Sustainability Strategy

We put sustainability at the heart of our strategy
to create social value through the power of beauty.

Executive Officer
Chief Strategy Officer

Toshinobu Umetsu

Sustainability Strategy

Q1.Sustainability is expected to play an increasingly important role in corporate management. How does Shiseido incorporate sustainability into its strategy?

Current and future market conditions have been thrown into uncertainty by the ongoing COVID-19 pandemic, not to mention the extreme weather brought on by climate change. Now more than ever, the world is at our fingertips with recent technological advances that offer us instant access to information and affect our lives in new ways. As a result, people’s values become more diverse and in many cases, the conventional definitions of concepts like wealth and happiness no longer apply.

Shiseido celebrates its 150th anniversary in 2022. Ever since our founding, we have always contributed to people’s happiness, fulfillment, and well-being through beauty. In line with our corporate mission of BEAUTY INNOVATIONS FOR A BETTER WORLD, we are committed to the realization of a sustainable world where everyone can enjoy a lifetime of happiness through the power of beauty by the year 2030. As Chief Strategy Officer, I am responsible for establishing and promoting the broader sustainability strategy for the entire Shiseido Group from 2022 onward, and I plan to make sustainability a more integral part of our strategy than ever before and promote the creation of social value and resolution of social issues through our core business. This decision reflects the fact that our stakeholders see Shiseido as an indispensable member of society. We, too, believe that this initiative is essential for the continued success of the entire Group.

Q2.What social issues is Shiseido working to solve?

At Shiseido, we are committed to creating a sustainable world and enhancing people’s happiness and fulfillment through value creation and beauty innovations, a tradition that has defined our company since its founding. In 2019, we honed in on social and environmental matters related to our core businesses, defining 18 material issues after interviews and discussions with various stakeholders. These material issues form the basis for promoting six medium-term goals and strategic actions, three each in the areas of society and environment.

In terms of society, we address inequality and social structures as well as other social issues such as discrimination and intolerance rooted in prejudice. Our unique position as a beauty company allows us to promote three strategic actions: “Advancing Gender Equality,” which is a critical issue particularly in Japan and throughout Asia; “Empowering People Through the Power of Beauty,” which contributes to authenticity and empowerment through Shiseido’s track record of research and technology; and “Promoting Respect for Human Rights,” which is at the heart of everything we do.

In terms of the environment, we have set medium-term targets for CO₂ emissions, water, and waste aimed at “Reducing our Environmental Footprint” as one of our strategic actions. For products delivering value directly to consumers, we are setting targets and “Developing Sustainable Products” that take into account both sustainable considerations and functional and emotional benefits sought by consumers. We are also “Promoting Sustainable and Responsible Procurement” that considers the environment and human rights.

Q3.How would you summarize Shiseido's sustainability performance in 2021?

In 2021, we worked together across brands, regional businesses, and corporate functions in order to accelerate our sustainability initiatives. In addition to the existing Sustainability Committee, where we deliberate and make expert decisions regarding sustainability issues, we have held further meetings with major divisions responsible for sustainability acceleration to incorporate sustainability into management and further strengthen these initiatives across the Group.

Again, in terms of society, we have been working for social change in the areas of gender equality and women’s empowerment in Japan, where these are particularly pressing issues. In collaboration with local governments and through the 30% Club Japan, where our President and CEO Masahiko Uotani was appointed as the first chair, our efforts have included raising public awareness and sharing information about increasing the ratio of female executives on Japanese company boards and creating work environments that promote the advancement of women. Internally, in addition to training sessions for female leaders, we also encouraged personal and professional growth for all employees through programs like Speak Jam, a mentoring program for female corporate officers and female employees to have candid discussions on career development options. We also promoted several other programs that allowed employees to voice their concerns about their careers, the future, and the importance of diversity in society. True to our commitment to human rights, Shiseido conducted human rights due diligence to identify Group-wide violations, such as rooting out harassment and making sure our suppliers comply with human rights. We worked with key divisions to resolve these issues.

Starting in 2022, we have appointed a Chief D&I Officer for internal and external acceleration of diversity and inclusion, a culture where people accept and respect others as individuals, regardless of background or differences in circumstances.

(For more information on our D&I strategy, see the Message from the Chief D&I Officer.)

The name “Shiseido” refers to praising the virtues of the Earth, and in terms of the environment, this year, we promoted initiatives based on a premise of sustainable value creation that included resource recycling and conservation of the global environment. These initiatives involved environmental impact reduction and sustainable product development throughout the entire value chain. In particular, the CO₂ reduction efforts required to combat climate change cover not only the curbing of CO₂ emissions from energy use but also the procurement of raw materials, the use of water and other resources, and product design. Since 2019, we have expressed our support for the recommendations of the TCFD, and in 2021, we conducted a quantitative analysis of the long-term impacts of climate change on our business activities in line with the TCFD framework and disclosed the results. We also provided key response actions regarding risks and opportunities posed by the transition to a decarbonized society and other changes in the natural environment. To reduce CO₂ emissions, we have set science-based targets accredited under the SBT initiative and joined the RE100 initiative, which brings together businesses around the world that are committed to shifting to 100% renewable electricity. In addition to installing solar panels at our factories and at other locations, we are also promoting the use of renewable energy at our offices.

In recent years, we have witnessed a change in consumer purchasing behavior. We feel that there has been a conscious shift toward purchasing products that are not only safe in terms of ingredients and formulations but also more socially and environmentally conscious. To quickly respond to this ever-changing social environment and meet a broader range of consumer needs, in 2021, we established our own R&D philosophy, DYNAMIC HARMONY. One of the research approaches behind this philosophy is “Premium/Sustainability,” where we step up to the challenge of creating sustainable value unique to Shiseido. With this value, we aim to satisfy consumers in terms of beauty benefits, high-quality design, and feel of our products that incorporate sustainability and respect for and coexistence between people, society, and the global environment. Specifically, we are collaborating on external technological development for the procurement of raw materials and the development of formulas and ingredients that allow us to reduce our environmental impact. In supporting the concept of a circular economy and encouraging consumers to reuse containers and packaging, we have introduced refills and refillable containers in such countries and regions as China and Taiwan. In terms of packaging innovations, we developed and marketed mono-material packaging that can be easily recycled and biomaterial packaging that reduces CO₂ emissions. We also began recycling programs not only in Japan but in China and other countries in Asia to collect and recycle used packaging.

In February 2022, we revised the Shiseido Group Procurement Policy, which is critical to manufacturing. Adding on to our previous procurement vision and basic policy, we included a new policy for responsible procurement, which articulates an even clearer risk elimination process and sustainability-focused policies.

Q4.What can we expect to see going forward?

Amid the unprecedented speed of change in the world today, there is a growing demand for corporations to take action on sustainability. Since its founding, Shiseido has contributed to society through a value proposition that seeks to enrich people's lives through beauty. For Shiseido to continue to grow over the next century, we must think about creating long-term social value through our business while building upon our rich corporate culture and heritage. In 2022, the year of our 150th anniversary, I believe we must first define Shiseido's roles and responsibilities in order to make real progress toward a sustainable world where everyone can enjoy a lifetime of happiness through the power of beauty.

We must continue to promote empowerment through the power of beauty both inside and outside the company. A spirit of acceptance and respect for diversity are two things that have always been valued at Shiseido. We are committed to incorporating these values with our knowledge of D&I to help create a more inclusive society where everyone can live their lives to the fullest. Shiseido will promote social change, specifically through its actions as a leader in tackling the gender gap, one of the most immediate issues facing Japanese companies.

We are also committed to taking a multifaceted approach to climate change as part of our environmental efforts. We believe that climate change directly impacts not only biodiversity, water resources, and natural disasters but also corporate management, from its financial impact to sustainable procurement. Responding to consumer insights is important to sustainable product development and innovation that deliver the power of beauty to consumers.

As we work to realize our vision of becoming a “Personal Beauty Wellness Company” by 2030, we believe that sustainability will have an increasingly greater impact on corporate management going forward. We see this as a new growth opportunity, a chance to create social value through business growth with a high level of transparency in cooperation with various internal and external stakeholders.

April 2022