II. Concept of Green Procurement of KITASHIBA

4. Criteria for evaluation and selection

(1) Evaluation and selection of the supplier

KITASHIBA selects the supplier based on the evaluation of quality, cost, delivery, service and the status of environmental preservation activities of the supplier. The supplier is evaluated for the following items in which the acquisition of ISO 14001 certification has the highest priority (refer to <Example 1>) and the supplier evaluated as high rank is prioritized.

1) Evaluation criteria

1. The supplier has acquired ISO 14001 certification, or has a plan to acquire the certification
   
2. The supplier is implementing green procurement of its own, or has a promoting plan
   
3. The supplier actively carries out the following 10 items concerning environmental preservation

1.	The supplier has established the organization to promote environmental management such as environmental pollution control measure committee.
2.	The supplier has clarified the position and function of the said promoting organization.
•	The supplier has also defined the organization to achieve the purpose and target, the leader of the organization, its role and its authority.
•	The supplier has its environmental policy and pledges to improve continually and prevent pollution.
•	The environmental policy is laid down into document and disseminated to all employees.
•	The supplier has its environmental purpose and target laid down into document.
•	The program is defined that clarifies the responsibility, procedure and schedule for the achievement of the purpose and target.
•	The supplier has a system of product assessment.
•	The supplier has a system to deal with emergency.
•	The supplier has an internal audit system on environment.
3.	The management of the supplier participates in the organization mentioned above.
•	The supplier has a corporate philosophy concerning environmental preservation.
4.	The supplier understands the relevant laws such as Chemical Examination Law, Air Pollution Control Law and Water Pollution Control Law, and has certified controllers.
•	The supplier pledges to observe the laws relevant to environment in its environmental policy.
•	The supplier evaluates and controls environmental impact concerning air pollution, and endeavors to improve.
•	The supplier evaluates and controls environmental impact concerning water contamination, and endeavors to improve.
5.	The supplier reviews to utilize materials considering the environment.
6.	The supplier is positive to improve the production process considering the environment.
•	The supplier endeavors for the improvement concerning environmental impact substances, wastes, resource consumption, odor, noise and vibration.
•	The supplier is struggling actively to improve, re-use and recycle packaging and to improve the efficiency of transportation.
7.	The supplier carries out training, dissemination and information disclosure to employee regularly, concerning environmental preservation.
•	The personnel is separately trained in accordance with the proper training program who is engaged in the work that may cause to give considerable impact on environment. The training status is controlled.
•	The supplier discloses its information on its environmental preservation.
8.	The supplier has not been disciplined or punished by the relevant authorities for the past five years.
9.	The leader of the supplier understands the environmental policy of KITASHIBA.
10.	The supplier quickly corresponds to the request of KITASHIBA for cooperation concerning environmental activities such as survey of using status of regulatory substances, etc.

2) Selection criteria of supplier

The total of figure of merit based on the evaluation item is ranked as below. The supplier ranked in S and A is prioritized in our procurement.

Rank	Total of figure of merit	Criteria
S	Acquired ISO 14001 certification, or above 100	Prioritized in procurement
A	80 - 100
B	50 - 70	Improvement is requested.
C	30 - 40
D	Less than 20

(2) Selection criteria of procurement goods

The priority of procurement is given to the supplier that provides goods superior in the following items related to the reduction of environmental burden, adding to quality and cost.

1) Selection criteria of procurement goods

1. Resource saving
   
   The goods that consume fewer resources.
   
2. Re-use
   
   The goods that can be re-used.
   
3. Recycling
   
   The goods that can be recycled, or utilize plenty of recycled materials.
   
4. Energy saving
   
   The goods that consume less energy.
   
5. Long life
   
   The goods that can be used for a long term.
   
6. Contained environment-related substances
   
   The procurement goods shall not contain any of the prohibited substances listed in Annex 1, and the chemical substance contained in the procurement goods shall be reduced or controlled according to the control rank in Annex 1.

(3) Submission of the report on the activity to create environmentally harmonized product

The supplier is kindly requested to report on the overview of regular environmental activities for the evaluation described above.

Regarding the item e among the evaluation items, KITASHIBA may specify the required standard by purchase specification. Refer to the following for the evaluation index of other items.

1. Activity on saving resources (e.g. minimizing of parts to use, lightening of product)
   
   Target: To achieve saving resources by XX% of the year YYYY in the year ZZZZ
   
   The rate of saving resources is calculated with following equation:
   
   

Rate of saving resources (%)	=	(Weight of procurement in the objective year)	x	100
		(Weight of procured material of basic year)



2. Activity on re-use of procurement goods

   Target: To achieve the rate of re-usable portion of procurement goods by XX% in the year YYYY

   The rate of re-useable portion of procurement goods is calculated with following equation:
   

   Rate of re-usable portion (%)	=	(Weight of re-usable portion of procurement)	x	100
   		(Weight of procurement goods)



3. Activity on recycling of procurement goods
   
   Target:To achieve the rate of recyclable portion of procurement goods by XX% in the year YYYY
   
   The rate of recyclable portion of procurement goods is calculated with following equation:
   
   

   Rate of recyclable portion (%)	=	(Weight of recyclable of portion of procurement)	x	100
   		(Weight of procurement goods)



4. Activity on energy saving
   
   Target: To achieve the rate of energy saving by XX% of the year YYYY in the year ZZZZ
   
   The rate of energy saving related to electric consumption and fuel and light expenses concerning the manufacture of delivery goods is calculated with following equation:
   
   

   Rate of energy saving (%)	=	(Energy consumption)	x	100
   		(Energy consumption in the basic year)

   
   
5. Activity of life elongation of goods
   
   Target: To achieve the life elongation by XX% of the year YYYY in the year ZZZZ
   
   The achievement of life elongation of the procurement goods, or its rate is calculated with following equation:
   
   

   Rate of life elongation (%)	=	(Improved life of procurement goods)	x	100
   		(Life of procurement goods in the basic year)

   
   
6. Environment-related substances
   
   Please refer to Annex 2 for the environment-related substances.
   
   The objectives of survey are the substances of control rank A and the substances of rank A’ with content rate of the environment-related substances more than 0.1%. The components to compose unit are also the objectives of survey.

5. Terms and Definitions

The definitions of the terms used in the Guidelines are as follows.