BEYOND INNOVATION, FOR A BEAUTIFUL SMILE!

SUSTAINABILITYREPORT 2023

History of Shinnihonseiyaku

Philosophy
PurposeBeyond innovation, for a beautiful smile!

MissionAchieving the Greatest Possible
Satisfaction and Trust from Our
Customers
Making Our Employees Happy and Giving
Them Dreams for the Future
As a Company That Contributes toSociety, We Aim to Expand Our Efforts Far
and Wide without Limitation

2005

2006

2014

2021

Launched cosmetics brand“RAffINE”

Released “RAffINE Perfect One”

Changed the cosmetics brandname to “PERFECT ONE”

Launched cosmetics brand“PERFECT ONE FOCUS”

Value
Creating inspiration

Credo
We will:
Place importance on greetings, smiles,
and altruism.
Thoroughly implement listening, empathy,
and gratitude.
Act in a challenge, change, andgrowth-oriented manner.

Contents
History of Shinnihonseiyaku/
Editorial Policy/Contents

01

Message from the President

03

Shinnihonseiyaku Value Chain

05

Sustainability Management

07

Materiality Targets and Progress

09

Special Feature
Purpose Permeation Project Roundtable
Discussion

11

Human Resources Development Initiatives

13

Environment
1994

1996

Released
Released “Gokusen“Shanghai
Shanghai Kocha”
Kocha”(Our firstoriginal healthy
tea)

2004

2013

2019

Released "Ryosai
Aojiru"Released “Asaichi Sukkiri! Aojiru Salad”(Now “Asaichi Sukkiri! Aojiru Salad Plus”)

Release of “W noKenko Aojiru”

1994

1997

2000

2006

2012

2016

2018

Started sales ofhealth foods bymail orderStart ofregulardeliverycourseCommenced sales ofbasic cosmetics bymail orderStarted sales ofpharmaceuticals by mailorder

Started wholesale ofcosmetics brand “RAffINE”

Started sales
overseas(Taiwanese market)
by mail orderStarted crossborder EC in the
Chinese market

2000

2010

Environmental Policy and Targets

15

Response to Climate Change

16

Initiatives for a Recycling-Oriented
Society

17

Conserve Biodiversity

18

Response to Water and Chemical
Substances

19

Social
2020

R&D

20

Supply Chain Management

21

Initiatives for Safe and Secure Quality

22

Human Resources

23

1992

2002

2003

2006

2010

2019

2020

2021

2022

2023

Human Rights and Diversity

25

Established
Shinnihonliving
Co., Ltd. (currently
Shinnihonseiyaku Co.,Ltd.)

Renamed to
Shinnihonseiyaku Co., Ltd.

Opened Logistics
CenterEstablished Iwakuni-Hongo
Research Institute as the basefor cultivation and research of
medical plants*

OpenedTokyo
Sales Office(currently Tokyo
Office)Listed on Tokyo
Stock Exchange
Mothers

Changed listing
market to theFirst Section of
the Tokyo Stock
Exchange

Acquired sharesof Flatcraft, Inc.
and made it aconsolidated
subsidiary

Transitioned toPrime Marketof Tokyo Stock
Exchange

Established PERFECTONE US Co., Ltd. in the
United States

CSR

26

*The institute was integrated into
Yoshizuka Office (R&D Center) in
June 2020

Editorial Policy

GovernanceCorporate Governance

27

Executive Compensation System

30

Risk Management and Compliance

31

Editorial Policy for Sustainability Report 2023

Scope of Report

Referenced Guidelines

The purpose of this report is to serve as a communication tool with stakeholders,
and to convey our sustainability initiatives in an easy-to-understand manner. The
contents of this report were discussed by the Sustainability Committee andapproved by the Board of Directors meeting.
We will continue to expand and disclose information.

Shinnihonseiyaku Co., Ltd.

Information Security/
Personal Information Protection

32*Part of the information includes information on the subsidiary "Flatcraft, Inc."

The GRI Standards
TCFD (Task Force on Climate-related Financial Disclosures)

PeriodDisclaimer

Stakeholder Engagement33

WebsiteFY2023 (October 2022 to September 2023)*Where it is appropriate to present historical information, data, and recent examples,
activities and information outside the period covered are reported.

Statements in this report are based on judgments made in light of the information
currently available to us and involve potential risks and uncertainties that could cause
the results of our business activities to differ materially from those projected.

We are updating the "Sustainability" page on the Shinnihonseiyaku Corporate
Website.

Non-financial Data

35

Corporate Profile

36

Shinnihonseiyaku Corporate Site Sustainability Information
https://corporate.shinnihonseiyaku.co.jp/en/company/sustainability/

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Message from the President

environmental considerations, such as the use of certified forest paper and recycled paper for the packaging,which is certified as being made from properly managed
forest wood, and a switch to mail delivery for delivery inconjunction with sales of refills. In the last fiscal year, weformulated the Environmental Policy. One of its objectives is to encourage employees to add an environmental
perspective when considering products and services

Purposein the future. Once again, products and services are
created by people. I believe that if everyone working at

Beyond innovation,
for a beautiful smile!

our company keeps in mind that our corporate activities
are friendly to the global environment, we will be able
to fulfill our social responsibility, develop our humanresources, and further evolve our products. At the sametime, we formulated our Procurement Policy. We owe ourbusiness to our many partners. We will continue to work

into the United States. The COVID-19 pandemic start-

to preserve the global environment throughout our sup-ed when we were finally about to begin our overseas

ply chain with the cooperation of our partners.

expansion, and we had to revise our original plans, but
we hope to use this experience to change into a more

Aiming for sustainable improvementof corporate value
In November 2021, we announced our medium-termbusiness plan, VISION2025, and in FY2023, the second
year of the plan, net sales, operating profit, and ordinary
profit all exceeded those of the previous fiscal year.
In the mail order cosmetics segment, which has

A year that started with a focus on
people to realize Purpose

dreams, aspirations and growth, and that we respect

continued to perform well despite the COVID-19 pan-the personality, individuality, human rights and diversity

demic, we have continued to receive high praise fromof each and every person who works for us, and we will

customers even after the lifting of restrictions on activi-

In FY2023 we took new steps towards realizing our

promote the creation of a workplace that can realizeties, particularly for our All-in-One Gel series. PERFECT

healthy and flexible working styles through the creation

ONE FOCUS, which is expected to be a pillar of ourof a culture in which employees feel a sense of fulfil-

developing brands, achieved net sales growth, mainly

ment.

through EC malls, and significantly exceeded the plan at

purpose, “Beyond innovation, for a beautiful smile!” I lookback on a year in which we have worked together withall employees to discuss and advance what is needed torealize our Purpose.

the beginning of the fiscal year, as a result of the launch

Formulation of Environmental Policy
and Procurement Policy.
Bringing environmental perspectives
to businessof limited design products featuring popular charactersed this to our stakeholders. The establishment of theSince our founding, we have been engaged in thegrowth, with the acquisition of new customers in EC

Purpose reaffirms this belief. A company is all about its

fields of beauty and health. All of the products we carryphilosophy and the people who gather there, and thehave their key ingredients derived from nature and aresuccessful synchronization of these will create a suc-closely related to changes in the natural environment.

cessful business. It is our human resources that support

The recent increase in extreme weather and natural

our products, services, and all our business. Therefore,

disasters, which are said to be caused by global warm-

I feel that taking care of employees and their families ising, could have a major impact on our products manu-

more important than anything else for the future of thefacturing.

When I consider realizing our Purpose, it is inevitable
to think that human resources are what realize it andmaterialize it. I have long believed that people are thetreasure of our company, and we have communicat-

company. Investment in human capital is essential for

Perfect One has a range of products that are multi-

the sustainable improvement of corporate value. In thefunctional. For example, our main products, the PERFECT

last fiscal year, we formulated the Human Resource De-

ONE All-in-One Gel series, combines more than six

velopment Policy and the Internal Environment Develop-

functions. It has also been considered to contribute toment Policy in order to make each employee understanda resource-saving measure since the beginning of thethe concept better. We declare that all employees havesales. In addition, we will continue to make efforts foramong people in their teens and 20s, as well as collaboration measures with influencers. In the healthcare sector, sales of W no Kenko Aojiru (Doubly Healthy Green
Drink), a food with functional claims, are driving net sales
increasing further. While consumption by foreign visitors
to Japan is recovering, we also promoted initiatives suchas the launching of sales of PERFECT ONE at drug
stores, the expansion of store bases handling PERFECTONE FOCUS, and the re-stocking of our products at
airport duty-free stores.
With regard to overseas sales, although there are differences in progress between countries due to the trendof lifting restrictions on activities in each country following the COVID-19 pandemic, net sales have remained at
the same level as the previous year due to the expansionof sales in Taiwan. In July, we established a subsidiaryin the United States with an eye to full-scale expansion

resilient and stronger company.
Following the approval of the Ordinary General Meeting of Shareholders in December 2023, we transitioned
to a company with an Audit and Supervisory Committee.
There are two main purposes for this transition. One isto further enhance corporate governance by making
Audit and Supervisory Committee Members constitutethe Board of Directors, and to achieve more transparent management by having the Audit and Supervisory
Committee, the majority of whose members are Outside
Directors, responsible for auditing and supervising thelegality and appropriateness of the execution of duties
of Directors of the Board. The other is to speed up management decision-making and business execution bydelegating some important business execution decisions
to Directors of the Board. With this change in institutional design, we aim to further enhance our corporate
value by establishing a structure that more accurately
meets the expectations of our stakeholders in Japanand overseas.
At the core of our company are "customer satisfaction," "employee happiness," and "contribution tosociety." Growth for these three is the reason for our
existence, and our ultimate target is to implement theMission that incorporates this without becoming a mere
shell, and to make Purpose tangible.
With the awareness that our efforts can affect eachand every person on the planet, we will continue to
conduct our business in a sustainable manner and contribute to bringing smiles to the faces of our customers
every day.
President & Representative
Director of the Board andChief Executive Officer
Takahiro Goto

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Shinnihonseiyaku Value Chain At each stage of our business activities, Shinnihonseiyaku is implementing initiatives to achieve a sustainable society.
Products planningand development

Marketing

Products
manufacturing(OEM)

Advertisement
planning andproduction

Promotional
planning

Sales activities

Delivery tocustomer

After-sales
follow-up

Collect customer and market
voices and plan and propose
new ideas.

Planning and development of
products based on market
research and customer
database marketing.

Establishing a system for
quality and safety assuranceof products through close
cooperation with OEM
partners.

Formulating and executing
advertising strategy aimed atacquiring new customers.

Formulation of sales
strategy. Planning andanalysis of sales promotions.

Online and offline mail order.
Wholesale for GMS, drug
stores, etc.

Products storage
management for stablesupply. Maintain and improvedelivery quality.

After-sales follow to improvecustomer loyalty.

FeaturesFeaturesFeaturesFeaturesFeaturesFeaturesFeaturesFeaturesMarketing utilizing
accumulated customer
database.

Products planning anddevelopment using original
materials and technologies
through R&D.

Quality assurance and safety
management based on
in-house standards thatexceed legal requirements.

Cross-media advertisingstrategy using TV,
newspapers, and the Internet.

Creating and directing
promotional tools using
customer databases.

Conducting optimal productproposals through at callcenter dialogue.

Delivery quality utilizing theexpertise of our own
Logistics Center.

Hospitality tailored to eachcustomer at the call center.

Providing products andservices to improvecustomer satisfaction

Response to environmental
issuesProviding products andservices to improvecustomer satisfaction

Response to environmental issues
Reduced paper waste by improving delivery documents.

Providing products andservices to improvecustomer satisfaction

Response to environmental
issuesProviding products andservices to improvecustomer satisfaction

Strengthening compliance and risk management initiatives

Product proposals that match
each customer at our callcenter.

Conducting questionnaires
through delivery documents
and monitoring of new
products.

Adoption of environmentallyfriendly raw materials.
Expansion of refill products.

Providing products andservices to improvecustomer satisfaction
Implementing products
development reflecting
customer questionnaire
results.

Conducting quality
assessments before mass
production and shipment.

Checking for violations of various laws and regulations in advertising
media and promotional materials based on our own guidelines.

Reduction of packing
materials by switching maildelivery.

Providing products andservices to improvecustomer satisfaction

Responsible supply chain
management
Evaluate OEM partners andconduct periodic audits.

Consultation by acommunicator with expert
knowledge at our call center.
Providing beauty and healthinformation through DMs,
included flyers, andsubscriber news magazine.

Improving and enhancing
delivery boxes andcushioning materials toreflect customer feedback.

Foundation for supporting our business
Compliance

Human resources
Information security
Protection of personal
information

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Risk management

Corporate governance

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■ Materiality identification process

Sustainability Management
Shinnihonseiyaku is striving to promote management in order to achieve sustainable
development as a company under our Purpose, “Beyond innovation, for a beautiful smile!” We
will work together with our stakeholders to realize a sustainable society through the "beyond
innovation" in beauty and health that we have set forth in our Purpose.

■ Basic Sustainability Policy

With reference to our policies, international frameworks and principles*, social
conditions, and other factors, we have identified 39 social issues to be considered.

Identification ofsocial issues*GRI, SASB, ISO 26000, SDGs, etc.

Prioritization ofsocial issues

We evaluated the identified social issues from two perspectives: their importance tostakeholders and their importance to our business, and prioritization was conductedwith various divisions within the company.

Formulation ofmateriality
proposals

The selected social issues were organized into six categories based on their content
and characteristics, and materiality proposals were prepared.

Verification ofvalidity

We exchanged opinions with management on the proposed materiality and the process
to formulate it, and verified its validity.

Identification ofmateriality

The materiality was identified with management approval.

Limitless Future
Under the Purpose of “Beyond innovation, for a beautiful smile!,” our Group aims to resolve issues
surrounding the global environment and society, and contribute to the realization of a sustainable society
together with our stakeholders.

■ Toward the realization of a sustainable society
We will contribute to the realization of a sustainable society through our business activities based on the
Shinnihonseiyaku Group Basic Sustainability Policy.

■ Sustainability promotion system
We have identified materiality (key issues) related to sustainability and are developing a promotion system to solve
them. Materiality and other important matters related to sustainability are discussed and resolved by the Sustainability
Committee chaired by the President & Representative Director of the Board and Chief Executive Officer. Matters
discussed and resolved by the Sustainability Committee are reported to the Board of Directors as appropriate. In
addition, targets have been set for efforts to resolve materiality, and related divisions and conferences across the■ Materiality map
In identifying materiality, we evaluated social issues on two axes: "Importance to stakeholders (Customers,
employees, shareholders, investors, environment, local communities, government, etc.)" and "importance to ourbusiness." We have identified social issues of particular importance to our company and identified six materialities (keyissues) among them.

company are taking initiatives and promoting efforts.

● Response to environmental issues●P roviding products and services toimprove customer satisfaction

Board of Directors
ReportSustainability Committee
ESG Promotion Office (Secretariat)

Other related conferences

Corporate Planning Division

DX Strategy Division

Information Systems Division

Management Division

Finance & Accounting Division

Product Management Division

Overseas Business Division

Retail Marketing Business
Development Division

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

Retail Marketing Division

Communication Strategy Division

Product Development Division

Mail Order DivisionMarketing Division

Management Promotion Division

7● Responsible supply chain management

Importance to stakeholders

Supervision andrecommendations●P romotion of women’s participation andadvancement●S trengthening compliance and risk
management initiatives● Protection of personal information

Importance to our business

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■ Major initiatives in FY2023

Materiality Targets and Progress

Survey and understanding resource usage
Shinnihonseiyaku has identified six materialities that need to be prioritized for the realization ofa sustainable society and the sustainable growth of our company. We also set targets for theidentified materialities and promote initiatives to achieve these targets under the supervision of
the Sustainability Committee.
Materiality

Environment

Response toenvironmental issues

Items

Targets

FY2023 Results

Maintaining adequate inventory turnover

25

23

Percentage of eco-friendly cushioning
materials used

100% by FY2030

100%

Percentage of certified paper used in
product packages and shipping boxes

100% by FY2030

Shipping boxes: 88%
Product packages:
35%

Completed by
FY2023Completed

Survey and understanding resource usage
Understand the actual situation in order to set
specific reduction targets

Providing products
and services toimprove customer
satisfaction

Responsible supply
chain management

Organize unique evaluation items and set
targets to improve customer satisfaction

Completed by
FY2023Completed

Formulation of the Procurement Policy thatconsiders sustainability

Completed by
FY2023Completed

FY2024

Started considering
supplier guidelines
for awarenessactivities.

30% or more by
FY203015%Completed by
FY2024

Under consideration
for achieving thetargetConduct awareness-raising activities for
suppliers based on the Procurement Policy

Ratio of female managers**Section manager or above

SocialBuilding a system for balancing childcare
and nursing care with work
Review of the current system and establishment of
a new system

Promotion of women’s
participation andadvancement

Strengthening compliance and risk management initiatives
GovernanceProtection of personal information

In-house breast cancer implementation
rate

100%

Relevant SDGs

Related pages: p17 Initiatives for a Recycling-Oriented Society⃝ Resource-saving efforts
To reduce the use of plastic, we launched a refill for our main
products, PERFECT ONE Moisture Gel, in May 2023. We plan tolaunch refillable versions of all the products in the All-in-One Gel
series.

Organize unique evaluation items and set targets
to improve customer satisfaction

Related pages: p22 Initiatives for Safe and Secure Quality⃝ Formulation of evaluation indicators to improve customer
satisfaction
Leaders of relevant divisions, mainly those participating in the
Quality Conference, met to discuss our company’s original customer

100%

satisfaction and formulated evaluation items to measure customer
satisfaction.

Formulation of the Procurement Policy thatconsiders sustainability

Related pages: p21 Supply Chain Management⃝ Formulation of the Procurement Policy
Managers of departments deeply involved in products procurement,
including the Product Management Division, met to discuss what it

Improving breast cancer screening rates inFukuoka Prefecture

55% or more by
FY2026**Scheduled to referto the"Comprehensive
Survey of Living
Conditions"published by the
Ministry of Health,Labour and Welfare
in 2026

Conduct awarenessactivities for breast
cancer screening

Number of serious compliance violations

00

Training attendance rates for complianceand risk management

100%

100%

Number of serious incidents related to
information security00

Number of serious personal information
breaches0

Training attendance rates for information
security and personal information protection

100%

would take to build a sustainable supply chain, and then formulated
the Procurement Policy.

Improving breast cancer screening rates in Fukuoka Prefecture

Related pages: p26 CSR⃝ Conduct awareness activities for breast cancer screening inFukuoka Prefecture
We carried out activities to raise awareness of breast cancer

0

screening in cooperation with Happy Mamma, an NPO certified by
Fukuoka City, at a match of Avispa Fukuoka, a professional soccer

100%

team based in Fukuoka, which was sponsored by our company.

*Maintain numerical values for those that do not have a set achievement year

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Special Feature

Purpose Permeation Project
Roundtable Discussion

Q Project?
●

What did you do in the Permeation

Yonemura:

In carrying out this project, I thought that withouta goal for the project itself, the purpose of the
project would be to implement measures along
the way. So we worked on setting goals first.
After discussions with the members, the goal
was set as "a situation in which employees arevoluntarily practicing actions with awareness of
the Purpose." And it was decided to work toward
this goal by dividing the phases into recognition,
understanding, empathy, commitment, andvoluntary actions. In FY2023, we promoted

Employees participating in group work

awareness and understanding of the Purpose.

Q●
Shinnihonseiyaku established its Purpose in January 2023. The
employees in charge of the Purpose Permeation Project wereasked to review the project so far and discuss future activities.
Participants
IR and Public Relations Office, Management Promotion Division:
Konishi, Hirabayashi, YonemuraIs the implementation of group work andthe display of the Purpose throughout thecompany are part of the measures for this"recognition" and "understanding" phase,
isn't it?

that this group work would help employees who
were wondering, as I did at the beginning, "Whatis a Purpose?" And I hoped that this group work
would give employees the opportunity to findYes. At first, I had all sorts of worries about how

as their Purposes. Therefore, we incorporated

to promote awareness and understanding, anda game where participants matched Purposes

how to communicate this to employees. However,to companies into this group work. I believe thatwhen I had the opportunity to speak with a personby thinking about the connections between

who is in charge of the purpose permeation inother companies' Purposes and the company's

other company, I was advised to strike while thebusiness on their own, they were able to thinkiron is hot. Those words made me think that weabout Purposes in a more active manner.

should keep moving forward with the measuresresults and correct the course. I'm working on
it every day “let’s just give it a try.” Now, in orderQ●

to make sure that all employees understand that
Purpose is the axis of our company in the future,

let us know your thoughts and feelings
when you started this project.

Yonemura:

conducted group work on the Purpose. I hoped

out for themselves what other companies have
Konishi:that we can implement anyway, and see theWhat circumstances led you to launch theQ● Purpose Permeation Project? Also, please

Hirabayashi: I gathered employees from each division and

we put Purpose on every bulletin board, ballpoint
pen, sticky note, PC wallpaper...and everywhereelse.

In 2022, when our company celebrated its 30 year
anniversary, we worked together with management

Thank you. Now, as one of our employees, I
feel that wherever I look in the company,
the Purpose catches my eye. I am surethat all employees feel the axis of thecompany is changing through thesevisually noticeable changes. Finally, what isyour outlook for the future?

Konishi:to formulate the Purpose. From the formulation

promote this project with a sense of speed, andphase, we thought that it would be meaninglessto dissolve the project when the Purpose is talked

if we did not make it permeate throughout theabout within the company as a matter of course.

company, so we very naturally decided to launch
the Purpose Permeation Project. The Purposeis the “why” of the company, and the Mission is

Yonemura:
Announcement of Purpose at the Management Policy Presentation

The other is that as more and more new
employees join, we need to consider how to

the “what” (what we do). I believe that awarenessof the “why” will lead to the realization of ourI believe that there are two things, and one is toincorporate the practice from the permeation
Konishi:At first, I was not familiar with the word "Purpose"of the Purpose into the internal structure of the

because I also joined the project after it wascompany. I believe that there is no end to efforts

formulated. As I proceeded to understand it
Hirabayashi: Since I joined the project after the Purpose wasto promote the permeation of Purpose when there

better, I came to realize that “we should just keep

formulated, I did a lot of information gathering tois employees are moving around, and I would likeon valuing what our company has always valued.”

Mission.

understand what the Purpose is. I thought otherpeople would probably feel the same way about

to continue to work with the aim of making it a
Purpose goods distributed to employees

normal part of our company's culture.

the questions I was having, so I thought I had tounderstand them first.

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Special Feature

Human Resources Development Initiatives
We believe that human resources are important for our company to continue to grow and develop. With theestablishment of Purpose, we reviewed our Ideal Human Resource Image and defined our ideal employee as "A person
who embodies the Mission and practices the Credo to realize the Purpose." In addition, we have formulated the Human
Resource Development Policy to realize our vision for the Ideal Human Resource Image. In the future, we will continue
to improve the workplace environment based on the Internal Environment Development Policy formulated in parallelwith the Human Resource Development Policy, as well as develop human resources development measures andpersonnel systems based on the Human Resource Development Policy.

Related pages: p23 Human Resources

Realization of Purpose
Ideal Human
Resource Image
Human Resource
Development Policy
Personnel systems and human resources
development measures

Ideal Human Resource Image

Human Resource Development Policy

In order to realize our Purpose, the ideal employee will embody the philosophy as an employee of
Shinnihonseiyaku and have the ability to put the Credo into practice.

We believe that in order to realize “Beyond innovation, for a beautiful smile!,” as statedin our Purpose, it is essential for all employees to have dreams and aspirations, and togrow through daily challenges.

1 As an employee of the company, have a work attitude, sense of ethics, and human skills appropriate to theirposition.
2 Treat all people around us with love, never take anything for granted, and always act with a spirit of gratitude
both inside and outside of the company.
3 Possess the ability to see changes in social conditions and business conditions in a positive manner, use themas opportunities for personal growth, and lead to the creation of innovation.
4 Possess the ability to face various challenges with an orientation toward challenge, change, and growth, and to
produce results with high performance while maximizing the value of previous experience.
5 Possess the ability to contribute to the development of future generations by always keeping in mind therealization of Purpose and spreading it to those around them for the company's permanent development aswell as their own personal growth.

1 We will realize our Mission and management policy, as well as develop the next generation ofleaders who will solve social issues.
2 We will develop human resources who continue to challenge themselves, without losing sight of
their own value, even in a complex and ever-changing environment.
3 In order to continue to create new value in times of high uncertainty, we will develop diverse humanresources by respecting individuality such as age, gender, nationality, expertise, and experience.
4 We will develop human resources who do not take everything for granted and strive to realize their
dreams and aspirations with gratitude.

Workplace environment

Human resources development measures
Internal Environment Development Policy
Our Charter of Conduct stipulates the creation of a working environment. To create a work environment where employees feel comfortable and rewarding to work, we have formulated theInternal Environment Development Policy.

We respect the character, individuality, human rights, and diversity of our employees and realize a comfortable, pleasant, and rewarding work environment.
1 Respect for human rights and diversity
In addition to attributes such as nationality, race, gender, and age, we respect all kinds of diversity such as experience, sensitivity, values, and expertise, and create an environment in which each
employee can demonstrate each individuality and abilities and play an active role.
2 Promoting the safety and security of employees and their physical and mental healthTo create an environment where each and every employee can perform their duties safely and securely, we will enhance organizational capabilities through active communication and create anenvironment that generates innovation.
As a company that provides the "innovation" in beauty and health around the world, we are committed to raising the health awareness of our employees and promoting physical and mental health.
3 Realization of flexible working styles
We aim to improve productivity and the work-life balance of each employee by supporting flexible working styles.
4 Realization of a rewarding culture
We value the autonomy and challenging spirit of each and every employee, and we strive to maximize performance by creating culture in which we can grow ourselves through challenging andlively work.

Shinnihonseiyaku has been developing various training programs to improve theindividual knowledge and skills of employees and to support their challenges andgrowth. In addition to training by job level according to the employee's role and by
department according to the expertise of the department, we also provide training that
employees can participate in on their own initiative.
■ Courses taught by employees
In addition to company-led training by level and department, employees serve as instructors
for various courses to acquire qualifications and improve knowledge and skills as opportunities tosupport employees' independent learning.

▼ IT Passport Acquisition Support Course

A total of eight lectures were held by the DX Strategy Division to support the acquisition of the"IT Passport," a national qualification that can prove basic knowledge about IT, and to raise thelevel of IT and digital skills.

Voice from Human Resources Section personnel■ Improvement of working environment
To ensure that employees can engage in their work with peace of mind and good mental and physical health, we are working to improve the working
environment by providing a company cafeteria that offers health-conscious meals to employees and counseling services for the mental and physical.

▼ Smart lunch (Healthy set meal)
The employee cafeteria at the Head Office serves daily set meal as called "smart lunch" under the supervision of a registered dietitian. Smart lunch isdesigned to provide 1/3 of the daily energy intake needed by adult women.
Smart lunch served in the cafeteria

13

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

Utsunomiya, Human Resources
Section, Management Division

For our company to grow sustainably, it is essential todevelop human resources that drive the realization of
our Purpose. In order for human resources to develop,
we believe that the first priority is to create a systemthat supports new challenges and an environment inwhich people can work with satisfaction. Based on thetwo policies we have formulated from this, we intend tolay the groundwork so that each employee can enhancetheir own value.

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

14

ENVIRONMENT
Environmental Policy and Targets

Response to Climate Change

For the sake of an “unlimited future,” Shinnihonseiyaku considers that addressing environmental issues,

In recent years, extreme weather events, which are thought to be caused by global warming, have been

including climate change, is an important issue for the continuation of our business, and we will continue tooccurring frequently and are becoming more serious every year. Since FY2022, Shinnihonseiyaku has beentake environmentally friendly measures in all aspects of our corporate activities.

monitoring CO2 emissions and promoting efforts to reduce them.

Environmental Policy

Environmental targets

Understanding CO2 emissions

TCFD

In June 2023, Shinnihonseiyaku formulated the

We set various targets to promote our response toEnvironmental Policy after receiving approval of theenvironmental issues, and discuss their progress with theof CO2 emissions in order to set a target for reducing

accordance with the TCFD last year, we identified theSustainability Committee. In line with this policy, we will work

Sustainability Committee.

emissions.

financial impact.

to promote our business and solve environmental issues.

In order to realize the Our Group’s Purpose of “Beyond
innovation, for a beautiful smile!,” we will engage incorporate activities that are friendly to the global
environment, and that contribute to local communities
and society through business activities.

■ Effective use of resources
We will make effective use of limited resources to strive
to improve the recycling rate of resources, reduce waste,conserve energy, and conserve water.

■ Conservation of biodiversity

Percentage of eco-friendly
cushioning materials used

100% by FY2030

Percentage of certified paper
used in product packages andshipping boxes

100% by FY2030

Survey and understanding
resource usage

Completed by FY2023

Promotion system
In order to promote company-wide efforts to address■ CO2 emissions in FY2023 (unit: t-CO2)

follows.

Impact on our company

company, in addition to the identified materiality, in order toengage in business activities and environmental conservation.

Risk factors

Risk details (Expected financial impact)

2°C or less scenario

4°C scenario

2030

2050

2030

2050

⃝ Increase in raw material costs due to the carbon tax: The imposition of a carbon tax (e.g., global
warming tax) will increase raw material and manufacturing costs at suppliers, which will increase
our procurement costs.

Large

Large

Small

Small

Stronger regulation of
GHG emissions

Accelerating supply chain
decarbonization

Introduction of a carbon tax⃝ Increase in transportation costs due to the carbon tax: The imposition of a carbon tax (e.g., global
warming tax) will increase logistics costs will increase due to higher transportation and home delivery
costs associated with higher fuel costs.

Small

Small

Small

Small

Change in consumer
behavior

Products and services thatare not environmentallyfriendly and low carbon are
eliminated.

⃝ Decrease in sales of products and services that are slow to respond to low carbon emissions: An
increase in ethical consumption will result in a decrease in sales of products that are notenvironmentally friendly. (In particular, increased procurement and manufacturing costs to meet thegrowing demand for products that uses eco-friendly packaging paper and containers, anddecreased sales if they are not used)

Large

Large

Small

Small

Increased concern
among stakeholders

Deterioration of corporate
image, decline in stock
prices, exclusion frominvestment⃝ Reputation risk and investment-related risk associated with inadequate responses to climatechange and water risks: Failure to adequately address climate change and water risks can lead toa decline in our external valuation, resulting in lower stock prices, criticism of our company, andwithdrawal of investment.

Small

Small

Small

Small

Increase in extreme
weather such as
heavy rain and floods

Supply chain manufacturing
outages and disruptions⃝ Decrease in sales due to supply chain disruption: If OEM partners are damaged, sales will
decrease due to the suspension of manufacturing due to raw material shortages and sales when
deliveries to customers are not possible due to disruption of delivery routes.
⃝ Decrease in sales due to decreased manufacturing capacity: Sales decrease due to shortage of
products supply due to suspension of manufacturing when OEM partners are damaged.

Small

MediumMediumLarge

Harvest and capture ofnatural raw materials⃝ Increase in the cost of raw materials due to an increase in the average temperature: The increase in
the average temperature results in a decrease in the yield and capture of raw materials, which inturn increases the cost of raw materials and is passed on to the cost of products.

Small

Small

Small

Large

Change in weather patterns
Effect of water withdrawal
restrictions on cosmetics
manufacturing⃝ Reduction in sales due to production restrictions: If water withdrawal and effluent limitations are
introduced to mitigate the impacts of climate change on water bodies, sales will decrease due torestrictions on merchandise production.

Small

Small

MediumMediumQuality maintenance⃝ Increase in management and development costs due to an increase in average temperature: If theaverage temperature increases, the cost of reviewing and improving storage facilities and quality
control of products will increase.

Small

MediumMediumLarge

Chronic

We will strive for environmental consideration in ourbusiness activities through cooperation with our business
partners.

26,095.4

Classification

Physical risk

■ Working with our supply chain

Scope3(i) Risk■ Compliance with laws and regulations
We will comply with the legal rules concerning
environmental conservation.

488.0

Acute

assessments on environmental issues to be addressed as a

Scope2▶ List of risks/opportunities and importance assessment

Committee discussed and formulated the Environmental
We will continue to collect information and conduct risk

2.0

Calculation period: October 2022 - September 2023 Calculation range:
Shinnihonseiyaku Co., Ltd.
*Categories 1, 4, and 12 in Scope 3 are calculated only for cosmetics. Categories 8,
10, 11, 13, 14, and 15 are excluded from the calculation due to reasons such as theabsence of relevant emissions, inclusion in other categories, and inclusion in
Scope 1 + 2. In FY2023, the industrial waste data used for calculation of Category
5 was not calculated because it was not yet collected.

the Sustainability Committee. In FY2023, the Sustainability
Policy.

Scope1

Reputation

environmental issues, Shinnihonseiyaku holds discussions at

the risks and opportunities and revised our assessment as

MarketWe will contribute to a decarbonized society by reducing
emissions of greenhouse gases, especially CO2, from ourbusiness activities and preventing global warming.

25

the determined emissions.

Transition risk

■ Response to the climate change

Maintaining adequate
inventory turnoverTargets

Based on the financial impacts identified, we reassessed

Policy and legal

We will strive to understand the impact on biodiversity
in our value chain, and strive to conserve and restore
biodiversity.

Based on the risks and opportunities identified in

In the future, we will consider reduction targets based on
Items

Environmental Policy

Shinnihonseiyaku is working to understanding the amount

Average temperaturerise, long-term heatwave

Impact on our company■ In-house education and awarenessWe will strive to improve employees’ understanding of theEnvironmental Policy and awareness of environmental
conservation.

(ii) Opportunity
Classification
Resource
efficiency

Products andservices

Reputation

2°C or less scenario

4°C scenario

Opportunity details (Expected financial impact)

2030

2050

2030

2050

Efficient production anddistribution processes⃝ Reduce manufacturing and management costs: Energy saving and streamlining of logistics processes, DX, and the use of
direct marketing methods reduce manufacturing and administrative costs.

MediumMediumMediumMediumDevelopment and expansionof low-carbon products andservices⃝ Increase in sales through low-carbon products and services: Low-carbonization of the PERFECT ONE Brand
products, use of certified palm oil and certified paper, and calculation and reduction of the carbon footprint of thecompany's products will increase products value and corporate value, leading to increased sales.

Medium

Large

Small

Small

Change in consumer
preferences⃝ Revenue will increase as demand for products adapted for climate change increases. (Examples: cosmetics withcooling ingredients, base makeup products with sunscreen and UV benefits, products for infectious diseases,
products for heat stroke, etc.)

MediumLarge

MediumLarge

Change in rating among
stakeholders⃝ Higher stock price and lower cost of capital if the company's response to climate change is highly rated by an
external evaluation agency.

Small

Medium

Small

Small

Opportunity factors*Risks and opportunities reassessed after calculating financial impact

15

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

16

ENVIRONMENT
Initiatives for a Recycling-Oriented Society
To continue to make effective use of limited resources, in addition to ongoing 3R activities,

Conserve Biodiversity
Shinnihonseiyaku uses many natural ingredients in its products. We believe that conservation of

Shinnihonseiyaku is promoting initiatives to reduce the amount of plastic used and to switch to materials

biodiversity is important to continue providing products that satisfies our customers, and we are promoting

made from recycled raw materials.

initiatives both internally and externally.

Understanding the amount of resources
used to promote resource-saving initiatives
Shinnihonseiyaku worked to survey and understand theamount of resources used in order to reduce the resources
used and promote effective utilization.

Reduction of plastic usage
We have started selling refills of our mainstay PERFECTONE Moisture Gel, which was relaunched in May 2023.
We have received many requests from customers for refill

Establishment of cultivation method andadoption of Lithospermum erythrorhizon,
listed as Endangered IB (EN), as products
Shinnihonseiyaku is focusing on Shikon (root of

Adoption of FSC® certified paper
Due to the rapid decline of the world's forests, we are
actively promoting the adoption of FSC® certified paper madefrom wood from forests that are confirmed to be properly

products, and we launched them with the aim of achieving

Lithospermum erythrorhizon), which has been used as amanaged following international standards or from otherWe organized resources as follows to understand theboth environmental consideration and customer satisfaction.

traditional Chinese medicine since ancient times and ismaterials that supports sustainable use of forest resources.

amount of resources used in business activities, promotional

In addition to reducing the amount of resources used, we

conducting research with the idea that its ingredients can

In addition to PERFECT ONE All-in-One Gel series packages,

activities and office activities, and the amount of resources

are also able to reduce the weight of packaging and delivery,

improve and resolve the loss of collagen, which causes

PERFECT ONE FOCUS, which began sales in 2021, alsothat are not recycled and disposed of.

which we believe will reduce CO2 emissions related towrinkles and sagging skin.

uses FSC® certified paper. In addition, FSC® certified paperdelivery.
Activities

Resource type

Business activities

since 2006. In 2009, we succeeded in Japanese cultivation

Glass bottles (other)using tube cultivation, and in 2016, we obtained a patent for aPaper

cultivation technique to increase the useful ingredient content

Plastic

of Lithospermum erythrorhizon. In addition, we have obtained
a patent for a manufacturing method of "Capsule Shikon*"

Packing material

that can enhance skin penetration by liposomalizing Shikon

Cushioning material

Promotional activities

Paper

DM
In-store promotional
materials
Bottles and cans
Office activities

Paper
Plastic

Based on the amount of waste we have identified, we plan
to set targets in the future for resource conservation.

since the same year. (FSC®N003734)

for Japanese cultivation of Lithospermum erythrorhizon

Glass bottles (brown)

Material included in the
products

has been used in the delivery boxes used to deliver products

supply. For this reason, we have been researching methods

Glass bottles (clear)
Containers
andpackaging

Lithospermum erythrorhizon, however, is listed as an
Endangered IB (EN) and relies on imports for much of its

extract extracted from Shikon.

Reduce discarded paper resources byreviewing delivery documents*Oil-soluble Shikon extract (1), hydrogenated soy phospholipids (moisturizing
ingredients)

Related pages: p20 R&D

PERFECT ONE FOCUS Smooth Cleansing Balm

In order to reduce waste paper resources, we have beenreviewing the delivery documents that are included when
delivering products to customers.
We used to prepare and package five types of delivery
documents, depending on the customer's shopping stage andNumber of products containing
Lithospermum erythrorhizon*

39*Number of PERFECT ONE and PERFECT ONE FOCUS products (excluding
limited items and samples)the products they ordered.
However, since many types of delivery documents were
disposed of, we worked to reduce the types of delivery
documents in order to reduce resources while maintaining
convenience for customers.
First, we extracted and analyzed customer feedback(VOC*) collected at our call center, and based on the results,
we worked out a layout and wording that would be easy tounderstand. As a result, we were able to combine five types ofdelivery documents into two types.
As a result, we expect to reduce the amount of waste

Cultivation of Lithospermum erythrorhizon

paper used in delivery documents. We will continue to reduce
the amount of resources used and the amount of waste.
*Voice Of Customer

17

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

18

ENVIRONMENTSOCIAL

Response to Water and Chemical Substances

R&D

At the Yoshizuka Office, where our research facilities are located, Shinnihonseiyaku is working to comply
with environmental laws and regulations.

Prevention of water and soil pollution
At the Yoshizuka Office, where Shinnihonseiyaku's

In the domain of Health & Beauty, Shinnihonseiyaku is engaged in R&D to realize new and smart lifestyles
for customers.

⃝ Working environment measurement

R&D policy

In order to prevent workers from suffering from healthShinnihonseiyaku has established the R&D policy of “smart

research facilities are located, we are working to prevent soil

problems caused by harmful factors, we measure thelife science” in order to deliver new value to customers goesand groundwater from being contaminated by leakage ofenvironment of the workplace once a year and manage it.

beyond the boundaries of conventional wisdom.

waste and waste liquid containing chemical substances. In
accordance with the Soil Contamination Countermeasures⃝ Reagent management

Strengths of R&D

Act, the Act on Waste Management and Public Cleansing,

Precautions for handling (ventilation, etc.) are posted on

the Air Pollution Control Act, the Water Pollution Prevention

devices using reagents. In addition, a record-keeping ledger

Act, and other laws and regulations that control waste,

is kept to record the quantities of chemicals used before

biological barrier research. Our strength in developing newwastewater, and exhaust gas emitted by corporate activities,

and after their use, who used them, etc., and to manage

materials is the development of highly functional and uniqueas well as related ordinances of local governments, we record,them.

new materials, focusing on the three areas collagen, medicinal
plants, and advanced materials. We use the new raw materials

store, move, discard, and conduct necessary investigations
and inspection on a regular basis.

Our R&D focuses on the development of new materials and⃝ Permanent organic solvent work chief

developed in our products in order to develop products that

Employees who have completed a training course forsatisfy our customers. We are also conducting joint researchsupervisors in charge of instructing employees onwith universities and other organizations on the function of

workplaces and work methods for handling organic

biological barriers. It has been proven that the deterioration

solvents are permanently stationed.

of the biological barrier function accelerates the aging of
the skin and body, and Shinnihonseiyaku believes that it is⃝ Education and training

working on R&D in this area. We are actively applying fororganic solvents) based on government textbooks.

patents for the results of our R&D activities.

Yoshizuka OfficeChemical substance risk assessment
The revised Industrial Safety and Health Act, which cameinto effect in June 2016, requires risk assessment of certain
hazardous chemical substances at all workplaces where
chemical substances are handled. Employees from the

For the disposal of chemicals, waste tanks are preparedaccording to the type of chemicals used, specifictreatment is carried out, and disposal is entrusted toindustrial waste companies. We also report the industrial
waste management slips (manifests) we receive to local
governments in the form of a status report on the issuanceof industrial waste management slips, etc.

■ Development of Lithospermum erythrorhizon fermented
collagenThrough joint research* with Professor Masanori Sugiyamaof the Graduate School of Biomedical and Health Sciences(Pharmaceutical Sciences), Hiroshima University, we havedeveloped "Lithospermum erythrorhizon fermented collagen,"
the world's first proprietary material in which collagen isfermented with lactic acid bacteria discovered from theat Yoshizuka Office, where we take to measures to reduce

flowers of the medicinal plant Lithospermum erythrorhizon.

the risk of hazards and health problems. Specifically, we are

Lithospermum erythrorhizon fermented collagen has been

implementing the following six initiatives.

confirmed to have a higher amount of amino acids thanunfermented collagen and to be more effective in producing
as moisturizing and improving elasticity of the skin, and is

We conduct medical examinations for workers engaged inplanned to be used in cosmetics in the future.

work that is particularly harmful in terms of occupational*Collected lactic acid bacteria from various medicinal plants through joint researchand determined scientific names

health measures stipulated in the Industrial Safety and19

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

Technology for applying
guanine crystals to
cosmetics(Cosmetic composition,brightening gel cosmetic,
cream cosmetic for eye
area and cream cosmetic
for foundation)(No. 7039086)

Inspired by the habit of fish to manipulate
light and assimilate it into the surrounding
environment, development of a new material
that covers dark spots and dullness andbrightens skin tone, and a method for
manufacturing cosmetic compositions

Placenta collagen(Method for producing
cosmetic composition) (No.
6944606)

A material and method for manufacturingcosmetic compositions that combine thefunctions of the beauty ingredient placenta
extract and collagen, focusing on the factthat collagen is also abundantly containedin the placenta.

VC collagen(Method of manufacturingcosmetics)(No. 6727468)

A method for manufacturing cosmetic
material that combines the action ofcollagen for producing beautiful skin andvitamin C, which is necessary for collagenproduction, and that excels in promoting
collagen production by approximately fivetimes compared to common collagen raw
materials.

Liposomal Shikon (root of
Lithospermum
erythrorhizon) extract(Method of manufacturingcosmetics raw materials)(No. 6242422)

A production method in which Shikon
extract is made into liposomes with alamellar structure consisting of alternating
layers of water and oil, which allows for
greater penetration into the skin.

Method of cultivating
Lithospermum
erythrorhizon(Method of cultivating
Lithospermum
erythrorhizon)(No. 5885320)

A cultivation method to improve thesurvival rate of rare and valuable
Lithospermum erythrorhizon by mixing
arbuscular mycorrhizal fungi spores(symbiotic fungi) into the medium used
for growing Lithospermum erythrorhizon
seedlings, and to increase the content ofactive ingredients.

■ Variety registration

hyaluronic acid. It is expected to have cosmetic effects suchexaminations are conducted once every six months.

Health Act.

Cosmetics raw materials that have been
confirmed to improve the skin barrier
function and moisturizing function by
combining amino acids unique to collagenand ingredients extracted from the
medicinal plants Glycyrrhiza andLithospermum erythrorhizon.

Efforts to develop new materials

Quality Assurance Section and the R&D Center Section work

⃝ Regular medical examinations: Special medical

Cosmetic raw material
combining amino acidunique to collagen andmedicinal plants(Cosmetics material)(No. 7313755)

important to enhance the biological barrier function and is

We conduct study sessions on chemicals (especially⃝ Disposal of chemicals■ List of patents

Display of warnings

Shinnihonseiyaku GG01
(Registration number:
29026)

Registered as the first new variety of
Glycyrrhiza glabra in Japan. Compared to
the growing period of the conventional
Glycyrrhiza glabra, the glycyrrhizic acidcontent, a key component, was increased
to 2.0%, the standard value in theJapanese Pharmacopoeia, within 18
months after planting.

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

20

SOCIAL
Supply Chain Management

Initiatives for Safe and Secure Quality

Cooperation with suppliers is essential to the continuation of Shinnihonseiyaku's business and theresolution of social issues. We are committed to sustainable procurement activities, including compliance

Shinnihonseiyaku listens to our customers and promotes initiatives to improve and maintain the quality ofwith laws and social norms, human rights, occupational health and safety, and environmental

our products and services. To earn the trust of customers who purchase our products, we work with ourconsiderations.

OEM partners to ensure safe and secure quality control.

Procurement Policy

Supply chain management targets

To realize sustainable procurement, Shinnihonseiyaku
formulated its Procurement Policy in June 2023.
Going forward, we will implement responsible supply chain
management in cooperation with our suppliers.

Items

Targets

Formulation of the Procurement Policy thatconsiders sustainability

Completed by
FY2023

Conduct awareness-raising activities for
suppliers based on the Procurement Policy

FY2024

Under our Purpose, “Beyond innovation, for a beautiful
smile!,” Shinnihonseiyaku will consider the social
responsibility to be fulfilled throughout the entire supply
chain, including suppliers involved in our products andservices, and will conduct sustainable procurement.

■ Compliance and fair trade
We will always conduct free competition and fair,
impartial, and honest transactions in compliance withlaws and regulations, international norms, and social
norms.

■ Human rights and working conditions
We respect the human rights and diversity of ouremployees and provide a comfortable and pleasantworking environment.

■ Quality, safety, and customer satisfaction
We continuously provide products and services withquality and safety that meet laws and regulations andrequirements, and earn customer satisfaction and trust.

■ Environmental considerations
We will engage in environmentally friendly businessactivities and reduction of environmental burdens,
envisioning the entire process from products planning todisposal after use.

■ Relationship with society
Recognizing that we are members of society, we
conduct activities that contribute to the development oflocal communities with gratitude. We will also disclose
information appropriately as a company open to society.

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

Formulation of customer satisfaction
indicators
We strive for the highest level of customer satisfactionin order to realize “a beautiful smile” in our Purpose. We
have formulated "customer satisfaction indicators" for all

Based on our Procurement Policy, we plan to conduct

the improvement of customer satisfaction as considered by
Shinnihonseiyaku.

Procurement Policy Formulation Project
managers of divisions deeply involved in the
procurement of products, such as the Quality
Assurance, Logistics, Product Development, and(v)
Activities topursue ourcompany
charactermanuals, quality assurance regulations, and procedure
manuals based on the Act on Securing Quality, Efficacy andShinnihonseiyaku
Customer
Satisfaction

consulted external guidelines. After a total of six

the Procurement Policy was formulated with theapproval of the Sustainability Committee.
Going forward, we will continue to strengthen
cooperation with our suppliers and promote theconstruction of sustainable supply chains.

Devices, to ensure thorough quality control and quality
assurance.

Quality audit results(iii)
Activities toimprovecustomersatisfaction

100%

TOPICS
Customer Satisfaction Indicator Formulation
Project
The managers of Product Development, Callrounds of discussions by project members, andexchanges of opinions with Directors of the Board

Safety of Products Including Pharmaceuticals and Medical■ Quality audits in FY2023(iv)
Customersatisfaction

In formulating the Procurement Policy, we

determined after the stability test. However, if there is astability. In addition, we have established in-house quality(ii)
Safety andsecurity results

Mail Order divisions, gathered together.

production. We check the quality according to the standard

check directly with the OEM partner to maintain quality(i)
Activities forsafety andsecurity(vi)
Customersatisfaction
typical of ourcompany

by obtaining samples before shipment and before massfluctuation in the value even if it is within the standard, we

Our view of customer satisfaction

aim for sustainable procurement based on quality audits,

To formulate the Procurement Policy, theWe are particularly committed to safety and security, andmanufactured by OEM partners meet our quality standards

inspections in the form of questionnaires, and feedback. We

TOPICStaking measures based on our Quality Policy.
the Quality Assurance Section assesses whether products

awareness-raising activities for suppliers, document

which we have already implemented in quality management.

We have established a quality control system to ensure that
customers can use our products with confidence, and arebasis.
of the following six indicators, which we believe will lead toPlans for future initiatives

Quality initiatives

employees to engage with customer satisfaction on a daily
Our company's concept of customer satisfaction consists

Procurement Policy

21

Based on the Quality Policy established in accordance with our Mission and Charter of Conduct,

In the future, targets will be set for each indicator, andrelated departments will work to achieve the targets.
We think about each indicator as follows.
Evaluation item

Example targets(i) Activities for safety
and security

Number of quality audits conducted
and employee safety and security
training attendance rates(ii) Safety and security
results

Number of violations of laws andregulations concerning products andservices(iii) Activities to improvecustomer satisfaction

Percentage of customer feedbackreflected in products and services(iv) Customer satisfaction

Satisfaction based on customer
satisfaction surveys(v) Activities to pursue ourcompany character(i.e., our Purpose)

Number of customer hospitality
programs conducted(vi) Customer satisfaction
typical of our company(i.e., our Purpose)

Smile level based on customer
satisfaction surveys

Center, Quality Assurance, Sales Promotion
Planning, and other divisions gathered to formulate
customer satisfaction indicators.
In formulating the policy, our products mustbe safe and secure for customers, and basedon the established purpose, we discussed “whatconstitutes customer satisfaction unique to ourcompany” six times in total.
Targets set for each indicator are to be achievedby the division in charge, and the entire company
aims to improve customer satisfaction along withthe realization of the Purpose.

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

22

SOCIAL
Human Resources
Shinnihonseiyaku considers people to be its strength and is working to develop talent that embodies its■ Employee awareness survey

Ideal Human Resource Image. We are working to develop a human resources development system so that

In order to create an environment where employees caneach employee can demonstrate their individuality and play an active role, and to create an environment inwork in a lively and positive manner, we conduct an annual

which they can work lively and with a sense of fulfilment.
Related pages: p13 Special Feature “Human Resources Development Initiatives”

Human Resource Development Policy■ Support for voluntary learning by employees
We have established a self-development allowance system

We believe that in order to realize “Beyond
innovation, for a beautiful smile!,” as stated in our
Purpose, it is essential for all employees to havedreams and aspirations, and to grow through daily
challenges.

to support the attitude and actions of each employee to study

1. We will realize our Mission and management policy,
as well as develop the next generation of leaders
who will solve social issues.
2. We will develop human resources who continue tochallenge themselves, without losing sight of theirown value, even in a complex and ever-changing
environment.
3. In order to continue to create new value in timesof high uncertainty, we will develop diverse humanresources by respecting individuality such as age,gender, nationality, expertise, and experience.
4. We will develop human resources who do not takeeverything for granted and strive to realize their
dreams and aspirations with gratitude.

and improve their knowledge and skills for their own personal

Shinnihonseiyaku has been developing various training

for personnel rotation and human resources development

the Human Resources Section are open to all participants
regardless of their department or employment status.
*A lottery system may be applied depending on capacity

Creating an environment that fosters asense of fulfillment
Shinnihonseiyaku aims to achieve the "rewarding culture"
respect the autonomy and challenging spirit of our employees
and work to create an environment where they can feel
fulfilled.
In addition to the personnel evaluation system, various
award systems are established.
⃝ Innovation Award
A system to recognize employees who have createdto the company.
*Entry system for self-recommendations and recommendations by others⃝ MVP Awardparticipate in on their own initiative.

A system to award employees who are considered to■ Main training by grade and division

have contributed the most to the company's performancefrom among those who have received a certain level ofrecognition in personnel evaluations⃝ Logical thinking training⃝ Facilitation training⃝Management training⃝ Compliance training

1,053 hours

Annual education and training costs per
employee

29,513 yenview, and serves as a place for employees to relax.

measures to support the career development of employees.

Health and Productivity Management
Under the "Shinnihonseiyaku Health and Productivity
Management Declaration," Shinnihonseiyaku believes thata healthy lifestyle for employees is an essential element ofsustainable corporate management, and is committed to

Aojiru Salad smoothie served in the company cafeteria

providing support to employees both mentally and physically.

⃝ Counseling for mental and physical■ Health and Productivity Management Declaration

life, we have established a contact point where they can

set forth in its Internal Environment Development Policy. We

role and by department according to the expertise of the

Total annual education and training hours

The company cafeteria is located on the top floor with a greatknowledge and skills. Courses offered with the approval of

conventional or systems that are recognized as meaningful

FY2023

At Shinnihonseiyaku, once a year, employees submit atheir own careers. The contents of the declaration are usedaddition to training by job level according to the employee's

FYcompany's own products, “Asaichi Sukkiri! Aojiru Salad Plus.”■ Sharing career design

employees' independent learning, as well as company-

innovative technologies that are different from the⃝ Specialized training

based on sports nutrition and smoothies made with theon career development as an opportunity to think about

employees and to support their challenges and growth. In⃝ Onboarding training

including a daily set meal supervised by a registered dietitianculture.

self-development. In addition, as opportunities to support

programs to improve the individual knowledge and skills of

department, we also provide training that employees can

The company cafeteria at the Head Office offers a menu

working to identify and improve issues in the organizational

pays the expenses required for learning for the purpose of

instructors for courses to acquire qualifications and improvehealththat takes into consideration the health of employees,

career design sheet to inform the company of their views

led training by rank and department, employees serve as⃝ Employee cafeteria that pays attention to employee

their employment status. Based on the survey results, we are

growth. With an annual limit of 50,000 yen, the company■ Award system

Human resources development andtraining system

employee awareness survey of all employees, regardless of■ Initiatives for health and productivity management

In order to help employees lead a comfortable corporate

Shinnihonseiyaku endorsed the founding objectives ofconsult directly with a professional counselor outside thethe Kyushu-Fukuoka Health and Productivity Managementcompany. Employees can discuss personal concerns as well

Promotion Council*, which was launched in February 2018,as their concerns about interpersonal relationships and work.

and participated as one of the initiating organizations. Taking
this opportunity, we declared that we realize health andproductivity management.
*Established by the Japan Society of Preventive Medicine Foundation as acompany promoting health and productivity management in Kyushu

Shinnihonseiyaku Health andProductivity Management Declaration
1. We will provide a work environment
where employees can work comfortably,
vigorously, and happily.
2. We will realize a system that enables
employees to work with peace of mind andwell-being.
3. We will create a corporate culture where
employees can try new things and feel asense of fulfilment.

Scenes from the MVP Award Ceremony

23

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

24

SOCIAL
Human Rights and Diversity

CSR

Shinnihonseiyaku aims to create a workplace environment in which diverse human resources with

Shinnihonseiyaku is committed to CSR activities that bring happiness to local communities. Employees

various values and ideas can demonstrate their individuality and abilities and play an active role. We will also

actively participate in the activities, fostering a sense of participation in society by each and every

conduct business activities that respect the human rights of all stakeholders.

employee.

Respect for human rights and diversity■ System for balancing childcare and nursing care with work

Shinnihonseiyaku has established respect for humanrights and diversity in its Internal Environment Development

Childcare leave at birth

Policy, committed to creating a workplace environment where
all human resources can play an active role and a culturethat respects human rights and diversity. In addition, theLeave that can be taken when
taking care of a child up to theage of 2

Childcare leave

Procurement Policy clearly states respect for the humanrights and diversity of employees and aims to create acomfortable working environment. Based on these policies,
we will create an environment in which individual employees

Changes in working hours due
to childcare

can demonstrate their individuality and abilities, and conductbusiness activities that respect human rights and diversity
throughout the supply chain.

Promotion of women’s participation andadvancement

their careers, housework, childcare, and other daily activities

Leave that can be taken whencaring for a family member inneed of nursing care

Changes in working hours due
to nursing care

A system that allows employees to change their working
hours when caring for a family
member in need of nursing careChild nursing leave

Leave to take care of children
up to the end of the third gradeyear of elementary school (5days per fiscal year; 10 days
per fiscal year for two or morechildren)Nursing leave

Leave to care for a family
member in need of nursing care
(5 days per fiscal year; 10 days
per fiscal year for two or morefamily members)

due to their participation in society can experience thebenefits of skincare without the time and effort. In addition,
at our company, where approximately 80% of our employees
are women, we have identified the promotion of women's
participation as a materiality and aim to create a working
environment and society where women can play an active

A system under which working
hours can be reduced by up to
two hours a day when raising achild until the end of the third
grade year of elementary
schoolNursing care leave

Our main products, the PERFECT ONE All-in-One Gel
series, was developed so that women who are busy with

Leave that can be taken for up
to 28 days within 8 weeks after
the birth of the child to becared forCampaign to eradicate drunk driving
Shinnihonseiyaku has been working to eradicate drunk
driving since 2008 in Fukuoka Prefecture, where its Head

For this reason, all female employees, regardless of age,

Ohashi Bridge drunk driving incident occurred, the entire

can receive medical examinations for the female-specificprefecture has been working to eradicate drunk driving, but

cancers of breast cancer and cervical cancer in order to

we have yet to eradicate it. In FY2023, we held a lecture bycreate a safe working environment for women. On the otherMiyako Yamamoto, the representative of NPO Heart Space

hand, in order to improve the low breast cancer screeningthat works to eliminate drunk driving, in cooperation with

rate in Fukuoka Prefecture, we have been conducting the

Hakata High School, and released balloons with the wish of

Pink Ribbon Campaign at our sponsored Avispa Fukuoka

eradicating driving under the influence.

matches since 2021. In cooperation with NPO Happy Mamma,

At the same time, we conducted an awareness-raising

we are working to raise awareness of medical examinations

campaign for employees with the aim of eradicating drunkby distributing educational leaflets and distributing original

driving.

goods.

Breast cancer screening targets
Items

the Promotion of Women's Active Engagement inProfessional Life and Act on Advancement of Measures
to Support Raising Next-Generation Children
In order to realize a workplace environment in which
women and other diverse human resources can play an activerole, Shinnihonseiyaku has formulated an action plan* that
includes support for women's careers and consideration of
initiatives to encourage participation in childcare regardlessof gender. We are promoting initiatives in line with this actionplan.
* We are disclosing this action plan on the Ministry of Health, Labour and Welfare's“Information site to support efforts to balance work and family life: Support for
Balancing Work and Family Life.”

25

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

Shinnihonseiyaku employs people with intellectual
disabilities at the Logistics Center responsible for shipping
products. They are in charge of sorting and packaging

Targets

In-house breast cancer
implementation rate
Improving breast cancer
screening rates in Fukuoka
Prefecturerole.
■ Formulation of action plans based on the Act on

About 80% of Shinnihonseiyaku’s employees are women.

Office is located. Since the Fukuoka Uminonakamichi*There are requirements for using some systems.

Towards a workplace where all can play anactive role

Pink Ribbon Campaign at Avispa Fukuoka
home match

Collaborative project with Fukuoka City
and Avispa Fukuoka, "Fukuoka Clean
Campaign" and others
In recent years, as climate change and global warming

100% annually

55% or more by 2026**Scheduled to refer to the "Comprehensive Survey of Living Conditions" publishedby the Ministry of Health, Labour and Welfare in 2026

Main CSR activities

products to be shipped to customers. Instead of providing

have become social issues and the importance of forests

Avispa Fukuoka/Premium Uniform Partner

temporary work, we aim to create a safe working environment

has increased, we wanted to expand activities for the local

RIZING ZEPHYR FUKUOKA/Official Partner, Wheelchairby examining within the company the work that is essential tocommunity, so we organized “Making our Home beautiful!

Team Sponsorshipdeliver products to our customers.

Fukuoka Clean Campaign” (clean-up) event in collaboration

Japan Heart/Sponsorship of Smile Smile PROJECT■ Trends in employment of persons with disabilities

with Avispa Fukuoka, who are based in Fukuoka and for which

NPO Heart Space/Sponsorship

we are the uniform sponsor (chest), and “FUKUOKA TAKE

Oita International Wheelchair Marathon/Sponsorship

ACTION!,” a J League social collaboration project initiative.

FUKUOKA MARATHON/Sponsorship

FY

FY2021

FY2022

FY2023

Employment
rate forpersons withdisabilities

3.2%

3.6%

4.0%

C’s Athlete/Sponsorship
Kyushu Pro-Wrestling/Kyushu Genkitai Member (Platinum)

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

26

GOVERNANCE
Corporate Governance
Shinnihonseiyaku believes that streamlining management and increasing soundness, transparency andcompliance will lead to long-term improvements in corporate value, and is actively working to build anorganizational structure that can respond quickly and flexibly to changes in the business environment, whilestrengthening corporate governance.

■ Board of Directors

remuneration, etc. for each individual Director of the Board,

The Board of Directors makes decisions based on open

necessary by the Board of Directors, and reports to the Board

strategy and management plans. The Board of Directorsof Directors on the results of its deliberations.

consists of six Directors of the Board, three of whom are

Meetings of the Nomination and Compensation Advisory

Independent Outside Directors. Outside Directors express
their high insights and objective opinions from an independent

Changes in corporate governancestandpoint, and the Board of Directors conducts discussions
from multiple perspectives.

2016

Establishment of Board of Directors

2018

Establishment of Risk Management and Compliance
Committee
Establishment of Audit & Supervisory Board

2020

2019

Listed on Tokyo Stock Exchange Mothers

2021

Appointment of female Outside Director

2022

Transitioned from the First Section to the Prime
Market of the Tokyo Stock Exchange
Establishment of Sustainability Committee

Establishment of Nomination and Compensation
Advisory Committee
Changed listing market to the First Section of theTokyo Stock Exchange
Introduction of stock-based compensation system

Meetings of the Board of Directors
Chair

President & Representative
Director of the Board and Chief
Executive Officer

Number of meetings

15 times

Attendance rate

100%

The Audit & Supervisory Board consists of three members,
one full-time Audit & Supervisory Board Member and two

The company has adopted a company with an Audit & Supervisory Board as the organizational design under the Companies Act,

part-time Audit & Supervisory Board Members, all of whomand has adopted the following corporate governance system in the belief that the soundness, objectivity and appropriateness of

are Outside Audit & Supervisory Board Members. Under

management can be ensured through inter-organizational cooperation.

the chairpersonship of the full-time Audit & Supervisory
Board Member, the Board monitors the governance and its*The company became a company with an Audit and Supervisory Committee on December 19, 2023.

operational status and audits the day-to-day activities of
Directors of the Board, including their execution of duties. In

General Meeting of Shareholders

accordance with the Audit & Supervisory Board Member Audit
Appointment and dismissal
ReportConsult

ReportSustainability Committee

Risk Management and Compliance Committee

Board of Directors
Selection, removal,
and supervision

Response

Appointment
and dismissal

Business audit
Nomination andCompensation
Advisory Committee

Accounting
audit

Audit &
Supervisory Board

Cooperation

Directions

ReportPlan and Regulations, the system is set up so that the fulltime Audit & Supervisory Board Member can always monitor

Number of meetings

6 times

Attendance rate

100%

■ Risk Management and Compliance Committee
The Risk Management and Compliance Committee, whichis established as part of the corporate governance structure,
Board and Chief Executive Officer and is composed of fulltime Directors of the Board, Corporate Officers, and General
Managers. In principle, meetings are held once a quarter,
but when necessary, extraordinary committee meetings areheld to discuss and decide on the overall management of
all risks associated with Shinnihonseiyaku, compliance, andspecific issues and responses to specific risks. It also plans,manages, and implements compliance education for officers andemployees.
Meetings of the Risk Management and Compliance
Committee

the execution of duties of Directors of the Board, such as
by attending important meetings such as the Management
Shareholders and the Board of Directors meeting and others,
and making statements of opinions as necessary.

Internal Audit
Oﬃce
ReportDirections

President & Representative
Director of the Board and Chief
Executive Officer

Chair

President & Representative
Director of the Board and Chief
Executive Officer

Chair

Strategy Conference as well as the General Meeting ofReportRepresentative
Director of the Board

Appointment
and dismissal

Committee

is chaired by the President & Representative Director of the■ Audit & Supervisory Board

Corporate governance system

succession planning, and other advisory matters deemedand natural discussion of basic policies such as management

Accounting Auditor

Chair

Full-time Audit & Supervisory
Board Member

Accounting audit

Number of meetings
Attendance rate

Improvement
reportBusiness execution departments and aﬃliated companies

AdviceLawyers andtax accountants

4 times

Attendance rate

100%

Meetings of the Audit & Supervisory Board

Internal audit

Management Committee

Number of meetings

20 times98%■ Nomination and Compensation Advisory Committee
The Nomination and Compensation Advisory Committee, avoluntary advisory body to the Board of Directors, serves as boththe Nomination Committee and the Compensation Committee.
The committee is chaired by the President & Representative
Director of the Board and Chief Executive Officer and■ Sustainability Committee
The Sustainability Committee, which has been establishedto strengthen the sustainability promotion system, is chairedby the President & Representative Director of the Board
and Chief Executive Officer, and is composed of full-time
Directors of the Board and Corporate Officers. The committee
formulates targets for key issues related to sustainability, andconducts progress management, supervision, and monitoring.
In addition, matters to be discussed are reported to the Boardof Directors as appropriate.
Meetings of the Sustainability Committee

consists of five members, including three Outside Directors. In
principle, meetings are held once a year, but issues are set for

President & Representative
Director of the Board and Chief
Executive Officer

Chaireach fiscal year and extraordinary committee meetings areheld as necessary. The committee deliberates on the policy

Number of meetings

5 times

for nomination and selection/dismissal of Directors of the

Attendance rate

100%

Board and Audit & Supervisory Board Members, the policy for
remuneration, etc. of Directors of the Board and the details of

27

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

28

GOVERNANCE
Executive Compensation System
Evaluation of the effectiveness of theBoard of Directors
We conducted an analysis and evaluation of theeffectiveness of the Board of Directors with the aim of
improving its functions. All Directors of the Board and Audit &Supervisory Board Members participated in the analysis andevaluation, and Outside Directors also participated in thediscussion.
■ Summary
Implementation period: September 2023
Respondents: All Directors of the Board (6) and All Audit &Supervisory Board Members (3)Methods: Self-evaluation method using questionnaire(1) An anonymous effectiveness evaluation questionnaire wasadministered to all Directors of the Board and all Audit &Supervisory Board Members.
(2) Reported the summary of the results of the effectivenessevaluation questionnaire at a meeting attended by
Directors of the Board and Audit & Supervisory Board
Members, and discussed the summary of the results andfuture issues.
(3) The Board of Directors confirmed the evaluation of theeffectiveness of the Board of Directors.
■ Question(1) Questions about the composition of the Board of Directors(7 questions)⃝ Adequacy of number and diversity the Board of
Directors⃝ Appropriateness of execution of duties of Directors of
the Board⃝ Adequacy of knowledge and abilities of Outside Directors,
status of concurrent positions, and appropriate period of
appointment(2) Questions about the operation of the Board of Directors (9questions)⃝ Appropriateness of the schedule and frequency of
meetings of the Board of Directors⃝ Appropriateness of content and quantity of agenda
materials for the Board of Directors meeting, andsufficiency of time for prior consideration anddeliberation of proposals⃝ Appropriateness of the proceedings of the Board of
Directors meeting, status and atmosphere of remarks atmeetings, etc.
(3) Questions on the Board of Directors' agenda (12questions)⃝ Appropriateness of the agenda, timeliness of proposals,and content of deliberations of the Board of Directors⃝ Appropriateness and sufficiency of discussions
on succession development plans, remuneration,
appointment and dismissal of officers, and Medium-Term
Management Plans, etc.

Shinnihonseiyaku's executive compensation system is designed to enhance its commitment not only tothe short-term but also to the medium- to long-term improvement of business performance and thesustainable improvement of corporate value to continuously improve corporate value.

(4) Questions about the structure that supports the Board of
Directors (8 questions)⃝ Adequacy of provision of information to Outside
Directors and Audit & Supervisory Board Members

Basic Policy on Executive Compensation

Process of determining compensation⃝ Adequacy of cooperation between Directors of the

Executive compensation consists of fixed monetary

Board and Audit & Supervisory Board Members

compensation paid in consideration of the execution ofNomination and Compensation Advisory Committee, an

duties, stock-based compensation linked to performanceadvisory body to the Board of Directors, comprehensively

in the fiscal year under review and over the medium to longconsiders each Director of the Board's duties, contributions,term, and stock-based compensation in lieu of retirement

and performance, and compares them with other companies

benefits for Executives. The 32nd Annual General Meetingin the same industry and of the same size, before reportingof Shareholders held on December 23, 2020 approved theits deliberations to the Board of Directors. In response to

introduction of the stock-based compensation system. With

the report of the Committee, the Board of Directors makes

regard to compensation for the Company's executives, thedecisions within the limits resolved at the General Meeting

Board Members responded that (2) Questions about the27th Annual General Meeting of Shareholders held on Juneof Shareholders. Compensation for Audit & Supervisory

operation of the Board of Directors, (3) Questions on the Board

20, 2016 resolved that the maximum amount of compensation

Board Members is determined by consultation of Audit &of Directors' agenda, and (4) Questions about the structure thatfor Directors of the Board shall be 200 million yen per year

Supervisory Board Members within the limit amount resolved

supports the Board of Directors were generally appropriate.

(the number of Directors of the Board at the close of suchat the General Meeting of Shareholders.

⃝ Appropriateness of membership, management, andreports of the Nomination and Compensation Advisory
Committee■ Evaluation
In the effectiveness evaluation questionnaire for the fiscal
year ended September 2023, a high percentage of the
respondents answered "sufficient" or "appropriate" on mostquestions. All Directors of the Board and Audit & Supervisory

On the other hand, when asked about (1) Questions about

meeting was 3), and the maximum amount of compensation

the composition of the Board of Directors, there was an

for Audit & Supervisory Board Members shall be 50 million

opinion that the number of members of the Board of Directors

yen per year (the number of Audit & Supervisory Boardand its diversity should be strengthened on the executive side,

Members at the close of such meeting was 1).

including Directors of the Board, and that specialist personnel
and Corporate Officers should be trained. Based on these
opinions, we will further enhance our efforts by promoting the
succession plan formulated last year to develop specialist
personnel and Corporate Officers.
In addition, in the effectiveness evaluation for the fiscal year

Regarding compensation for Directors of the Board, theTotal amount of remuneration of executives
The total amount of remuneration for executives for the
fiscal year is as follows.

■ Directors of the Board
Compensation for executive Directors of the Board
consists of monetary compensation and stock-based
compensation (performance share unit system andExecutiveclassification

Number ofpeoplereceivingcompensation

Monetary
compensation

Stock-based
compensation

Total amountof
remuneration,etc.

restricted stock system). The payment ratio is designed to

Director of theBoard

3 people99 million yen

8 million yen

107 million yen

ended September 2022, with regard to (3) the agenda of theBoard of Directors, we have set as a challenge the creation of

be approximately 75% for monetary compensation and 25%

Outside Director

3 people

17 million yen—

17 million yen

a system that enables strategic and big-picture discussions

for stock-based compensation (when performance-linked

at Board of Directors meetings. In response to these issues,compensation is paid at the base amount).

Audit &
Supervisory
Board Member(of whichOutside)3 (3) people

24 (24) millionyen—

24 (24) million
yen

the Board of Directors reviewed the content of deliberations
and increased and created opportunities for Directors of theBoard to discuss the issues. As a result, in the effectivenessevaluation questionnaire for the fiscal year ended September
2023, the majority of the respondents answered that it was
being discussed appropriately, confirming that improvements
are being made.
Taking the above results into consideration, we believe thatthe effectiveness of the Board of Directors for the fiscal year

■ Outside Directors
Compensation for Outside Directors consists of monetarycompensation only.
■ Audit & Supervisory Board Members
Compensation for Audit & Supervisory Board Members
consists of monetary compensation only.

ended September 2023 has been appropriately ensured.
Our Board of Directors will fulfill the roles andresponsibilities of the Board of Directors, including
addressing the above issues, and work to further improve
its effectiveness. By doing so, we will further enhance ourcorporate governance and aim to continuously improve ourcorporate value.

29

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

30

GOVERNANCE
Risk Management and Compliance

Information Security/Personal Information Protection

As part of its corporate governance, Shinnihonseiyaku believes that it is important to identify andShinnihonseiyaku regards the appropriate management and protection of confidential information related

respond to potential risks in the promotion of our business. In addition, in order to remain a company that is

to research and products development, including about 6 million pieces of personal information possessedtrusted by our customers and society, we are implementing various initiatives to promote and improveby Shinnihonseiyaku, as one of its important management issues, and focuses on strengthening thecompliance.

governance of information security and educating employees.

Risk management

Compliance

Under the Basic Risk Management Policy, Shinnihonseiyaku

Information Security Policy

In accordance with our Mission and Charter of Conduct,

Thorough protection of personal
information

Based on our Mission, Shinnihonseiyaku has establishedstrives to accurately identify the various risks facing ourShinnihonseiyaku complies with laws, regulations, and internaland strictly adheres to an information security policy tocompany and reduce the possibility of such risks, minimize

regulations, and strives to be a company that is trusted byensure and improve confidentiality, integrity, and availability,

management of customer personal information and otherlosses in the event of such risks, and prevent early recovery

all stakeholders, including customers, business partners,

the three major requirements for information security, in orderpersonal information entrusted to it by all stakeholders in ourand recurrence.

employees, shareholders, and local communities. Under

to earn the trust of our customers and society as a whole.

company to be a top priority and has established a privacy

the Basic Compliance Policy, executives and all employees■ Risk assessment

understand the significance of compliance and conduct

We create a matrix to evaluate critical risks on two axes,

corporate activities in compliance with it. We also strive tothe degree of impact on the business and the frequency of

promote, improve, and enhance compliance by continuously

occurrence, and assign points to prioritize and determine

evaluating and reviewing our policies and management

critical risks. Based on this, we determine the main divisionsystems.

policy. We also conduct training and education in accordance▪ Compliance with laws
▪ Establishment of information security management
system▪ Establishment of Information Security Regulations▪ Implementation of information security measures▪ Implementation of information security education andresponsible for responding to risks, and form a team including
related divisions to respond. Critical risks are reviewed■ Compliance Consultation Desk (Whistleblowing system)by the Risk Management and Compliance Committee at

We have established a Compliance Consultation Desk

Shinnihonseiyaku considers the safe and appropriate

training▪ Evaluation of implementation of information security

with the Personal Information Protection Regulations andstrive to ensure the protection of personal information.
Percentage taking e-learning courses on protection of
personal information
Percentage taking e-learning courses onprotection of personal information100%

measures and continuous improvement

the beginning of the fiscal year, and progress is checked(Legal Division) as an internal consultation desk forapproximately once a quarter. The committee is chaired bycompliance violations. In addition, we have an external

the President & Representative Director of the Board andconsultation service (at our legal advisory office) that allows

Chief Executive Officer, full-time Directors of the Board,

direct consultation and reporting without going throughCorporate Officers and General Managers.

the internal consultation service and the company, andof our employees in order to prevent serious incidents due

system for handling personal information, and we continue tothe external consultation service also allows anonymous

to human causes. We conduct e-learning for all employees

renew it.

reporting. In addition, we have established whistleblower

once a year on information security and personal information

protection regulations aimed at protecting whistleblowers,

protection, and continue to raise awareness on our intranet.

■ Obtaining PrivacyMark■ Initiatives to improve information security literacy

In April 2005, we obtained the PrivacyMark, which is

We are working to improve the information security literacy

recognized as proof that a business has an appropriate

and have taken appropriate measures, such as conducting
follow-up surveys to ensure that counselors andPercentage taking e-learning courses on information

whistleblowers are not treated unfavorably.

security
Percentage taking e-learning courses on

Number whistleblowing andconsultations

3 cases■ Information security promotion system*There were no reports of serious violations of law.

■ Compliance promotion and whistleblowing system

Head of Information Security
President & Representative Director of theBoard and Chief Executive Oﬃcer(Committee Chair)

Risk Management and Compliance Committee
Report(Compliance)

Directions

100%

information security

Members: Directors of the Board(excluding part-time Directors of the Board)
Corporate Oﬃcers
General Managers
Members are determined according to the case

Report(Whistleblowing)*

Directions

Audit &
Supervisory Board
ReportSecretariat

OpinionInformation Security Secretariat
Director of the Information
Security Secretariat

Personal Information Management
Secretariat
Director of the Personal Information
Management Secretariat

Member of the Information
Security Secretariat

Member of the Personal Information
Management Secretariat

Observer: Full-time Audit & Supervisory Board Member

Compliance and Whistleblowing Consultation Desk (Legal Division)

Head of Personal Information

Whistleblowing hotline (the company’s legal advisory oﬃce)
Directions* Whistleblowing concerning the President & Representative Director of
the Board and Chief Executive Oﬃcer shall be reported to the Audit &Supervisory Board.

31

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

Workplace

Whistleblowing

Internal Audit Oﬃce

Audit system
Audit manager

Consultation

Executives, employees, etc.

Group companies

Information security management system/
personal information protection management system● Supervisor of each section● Nominated person in charge

AuditorShinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

32

GOVERNANCE
Stakeholder Engagement
In order to achieve our Purpose, Shinnihonseiyaku is working to understand the opinions and requests ofstakeholders through various mechanisms, such as proactive information disclosure and surveys, and toreflect them in our business activities.

Customers■ Customer questionnaire

Dialogue and communication

Frequency

Dialogue with Employees■ Management Policy Presentation

At Shinnihonseiyaku, we conduct a questionnaire in theCommunication with Stakeholders
Stakeholders

Dialogue with Customers

Once a year, at the beginning of each fiscal year, we holddelivery document that is included when we deliver productsa presentation called the Midterm Strategy Conference

to customers who have placed an order. The results of(MSC) as an opportunity to deliver management strategies

the questionnaire are used for business activities such as

and execution plans for the fiscal year directly from top

products development, sales promotion, and advertising.

management and department managers to each employee.
After the conference, we conduct a questionnaire for all■ Company-wide sharing of VOC*◦ Business activities

Daily◦ Customer contact points such as call centers andwebsites

Daily◦ Website

Always◦ Customer questionnaire

Daily

the intranet and through internal postings, and reflected in◦ Customer satisfaction survey

As needed

products improvements and service improvements.

◦ General Meeting of Shareholders

Once per year

◦ Financial results briefing

Four times per year

◦ Small meetings with investors

As needed◦ Individual inquiries

As needed◦ Corporate site

As needed◦ Responses to questionnaires and surveys from ESG
rating agencies

As needed

In addition to the voices of customers gathered at callcenters on a daily basis, messages sent to subscriber

employees. The results of the questionnaire are reported tothe management and reflected in the management of theconference to enable better communication.

news magazines are shared throughout the company on*Short for Voice Of Customer

Shareholders and Investors

Suppliers

Employees

Local Communities

NPOs, NGOs

Government, local government, industry,
and academic societies◦ Procurement activities

Daily◦ Partner briefings

As needed◦ Quality Conference

Regular◦ Quality Improvement Report Meeting

Regular◦ Quality audit

Regular◦ Various interviews

As needed◦ Management Policy Presentation

Once per year

◦ Intranet and internal newsletters

As needed◦ Whistleblowing system

Daily◦ Participation in local events

As needed◦ CSR

As needed◦ Meetings and collaboration with NPOs and NGOs

As needed◦ Participation in industry activities

As needed◦ Research in collaboration between industry andacademia

As needed

View of the MSC event

Dialogue with Local Communities
VOC displayed inside the company

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

Shinnihonseiyaku is committed to CSR activities that create

Dialogue with Shareholders and Investors

smiles in the community in order to realize “a beautiful smile”■ Financial results briefings, individual interviews, and small

in our Purpose. One of the CSR activities we continue to carrymeetings

out is the campaign to eradicate drunk driving. In FY2023,

In addition to dialogue at the General Meeting ofan event to eradicate drunk driving was held at Hakata High

Shareholders, we hold quarterly financial results briefings for

School (Fukuoka City) in conjunction with the NPO Heart

shareholders and investors, as well as individual interviews

Space (Fukuoka City, President: Miyako Yamamoto) toand small meetings for follow-up. A total of 74 individual

coincide with Drunk Driving Eradication Week set by Fukuoka

interviews and small meetings were held in FY2023.

Prefecture.

Scenes from the 34th Annual General Meeting of Shareholders

33■ CSR/Campaign to eradicate drunk driving

A message from a student expressing a wish to eradicate drunk driving

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

34

Non-financial Data

Corporate Profile

Environment
Unitt

Amount of industrial waste *1
CO2 emissions
Water consumption (domestic water and sewage) *4

Scope 1
Scope 2*2
Scope 3*3

tCO2
m3

FY2021
22.2
1.4
655.1
2329.9FY2022
56.2
0.9
520.3
24977.1
2205.1

FY20232.0
488.0
26095.4
2038.1*1: Total amount of industrial waste at the three locations of: Head Office, Yoshizuka Office, and Logistics Center. The calculation period for the amount of industrial waste was FY2021 (April 2021
to March 2022) and FY2022 (April 2022 to March 2023). The figures for FY2023 are scheduled for calculation in April 2024 or later. We believe that the increase in FY2022 was due to thedisposal of heavy products using bottles.
*2: Adopt market standards. In line with the revision of the calculation method, we recalculated the amount of emissions in FY2021 and FY2022. We believe that the decrease in FY2023 was dueto the closing of company-operated stores.
*3: The calculation range is non-consolidated for Shinnihonseiyaku Co., Ltd. Categories 1, 4, and 12 are calculated only for cosmetics. Categories 8, 10, 11, 13, 14, and 15 are excluded from thecalculation due to reasons such as the absence of relevant emissions, inclusion in other categories, and inclusion in Scope 1 + 2.
In FY2023, the industrial waste data used for calculation of Category 5 was not calculated because it was not yet collected.
*4: Total amount of water and sewage used at the three locations of: Head Office, Yoshizuka Office, and Logistics Center.

Human Resources
Scope of Report
Full-time
FemaleMale
employee

Number of employees

Contract
employees
Dispatch
employees

FemaleMale
FemaleMale

Average years of service

FemaleMale

Average age

FemaleMale

Number of managers

FemaleMale

Ratio of female managers
Ratio of female employees
Employment rate for persons with disabilities
Number of childcare leave system users

FemaleMaleChildcare leave acquisition rate
Paid leave acquisition rate
Self-development allowance utilization rate*5
Filial allowance utilization rate*5

Unit
Total
Total

People

Total
Total
Total
Total
Total

Year
Age
People
%
%
%

Total

People%%%%FY2021
212
93
305
165
20
185
19
1
20
510
8.7
6.1
7.9
38.0
38.4
38.1
4
22
26
15.4
76.5
3.2
7
4
11
64.7
97.2
12.9
58.6

FY2022
198
99
297
171
22
193
21
1
22
512
8.7
6.2
7.9
37.8
39.7
38.4
4
26
30
13.3
75.2
3.6
17
3
20
83.3
85.6
10.5
62.4

FY2023
206
95
301
158
21
179
2
1
3
483
8.8
6.4
8.0
37.7
40.1
38.5
5
29
34
14.7
75.7
4.0
13
4
17
85.0
84.7
12.3
67.1

*5: Our company's unique benefit system. The usage rate is the number of employees using the system divided by the number of eligible employees (directly employed employees).

Memberships and qualifications

Shinnihonseiyaku Co., Ltd.

Japan Direct Marketing Association
Japan Health and Nutrition Food Association

Representative

COSMETIC FAIR TRADE CONFERENCE
Japan Cosmetic Industry Association

President & Representative Director of the Board

Call Center Association of Japanand Chief Executive Officer

Council for Responsible Nutrition of Japan

Takahiro Goto

The Pharmaceutical Society of JapanThe Japanese Society of Pharmacognosy

Head Office

Japanese Society of Anti-Aging Medicine
Japan Anti-Aging Foundation

1-4-7 Otemon, Chuo-ku, Fukuoka City,

Japan Self-Medication Industry

810-0074, Japan

Japan Online Drug Association

TEL 092-720-5800

Cosmetics Manufacturing and Sales Business License
Japanese Cosmetic Science Society

EstablishedMarch 11, 1992

Pharmaceutical Store Sales Business License
Pharmaceutical Wholesale Sales Business License
Type 2 Pharmaceuticals Manufacturing and Sales
Business licenses

CapitalQuasi-drug Products Manufacturing and Sales
Business licenses

4,158 million yen

Japan Advertising Review Organization

Number of employees

Other offices

483 people

Tokyo Office
Marunouchi Building 16F, 2-4-1 Marunouchi,

GovernanceCorporate governance system
Number of Directors of the
Board

Company nameInternal
OutsideIndependent
outsideRatio of Independent Outside Directors
Ratio of female Directors of the Board
Number of Audit & Supervisory
Internal
Board Members
Independent outside

FemaleMale
Total internal
FemaleMale
FemaleMale
Total outside
Total

Unit

People%FemaleMale
FemaleMale

PeopleTotal

Ratio of Independent Outside Audit & Supervisory Board Members
Term of Directors of the Board
Number of Board of Directors meetings
Attendance at Board of Directors meetings (Directors of the Board)
Attendance at Board of Directors meetings (Audit & Supervisory Board Members)
Number of meetings of the Audit & Supervisory Board
Attendance at Audit & Supervisory Board meetings
Attendance rate of Independent Audit & Supervisory Board Members
Number of Corporate Officers
FemaleMale
Total
Ratio of female Corporate Officers
Number of Nomination andNumber of Internal Directors of theFemaleMale
Compensation Advisory
Board
Number of Independent Outside
FemaleCommittee members
Male
Directors
Total
Number of meetings of the Nomination and Compensation Advisory Committee
Attendance at meetings of the Nomination and Compensation Advisory Committee
Compliance
Number whistleblowing and consultations
Number of legal violations
Number of personal information breaches

%
Year
Time
%
%
Time
%
%
People%People
Time
%
Unit
Cases
Cases
Cases

FY2023
0
3
3
1
2
1
2
3
6
50.0
16.7
0
0
0
3
3
100
1
15
100
100
20
98.3
98.3
0
7
7
0
0
2
1
2
5
6
100
FY2023300Chiyoda-ku, Tokyo,
100-6316, JapanTEL 03-6837-1685
Yoshizuka Office8-7-11 Yoshizuka, Hakata-ku, Fukuoka City,
812-0041, JapanTEL 092-626-8822
Logistics Center
8-5-75 Yoshizuka, Hakata-ku, Fukuoka City,
812-0041, JapanTEL 092-626-8163
As of September 30, 2023

Period: FY2021 (October 2020 to September 2021), FY2022 (October 2021 to September 2022), FY2023 (October 2022 to September 2023)

35

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

Shinnihonseiyaku Co., Ltd. SUSTAINABILITY REPORT 2023

36