and the environment. | ||
| 6 | Respect for the dignity of the individual and the importance of human rights form the basis of the behaviours Hitachi Energy expects from everyone who works for it, either engaged as a direct Hitachi Energy employee, or engaged indirectly through its supply chain. Hitachi Energy does not accept any form of discrimination, harassment or bullying within its business or supply chain. All managers are required to implement processes designed to ensure equal opportunity and inclusion for all Hitachi Energy employees as well as for individuals employed in the supply chain. Further, suppliers must take measures to avoid any form of forced, bonded or compulsory labour (or any other kind of modern slavery or human trafficking). Recognising the extremely complex nature of modern slavery, Hitachi Energy continues to emphasise the importance of collaboration and learning from others. | ||
| Section 2 | |||
| Hitachi Energy’s business operations | |||
| 7 | To deliver maximum value, Hitachi Energy has organised its operations around four global business units (BUs) and has local offices and research centres spanning over 60 countries. This highly networked structure across over 200 local offices enables Hitachi Energy’s over 45,680 employees and its global business units to stay close to customers, fostering strong awareness and knowledge of local market operating conditions, whilst further connecting to the company’s latest technology developments and solutions, competence, and reference points. | ||
| 8 | Hitachi Energy’s four global business units (Business Units) are: (a) Grid Automation (GA): the grid automation business unit offers a comprehensive portfolio of solutions ranging from substation automation, communication networks, grid automation services, and grid edge solutions to enterprise software. These solutions address all key segments connected to the energy system including generation, transmission distribution, industries, transportation, and infrastructure sectors. (b) Grid Integration (GI): the grid integration’s portfolio spans a wide range of transmission and substation applications, which facilitate reliable and efficient system integration of the future digital electric network with minimum environmental impact. Grid integration incorporates solutions and services of the business's direct current (DC) and alternating current (AC) fields, including HVDC, substations, FACTS, offshore wind connections, semiconductors, and power consulting for utility and industrial grid applications, as well as e-transportation solutions. (c) High Voltage products (HV): Hitachi Energy is a leader in high-voltage technology, offering a wide range of highvoltage products up to 1,200-kilovolt (kV), helping to enhance the safety, reliability, and efficiency of power networks while minimising their environmental impact. The high voltage primary offerings include switchgears, circuit-breakers, generator circuit breakers, power quality products, surge arresters, disconnectors, instrument transformers, and highvoltage service. Hitachi Energy’s technological leadership continues to facilitate innovations in areas such as ultra-highvoltage power transmission, enabling smart grids, and enhancing eco-efficiency. (d) Transformers (TR): through its innovative and diverse team and pioneering technologies, Hitachi Energy transforms energy to add social, environmental, and economic value, powering future generations. Our TR business unit offers a complete range of power and traction transformers, insulation and components, digital sensors and transformer services to support power generation, transmission, and distribution, serving various sectors: metals and mining, oil and gas, commercial and infrastructure projects, and mobility. |
||
| Hitachi Energy’s supply chains | |||
| 9 | Hitachi Energy offers leading power and automation products, systems, service and software solutions across the generation, transmission, and distribution value chain and supports operations in over 60 countries. Hitachi Energy sources materials and services from a variety global source. These materials and services are made up of three major categories as follows: (a) Direct materials and services: sourced globally from over 20,000 direct material and project service supplier, both wholly owned (internal) Hitachi Energy Business Units and third-party suppliers. These include transformers, capacitors, switchgear, surge arrestors, relays and engineering services. (b) Indirect materials and services: sourced through third party suppliers who engage suppliers globally. (c) Transport and logistics services: sourced from global service providers. |
||
| 10 | Hitachi Energy remains committed to high standards of integrity, ethics, and sustainability and has a zero-tolerance policy when it comes to unethical business behaviour, such as bribery, corruption, and forced labour. Hitachi Energy expects all its suppliers to adhere to its standards and to conduct their business ethically and comply with all applicable laws and regulations. | ||
| Section 3 | |||
| Modern slavery risks in Hitachi Energy’s business | |||
| 11 | Hitachi Energy has undertaken an assessment of modern slavery risks in its business. | ||
| 12 | Hitachi Energy regularly considers the risk of modern slavery practices in its business by maintaining a working group made up of stakeholders from various departments that reviews company processes and procedures and to better understand operations, the supply chain, potential risks to the organisation and the actions being taken in support of the objectives of applicable laws and regulations concerning modern slavery. | ||
| 13 | Hitachi Energy considers the risk of modern slavery practices in its own operations as low, given it continues to employ largely a professional workforce. As part of Hitachi Energy’s commitment to address and mitigate modern slavery risks in its own operations, it continues to perform pre-employment background checks, verification, and assessment of qualifications for the relevant positions to ensure legal compliance. | ||
| 14 | The most significant modern slavery risks associated with Hitachi Energy’ supply chain during the Reporting Period were identified: (a) direct materials and services sourced from emerging markets where there is higher risk of modern slavery and/or human trafficking; (b) indirect services provided by third party contractors such as cleaning, site works, labour hire, service contractors; and (c) international logistics providers, especially shipping from emerging markets. |
||
| 15 | During the Reporting Period Hitachi Energy focused on improving how it assesses and addresses those identified modern slavery risks in its supply chain. | ||
| Section 4 | |||
| Actions taken to assess modern slavery risks in 2022-2023 | |||
| 16 | In Hitachi Energy’s 2022-2023 statement, it identified the below actions to assess for suppliers with higher sustainability risks, manage and reduce the risks of modern slavery practices in its operations and supply chains. These included: (a) implementation of EcoVadis third party sustainability assessments of current and new suppliers to further assess supplier on ESG risk; (b) implementing the Hitachi Group Code of Ethics and Business Conduct which emphasises the Hitachi Group’s respect of human rights and commitment to combatting the risks of modern slavery (c) Category managers assessing suppliers as potential partners based on their long-term operational and sustainability performance, integrity and anti-bribery compliances. This process also considered de-sourcing and blocking suppliers in |
||
| Actions taken to assess modern slavery risks during the Reporting Period | |||
| 17 | During the Reporting Period, Hitachi Energy continued to perform the actions identified in its prior statement, while improving and expanding the way those actions are performed by: (a) establishment of a regulatory function that supports the regulatory impact of sustainability developments, including environment, social, and governance (ESG) standards, among which those concerning human rights; (b) establishment of a connected SCM Regulatory Compliance team addressing regulatory compliance requirements in the supply chain and establishing procedures and processes, (c) extending the scope coverage of the high-risk countries evaluated under Hitachi Energy’s Supplier Sustainability Development Program (SSDP); (d) reviewing current training materials to ensure it remains relevant to those who have a direct involvement in purchasing decisions and reflect the relevant best practices adopted by Hitachi Energy; and (e) assessing Hitachi Energy’s current suppliers through Hitachi Energy Supply Base Management processes and ESG risk through EcoVadis third party sustainability assessments (f) promoting an open reporting and transparency culture via internal communication campaigns. (g) continued working to enhance its human rights Due Diligence process These are discussed in further detail below. |
||
| Human rights policies and procedures | |||
| 18 | Hitachi Energy implements several key global and local policies that address the prohibition of modern slavery within its operations and supply chain, including reporting channels. These policies and procedures remained substantively unchanged during the Reporting Period. | ||
| 19 | During the Reporting Period, Hitachi Energy established a dedicated Legal Regulatory function, which supports the regulatory impact of sustainability developments including the fields of environment, social and governance (ESG) standards. The Legal Regulatory Function places particular focus on human rights, human trafficking, modern slavery, as well as conflict minerals. The establishment of the Legal Regulatory Function enhances Hitachi Energy’s commitment to ESG performance, preserving human rights, and combatting modern slavery throughout its business dealings via a centralised global function. | ||
| Supply chain management policies | |||
| 20 | Hitachi Energy implements and enforces the Supplier Code of Conduct (SCoC) which is published in 10 different languages. Hitachi Energy’s Supplier Code of Conduct specifies the standards and requirements all suppliers are expected to adhere to and always comply with. The Supplier Code of Conduct remained substantively unchanged during the Reporting Period. | ||
| 21 | As a precondition to engagement, suppliers are requested to review and in turn, acknowledge the need to comply with the Supplier Code of Conduct as well as Hitachi Energy’s General Terms and Conditions. | ||
| 22 | Under its Supplier Sustainability Development Programme (SSDP), Hitachi Energy continued to train its suppliers on human rights risks, focusing on those related to modern slavery and human trafficking. The focus remained on tier one suppliers in priority countries; however, during the Reporting Period, the focus increased from 17 high risk countries to suppliers located in 21 high risk countries across Asia, the Middle East, Africa, Europe, and the Americas, as well as those who supply high-risk materials or are a key strategic supplier. | ||
| 23 | In addition to continuing those actions identified in its previous statement, Hitachi Energy continued its participation in EcoVadis’ independent external sustainability assessment. This assessment considers performance criteria including environment, labour and human rights, ethics, and sustainable procurement. The EcoVadis assessment provides a globally recognised sustainability score for companies worldwide. Hitachi Energy employs EcoVadis independent assessment both to assess it performance as well as that of its supply base. | ||
| 24 | In 2021 Hitachi Energy scored a Silver rating or the top 25 percent of the companies rated by EcoVadis. As a result of its participation in the EcoVadis assessment in December 2022, Hitachi Energy scored a Gold rating. During the Reporting Period, Hitachi Energy once again scored a Gold rating, retaining a placement in the top 5 percent of the 130,000 companies assessed globally by EcoVadis. | ||
| Supply chain management procedures | |||
| 25 | During the Reporting Period, Hitachi Energy remained committed to the SSDP and continued to perform supplier assessments. Continuous assessment of suppliers under the Hitachi Energy’s robust SSDP was undertaken. The SSDP assesses suppliers against 42 assessment criteria, to actively evaluate the supplier and its respective supply chain. | ||
| 26 | During the Reporting Period, Hitachi Energy assessed 103 high risk suppliers as part of the SSDP. As part of this assessment, Hitachi Energy identified 277 risks and mitigated 52 of them, in addition to mitigating 79 other risks raised from prior reporting periods. For every area of non-compliance identified during the supplier assessments, a supplier support action was launched to systematically address each issue in turn. These support actions included capacity building, customised participatory workshops, sharing best practices, jointly implemented collaborative programs, and transfer of knowledge and expertise. | ||
| 27 | As at the end date of the Reporting Period, any identified risk not yet mitigated or resolved under the SSDP remained under investigation as part of the supplier support action process, as outlined above, requiring remediation. | ||
| 28 | During the Reporting Period, the reach of the EcoVadis supplier sustainability assessment was extended. The assessment evaluates suppliers on environmental, labour and human rights, ethics and responsible sourcing, across 21 sustainability criteria. | ||
| 29 | During the Reporting Period, Hitachi Energy expanded its focus under the EcoVadis program from strategic suppliers to all high- and medium-risk suppliers, assessing in total 1,289 suppliers. This was an increase from the 269 suppliers assessed during the 2022-2023 reporting period. Furthermore, as part of the EcoVadis program, 259 suppliers undertook at least one (1) training course during the Reporting Period. | ||
| 30 | In addition to the above actions, Hitachi Energy continued to routinely monitor key global industry and government sources that reported on modern slavery risks and patterns. Where relevant to its supply chain, and/or where Hitachi Energy considered it reasonable or necessary to do so, internal screening tools were updated to reflect these developments, such as prohibiting purchasing from newly identified entities listed under sanction laws. | ||
| 31 | Notwithstanding the identification of these risks and the update to internal supplier screening tools, neither the assessments nor other supplier due diligence processes indicated the presence or use of modern slavery or human trafficking in Hitachi Energy’s supply chain. | ||
| Employee training and engagement | |||
| 32 | During the Reporting Period, Hitachi Energy reviewed current training materials to ensure it remains relevant to those who have a direct involvement in purchasing decisions and reflects the relevant best practices adopted by Hitachi Energy during the Reporting Period. | ||
| 33 | Hitachi Energy trained 70 employees from the Supply Chain Management Function on its Responsible Minerals Sourcing Program (RMSP) during the Reporting Period. The RMSP establishes a framework for the sourcing of materials in an ethical and sustainable manner that ensures the health, safety, and protection of people and planet, whilst establishing a management systems pursuant to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict Affected and High-Risk Areas. | ||
| 34 | During the Reporting Period, Hitachi Energy trained all 42 new employees involved in purchasing decisions (nominated by the Business Units) as part of the SSDP | ||
| 35 | Hitachi Energy continued to offer its specialised support offering under its Employee Assistance Program (EAP), providing employees with assistance from experienced and qualified consultants who have specialist expertise, such as consultants providing specialised support to those who may be more susceptible to modern slavery practices. | ||
| 36 | To encourage all stakeholders to speak up against breaches of our core values and standards, we have implemented the Whistleblower Policy. The policy covers all issues mentioned in our Code of Ethics and Business Conduct and Supplier Code of Conduct. These include ethics and compliance issues, together with discrimination, retaliation, health and safety, human rights, and environmental breaches. We enforce a strict, zero-tolerance policy for violations of the law or our corporate policies. | ||
| Section 5 | |||
| Action effectiveness assessment | |||
| 37 | Hitachi Energy measures how effective it has been in ensuring that modern slavery is not present in any part of its operations or supply chains using various metrics which have been summarised in the table (next page). | ||
| 38 | Following a review of the effectiveness of the steps Hitachi Energy took during the Reporting Period, to ensure that it continues to improve on the way it assesses and addresses modern slavery risks in its operations and supply chain, Hitachi Energy intends to undertake the following further remedial steps: (a) providing mandatory training the management team members at various levels of the organization to provide decision makers with the relevant background on identifying and managing such risks and necessary steps to combat modern slavery in operations and supply chain; (b) participating in customer-led audits to further align Hitachi Energy’s practices, assessment, and actions with the expectations and processes of our customers; and (c) promoting the open reporting and transparency culture via internal communication campaigns Actions Matrix |
||
| Action | Metric | Details | |
| Human rights policies and procedures | Number of people who reported issues concerning modern slavery | During the Reporting Period, there were no incidents reported concerning allegations of modern slavery within Hitachi Energy’s operations or supply chains | |
| Supply chain management policies and procedures | Number of instances of the presence or use of modern slavery or human trafficking | During the Reporting Period, neither remote supplier assessments nor other supplier due diligence processes indicated the presence or use of modern slavery or human trafficking in supply chains (as supported by the activities in paragraphs 25 and 26) | |
| Number of suppliers who received training addressing modern slavery as part of the SSDP | During the Reporting Period, 109 suppliers received training as part of the SSDP which also addressed modern slavery | ||
| Number of suppliers with whom business has been terminated due to continued non-compliance as part of the SSDP | During the Reporting Period, business with three (3) suppliers were descoped due to unsatisfactory progress in resolving identified risks | ||
| Number of suppliers who received training addressing modern slavery as part of the EcoVadis assessment | During the Reporting Period, 259 suppliers undertook at least one (1) training course relevant to the EcoVadis sustainability criteria slavery as part of the assessment program | ||
| Employee training and engagement | Number of people within the business who received training under the RMSP | During the Reporting Period, 70 Supply Chain Management Function employees were provided training under the RMSP, as set out in paragraph 33 | |
| Number of people within the business who received training under the SSDP | During the Reporting Period, all new 42 employees involved in purchasing decisions (nominated by the Business Units), received training addressing modern slavery as part of the SSDP, as set out in paragraph 34 | ||
| Section 6 | |||
| Consultation process | |||
We recognize that reaching excellence in human rights compliance is a journey which requires partnerships with various stakeholders including suppliers as well as transparency and accountability. Hitachi Energy’s modern slavery working group, key stakeholders and various internal functions such as Legal and Integrity, Human Resources, Sustainability, and Supply Chain Management globally were all consulted to inform and contribute to the development of this joint statement. This joint modern slavery and human trafficking statement was approved by Hitachi Energy Board of Directors. Alistair Dormer |
|||