Responsible Procurement

Shiseido aims to find new and profound values through encounters with diverse groups of people, to create a “beautiful life” culture, and to engage in research, development, manufacturing, and the sales of superior products and services of a high quality, safety, and which deliver peace of mind. We regard all business partners as partners who create new values together and aim for sustainable development with high ethical standards. In the wake of our participation in the United Nations Global Compact, Shiseido has been working with our business partners on ethical business activities since we formulated the Shiseido Group Supplier Code of Conduct in 2006, stipulating the standards regarding human rights, legal compliance, labor practices, intellectual property protection, confidentiality, environmental protection, and fair trade. The business partners that are subject to the Shiseido Group Supplier Code of Conduct have agreed to the standards and we conduct periodic monitoring through surveys and audits. In the event that any supplier is identified to have violated the Shiseido Group Supplier Code of Conduct, we strictly implement a request for corrective action, offer corrective guidance, and provide support. In Japan, we also established the Business Partner Hotline and we have a system in place to receive opinions and consult with our business partners (No reporting was made in FY2018.). In recent years, with social issues and environmental problems becoming more serious, companies are more strongly required not only to comply with the laws and regulations of each country, but also to respect international treaties and conventions in order to realize sustainability throughout the supply chain and, in particular, to ensure respect for human rights. In response to such social demands, we revised the Shiseido Group Supplier Code of Conduct in April 2018, including strengthening the human rights provisions. In June 2019, we also added a provision for the proper management of working hours, days-off, and leave of employees.

In order to achieve an ethical supply chain, the policy was established in 2018 based on fruitful coexistence with consumers, business partners, and society. The policy indicates the following: Our purchase principles are based on a consumer-oriented perspective; we carry out procurement activities to create better products through co-creation with business partners; we comply with all relevant laws and regulations, as well as placing the foremost priority on respect for human rights and consideration of the global environment; and we actively promote sustainable procurement.

This is a guideline formulated in 2018 for palm-derived materials, which exacerbate environmental and human rights problems in the country of origin, in order to promote sustainable procurement under the Shiseido Group Procurement Policy. We will promote sustainable procurement that respects human rights in consideration of the environmental protection of the place of origin.

Palm oil, a raw material for cosmetics, is mainly produced from oil palms in Southeast Asia. Environmental protection in palm oil production areas and consideration of human rights of people working on plantations are essential to build an ethical supply chain. Shiseido joined RSPO (Roundtable on Sustainable Palm Oil)and formulated Shiseido Group Sustainable Raw Materials Procurement Guidelines［ PDF : 131KB ］in order to procure palm oil and palm kernel oil that is environmentally and socially friendly. In addition, we are making progress toward obtaining RSPO supply chain certification*1 at the Shiseido Group factories. Through these efforts, we are shifting toward sustainable palm oil procurement.

Mica is a mineral used in various industries such as electrical machinery and painting and is an ingredient in makeup products in cosmetics. In recent years, there were some cases where child labor is suspected in the mining of India-produced mica. Shiseido aims to build a responsible supply chain, and in May 2017, participated in an initiative to tackle sustainable mica procurement, called the Responsible Mica Initiative (RMI). The goal of RMI is to work with members of various industries to turn all Indian mica into sustainable raw materials by 2022. Currently, we collect information on mica from various suppliers and aim to improve the traceability and transparency of the mica supply chain. In addition, through the activities of RMI, we will cooperate with NGOs to improve the working conditions of mica miners and improve the educational system for local children.

In order to understand issues such as human rights and labor issues on the supply chain in raw material procurement, we are conducting a social risk assessment of raw materials used by Shiseido. We analyzed palm oil using Social Hotspot Database (SHDB), made by nonprofit organization, New Earth, and discovered that the size and type of risks differs depending on the country of origin. By examining materials other than palm oil using SHDB, we plan to build a tool to identify social risks and use it when introducing new materials. By evaluating and appropriately managing the risks of each raw material, we will endeavor to manufacture products that customers can use with peace of mind, even with an understanding of the background of the products.

In August 2018, in order to understand human rights issues in palm oil procurement, we participated in the Stakeholder Engagement Program in Indonesia held by Caux Round Table, Japan. Through dialogues with NGOs/NPOs and small palm oil farmers, we deepened our understanding of the human rights risks, violations, and labor issues. In order to be a company that fulfills our responsibility to human rights, we will reflect these dialogues with various stakeholders in the construction of an ethical supply chain.