President Maeda stated the following in the beginning of Shiseido’s CSR vision,
“Shiseido declared its intention to redouble its transformation into a global company in a new three-year plan beginning in 2008.�E/span>
In this respect, many Japanese companies, which have achieved success through carrying out reforms directed toward becoming a global company, are categorized into mass production, assembly-type industries. At the same time, not many Japanese companies denote their global presence in lifestyle-related industries, which provide products and services that are deeply rooted in people’s values and cultural background. Shiseido’s voyage as a global lifestyle-related industry originating from Japan could be referred to as navigating without a map. In fact, up until now Shiseido has been receiving various requests from its stakeholders who have a desire for securing social sustainability, including requests that Japanese companies have not addressed before. This trend is also expected to continue into the future. The issues for Shiseido’s CSR efforts are to what extent the Company is prepared to address a wide range of social expectations that are scrutinized because the Company is a global player, and to what extent has the Company actually responded.

Shiseido possesses well-developed internal systems that enable the Company to incorporate various stakeholder opinions, which are reflected in CSR activities. The Company has established the CSR Committee under the direct control of the Board of Directors. This committee is responsible for verifying various aspects, including whether or not Shiseido’s CSR initiatives are in line with stakeholder requests or if the Company is realizing CSR that is unique to Shiseido, and in turn, identifies issues that need to be addressed and requests relevant departments in charge to formulate plans. Moreover, in addition to its Corporate Mission, Shiseido has also established THE SHISEIDO WAY (declaration of corporate code of conduct) and THE SHISEIDO CODE (corporate ethics and behavior norms) as rules to support Shiseido CSR initiatives. While these three documents are logically written in general terms, they serve as the guidelines for discussing specific aspects by the CSR Committee and implementing discussed matters. Additionally, Shiseido clarifies its management commitment on a global scale through various initiatives, including participation in the UN Global Compact and signing the “CEO Declaration to Respect and Support Human Rights in Corporate Activities.�EIn this respect, Shiseido is regarded as a company that is prepared to listen to stakeholder opinions.

Looking at the initiatives related to human resources, for example, Shiseido’s activities aimed at growing “together with employees,�Eincluding the Kangaroo Staff program and efforts to support female employees, are an outstanding standard among Japanese companies. In particular, the Kangaroo Staff program is highly evaluated as a solution to address the growing social issue of Japan’s declining birthrate and a way of promoting work sharing initiatives. Additionally, various active responses have been reported from an environmental perspective as well.

Shiseido is currently implementing numerous initiatives. On the other hand, the scope of initiatives introduced in reports (booklets and website) is not necessarily sufficient. One example is the issue of animal testing. There is no doubt that a considerable number of readers, especially international readers, are concerned about animal testing. Reports, however, briefly refer to the Company’s contribution toward the widespread use of alternative testing methods. At the same time, I expect the issues in relation to animal testing will be raised in future stakeholder dialogs as well.

The way in which this specific issue will be addressed is a matter of judgment. As a third party, I am not in the position to make any prejudgments on a “desirable�Edecision. At the same time, as long as major issues are raised, regardless of the final outcome, I think these efforts are indispensable to communicate with stakeholders who will comprehend relevant facts and become involved.

Internal systems for Shiseido’s CSR activities are well established and external commitments are also clear. At the same time, accountability in relation to a portion of principal CSR initiatives is not necessarily sufficient. Why is such a gap occurring? Shiseido organizes CSR into “fundamental CSR,�Ewhich centers on compliance, and “selective CSR, �Ewhich focuses on social contribution. In fact, various CSR-related issues exist in between these respective categories. A typical example is global warming. As evidenced by animal testing, not every social issue has corresponding laws and regulations, but rather, issues are often raised as a corporate social responsibility precisely because there are no effective laws and regulations in terms of response.

In reading the report, it becomes clear that the Company is also promoting activities beyond the framework of compliance, including the establishment of the Shiseido Group Supplier Code of Conduct and the aforementioned Kangaroo Staff program. In the future, Shiseido’s CSR initiatives will be undertaken with greater effort that goes beyond laws and regulations and integrates solutions for environmental and social issues into its business.

One of the major emphasis Shiseido places on its CSR is social contribution activities, as represented by the SHISEIDO LIFE QUALITY BEAUTY PROGRAM. In this context, I would like to provide an independent evaluation regarding social contribution activities since issues are often separated into CSR and social contribution aspects in Europe and the United States. The Company’s social contribution activities that “support improvements in quality of life (QOL) by providing our distinctive beauty products and services�E/span> are initiatives truly unique to Shiseido. Details of such activities introduced on the website convey that top management is committed to such activities and employees are actively participating as well. In this respect, I would highly evaluate and fully support Shiseido’s social contribution activities, and anticipate further international development in this area.

Based on the above evaluation, I would like to state three points in relation to expectations for the future of Shiseido.

1) Strengthen social contribution activities through integrating accountability and critical opinions into these initiatives
If only a single side of an issue is expressed, communication can become one-way. Shiseido’s social contribution activities can be more accurately communicated with the reporting of critical opinions submitted to the Company, thereby fulfilling accountability. An additional scope of discussions regarding the method of stakeholder engagement is evident from this standpoint as well.

2) Undertake efforts to further revitalize internal deliberation structure for CSR while also improving transparency
The Company states that CSR verification handled by the CSR Committee is carried out from the three perspectives of “activities requested by society,�E“activities that are not addressed (or unable to be addressed) by Shiseido�Eand “activities that should be addressed by Shiseido.�E/span> While this approach is highly appropriate, the verification process and results are not clear from the report.
Of course, it is not realistic for a company to respond to all expectations and criticisms received from various stakeholders. It is natural that there are issues that cannot be addressed; however, because of this reason, it is important to fulfill accountability regarding the selection of issues to be addressed and issues that will not be addressed. In this respect, Shiseido is expected to “visualize�Ethe CSR verification process.

3) Reinforce initiatives for creating new market value
Finally, I would like to mention “creation of new market value,�Ewhich is designated as the highest priority in “selective CSR.�EThe road to new market value will open by fusing social understanding and business through CSR. This specifically applies to Shiseido, which provides lifestyle-based products. One of the aspects, which is currently the most strongly expected of global companies by the international society, is the creation of new business value in the least developed countries (bottom of the pyramid (BOP)). In the United Nations Millennium Development Goals, eight targets were established to be accomplished by 2015, including the eradication of extreme poverty and hunger as well as the promotion of gender equality and empower women. Of course, governments of developed countries also have significant roles to play; however, similar expectations are directed toward companies as well.
The purpose of carrying out business activities in BOP markets is not limited to creating jobs. Working suggests “being helpful for someone,�E while it also brings meaning to life as well as self-respect to people, which is something many people in developing countries continue to pursue and desire. Additionally, new products and services offer new customers a sense of richness and hope. For example, new businesses may emerge as a result of efforts such as pursuing further global expansion of the SHISEIDO LIFE QUALITY BEAUTY PROGRAM. As with hybrid engines, which were favorably received by celebrities in Hollywood, customers in developed countries may also form a positive impression of Shiseido’s unique commitments toward global development issues.
The desire to be beautiful is universal. It would be wonderful for everyone to realize “This moment. This life. Beautifully.�Eno matter where one lives in the world.