Sustainability Management

Message from the Head of the ESG Division

Kenji Ueda

Senior Executive Officer, General Manager of ESG Division

Unicharm Corporation

We will redouble our efforts to address environmental and social issues and ensure appropriate governance in order to sustainably enhance our corporate value.

In keeping with its purpose (reason for existence) of contributing to the achievement of the Sustainable Development Goals (SDGs), Unicharm works to resolve environmental and social issues through its business activities. I will discuss some of these initiatives in this section.

　In conjunction with our Kyo-sei Life Vision 2030 medium- to long-term ESG goals, in Environmental Targets 2030 focused on the natural environment, we have defined three key issues and medium- to long-term ESG goals responding to the problem of plastic waste, responding to climate change, and helping prevent deforestation (response to procurement-related issues). Our approach to these issues is strongly linked to our business continuity, and I believe that the achievement of these goals will have a significant impact on our business results.

　In responding to the problem of plastic waste, we are reducing materials costs and plastic use by using thinner packaging materials and switching to paper for in-store promotional materials. In responding to climate change, we are introducing solar power generation systems through a power purchase agreement (PPA) to increase the use of renewable electricity and thereby reduce GHG emissions, and minimize the increased costs from rising energy prices. In helping prevent deforestation (response to procurement-related issues), we are engaging in a Groupwide effort to expand the procurement of certified pulp, one of the main raw materials for disposable diapers and sanitary pads. By virtue of these efforts, in fiscal 2024 we were selected for the CDP's A List, the highest rating, in all three categories of climate, forests, and water.
　Next, regarding resolving social issues, I would like to talk about Project Jagriti,^*1 an initiative implemented in India. In cooperation with non-government agencies (NGOs), this project develops female entrepreneurs who sell sanitary pads and other products in rural areas of India and contributes to the advancement of women in society by promoting financial independence and widespread access to sanitary products. Meanwhile, in Japan, where the birthrate continues to decline, we sell Sofy Ninkatsu Orimono Sheet in support of those trying to conceive,^*2 in addition to providing Sofy Be, a menstruation and physical condition management app that helps users understand the relationship between hormones and physical condition.Through such product sales and service offerings, we remain committed to helping resolve social issues through our business activities.
　Finally, with respect to governance, we work to ensure compliance and strengthen risk management based on fair, transparent, prompt, and decisive management. The countries and regions in which we operate continue to increase and therefore, we are working to establish a management system that not only ensures compliance with the laws and regulations of each country and region but also can recognize and respond to risks in a timely manner.

　Unicharm will continue to step up efforts in addressing environmental and social issues and maintaining appropriate governance, keeping in mind that these are essential for sustained improvement of corporate value. In addition, we will strengthen information disclosure in accordance with international standards and aim to become a company that is trusted by all stakeholders, including consumers, shareholders, business partners, employees and their families, and local communities.

*1 A Hindi word that means “awakening”

*2 Refers to acquiring knowledge, discussing with family members, monitoring one’s physical condition, and receiving fertility treatment, among other activities people often engage in when trying to conceive a child

Management Structure

Sustainability Promotion Structure

Unicharm has established an appropriate system to steadily implement sustainability management. Specifically, the ESG Committee, 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 2024 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 ・Disclosure of biodiversity-related information ・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

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 2024 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

・Disclosure of biodiversity-related information

・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	・Plastic waste: Reduction of plastic use ・Climate change risk: Reduction of greenhouse gases and management of energy use ・Water risk: Reduction of water use ・Pollution and resources: Waste reduction, resource usage, recycling, and pollution prevention ・Supply chain: Supplier policy, environmental issues, and sustainable procurement of forest resources and palm oil ・Biodiversity: Forest-derived raw materials and palm oil ・Development of environmentally friendly product
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 of employees ・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, whistleblowing 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, Corporate Code of Conduct, and Multi-Stakeholder Policy, 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 hygienic lifestyle, we regard the global environment, international community, and next generation as important stakeholders.　

Multi-Stakeholder Policy (in Japanese only)

The Unicharm Group’s Stakeholders

Communicating with Stakeholders

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