Reducing Our Environmental Footprint

The impact of climate change, including extreme weather events, is becoming more apparent every year. It is important that companies make strong sustainability commitments and take actions toward solving environmental issues.
We fully understand and support the “1.5°C goal.”^* In 2021, we disclosed our medium-to-long-term targets for the reduction of CO₂ emissions — which account for the majority of greenhouse gas (GHG) emissions — as well as the reduction of water consumption and waste. To achieve these targets, we are taking action across all areas of our business and value chains, and promoting initiatives to reduce our environmental footprint in cooperation with various stakeholders.

1. *The 1.5°C scenario refers to the long-term temperature goal to limit global warming to 1.5°C above preindustrial levels.

As part of our efforts to mitigate climate change, it is important to reduce and optimize energy consumption related to CO₂ emissions. Improving energy efficiency, such as the use of electricity in buildings and facilities, is an effective initiative to reduce CO₂ emissions.

At Shiseido factories, we are introducing building design improvements such as heat insulation, selecting more efficient equipment that leads to energy saving, and implementing environmental measures based on the ISO 14001 environmental management system.

At our Kakegawa factory (Japan), in addition to the use of LEDs, we installed Energy Management Systems (EMS) ^* to visualize and optimize energy consumption. Our Osaka Ibaraki factory and West Japan distribution center (Japan) were designed in consideration of sustainability. By pursuing an energy-saving design and improving the thermal insulation performance of the building, we have been able to reduce CO₂ emissions by approximately 30% compared to regular designs.

In 2021, the Intergovernmental Panel on Climate Change (IPCC) published its Sixth Assessment Report, which summarizes the latest scientific findings on climate. In response to the findings, the Glasgow Climate Pact — which agrees to limit the global temperature increase to 1.5°C above pre-industrial levels — was adopted at the 2021 UN Climate Change Conference (COP26).
We recognize that climate change is not only an environmental issue, but a broader issue that will affect our business strategies and financial plans over the medium to long term due to factors such as changing regulations, natural disasters, and consumer perceptions.
In 2020, in order to mitigate climate change, we disclosed our target of achieving carbon neutrality (Scope 1^*1 and Scope 2^*2) by 2026. We also committed to accelerate our plans to analyze climate-related risks and opportunities, and integrate them into our group-wide actions.

In order to mitigate the climate-related risks, we set the reduction of CO₂ emissions as our target.

We aim to achieve carbon-neutrality (Scope 1 and 2) by 2026, and we monitor the progress every year. In terms of mitigating market risks and creating opportunities in the 1.5/2°C scenario, we support the concept of a circular economy, and aim to reduce CO₂ emissions and eliminate single-use plastics with the target of switching to 100% sustainable packaging by 2025^*3.

To manage the risk of water shortage in the 4°C scenario, we selected water consumption at our sites as an indicator and set a target of reducing it by 40%^*4 by 2026 (versus 2014).

As for other physical risks, we will examine appropriate metrics from the viewpoint of long-term risk management.

Quality water is not only essential to our industry, but also every aspect of life. While some countries and regions are rich in water, others are affected by water stress^*1. It is predicted that approximately 5 billion people will face water shortages in 2050 due to urbanization and climate change.
Water supports every aspect of our products, including the development of water-containing products such as lotions; the growth of plants as raw materials; temperature control and equipment cleaning at factories; consumption; and waste disposal.
In consideration of water as a shared resource, we aim for reduced and sustainable consumption that respects and promotes a healthy water cycle and culture. We aim to reduce group-wide water consumption by 40% by 2026 (versus 2014) ^*2. To achieve this target and reduce the impact of our business activities on the water cycle, we are actively promoting water saving and recycling activities — especially in areas with high water stress and areas where rainfall is expected to decrease.

In collaboration with local stakeholders, we promote “Water Stewardship”^*— the concept of managing water resources as a common property within the same river basin. To make effective use of water, we focus on circular usage, where used water is purified and reused or recycled.

At our Osaka Ibaraki factory (Japan), we introduced a circulation-type system using recycled water as a cooling medium. This could lead to an annual reduction in water of 65,000m³. At our Nasu factory (Japan), we use the high-quality groundwater for manufacturing processes and as a raw material for cosmetics. In consideration of the natural environment, the Nasu factory has also established its own strict standards to control discharged water, thereby minimizing any impact on the local ecosystem.

In cooperation with our stakeholders, we conduct water footprint^*1 assessments to understand the environmental impact of water usage throughout the value chain. We utilize the latest knowledge and findings on hydrology^*2 and climatology to gain a better understanding of water as a resource, including availability and future projections in relation to climate change. As results suggest that a large environmental impact occurs during the raw material procurement stage, we ask our suppliers to provide information on their water usage through self-assessment.

At our Shanghai factory in China — a country affected by high water stress — we participate in a local environmental protection association and proactively obtain environmental information (including wastewater treatment and gray water recycling) such as environmental laws and regulations surrounding factory activities. We also report monthly water consumption to the government, which promotes water conservation and is working to improve water utilization rates and strengthen water conservation management.

We are working to reduce, reuse, and recycle the waste generated at all our factories.

We achieved zero emissions^* at domestic factories in 2003. We have been working on recycling and reusing waste for many years, promoting thorough waste management with careful sorting of materials before disposal and reuse of shipping boxes at all our factories. As for our target of zero landfill at all our factories worldwide by 2022, we achieved it in 2020— two years ahead of schedule and it is continued. We also plan to achieve zero landfill at our newly established Kurume factory (Japan) in 2022. The recycling rate of waste discharged from all Shiseido sites and treated for a fee reached 99% or more.

We are implementing various initiatives to minimize waste throughout the value chain, such as reducing packaging materials, optimizing containers and packaging, eliminating paper inserts, and designing lightweight cardboard. By carefully planning inventory and improving the accuracy of demand forecasts, and shortening delivery times of production and procurement, we aim to prevent the generation of excess inventory.

We held online seminars and remote confirmations for newly appointed managers and employees in charge of industrial waste in Japan. The aim was to share knowledge and ensure understanding and compliance with laws and regulations.

Both the seminars and remote confirmations were used to check the processing of industrial waste disposal, and with the help of our original guidelines and checklists, each participant can now identify how to effectively manage waste.