We aim to build coexistence and coprosperity with trading partners in accordance with the FANCL Group Sustainable Procurement Policy in order to realize sustainable procurement that is considerate of the environment, human rights, and labor issues.

The FANCL Group Sustainable Procurement Policy sets forth basic rules for relationships with suppliers, and the Trading Partner (Supplier) Guidelines include an anti-corruption clause to ensure that all suppliers are fully aware of these rules.
When negotiating an agreement with a new trading partner, we first carry out an onsite inspection and then confirm that it will comply with the Trading Partner (Supplier) Guidelines before concluding the agreement. We also carry out regular surveys and interviews with existing trading partners to check their status regarding compliance with the procurement policy.

Collaboration with trading partners is essential for practicing responsible, sustainable procurement. We are advancing a succession of initiatives aimed at strengthening the relationships of trust we have already built with these partners.
In June 2023, we became a new member of Sedex^※. Going forward, we will use Sedex to centralize the management of information concerning the environment, human rights, and labor in our supply chains, and we will also encourage trading partners to join Sedex to expand our information network, with the goal of creating a framework for monitoring, identifying, and analyzing supply chain risk.

Sedex is a reporting platform for sharing and verifying information on labor standards, health and safety, the environment, and business ethics, to promote responsible business practices in the supply chain.

To fulfill our responsibility to ensure that the human rights of all people involved our supply chains are respected, the FANCL Group Sustainable Procurement Policy and Trading Partner (Supplier) Guidelines stipulate respect for human rights in supply chains. We have established mechanisms to respond to human rights risk in accordance with the UN's Guiding Principles on Business and Human Rights, and if we identify any way in which the Group might negatively impact the human rights of anyone in society, we work to prevent or mitigate this impact. When opening discussions with a new trading partner, we inform them of our Trading Partner (Supplier) Guidelines in advance and do not start trading until they have agreed to comply with the guidelines. We have also established the Trading Partner Helpline to handle complaints and reports from trading partners, and we work to build and maintain fair and equitable relationships with all of our trading partners.

Click here for more information on the Trading Partner Helpline

The procurement of raw materials is accompanied by various environmental and social issues, including human rights violations such as forced or child labor.
The FANCL has positioned palm oil as a high-risk material, so we have made it a priority to share these issues with trading partners who supply the palm oil used in our mainstay product Mild Cleansing Oil and to work with them on switching to RSPO^※-certified oil. We are steadily switching the palm oil used in our business to RSPO-certified oil based on the understanding of our trading partners.

• Roundtable on Sustainable Palm Oil

Click here for more information on the Procurement of sustainable palm oil

As part of our efforts aimed at building relationships of mutual prosperity and coexistence with our trading partners and maintaining fair and appropriate dealings, each year we carry out a questionnaire survey^※ and hold interviews with these partners.
Through daily communication and collaboration on projects, we strive to ensure human rights with the trading partners we deal with directly, including asking that they factor things like working hours and holidays into considerations concerning delivery dates and schedules.
In September 2023, we held a Trading Partner Appreciation Event to show our appreciation to the partners who have supported us since our establishment and to outline our expectations for the future. We will continue to value our trading partners and build firm relationships of mutual prosperity and coexistence.

• Trading partner questionnaire surveys monitor areas such as laws and regulations, including the Subcontract Act, and the general state of compliance. The aim is to facilitate corrections and improvement.