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Reducing our Environmental Footprint

Across all areas of our business, we are promoting initiatives that reduce the environmental impact of our activities and ensure a sustainable use of resources.

To help combat climate change, we are stepping up efforts to reduce greenhouse gasses (GHG) emissions, particularly carbon dioxide (CO₂) emissions. To put a halt to deforestation, we are promoting the ethical procurement of palm oil and paper. And to make the best use of natural resources, we are continuing to find ways to minimize water and energy consumption, reduce and recycle waste, and develop new sustainable solutions for products and packaging.

Reducing CO₂ Emissions

To mitigate climate change, we work to reduce the emission of CO₂ and other greenhouse gasses (GHG) at all our production sites and business locations.

In February 2020, we announced our commitment to CO₂ reduction*: We aim to be carbon neutral by 2026.

In order to achieve this target, we are taking actions such as to improve energy efficiency and to use renewable energy.

  • * CO₂ emissions of scope 1 & 2

Improving Energy Efficiency

We have been making dedicated efforts to reduce GHG emissions related to energy consumption by introducing and installing equipment and using electric power. We introduced a cogeneration system*1 at our Kuki factory, and CO₂ emissions have been reduced by improving energy efficiency.

At all our production sites*2, we carefully select equipment in order to save and use energy efficiently, as well as improve environmental measures based on the environmental management system ISO 14001.

We will continue our efforts to further improve energy efficiency across the Shiseido Group. This includes formulating an energy efficiency improvement plan that sets the direction for investments in in-house power generation equipment as well as equipment that reduces environmental impact.

  1. *1:Cogeneration system: An efficient system that simultaneously obtains different energies (electricity, heat) from a single energy source.
  2. *2:Except at our Nasu factory, which began operation in Dec. 2019.

Using Renewable Energy

We have been increasing the use of renewable energy, particularly in our factories that have high power consumption. In 2019, we increased our usage of renewable energy by 52% versus the previous year. In particular, at our East Windsor factory in Shiseido America, Inc. (New Jersey, USA), 100% of electricity is now derived from renewable energy.

● Utilizing water power

About 54% of the electricity used in our Osaka, Kuki, and Kakegawa factories is sourced from hydroelectric power, which contributes to a reduction in CO₂.

● Utilizing solar power

Our East Windsor factory in Shiseido America, Inc. has been equipped with a fixed-tilt solar power system since 2007, and a solar-tracking solar power system since 2010. With an annual power generation of approximately 2.3 million kWh, more than 70% of the factory’s annual power consumption was covered by solar power. This amounts to a total reduction of 1,100 ton CO₂ annually. These efforts meant that the factory won the 2010 New Jersey Governor’s Environmental Excellence Awards.

Solar power generation equipment

Solar power generation equipment

Assessing Climate Risks

In April 2019, Shiseido announced its support for the Task Force on Climate-related Financial Disclosures (TCFD), recognizing that the mitigation of climate-related risks is critical to our continued sustainable growth.

Based on the TCFD recommendations, we identify and report on the climate-related risks and opportunities pertinent to our business.

Scenario Analysis

We have identified significant potential risks we may encounter by the end of this century based on the important geographic points for our business, and scientific insights such as meteorology, hydrology, and statistical data. The risks resulting from the transition towards a decarbonized society, and the physical risks brought about by changing environmental conditions, are considered in the 1.5°C scenario and in the 4°C scenario, respectively.

The 1.5°C scenario identifies transition risks such as carbon pricing and market trend changes. When carbon pricing is determined by taking into account the social cost of carbon – such as the costs of climate measures and compensation for the predicted damage caused by climate disasters – the financial impact will be significant.

In the 4°C scenario, we expect to face physical risks due to rising temperatures and associated phenomena. According to the IPCC reports, water-related issues will occur more frequently. We anticipate that changing weather conditions will affect factory operations and disrupt logistics; we also expect that they will have an impact on crop cultivation for the production of raw materials. We have to prepare long-term measures that take into account the natural conditions of each region.

In the meantime, increasing awareness among consumers will open new opportunities for environmentally conscious products and brands. Especially the products and services that support climate adaptation, such as UV care products and cool touch products, are expected to meet consumers’ needs.*

In order to mitigate climate-related risks, we have committed to the long-term target of carbon neutral operations by 2026. Moreover, we are taking action on our climate change risks and will actively seek out ways to realize opportunities and benefits that arise across our value chain, in line with the outputs from the scenario analysis.

  • * JAMSTEC (Japan Agency for Marine-Earth Science and Technology) has shown that harmful UV radiation reaching the Earth's surface is projected to increase in the northern mid-latitudes, including Japan, in the latter half of the 21st century – despite the expected recovery of the stratospheric ozone layer. In fact, an increase in UV radiation has been observed by the Japan Meteorological Agency during the last 20 years. JAMSTEC suggested some reasons for this increase, one of them being climate change.

Water

Across the Shiseido Group, we aim to ensure the sustainable use of water by preserving water circulation in water systems as well as the water utilization by local communities.

To that end, we identified the actual use of water resources across our value chains. Based on this assessment, we work to reduce the impact of our business activities on water circulation and water utilization.

In February 2020, we announced our commitment on water: We will reduce water consumption by 40% compared with 2014 across all Shiseido Group, per unit sales*, by 2026.

In order to achieve this target, we are taking two actions. One is to install equipment that can reuse and recycle water; the other is to introduce water-saving initiatives in product development and at production sites.

  • *Per unit sales: unit value is the total amount of water consumed per product manufactured.

New Instalments

Our production sites have been working to reduce water consumption since they were established. In order to make more effective use of water, we will be making capital investments, particularly in water circulation equipment.

In the manufacturing process, water for cooling and cleaning of equipment accounts for about half of the total water consumption in our factories. In the coming years, we will gradually introduce equipment that will enable us to use water more efficiently.

At our Val de Loire factory in France, the water used for cleaning equipment is recycled and new cleaning equipment has been introduced to significantly improve the water utilization.

Water-saving Initiatives

At the Osaka factory, we also looked into the rinsing process to verify the effect of reducing the temperature of the water used for cleaning equipment. By using lukewarm rather than hot water, we reduced the amount of water lost to evaporation in the process, which subsequently reduced CO₂ emissions.

Our Gien factory in France switched their water-cooled vacuum pump to an air-cooled type. In addition, the water cleaning of the fragrance manufacturing equipment was changed to alcohol cleaning, and the alcohol used for this process is recycled. These measures significantly improved water utilization at the factory by reducing water usage by 77%*.

In 2019 the Shiseido Group reduced water consumption by 30,000 m3, in absolute terms.

  • *77% reduction compared with 2009 in terms of water usage per production. (Water consumption (L) per content production (kg).

● In product development

To contribute to the protection of water resources, we develop products that can reduce water consumption when used by our consumers.

In 2016, Shiseido developed a new foamy facial wash that can be rinsed off quickly, and with less water consumption, by improving dispersibility of dirt into the water. This facial wash reduced the amount of water necessary for rinsing by about 35% compared to standard cleansers. We are expanding the technology developed for water-saving to products such as Clé de Peau Beauté SOFTENING CLEANSING FOAM and UNO Whip Speedy

Waste

Across the Shiseido Group, we work to accelerate our contribution to the reduction of waste.

In February 2020, we announced our commitment on waste: We aim to divert all solid waste from landfills, achieving zero landfill by 2022 at all Shiseido Group factories.

To reach this goal, firstly, we conducted the thorough classification of waste, turn waste to resource for accelerating the reuse and recycle.
In addition, 47% of unnecessary materials such as plastics and metals are sold as recycled resources, contributing to resource recycling by separating and collecting waste at the factories. The activities at our sites resulted in a 94% rate of recycling* in 2019. And, 10 out of 11 factories have achieved this target.

We have also taken actions to improve manufacturing and packaging processes to minimize production losses and optimize the transportation of packaging in factories and through distribution.

On top of that, we are optimizing our use of materials, and minimizing the total volume of industrial waste across the value chain by taking part in circular economy initiatives locally and globally.

Our specific initiatives include the redesign of products (e.g. using less wrapping for our packaging, launching refillable packaging, simplifying packaging design, eliminating the
need for inserting leaflets inside the packaging, designing light-weight cardboard), and the redesign of the ordering management system, using the business transformation framework (BTF).

In 2019, the Shiseido Group reduced waste at factories by 394 t in absolute terms.

  • *Including thermal recovery

Employee Training for Proper Disposal of Industrial Waste

We hold industrial waste seminars twice a year for all managers and people in charge of industrial waste in all departments and Shiseido Group companies in Japan. The aim is to share knowledge, understanding and compliance with laws and regulations.

As a result of these activities, there were no accidents or legal violations associated with waste in 2019.

Industrial waste workshop

Industrial waste workshop

Deforestation(Palm Oil and Paper)

To promote environmental protection, we have committed to sustainable procurement across all our business activities, including the procurement of raw materials especially palm oil and paper. This is because the rainforest, where palm oil and paper pulp are procured, conserves valuable biodiversity and provides valuable ecosystem services.

We are strengthening our response to the protection of the environment, particularly with regard to the use of sustainable palm oil and paper, both of which can contribute to preventing deforestation.

Sustainable Use of Palm Oil

Palm oil is a raw material used in cosmetics for its moisturizing and texturizing properties. It is mainly produced from oil palms in Southeast Asia. A vast tropical rainforest extends to Southeast Asia. The chaotic development of tropical rainforests not only destroys these forests and the valuable ecosystems they grow, but also releases large amounts of carbon into the atmosphere, accelerating climate change.

Environmental protection in palm oil production areas, and consideration of human rights of the people working on plantations, are essential to building an ethical supply chain.

As part of our efforts in this area, we joined the Roundtable on Sustainable Palm Oil (RSPO), an international non-profit organization, in 2010.

In order to support the sustainable production of palm oil, since 2018 we have purchased certificates (credits) equivalent to 100% palm oil and palm-derived materials. In 2019 the Shiseido Group purchased credits equivalent to around 9,700 tons of palm oil and palm kernel oil derivatives.

For our next step, we aim to achieve usage of 100% RSPO-certified sustainable palm oil and palm kernel oil derivatives from physical supply chain options (identity preserved, segregated and/or mass balance) by 2026.

Sustainable Use of Palm Oil

Sustainable Use of Paper

To protect the environment and prevent deforestation, we are promoting the procurement of sustainable paper such as (third-party) certified paper and recycled paper.

We aim to achieve 100% use of sustainable paper by 2023. We are currently in the process of switching to (third-party) certified paper (e.g., FSC, PEFC) or recycled paper for all Shiseido products.