Primary Initiatives

Here listed are our primary initiatives regarding human rights and responsible procurement.

Human Rights Due Diligence

Based on the United Nations Guiding Principles on Business and Human Rights (UNGPs), National Action Plans (NAPs) have been formulated in various countries, mainly in the EU, and many NAPs include a statement on human rights due diligence.
In 2020, we established a human rights due diligence process to promptly identify, prevent and mitigate potential human rights issues.
The human rights due diligence process begins with a human rights risk assessment to assess and identify human rights risks for all stakeholders. Next, improvement activities are promoted to stop, prevent or mitigate the negative impacts of the identified human rights risks. The promotion of these activities is checked and activities to further reduce human rights risks are continued, as well as progress reporting and disclosure.

Human Rights Risk Assessment

Step1: Identification of human rights issues

In cooperation with external human rights experts and by referencing international codes on human rights, standards on non-financial disclosures, and the Corporate Human Rights Benchmark (CHRB), we have developed a list of human rights issues to address including modern slavery issues and other wider-ranging issues. Throughout the value chain, we have identified the risks of targets relevant to the Company and organized the areas and targets of our due diligence in this field.

- Affected parties: business partners, employees, consumers, and members of society. Specifically, contractors, suppliers’ employees, our own employees (employed both directly and indirectly), women, children, indigenous peoples, local residents, and immigrants.
- The state of the cosmetics and personal products industry.
- Human rights issues to be considered: 25 listed items including respect for human rights and non-compliance with abuses, harassment and abuse, child labor (right to education), discriminatory actions and expressions, forced labor (including human trafficking), restrictions on the right to association and collective bargaining, and disadvantages on the basis of gender (including gender equality and equal pay for equal work), etc.
- International norms on human rights and corporate human rights benchmarks: The Ten Principles of the UN Global Compact, the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the ILO Core Labor Standards, the Universal Declaration of Human Rights, the Global Reporting Initiative (GRI), the CHRB, the Dow Jones Sustainability Index (DJSI), and the FTSE.

Step2: Assessment of human rights risks

We assessed the status of our activities against the human rights issues identified above. This was done by interviewing stakeholders in Japan and overseas, and investigating internal documents such as surveys and reports — while also referring to external documents for any potential impact on human rights. Based on our findings, we determined the severity and likelihood of both potential and visible risks to human rights, as well as the status of our preventive and corrective measures.

- Third-party evaluations: A third-party organization specializing in human rights risk assessment was commissioned to conduct the assessment. Based on various materials and records related to Shiseido's human rights activities as well as information obtained through interviews with Shiseido Group employees in Japan and overseas, the assessment sought to determine the existence or absence of human rights risks (potential and visible risks) in the entire value chain. The organization evaluated Shiseido's human rights risk management system, including the status of our preventive and corrective measures.
- Investigation of impact on human rights: Country-specific human rights risks were extracted from materials such as the International Labor Organization’s (ILO) survey on discrimination, World Bank surveys on training and education and consumer rights, WIN World Survey research materials on gender equality, and UNICEF surveys on child labor.
- Status of preventive and corrective measures: We created a checklist of preventive and corrective measures related to human rights from items that international organizations, such as the CHRB, DJSI, FTSE, and GRI, require to be addressed and disclosed. We evaluated whether or not Shiseido has taken these preventive and corrective measures.

Results and Responses：

Regarding our value chain, our identification and assessment activities highlighted human rights risks related to*: “discriminatory actions/ expressions,” “violation of compliance/ fair competition,” “personal/ confidential information leakages,” “employees’ personal data and privacy,” “incomplete supplier management,” “occupational safety and health issues (work-related accidents)", “breach of working hours, breaks, and rest period (overtime-work),” and “harassment and abuse.”^*

On the other hand, forced labor and child labor, which are closely related to modern slavery and human trafficking, were assessed as low human rights risks compared to other areas.

Going forward, we will prioritize the human rights issues and risks discovered in our activities in 2020. We will take measures to reduce both manifest and latent risks, and strive to further enhance preventive and corrective measures and promote improvement efforts.

*In no particular order

Human Rights Risk Reduction Activities

In 2021, the eight areas identified by the human rights risk assessment were reorganized and integrated into six categories according to issues and measures to be taken. Executive officers were then assigned to each category to implement improvement activities aimed at curbing, preventing, and mitigating negative impacts on human rights.
Human rights of employees are managed by the Human Resources and Risk Management departments, which promoted e-learning for employees and implemented activities to reduce the occurrence of occupational accidents.
Human rights of suppliers and contracted manufacturers are handled by the Supply Network Division, which continuously conducts supplier assessment programs and reviews procurement policies.

Understanding risks throughout the supply chain

We procure raw materials and indirect materials (promotional materials) for our products from various suppliers in the global market. Of these, there are more than 800 primary suppliers who conduct direct transactions. Our aim is to create a sustainable supply chain built on responsible procurement and to minimize risk across the entire supply chain. To do so, we are promoting the implementation of a supplier assessment program.
Beginning in 2022, based on the revised procurement policy, we will evaluate suppliers from a sustainability perspective and increase business with high-performing suppliers.
As well as Tier 1suppliers, we will also assess suppliers beyond Tier 1.
With regard to raw materials (palm oil/mica), which our company considers to carry high risks for human rights, we will strengthen our measures by participating in international initiatives. In order to procure sustainable palm oil, we joined RSPO^*1 in 2010 and have reduced risks since then by procuring RSPO-certified raw materials, taking into consideration environmental protection and human rights in the places of origin.
In addition, in order to procure sustainable mineral mica and strengthen our responsible supply chain, we joined RMI^*2 in 2017. Going forward, we aim to improve traceability and transparency in the supply chain of these raw materials.

*1：RSPO: Roundtable on Sustainable Palm Oil
*2：RMI: Responsible Mica Initiative

Please check the details in Promoting Sustainable and Responsible Procurement.

Living Wages

Shiseido considers wages to be the amount of monetary compensation necessary for our employees and their families to be able to lead fruitful lives.
In addition, for employees with children in the Shiseido Group in Japan, we provide monthly allowances to cover childcare and education in addition to base salary. (Subsidies for childcare and education expenses are available through the Cafeteria Plan.)
In 2022, in the case of employees of Shiseido Co., Ltd. and Shiseido Japan Co., Ltd. a self-assessment confirms that the basic salary is designed to exceed the living wage in comparison with the 2021 RENGO Living Wage Report issued by the Japanese Trade Union Confederation.

Dialogues with stakeholders

In order to ensure sustainable and responsible procurement and respect for human rights in the course of our business activities, Shiseido works with various stakeholders to discuss both the environment and society and share and resolve issues. In dialogues with human rights experts, we received advice on how to proceed with human rights due diligence and reflect it in our activities.
In 2021, we held a dialogue with 14 human rights organizations and experts on the following topics.

- Forced labor and human trafficking in the supply chain
- Children's human rights in advertising and marketing
- LGBT human rights
- Living wage

Reporting and consultation center for suppliers

Since 2013, we have been hearing opinions from/consulting with our business partners using the Business Partner Hotline, a center which receives reports from/consults with suppliers in writing and by email.

Reporting and consultation center for employees

We have established Whistleblowing and Consultation Hotlines at our global headquarters to handle consultations and reports from employees on various human rights and labor issues.
At each of our regional offices/headquarters, contact window has been setup to handle reports of violations of the Shiseido Code of Conduct and Ethics, internal rules and each country’s laws and regulations.
At our global headquarters in Japan, the “Shiseido Group Global Hotline” has been established to receive reports directly from employees of our affiliates/business partners around the world.
Employees can also directly e-mail the Audit & Supervisory Board to report on words and/or actions breach of ethics by directors and executive officers.Furthermore, in Japan, we established “Sodan Room” (an in-house Shiseido hotline) and an “External Shiseido Hotline.” Both handle general workplace issues and whistleblowing, while the “Compliance Committee Hotline” is dedicated to whistleblowing.
Information about all our hotlines — including instructions for use, internal rules, fair research processes, prohibition of disadvantageous treatments of whistleblowers, and confidentiality　of reported and consulted contents — is well clearly communicated to every employee via a digital leaflet, intranet bulletin board messages, etc.

Human rights education training for employees

Since human rights issues are diverse, the Human Resources, Risk Management, and Sustainability functions are playing the central role in the initiative, working in partnership with the Shiseido Group companies. With regard to the Shiseido Code of Conduct and Ethics and related policies and rules, we conduct regular training and education according to position and job type to deepen our understanding of the human rights of employees and to work to reduce human rights risks. We hold training sessions for top-level employees including the Global Headquarters officers and department directors in Japan, division/department heads of domestic and overseas offices, employees in various divisions/departments, and new employees once a year.

Employees of the Shiseido Group in Japan

At each business location in Japan, there is a Human Rights Enlightenment Promotion representative in each department, and the Human Resources Department conducts training for those representatives who themselves deliver human rights training to other employees in each of their respective departments. We are enlightening people to eliminate discrimination and prejudice on various human rights issues, such as social integration, women’s empowerment, children, people with disabilities, LGBT, and harassment.

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