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Together with Supply Chains Aiming for Sustainable Raw Material Procurement

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The Lion Group 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 the Lion Group's products, present risks related to raw material procurement 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 Palm Oil Procurement

The Lion Group 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.

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The Raw Material Behind Palm Oil: Oil Palms

Palm oil production is increasing year by year, partly because oil palms (the source of palm oil) 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 Group started procuring RSPO-certified palm oils from 2012. The Lion Chemical Corporation Fine Chemical Production Site received RSPO supply chain certification in March 2020, and Lion Corporation and all its plants (the Chiba Plant, Odawara Plant, Osaka Plant and Akashi Plant) were certified in August 2020. Moreover, the Lion Specialty Chemicals Co., Ltd. were certified in June 2022.

The Lion Group’s aim for the end of 2030 was to ensure RSPO certification for all the palm oil derivatives it uses. As of the end of 2021, Lion had switched to RSPO-certified products for 93% of its key raw materials.

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.

* 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.

RSPO Supply Chain Verification certificates of the Lion Chemical Co., Ltd. Oleochemical Production Site and Fine Chemical Production Site
RSPO Supply Chain Verification certificate of Lion Corporation and all its directly owned plants
RSPO Supply Chain Verification ertificate of the Lion Specialty Chemicals Co., Ltd.

Sustainable Pulp and Paper Procurement

Pulp and paper are used in the manufacture of the Lion Group’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 Material Procurement Policy, we are advancing the procurement of third party-certified paper products. As of the end of 2021, 98% (by weight) of such products procured from domestic manufacturers was third-party certified, and 65% (SKU) of packaging materials for major products was third-party certified. In addition, we have identified the country of harvest’s administrative divisions (states, provinces, etc.) for 100% of the woodchips and pulp used in our product packaging.

Target:

For all pulp, paper and woodchips 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.

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

The Lion Group holds the Regional Purchasing Manager meeting 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 2021, the conference was held online in September, with participation from six countries including Japan. At the conference, the 11th of its kind, representatives from each company reported on their ESG initiatives, challenges facing Purchasing Departments with the COVID-19 pandemic, cost reduction efforts and other issues, and shared information. We will continue to support the purchasing activities of each company to strengthen the purchasing power of the entire Group.

Participating Overseas Group Companies

  • Lion Corporation (Thailand) Ltd.
  • Southern Lion Sdn. Bhd.
  • PT. Lion Wings
  • Lion Corporation (Korea)
  • Lion Daily Necessities Chemicals (Qingdao) Co., Ltd.
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Participating purchasing staff of each company at the online meeting

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.

Transition to Biomass Inks for Product Packaging

Products with reduced environmental impact are required if we are to minimize environmental problems such as marine plastic pollution and global warming. With this aim in mind, Lion has started using biomass inks* made from plant-based raw materials for some of the color inks used in product packaging (pouches, shrink films, attention seals, labels, etc.).

* Inks designed with biomass-derived raw materials as a portion of the resin component and comprising more than 10% plant-based ingredients in the ink film once dry.

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