Ensuring Sustainable ProcurementWhile building relationships of mutual prosperity and coexistence with its business partners and providing customers with reliable, safe, high-quality products and services, the FANCL Group is aiming for sustainable procurement that takes into consideration aspects that include the environment, human rights and labor issues.Key issuesTargets4-1364-21-100-00SustainabilityFY Mar/2022: 100% RSPO (including book and claim method)Progress to DateQuantitative targetsAdoption of Certified Palm Oil Based on the Sustainable Procurement Basic PolicyPalm oil is a vegetable oil derived from oil palms cultivated in the tropics. In Malaysia and Indonesia, the two largest producers of palm oil, there are serious issues related to the large-scale deforestation of tropical forests brought about by agricultural development and issues surrounding the human rights of agricultural workers. Having made the adoption of certified palm oil its target, the FANCL Group joined the RSPO*1 and JaSPON*2 and is addressing these issues by means of its membership.Business Partner Questionnaire Surveys by Internal AuditsP4535* Covering FANCL Corporation, ATTENIR CORPORATION cosmetics, and health foods*1Roundtable on Sustainable Palm Oil, the FANCL Group joined in 2018*2Japan Sustainable Palm Oil Network, joined in 2019*3RSPO Supply Chain Certification is a system to verify that a reliable delivery system has been established in the supply chain of RSPO-certified raw materialsIntroductionAdoption of certified palm oil*In September 2021, RSPO supply chain certification*3 was obtained for the FANCL and ATTENIR head offices and the Company’s factories (Chiba, Gunma, and Shiga factories).In January 2022, the RSPO book and claim method was used to handle the equivalent of palm oil-derived ingredients used in cosmetics and health foods.From now on, we will gradually switch to the mass balance method, which is physically certified oil.ManagementBy FY Mar/2024 100%Business ModelIn the years to come, we will conduct questionnaire surveys on the status of compliance with the policy and guidelines, and while communicating with our business partners will strive to identify risks in the supply chain and consider countermeasures.The FANCL Group Sustainable Procurement Policy (in Japanese)https://www.fancl.jp/procurement/guideline/index.htmlThe Internal Audit Office conducts a questionnaire survey of business partners every year to monitor the stance of their employees toward purchasing and the status of legal compliance such as with the Subcontract Act. The results of the questionnaire are linked to the building of sound business relationships with our business partners through specific improvements. We have also adopted the results of business partner evaluations as an indicator for medium-term incentives in officer compensation.Procurement with Business Partners That Takes into Consideration the Environment and Human Rights in the Supply ChainThe basic concept of FANCL Group procurement activities is summarized in the FANCL Group Sustainable Procurement Policy, and we have published the Supplier Guidelines as the action guidelines that we would like our business partners to follow. Their content was notified to all our business partners, approximately 2,200 companies in all, in January 2021.Data Section
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