AIMING FOR SUSTAINABLE GROWTH

Perfect Cover Foundation, which was developed by Shiseido, helps to resolve such concerns as portwine stains, nevus of Ota, very dark spots, vitiligo, and skin irregularities, which can be difficult to achieve with ordinary foundation, and covers skin color changes due to side effects from medical treatment. In October 2017, we launched the Perfect Cover Foundation MV Series, which offers enhanced functionality. It is long-lasting, less likely to stain clothing, and easy to use. In addition to Japan, the product is currently available in certain markets in Asia. To extend the "Improvement of Quality of Life with Cover Makeup" activities around the world by 2020, we are aiming to expand into more markets and are advancing our research and information development activities.

The Shiseido Life Quality Beauty Center was established in Ginza, Tokyo in 2006 as a special facility for teaching consumers how to use Life Quality Makeup and offering advice. In private, individual rooms, our experts provide consultations about particular skin concerns and recommend the best makeup. Subsequently, they offer advice to make sure that the consumers can use the makeup effectively by themselves.

Shiseido started the Shiseido Life Quality Beauty Seminar in 1949 as a special beauty class that taught students who were graduating from high school how to use cosmetics in order to maintain an appearance appropriate for an adult. Since that time, striving to provide beauty for all consumers, we have undertaken seminar activities throughout Japan for more than 60 years. These activities are intended to help various participants maintain and improve their quality of life.

From July 2013, we have been providing fee-based seminars on how to maintain an appearance appropriate for a working professional and conducting seminar activities that leverage the power of makeup to resolve the issues of an aging society. In addition, we also offer lectures on maintaining one's appearance at facilities and schools for persons with disabilities.

The realization of a society that accepts diversity is an important and urgent issue. Shiseido is focusing on the empowerment of women, who are deeply significant to our business. In collaboration with UN Women, a UN agency that promotes gender equality and women’s empowerment, we will promote education on gender equality for young people.

On March 8, 2018, we commemorated International Women's Day. Together with BuzzFeed Japan Corporation, we cosponsored "Happy Women's Day—To Me in the Future," a discussion-based event supporting women and men alike in living their own lives. Activities included a discussion with special guest Christel Takigawa and a lecture by a Shiseido researcher about the power of pink, which was selected as the symbol color of the event. Through these types of events, Shiseido aims to realize a society in which women can be proud of being women and in which all people can enjoy dynamic lifestyles.

In collaboration with UN Women, we are sponsoring gender equality workshops for young consumers (principally high school students), who will become future leaders. These workshops encourage young consumers to learn about the variety of gender issues in society as well as to take a personal stand on them and to make presentations to the public, from raising issues to formulating countermeasures. In 2018, which will be the second year of our involvement, we will expand the scope of participants to high schools across Japan, and take steps to involve more students. Representative schools that are selected in regional qualifying competitions will make presentations to government institutions, private-sector companies, NPOs, and other institutions at a conference, which will be held in Tokyo in October 2018.

Since 2011, Shiseido has been promoting activities for women in rural areas of Bangladesh in order to improve their social status and support their success. These activities include the sale of Les DIVAS skincare products, which were developed especially for the local region, as well as educational activities, such as workshops related to health, hygiene, and nutrition. In these ways, we are helping to empower women and improve their lifestyles. Through these activities, we are aiming to leverage our know-how in order to advance our business operations while at the same time contributing to the resolution of the social issues of the women who live in these rural areas.

In addition to the workshops, we launched a new initiative in 2018. In seven regions around Bangladesh, we screened a short movie that promotes the independence of women in these areas. This movie visually communicated the worldview of "Shining Original Beauty," which is the brand concept of Les DIVAS. We hope it helps women in Bangladesh recognize their own original beauty and encourage them to think about their own lifestyles.

The demand for palm oil, which is a raw material for food and cosmetics, has been drastically increasing in recent years. Tropical rainforests have been illegally logged for the development of large-scale plantations of Elaeis guineensis, which is the principal source of palm oil. The influence of these activities on endangered wildlife and on global warming from reduced forests is becoming a serious issue. In addition, in recent years growing attention has been paid to forced labor and other human rights issues. In order to support the certified sustainable production of palm oil, since 2010, Shiseido has been participating in the Roundtable on Sustainable Palm Oil (RSPO), which was established with the aim of conserving the environment and promoting and operating a sustainable palm oil industry. In 2018, we formulated the Shiseido Group Sustainable Raw Material Procurement Guidelines and are aiming to transition all of our palm oil to RSPO certified raw materials by 2020.

Supplier Ethical Information Sharing Platform (Sedex) is a non-profit organization that aims to realize ethical, responsible business practices in the global supply chain. Sedex provides the world's largest platform for managing and sharing ethical supply chain data. Shiseido joined Sedex in August 2017 and registered the Kakegawa Factory (Japan) on the Sedex platform. Going forward, we will steadily register our in-house factories. We will aim to realize an ethical supply chain by objectively evaluating and enhancing social and environmental initiatives in our supply network.

Shiseido formulated its "Production Eco Standards" in 2010 to serve as environmental standards for product design. In addition to environmental friendliness, we are emphasizing design and ease of use. As we moved forward with the development of eco-friendly containers, we focused on mechanically recycled PET* resin. We resolved issues presented by cosmetics containers, such as varying thicknesses and complicated shapes, and since 2015 we have been using mechanically recycled PET resin in containers for SEA BREEZE body soap. In the future, we will continue working on such initiatives as sustainable containers and the utilization of paper for related items.

• * High-purity, high-quality PET resin produced by using heat, vacuum, and other processing to decontaminate resin from PET bottles that have been sorted, flaked, and washed. Its manufacturing generates less CO₂ emissions compared with those of conventional recycling methods.