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.
In addition to the visible human rights risks, potential negative impacts on human rights are regularly identified and risk mitigation measures are taken to prevent serious damage. Progress and findings are reported to the Sustainability Committee, a management meeting focused on the deliberation of sustainability and human rights-related issues. Significant achievements and concerns related to human rights are reported and proposed to the Board of Directors each year.
The scope of the risk identification process in Shiseido’s human rights due diligence not only includes our operations but is also extensively expanded into those of our suppliers. In any new business relationship, 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 all investment decisions. Our human rights risk assessment focuses on issues such as forced labor and child labor, clearly regarding employees of suppliers as those in a vulnerable group. The risk mapping of both potential and visible impact on human rights is reviewed on a regular basis.
In 2023, we conducted a human rights risk assessment as part of our periodic review of our risk map regarding potential human rights issues. Two of our factories were surveyed by a human rights NGO to assess the working environment, which included interviews with migrant workers. Although the survey did not find any significant human rights risks, we have taken corrective measures for the cases that were identified as human rights risks. We will continue to conduct investigations to identify potential human rights risks and continuously improve our working conditions.
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.
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.
Human rights risk assessment scores are mapped on two axes, severity and likelihood of occurrence, to determine the priority of responses. For severity, we assess actual risks and risks by country and region to understand their severity. For likelihood, we assign scores based on latent risks, industry-specific risks, and the existence of effective preventive and corrective processes to reduce risks. We conducted the first human rights risk assessment for the entire Shiseido Group in 2020 and the second in 2023 to confirm human rights risks. In the 2023 assessment, we received third party advice from Deloitte Touche Tohmatsu LLC, a limited liability auditing firm in the Deloitte Tohmatsu Group, as an organization with expertise in the fields of business and human rights. The risk map was reviewed regularly during the assessment, which was conducted once every two years. We identified important human rights risks of a particular priority level that needed to be addressed, and reported them to management.
| Human Rights Risk Assessment 2020 | Human Rights Risk Assessment 2023 |
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Scope* | 3 Regions (Japan/GHQ, China, Americas) | Regional headquarters of all regions |
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. | |
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. |
Our human rights risk assessment identified the areas that are assumed to be relatively at high risk in Shiseido’s value chain as follows: “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.
The eight areas identified through the human rights risk assessment have been consolidated into six categories and assigned as an area of responsibility to an executive officer. In no particular order, the six categories are:
By assigning each category to an executive officer, we help ensure the active implementation of activities to stop, prevent and mitigate negative impacts on human rights.
In Shiseido, human rights issues concerning employees are managed by the Human Resources and Risk Management departments, while human rights issues concerning suppliers and contracted manufacturers are handled by the Supply Network Division.
In order to deepen our employees’ understanding of human rights and strengthen our work to reduce human rights risks, we provide training on ethics and harassment for employees in managerial positions. This includes regular training and education on the Shiseido Code of Conduct and Ethics, as well as related policies and rules, according to the employee’s position and job type. Training sessions are delivered to employees in various divisions/departments and to new employees.
If improper acts or the like are revealed, we stop such acts immediately and implement corrective measures and reoccurrence prevention measures rapidly in cooperation with the relevant companies, offices, and divisions/departments. We also take disciplinary action against employees who have been involved in such acts in accordance with employment regulations and internal rules. If any cases of disadvantageous treatment, harassment, etc. toward whistleblowers or consulters are identified, we take appropriate relief/restoration measures immediately in cooperation with the relevant companies, offices, and divisions/departments, and take strict measures including any disciplinary punishment against the persons who have engaged in such disadvantageous treatment or harassment.
If the case may pose a risk to our business management, it is promptly reported to management from the divisions/departments. Any serious compliance-related concern is reported to management of the Global Risk Management & Compliance Committee and/or HQ/SJ Compliance Committee, and we work to eliminate the concern immediately and implement corrective measures and reoccurrence prevention measures rapidly in cooperation with the relevant companies, offices, and divisions/departments.
At the time when a supplier becomes aware of any violation of Shiseido Group Supplier Code of Conduct, it shall immediately inform the Shiseido Group thereof. If any violation is acknowledged, the supplier must formulate a plan to correct such violation and conduct suitable corrective measures, as well as reporting the status of such correction to the Shiseido Group on each occasion. An agreement entered into with the Shiseido Group may be cancelled depending on the contents of the violation.
Suppliers shall accept whistle-blowing and complaints from their employees, shall make sure to protect their employees from possible retaliation from the suppliers and persons against whom the relevant whistle-blowing was made, and shall take appropriate measures to rectify the status and conditions against which such complaints are made, while always taking the privacy of whistle-blowers into consideration.
We conducted human rights impact assessments at eight business sites in Japan and overseas (six regional headquarters in all regions and two factories in Japan).
A safety culture audit was conducted at 22 Shiseido Group companies in Japan to evaluate and analyze the level of safety culture at each company in the areas of education and training, reporting obligations, performance, resources and the environment, and organization and corporate culture. The results of the audit are reported back to the Shiseido Group Occupational Health and Safety Management System Committee, which meets four times a year. The committee analyzes trends in work-related accidents at each business site and gives instructions for improvement, especially for the improvement of dangerous locations and dangerous actions to ensure that they do not recur.
In 2022, a workplace harassment fact-finding survey was conducted in 309 departments of the Shiseido Group in Japan. The results of the survey were provided to each department as feedback, and each department was requested to take measures to resolve harassment issues. In response, each department took corrective measures individually. In 2023, a harassment fact-finding survey was conducted at departments deemed to be at high risk of harassment to ascertain the status of subsequent improvements. The survey results were provided to all responsible persons in the departments subject to the survey as feedback, and for departments that were not making sufficient improvements, corrective measures were requested again based on the survey results.
In 2023, six disciplinary actions were taken at the Shiseido Group in Japan regarding harassment. In each case, employees involved in misconduct were punished in accordance with work rules and internal regulations, and corrective measures and measures to prevent recurrence were promptly taken in cooperation with the relevant departments.
We were able to achieve the goal of using 100% sustainable paper for product packaging by 2023.*
As for raw materials derived from palm oil, we have replaced 51% of palm oil-derived raw materials (palm oil equivalent, on a weight basis) with certified palm oil based on the RSPO’s physical supply chain model.
In 2023, we conducted the Supplier Assessment Program globally for all 860 Tier 1 suppliers (categories: direct materials, OEM products, contract manufacturing goods, and sales support tools). It was since 2020 that we conducted the program covering all Tier 1 Suppliers. As a result, we completed the self-assessment of all 860 suppliers*1.
Furthermore, 12 suppliers were identified as high-risk suppliers in the self-assessment.
We will continue working with the 3 high-risk suppliers for corrective actions, aiming to complete the corrections by the end of 2024. In addition, we will expand the categories of the Supplier Assessment Program and plan to start an assessment of Tier 1 suppliers of indirect materials*2 in 2024.
Please refer to "Promoting Sustainable and Responsible Procurement" for the results.
We offer whistleblowing and consultation hotlines for the purpose of detecting and correcting violations against the laws and regulations, the Articles of Incorporation, and rules within the Shiseido Group. The whistleblowing and consultation hotlines are operated according to internal rules that specify confidentiality, prohibition of disadvantageous treatment or reprisals against whistleblowers/consulters, elimination of conflicts of interest, and the process for handling whistleblowing and consultations, etc. These internal rules are disclosed via the internal intranet so that employees can view them at any time.
Globally, we have established whistleblowing and consultation hotlines at each regional affiliate for employees to voice their concerns about or report on words and/or actions which are or may be unethical or in violation of laws in the relevant countries/regions, the internal rules, and the Shiseido Code of Conduct and Ethics. At Company headquarters, the Shiseido Global Hotline has been established to receive reports directly from any employee in the Shiseido Group.
In Japan, we have established the Shiseido Hotline, which handles consultations and reports from a wide range of workplaces, and the Shiseido Group Audit Committee Hotline*, which handles domestic and overseas reports related to directors, executive officers, and persons in charge of the hotline. All these hotlines accept anonymous whistleblowing and consultations.
Shiseido also has a Business Partner Hotline for suppliers and business partners in Japan to voice any concerns on violations of human rights and compliance by Shiseido Group companies and employees.
Shiseido considers wages to be the amount of monetary compensation necessary for our employees and their families to be able to lead fruitful lives. We have established an internal project to develop an approach to living wages throughout the value chain. In 2023, we collaborated with the Fair Wage Network to evaluate the living wages of employees across the entire Shiseido Group using the Living Wage Methodology. We have also begun evaluating the living wages of suppliers using the same method.
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.
Furthermore, the Shiseido Group Supplier Code of Conduct stipulates that suppliers need to take into consideration their wage levels to ensure that wages paid are at a level necessary for their employees and their family members to live with human dignity.
In 2023, through the EcoVadis* questionnaire, we checked if some of our suppliers made the commitment to paying a living wage or have conducted an assessment as to whether their employees were being paid a living wage. As a result, we confirmed that 15 of them made the commitment or conducted an assessment.
In addition, we plan to conduct living wage assessment of our strategic suppliers from 2024, with the Fair Wage Network.
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 2023, we held a dialogue with human rights experts to report on the results of our human rights risk assessment and discuss the progress of our response to each human rights risk, disclosure of human rights due diligence, and response to human rights risks in the supply chain.
Date | October 16, 2023 |
Agenda | Building grievance mechanisms, supplier management in human rights |
Experts | Human rights experts from the World Benchmarking Alliance and the United Nations Development Programme Asia Pacific |
Key comments | Human rights experts advise that it is important to build a relationship of trust with rights holders and to promote engagement with suppliers in order to build a grievance mechanism. |
In 2022, dialogues with ten human rights bodies and experts were set up under the following themes.
Important matters of concerns and improvements gained through the dialogues with stakeholders are reported in the Sustainability Committee held annually.
In 2023, we conducted a human rights risk assessment as part of our periodic review of our risk map regarding potential human rights issues. Two of our factories were surveyed by a human rights NGO to assess the working environment, which included interviews with migrant workers. Although the survey did not find any significant human rights risks, we have taken corrective measures for the cases that were identified as human rights risks.
Date | September 21-22, 2023 |
Venue | Shiseido Kakegawa Factory and Shiseido Osaka Ibaraki Factory |
Agenda |
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Survey and interviewer | The Global Alliance for Sustainable Supply Chain(ASSC), a human rights NGO |
Contents of the survey |
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Shiseido reports progresses concerning human rights issues in our sustainability reports and “Sustainability” on our corporate website. The report includes updated due diligence, risk assessment activities, and if applicable, incidents relating to human rights and remedial actions/plans. Shiseido also discloses a declaration concerning the UK Modern Slavery Act on our corporate website. Through these communications, we review and improve the assessment processes.
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