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Sustainability Material Issue 8 Respecting Human Rights
Objectives
Ensure respect for the human rights of all stakeholders affected by Group business activities, in line with the LION Human Rights Policy
| Indicators (2030) | Human rights due diligence implementation for material human rights issues ⇒100％ |
|---|---|
| Progress* (2022 results) |
Human rights due diligence implementation Lion Group: 100% Suppliers: 68% |
| Globally Common Measures to 2030 |
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*Percentage of risk assessments conducted for the Lion Group and its suppliers
The Lion Group is committed to taking responsibility for identifying, preventing, mitigating and addressing negative human rights impacts caused or contributed to by its business activities. To do so, we implement human rights due diligence* through the following process based on the UN Guiding Principles on Business and Human Rights and reflecting the advice of external experts.
Recognizing that human rights risks may change as the Lion Group's business and operating conditions evolve, we will seek better ways to enhance the effectiveness of our efforts, such as by regularly reviewing the human rights issues anticipated in the Group.
* Corporate measures to avoid causing human rights violations and provide remediation for the victims of such violations
The Group’s main business encompasses the development, manufacture and sale of household products. Among these, we notably handle many cleaning products, including laundry detergents. The surfactants that comprise the washing ingredients of such products are derived from palm oil, palm kernel oil and their derivatives, which are renewable and carbon-neutral raw materials. The main production areas for palm oil are Malaysia and Indonesia, and we recognize that these countries and areas are not only high risk regarding human rights, but also face environmental, human rights and sustainable procurement issues, such as deforestation due to illegal land clearing. Specifically, we must be vigilant with regard to labor and environmental risks such as overwork for palm plantation workers, the use of child labor and smoke damage from illegal slash-and-burn forest clearing, supply risks related to raw materials for Lion products, and reputation risks from various stakeholders due to the use of unsustainable raw materials.
In addition, for household products, we use many packaging materials (paper and pulp), including individual packaging and cardboard boxes for shipping. Therefore, potential supply risks and reputation risks are anticipated due to the use of wood chips—the raw material of paper and pulp—for which sufficient forest management cannot be assured.
In the manufacturing process, we are supplied with many types of raw materials from a wide array of material manufacturers and work with a large number of production contractors. Therefore, we assume transactions with suppliers whose sustainability activities are insufficiently advanced present potential raw material and product supply risks and reputation risks.
Furthermore, with regard to planning, manufacturing and selling household products, we have in place multiple departments throughout the entire value chain, including procurement, research, planning, production, sales and administration and as of December 31, 2022, consisting of over 7,500 consolidated employees. The content of its business operations is finely segmented. As such, human rights violations could occur, including race and gender discrimination and harassment as well as conflict between employees regarding work content and employee benefits. This could hinder the smooth execution of business.
In order to further clarify the potential and actual human rights risks that may occur in the value chain in the countries and areas where the Group operates, we have identified as relevant to the Group's business activities the following human rights issues* from the International Bill of Human Rights, the Ten Principles of the UN Global Compact, the ILO Declaration on Fundamental Principles and Rights at Work, the Children’s Rights and Business Principles and other international standards related to human rights.
In identifying human rights issues, we have referred to the social context surrounding business operations and human rights, the United Nations Environment Programme Finance Initiative (UNEP) and guidelines on human rights formulated by the Japan Business Federation.
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Identified Human Rights Issues
Forced and coerced labor; freedom of movement and residence; child labor; right to an education; rights of young workers; freedom to form and join trade unions; equal pay for equal work; discrimination in hiring; discrimination in conditions of employment; discrimination in opportunities and evaluations; protection of motherhood and childhood; harassment; freedom of thought and religion; overwork and excessive working hours; right to rest and leisure; just compensation and living wages; freedom of choice of employment and protection against unemployment; right to safe and healthy working conditions; right to a decent standard of living and health; right to social security; right to privacy; impacts on the lives of local residents; access to water; environmental management; consumer safety and health
The Lion Group identified certain human rights issues as potential challenges to its business activities through an assessment of potential and actual impacts on our stakeholders: our employees and temporary employees; business partners including third-party contractors; suppliers; communities including indigenous peoples; and consumers.
Based on the United Nations Guiding Principles Framework and other guidelines on human rights, we assessed the scale of human rights violations, the scope of those violations, the possibility of resolution and the likelihood of occurrence. This task was undertaken mainly by persons responsible for the relevant departments as well as an investigative committee on human rights and external experts, who after making a comprehensive judgment, created a risk map that identified outstanding human rights issues which are priorities for the Company.
To prevent, mitigate and remedy negative human rights impacts, priorities identified by the human rights impact assessment, the following actions will be taken.
| Priority Issues for Rights Holders | Measures to prevent, mitigate and correct negative impacts |
|---|---|
| Suppliers using forced labor, child labor, the rights of young workers, overwork and excessive working hours, the right to enjoy safe and healthy working conditions, freedom of residence and relocation, the right to education, freedom of work and employment security |
To prevent, mitigate and correct the negative impacts of such violations as suppliers using forced labor, we will promote the procurement of RSPO and FSC certified products, Sedex membership of major companies and Lion Group Supplier CSR Guidelines self-checks. We will also add the Lion Human Rights Policy, the International Bill of Human Rights, and the ILO Declaration on Fundamental Principles and Rights at Work to the memorandum of the Lion Group Supplier CSR Guidelines and require that the human rights policy be endorsed and followed by suppliers as well. |
| Community access to clean water resources, impact on local livelihoods and environmental management |
To prevent, mitigate and correct such negative impacts as lack of access to water resources in communities of local residents living near supplier bases, we will add questions regarding environmental management in the subrecipient self-check to ascertain the status of specific initiatives for the community. In addition, we will encourage suppliers with low scores to take corrective action by conducting additional interviews. |
| Overwork, excessive working hours and internal employee harassment among our business partners |
To prevent, mitigate and correct the negative effects of overwork and excessive working hours at our business partners, we are working to disseminate and establish the Lion Group Charter of Corporate Behavior and the Lion Human Rights Policy through e-learning and training programs for our employees. We will also appropriately disseminate information regarding the Lion Human Rights Policy and AL Heart Hotline available through avenues such as the Company's website to our business partners. |
| Consumers’ right to privacy |
To prevent and reduce the risk of personal information leaks and thereby protect consumers’ right to privacy, we have established policies and regulations such as the Personal Information Management Regulations, the Basic Policy of Our Information Management, the Information Management Regulations and the Information Security Regulations in accordance with the Act on the Protection of Personal Information. |
Each preventive, mitigating and corrective measure is assigned a qualitative or quantitative indicator and the investigative committee on human rights regularly monitors the progress of each measure, reporting to the person responsible for the relevant department while tracking and evaluating their efficacy.
The status of human rights initiatives, etc. will be published on the Company's website as necessary.
The Company implements annual e-learning training for all domestic employees (including part-time employees) to ensure that the Lion Group Charter of Corporate Behavior and the Lion Human Rights Policy are widely understood and firmly established.
In addition, every year we conduct a Compliance Awareness Survey for all domestic employees (including part-time employees) to quantitatively and qualitatively assess their awareness of compliance, including with regard to human rights and workplace behavior, while providing feedback to each department on the results to raise employee awareness and create a better environment.
In 2022, in promoting human rights due diligence, we held study sessions and exchanged opinions on business and human rights with directors, Audit & Supervisory Board members, executive officers, managers of divisions with human rights jurisdiction and external experts to deepen understanding of the issues.
The Group also participates in such external initiatives as workshops held by the Human Rights Due Diligence (HRDD) Subcommittee of the Global Compact Network Japan (GCNJ) to promote understanding of social conditions surrounding human rights. The Japan Cosmetic Industry Association (JCIA), to which we belong, has formulated Sustainability Guidelines and, through a social issues subcommittee, held a seminar for its members on respect for human rights and gender equality in 2023.
The Group has established the AL (All Lion) Heart Hotline, an internal and external whistle-blowing system, as a grievance mechanism to manage complaints about transgressions of business ethics, particularly those involving human rights.
Through this system, whistleblowers can be stakeholders from outside the Group, like business partners. The privacy of whistleblowers and informants is safeguarded and secrecy is assured for any investigations. Aside from anonymous reports, etc., all instances are also relayed to all informants.
We conduct interviews with the heads of eight overseas Group companies on issues regarding human rights that are assumed to be incorporated into their business activities. During those hearings the Company uses the Sustainability Status Sharing Sheet, which with the help of external experts, identifies the issues that need to be considered in the countries and areas where we operate with respect to key sustainability issues as a means of ascertaining the status of prevention, mitigation and corrective measures and responses, as well as monitoring the progress of such measures and responses.
For suppliers that conduct business with our overseas affiliates, we implement self-checks based on the Lion Group Supplier CSR Guidelines to assess the impact of suppliers on matters related to the Group's Procurement Policy, including human rights and labor.
The Group is taking the following steps to reduce the risk of potential human rights violations along various value chains involving the procurement of raw materials, activities at the Company and use by consumers.
An overall layout of our efforts to prevent human rights violations by value chain and stakeholder
The Lion Group has clarified its stance on sustainability, including legal compliance, environmental conservation and respect for human rights in its Procurement Policies as part of its efforts to prevent human rights violations in raw material procurement. The Group is also evolving its efforts with its suppliers.
We are also promoting the sustainable procurement of palm oil, our main plant-based raw material, as we recognize the importance of such efforts.
| Prevention and Mitigation Measures | Targets and Progress in 2022 |
|---|---|
| Procure third party-certified raw materials → Procure products certified by the Roundtable on Sustainable Palm Oil (RSPO) and Forest Stewardship Council (FSC) |
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| Promote trade with suppliers with the ability to resolve social and environmental problems that may occur in the supply chain → Suppliers that support efforts aimed at zero deforestation |
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| Prevention and Mitigation Measures | Progress in 2022 |
|---|---|
| Regular risk evaluations of the sustainability activities of suppliers | Implementing self-checks based on the Lion Group Supplier CSR Guidelines for suppliers of Lion, domestic Group companies, Lion Corporation Korea, Qingdao Lion and Southern Lion Sdn. Bhd. |
| Risk assessment through Sedex: 18 companies | |
| Identification of high-risk suppliers | Set standards for high-risk suppliers for self-checks based on the Lion Group Supplier CSR Guidelines |
| Audits of high-risk suppliers and formulation of improvement plans | High-risk suppliers were not applicable |
*As of March 2023
As part of our efforts to ensure that our customers can use our products safely and with peace of mind, we have established a Product Management System, a set of rules that defines our business processes and quality assurance at each stage of product development. In addition to complying with the Act on Pharmaceuticals and Medical Devices, the Act against Unjustifiable Premiums and Misleading Representations, the Health Promotion Act, and other related laws and regulations, we have established a representation drafting manual and conduct accurate and moderate advertising and promotions that do not cause misunderstanding or discomfort, taking the customer's viewpoint into consideration.
In countries and areas where many Muslims live, such as Malaysia and Indonesia, we are working to obtain Halal certification* so that local consumers can use our products with peace of mind.
*Certification under systems for labeling products that have cleared halal certification standards with a halal-certified mark. A halal certificate issued by a certifying body officially recognized by the country’s halal certification authority is required to sell products with a halal-certified mark.
