Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Achieved zero emissions at three factories (Shiseido Kakegawa Factory, Shiseido Itabashi Factory, and Shiseido View Tech)
• 98% recycling rate across 9 domestic factories
• Zero emissions achieved at Ginza main offices and Shiodome offices

Social Achievements

• Provided personal appearance training courses to 50,000 elderly and handicapped persons
• Developed services for the visually impaired, including Braille and audio information
• Supported employees' participation in social service activities through a 'Social studies day' system
• Opened a day care center within the offices (Kanga-room Shiodome)

Governance Achievements

• Implemented corporate governance reforms, including the reform of Board of Directors meetings and introduction of a system of Executive Officers
• Established a Corporate ethics committee and Shiseido Code
• Received the “Disclosure Award for Listed Companies” from the Tokyo Stock Exchange

Climate Goals & Targets

Environmental Challenges

• Illegal disposal of industrial wastes
• Reduction of carbon dioxide emissions (index was 138 in fiscal 2002, 10 points worse than fiscal 2001)

Mitigation Strategies

• Appointed Industrial Waste Managers at all workplaces and constructed a total management system
• Planning expanded introduction of the co-generation system to other factories

Supply Chain Management

Responsible Procurement

• Green Purchasing

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, Ministry of the Environment’s “Guidelines for Environmental Reports”

Certifications: ISO 14001

Sustainable Products & Innovation

• AMT (acylmethyl taurine) cleansing ingredient
• Taurine Soap

Awards & Recognition

• Grand Prize in the fiscal 2003 “Survey of corporate contributions to society” made by Asahi Shimbun Cultural Foundation
• Golden Presentation Award of the Japan Alternatives to Animal Testing Association (nine times)

Environmental Metrics

ESG Focus Areas

• Women and Beauty
• Culture
• Environment
• Personnel

Environmental Achievements

• Reduced CO2 emissions (Specific figures not available in report, but mentions targets and ongoing efforts)
• Achieved zero emissions at all Japanese production bases by using waste substances as raw materials
• Switched to exclusive use of RSPO-certified palm oil and palm kernel oil by 2013
• Expanded the switch to sugar cane-derived polyethylene packaging to approximately 60 cosmetics products.

Social Achievements

• Increased percentage of female leaders in Japan to 27.2% as of April 1, 2015 (from 26.8% in 2014)
• High stability rate for employees returning to work after taking childcare leave in Japan
• Held 3,877 SHISEIDO LIFE QUALITY BEAUTY SEMINARS with 65,555 participants in the year ended March 2015
• Introduced systems and programs in 1990 to help employees balance work with childcare and nursing care.

Governance Achievements

• Established CSR Committee reporting directly to the Board of Directors
• Established Remuneration Advisory Committee and Nomination Advisory Committee, both chaired by external directors
• Increased number of external directors to 3 (from 2 in 2011)
• Implemented a new remuneration policy for directors, Audit & Supervisory Board members and corporate officers effective from 2015.

Climate Goals & Targets

Environmental Challenges

• Decreasing domestic market share despite high brand favorability
• Decreasing investment in marketing and R&D
• Inefficient organization and too many products/brands
• Slow decision-making and response to market changes
• Slow sales growth in China due to inventory problems
• Pullback in demand following the April 2014 hike in Japan’s consumption tax.

Mitigation Strategies

• Consumer-oriented transformation
• VISION 2020 medium- and long-term strategy
• Increased marketing and R&D investment
• Organizational and personnel system reform
• New organizational matrix with brand and region vectors
• Optimization of market inventory levels in China and Asia
• Cost structure reforms to generate funds for investment (¥30-40 billion in savings during 2017).

Supply Chain Management

Supplier Audits: 459 surveys of compliance with the Shiseido Group Supplier Code of Conduct

Responsible Procurement

• Shiseido Group Supplier Code of Conduct (human rights, legal compliance, labor practices, environmental protection, fair operating practices)

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IIRC), United Nations Global Compact, ISO26000, GRI G4, Japan’s Ministry of the Environment’s 2012 Environmental Reporting Guidelines

Certifications: Eco-First Company (Japan’s Ministry of the Environment)

Sustainable Products & Innovation

• Products with sugar cane-derived polyethylene packaging

Awards & Recognition

• Top award in the poster presentation category at the 28th IFSCC Congress
• Eco-First Company certification
• CDP Climate Performance Leadership Index
• World’s Most Ethical Companies (Ethisphere Institute)
• Minister of State for Special Missions Prize (Cabinet Office)
• Nikkei Woman’s “100 Best Companies Where Women Play an Active Part” (first place)

Environmental Metrics

ESG Focus Areas

• Social Issues and Expectations
• Sustainability
• Compliance

Environmental Achievements

• Began using mechanically recycled PET for SEA BREEZE product packaging
• clé de peau BEAUTÉ Synactif received the Cosmetics Packaging Award at Japan Packaging Contest 2015 for refills that offer both sophisticated aesthetics and environmental friendliness
• Product formulation began using plants cultivated at an in-house test facility (a plant factory) as raw material
• Continued to promote forest conservation activities in Japan and abroad

Social Achievements

• Social business model in Bangladesh was selected as an initiative of the Business Call to Action (BCtA) led by United Nations Development Programme (UNDP)
• Held 3,231 Shiseido Life Quality Beauty Seminars with 55,814 attendees
• Published a booklet titled Cancer Patients’ Guide to Caring for Your Appearance and distributed it to cancer patient groups
• Percentage of female leaders reached 50.6 percent globally, 28.5 percent in Japan

Governance Achievements

• Established the Compliance Committee
• Strengthened corporate governance to enhance management transparency and fairness
• Modified the agenda of the Board of Directors to focus on important matters

Climate Goals & Targets

Environmental Challenges

• Deceleration of China’s economy
• Intensifying competition from global peers and emerging local and Korean brands in China
• Low overseas profitability
• Rebuilding the China business
• Improving profitability overseas
• Continuing growing brands in Japan
• Expiration of a fragrance brand license agreement
• Rapid slowdown in the global economy

Mitigation Strategies

• Business structure reforms to generate capital for investing in growth
• Cost reductions of ¥30 to ¥40 billion in year ending December 2017 compared with the year ended March 2014
• Strengthening brands to increase sales and reforming cost structure in each region
• Reengineering the cosmetics business in China
• Rejuvenating the China-only AUPRES brand
• Increasing marketing investment
• Establishing integrated operations in the Americas to improve profitability
• Restoring the growth potential of Bare Escentuals, Inc.’s bareMinerals brand
• Establishing a unified business structure within the EMEA region
• Strengthening fragrance brands and acquiring new ones
• Implementing the regional headquarters system
• Implementing additional contingency measures

Supply Chain Management

Supplier Audits: More than 1,500 companies globally had concluded MoUs as of March 2015

Responsible Procurement

• Shiseido Group Supplier Code of Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: International Integrated Reporting framework, United Nations Global Compact, ISO26000, GRI G4, 2012 Environmental Reporting Guidelines (Japan’s Ministry of the Environment)

Sustainable Products & Innovation

• Refills for clé de peau BEAUTÉ Synactif
• Mechanically recycled PET for SEA BREEZE product packaging

Awards & Recognition

• 23 IFSCC awards
• Gold Pentaward
• Japan Newspaper Publishers and Editors Association Newspaper Advertising Award
• Dentsu Newspaper Advertising Excellence Award
• Tokyo Arts Directors Club (ADC) Award for Best Newspaper Ad
• Grand Prix Film award (Epica Awards)
• Gold award in the film category at the Asia Pacific Advertising Festival (ADFEST)

Environmental Metrics

ESG Focus Areas

• Environment
• Society
• Culture
• Governance

Environmental Achievements

• Reduced CO2 emissions by approximately 49,000 tons thanks to refill products and other initiatives.
• Achieved 100% RSPO-certified palm oil procurement.
• Improved water usage efficiency at French production facilities.
• Achieved an 89% waste recycling rate in 2018.
• Developed various kinds of environmentally friendly packaging (e.g., biomass containers, recyclable PET bottles, low-temperature combustible materials).

Social Achievements

• Launched Shiseido Life Quality Makeup activities in 4 countries/regions in 2019.
• Conducted gender equality workshops with 910 participants in 2019.
• Conducted 4,457 Shiseido Life Quality Beauty Seminars in 2018.
• Supported patients with Xeroderma Pigmentosum (XP) by donating sunscreen products and providing educational materials.
• Opened Kangaroom Shiodome and Kakegawa in-house nurseries to support employees with childcare.

Governance Achievements

• Established the Social Value Creation Division in 2019.
• Revised the Shiseido Group Supplier Code of Conduct in 2018 and 2019 to strengthen human rights provisions.
• Implemented human rights due diligence and risk assessments.
• Established the Shiseido Group Human Rights Policy based on the UN Guiding Principles for Business and Human Rights.
• Appointed three highly independent external directors to the Board of Directors.

Climate Goals & Targets

Environmental Challenges

• Climate change impacts (increased UV exposure, drought risk).
• Deforestation linked to palm oil and paper procurement.
• Water scarcity in certain regions.
• Waste management.
• Human rights risks in the supply chain (palm oil, mica).

Mitigation Strategies

• Reduced CO2 emissions through various initiatives.
• 100% RSPO-certified palm oil procurement.
• Water-saving initiatives at production facilities.
• Waste recycling programs.
• Participation in RSPO and RMI initiatives to address human rights risks in supply chain.
• Human rights due diligence and risk assessments.
• Revised Shiseido Group Supplier Code of Conduct.

Supply Chain Management

Supplier Audits: 197 suppliers completed the Shiseido Supplier Code of Conduct Compliance Survey in 2018.

Responsible Procurement

• Shiseido Group Supplier Code of Conduct
• Shiseido Group Sustainable Raw Materials Procurement Guidelines
• Participation in RSPO and RMI initiatives.

Climate-Related Risks & Opportunities

Physical Risks

• Increased UV exposure
• Drought risk in Europe

Transition Risks

• Regulatory changes related to environmental protection.

Opportunities

• Development of energy-efficient products and processes.

Reporting Standards

Frameworks Used: UN Global Compact, TCFD

Certifications: ISO 14001

Third-party Assurance: SGS Japan Inc. (partial assurance for Scope 3 emissions)

UN Sustainable Development Goals

• Goal 6 (Clean Water and Sanitation)
• Goal 7 (Affordable and Clean Energy)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 5 (Gender Equality)
• Goal 15 (Life on Land)

Various initiatives contribute to these goals through environmental protection, sustainable procurement, gender equality promotion, and community engagement.

Sustainable Products & Innovation

• Refill products
• Eco-friendly packaging
• Water-saving products.

Awards & Recognition

• 2010 New Jersey Governor's Environmental Excellence Award
• Corporate Philanthropy Award from the Japan Philanthropic Association (2019).

Environmental Metrics

ESG Focus Areas

• Environment
• Society
• Culture
• Governance

Environmental Achievements

• Achieved carbon neutrality at all Shiseido factories in 2020
• Reduced water consumption by 16% (compared with 2014)
• Reduced CO2 emissions by 12% (compared to 2019)
• Achieved zero landfill at all 12 factories worldwide in 2020
• Sustainable packaging accounted for 57% of all Shiseido packaging developed in Japan in 2020
• Increased renewable energy use to 33% of electricity consumed at sites

Social Achievements

• Launched online consultations in China and developed the Makeup Navigator website in Japan to support consumers during the COVID-19 pandemic
• Published the Beauty Book for Cancer Patients and Men’s Grooming for Cancer Patients
• Provided beauty care seminars at hospitals in collaboration with CancerNet Japan and the Japan Cancer Society
• Participated in LAVENDER RING, a multilateral project to support people with cancer
• Partnered with Friends-International on ‘Empower Her’ to help young women from disadvantaged backgrounds in Cambodia

Governance Achievements

• Established the Sustainability Committee in January 2020
• Disclosed management risks in accordance with the TCFD recommendations
• Published the first global Sustainability Report in July 2020

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic and its impact on the cosmetics industry and global supply chains
• Climate change risks (transition and physical risks)
• Water shortages
• Gender inequality in Japan

Mitigation Strategies

• Repurposed production lines to manufacture hand sanitizer for donation and sale
• Offered beauty information and tips for the “new normal”, commenced online counseling, and developed new products
• Set medium-to-long-term targets for reducing CO2 emissions, water consumption, and waste
• Disclosed climate-related risks and opportunities in accordance with the TCFD framework
• Participated in the 30% Club Japan to increase female representation on boards and in upper management
• Introduced various initiatives to support women in Japan, including childcare support and the Shiseido Female Researcher Science Grant

Supply Chain Management

Supplier Audits: 791 first-tier suppliers assessed in 2020

Responsible Procurement

• Shiseido Group Supplier Code of Conduct
• Shiseido Group Procurement Policy
• Shiseido Group Sustainable Raw Materials Procurement Guidelines
• Medium-term targets for sustainable procurement of palm oil and paper

Climate-Related Risks & Opportunities

Physical Risks

• Floods
• Water shortages
• Natural disasters disrupting operations and logistics

Transition Risks

• Carbon tax increase
• Fuel price increase
• Tighter regulations

Opportunities

• Increased consumer demand for sustainable and ethical products
• Opportunities for products that can help people live with high temperatures

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Refillable products
• Packaging made from biodegradable materials
• Sunscreen products free from ingredients that pose a risk of coral bleaching

Awards & Recognition

• Prime Ministerial Award for Women-Empowering Companies
• Nadeshiko Brand
• WCD Visionary Award
• Champions of Good award
• Japan Mécénat Awards Special Award
• 2nd Nikkei SDGs Management Grand Prix Social Value Award

Environmental Metrics

ESG Focus Areas

• Environment
• Society
• Culture
• Governance

Environmental Achievements

• Reduced CO₂ emissions by 12% year-on-year in 2020.
• Increased renewable energy use by 95% year-on-year in 2020, reaching 33% of total energy use.
• Achieved landfill-free waste disposal in all 12 global factories in 2020.

Social Achievements

• Participation in 30% Club Japan to promote gender equality in corporate leadership.
• Launched the Lavender Ring project to support cancer survivors through makeup and photography.
• Established in-house childcare facilities (Kangarooms) in Tokyo and Shizuoka.

Governance Achievements

• Established a Sustainability Committee in 2020 to oversee ESG initiatives.
• Achieved 46.2% female representation on the board of directors (as of March 2021).
• Implemented a job-type personnel system in 2021 to enhance transparency and objectivity in compensation.

Climate Goals & Targets

Environmental Challenges

• Climate change risks, including carbon tax increases, energy mix changes, and regulatory tightening.
• Physical risks from extreme weather events such as floods and water scarcity.
• Supply chain disruptions due to climate change impacts on agricultural raw material production.

Mitigation Strategies

• Setting a carbon neutrality target for Scope 1 & 2 emissions by 2026.
• Transitioning to 100% renewable energy in factories and offices.
• Developing alternative sourcing strategies for raw materials vulnerable to climate change.
• Reducing water consumption by 16% compared to 2014 (as of 2020).

Supply Chain Management

Supplier Audits: 94% of primary suppliers assessed in 2020.

Responsible Procurement

• Shiseido Group Supplier Code of Conduct
• Sustainable sourcing guidelines for palm oil and paper
• Third-party assessments (Sedex, EcoVadis)

Climate-Related Risks & Opportunities

Physical Risks

• Floods
• Water scarcity

Transition Risks

• Carbon tax
• Regulatory changes
• Consumer preferences

Opportunities

• Development of sustainable products and packaging
• Increased demand for sustainable brands

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC

Certifications: ISO 14001

Third-party Assurance: Bureau Veritas

UN Sustainable Development Goals

• Goal 4 (Quality Education)
• Goal 5 (Gender Equality)
• Goal 7 (Affordable and Clean Energy)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

The report details how various initiatives contribute to these SDGs.

Sustainable Products & Innovation

• Products with sustainable packaging (e.g., using Kaneka's biodegradable polymer)
• Refill/replacement packaging

Awards & Recognition

• Cabinet Office's Award for Advanced Companies Promoting Women's Empowerment (2020)
• WomenCorporateDirectors Foundation's 2020 Visionary Award
• Nikkei SDGs Management Grand Prize, Social Value Award (2020)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Resource Management
• Waste Reduction
• Gender Equality
• Diversity & Inclusion
• Human Rights
• Sustainable Procurement
• Biodiversity

Environmental Achievements

• Achieved carbon neutral electricity at all sites by 2026 (Scope 1 & 2)
• Reduced CO2 emissions by 45% (compared with 2019) in Scope 1+2
• Reduced water consumption by 37% (compared with 2014)
• Achieved zero waste to landfill from factories worldwide by 2020
• 64% sustainable packaging for products with plastic packaging in 2022
• 36% of palm oil-derived raw materials replaced with certified palm oil (RSPO)
• 97% sustainable paper usage (paper weight basis)

Social Achievements

• Increased percentage of managerial positions filled by women in Japan to 37.6% (as of January 2023)
• Launched Shiseido D&I Lab to explore the relationship between diversity and corporate growth
• Supported over 3.5 million girls and young women through Clé de Peau Beauté's partnership with UNICEF
• Provided vocational beauty training to 134 young women in Cambodia through the “Empower Her” initiative
• Launched the “Shiseido Life Quality Beauty” initiative to empower people of all ages and abilities
• Developed a medical wig in collaboration with JHD&C and Aderans Co., Ltd.

Governance Achievements

• Incorporated sustainability into the Corporate Strategy department
• Established new sustainability functions within major departments
• Introduced long-term incentive-type remuneration incorporating ESG targets
• 40% of directors and Audit & Supervisory Board Members are women (as of April 2023)

Climate Goals & Targets

Environmental Challenges

• Climate change impacts (extreme weather, water scarcity, biodiversity loss)
• Transition risks (carbon tax increase, fuel price increase, loss of sales opportunities for single-use plastics)
• Physical risks (natural disasters disrupting operations and logistics, changes in rainfall impacting raw material costs, water shortages)
• Deforestation and human rights issues associated with palm oil and paper production
• Mica mining issues (child labor and forced labor)
• Gender inequality in Japan and globally
• Unconscious beauty biases (UBBs)

Mitigation Strategies

• Set science-based targets to reduce CO2 emissions (SBTi accredited)
• Increased use of renewable energy (75% of electricity used)
• Improved energy efficiency in factories and offices
• Reduced water consumption through various initiatives
• Waste reduction, reuse, and recycling initiatives
• Sustainable procurement of palm oil and paper
• Collaboration with RMI to address mica mining issues
• Various initiatives to advance gender equality (internal and external)
• Launched the SEE, SAY, DO project to address unconscious beauty biases

Supply Chain Management

Supplier Audits: 72 suppliers assessed globally in 2022 (28 strategic and 44 high-risk)

Responsible Procurement

• Shiseido Group Supplier Code of Conduct
• Sustainable Raw Materials Procurement Guidelines
• Supplier Assessment Program (using EcoVadis, Sedex, or SAQ)
• Third-party audits for high-risk suppliers
• Business Partner Hotline

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters
• Water shortages
• Changes in rainfall

Transition Risks

• Carbon tax increase
• Fuel price increase
• Regulatory changes

Opportunities

• Market for sustainable brands and products
• Development of climate-adaptive solutions

Reporting Standards

Frameworks Used: GRI Standards, TCFD, SASB, UN Global Compact

Certifications: ISO 14001

Third-party Assurance: Third-party assurance provided for some environmental and social data (marked with � in the report)

UN Sustainable Development Goals

• Goal 5: Gender equality
• Goal 6: Clean water and sanitation
• Goal 7: Affordable and clean energy
• Goal 8: Decent work and economic growth
• Goal 12: Responsible consumption and production
• Goal 13: Climate action
• Goal 15: Life on land

Various initiatives contribute to these goals as detailed in the report.

Sustainable Products & Innovation

• Refill packaging
• LiquiForm® packaging
• Packaging made from recycled glass and other sustainable materials
• Products using Brewed Protein™

Awards & Recognition

• Best Portfolio Performance Improvement Award at the Sustainable Procurement Leadership Awards 2023
• CDP Supplier Engagement Leader (2021)
• A-List company in CDP's climate change survey (2022)
• Gold Award for Shiseido Life Quality Makeup at the IAUD International Design Award (2022)
• Champions of Good award (2020)

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Achieved 100% carbon neutrality in all domestic and overseas factories in 2022.
• Reduced CO2 emissions by 46.2% (Scope 1 & 2) and aiming for a 55% reduction (Scope 3) by 2030.
• Increased renewable energy share to 75% in 2022.
• Achieved 97% sustainable paper usage in 2023.
• 63% of plastic containers procured in 2023 were sustainable (domestic only).

Social Achievements

• Achieved 37.6% female management ratio in Japan (as of January 1, 2023).
• Launched Shiseido DE&I Lab in 2023 to promote diversity and inclusion.
• Expanded global support for cancer survivors through the LAVENDER RING program.
• Supported women's education and economic independence globally, reaching over 3.5 million girls and young women.
• Implemented various initiatives to support employees' work-life balance, including on-site childcare facilities and flexible work arrangements.

Governance Achievements

• Transitioned to a company with nomination committees, etc., in March 2024.
• Established a Sustainability Committee to oversee ESG initiatives.
• Linked executive compensation to ESG performance.

Climate Goals & Targets

Environmental Challenges

• Climate change impacts on supply chain (e.g., water scarcity, extreme weather events).
• Social risks in the supply chain (e.g., human rights violations, labor standards).
• Maintaining high ethical standards and transparency throughout the value chain.

Mitigation Strategies

• Developed alternative sourcing strategies and implemented risk mitigation plans.
• Implemented a supplier assessment program to ensure compliance with ESG standards.
• Enhanced transparency and communication with stakeholders.

Supply Chain Management

Supplier Audits: 72 suppliers audited in 2022 (including 28 strategic suppliers and 44 high-risk suppliers from 2021).

Responsible Procurement

• Shiseido Group Supplier Code of Conduct
• Shiseido Group Procurement Policy
• Shiseido Group Sustainable Raw Material Procurement Guidelines
• Use of EcoVadis, Sedex, and Shiseido SAQ for supplier assessments.

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Water scarcity
• Extreme weather events

Transition Risks

• Carbon tax
• Changes in regulations and consumer preferences

Opportunities

• Development of climate-friendly products and services.
• Increased demand for sustainable products.

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC

Certifications: ISO 14001, ISO 45001

Third-party Assurance: SGS Japan

UN Sustainable Development Goals

• Goal 6: Clean Water and Sanitation
• Goal 7: Affordable and Clean Energy
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action
• Goal 5: Gender Equality

The report explains how Shiseido's initiatives contribute to these SDGs.

Sustainable Products & Innovation

• Refill packaging
• Bio-based materials
• Recycled materials
• Products with reduced environmental impact

Awards & Recognition

• Health Management Excellent Company 2024
• IAUD International Design Award
• Mesena Award
• Various other awards for D&I initiatives