Sustainability Management

Since its founding, Shiseido has committed to bringing happiness to people and has　delivered new value through its core beauty business, bringing joy, confidence, and smiles to the world. When I became CEO in January 2025, I reflected on the f undamental question of how Shiseido can contribute to society. I came to believe that the true value we offer lies in inspiring people, touching their hearts , and enriching their lives.

When people encounter beauty, their hearts are nourished, and they are moved to show kindness toward others and the environment. The beauty realized through cosmetics is rooted in daily life and it has the power to bring positivity to our everyday experiences. With a firm belief in the possibilities of beauty to enrich people's hearts, and guided by our mission, BEAUTY INNOVATIONS FOR A BETTER WORLD, we are working toward 2030 to help realize a sustainable world where everyone can enjoy a lifetime of happiness through the power of beauty.

We are committed to fostering a diverse and inclusive society where every individual is respected and empowered to thrive while also contributing to a rich global environment. We have set forth strategic actions in the areas of society and the environment, and in 2024, we promoted numerous initiatives and achieved tangible results through the collective efforts of our over 30,000 employees and through dialogue and collaboration with various stakeholders.

In the area of society, we are promoting diversity, equity, and inclusion (DE&I) not only within our company, but also to lead a transformation toward greater diversity throughout the beauty industry and society as a whole. Our greatest strength lies in our employees who are diverse in terms of their identities, including gender, age, nationality, sexual orientation, gender identity, and disability, as well as their lifestyles, careers, and working styles, and who come together to fully demonstrate their abilities.

As part of our efforts to “Advance gender equality”, we have set the goal of having 50% of the people in leadership positions across all levels be women in Japan by 2030 to symbolize the equality of the opportunities within the Group. In our latest achievements, we made steady progress, with 54.5% of the Board of Directors being women and 59.5% of the people in management positions across the Shiseido Group globally, and 41.1% in Japan being women. Our brands and regional headquarters also continue to collaborate to support the education and independence of socially vulnerable girls, aiming to resolve the gender gap and empower women.

“Empowering people through the power of beauty”, one of our strategic actions, includes the activities of the Perfect Cover. The brand that will celebrate its 30th anniversary in 2025 offers products designed to address skin tone changes that are difficult to conceal with ordinary foundation, such as birthmarks, vitiligo, scars, and the side effects of cancer treatment.
Dedicated to supporting individuals who seek to express their true selves through coverage, the brand has expanded its reach from Japan and other countries and regions—including China, Singapore, and Taiwan—to now include France, accompanied by a complete renewal of its product line. It continues to broaden its support, empowering everyone to take a confident step forward in their own unique way.

In the area of the environment, an essential pillar for a sustainable world, we are advancing innovations and building business models aimed at achieving a circular economy. Emphasizing efforts throughout the entire value chain through our business activities, we push forward with three strategic actions: reducing our environmental footprint, developing sustainable products, and promoting sustainable and responsible procurement, all of which require collaboration with other companies and stakeholders.

Regarding climate change, we have set CO_₂ emissions reduction targets (SBTi) across the entire value chain as we work toward 2030. We are actively implementing measures to reduce CO_₂ emissions, including the adoption of renewable energy and the use of sustainable raw materials in our manufacturing processes. In 2024, we promoted the use of renewable energy at all our global factories, offices, and research centers, achieving a company-wide renewable electricity ratio of 89%. Looking ahead, our top priority is to address Scope 3 emissions, which represent the largest share of our total emissions. We will accelerate our efforts in this area by further strengthening collaboration with business partners and other stakeholders.

We have also been proactively adopting initiatives to address climate change and biodiversity, including initiatives to protect water resources. In recognition of these efforts, Shiseido was selected to be on the CDP's A List, its highest-ranked list, in the climate change and water security categories. These our initiatives are disclosed in the Shiseido Climate/Nature-related Financial Disclosure Report.

In terms of developing sustainable products, we provided refillable containers across 31 brands globally, helping reduce plastic usage to lower our environmental footprint.

The steady success of these initiatives would not be possible without the strength of each and every Shiseido employee. Based on our PEOPLE FIRST philosophy, we regard employees as our most valuable asset and continue to proactively invest in them. In November 2023, we opened the “Shiseido Future University (SFU),” our talent development facility for next-generation leaders, which began full operations in 2024. We conducted selective leadership training programs for leaders around the world, as well as the Shiseido Learning Festival for all employees, aimed at fostering a culture of continuous learning. SFU supports employee growth through its original curricula that integrate cutting-edge business school knowledge with the heritage that Shiseido has established since its founding, including a refined sense of beauty, richness of spirit, curiosity, and a sense of playfulness to stay ahead of the times.

Shiseido's journey of over 150 years is also a history of social value creation with the power of beauty. This spirit will remain unchanged. With a long-term perspective and strong governance, we are committed to the continued evolution of our sustainability initiatives. We will continue to rise to the challenge of enriching people’s hearts and realizing a beautiful and sustainable society and planet backed by our outstanding research and development capabilities, globally loved brands, and the passion and strength of our diverse people.

At Shiseido, we are committed to realizing a sustainable world where everyone can enjoy a lifetime of happiness and fulfillment through value creation, as we have been doing since our founding. To select the environmental and social issues to be addressed through our business, we identified key sustainability issues based on interviews, surveys, and dialogues with our stakeholders. We then assessed these issues from two perspectives: their importance to all stakeholders - including employees, consumers, business partners, shareholders, society, and the earth - and their importance to Shiseido’s business. Based on these two axes, we categorized and prioritized the issues, ultimately defining 18 material issues in 2019. Additionally, in light of recent changes in the environment surrounding society and the industry, we are in the process of reviewing our current materiality.

The following process was implemented to define material issues.

At Shiseido, we work to promote sustainability across the entire company through our brands and regional businesses. The Sustainability Committee was set up to ensure timely management decisions related to sustainability efforts and their proper implementation across the Group, and meetings were held regularly in 2024. The Sustainability Committee makes decisions on specific action plans, including strategic actions and policies related to sustainability for the entire Shiseido Group, risks and opportunities associated with climate change and the natural environment, and initiatives to address human rights. The committee also monitors the progress of medium to long-term targets within our sustainability strategy. The committee consists of the representative corporate executive officers and executive officers in charge of Corporate Strategy, Finance, R&D, Supply Network, Human Resources, DE&I, Corporate Communications, and our brand holders, as well as other corporate officers from different fields, allowing us to discuss a range of issues from different perspectives. In addition, important matters related to business execution, which require approvals are proposed or reported to the Global Strategy Committee or the Board of Directors. In order to ensure executing and promoting of sustainability actions, a Sustainability TASKFORCE was set up under the Sustainability Committee, consisting of the heads of key relevant functions. At the Sustainability TASKFORCE, practical approaches to achieve our long-term targets are discussed with relevant functions, regional headquarters, and local subsidiaries as necessary.

To promote sustainability initiatives, Shiseido has established a long-term incentive-type remuneration that incorporates multiple internal and external ESG performance targets, such as CO_₂ emissions reduction and the ratio of female managers. This remuneration applies to Directors (excluding External Directors and full-time members of the Audit Committee), Corporate Executive Officers, Executive Officers, and leaders in key positions in Japan and overseas. The actual value of this incentive remuneration is adjusted based on the achievement of individual targets, increasing or decreasing accordingly.

Shiseido has established three strategic actions based on the material issues we have defined in each area of the environment and society. We have allocated management resources on a priority basis to each department across the entire Group to implement these priority initiatives.