Reducing Our Environmental Footprint

The impact of climate change, including extreme weather events caused by global warming, is becoming more apparent each year. To preserve the natural environment and its biodiversity, companies must take action to resolve these environmental — while simultaneously ensuring sustainable growth for themselves and the global economy.
Shiseido has set long-term targets to be achieved by 2030 in order to reduce the environment impact of its business operations. we have identified 3 key actions 'the reduction of CO₂ emissions’, ‘the reduction of water consumption’, and ‘waste reduction’ under the strategic action of “Reducing environmental footprint”. We will continue to work with stakeholders throughout our value chain to create sustainable impact within each of these actions.

To mitigate climate change, we are committed to reducing CO₂ emissions from the electricity and fuel used in our business activities. As part of our efforts, we use renewable energy where possible and constantly seek to improve energy efficiency in our factories, offices, and other facilities.

Our indirect CO₂ emissions result from our business activities but they are not directly under our control – for example, emissions that derive from the manufacturing and shipping of raw materials or the use and disposal of our products. As part of our work to reduce the impact of our business activities on climate change, we have established science-based long-term reduction targets for our indirect CO₂ emissions, and we are working with our suppliers and other stakeholders to reduce emissions across our entire value chain.

Given the seriousness of the impact of climate change issues on business growth and social sustainability, Shiseido has been disclosing information in line with TCFD’s framework. Disclosures include the results of our qualitative and quantitative analyses of the risks and opportunities associated with the transition to a decarbonized society and changes in the natural environment due to climate change for both the 1.5/2°C and 4°C scenarios, as well as our major actions, over the short, medium, and long term.

Shiseido is promoting sustainability initiatives through our brands and regional businesses. In 2022, the Shiseido Sustainability Committee was held regularly to ensure prompt decision-making in sustainability-related operations and company-wide implementation. The committee makes decisions on group-wide sustainability strategies and policies, manages the progress of medium- and long-term targets, and implements such activities as the TCFD and human rights actions. Attendees consist of representative directors and executive officers of corporate strategy, R&D, supply network, public relations, brand holders, who actively discuss issues from the perspective of their respective areas of expertise. For decisions regarding business execution, issues are also discussed by the Global Strategy Committee and the Board of Directors.

We conducted our scenario analysis for both the transitional and the physical risks/opportunities in terms of the 1.5/2°C and 4°C scenarios, respectively, based on the Representative Concentration Pathways (RCPs) and Shared Socioeconomic Pathways (SSPs) provided by the IPCC.
Regarding transitional risk, the elements associated with the transition to a decarbonized society — such as policy, regulation, technology, market, and consumer perceptions — were considered. Physical risks related to the acute or chronic phenomena caused by the rise in temperature — such as floods and water shortages — were also considered. Based on these considerations, the financial impacts of the 1.5/2°C and 4°C scenarios were then analyzed. The influence of carbon tax was identified as the transition risk, with projections pointing toward approximately JPY 0.05-0.87 billion in 2030, depending on the number of countries and regions where carbon tax would be introduced. For Physical risks, JPY 0.89 billion of floods and JPY 3.5 billion of water shortage were forecasted potentially.
As for opportunities, in the 1.5/2°C scenario, high awareness by consumers means there is a market for sustainable brands and products. Similarly, the 4°C scenario identifies sales opportunities for products that can help people to live with high temperatures. At Shiseido, we aim to leverage these findings — by mitigating risks and making the most of opportunities to provide sustainable products to consumers and promote our beauty innovations.

We assessed and identified the impactful risks holistically from a mid-to-long-term perspective. “Environment and Climate Change” and “Natural and Human-made Disasters” are listed as the categories related to sustainability. Climate-related risks are analyzed based on scientific and socioeconomic evidence and integrated into the enterprise risk management system as one of the elements related to climate change or natural disasters. Based on the significance of the evidence, the Shiseido Group’s risk assessment and countermeasures are reviewed by the Global Risk Management & Compliance Committee, the Global Strategy Committee, and the Board of Directors.

We actively work to reduce water consumption at all our factories. As each Shiseido factory has various facilities and equipment tailored to the kind of cosmetics it produces, we design specific water reduction initiatives for each site.

Examples of our water-saving initiatives include using automatic cleaning to ensure the manufacturing equipment is cleaned more effectively, consolidating the washing locations of equipment parts, and redesigning the nozzles on our cleaning facilities. At our Val de Loire factory in France―an area where rainfall is expected to drop in future―initiatives like these successfully reduced the amount of water used per clean by 30%.

When we build new facilities, we incorporate water-saving processes in the design. This measure has a significant impact. For example, we expect our Fukuoka Kurume factory in Japan―which began operations in 2022―will use around 6,600 tons less water per year than equivalent factories, as well as expecting around 466 fewer hours on cleaning.

To ensure more effective use of water, we focus on circular systems that clean water and reuse or recycle it within the process. At our Taiwan factory, for example, we reuse 100% of the wastewater from our water purification systems in onsite facilities. At our Osaka Ibaraki factory in Japan, we introduced a circular system that utilizes re-used water to cool the manufacturing tanks. This system led to an annual reduction in water consumption of around 65,000 m³ in 2022. Other new water utilization initiatives include optimizing our pure water manufacturing equipment – as we have done at our Nasu factory in Japan, for example. Pure water manufacturing consumes approximately half of all water used at the factory. Through this initiative, as well as other water recycling schemes, we reduced our annual water consumption by around 72,000 m³, an amount that is approximately one third of the factory’s annual water usage.

At our Gien factory in France, we switched from water-based cleaning to alcohol-based cleaning for our fragrance manufacturing equipment and transportation components. The alcohol used is cleaned and reused in the process repeatedly.

As population growth continues and income levels rise, resource consumption and waste increase. To make more effective use—and reuse—of limited resources, it is important that businesses shift from a disposable, linear economic model to a circular economy.

At Shiseido, we are doing this by optimizing the use of raw materials and reducing waste throughout our entire value chain, while complying with all relevant waste management rules in the countries and regions where we operate.