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Sustainability

Responsible Procurement

Shiseido wants to develop together with society while promoting respect for human rights and ensuring environmental protection in all its business activities, including the procurement of raw materials. By complying with laws and having a high sense of ethics, we are working on the following to achieve sustainable procurement and corporate social responsibility.

Ethical Supply Chain Policies/Standards

Shiseido Group Supplier Code of Conduct

Shiseido aims to find new and profound values through encounters with diverse groups of people, to create a “beautiful life” culture, and to engage in research, development, manufacturing, and the sales of superior products and services of a high quality, safety, and which deliver peace of mind. We regard all business partners as partners who create new values together and aim for sustainable development with high ethical standards. In the wake of our participation in the United Nations Global Compact, Shiseido has been working with our business partners on ethical business activities since we formulated the Shiseido Group Supplier Code of Conduct in 2006, stipulating the standards regarding human rights, legal compliance, labor practices, intellectual property protection, confidentiality, environmental protection, and fair trade. The business partners that are subject to the Shiseido Group Supplier Code of Conduct have agreed to the standards and we conduct periodic monitoring through surveys and audits. In the event that any supplier is identified to have violated the Shiseido Group Supplier Code of Conduct, we strictly implement a request for corrective action, offer corrective guidance, and provide support. In Japan, we also established the Business Partner Hotline and we have a system in place to receive opinions and consult with our business partners (No reporting was made in FY2018.). In recent years, with social issues and environmental problems becoming more serious, companies are more strongly required not only to comply with the laws and regulations of each country, but also to respect international treaties and conventions in order to realize sustainability throughout the supply chain and, in particular, to ensure respect for human rights. In response to such social demands, we revised the Shiseido Group Supplier Code of Conduct in April 2018, including strengthening the human rights provisions. In June 2019, we also added a provision for the proper management of working hours, days-off, and leave of employees.

Shiseido Group Procurement Policy

In order to achieve an ethical supply chain, the policy was established in 2018 based on fruitful coexistence with consumers, business partners, and society. The policy indicates the following: Our purchase principles are based on a consumer-oriented perspective; we carry out procurement activities to create better products through co-creation with business partners; we comply with all relevant laws and regulations, as well as placing the foremost priority on respect for human rights and consideration of the global environment; and we actively promote sustainable procurement.

Shiseido Group Sustainable Raw Materials Procurement Guidelines

This is a guideline formulated in 2018 for palm-derived materials, which exacerbate environmental and human rights problems in the country of origin, in order to promote sustainable procurement under the Shiseido Group Procurement Policy. We will promote sustainable procurement that respects human rights in consideration of the environmental protection of the place of origin.

Revision history

June 2018

We formulated the Shiseido Group Sustainable Raw Materials Procurement Guidelines for palm oil and set targets up to 2020. In line with the guidelines, we will promote sustainable palm oil procurement.

June 2018

We formulated the Shiseido Group Procurement Policy in order to realize an ethical supply chain.

April 2018

We revised the Shiseido Group Supplier Code of Conduct to ensure that it meets the current social needs. It requires business partners to comply with laws and regulations, prevent corruption, respect human rights, provide a safe and healthy working environment, and protect the environment.

June 2019

A provision for the proper management of working hours, days-off, and leave of employees was included in the Shiseido Group Supplier Code of Conduct.

Supplier monitoring/collaboration

Since having developed the Shiseido Group Supplier Code of Conduct in 2006, we have been implementing the Shiseido Supplier Code of Conduct Compliance Survey (Shiseido's proprietary SAQ*), which confirms the compliance status of suppliers. In 2018, of the suppliers who have trading records with our Purchasing Department in our Global Headquarters, we received responses from 197 suppliers and provided feedback of the analysis and evaluation results of the survey to each company. To suppliers who did not complete the survey and provided answers that we need to confirm, we asked them to complete the survey again and sent inquiries about the responses. In addition, in August 2017, we joined Sedex (platform to share supplier ethical data). In 2018, we discussed the use of Sedex and the sharing of their ethical information with our primary suppliers (compliance, environmental, human rights, and occupational safety and health) from 45 sites in 31 companies. Furthermore, regarding suppliers who do not complete Shiseido’s unique SAQ or participate in Sedex, we share the evaluation results of other accreditation organizations, the acquisition status of international standards certifications, and we are promoting supplier monitoring from multiple perspectives.

  • *SAQ:Self-Assessment Questionnaire
Type Descriptions 2015 2016 2018 2019
Target
Shiseido Group Supplier Code of Conduct Compliance Survey Number of suppliers which completed the survey 214 224 197
Response rate (%) 83 90 88 90
Sedex Number of suppliers who set access rights 31
Evaluation/certification other than Sedex Number of suppliers which have obtained evaluations/certification other than Sedex 4
Total Number of monitored suppliers 214 224 229*
Monitoring rate (%) 83 90 89 90
  • *Excludes 3 duplicate suppliers

Reporting and consultation center for suppliers

Since 2013, we have been hearing opinions from/consulting with our business partners using the Business Partner Hotline a center which receives reporting/consultations from suppliers in writing and by email (No reporting was made in FY2018.).

Sustainable procurement of raw materials (palm oil/mica)

With regard to raw materials (palm oil/mica), which our company considers to carry high risk for human rights, we will strengthen our measures by participating in international initiatives.

Procurement of sustainable palm oil

Palm oil, a raw material for cosmetics, is mainly produced from oil palms in Southeast Asia. Environmental protection in palm oil production areas and consideration of human rights of people working on plantations are essential to build an ethical supply chain. Shiseido joined RSPO (Roundtable on Sustainable Palm Oil)(target_blank) and formulated PDFShiseido Group Sustainable Raw Materials Procurement Guidelines[ PDF : 131KB ] in order to procure palm oil and palm kernel oil that is environmentally and socially friendly. In addition, we are making progress toward obtaining RSPO supply chain certification*1 at the Shiseido Group factories. Through these efforts, we are shifting toward sustainable palm oil procurement.

Activities

2018
  • We formulated the Shiseido Group Sustainable Raw Materials Procurement Guidelines for sustainable procurement of palm oil and palm kernel oil and disclosed targets up to 2020.
  • In order to support the sustainable production of palm oil, we purchased certificates (credits) equivalent to 100% palm oil and palm-derived materials (achieved targets up to 2020).
  • We had a dialogue with palm oil producers in Indonesia
  • We obtained RSPO supply chain certification for the Shiseido Kuki factory and also for Shiseido Vietnam Inc (As of June 2019, 7 have factories obtained the certification.).
2017
  • We had a dialogue with palm oil producers in Malaysia.
  • Acquired RSPO supply chain certification for the Shiseido Kakegawa factory.
2013
  • We supported the production of sustainable palm oil by purchasing the Book & Claim*2 certificate that covers the palm oil and palm kernel oil used by the Shiseido Group.
2010
  • *1RSPO Supply Chain Certification: Certification to ensure logistically reliable delivery of RSPO-certified raw materials.
  • *2Book & Claim system: A system of trading the production of palm oil and palm kernel oil produced on RSPO-certified farms as certified credits. As in Energy Green, purchasing a credit is considered equivalent to purchasing RSPO-certified oil.

Changes in Palm Oil Consumption

2016 2017 2018
Total (t) of palm oil, palm kernel oil consumption amount 6,788 8,024 9,750
Book & Claim system (t) 50 75 9,750
Book & Claim System Coverage Ratio (%) 1 1 100

Procurement of sustainable mica

Mica is a mineral used in various industries such as electrical machinery and painting and is an ingredient in makeup products in cosmetics. In recent years, there were some cases where child labor is suspected in the mining of India-produced mica. Shiseido aims to build a responsible supply chain, and in May 2017, participated in an initiative to tackle sustainable mica procurement, called the Responsible Mica Initiative (RMI)(target_blank). The goal of RMI is to work with members of various industries to turn all Indian mica into sustainable raw materials by 2022. Currently, we collect information on mica from various suppliers and aim to improve the traceability and transparency of the mica supply chain. In addition, through the activities of RMI, we will cooperate with NGOs to improve the working conditions of mica miners and improve the educational system for local children.

Activities

2018
  • We expanded the survey target to include mica used by the Shiseido Group and began collecting information on mica procured from home and abroad through various suppliers.
  • We attended the RMI Annual General Meeting held in New Delhi, India. (Oct. 30-Nov. 1)
  • We had dialogues with local mica mining companies.
  • We consulted with NGOs and RMI members to improve the education system of local children.
  • We discussed and formulated the activities to be addressed in 2019. Please check the progress on the RMI website(target_blank)
2017
  • We joined Responsible Mica Initiative (RMI), an initiative with the aim of a responsible supply chain for mica.
  • We gathered information on suppliers of mica used by Shiseido Company, Limited.
  • We attended the RMI Kickoff Meeting held in New Delhi, India.

Risk assessment of raw materials (social risk assessment when introducing new raw materials)

In order to understand issues such as human rights and labor issues on the supply chain in raw material procurement, we are conducting a social risk assessment of raw materials used by Shiseido. We analyzed palm oil using Social Hotspot Database (SHDB)(target_blank), made by nonprofit organization, New Earth, and discovered that the size and type of risks differs depending on the country of origin. By examining materials other than palm oil using SHDB, we plan to build a tool to identify social risks and use it when introducing new materials. By evaluating and appropriately managing the risks of each raw material, we will endeavor to manufacture products that customers can use with peace of mind, even with an understanding of the background of the products.

Dialogues with stakeholders

In order to ensure sustainable and responsible procurement and respect for human rights in the course of our business activities, Shiseido works with various stakeholders to discuss environmental and social issues, to share information, and to create resolutions.

Dialogue with NGOs/NPOs and small palm oil farmers

In August 2018, in order to understand human rights issues in palm oil procurement, we participated in the Stakeholder Engagement Program in Indonesia held by Caux Round Table, Japan. Through dialogues with NGOs/NPOs and small palm oil farmers, we deepened our understanding of the human rights risks, violations, and labor issues. In order to be a company that fulfills our responsibility to human rights, we will reflect these dialogues with various stakeholders in the construction of an ethical supply chain.

Dialogue with human rights experts

In September 2018, we talked with human rights experts (Danish Institute for Human Rights, Institute for Human Rights and Business, and Verisk Maplecroft) and received advice on how to proceed with human rights due diligence in our company. We are implementing this knowledge in our efforts.

Photo 1: Exchange of opinions with palm farmers in Indonesia

Photo 1: Exchange of opinions with palm farmers in Indonesia

Photo 2: Dialogue with human rights experts, such as the Danish Institute for Human Rights

Photo 2: Dialogue with human rights experts,
such as the Danish Institute for Human Rights

2018 performance

  Name (sponsored/co-sponsored) Venue Stakeholders Main theme
September 2018 2018 International Conference regarding Business and Human Rights, Individual dialogue (Caux Round Table, Japan) Japan Human rights experts (Danish Institute for Human Rights, Institute for Human Rights and Business, Verisk Maplecroft) (Photo 2) Exchange of views on how to proceed with our human rights due diligence
September 2018 Global Stakeholder Engagement Program (Caux Round Table, Japan) Japan Human rights experts, NGOs, companies participating in stakeholder engagement programs in Thailand, Malaysia, Indonesia, and Japan Business and human rights considerations and points to note in Southeast Asia
August 2018 Stakeholder Engagement Program (Caux Round Table, Japan) Indonesia Fieldwork: small-scale palm oil farmers, companies, NGOs in Indonesia (Photo 1) Human rights issues in the palm oil industry in Indonesia
Workshop: Companies, NGOs
May-July 2018 Stakeholder Engagement Program (Nippon CSR Consortium) Japan Companies, NGOs, NPOs Understanding and practice of the United Nations Guiding Principles on Business and Human Rights in companies and identification of key human rights issues by industry

2017 performance

  Name (sponsored/co-sponsored) Venue Stakeholders Main theme
September 2017 2017 International Conference regarding Business and Human Rights, Individual dialogue (Caux Round Table, Japan) Japan Human rights experts (Danish Institute for Human Rights, Institute for Human Rights and Business, Sedex) Exchange of views on how to proceed with our human rights due diligence
September 2017 Global Stakeholder Engagement Program (Caux Round Table, Japan) Japan Human rights experts, NGOs, NPOs, companies involved in dialogue with stakeholders in Thailand, Malaysia, and Myanmar Business and human rights considerations and points to note in Southeast Asia
June-July 2017 Stakeholder Engagement Program (Nippon CSR Consortium) Japan Companies, NGOs, NPOs Relationship between business activities and human rights, the importance of business activities in consideration of human rights, and identification of key human rights issues by industry
May 2017 Global Stakeholder Engagement Program (Caux Round Table, Japan)/Global Compact Network Malaysia Malaysia Palm oil small scale farmers, companies, NGOs in Malaysia Environmental and social considerations and current status of palm oil procurement in Malaysia
Malaysian government agency, companies, NGOs Consideration of human rights of immigrant workers in Malaysia

Future issues and initiative plans

We will continue to work to prevent human rights abuses throughout our business and supply chain, based on the United Nations’ Guiding Principles on Business and Human Rights.



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