Sustainability Management

The following process was implemented to define material issues.

• Comprehensive identification of social issues based on international guidelines (GRI, SASB, SDGs, etc.)

• Quantitative surveys of employees and consumers

• Interviews and questionnaires with Officers and regional CEOs

• Interviews with shareholders, investors, and external experts, as well as a review of social expectations and requirements reflected in ESG assessments such as S&P, MSCI, and CDP

• Evaluating and scoring based on the level of importance to multiple stakeholders and the business

• Classification and organization of the identified material issues

• Approval at the global management meeting

To achieve our corporate mission, BEAUTY INNOVATIONS FOR A BETTER WORLD, Shiseido Group has positioned “sustainable value creation” as one of the important strategic pillars in our 2030 Medium-Term Strategy. Within this, in our sustainability strategy, we have set forth strategic actions based on the materiality (material issues) to be addressed in the society and environment areas, while establishing medium-term targets toward 2030 and advancing company-wide initiatives.

In the society area, we are addressing social issues by expanding the diversity, equity, and inclusion (DE&I) expertise we have long cultivated into society through our business and brands. We are executing three strategic actions: “Advancing gender equality,” which aims to realize a society where fair opportunities are available to all—regardless of gender, age, nationality, sexual orientation, gender identity, or disability—and where individuals can live authentically; “Empowering people through the power of beauty,” which seeks to eliminate unconscious biases and prejudices related to beauty, fostering a society that celebrates individual beauty; and “Promoting respect for human rights,” which serves as the foundation of all our activities.

In the environment area, based on the idea of banbutsu shisei, the origin of our company’s name, we are working to develop technologies and build business models aimed at reducing our environmental footprint and contributing to realizing a circular economy. We are executing three strategic actions: “Reducing our environmental footprint” and “Developing sustainable products,” which we work on in collaboration with various stakeholders throughout the entire value chain, and “Promoting sustainable and responsible procurement,” which addresses not only environmental issues but also human rights issues.

At Shiseido Group, 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 are held regularly. The 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. It also monitors the progress of medium- to long-term targets within our sustainability strategy. The committee consists of the Representative Corporate Executive Officers, and Chief Officers and Division Officers from various fields—including Finance, R&D, Supply Network, Human Resources, Corporate Governance, Corporate Communications, and our brand holders—enabling active discussions on a range of issues from the perspectives of their respective areas of expertise. 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. Furthermore, in order to ensure the reliable execution and promotion of strategic actions, a Sustainability TASKFORCE was set up under the Sustainability Committee, consisting of the heads of key relevant functions. The TASKFORCE discusses practical approaches to achieving long-term targets and solving sustainability-related issues, driving activities that involve regional headquarters, overseas offices, and other relevant departments.

At Shiseido Group, we have identified 19 material issues based on two dimensions: “importance to all stakeholders” and “importance to Shiseido Group’s business”. Based on this materiality, we have set forth three strategic actions and medium-term targets in each of the society and environment areas, and we are promoting initiatives across the entire company. In accordance with our “2030 Medium-Term Strategy,” we have expanded the scope of our actions in the environmental area and updated our targets toward 2030. Furthermore, we have introduced long-term incentive-type remuneration that incorporates ESG-related performance targets, such as CO₂ emissions reduction and the ratio of women in management positions, for leaders in key positions both in Japan and overseas, in addition to the Representative Corporate Executive Officers, Chief Officers, and Division Officers.