Climate Change Data

FANCL CORPORATION

Climate Impact & Sustainability Data (2023-04 to 2024-03)

Reporting Period: 2023-04 to 2024-03

Environmental Metrics

Total Carbon Emissions:4,134 t-CO2 (Scope 1+2)
Scope 3 Emissions:10,665 t-CO2

ESG Focus Areas

  • A Prosperous Environment
  • Healthy Living
  • A Thriving Society for All

Environmental Achievements

  • Reduced CO2 emissions (Scope 1+2) to 4,134 t-CO2 in FY Mar/2024
  • 77.9% of palm-oil derived materials switched to RSPO mass balance
  • 55.4% of packaging made from plastic wrap materials adhere to the 4Rs
  • 40.6% use of plant-based and recycled plastics in FANCL cosmetics containers
  • 45,000 customers participated in cosmetics container recycling (cumulative)

Social Achievements

  • 48.5% ratio of female employees in management positions
  • 67.8% ratio of female employees aspiring to hold management positions
  • 100% ratio of male employees taking maternity leave
  • Launched nutritional education activities at children’s cafeterias
  • Launched makeup seminars for the visually impaired
  • Conducted personal grooming seminars for special needs schools

Governance Achievements

  • Established Sustainability Committee composed of executive directors and officers
  • Implemented a system linking executive officer compensation to results
  • Conducted self-evaluations of Board of Directors’ meetings
  • Utilized a third-party organization to evaluate the Board of Directors

Climate Goals & Targets

Long-term Goals:
  • Make the world healthier and more beautiful and become a company that is loved around the world (VISION 2030)
Medium-term Goals:
  • Reduce CO2 emissions to net zero by FY Mar/2051
  • 100% packaging made from plastic wrap materials that adhere to the 4Rs by FY Mar/2031
  • 50% use of plant-based and recycled plastics in FANCL cosmetics containers by FY Mar/2031
  • 100,000 customers participating in the collection and recycling of cosmetics containers (cumulative) by FY Mar/2027
  • 80% RSPO mass balance ratio for sustainable palm oil procurement by FY Mar/2027
  • 100% adoption of environmentally-friendly paper for ATTENIR paper-based container packaging by FY Mar/2026
  • 50% ratio of female employees in management positions by FY Mar/2031
  • 70% ratio of female employees aspiring to hold management positions by FY Mar/2031
  • 19,000 employees participating in activities leading to a healthy future (cumulative) by FY Mar/2027
  • 1,400 employees participating in activities helping enable people with disabilities by FY Mar/2027
Short-term Goals:
  • Increase use of FANCL cosmetics and health foods among people aged 50+ by 110% (compared to FY Mar/2024) by FY Mar/2027
  • Increase the number of pre-senior and senior individuals who use FANCL’s products by 125% (compared to FY Mar/2024) by FY Mar/2027
  • Increase the number of people who use FANCL’s products to address specific health issues faced by women by 120% (compared to FY Mar/2024) by FY Mar/2027
  • Increase the number of people who use FANCL’s Mutenka skin care products by 120% (compared to FY Mar/2024) by FY Mar/2027
  • Increase the number of people who use FANCL’s products to supplement adequate intake of basic nutrition by 115% (compared to FY Mar/2024) by FY Mar/2027

Environmental Challenges

  • Traditional winning formula no longer working due to increased e-commerce competition
  • Impact of treated water release from nuclear power plant on sales in China
  • Issues concerning safety and security of nutritional supplements
  • Supply instability due to geopolitical risks and climate change
  • Decreased inbound demand due to travel restrictions
Mitigation Strategies
  • Shifting focus from direct response advertising to enhancing connections with existing customers
  • Proactive information dissemination and promotions in China
  • Quick and urgent responses to various crises
  • Consultations and negotiations with suppliers in good faith
  • Developing products that meet local needs in overseas markets

Supply Chain Management

Supplier Audits: Survey and interviews conducted in October 2022; Joined Sedex in June 2023

Responsible Procurement
  • FANCL Group Sustainable Procurement Policy
  • Trading Partner (Supplier) Guidelines

Climate-Related Risks & Opportunities

Physical Risks
  • Increasing intensity of weather-related natural disasters and rising sea levels
  • Decrease in production volumes and deterioration in the quality of raw materials derived from agricultural products
Transition Risks
  • Tighter policies and regulations to address climate change
  • Tighter policies and regulations to address resource recycling
Opportunities
  • Changes in consumer needs due to climate change and the outbreak of infectious diseases
  • Increase in sales of Mutenka skin care and basic nutrition-related products

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, Guidance for Collaborative Value Creation 2.0

Sustainable Products & Innovation

  • Products using sustainable palm oil and environmentally-friendly paper

Awards & Recognition

  • Certified Health & Productivity Management Outstanding Organization
  • Outstanding “Eruboshi” Company
  • Kurumin Certification
  • Gan-Ally Awards Gold Award
  • PRIDE Index Gold certification
  • Award for Companies Promoting Experience-based Learning Activities for the Youth
  • Career Education Award