Aiming for Sustainable Raw Material Procurement

Approach

Lion aims to contribute to the achievement of the Sustainable Development Goals (SDGs), a set of shared worldwide goals for 2030. However, palm oil derivatives and pulp and paper products, which are key raw materials in Lion's products, present risks to sustainable development in terms of human rights, labor issues and environmental issues. To address these risks, we have established the Sustainable Material Procurement Policy. Based on this policy, we are advancing initiatives aimed at the sustainable procurement of palm oil derivatives and pulp and paper products.

Sustainable Material Procurement Policy

(1) Basic Policy

The Lion Group recognizes the risks business poses to sustainable development through issues related to human rights, labor practices and the environment, and is promoting the sustainable procurement of materials. In accordance with the Sustainable Development Goals adopted by the United Nations, with special attention to Goal 12, Responsible Consumption and Production, and Goal 15, Life on Land, and the Environmental Guidelines of “realizing a society harmonizing with nature to conserve people’s health, natural ecosystems and biodiversity,” we support the Zero Deforestation.*

*Zero deforestation: No Deforestation, No Peat Development, No Exploitation of People or Communities

(2) Target

For all palm oil, palm kernel oil and their derivatives as well as pulp, paper and wood products used in the domestic Lion Group’s consumer products to meet the sustainability standards of third-party institutions or be sourced from recycled materials by the end of 2030

(3) Scope

Product ingredients, packaging (individual packages, outer packaging, cardboard boxes, packing materials), instruction manuals, pamphlets, booklets, and office supplies

Established July 1st, 2019
Lion Corporation

Sustainable Palm Oil Procurement

Lion is proactively advancing the utilization of plant-derived materials that are carbon neutral and non-depletable. Among the plant-derived materials that Lion uses are derivatives of palm oil—the world’s leading vegetable oil in terms of production volume. Palm oil is produced in principally Malaysia and Indonesia.

Global palm oil production is increasing year by year, partly because oil palms are highly productive and can be harvested throughout the year. However, with the rapid expansion of production, a number of issues have arisen in producing regions, such as the destruction of tropical rainforests and wildlife habitats as land is cleared for the development of new plantations. Furthermore, improper farming operations involving a wide range of human rights and labor abuses that reflect a lack of social justice have been identified. These include poor labor conditions with inadequate consideration given to health and safety, low wages, improper treatment of immigrant workers and the use of child labor.

Since 2006, Lion has been a member of the “Roundtable on Sustainable Palm Oil (RSPO),*” which works toward the resolution of such issues. In 2012, the Oleochemical Production Site of Lion Chemical Co., Ltd., a domestic affiliate that procures palm oil from Malaysia and Indonesia, passed the RSPO’s supply chain certification system inspection and was certified as a plant that may handle RSPO-certified palm oils. Accordingly, Lion started procuring RSPO-certified palm oils from 2012.
By the end of 2020, Lion aims to ensure that all the palm oil derivatives it uses are RSPO certified. In 2019, we progressed in our efforts to purchase RSPO-certified palm oil derivatives and achieved an RSPO-certified procurement rate for palm oil derivatives of approximately 14%.
Going forward, we will continue to work to procure sustainable palm oil.

Targets:

  • For all palm oil, palm kernel oil and their derivatives used in the domestic Lion Group’s consumer products to meet the sustainability standards of third-party institutions by the end of 2030.
  • For all palm oil derivatives purchased by the Lion Group to be RSPO-certified by the end of 2020.

*The Roundtable on Sustainable Palm Oil
The Roundtable on Sustainable Palm Oil (RSPO) believes that for palm oil production to be sustainable, it must not only be compliant with relevant laws and regulations, but economically sustainable, environmentally appropriate and socially beneficial. These requirements are laid out concretely in the RSPO Principles and Criteria. Only palm oil produced in accordance with these seven principles and 40 criteria can be RSPO-certified.

Initiatives at Global Eco Chemicals Malaysia

Global Eco Chemicals Malaysia SDN. BHD. (based in Malaysia, formerly Lion Eco Chemicals) obtained RSPO supply chain verification in June 2014. The company manufactures the environmentally friendly surfactant MES for sale to customers around the world using palm oil as a raw material. Calls for the use of certified sustainable palm oil, produced with adequate consideration given to environmental impact and labor conditions, are increasing globally. Customers in Europe, the United States and Australia, to which the company plans to sell MES, particularly seek MES made with certified palm oil. To meet this demand, Global Eco Chemicals Malaysia maintains supply chain certification.
Going forward, we will continue working to reflect the demands of the market and our customers in our business operations as quickly and fully as possible.

Employee’s Perspective

Maintaining RSPO Supply Chain Certification

We have maintained RSPO supply chain certification since 2014 and are building a framework to meet the needs of customers who require MES made from certified raw materials.
Currently, there is a great deal of demand for certified MES from customers in Europe and United States. In an effort to expand sales going forward, we are working to increase awareness of environmental issues among customers in Asia.

Suggesting MES-Based Detergents That Meet Customer Needs

We analyze the specific conditions of each country and region, such as laundry-related needs and water hardness, to make suggestions about detergents formulated with MES that will be optimally suited to our customers’ needs. We also offer advice about the best manufacturing processes for such detergents.
Generally speaking, the petroleum-based surfactants most commonly used in many countries release more CO2 when they break down in the environment than plant-based surfactants do. I feel that it is my job to explain to customers from a technical standpoint MES’s environmentally friendly features and excellent functionality in an easy to understand way to promote the use of MES.
Going forward, I hope to contribute to expanding sales of certified MES as well as to the development of environmentally friendly products by studying MES-based detergents that meet customer needs.

Sustainable Pulp and Paper Procurement

Pulp and paper are used in the manufacture of Lion’s product packaging, booklets and pamphlets as well as in the copy paper and other office supplies the Company purchases. In order to better protect biodiversity in the procurement of these materials, based on the Sustainable Raw Material Procurement Policy, we are advancing the procurement of third party-certified paper products. As of the end of 2019, the procurement rate of such products was 96%.

Target:

For all pulp and paper used in the domestic Lion Group’s consumer products to meet the sustainability standards of third-party institutions or be sourced from recycled materials by the end of 2030.

*FSC®-Certified Paper
FSC®-certified paper is paper certified by Independent third party. The certification complies with the Forest Stewardship Council® (FSC®) standards for responsible forestry, processing and distribution. The FSC® is an international non-profit organization that aims to promote responsible forestry worldwide, including the appropriate use and protection of forests.
FSC® certification is a system in which products made from wood that has been produced in forests deemed to be properly managed or from other low-risk wood materials can be affixed with the FSC® label and sold as an FSC®-certified.
The FSC® label indicates that a product was made in an environmentally and socially responsible manner. Selecting products with the FSC® label helps to take care of forests.

Lion products with the FSC® label

Participation in External Supply Chain Initiatives

Lion has been a member of the Roundtable on Sustainable Palm Oil (RSPO), an international initiative, since 2006. Furthermore, since 2012, Lion has taken part in the Supply Chain Subcommittee of the Global Compact Network Japan, contributing to the preparation of various publications, such as an introductory text on CSR procurement.

Holding the 9th Regional Purchasing Manager Meeting

In August 2019, we held the 9th Regional Purchasing Manager Meeting. This meeting is held annually with the goals of reducing costs at the overall Group level and reinforcing communication between the purchasing staff of participating companies by fostering personal connections.
In addition to sharing information on and discussing topics related to cost reduction, participants shared knowledge and information about sustainability, including sustainability initiatives to promote across the Group*; topics related to the Sustainable Development Goals (SDGs) as well as marine plastic waste and other environmental problems; and the Lion Group’s sustainable procurement initiatives in Japan (RSPO-certified oils and FSC-certified paper).

*A presentation on the supplier sustainability self-checks implemented in 2018 by Lion Corporation Korea and the necessity of CSR procurement to expand such efforts to other countries where the Group does business

Participating Overseas Group Companies

Green Purchasing

The second item of Lion’s Procurement Principles states that Lion shall “Rationally select business partners not only on the basis of quality, cost and timely delivery, but also regulatory compliance, environmental protection, labor, and human rights, to fulfill our responsibility to customers and to create a sustainable, healthy society.” In line with this principle, we promote environmentally friendly green purchasing on a Company-wide basis.
We utilize an ordering system for employees’ office supplies that helps ensure that such supplies are environmentally friendly products. Through such efforts, we are carrying out our commitment to green purchasing.