Sustainability Management

Message from the Head of the ESG Division

Kenji Ueda

Senior Executive Officer, General Manager of ESG Division

Unicharm Corporation

We aim to be a company trusted by all stakeholders in our unwavering commitment to resolve environmental and social issues through our business activities.

At the Unicharm Group, our purpose (reason for existence) is contributing to the achievement of SDGs. Accordingly, realizing this purpose through our business activities is our vision of sustainability.

    To further embody this vision, in October 2020 the Group announced its medium- to long-term ESG goals, Kyo-sei Life Vision 2030. It consists of 20 key themes, indicators, and targets spanning the four themes of safeguarding the well-being of individuals, safeguarding the well-being of society, safeguarding the well-being of our planet, and the Unicharm Principles. These 20 key themes were established to contribute to the achievement of the 17 goals and 169 targets of the SDGs, and cover environmental issues such as climate change and marine plastic pollution, and social issues such as declining birthrates and aging populations in East Asia and other mature economies and poverty in emerging countries.

    Moreover, under Environmental Targets 2030 announced in May 2020, we set specific targets for the three issues of responding to the problem of plastic waste, responding to climate change, and helping prevent deforestation (response to procurement-related issues) based on our vision of where we want to be as a corporate group in 2050.

    We are engaged in a Companywide effort to steadily move forward with Kyo-sei Life Vision 2030 and Environ-mental Targets 2030 progress and discussing issues through the ESG Committee which operates under the direction of the president & CEO.

    Now, allow me to touch on a few initiatives undertaken in fiscal 2023.     

    To accelerate our response to climate change issues, under the Greenhouse Gas (GHG) Emissions Visualization Project introduced in fiscal 2022, we established a system to swiftly calculate the carbon footprint of products (CFP)* for all products in the Personal Care Business produced in-house at our factories in Japan. We also cooperated with various external organizations, such as those engaged in decarbonization, to ensure consistency with international standards and formulate reliable GHG emission calculation rules, and were certified under the Internal-PCR approval program of the Sustainable Management Promotion Organization (SuMPO). In fiscal 2024, we plan to expand these activities to our Pet Care Business and overseas subsidiaries and disclose specific numerical data for the CFP of certain products.

    Regarding progress in achieving 100% use of renewable electricity for all electricity used in our business operations by 2030, as set forth in Kyo-sei Life Vision 2030, we have increased our use of renewable electricity to 22.8% as of the end of fiscal 2023. To accelerate progress in this area, we became a member of the Renewable Energy 100% (RE100) global initiative in November 2023. We will continue to consider and steadily implement the most appropriate procurement methods according to the circumstances of each company with a view to achieving 100% renewable electricity use.

    In these ways, Unicharm remains committed to reducing CO2 emissions across its wide range of business activities. We will continue to actively call on those involved in the supply chain to do their part in reducing CO2 emissions throughout the product life cycle.

    We have positioned Kyo-sei Life Vision 2030 and Environmental Targets 2030 as our key ESG related objectives, which are reflected in the goals of each department and also linked to individual targets and weekly action plans. As a part of these detailed efforts, ESG targets were incorporated into employee assessments in fiscal 2023.

    We will continue to steadily promote these key ESG objectives in Groupwide efforts to resolve environmental and social issues through our business activities and contribute to the betterment of local communities. Furthermore, through the appropriate disclosure of ESG information, we aim to be a company trusted by all stakeholders, including customers, shareholders and investors, business partners, employees and their families, and local communities.

* A system displaying GHG emissions for the entire life cycle of products and services, from the procurement of raw materials to disposal and recycling, by converting them into CO2 emissions 

Management Structure

Sustainability Promotion Structure

Unicharm has established a system to seamlessly promote sustainability management that meets the expectations of its stakeholders. Specifically, the ESG Committee, a cross-organizational structure chaired by the president & CEO, meets four times a year to deliberate and decide on all sustainability matters and governance-related policies and activities, and monitors their progress. The ESG Committee is attended not only by directors, executive officers, and other members of management, but also by those in charge of the Sales Division, R&D Division, Marketing Division, Corporate Division, and consolidated subsidiaries in Japan and overseas, and has a system in place to quickly carry out the various sustainability-related activities that are decided by its members. Matters deliberated and decided on by the ESG Committee are reported to the Board of Directors at least once a year.

Sustainability Promotion System

Roles and Results of the ESG Committee

Roles

・Deliberate and decide on the progress of Kyo-sei Life Vision 2030 medium- to long-term ESG goals and the medium-term management plan

・Identify and address risks, opportunities, and key issues related to sustainability across the Group and deliberate and decide on information disclosure

・Report matters deliberated and decided on by the ESG Committee to the Board of Directors at least once a year

Fiscal 2023 Results No. of Meetings Held

Four (February, May, August, and November)

Main Themes of Discussion

Progress of Kyo-sei Life Vision 2030 medium- to long-term ESG goals, Environmental Targets 2030, and the medium-term management plan

・GHG Emissions Visualization Project

・Operation of SDGs Theme Guideline—internal guideline for contributing to sustainability

・Policy and progress on production of integrated and sustainability reports

・Sharing of information on external ESG assessments

・Control Self-Assessment (CSA) and internal audit plan

Core Themes and Categories of ESG Committee Initiatives

ISO26000
Core Subjects
Organizational governance, human rights, labor practices, the environment, fair business practices, consumer issues, and community involvement and development
Core Themes
E

・Climate change: Greenhouse gases, energy use management, and climate change-related risks

・Water resources: Water usage and its reduction

・Pollution and resources: Waste disposal, resource usage, and recycling

・Supply chain: Supplier policy, environmental issues, and sustainable procurement of forest resources and palm oil

・Biodiversity

・Development of environmentally friendly products

S

・Labor standards: Forbiddance of child and forced labor, prohibition of discrimination, freedom of association, collective bargaining rights, minimum wage, and prevention of harassment

・Health and safety

・Human rights: Due diligence, children’s rights, forbiddance of child labor, community employment, and complaint handling

・Society: Community investment and social contribution activities

・Responsibilities to customers: Responsible advertising and marketing and customer satisfaction

・Supply chain: Forbiddance of child and forced labor, prohibition of discrimination, freedom of association, collective bargaining rights, minimum wage, health and safety, due diligence, and capacity building

・Product quality and safety

G

・Corruption prevention: Bribery prevention, insider trading, whistleblower system, education, and risk assessment

・Corporate governance

・Companywide risk management: Environment, society, corporate governance

・Compliance

・Tax transparency

Communicating with Stakeholders

Guided by our Beliefs & Pledges and Corporate Code of Conduct, which vow that Unicharm will undertake honest corporate activities that win the fullest confidence of its customers, shareholders and investors, business partners, employees, and society, we are working to increase stakeholder engagement through a range of opportunities. In addition, as a company that provides consumables that are essential to a clean and healthy lifestyle, we regard the global environment, international community, and next generation as important stakeholders.

The Unicharm Group’s Stakeholders

Communicating with Stakeholders
Stakeholders Communication Policy (Beliefs & Pledges) Primary Communication Methods Frequency Example Themes

Customers
Customers

We pledge to earn the full support of customers by always doing everything we can.

Customer Communication Center, group interviews, monitoring surveys, exhibitions and seminars, websites, and various social media accounts

Regularly

Quality, safety, and functions of products and opinions and responses concerning products and services

Shareholders and Investors
Shareholders and Investors

We pledge to distribute industry-leading returns to shareholders.

General meeting of shareholders

Once a year

Summary explanations of financial results and sound company management

Financial results announcements and briefings

Four times a year

Individual dialogue with investors and overseas IR activities

Regularly

Business Partners
Business Partners

We pledge to achieve mutual growth by maintaining fair and equitable relationships.

Growth strategy awareness-raising program

Twice a year

Product and service proposals, supply chain management, quality, safety, and the environment

Exhibitions and events

Regularly

Medium- to long-term policy briefings

Once a year

Questionnaires and audits

Regularly

Employees
Employees

We pledge to enable the happiness of employees and their family members by filling each of them with confidence and pride.

Management with resonance practical meetings

Once a week

Compensation, health, satisfaction toward work, and introduction of programs and case studies that demonstrate respect for diversity

Employee surveys

Once a year

Labor-management discussions, employee counseling hotline, family day at factories, and in-house intranet and Company newsletter

Regularly

Society
Society

We pledge to contribute to the economic and emotional fulfillment of all people and all of society through our corporate activities

Activities in local communities, cooperation with governments and NGOs / NPOs, and activities held in emerging countries and through trade groups

Regularly

Disaster assistance, incontinence care, health promotion, health and hygiene, local hiring, and coordination through business activities

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