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  3. Respecting Human Rights and Ensuring Responsible Procurement
  4. Primary Initiatives

Primary Initiatives

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

●Human Rights Due Diligence

We have established a human rights due diligence process to promptly identify potential human rights issues and prevent and mitigate future occurrences of such issues. Potential negative impacts on human rights are regularly identified and risk mitigation measures are taken to prevent serious damage. These are overseen by the Board of Directors.

Starting in 2021, the executive officer in charge of each area is responsible for monitoring risks, developing rules for improvement, and conducting training. Each executive officer will report and deliberate on the annual progress toward achieving their targets and KPIs at the Sustainability Committee, a management meeting on sustainability. The Human Resources Department and the Risk Management Department deal with human rights issues related to the Company's own employees, and the Supply Network Department handles the human rights issues related to the employees of suppliers and contract manufacturers. In new business relationships, such as mergers and acquisitions, respect for human rights (compliance with personnel and labor issues, employee and customer safety, etc.) is part of the due diligence process for investment decisions.

Human Rights Due Diligence Process

Human Rights Due Diligence Process

In 2020, we took steps to identify, assess, prevent, or mitigate the visible and potential impact of our activities that are related to human rights. These efforts included:

Step 1. 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 Labour Standards, the Universal Declaration of Human Rights, the Global Reporting Initiative (GRI), the CHRB, the Dow Jones Sustainability Index (DJSI), and the FTSE.

Step 2. 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 Labour 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

  • * In no particular order

●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. For domestic Shiseido Group labor union members, wages are compared against the Japanese living wage and industry salary levels during annual labor-management negotiations. For non-union members, similar comparisons are made during recruitment. These comparisons and evaluations function as due consideration for living wages. 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.)

●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 900 primary suppliers who conduct direct transactions. In order to evaluate and confirm the status of compliance with the Shiseido Group Supplier Code of Conduct, Sedex (Supplier Ethical Data Exchange, that is one of the world’s leading ethical trade service providers), original Self-Assessment Questionnaire (SAQ) revised in 2019, and EcoVadis are used in cooperation with the supplier.
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.

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

●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.

●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

A consultation center was set up to handle consultations and reports on various employee human rights and labor issues. We set up the In-house Shiseido Consultation Office and the External Shiseido Hotline to receive a broad range of consultations and reports from various workplaces. The Compliance Committee Hotline specializes in receiving reports and Report Mail to Auditors receives reporting on officers.

●Human rights education training for employees

Since human rights issues are diverse, the Human Resources Department, Risk Management Department, and Social Value Creation Division are playing the central role in the initiative, working in partnership with the Shiseido Group companies. With regard to the Shiseido Group Standards of Business 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.