CSR Report

Love today, Love your life.

Contents

Editorial Policy/CSR Material Issues� ���� 01
About Lion �������������� 02
Message from the Management ����� 04

Lion's CSR ��������� 06
Establishing the Group-wide CSRManagement Structure �������� 08
2013 Highlight 1

Promoting Activities to Spread Hand
Washing Habits ����������� 102013 Highlight 2

Promoting New Environmental
Communications through Products ��� 122013 Highlight 3

Proposing New Oral Care
Solutions�������������� 15
Organizational Governance

Maintaining a Sound Management System thatis Continuously Trusted by Society � ��� 16
Human Rights

Establishing Framework for Respecting Human
Rights � ��������������� 19
Labor Practices

Changing Awareness of Employees
through Raising Morale and Motivation � 20
The Environment

Contributing to the Development ofa Sustainable Society as an Environmentally
Advanced Company  ��������� 25
Fair Operating Practices

Promoting CSR Activities throughout the Value
Chain ���������������� 34
Consumer Issues

Pursuing Customer Satisfaction by Creating Safe
and Trustworthy Products  ������� 36
Community Involvement and Development

Co-existing and Co-prospering with Society andCommunities/Contributing to the Developmentof Society in Health, Comfort and Environment
Areas ���������������� 42

Editorial Policy
Lion views its CSR Report as an important tool
allowing the company to communicate its CSR
initiatives and draw on stakeholder opinions
while furthering corporate activities.
The CSR Report 2014 was prepared taking into
account the following points.
● Since 2011, CSR activities have been systematizedin accordance with ISO 26000, an international
standard concerning social responsibility. The CSR
Report and CSR website also reflect the above.
CSR material issues identified during 2013 arereported in the 2014 CSR Report (see chart on theright) and provides full details of activities that havedemonstrated more progress than others as 2013
Highlights so that the readers can have a betteridea of the status of such major activities. Also,
information of activities on the CSR website is given
at the bottom of each core topic page to allow
easier understanding of the total picture of CSR
information.
● Third-party review by outside expert has been
included to provide an objective assessment.
●Information on standard disclosure items as requiredby the GRI Sustainability Reporting Guidelines areprovided.
●For articles that have more details available on thewebsite, a URL mark has been added.

Reference guidelines
・The Environmental Reporting Guidelines (2012) of
the Japanese Ministry of the Environment
・G4 Sustainability Reporting Guidelines of the Global
Reporting Initiative・ISO 26000: Guidance on social responsibility issued
by Japanese Standards Association

Coverage
Lion Corporation, Lion Chemical Co., Ltd., Lion Specialty
Chemicals Co., Ltd. (formerly Lion Akzo Co., Ltd.), Lion
Business Service Co., Ltd., Lion Hygiene Co., Ltd., Lion
Trading Co., Ltd., Ipposha Oil Industries Co., Ltd., Lion
Packaging Co., Ltd., Lion Engineering Co., Ltd., Lion Field
Marketing Co., Ltd., Lion Logistics Service Co., Ltd., Lion
Cordial Support Co., Ltd., Issua Co., Ltd., Lion Dental
Products Co., Ltd.,(Regarding the environmental data, overseas groupcompanies are included in addition to the above domestic
group companies.)

Third-Party Review ���������� 46
Lion’s Response / Editorial Note����� 47

Period Covered
January 1 to December 31, 2013
(Some parts of the activities include those of 2014.)

CSR Material Issues
Core Subjects

Ideal Visions

CSR Material Issues
Establishing the Group-wide CSR Management Structure

Organizational
Governance

Maintaining a Sound
Management System that is
Continuously Trusted
by Society

Reviewing the Business Continuity Plan

Embedding Compliance/ Internal Control Systems

Formulating and Disseminating Human Rights Policy
Human
RightsEstablishing Framework for
Respecting Human Rights
Ensuring Human Rights Due Diligence
Promoting Human Resource
Development/Revitalization Programs

Labor
Practices

Changing Awareness of
Employees through Raising
Morale and Motivation

Establishing Good Working Environments

Promoting Employees' Health Management
Enhancing Group-wide Occupational Health and
Safety Management System
Engaging in Progressive Environmental Activities

The
Environment

Contributing to theDevelopment of a Sustainable
Society as an Environmentally
Advanced Company

Preventing Pollution
Enhancing Group-wide Management of Chemical
Substances

Fair Operating
Practices

Promoting CSR Activities
throughout the Value Chain

Promoting CSR Procurement
Offering Products and Information that Contributeto the Development of a Sustainable Society

ConsumerIssuesPursuing Customer
Satisfaction by Creating Safe
and Trustworthy Products

Providing Information Useful for Daily Lifeand Promoting Educational Activities
Enhancing the Group-wide Quality Assurance System

Promoting Information Security
Community
Involvement andDevelopment

Co-existing and Co-prospering with Society andCommunities/Contributing to the Development ofSociety in Health, Comfort and Environment Areas

Enhancing Social Contribution Programsin Health and Comfort Areas

CSR Report 201401

About Lion
Corporate Data

Performance Transition(consolidated)

Corporate Name Lion Corporation

Net Sales

Address

3-7, Honjo 1-chome, Sumida-ku, Tokyo
130-8644, JapanFoundation

October 30, 1891

（million yen）
400,000

Capital￥34,433.72 million (as of December 31, 2013)

350,000

Representative

Itsuo Hama, Representative Director/President

300,000

Employees

Consolidated: 6,162
Non-consolidated: 2,497 (as of December 31, 2013)

250,000

Net Sales

Consolidated:￥352,000 million
Non-consolidated: ￥253,700 million(as of December 2013)

PlantsChiba Plant (Ichihara City), Odawara Plant (Odawara City),
Osaka Plant (Sakai City), Akashi Plant (Akashi City)

321,947 331,100 327,500

335,171

2010

2012

200,000
150,000
100,000
50,000
0

2009

2011

Research Facilities Hirai (Edogawa-ku), Odawara (Odawara City)
Sales Offices(million yen)
12,000Net Sales Breakdown by Business

10,000Consumer Products Business￥265.20 billion

6,000

Oral Care Products￥51.62 billion

4,000

Beauty Care Products￥19.04 billion

2,000

Fabric Care Products￥80.95 billion

Living Care Products￥21.62 billion

Pharmaceutical Products￥36.77 billion

Other Business￥55.18 billion

0￥76.86 billion

12,000

Others￥28.72 billion

10,000- ￥70.42 billion

8,000*Intra-segment and inter-segment sales

Location of Overseas Group Companies
Overseas sales compared
to previous year: 130%
Thailand(Lion Corporation (Thailand) Ltd.)

Malaysia

Ratio of overseas sales(consolidated) : 21%

Hong Kong(Lion Corporation(Hong Kong) Ltd.)South Korea(Southern Lion Sdn. Bhd.)(CJ Lion Corporation)

Malaysia

China(Lion Eco Chemicals Sdn. Bhd.)(Lion Daily Necessities
Chemicals(Qingdao) Co., Ltd.)Singapore(Lion Chemical Industry(Taiwan) Co., Ltd.)

Taiwan(Lion Corporation (Singapore) Pte. Ltd.)(P.T. Lion Wings)

Philippines(Peerless Lion Corporation.)(Business started in 2013)02

CSR Report 2014

10,819

2009

2010

2012

2011

2013（Year）

11,14512,30011,795 12,183
8,564

6,000
4,000
2,000
0

2009

2010

2011

2012

2013（Year）

Net Income（million yen）
7,000
6,000

6,097

6,041
5,465

5,000
4,000

4,077

4,235

2011

2012

3,000
2,000
1,000
0

Indonesia

11,169

7,213（million yen）
14,000Overseas Business￥352.000 billion

10,500Ordinary Income￥51.63 billion

Consolidated Net Sales

10,036

8,000

Industrial Products Business

Adjustment*

2013（Year）

Operating Income

Sapporo, Sendai, Tokyo, Nagoya, Osaka, Fukuoka* List of Major Subsidiaries and Affiliates
URL http://www.lion.co.jp/en/company/html/com0301f.htm

352,005

2009

2010

2013 （Year）* IR Library
URL http://www.lion.co.jp/en/invest/html/inv0300f.htm

Fabric Care Products
Living Care Products

Consumer Products Business

Beauty Care Products

Oral Care Products

Main Lines of Business
Advanced oral care products to help customers stay healthy

Main Product Categories
Toothpastes, toothbrushes,
mouthwashes, and otherdental products

Hair and skin care products for health and comfort of body and mind
Main Product Categories
Shampoos, conditioners,
hair-styling products,
hair-nourishment treatments,
hand soaps, body washes,
men’s cosmetics, andantiperspirants

Reliable products to keep clothes clean and to give comfort

Main Product Categories
Laundry detergents, fineclothing care products,
pre-care products, bleaches,
fabric softeners, andmaintenance products

Products useful for clean and comfortable living and dining

Main Product Categories
Dishwashing detergents,
household cleaners, andcooking aids

Chemical Products

Industrial
Products Business

Goods-on-Order andDirect-to-Consumer Products

Pharmaceutical
Products

A well-rounded range of brands to meet growing self-care needs
Main Product Categories
Analgesics, gastrointestinal
medicines, anti-diarrhoeal
drugs, eye drops, tonics andnutrients, anti-inflammatory
poultices, acne medications,
insecticides and prescription
drugs

Various products customized for our customers and mail-order specialty items to meet specific needs ofour customers

Main Product Categories
Gifts, novelty products,
functional foods, etc.

Always bearing our motto, "contributing to the global environment," in mind, we meet the needs
applying high technical capabilities and high functionality products based on interface science.
Main Product Categories
Surfactants, fatty acidnitrogen derivatives, fatty acidmethyl ester and its
derivatives, electro-conductive
carbon black, and various
industrial cleaners

Palm tree fatty acid ester electrical insulation oil
and application examples(environment-friendly transformers)

Electro-conductive carbon black and application
products (packing materials for electronicmaterials including IC chips)

Industrial cleaners and subjectedmaterials (precision component
including automobile parts)

CSR Report 201403

Message from the Management

Aiming to become "a company that creates value
for lifestyle and spiritual fulfillment," we willcontinue on with our unwavering progress.
As its new management style for the year 2020, Lion has
established "Vision 2020," which envisions "a company thatcreates value for lifestyle and spiritual fulfillment."
In 2013, we made ambitious efforts for the development
and nurturing of high value-added products and marketcreating products to realize a "recovery of its earning power in
its consumer products business," which is the top priority in
Lion’s domestic operations, and did recover its profitability.
Also, since our overseas operations have grown and direct-toconsumer sales business reached over 10 billion yen, in net
sales, both income and profit have recorded an increase.

Sadayoshi Fujishige,
Representative Director andChairman04

CSR Report 2014

In 2014, we will accelerate qualitative growth in ourdomestic businesses through nurturing of high value-added
products and quantitative expansion of our overseas
businesses by expanding sales volume. At the same time, wewill also focus on the enhancement of CSR activities, including
those that would help us evolve into a company that is
advanced in the area of environmental responsiveness, and thebuilding of a structure for effective corporate governancefurther than ever. By integrating CSR into the managementfoundation, we will steadily progress to become "a company
that creates value for lifestyle and spiritual fulfillment."

Itsuo Hama,
Representative Director,
President and Executive
OfficerCreating future value by consistently
safeguarding cleanliness, health,comfort, and the environment forpeople each and every day
The phrase "Fulfilling a Spirit of Love" is an important part ofour company motto. The spirit that has always championed
over the past 120 years since its foundation is reflected in our
slogan of "Life. Love. Lion." Lion is determined to provide
assistance in achieving the meaning contained in the slogan;Love this day and live life to its fullest, and you will become atorch to illuminate the path to a brighter future. In its Vision
2020, Lion clearly states that we aim to become a "company
that creates value for lifestyle and spiritual fulfillment," a"company that is advanced in the area of environmental
responsiveness" and a "company that continues to take onchallenges, create and learn." We are looking to contribute to
the society by continuously offering new values around the
keywords of Health, Comfort and Environment.

"Aiming to become a company that createsvalue for lifestyle and spiritual fulfillment"
In 2013, Lion created and nurtured new values, including the
introduction of high functionality eye-drops that use a newtechnology to address age- or overuse-related eye strain andantimold bath cleaner that came out of the new idea of"preventing invisible stains."
This year marks the 100th anniversary of our awarenessactivities to promote oral care habits. In the future, we will
evolve it into a business that can offer new values from theviewpoint of "comprehensive oral health care." Also, we
worked to further disseminate correct hand washing habits as
a company-wide program, including the provision of our handsoap to our business partners and promotion of hand-washingeducation activities for kindergarteners by volunteer
employees.
Also, in Thailand, Malaysia and the Philippines, we built andbegan operations of new factories to increase our production
and supply capacity for further business expansion in overseas
operations. We will continue with our oral care and handwashing education activities along with our productdevelopment and marketing. Under the Lion Group's common
vision to contribute to the creation of clean, healthy andcomfortable lifestyles for people in Asia, we will keep up with
our efforts by adapting our accumulated knowledge to theculture and habits of different countries.

"Aiming to become a company that is
advanced in the area of environmental
responsiveness"
Lion started the company with the production and selling ofsoaps based on plant-derived oils, and had consistently
engaged in environmental efforts over many years. It is thecornerstone of our DNA that we have nurtured in all of ourbusinesses over 120 years.
In 2013, we established Eco Vision 2020 and an overview ofenvironmental communications in and outside of thecompany. Eco Vision 2020 clearly shows Lion's approach toglobal environmental problems such as "global warming,""shortage and uneven distribution of resources" and "loss of
biodiversity." We established target items for each of thestages of raw materials, packages, and containers
procurement, manufacturing, distribution, use of product anddisposal by customers from the viewpoint of a "product life
cycle," and established an "environmental logo" that is madeup of our environmental slogan and "Eco Lion mark".
Lion will promote Eco Vision 2020 and contribute to therealization of a sustainable society with its advanced green
technologies and through communication with stakeholders.

"Aiming to become a company that
continues to take on challenges, create andlearn"In achieving Vision 2020, it is critical that every employee
becomes conscious of participation in management and takeon new challenges across the board. A code of conduct was
set forth in 2012 to provide support to employees who are
creative and are working hard toward the goals. We see
progress in our activities to comply with the code and we feelthat internal communications are coming to life. In 2013, I
visited many facilities and posted my views on my blog on the
Intranet to maintain dialogues with our employees. Each
employee will understand individual strengths and progress torealize Vision 2020 as one team.
To remain as a company that is trusted by society, it isimportant to integrate CSR with the managerial structure of
the company. We reviewed our management challenges inlight of our understanding of the requirements from society as
included in the international standard of social responsibility,
ISO 26000, and identified CSR material issues. In 2013, we
promoted exchange of CSR information with the overseas
group companies and shared with them an image of what
Lion Group aspires to achieve. Despite the differences inculture, habits, and business content and sales from one
country to another, we have a common management
philosophy. We will share CSR material issues specific toindividual companies and effectively work on them.
In 2009, Lion announced its support for the UN Global
Compact: a global framework to realize sustainable growth.
We will continue to support it and continue with our efforts
toward CSR management.
CSR Report 201405

Lion's CSR
Business Activities Supporting Clean, Healthy, Comfortable and Sustainable Life
The origins of Lion's approach to CSR can be traced to our founding spirit of "working for the benefitof people and society." With the robust business foundation established based on the company mottoand the management philosophy, Lion has contributed to sustainable development of society throughconducting business activities under the management vision and by integrating CSR material Issues.

Sustainable corporate andsocial developmentin 2020

Management Vision(Vision 2020)

Ideal
Visions

Aiming to become a company thatcreates value for lifestyle and spiritual fulfillment
Aiming to become a company that is advancedin the area of environmental responsiveness
Aiming to become a company that continues totake on challenges, create and learn

A company that creates value forlifestyle and spiritual fulﬁllmentthat creates future value by
consistently safeguarding health,comfort, and the environment forpeople each and every day

in 2017

Promotion of PDCA

Medium-term
management plan

ComfortBusiness

in 2014

V-1 Plan

HealthBusiness

Environmentallyfriendly Business

CSR Material Issues

See Pages 8 and 9

Lion Group Charter for Corporate Behavior/Behavioral Guidelines
Foundation for BusinessCompany Motto / Management Philosophy
Lion Group Charter for Corporate Behavior

Behavioral Guidelines

http://www.lion.co.jp/en/company/html/com0201f.htm

http://www.lion.co.jp/ja/company/about/indicator.htm

Company Motto/Management Philosophy
http://www.lion.co.jp/en/company/html/com0101f.htm

06

CSR Report 2014

History of Lion Group's Business Activities

Organizational Governance

Lion's CSR

Lion's business that started out with manufacturing laundry soap and toothpaste has continued tooffer products and propose good lifestyles as a culture bearer for oral hygiene and cleanliness.
We have been focusing on "oral hygiene," "cleanliness" and "environmental friendliness" as main
business fields because they are the strengths of Lion Group and are also social issues attracting a lot of
attention.

Oral Hygiene Business
Oral hygiene is Lion’s core area of business. Over the years, we have contributed to the improvement of people’s
living habits by developing many dentifrices with new functions throughout the eras, and have disseminated thecorrect knowledge about oral hygiene.

Clinica(for prevention of cavity)
Lion Dental Clinic for Children

Toothbrush and toothpaste donations
to communities in Asian counties

Clinica(for prevention of cavity)

Completion of the Odawara Plant

Toothbrush and toothpaste donations
to communities in Asian counties

Lion Dental Clinic for Children

Charity coupons printed
on the back of the packet
Lion Toothpowder(the root of Lion’s social action program)Charity coupons printed
on the back of the packet(the root of Lion’s social action program)

Founding (1896-)

Promoting oral health/Founding(1896-)The root of social
actionprograms
Promoting oral health/The root of social action
programs

A supplement picture bookthat comes with the product
White & White(This is the root of educational(Development of laminated tubes)
activities about oral health for children)
A supplement picture bookthat comes with the product
White & White(This is the root of educational(Development of laminated tubes)
activities about oral health for children)(the 1960s-and 1970s)

Growth (1913-)

Starting educational
Growthactivities to(1913-)
make tooth

Dentor(for prevention of pyorrhea)
The Dentor Systema series(for prevention of periodontal disease)

Mass Production

Expansion
The Dentor Systema series

Mass
Production
Expandingthe market, andExpansion
Responding to diversifying

prevention of periodontal disease)(the (for1970s-onward)(the1960s-and1970s)
developingworld-classproducts
brushing habits for children
Starting educational
Expanding the market, andactivities to make toothdeveloping world-class products
brushing habits for children

Labor Practices

Lion Toothpowder

Dentor(for prevention of pyorrhea)

Clinica Advantage(promotion of preventive dentistry)

Present

Clinica Advantage(promotion of preventive dentistry)

From oral health to
Present
systemic health(the1970s-onward)
oral healthissues with morescientific research
Responding to diversifying
oral health issues with morescientific research

From Japan to otherFromhealth to
Asian oralcountries
systemic
healthPromotionof
From
Japandentistry
to otherpreventive
Asian countries
Promotion of
preventive dentistry

The Environment

Completion of the Odawara Plant

Human Rights

Functions added in response to people’s needs, as well asawareness and education of oral health

Culture of Cleanliness and Environmentally-friendly Business

KireiKirei
Medicated Foaming Hand Soap

Manual on standard
home laundry
procedures(Education on laundry
Manualon standard
procedures)home laundry
procedures(Education on laundry
procedures)

Promotion ofawareness of hygiene(1891-1940s)
Promotionofawareness of hygiene

Promoted(1891-1940s)awarenessabout washingwith detergent
Promoted awarenessabout washingwith detergent

KireiKirei
Medicated Liquid
Hand soap

Contribution
to Improved
Hygiene inContribution
Post-warJapan
toImproved(1950s)HygieneinContributedJapanto
Post-war
eradication of(1950s)parasites with
Contributed
toa neutral detergent
eradication
for washingof
vegetables
parasites witha neutral detergent
for washing vegetables

The "Beat" brand laundry detergent
sold in South Korea
The "Beat" brand laundry detergent
sold in South Korea

Dash

Spark

Dash
Lipon
(Japan’s first fatty
alcohol-based
synthetic detergent)
Lipon(Japan’s first fatty
alcohol-based
synthetic detergent)

KireiKirei
Medicated Foaming Hand Soap

Spark

Murin (phosphorus-free) TOP

floating which occurredin rivers and eutrophication
Respondedbubbleas the use oftosynthetic
floating
which
occurreddetergents
becamepopularin rivers and eutrophication
as the use of synthetic
detergents became popular

Educational activities
to make hand washing a habit

TOP NANOX

Response to
ActionsEducational
to Meetactivities
Response toNANOX
Water
Petroleum Resources Increasing
Needs
fora habit ResourcesTOPIssues,
to make handwashing
Present
Issues andtoResource Actions
Disinfectants
that Came Response
Water UsetoReductions
Response
to Meet
Water
Conservation
Out of Food
Poisoning
and Combating
Petroleum
Resources Increasing
Needs
for
Resources
Issues,Odors-2000s)(1990s)Cases(1990s(2010s)Issues and Resource Disinfectants that Came Water Use Reductions Present
Expanded a line of
Launched
medicated
Released
Conservation
Outof Food
Poisoning andCombating Odors Building
products
soaps (1990s
Developed"TOP
a sustainable-2000s)(1990s) basedCases(2010s)NANOX"

Murin (phosphorus-free) TOP

Response to Water
Environment Issues(1960s-1980s)
Response
to Water
Environment Issues
Responded
to bubble-1980s)(1960s

Shokubutsu-Monogatari(Plant Story)

Community Involvement andDevelopment

Education of cleanliness andmeasures for the global environment
Plant-Derived Lion Laundry Soap
(Japan’s first plant-derived soap)
Education of cleanliness andmeasures for the global environment
Plant-Derived Lion Laundry Soap
(Japan’s first plant-derived soap)

KireiKirei
Medicated Liquid
Hand soap

Consumer Issues

Education of cleanliness and measures
for the global environment
Lipon F(earned the top
recommendationof the Japan
Lipon
F
Food Hygiene(earnedthe top
Association)
recommendationof the Japan
Food Hygiene
Association)

Fair Operating Practices

Through supplying many kinds of detergent, including laundry detergents and soaps, Lion has helped instill aculture of cleanliness in society from the days when notions about cleanliness were weak until the present day. In
product development, we are currently tackling global environmental issues beginning with those relating towater.

Shokubutsu-Monogatari(Plant Story)

on plant-derived
Expandedmaterials a line ofproducts basedon plant-derived
materials

educational activities
Launched
medicatedfor children
soaps Developed
educational activities
for children

mixed with
Releaseduniquely-developed"TOP
NANOX"
cleaning
ingredientsmixed withuniquely-developed
cleaning ingredientssociety / Contributing
Building
to a clean lifestyleainsustainableAsia
society / Contributing
to a clean lifestylein Asia

CSR Report 201407

Establishing the Group-wide CSR Management Structure
Setting objectives and managing progress● Promotion of CSR Activities

2012. Also, for each of the material issues, we established a
medium-term objective and included them in our CSR Report for2013. For Key Performance Indicators (KPI), we collectively
ascertained activities carried out on such objectives by their
qualitative information and evaluated overall achievement(published on the Web). We visited eight of our groupcompanies overseas and interviewed them regarding their CSR
efforts and shared our ideal visions and material issues.

We have promoted our CSR activities based on ISO 26000, theglobal social responsibility standard, since 2011, and by listening
to, and incorporating opinions of third party organizations, wehave confirmed and evaluated our achievements in our domestic
group. By considering world CSR trends, our company's uniquebusiness characteristics, potential risks, opportunities and theirrespective implications, we identified CSR material issues inSpecific Processes of Identifying Material Issues
International CSR initiatives including ISO 26000 and UN Global Compact

Internal factors

External factors

Our ideal visions in 2020 and its alignment
with basic strategies leading up to it

Needs of stakeholders thatcan be addressed by Lion
through dialogues therewith▶ Management Vision (Vision 2020)▶ Medium-term management plan (V-1 Plan)

Lion's CSR Material Issues● Achievements in 2013

The CSR Material Issues and the Main Stakeholders that we identified were laid out below in each stage of the value chain,from Procurement of Raw Materials, Packages, and Containers, Major Initiatives Undertaken by Lion, Use by Consumers, andSociety/Environment. In 2013, for each of the CSR material issues, we promoted activities to achieve its objective.
For information about material issues, medium-term objectives, and a list ofachievements by core subject, please access:Stages ofValue Chain

URL

http://www.lion.co.jp/ja/csr/lion_csr/promotion/#result2013

Procurement of Raw Materials,
Packages, and Containers

Major Initiatives
Undertaken by Lion
・Promoting Human Resource Development/ ▶ p20

CSR Material Issues

Revitalization Programs

・Establishing Good Working Environments ▶ p22
・Promoting Employees' Health Management ▶ p23

Opportunities

Establishing the Group-wide CSR Management Structure ▶ p8-9
Formulating and Disseminating Human Rights Policy,

Risks

Enhancing Group-wide Management of Chemical Substances,
Promoting Information Security ▶ p38

Promoting CSR Procurement ▶ p34-35

Enhancing the Group-wide Quality Assurance Systemy ▶ p36-38
Enhancing Group-wide Occupational Health▶ p24
and Safety Management System
Business Partners

Key Stakeholders

Employees＊Human rights due diligence: Steps that an organization should take in order to recognize, prevent and address negative influences on human rights.
08

CSR Report 2014

Promoting Human Resource Development/
Revitalization Programs

Highlight ➊ Promotion of Activities to Spread Hand
Washing Habits

In 2013, with the introduction of a new personnel system, Lion
newly defined the type of human resources that are sought by thecompany. To develop all such human resources, we enhanced PDCA
in the business management and improved training systems.

In order to inform consumers of the importance of environmental
considerations, Lion established standards for new eco-products
through review of evaluation items from a product life cycle
perspective, and created an environmental logo and label to bea t t ached to eco-products to initiate new environm e n t a lcommunications.
For related information, see p12-14

Providing Information Useful for Daily Life andPromoting Educational Activities
Highlight ➌ Proposal for New Oral Care Solutions
As a leading company in the field of oral care, not only selling oral
care products such as toothpastes and toothbrushes, Lion is engaged
in a new solution business that realizes both improved self-care andprofessional care.
For related information, see p15

Use by Consumers
Providing Information Useful for Daily Life
▶ p15,40
and Promoting Educational Activities

Organizational GovernanceFor related information, see p40

For other achievements including the above, go to
the related information pages in the diagram below.

Human Rights

Highlight ➋ Promotion of New Environmental
Communications through Products

Led by "Meisters of Daily Life;" Lion's unique specialists, we created
opportunities to communicate with our customers and delivered
many life-related information through events, publications andwebsites that we co-sponsored with other companies.

We c o u l d n o t re v i s e t h e L i o n G ro u p C h a r t e r f o r
Corporate Behavior (our CSR policy) or reinforce ourhuman rights content in 2013 because of our need toreorganize our thinking regarding such revisions/reinforcement. We will continue to work on themcontinuously.

Labor Practices

Offering Products and Information that Contribute to
the Development of a Sustainable Society

Providing Information Useful for Daily Life

● Ongoing efforts

Hereafter, our domestic group companies will promote
their own activities toward achievement of their mediumterm objectives in 2014 and establish objectives andmeasures to be included in the next medium-term threeyear plan (2015 to 2017). Also, our overseas groupcompanies will continue to exchange information andaddress material issues.

The Environment

For related information, see p10-11

For related information, see p20

Society/Environment
Fair Operating Practices

Our employees actively participated in educational activities topromote tooth brushing and hand washing hygiene programs tokindergarteners and preschoolers so as to contribute to thepromotion of cleanliness and hygiene practices and to have people
better understand our activities and products.

Lion's CSR

Enhancing Social Contribution Programsin Health and Comfort Areas

Offering Products and Information that Contribute▶ p12-14,41
to the Development of a Sustainable Society

Engaging in Progressive Environmental Activities ▶ p25-26,28-33
Enhancing Social Contribution Programs in Health and Comfort Areas ▶ p10-11,42-45

Consumer Issues

Reviewing the Business Continuity Plan, Embedding Compliance/ Internal Control Systems ▶ p17-18
Ensuring Human Rights Due Diligence＊▶ p19

Customers

Community Involvement andDevelopment

Preventing Pollution ▶ p27

Local Communities
Environment

Shareholders/Investors

CSR Report 201409

2013 Highlight1

Promoting Activities to Spread Hand Washing Habit

Nurturing of cleanliness and hygiene culture in the society

Penetration of cleanliness and hygiene practices to many people

Promotion of activities by
employees to spread hand-washing habits

1
Educational
activities
at kindergartensand preschools

2

3

4

5

Activities atrestaurants andpublic facilities

Activities
to set up"Kirei Kirei
Hand Soap"

Event activities atstores; Support for
set up of promotion
areas in stores

Activities
overseas

Background
Lion has been making contributions to the development of cleanliness and hygiene culture since its
foundation. Presently, by offering products like "Kirei Kirei" brand hand soaps, gargles, anddisinfectants, we are driving efforts to help people realize hygiene and healthy life. However, as very
few people know how to wash their hands correctly, it is a social challenge to disseminate correct
hand washing practices. Our "Kirei Kirei" hand soap is receiving accolades in the market, and we
consider the dissemination of hygiene practices to people and continuation of such practices by them
to be a social responsibility.
Notably, basic living habits like hand washing and gargling need to be practiced from childhood.
Thus, not only are we selling products but are also actively engaging ourselves in activitiesｙ to
educate how to wash hands and gargle at kindergartens and preschools.
To prevent diseases and infections and help people live a healthy and comfortable life, all of us at
Lion will work together to help make hygiene practices and habits stick in society.

"Photo Mosaic Art," the Symbol of Our
Activities to Connect with Our Customers
throughout Japan
A large-scale art was completed with participation of a total of
21,571 persons, including our regular users of "Kirei Kirei,"kindergarteners and preschoolers who engaged in hand washingeducational activities, our suppliers and vendors who have been long
involved in "Kirei Kirei" from materials procurement to selling, Lion's
employees and many other people that connected to us throughvarious activities.

10

CSR Report 2014

Executedin AugustMade up of many
pictures of palms andsmilesExecutedin December

Efforts in 20133

We offered samples of "Kirei Kirei Medicated Foaming Hand Soap" tobe set up in restrooms or next to hand washing basins mainly at ourclient restaurants and social welfare facilities. Also, to our business
partners, governmental agencies, pediatricians, and kindergarteners,
DVDs and booklets that describe hygienic
hand washing methods
have been distributed
to educate through ourbusiness relationshipchannels.

Sent from children at Watanohapreschool in Ishinomaki(Miyagi Prefecture)

Activities to set up"Kirei Kirei Hand Soap"

Bottle setup

first stage

From each of ourdepartment, our products weredelivered to our business
partners to help with educationof correct hand washing byoffering educational signs to be O u r b u s i n e s s p a r t n e r s w h oposted up within facilities.
collaborated with us on this4

Labor Practices

Happy children at Kita
kindergarten in Takamatsu(Kagawa Prefecture)

Activities at restaurants andpublic facilities

Organizational Governance

We visited 33 kindergartens and preschools throughout
Japan and demonstrated how to wash hands correctly to4,553 children while having fun together in the "Hand
Washing Workout" and through the "Kirei Kirei PictureStory Show." These were received favorably. We evenreceived thank you notes from some of the preschools.

2

Human Rights

Educational activities at
kindergartens and preschools

Event activities at stores;
Support for set up of promotion
areas in storesWith the cooperation of large-sized stores, we conducted a hand washing classas part of promoting our products inside stores. Through our performances ofthe "Hand Washing Workout" and the "Kirei Kirei Picture-Story Show," ouremployees had valuable opportunities to communicate directly with ourcustomers. Also, to spread hygienic practices from the store front, we supported
the set up of over 20 thousand promotion areas in stores throughout Japan.

The Environment

1

Lion's CSR

To communicate the importance of hand washing to consumers, we promoted educational
activities with our employees to make hand washing a habit for consumers by mainly using our"Kirei Kirei" brand products.

initiative

Bottle setup

5

Activities overseas
Singapore

Fair Operating Practices

Large-scale in-store display of "Kirei Kirei"

Besides in Japan, we are also conducting hand washing educational activities incountries where we operate our "Kirei Kirei" business, including Thailand, South Korea
and Singapore. Cultures vary between countries, but by learning from each other's
activities, we aim to implement activities that are of further use to our customers.

Consumer Issues

Message card to be enclosedwith the message

second stage Each of our employeesdelivered a total of over 20
thousand of our products with
our message attached thereto totheir friends and acquaintances.

Community Involvement andDevelopment

In 2013, Singapore Lion conducted hand washing promotion educational activities
using the "Kirei Kirei" hand soap, in 18 nurseries, kindergartens and preschools.
Lion believes that it is important to teach children the proper hand washingprocedures, and keep them aware of the significance of hygienic care. One strong
characteristic of "Kirei Kirei" is to keep intact the bodily function of protecting
against bacteria – i.e., inherent bacteria barrier function – and prevent such function
from being weakened. The local employees conducted organized enjoyable activities,
such as showing a skit to teach children the importance of removing bad bacteria
and retaining the good ones to keep them healthy, and finger-painting sessions
which was followed by cleaning their own hands using the "Kirei Kirei" hand soap.
We will continue with our hand washing educational activities in 2014 as well.
Hand washing educational event in Singapore

CSR Report 201411

2013 Highlight2

Promoting New Environmental Communications through Products
BackgroundWe have actively promoted our environmental initiatives from many years back, and we fully realize the needto further communicate our efforts to the stakeholders including consumers and employees. In our dialogue
with external specialists in 2012, an opinion was expressed that a full explanation from Lion would keep
consumers informed about environmentally friendly products that they can choose from.
In order to inform consumers – our most important stakeholder – about the importance of environmental
considerations, Lion established new standards for eco-products through review of evaluation items from a
product life cycle perspective, and created an environmental logo and label to be attached to eco-products toinitiate new environmental communications.

Establishment of Environmental Logo and LabelThe newly established "environmental logo" contains the environment slogan and an environmental
mark and an environmental mark that clearly expresses Lion’s environmental aspirations that is in linewith its corporate slogan of "Life. Love. Lion."
Also, the environmental label has our "environmental logo" with an environmental statement on it.
It is now being attached to products that meet "Lion's eco-standards."

Environmental
mark
Environmental
slogan[Environmental logo]< Lion's eco-standards >Lion established the "Lion eco-standards"
based on the life cycle assessment
viewpoint, which provides quantitative
assessment of environmental load atindividual stages from procurement of
raw materials, packages, and containers
to disposal after use. Lion defines the
products that meet one or more of thecriteria for each evaluation item as "ecoproducts."[Example of environmental label]● Evaluation items under Lion eco-standards and review of such standards
Establishment of evaluation items from a product life cycle perspective

Procurement of
Raw Materials

Procurement of Packages,
Containers Materials

Concept of the pastmedium-term
environmental plan
(Revised every
three years)

Futureapproachfor Eco Vision
2020

Procurement that takebiodiversity conservation
into consideration
・Procurement of raw materials that takeplant-derived materials and biodiversity
conservation into consideration
・Use of recycled materials

Evaluation □ Use of plant-derived raw materials
items □ Use of sustainable raw materials
Lion'seco-standards

12

CSR Report 2014

・At least 50% of the content (organic ingredients)
consist of plant-derived materials
・Of the plant-derived materials used, at least 50%
take biodiversity conservation into consideration□ Use of recycled materials□ Use of plant-derived materials
・At least 10% consist of recycled materials
・In case of cardboards, at least 94% consist of oldpaper or wood from thinning of plantation
forests and pulp from certified forests.
・At least 20% consist of plant-derived resins

Manufacturing

Waste

Waste water
discharge

Waste

Waste water
CO 2
discharge

CO2

Used water・Do not contaminate atmosphereand rivers
・Conserve energy and water□ Energy saving □ Reduction of water usage□ Reduction of chemicals usage□ Reduction of wastes
・Reduction of greenhouse gases during manufacturing by
more than 20% from the standard product*
・Reduction of water usage during manufacturing by
more than 20% from the standard product*
・Reduction of chemicals (except raw materials) usage
during manufacturing by more than 20% from thestandard product*
・Reduction of the amount of wastes during manufacturing by more than 20% from the standard product*

Lion's CSR

Lion and the Environment

Organizational Governance

Making daily life more pleasant should also mean caring for the environment.
Each everyday activity can do good things for our planet.
That’s Lion’s eco-philosophy. It’s why we make environment-friendly products that fit right
into your lifestyle.

Human Rights

For example, we use renewable plant-derived carbon-neutral ingredients.
And we help you conserve water resources with our water-saving products while
protecting the water environment.
So day by day, without even thinking about it, you help keep our planet healthy.
Labor Practices

It’s an eco-lifestyle for everyday life.

Surfactant-derived CO2

Water usage during product use
CO 2・Increase logistics efficiency bymaking products more compact□ Inspissation, making products compact

・Inspissation of content or down-sizing of containers
by more than 20% from the standard product*

Content-derived
CO 2 in products post-use
・Reduction of water usage by designing
products that can save on water usage
・Reduction of CO2 to be released after
decomposition in natural environment byusing plant-derived components□ Energy saving during product use□ Reduction of greenhouse gas emissions
from products post-use□ Reduction of water usage (water saving)・Reduction of energy usage during product use by morethan 20% from the standard product*
・Reduction of greenhouse gases from products post-use by
more than 20% from the standard product*
・Reduction of water usage during product use by more than
20% from the standard product*

Packages andcontainer-derived
CO2 wastes

Waste

Consumer Issues

CO2

Disposal

Fair Operating Practices

Use・Reduction of packaging materials
・Increase of refill products

Community Involvement andDevelopment

Distribution

The Environment

That’s Lion's promise to you and the Earth.

□ Reduction of packages and containers□ Refilling・Reduction of packages and containers materials
by more than 15% from the standard product*
・Reduction of refill container packaging materials
by more than 50% of the product body

* Standard product: Products released in 2010, which is the target standard year for Eco Vision 2020

CSR Report 201413

Efforts in 2013

Environmental
Actions

1

Lion is presently promoting Eco Vision 2020 to realize one of our Vision 2020 goals of
becoming "a company that is advanced in the area of environmental responsiveness." At
the same time, to gain various stakeholders' recognition of our environmental initiatives, it
is important to continuously take strategic environmental communication measures. In thispage, we would like to introduce events that were held as part of such measures.
Lion's boothl

Participation in Eco-Products
2013, one of Japan's largest
environmental exhibitions

In December 2013, we participated in Eco-Products 2013, one
of Japan's largest environmental exhibitions, held at Tokyo Big
Sight (a major exhibition hall in Tokyo).
Under the theme of "Environmental Considerations
throughout Product Life Cycle," we set up five different areas "Selection (of raw materials, packages, and containers),""Manufacturing," "Transport," "Use," and "Disposal" - basedon the LCA* approach and introduced our environmental
considerations in each stage. Also, we conducted a workshop
to share with our customers our environmental slogan andenvironmental logo.
Lion's booth received an "Eco & Design Booth Award Top
Prize" for its environmental considerations andunderstandability.
For related information, see p41* An approach to quantitatively evaluate environmental load at each stage
from procurement of raw materials for products to disposal

2

In the "Selection" area, we provided In the "Manufacturing" area, we introduced
information on how we are utilizing the water waste disposal equipment of ourfactories. Water actually sampled from ourplant-derived raw materials.
Chiba factory was on display.

In a joint effort of three "Eco First Companies,"
an environmental seminar was given.

In December 2013, Sekisui House, Ltd., Daikin Industries, Ltd. and Lion jointly conducted the "'Kirei'
Seminar - Helping the Daily Lives of People" at Grand Front Osaka (a complex facility of shopping
centers and offices).
This seminar materialized because all three companies
are certified Eco First Companies* and are doing business
related to "daily lives" and "housing" of people. Eachcompany demonstrated their know-how and offered tips
on techniques that can be easily used in households.
Mascots from these companies
worked together*Companies certified as an environmental top runnercompany by the Ministry of the Environment of Japan
Living Care Meister introducing how to do Eco-cleaning (Left)

Joining the "Fun to Share" initiative which leads toa low carbon society.
Lion utilized its new environmental slogan
and declared its commitment to achieve a
low carbon society, as well as expressed
support for "Fun to Share," a climate change
mitigation campaign proposed by the
Ministry of the Environment of Japan. Aiming
to become an environmentally advanced
company, we will more than ever proactively
promote the realization of a low carbon
society.

14

CSR Report 2014

Fun to Share
URL

http://funtoshare.env.go.jp/< What's "Fun to Share"? >The "Fun to Share" initiative is a newform of "Challenge 25" that had been ascheme conducted by the Ministry of
the Environment of Japan, and its
purpose is to build a low carbon society
by sharing the most current wisdoms
with others in a fun way. In March 2014,
a kick-off event was held in which
representatives from organizations andlocal governments declared theirsupport for this program.

"Fun to Share" logo

Lion president Itsuo Hama declaring support for the
program as chairman of the Eco First Promotion
Council2013 Highlight3
Lion's CSR

Proposing New Oral Care Solutions
Background

Human Rights

Organizational GovernanceThe concept of self-medication is now spreading to consumers in Japan, and an interest in oral health isgaining steam, but there are still very few who are actually practicing it.
As a company engaged in health care, it is increasingly important to provide consumers with to-thepoint solutions on an on-going basis.
In light of such needs in the present time, Lion is aiming to make oral care a habit by not just selling
oral care products such as toothpastes and brushes but also running a new solution business that gives
concrete shape to improved self-care and provides professional care by dentists as a leading company inthe field of oral care.

Oral care goods shop based on a new concept
Opening of "ORALYSIS"

URL

http://oralysis.oralcom.net/

Grand Tokyo Oral Health Care Station

URL

Labor Practices"Mouth Concierges" provide advice
about selection of dental and oral
care products like toothbrushes andpastes that are best suited to theindividual customers.

おくちコンシェルジュ ORALYSIS

http://ohcstation.oralcom.net/

Fair Operating Practices

ORALYSIS

More than 100
oral care items
as selected by"Mouth Concierges"

The Environment

The "ORALYSIS" is a shop that sells oral care goods to improve self-care. It
has an assortment of more than 100 types of oral care products. Samples
and testing areas are also provided, where specialists having qualificationsof dental hygienists (Mouth Concierge) help customers find products thatare suited to the oral environment of each customer.
Annexed to the shop is a dental clinic called "Grand Tokyo Oral HealthCare Station," a dental clinic specializing in preventive maintenance andrun by the Lion Foundation for Dental Health, which provides professionalcare.

Sending out oral care information for maternity use
Setting up a maternity dental consultation room on"ORALcom" website

http://www.oralcom.net/

マタニティ歯科相談室 ORALcom

Community Involvement andDevelopment

URL

Consumer Issues

Lion has set up ORALcom, a website for providing oral care information necessary forpeople of many different life stages to live a healthy and comfortable life. The"maternity dental consultation room" in the website is designed for expectant mothers
and mothers of babies.
The oral health of mothers during pregnancy and when the child is still in infancy is
extremely important to keep healthy teeth for the rest of their lives. Especially during
pregnancy, many people have worries and concerns regarding oral health. Thus, Lion
teamed up with the Maternity Dental Outpatient Department of the Nippon Dental
University Hospital to offer services of listening to and advising about concerns andmanaging methods during such periods.
By April 2014, which was one year from the opening of the website, about 60
thousand people became registered users of such service.
The Maternity Dental Outpatient Department teamof the Nippon Dental University Hospital directly
responds to inquiries regarding oral care
We offer information through pamphlets such as"Oral Care from Minus One Year Old."CSR Report 201415

Ideal Vision

Organizational
Governance

Maintaining a Sound
Management System that is
Continuously Trusted by Society

Basic Approach
Lion's top priorities for corporate governance are toincrease management transparency, improve the efficiencyof supervision and decision making and ensure compliance.

By strengthening and improving its corporate governancesystem, Lion aims to enhance its corporate value.

Corporate Governance System
To evaluate our management objectively from the standpoint ofsocial acceptability, including social responsibilities to be fulfilled by
the company and stakeholders' trust, the Management Evaluation
Committee run by outside experts was set up in October 2003 toensure that evaluations and opinions of the committee members
regarding the concept of the corporate governance system,
directions of business and product development and views of CSR
by outside experts are reflected in management. The number of
directors was reduced when the System of Executive Officers wasintroduced in March 2004 to reinforce management decision
making and execution, and hence the function of the Board of
Directors. In March 2006, we installed two external directors toenhance supervision. In December 2006, in order to increase theobjectivity and transparency of compensation for directors, etc., theCompensation Advisory Committee consisting of external directors(two external directors and two external corporate auditors) was set

up. Regular meetings are held between the Representative
Directors and all external directors to exchange information so as toenhance supervision and monitoring of management. Also, inJanuary 2013, the Lion Corporation Standards Regarding theIndependence of External Directors/Corporate Auditors * were
instituted to clarify that only people who have no conflicts ofinterest with Lion and who can remain independent from thecompany will be appointed as external directors.
The countermeasures for mass purchase of the company's
shares, etc. (takeover defense measures) were introduced with theapproval obtained at the ordinary shareholders' meeting in 2009
and a three-year extension of the above was approved at the 2012
ordinary shareholders' meeting.
*The Lion Corporation Standards Regarding the Independence of External
Directors/Corporate Auditors
URL

http://www.lion.co.jp/en/invest/pdf/independence-e.pdf

Corporate Governance System

Basic policies for
medium- to long-term
management plans andother major corporate
strategies

Proposals

Opinions and advice on legal compliance andmanagement policy

Board of Directors(Supervision of management)
Decisions on execution ofimportant business matters
Supervision of directors
executive performanceSupervision of executive ofﬁcers(Chairperson: Representative Director, and Chairman)

Auditing

Corporate auditors
Monitoring(Legality audit)(Operational audit)

Executive Committee(Execution of operations)(Chairperson: Representative Director, President)

Reporting

CS/PL Committee
Safety, Hygiene andDisaster Prevention Meeting

Departments (Performance of operations)(Business, manufacturing, R&D divisions, and functional departments)
Create fair and comfortable
Setting and management ofworking environments
CSR targets
Ensure fair trade
Pursue customers satisfaction
Promote social action
Build trust relationships
programs
with shareholders and investors
Protect personal information

Auditing(Internal controls
relating tofinancial reports)(Legality, validity,
and efficiency
audits; compliance progress
audits)Auditing

Strengthening oflegal compliance and ethics

Corporate Ethics Committee
Lion Group Charter for Corporate Behavior; Behavioral Guidelines* Report on Corporate GovernanceURL16

http://www.lion.co.jp/ja/company/about/pdf/abo_gov.pdf

CSR Report 2014

Reporting

Reporting Delegation Reporting

Recommendations on director compensation
Environmental Action
Promotion Committee

Opinions
and advice
on legalcompliance

Accounting auditors

Senior Executive
Committee

Auditing Office

Reporting

Auditing

Compensation Advisory Management Evaluation
Committee
Committee

Shareholders MeetingRisk Management

Organizational Governance

Lion's CSR

Of many different risks that can occur in the course of our business
operation, the five points below have been disclosed in the Company's
Securities Report* as key areas that can have a major influence upon the
judgment of our investors:(1) product quality evaluation; (2) fluctuation in raw materials costs; (3)fluctuation in foreign exchange rate; (4) major lawsuits, etc.; and (5)natural disasters (e.g. earthquakes). With regard to the BusinessContinuity Plan (BCP), countermeasures such as backing up
headquarters functions, substituting order-receiving functions,alternative production in case of plant shutdown and stocking products
to enable the continuous supply of products are implemented.
* Securities Report
URL

http://www.lion.co.jp/ja/invest/library/yuhou/
Human Rights

In order to continue to provide our customers with safe and reliable
products, Lion has appointed a Director Responsible for Risk
Management who exhaustively controls and supervises the risk of thewhole Lion Group. Particularly for the risk management of theenvironment, quality assurance, and accidents and disasters, eachcommittee discusses countermeasures in advance and the Executive
Committee deliberates if necessary. Each factory is certified with ISO
14001 and eagerly works on quality management and environmental
protection.
In the case where physical emergencies such as natural disasters andaccidents arise, in accordance with the Emergency Response System, wecollect information, make decisions on policies and measures, investigate
causes and report to the Board of Directors.

Establishment of Internal Control Systems

UN Global Compact

Labor Practices
The Environment*Basic Internal Control System Policies
URL http://www.lion.co.jp/en/company/html/com0501f.htm

UN Global Compact's 10 Principles
Human Rights

Principle 1: Businesses should support and respect the protection ofinternationally proclaimed human rights; andPrinciple 2: make sure that they are not complicit in human rights abuses.

LabourPrinciple 3: Businesses should uphold the freedom of association and theeffective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; andPrinciple 6: the elimination of discrimination in respect of employment
and occupation.

Environment

Principle 7: Businesses should support a precautionary approach toenvironmental challenges;
Principle 8: undertake initiatives to promote greater environmental
responsibility; andPrinciple 9: encourage the development and diffusion of environmentallyfriendly technologies.

Anti-Corruption

Principle 10: Businesses should work against corruption in all its forms,
including extortion and bribery.

* UN Global Compact
URL http://www.unglobalcompact.org/

コミュニティへの参 画 および 発 展

The UN Global Compact (UNGC) is a voluntary
initiative of companies and organizations
participating in an effort to build a worldwide
framework for realizing sustainable growth. UNGC's member
companies continue with their efforts to realize ten principles as
relevant to the "protection of human rights," "exclusion of unfair
labor practice," "environmental responses" and "anti-corruption."
Lion has been part of this initiative since 2009.
Lion is also a member of the Global Compact Japan Network (GCJN), a local network of UNGC. GC-JN has a subcommittee for eachindividual theme for purpose of promoting CSR activities with themember companies, and Lion is a regular member of subcommittee
activities.

Fair Operating Practices

The Auditing Office that directly reports to the president is

Consumer Issues

Internal Audit

implementing audits of various business units in terms of their validity,
efficiency, compliance and risks in order to establish a foundation for
healthy business activities. More specifically, besides the audits includingof accounts receivables, accounts payables and assets, we examine thestatus of product quality, environmental protection(wastes), safety/
hygiene/disaster prevention, labor management, risks/compliance, etc.
and also determine if the individual operations are being implemented inaccordance with applicable laws/regulations and internal rules. We point
out if any areas not measuring up to the standards are found. After theaudit, the departments concerned are required to improve in those areas,
and are followed up on to make sure that they are, in fact, making
improvements. Also, specific themes are set for each half-year period,and cross-functional audit of those themes are implemented.Results ofinspections and findings of each department that is audited are reported
to the president. The results at the corporate level are summarized andreported to the Executive Committee twice a year for PDCA managementof audit work and to share information with business execution
departments.

Community Involvement andDevelopment

Systems and provisions have been put in place to ensure theappropriateness of the Lion Group's operations in accordance with Japan'sCompanies Act and the Ordinance for Enforcement of the Companies Act*.
With regard to systems for evaluating and auditing internal control overfinancial reporting as prescribed in Japan's Financial Instruments andExchange Act, Lion and the Lion Group have been establishing controls at
the company-wide and business-process levels since July 2006. In
December 2008, the Board of Directors passed a resolution on the Internal
Control Policies Regarding Financial Result Report.
Evaluations of internal control effectiveness are carried out by the
Auditing Office, which reports findings to the president and corporate
auditors, as well as to the Board of Directors on a regular basis. Areas
requiring improvements are communicated to the appropriate divisions andprogress of improvements are verified.
In 2013, since Lion's internal control over financial reporting was deemed
effective, a result report on internal controls was submitted to the Prime
Minister in March 2014 together with the Company's Securities Report.

* Global Compact Japan Network
URL http://ungcjn.org/

CSR Report 201417

Organizational
Governance

Embedding Compliance
The Corporate Ethics Committee, chaired by the
Director Responsible for Corporate Ethics, works tofoster compliance awareness within the Lion Group.
The basis for compliance is the Lion Group Charterfor Corporate Behavior. This is distributed in pamphlet
form to all employees working for the Lion Group andis publicly available via the Lion's website. An annual
program of employee awareness surveys and regulareducational activities are also implemented, the latterincluding e-learning, lectures by outside speakers, andvarious training courses (e.g. education according tojob position), and education conducted at each
workplace.
In 2013, in addition to going through andcommitting to the Lion Group Charter for Corporate
Behavior, e-learning provided training regarding thebasics of labor management, risks as relevant to social
media, and information security.

Raising Awareness of a Hotline
To ensure full communications to temporary staff andall our employees, an internal and external reporting
system, the AL (All Lion) Heart Hotline*, has been set
up by the company as a point of contact for employee
consultation for instances of non-compliance they
have discovered but could not or should not reportthe violations through normal channels. Also, througha yearly compliance awareness survey for our
employees, we find out the extent of awareness of the
Hotline, and also provide explanations about the pointof contact in reporting a case to the Hotline.
In 2013, there were ten instances of consultation orreporting, but no instances of grave misconduct were
found and all the cases were addressed and sortedout.
* AL Heart Hotline
URL http://www.lion.co.jp/ja/company/about/hotline.htm

Compliance Awareness Survey
All Lion Group employees are asked every year tocomplete a compliance awareness survey. It is going tobe the tenth survey this year. Findings are reported to
management and feedback is provided to individual
divisions in order to communicate issues within thesame company or workplace. This contributes to themaintenance and strengthening of compliancesystems.
The 2013 survey (about a 97% response rate fromaround 3,900 employees) drew opinions on a range ofissues including problems with work environments.

AL Heart Hotline Consultations and Notifications (2013)

Percentage of Employees Who Received Survey Feedback(employees within Lion Group, temporary staff, or external business partners)

Power harassment behaviors

4 cases

Personnel/labor management issues

2 cases

Expenses/company assets management issues

2 casesOther

2 cases

The System of AL Heart Hotline
Consulter/Informer

20

40

60

72.5％

2009

26.5％

80.3 ％

2010

9.2％ 0.3％

91.6％

2013

0.3％

12.0 ％ 0.3％

90.5 ％

2012

Consultations andNotifications

1.0%

19.3 ％

87.7 ％

2011

100（％）

80

8.1％ 0.3％

Seeking solutions/Resolving problems

0

Feedback

Internal Contact(general manager specializedin corporate ethics)
Report contents

Reporting

Feedback received

Not received

No response* The CSR Report for 2013 included a wrong year notation, and it has beencorrected.

External contact(lawyer)of consultation/
notification Report
Instruction results of investigationand countermeasures

Director
Responsible for
Corporate Ethics

ReportingBoard ofDirectors

The Corporate
Ethics Committee

The Ethics Evaluation Committee

Introduction of websites● Structure to promote activities (Corporate governance)

CSR Report 2014

Feedback

Report contents ofconsultation/
notification

Set up as needed(year)

18

Consultations andNotifications

http://www.lion.co.jp/ja/csr/management/(consisting of external experts)

Ideal Vision

Establishing Framework for
Respecting Human Rights

Lion's CSR

Human Rights

Lion has stipulated, "we shall respect human rights"
and "observe the spirit as well as the letter of all thelaws and international rules" in the Lion Group
Charter for Corporate Behavior. Moreover, theBehavioral Guidelines refers to the refusal of child

Organizational Governance

Basic Approachlabor and forced or compulsory labor, promoting
equal employment opportunity and fair treatment of
employees, and human rights of suppliers. In 2009,
we declared our intention to support the ten
principles of the United Nations Global Compact.

set up an opportunity on an annual basis via
e-learning or by document in which to ensure to have
the Charter read and consented to. Also, we areconducting a survey every year to promote andpenetrate the Charter to all our employees.

Labor Practices

Lion has stated its policies as relevant to respect forhuman rights, in the Lion Group Charter for
Corporate Behavior and Behavioral Guidelines. To
ensure thorough communication of the Charter todirectors, Lion Group employees, temporary staff, we

Human Rights

Disseminating Human Rights Policy

Ensuring Human Rights Due Diligence● Initiatives by Overseas Group Companies

In 2013, we visited our overseas group companies, andgrasped the status of their focus on respect for humanrights through interviewing top management and atour in their factories. As a result, it was ascertainedthat no employees of under the working age are hired
and that a house of worshiping is provided for Muslim
An entire picture of our initiatives for protecting human rights
Procurement of Raw Materials,

Stages of Value Chain Packages, and Containers

House of worshiping for Muslims in Lion
Wings (Indonesia)

Major initiatives
undertaken by Lion

Use by consumers

Society/Environment

Consumer Issues

Business partners
Employees
Customers
Residents around our factories● Procurement Principles,● Confirmation of recruitment,● Aggressive pursuit of safety● Environment
Efforts based on Lion Groupevaluation, and remuneration at
and functionalities by using
management to the
Supplier CSR Guidelines
each point of time
our own "product
Lion's Environmental
management system"
Guidelines to prevent
For related information, see p35 ● Execution of human rights
contamination, andeducation
For related information, see p36-38● Establishment of the Hotline
compliance with laws
● Establishment of the Hotline● Consideration for "theFor related information, see p18
and regulations
For related information, see p18
vulnerable users" such as thePalm oil farms
For related information, see p25-27
elderly and children, by
Subjects for Clinical Trials● Participation in RSPO
● Implementation of
preparing the "labeling● Respecting the Helsinki
activities
environmental assessment
manual"Declaration● Increased purchase of RSPOahead of construction of● Operation of the "regulations forcertified oils
new factories
implementation of clinical trials"
For related information, see p34
in order to place top priority on
the safety of subjects and ethicalconsiderations

Community Involvement andDevelopment

Main Subjects to beAssumed and EachApproachworkers in factories of P.T. Lion Wings (Indonesia), Lion
Eco Chemicals (Malaysia), Southern Lion (Malaysia).
Also, for countries and geographical regions for which
many cases of discriminative treatment of migrant
workers are being reported, we shared with thosegroup companies thata deficiency of communications with
migrant workers cancompromise ourbusiness, and deliberated about what
can be done about it.

The Environment

Lion believes that it is important to improve the system
which figures out, reports, corrects, and supports the effectof the company's activities on human rights from theperspective of human rights due diligence and by goingalong the value chain.

Fair Operating Practices

Frameworks to Ensure Respect for Human Rights

Introduction of websites● To care about the mankind (Human rights)

http://www.lion.co.jp/ja/csr/humanrights/

CSR Report 201419

Ideal Vision

Labor
Practices

Changing Awareness of
Employees through Raising
Morale and Motivation

Basic Approach
In the Lion Group Charter for Corporate Behavior, Lion calls
for "fair treatment respecting the diversity, individuality
and personality of our employees" and "ensuring a safe
and comfortable workplace to realize mental and physicalwell-being of our employees." Also included in the
Behavioral Guidelines are "to develop a better working
environment that allows flexible style of working throughpromotion of work-life balance," "to acquire excellence offunctional expertise and knowledge and provide maximum
support to employees who try hard to accomplish very
ambitious goals," and "to have sincere dialogues anddiscussions with employees and their representatives."
Innovation from the power of individual employees has
sustained Lion's business activities. Lion will continue tobuild its corporate culture by developing human resources
who always try to overcome problems voluntarily andcreate new values.

Promoting Amicable Labor-Management Relations

Union for the purposes of promoting labor management
relations based on mutual understanding and trust,observing the Lion Group Charter for Corporate Behavior
by realizing the social mission and responsibilities of thecompany and its workers' union, and working together toachieve growth of the company's business and maintain/
improve working conditions of union members.
The agreements provide that: the company shallrecognize freedom of lawful union activities by union
members; the company shall not unfairly treat union
members by reason thereof; and the company and theunion shall have a labor-management meeting on a regularbasis to consult with each other on an equal footing.
Operating under a union shop agreement, Lion has
endeavored to build amicable labor management relations,in which employees and management are proactively
conducting activities such as reporting on businessconditions and exchanging opinions about the working
environment at labor-management meetings.

Lion executes labor agreements with the Lion Workers'

Human Resource Development
Entrenching New Personnel Management System
In 2013, with the introduction of a new personnel
system, Lion newly defined the types of human resourcesthat are sought by the company.

[Types of Human Resources Expected by the Company]

・Leaders who drive strategies and achieve steady results・Managers and highly-professional specialists who havethe ability to instruct and support subordinates aiming
to realize assignments
・Employees who are able to solve their issues voluntarily
and perform their tasks

To develop all such human resources, we enhanced PDCA
in field operations and improved training systems.

Practice of PDCA and Improvement of a Training System
At the same time as the implementation of a new
personnel system, we revised the target management
system under which individual workers set ambitious goals
for themselves and run the PDCA cycle to accomplish theirgoals through communications with their supervisors.
Under the training systems, we have trainings tied to thepersonnel system that enhance abilities to be
demonstrated in each job position, and also trainings thatbuild expertise of individual positions. Also, we havetrainings to nurture leaders.
20

CSR Report 2014

Furthermore, in addition to trainings, we provide "selfdevelopment programs" such as the Lion Challenge Cup,which allows employees to present self-initiated groupresearch directly to Lion executives, and a variety ofcompetence development opportunities.
*List of main trainings
URL http://www.lion.co.jp/ja/csr/employee/development/

Global Human Resource Development
For quantitative expansion of overseas businesses, we are
involved in the development of global human resourceson an on-going basis. For three years from 2011 to 2013,
we introduced the "global human resources development
program" for young and mid-career employees, anddeveloped a total of 83 such employees. From 2014, westarted an even more practical "global human resource
development program" for further development of global
human resources. This new program helps trainees gain
professional knowledge in Japan, and sends them out tolocations overseas for one to one and a half years so they
can learn the nuts and bolts of their business in the field
and think on their feet. Furthermore, we provide an"overseas retail and distribution sector study tour" forsales personnel at managerial levels, and develop
measures on how to prepare "overseas academic
conference presentations" mainly in research fields.

Human Resource Diversity

The company believes that we should support the
career development of women at each life stage topromote their success in their careers. We will continue
to support them by utilizing the "career plan sheet,"which enables female employees to design their midto long-term career plan by themselves, and "virtualrole models," which depict role models in action wewill see some day in the near future as a result of ourcurrent effort.

Support Program for Transfer of Couples
Working for Lion
Lion has systems that support households of couples
who both work for the Lion Group. When a partner istransferred within Japan or overseas, with priorregistration, the spouse can choose from the following
three options: 1) accompany the transferred partner
while putting his or her own career on hold; 2) leave
the company with the right of being re-hired within five
years and accompany the transferred partner; or 3)change his or her own work location to that of thetransferred partner.

Employee Motivation Consultation Center
Lion has in place the Employee Motivation
Consultation Center, which helps employees develop a
positive approach to their careers. The center receives

Lion's CSR
Organizational Governance
Human Rights

Revision of Re-hiring System of Employees upon
Retirement

Labor Practices

In 2006, Lion began re-hiring employees who reached the
mandatory retirement age. The criteria were revised in
April 2012 to incorporate suggestions from theemployees. The company seeks to increase motivation
through the improvement of the working environmentthat allows re-hired employees to work in conditions
similar to full-time employees. This includes the re-hiringof all applicants, changing duties during the contract
period and awarding performance-based bonuses.
Furthermore, explanatory orientations and re-hiring
interviews with superiors are conducted three years before
the retirement age as a lead-in for them to recognize theirroles. The re-hiring rate per retired staff in 2013 was 77%.

The Environment

Implementation of Measures for Women's
Promotion (Career Development)

Lion wants employees to be able to fully apply theirtalents regardless of their disability. To further promote
inclusion, we will keep up our effort to nurture aculture of supporting them in all our workplaces.

System for Re-hiring Former Employees
Lion has introduced a system to re-hire former
employees who resigned for his or her own reasons,aiming to encourage them to be active again using
their various experiences gained from their career,lifestyle and expertise.

Fair Operating Practices

This is the measure proposed by the Diverse Human
Resource Promotion Committee for the purpose of
supporting career development of young employees.
To offer employees an opportunity to gain knowledge
about operations of positions/departments, to which
many employees request a transfer, a symposium ofrole models was held, in which the personnel of thosepositions provided explanations about their teams andthe content of their job. It was intended to help themto set their future goals more easily. The symposium
which introduces Finance/Legal and Marketing(household product planning) was held in July 2012
and Marketing (mail order business and H&H
business), Public Relations and CSR in November 2013,
with the participation of many employees across thecountry by using a video conferencing system.

Employing People with Disabilities

Implementation of Regionally
Based Employees Program
In 2013, the Regionally Based Employees Program wasstarted anew. The program was introduced to find –and keep – people from among our temporary
employees, who are contributing greatly to thecompany and performing above expectations, and toenable a change of regular employees' status toregionally-based employees to allow diverse working
arrangements.
The regionally based employees can select theirworkplace from seven regions in Japan that Lionclassified for this program, and their compensation
and benefits are the similar level as for regular
employees in the same block. Under the program, tenof them were hired from among temporary employees
in 2013 and eight in 2014, and they are performing
even better.
CSR Report 2014

Consumer Issues

Offering an Opportunity to Gain Knowledge about
Jobs in the Company (Holding a Career Forum)

inquiries via telephone and e-mails from Lion Group
employees (including employees dispatched toaffiliated companies) and temporary employees, andconducts interviews and provides appropriate advice
and information regarding their career. We have given
advice to about 210 employees in total, and, according
to a survey conducted on those employees, theirsatisfaction level was high and there were positivechanges in their consciousness and behavior.

Community Involvement andDevelopment

Lion has made efforts toward promoting humanresource diversity in light of the major changes in thecomposition of the workforce and the need to respondswiftly to changes in the business environment.
The Diverse Human Resource Promotion Committee
was set up in 2010, which plans and formulates
personnel measures for promoting the active
participation of diverse human resources.

21

LaborPractices

Promoting Work-Life Balance
Lion strives to build an environment where employees can deliver
results, while placing value on balancing work life with private life.

Building an Environment Where Employees
Can Work DynamicallySince 2010, Lion has been promoting work efficiency to reduce
overtime work and encourage employees to take paid holidays.
In 2013, to ensure thorough management of working hours
under the new personnel system, labor management explanation
meetings were held for all managerial personnel and e-learningfor labor management was given to all employees. Also, a noovertime week was implemented to each month in addition to
the no-overtime day once per week. It encourages employees tobecome more efficient on the job and go home early.

Next Generation Support
Act Phase 4 Action Plan

Have 17 or more male employees take childcare
leave during the action plan period.
→12 male employees took childcare leave. Anothermale in the sales division took leave for a year
from March 2012.

Goal: 1

In 2011, raise the age of the child applicable for"exemption from overtime work for childcare" from"three years old" to "under primary school age."→The new system was introduced in June 2011.

Goal: 2

In 2011, modify "child sickness leave" to allow
employees to take the leave by half-day units.
→The new system was introduced in June 2011.

Goal: 3

Support for Childcare and Nursing Care
Lion has proactively worked on reinforcement of measures forchildcare and nursing care. As a result of childcare-related support
enhancements and making the programs known to employees inline with an action plan based on the Act on Advancement of
Measures to Support Raising Next-Generation Children, the ratioof female employees taking childcare leave has been 100% inrecent years. Because of these improvements, male employees arealso taking more of such leave in many departments.
Moreover, because some employees tend to be less motivatedtoward work during the childcare period, Lion is promoting
activities to support career development during the childcare
period. We hold meetings to explain the childcare support
program from a career perspective so that employees can have an
accurate understanding of the program and be provided with
opportunities to think of their career in the future, and employeeswith experiences in childcare can share their experiences at suchmeetings.

BirthSupport for Childcare and Nursing Care
Maternity leave

Special leave,
・Two days paid leave (bonus leave)
childbirth by spouse
Childcare leave

Childcare

・Paid leave from six weeks prior to birth until eight weeks after birth・Up to 18 months leave until the child is three years
old (paid leave for the first successive two weeks)・A dditional childcare leave for fathers after using
childcare leave within eight weeks of their child's birth

Reduced working
hours for childcare

・Reduction of up to two hours/day in the workday
until the child finishes first grade

Exemption fromovertime work・E mployees with a preschool child can be
exempted from overtime work

Child sickness
leave・Employees with children under primary school age may
take child sickness leave by half-day units (paid leave)・Employees may take five days/year for one child of preschool
age or ten days/year for two or more children of preschool age

NursingNursing care・Up to 93 days available to nurse each family member
Leave and reduced
as necessary combining nursing care leave andreduced hours (up to two hours/day) for nursing care
hours for nursing care
Nursing careleave
Accumulated
leave (nursing
of close relative)

・Five days/year for one family member or ten
days/year for two or more family members
provided by day for nursing care・Accumulated annual paid leave that has expired (upto 60 days) may be used for nursing a close relative* Accumulated paid leave are also available for medical
and volunteer leave supporting employees participatingin volunteer activities.

*In addition to the above, a system enabling restriction of work hours for childcare or
nursing care purposes has been introduced in accordance with the law.
22

CSR Report 2014

"Kurumin"logo

Period: April 2011 to February 2015

Within the period of the action plan, implement
measures for supporting employees to strike a goodbalance between work and childcare from theviewpoint of career development.
→Presentations of Childcare Support Programs
including a symposium by the employees withchildcare experiences have been held since 2012.

Goal: 4

In 2011, introduce an overseas transfer support system
for married couples both working for Lion.
→A system for domestic and overseas transfer was
introduced in June 2011.

Goal: 5

Goal: 6

Within the period of the action plan, introduce atelecommuting system for employees meeting therequirements prescribed by the company.
→Tests have been conducted since 2012.

*Next Generation Support Act Phase 4 Action Plan
URL http://www.lion.co.jp/ja/csr/employee/work_life/

Employees Data (non-consolidated)
2011
Employees*1
New
employees
Re-hired
Retirees

2012

2013

Male

1,842

1,828

1,854

Female

597

614

643

Male

47

51

67

Female23

24

26

Number of people

142

137

181

%

5.8

6.0

7.9

Temporary employees（Number of people）

289

295

319

Female employees ratio（%）

24.5

25.1

25.8

Number of people

37

42

44

%

5.5

6.2

6.2

Femalemanagers

Number of people
Employeeswith disabilities
%

43

42

44

1.8

1.8

1.9

Male

4

6

5

Female

25

29

36

Male

0

0

0

Female49

49

43

Average overtime per month (hours)

11.2

12.0

13.1*2

Annual paid leave used (%)

54.1

46.2

48.6

Employees who resigned Number of people
within three years of%entering the company

1

1

3

0.5

0.5

1.3

Employees who
took childcare leave
Employees who took
reduced working
hours for childcare* "New employees" include new employees hired mid-year. *Data as of December 31 of every year
*1 Number of employees: Includes regular employees and re-hired retirees.
*2 The scope of overtime work has been expanded with the revision of the personnel employment system.

Promoting Employees' Health Management

Etsuo Kenmoku

Director of Health Support Office

Received the Japan's Minister of Education,
Culture, Sports, Science and Technology Award in2013 in recognition of the excellent healthbuilding organization developed by the office.
As a result of overall evaluation of our activities across theorganization, we were awarded with the Japan's Ministry of
Education, Culture, Sports, Science and Technology Award in 2013.
The Health Building Organization Award is awarded by the
National Council of Health Building (made up of nine
ministries and agencies and 233 related organizations) torecognize organizations that promote health and nutritional
improvement and health building activities in communities
and workplaces.
Lion was awarded for the following reasons:Since its foundation, Lion has consistently regarded its employees as"partners to develop the company," and has been taking employees'
education and health seriously.
● Lion cooperates with multiple in-house organizations including the
Health Support Office to conduct health building seminars, recreationand sporting activities.
● To prevent the metabolic syndrome, Lion has been implementing manydifferent measures in the field of health and nutrition, and has been
trying to build health overall.
Lion will continue with its PDCA activities based on the Guideline for
Health to promote health and fitness of our employees.
●* National Campaign for Health Building
URL http://www.health-net.or.jp/undou/index.html* Health Building Organization Award
URL http://www.mext.go.jp/b_menu/houdou/26/01/1342991.htm

82

90.1

2009

91

89

97.8

2010

96

87

90.6

2011

57

54

95.0

2012

52

48

92.3

Lion's CSR
Organizational Governance
Human Rights

Number with changed lifestyle habits

91%

Dental Prophylaxis Program (ALOHA)*
We have focused on the improvement of oral health byincorporating dental checkups into the annual health checkups
for all employees since 2002. In our activities collaborating with
the Lion Foundation for Dental Health, not only did we improvethe employees' oral health, but we also successfully
demonstrated that metabolic syndrome has relevance toperiodontal disease. We will continue these activities andenhance our efforts toward prevention of periodontal disease
and metabolic syndrome for all employees.
＊ ALOHA stands for "Al l Lion Oral Health Activity"

Mental Health Initiatives
With our Mental Health Basic Policy established in 2004,
Lion has taken proactive measures for the mental health of
our employees, aiming to create a working environment
where each employee can work with vitality. Consultation
after periodical checkups helps each employee feel securein terms of mental healthcare measures that the company
has for its employees. In addition to in-house consultations
provided by industrial physicians, nursing staff andpsychiatrists, we have a contract in place with anindependent organization for providing telephone
consultation and face-to-face counseling for employees.
Other than consultation after checkups, a stress level
check test is conducted for all employees, which is used fortheir self-care. Furthermore, we have continued our
initiatives toward organizational mental health care byrunning the PDCA cycle. For example, as a measure tocreate a working environment where each employee canwork with vitality, we provide feedback to the individual
section/departments and their Director of the Board
Responsible on the stress level compiled and analyzed bysection/department, which is utilized for managerial
training by full-time industrial physicians.
CSR Report 2014

コミュニティへの参 画 および 発 展

Left: Etsuo
Kenmoku, Directorof the HealthSupport Office.
Right: Norihide
Nishinoue,
supervisingindustrial physician

Participants
2008

Labor Practices

Voice of the
担当者の声
Personin Charge

Changes One Year After LIS21 Participation

The Environment

Lion has conducted health management activities throughdiscussions at a joint session called the Health Management
Promotion Committee Meeting attended by the employee who
is responsible for health management of the company (The
Personnel Manager), the Health Insurance Society and the HealthSupport Office. The company seeks even more effective healthmanagement through PDCA management based on the analysis
of present data, extraction of issues and setting of themes

Lion has held two-days hands-on seminars called LIS21 (LionLife Innovation Seminar 21) every year since 2001 for
employees aged 35 years old aiming to improve selfmanagement skills in health. We found that participants of thisseminar have a higher degree of awareness of lifestyle habits
and that they were able to control their weight gain five years
after the seminar. As we confirmed that establishment of good
health habits while still young leads to the prevention of
diseases later on, the seminar has been effective in raising our
employees' awareness regarding health.

Fair Operating Practices

Organizational Approach to Health Management

Age 35 Health Seminar

Consumer Issues*Guideline for Health
URL http://www.lion.co.jp/ja/company/about/health.htm

regarding initiatives. We will continuously make improvements
and accumulate the know-how of industrial health.

Community Involvement andDevelopment

Based on the concept that employees' good health serves asbusiness foundation to support sound corporate growth, Lionhas conducted a variety of measures, such as regarding
lifestyle habit improvement, oral health care and mental
health, for employees' health management and improvement.
Especially as a part of our detailed health management
activities, each employee is consulted by industrial physicians
and nursing staff after health checkups. We follow the
Guideline for Health* as our core basic principle.

23

LaborPracticesEnhancing Group-wide Occupational Health and Safety Management System
Based on the principle of "safety first," Lion has established its
unique Health, Safety and Disaster Prevention Management
System for domestic group companies, which was added to ourown disaster prevention measures which is the Occupational
Safety and Health Management System (OSHMS) based on theguidelines of Japan's Ministry of Health, Labor and Welfare. We
hold a Health, Safety and Disaster Prevention Meeting to which
representatives from production, R&D, international operations,administrative as well as sales divisions attend, and where
employees and managers strengthen and improve measures forhealth, safety, and disaster prevention in cooperation, in order tomanage and promote corporate policies, goals ("zero" major
accidents and "zero" major disasters), annual plans andperformance.
At each business location, there is a Safety, Hygiene andDisaster Prevention Committee in place, established inaccordance with laws, and it mainly promotes activities such as
resolving issues unique to each business location and reflecting
employees' opinions. In addition, the chairperson of the Health,
Safety and Disaster Prevention Meeting performs executive
environmental audits of individual production-related businessfacilities on a regular basis.

(cases)Domestic
Lion Group
Companies

Lion
Occupational Safety

In 2013, the number of accidents decreased to1419 from 20, but
the number of 16
lost time accidents increased to eight from five
10
compared to the previous 10
year.
11
In the future, to prevent major accidents occurring within theentire 7group including
the group companies overseas, Lion will
7
strengthen its structure based on its policies5 and regulations(under the Health, Safety and
2 Disaster Prevention Management
System,SafetyDesignGuidelinefor
Facilities,2013etc.) andpromote(year)
2009
2010
2011
2012
safety measures for production equipment systematically andconsistently for even safer workplaces.
Also, as a measure to prevent recurrence of a major accident
that occurred at one of the group companies in Japan in 2012,
where a worker fell from between the spacing of the safety fence
within the production plant, Lion completed sequential
improvement of handrails and safety fence at all domestic
production sites.

Safety of Facilities
Recently, most of the plant accidents that happened at Lion andother group companies took place while non-routine work was inprogress. Such were attributed to the diminished sense in safety
management and shortfalls in workers' skills and awareness.
Lion approaches this problem from both the hard (equipment
management) and soft (operational management) sides, and in
the midst of aging equipment, establishes daily inspection andNumber of abnormalities that happened*
2009
0

2010
0

2011
0

maintenance standards proportionate to the degree ofimportance so as to ensure sound management. Also, ourworkers are given trainings by each position level for faster
response to any changes in processes to enhance their safety
management abilities.
We will continue to focus on systematically promoting
equipment safety from a medium- to long-term perspective.

Response to emergencies
Lion has proceeded with the preparation for various natural
disasters including an earthquake that may directly hit the Tokyo
metropolitan area and has enhanced its disaster prevention
schemes.
In the disaster prevention training in 2013, assuming anearthquake across the extensive region of East Japan, we provided
training on how we respond to it by coordinating with businessoffices within the region, and confirmed the systems for collectionof information and instructions. Also, by holding drills such as
safety confirmation drills, evacuation drills, staff deployment
confirmation drills, firefighting drills and joint drills with municipal
firefighters, we are continuing to focus on enhancing disasterprevention. We will continue to provide trainings over extensive
regions and enhance disaster prevention capabilities.
Number of Labor Accidents/Disasters(cases)
20
15

16

2013
2

＊ "Abnormalities" refer to events like fire, explosion, rupture, leakage and runaway

reaction, and the category of which the event falls under is determined by the fire
department in the relevant jurisdiction.

CSR Report 2014

10

10

11

5

7

7

2

2009

2010

2011

0

10

5
2012

2013

(year)*Data from 2012 was modified after review. For accident frequency
and severity rates of the production division, see the website below
URL https://www.lion.co.jp/ja/csr/employee/prevention/

Holding the International Plant Manager Meeting
To enhance the plant management structure for the groupcompanies overseas, we held the first International Plant
Manager Meeting at our Chiba Plant. Plant managers fromgroup companies overseas and our domestic staff got together
and reported/shared their initiatives and best practices in
product supply, quality assurance, safety control,
environmental preservation and human resource development.
We will continue to have such meeting in the future.

Participating ・Lion Eco Chemicals Sdn. Bhd. ・Lion Corporation Ltd. (Thailand)(Malaysia)
・Southern Lion Sdn. Bhd.
Overseas
・CJ Lion Corporation(South Korea) (Malaysia)
Group
Companies ・Lion Chemical Industry Co., Ltd. ・P.T. Lion Wings (Indonesia)

Introduction of websites

24

14

Participants in the International Plant Manager Meeting20120● For the sake of employees (Labor Practices)

Domestic
Lion Group Companies

Lion

http://www.lion.co.jp/ja/csr/employee/(Taiwan)Ideal Vision

Contributing to the Development ofa Sustainable Society as an
Environmentally Advanced Company

Lion's CSR

The
Environment

In 2011, Lion announced its Management Vision (Vision2020). As its company-wide policy to become an"environmentally advanced company," which is included in
Vision 2020, we formulated Eco Vision 2020 as our new
environmental objective. We will work on environmental

Organizational Governance

Basic Approachawareness for customers and reform their consumption
behaviors through our products, in addition to achieving
targeted values with the aim of "realizing a low carbon
society," "realizing a sound material-cycle society" and"realizing a society harmonizing with nature."

formulation of Eco Vision 2020. The revised Guidelines more clearly
express our attitude toward "realizing a low carbon society,""realizing a sound material-cycle society" and "realizing a society
harmonizing with nature," as well as our stance toward our efforts
overseas.

Labor Practices

Lion's Environmental Guidelines adhere to the spirit of the Lion Group
Charter for Corporate Behavior, which states: "We shall play apositive and active role in creating a sustainable society, harmonizing
economic development and environmental protection."
In 2013, we revised the Guidelines in accordance with the

Human Rights

Environmental Guidelines

Environmental Management Structure

2 Complying with Legal and Other Requirements
Comply with the system of legislation, regulations and arrangements pertaining toenvironmental protection, and establish and implement voluntary standards ofconduct.
3 Setting and Verifying Implementation of Environmental Objectives and Targets
Correctly understand the environmental impact of corporate activity, and as far
as technically and economically possible, establish objectives and targets for

Production
DivisionManager ofenvironment
management

Administrative /Sales Division
Manager ofenvironment
management

Each plant

Each office(General manager of producti
on management department)(General manager ofgeneral affair department)

R&D Division
Manager ofenvironment
management

The Environment(Director of Environmental
Conservation Office)

Chairman : Director of the Board Responsible
Secretariat : CSR Promotion Department,
Environmental Conservation OfficeMembers of Committee :Directors of production, administrative, sales,
R&D and headquarters staff divisions

Affiliatedcompanies(General manager ofcorporate management
department)

Each laboratory

improvement, while at the same time formulating, implementing and regularly
verifying the status of implementation of an environmental management
program.
4 Developing Environment-Friendly ProductsContinue aggressively with product development in tune with Lion's own Lion
Eco Standards, and in light of lifecycle assessments.
5 Reducing Environmental Impact Together with Business Partners
Strive to reduce environmental burdens at all stages from purchase throughprovision of products to customers, in cooperation with suppliers of materials,
outsourcing contractors, and sales companies.
6 Harmonizing with Nature
Conduct business activities while taking into account biodiversity and air andwater environments, and proactively address natural environment protection
activities.
7 Enhancing Environmental Protection Activities Based on Uniform
Understanding of the Guidelines
Disseminate the Guidelines to all Lion employees, including those of its
affiliated companies, raise an awareness of environmental protection among
them and bolster environmental management activities throughout the entire
Lion Group.
8 Promoting Disclosure of Information
Seek to maintain and promote communication with stakeholders involvedin Lion's businesses. These Environmental Guidelines are freely available toanyone upon request.

コミュニティへの参 画 および 発 展

1 Aiming for a Sustainable Society
Promote an environmental management system, and through ongoing
maintenance and improvement of that system, protect the global environment.

Group-wide
Manager ofenvironment
management

Environmental Action Promotion Committee

Fair Operating Practices

Lion will act voluntarily and proactively to reduce its environmental
burden to the global environment in all processes of businessactivities from the development of products to the procurement of
raw materials, production, distribution, sales, use by customers, aswell as disposal. This will be done with due consideration to"realizing a low carbon society to prevent global warming","realizing a sound material-cycle society with maximum usage ofrecycled resources"; and "realizing a society harmonizing with nature
to conserve people's health, natural ecosystems and biodiversity".

Executive
Committee

Consumer Issues

Environmental Guidelines

Environmental Management Structure

Community Involvement andDevelopment

Lion has established an Environmental Action Promotion
Committee comprising members from production,
administrative, sales, R&D as well as headquarters staff
divisions, in order for all employees to respond toenvironmental management in a cooperative manner. Froman environmental perspective, the committee reviews
group-wide business activities, complies with laws andregulations, establishes standards and targets and ascertains
group-wide promotion and status of achievements of theabove.

Revised January 1, 2013

CSR Report 2014

25

The
Environment

Environmental Management System
The purpose of the Lion Group's Environmental Management
System is to identify, evaluate and remedy adverse effects thatour business activities, products and services have on theenvironment, and to improve our environmental protection
activities on an on-going basis. Ongoing improvements will beachieved through the implementation of the plan-do-check-act(PDCA) cycle in line with the Environmental Guidelines.
Systems for environmental management and reporting
activities have been enhanced with the aim of responding to
the environment globally. Data on overseas group companies isavailable on our website.
* Data on environmental burden of group companies' plants (overseas)
URL http://www.lion.co.jp/en/csr/pdf/csr_2014_17.pdf

Status of ISO 14001* Certification
Lion acquired ISO 14001 certification covering all its plants inJuly 2001. Certification was reviewed and renewed by theJapan Management Association Quality Assurance Registration
Center (JMAQA) for an additional three-year term in April
2013. It was verified that the frameworks to maintainmanagement systems were properly operated, conforming torequirements of the standard. Continual improvements are
made to management systems and environmental protection
activities based on audit results. Also, in relation to the plantsof group companies in and outside Japan, the Lion Grouphas obtained
ISO 14001
certifications
and operated
environmental
management
systems in compliance with ISO
14001.

Internal Environmental Audits
Employees who are qualified as internal environmental auditors
after undergoing appropriate training routinely perform
internal environmental audits to verify total conformance to ISO
14001 requirements and conduct management reviews.
Individual departments take responsibility for remedying any
non-conformance and reporting improvements to the generalmanager in charge.

Executive Environmental Audit
The Director of the Board Responsible for CSR, who chairs theEnvironmental Action Promotion Committee, carries out
executive environmental audits covering plants of Lion and its
group companies on a regular basis together with safety
audits. In 2013, we performed executive environmental audits
for Lion Packaging's Fukushima Plant and Lion's Odawara Plant
and Chiba Plant, and confirmed that their environmental
management was maintained adequately.

Executive environmental audit

ISO 14001 Certificate of Registration*ISO 14001 is a global standard governing voluntary
environmental efforts of organizations.

Legal Compliance
Lion complies with all environmental laws, ordinances andother regulations, and we ensure thorough management
according to our own independent standards.
Waste treatment contractors must satisfy the criteria
stipulated in the waste management regulations in order to be
selected by waste supervisors at each site. The premises ofwaste treatment contractors are inspected on a regular basis toverify conformance to the criteria.
Notably, equipment containing polychlorinated biphenyls(PCB) which we had been using in the past is being managed
securely in accordance with legal requirements. Suchequipment is being gradually disposed of through Japan
Environmental Safety Corporation (JESCO).
Wastewater is constantly managed to ensure that statutory
limits on wastewater are observed. This involves improving thereliability of wastewater processing facilities, strengthening and26

CSR Report 2014

ensuring management during processes and conducting
emergency drills.
Also, in regard to revisions of environmental laws andregulations - namely, the Act on the Rational Use of Energy, theAct on Promotion of Global Warming Countermeasures, theAct on Confirmation, etc. of Release Amounts of SpecificChemical Substances in the Environment and Promotion of
Improvements to the Management Thereof and the Act on the
Evaluation of Chemical Substances and Regulation of Their
Manufacture, etc. - the Environmental Conservation Officecollects and manages information from administrative agencies
and industrial associations to keep the related functions
updated about such information.
There were no violations resulting in a fine or other penalties
during 2013.

Pollution Prevention
Lion's CSR
Organizational Governance

Lion also implements voluntary initiatives for reducing emissions ofchemical substances that cause air pollution, including nitrogenoxides (NOx), sulfur oxides (SOx), particulate matter and volatileorganic compounds (VOC). We also strive to reduce COD*1 withimprovement in reliability of wastewater processing facilities andperiodical maintenance.
Data on management of chemical substances, including
notifications in compliance with the PRTR system, is summarized
in site reports*2 for each business location and available on Lion's
website. Domestic emissions of PRTR substances in 2013 rose by

18% compared to the 2010 level, and VOC emissions fell by 20%
compared to the 2010 level. The increase in PRTR substanceemissions was caused by increased usage of hexanes as a result of
increase in production and change in the manufacturing process.
We will continue to take initiatives with the goal of reducing
PRTR substances and VOC emissions by at least 15% and 25%,
respectively, for 2014 as compared to their 2010 level by
improving the manufacturing process.
*1: COD stands for "Chemical Oxygen Demand" and is an indicator ofwater contamination measuring the amount of oxygen required tooxidize and break down organic substances in water.
*2: Site reports
URL http://www.lion.co.jp/ja/csr/report/

Human Rights

Production Activities Conscious about Air
and Water Quality

Lion is actively promoting a dialogue with the local communities
as a member of the Responsible Care Committee of the Japan
Chemical Industry Association.* Our individual plants set up
opportunities for dialogue that suits the characteristics of eachregion and communicate with regional stakeholders.
In February 2013, members of the Chiba Plant talked withlocal residents under the theme of "Security and Disaster
Prevention, including Responses to Earthquake and Tsunami" atthe Chiba District Regional Dialogue Forum that was held in Goi
Hall in the city of Ichihara, Chiba under the auspices of the Japan
Chemical Industry Association. A total of around 190 people(local residents, citizens' organizations, schools, administrative
agencies, etc., and companies in the neighborhood) participatedin this forum. After providing a tour at our Chiba Plant forinterested participants, there was a briefing on specific examplesof our safety and environmental activities, which was followedby exchanges of opinions with local residents.
We will continue to have on-going communications with
communities to deepen mutual understanding with local
citizens.

Lion's Chemical Substance Management

Safety verification andmanagement of chemical
substances containedin raw materials, packages,
and containers

Production

Measurement andreduction of chemical
substance releases

Transportation

Provision of safety
information duringtransportation

Use and
Disposal

Provision of information
on safety and handlingof chemical products

コミュニティへの参 画 および 発 展

Product
Development

Chiba District Regional Dialogue Forum

Community Involvement andDevelopment*: Appropriately Handling Chemical Substances
URL http://www.lion.co.jp/ja/csr/env/prevention/

The Environment

Chemical substances are indispensable for people to lead
comfortable and fulfilling lives. Failure to properly manage
chemical substances, however, can result in accidents that put
human health and ecosystems at enormous risk. In addition tocompliance with related laws and regulations, Lion strives toensure strict management of chemical substances at all stages
from product development and use through disposal inaccordance with our own independent standards.

Fair Operating Practices● Responsible Care Activities at the Chiba Plant

Consumer Issues

Appropriately Handling Chemical Substances*

Labor Practices

Enhancing Group-wide Management of Chemical Substances[Responsible Care]
A voluntary management activity performed by a business entity that is handlingchemical substances, whereby the "environment, safety and health" over allprocesses of product manufacturing, distribution, use, final consumption,
disposal and recycling are ensured, and the results of such activities are disclosed
and dialogues and communications are exchanged with society.
* The Japan Chemical Industry Association
URL http://www.nikkakyo.org/

CSR Report 2014

27

The
Environment

Eco Vision 2020 performance
Target value for 2020

Greenhouse gases(domestic)
OutsideWithinthe company the company

Reduction ofgreenhouse
2 gases frompost-use
products

Emission intensity per
Emission intensity per
Emission intensity perunit total revenue
unit total revenue
unit total revenue
4% reduction (compared to 2010) 9% reduction (compared to 2010)
3% increase (compared to 2010)
47% reduction (compared to 1990) 51% reduction (compared to 1990) 53% reduction (compared to 1990)(Absolute quantity:(Absolute quantity:(Absolute quantity:
49% reduction compared to 1990) 48% reduction compared to 1990) 41% reduction compared to 1990)

Reduction ofgreenhousegases from
3 businessactivities,
overseas

Emission intensity per unitof production
3% reduction
over three years

Reduction ofgreenhousegases from4 post-use
products,
overseas

Reduction of
47 thousand tons
annually

Withinthe company

Reductionof water use
5 in businessactivities

Water use per unit total revenue
6% reduction (compared to 2010)
27% reduction (compared to 2000)(Absolute quantity:
32% reduction compared to 2000)

Water use per unit total revenue Water use per unit total revenue
9% reduction (compared to 2010) 15% reduction (compared to 2010)
30% reduction (compared to 2000) 35% reduction (compared to 2000)(Absolute quantity:(Absolute quantity:
29% reduction compared to 2000) 23% reduction compared to 2000)

Outsidethe company(final target of Vision 2020)

Emission intensity per
Emission intensity per
Emission intensity perunit total revenue
unit total revenue
unit total revenue
1% reduction (compared to 2010) 23% reduction (compared to 2010) 34% reduction (compared to 2010)
23% reduction (compared to 1990) 40% reduction (compared to 1990) 49% reduction (compared to 1990)(Absolute quantity:(Absolute quantity:(Absolute quantity:
29% reduction compared to 1990) 39% reduction compared to 1990) 40% reduction compared to 1990)

Reductionof water
6 usage using
our products

Water use per unit total revenue
2% reduction (compared to 2010)
36% reduction (compared to 2000)(Absolute quantity:
39% reduction compared to 2000)

Water use per unit total revenue Water use per unit total revenue
14% reduction (compared to 2010) 17% reduction (compared to 2010)
43% reduction (compared to 2000) 45% reduction (compared to 2000)(Absolute quantity:(Absolute quantity:
39% reduction compared to 2000) 33% reduction compared to 2000)

Zero emissions at nine
domestic production
sites out of ten

Zero emissions at all
domestic production sites

Waste

7

Zero
emissions
withinthe company

Emission intensity per unitof production
1% reduction
year-on-year

Emission intensity per unitof production
1% reduction
year-on-year

Reduction of
100 thousand tons
annually

Recycling
Waste
of factorywater
8 wastewater
discharge
discharge

Zero emissions at
all domestic production
sites and offices

Recycling ofwastewater*1
by 95% or more at
multiple plants

Procurement ofplant-derived
Obtain RSPO*2
oils that take
Supply Chain certification
Procurement 9 biodiversity
and purchase certified oils
conservation into
consideration

Obtain RSPO Supply
Chain certificationand start purchasing
certified oils

All palm oils
purchased to be
RSPO certified (2015)

Increase
Biodiversity 10 biodiversity
conservation
activities

Carried out inall Lion's factories

Carried out inall Lion's factories

Carried out inall domestic sites

Environmental
Awareness
awareness andandEducation in 11 education
for consumers
the Society

1.2 times(compared to 2010)

50% increase in consumer
participation in
our awareness activities(compared to 2010)

Doubling the number ofconsumer participation in
our awareness activities(compared to 2010)*1: Wastewater from production processes
28

Target value for 2014,

V-1 Medium-range plan target (2014)

Reduction ofgreenhouse
１ gases frombusiness
activities

Water

Realizing a Low Carbon Society
Realizing a Sound Material-Cycle Society
Harmonizing with Nature
Education

Performance in 2013

Greenhouse gases(overseas)
OutsideWithinthe company the company

Categories

CSR Report 2014

*2: Roundtable on sustainable palm oil

Realizing a Low Carbon Society
Reduction of greenhouse gases(domestic group companies)

0.3
0.2

Unit total revenue basis
Absolute quantity

77%
71% 72% 0.373
143,551
0.340 0.349
60%
73％
71％
65％ 67％
105,353
102,631
93,125 96,411
61％
100 ％

78%
0.375

150,000

100,000

Reduction of Greenhouse Gases(overseas group companies)

75,000● Reducing CO2 Emissions from Business Activities

50,000CO2 emissions from our business activities overseas have increased
compared to the previous year due to an increase in production
volume. However, CO2 emission intensity per unit of production fell
by 3% over a three-year period. We will continue to focus on the
reduction of CO2 emission intensity by 1% or more every year.

125,000
51%
60％

0.1

25,000
0

1990

2010

2011

2012

2013

0
2014
2020 (year)
target target● Reducing CO2 Emissions after Product Use

Lion focuses on ways to reduce CO2 emissions generated after
product use through its product-related research anddevelopment activities. Specifically, we have been working on
making products more compact and replacing petroleum-based
surfactant ingredients with plant-based ingredients that do notlead to an increase in CO2.
The CO2 emission intensity per unit total revenue in 2013 fell
47% , or 49% on an absolute quantity basis, compared to the1990 level. Although emissions rose slightly due to temporary
fluctuations in the product mix, we are proceeding with ouractivities to achieve the goal of reducing CO2 emissions (ascompared to the 1990 level) by 51% in 2014 and 53% in 2020
on emission intensity per unit total revenue.
Post-product Use CO2 Emissions Reductions and Targets(Tons/million yen)
Unit total revenue basis
100%
1.2
1.256

350,000100%
322,319

0.6

0.647

53%
0.669

0.3

51%

51%

165,504

165,825

2010

2013

0

1990

400,000

52%

300,000
49%

52%

47%
59%

250,000
200,000
150,0002014
target02020 (year)
targetOrganizational Governance
Human Rights

Business Activity-caused CO2 Emissions Reductions andTargets (domestic group companies)(ton/tons of production)(Tons)
Emission intensity per unit of production
Absolute quantity
0.20
80,000Emission intensity per unit of production

0.15

Absolute quantity

100%

99%

0.165

96%

0.163

0.158

97%

96%

0.161

70,000

115%
110%

0.10
100%
0.05

55,477

104%

63,57160,00060,921

57,58150,000

0

2010
2011
2012
2013
(Data from the five overseas production
sites of our consolidated subsidiaries)0
2014 (year)
target● Reducing CO2 Emissions after Product Use

Reduction of CO2 emissions overseas after product use will bepromoted by selling our proprietary plant-derived detergent
materials (MES)* to users overseas. The reduction amount of CO2
emissions is calculated by assuming that the conventional petrolderived detergent materials (LAS)* have been replaced by MES.
In 2013, Lion contributed to a reduction of 46,600 tons ofCO2. In the future, we will promote our activities toward our2020 goal of reducing 100,000 tons annually.

コミュニティへの参 画 および 発 展

0.9(Tons)
Absolute quantity
Unit total revenue basis
Absolute quantity*: Eco Rail Mark System is a system under which a company using morethan a certain level of rail cargo transportation at the time oftransporting products, or such company's products, can be certified.
*: Information on Eco Rail Mark as promoted by the Ministry of Land,
Infrastructure and Transport and Tourism
URL http://www.mlit.go.jp/tetudo/ecorailmark/ecorailmark-english.html

Labor Practices

0.4(Tons)
Absolute quantity

The Environment(Tons/million yen)
Unit total revenue basis
100%
0.5
0.482

Fair Operating Practices

Business Activity-caused CO2 Emissions Reductions andTargets (domestic group companies)

Consumer Issues

Lion worked to reduce CO2 emissions through persistent energy-saving
measures in addition to making laundry detergent more compact, areview of production process by the production division andintroduction of energy-saving equipment during facility renewals.
Furthermore, the entire company including the administrative & sales
division and the R&D division advanced activities to promote energysaving activities. However, as CO2 emission factors of each electric
power company in Japan have increased, CO2 emissions in 2013
increased from a year earlier while decreasing by 23% on emission
intensity per unit total revenue compared to the 1990 level (orreduction by 29% versus the 1990 level on absolute quantity basis).

Lion works to reduce CO2 emissions and energy consumption
intensity through efforts to improve logistics efficiency such asincreasing the size of transportation trucks and improving thetransport loading rate, and pursuing modal shifts such as alternationfrom truck transportation to transportation by rail or ship.
In 2013, the modal shift rate for all traffic volume was 22% (23%in 2012), and 71% (72% in 2012) for long-distance transport over
500 km, remaining generally unchanged from the past year. With
the ratio of transportation by rail of 63%, which significantly
exceeds the Eco Rail Mark* certification level of "15% or more," acertification has been obtained.
As a result, we reduced total CO2 emissions from logistics by
3.0% from the previous year to 18,113 tons. Furthermore, withthe reduction of specific energy consumptions by 7.6% over aseven-year period, Lion's target for year-on-year reduction of 1%
or more was achieved.

Community Involvement andDevelopment● Reducing CO2 Emissions from Business Activities

Lion's CSR● Initiatives in Logistics*: MES stands for Methyl Ester Sulfonate.
*: L A S stands for Linear Alkylbenzene Sulfonate.
CSR Report 2014

29

The
Environment

Realizing a Sound Material-Cycle Society
Reduction of wastes● Performance of Total Waste Generation● Zero Emissions within the Domestic Group Companies

In 2013, total waste generation of the domestic groupcompanies was down 51% compared to the 1990 level, fallingfrom the previous year's level, as a result of our continued efforts
to separate of wastes by type and their conversion into
valuables. We will make further efforts to reduce the waste
generation.
In 2013, the domestic group companies reduced the final
waste disposal amount by 99% compared to the 1990 level.
Since 2007, we have continuously attained the target set by
Keidanren (the Japan Business Federation), which is the
reduction of 89% or more by 2015 compared to the 1990 level.
All of Lion's four plants also attained zero emissions status in
2002, and have maintained such status since then. Among
domestic group companies, five out of six production sites havecontinued to achieve zero emissions. However, the recycling ratioof one production site that handles ammoniac sludge, which
generates odor during disposal, was 93%, falling short of thetarget of 99%.
We will further review the processing method and aim toattain zero emissions status regarding all the domestic
production sites by 2014.

(overseas group companies)
For the volume of wastes overseas in 2013, total waste
generation remained on par with that of the previous year
despite an increase in production volume, as a result of an effort
to reduce wastes. However, because of slowdown in therecycling process, the amount to be recycled decreased, causing
an increase in the final disposal volume.
Performance of Total Waste Generation (overseas group companies)(tons)
5,000

4,577

4,774

4,759

2010

2011

2012

2013

4,000
3,000
2,000
1,000
0

(year)

Performance of Final Waste Disposal (overseas group companies)(tons)
3,000
2,500

Performance of Total Waste Generation (domestic group companies)

2,000(tons)
20,0001,500

17,646（100％）

4,364

2,840

2,399

2,302

2,171

2011

2012

1,000
500

15,000

0

8,432
（４８％）

10,000

8,278
（47％）

9,032
（51％）

8,647
（49％）

5,000

0

1990

2010

2012

2011

2013 (year)

Performance of Final Waste Disposal (domestic group companies)(tons)
7,580
8,000 （100％）
7,000
6,000
5,000

2010

2013

(year)

Case of a Zero-Emission Initiativeat a Domestic Plant (Akashi Plant)
Lion is driving reduction and recycling of wastes as per thevision set out in the Fundamental Law for Establishing aSound Material-Cycle Society.
At the Akashi Plant, the sludge that is generated inconnection with wastewater processing is being recycled into
artificial sand (ARC sand) with the cooperation of a recycling
facility at the Sainokuni Resource Recycling Plant (Saitama
Prefecture). The ARC sand is being reused as materials forlower-layer roadbed, weed control material, water quality
improvement material, etc.
We will further promote recycling of wastes with a view
toward realizing zero emissions at our production plants.

4,000
Keidanren Voluntary Action Plan 2015 Target

3,000
2,000

830
（11％）

1,000
0

1990

2007

202
185
173
88
（3％） （2％） （2％） （1％）
2010

2011

2012

2013 (year)

Wastewater processing facility at the Akashi Plant

30

CSR Report 2014

Artificial sand (ARC sand)Reduction of Water Usage

100%
6.16
100%

4.00

77%
4.75

73%
4.52

73%
4.49

70%

3.00

2,000
65%

2.00

1,337

1,299

68%

68%

1,248

1,236

71%

77%

2010

2011

2012

2013

2014
target1,500

02020 (year)
target● Performance of Water Use in Business Activities(overseas group companies)
As for performance overseas in 2013, water consumption
increased with the increase in production volume.
Performance of Water Use in Business Activities(overseas group companies)(1000 m3)
Absolute quantity
800

66%
2.8

64%

1,000
2000

Unit total revenue basis
Absolute quantity

64%
2.7

57%

61%

61%

55%

2.00
709,806

1.00
0

0

2000

2010

67%

671,9112013

Lion's CSR
Organizational Governance

1,200,000
1,000,000
800,000
600,0002014
target02020 (year)
targetLion Products Useful for Saving Water Use
Top NANOX, Top HYGIAThey are laundry
detergents that require
only one rinse since thefoam from the detergents
washes off quickly, easily
removing cleaning agentsfrom the laundry.

781"Ofuro no Look"(Bath Cleaner)

700
684
600

0
1,108,023

1,830
73% 71%(1000 m3)
Absolute quantity

100%

Unit total revenue basis
Absolute quantity

77%
4.76

(1000 m3/million yen)
Unit total revenue basis
100%
4.2
4.00

687

This is a bath cleaner that saves water
usage by around 90 liters (or 30%) per
month as the foam from the detergent
washes off quickly.

637

500

Consumer Issues

6.00(1000 m3)
Absolute quantity

Reduction of Water Use during Product Use and Targets(domestic group companies)

Human Rights(1000 m3/million yen)
Unit total revenue basis

Lion is also focusing on reduction of water usage during product use
by our customers. For example, although conventional products
expect laundry to be rinsed twice, Lion is promoting the use oflaundry detergents that require just one rinse.
Water consumption per unit total revenue in 2013 was down
36%, or 39% on an absolute quantity basis, compared to the 2000
level.
By 2014, we will proceed with the development of new products
and technologies with the aim of reducing water consumption perunit total revenue by 43% compared to the 2000 level.

Labor Practices

Performance of Water Use in Business Activities and Targets(domestic group companies)● Reduction of Water Usage Using Our Products

The Environment(domestic group companies)
Lion continuously keeps a close watch on water usage andwastewater volume and works to reduce water usage throughcyclic use and lower environmental impact. In Japan, we havecontinued to focus on the reduction of water used in thewashing process, and, as a result, the water consumption perunit total revenue was down 27% compared to the 2000 level,remaining unchanged from the previous year.
Further efforts will continue to be made in 2014 for protecting
water resources through reducing water consumption per unit
total revenue by 30% as compared to the 2000 level as well as
through the reuse of recycled plant effluent.

Fair Operating Practices● Reduction of water usage in business activities* Comparison with Lion's conventional

products, as researched by our research institute

0

2011

2012

2013 (year)

CHARMY Crysta Clear Gel

コミュニティへの参 画 および 発 展

2010

Community Involvement andDevelopment

400

This is a dishwashing detergent that will
leave dishes and inside of dishwashers
spotless, even under a high-speed
setting, with its strong detergency.

CSR Report 2014

31

The
Environment

Harmonizing with Nature
Approach to Biodiversity Conservation
Lion has assumed a leading role in tackling water-related environmental
issues such as bubble floating occurred in rivers and eutrophication ofwaterways linked to the use of detergents, and has consideredbiodiversity conservation at each stage from raw material procurement
to disposal. However, in order to receive and preserve the blessings of
biodiversity into the future, it will be mandatory for us to coordinate
with local communities to focus on conservation of biodiversity andpromote sustainable use thereof. Also, it is important to promote a shift
in lifestyle of consumers through products that take biodiversity into

consideration, and to contribute to the realization of a society
harmonizing with nature.
To this end, Lion will contribute to the development of a sustainable
society through its business by ascertaining the natural resources used inbusiness activities and the impact on biodiversity throughout the value
chain and carrying out biodiversity conservation activities that lead tothe expansion of opportunities and reduce the risks. Also, by having
each of our employees participate in activities to conserve biodiversity as
part of our environmental education, we will spread awareness of
biodiversity conservation to all our office sites.

Overview of Our Business Activities Taking Biodiversity Conservation into Consideration
Biodiversity on Watershed* ecosystem Watershed ecosystem in whichin raw material
Watershed ecosystem where consumers reside
our plants are locatedwhich Lion relies
origination sites
Corresponding stagesof value chain

Procurement of raw
materials, packages,
and containers

Key natural resources
used by Lion

Plants used as raw materials(oil palms etc.)

Cooling water and,raw water used
for equipment cleaning etc. which areused in plants

Service water at the time of using our
products—

Possible major impactof our activities on
biodiversity

Impact on naturalenvironments of palm
oil growers and local
communities (watercontamination and impact
on wildlife habitat as caused
by illegal leveling of tropicalforests)

Impact of underground water intake
by plants on surrounding naturalenvironments and local communities
Impact of wastewater from plants on
surrounding natural environments
and local communities
Impact of light and odor from plants
on surrounding natural environments
and local communities

Impact of water intake by consumers on
surrounding natural environments and local
communities

Impact of wastewater
and waste packaging
materials fromconsumers on
surrounding naturalenvironments and local
communities

Biodiversity
conservation
activities

Promotion of procurementof sustainable palm oils
(participation in RSPO, RSPOcertified oils)

Conservation of river and otherecosystems by implementing
purification technologies ondischarged wastewater.

Development of water-saving detergents

Surveying environmental
impact of surfactants

Activities toreduce therisks

For related information, see p34

Use byconsumers

Production

For related information, see p31

For related information, see p33

Disposal by
consumers

Development of highly biodegradable
detergents
For related information, see web*2

For related information, see p32

Educational activities regarding care of water andnatural environments (forest improvement activities
by the name of Lion Yamanashi Forest, conducting
Rainwater Utilization Ideas Contest, conservation ofriver environments through the Top Eco Project,*3
water-related environmental research support
through Japan Society on Water Environment).

Promotion of 3Rs (refills,
condensing of content
to make products morecompact, and developmentof containers, e.g., recycled
PET and containers withthin-wall molding)

Reduction of plant wastes

For related information, see p30. p33

Activities toexpand theopportunities—

Conservation and monitoring of
habitat on the watershed where
factories are located(Activities to protect endangered
loggerhead sea turtles, activities
related to biotopes, etc.)
For related information, see p33

For related information, see p44. web*2

For related information, see p41*1: Watershed: Ecosystems, including forests, rivers, domestic woodlands (satoyama), tidal flats and beaches that are connected by water)*2: Great properties of MES URL http://www.lion.co.jp/ja/csr/env/resources/*3: Top Eco Project is a project in which 1 yen per product of Top Platinum Clear is donated to the Let's Make Beautiful Rivers fund.
*4: Natural Protection Activities URL http://www.lion.co.jp/ja/csr/community/conservation/

Surveying Environmental Impact ofSurfactants MES, MEE, etc.
Nearly all of Lion's products end up being discharged intorivers, streams and other waterways after use. We assess such
discharges during the development stage to confirm that it issafe for the environment. In order to check that theenvironment has not been harmed, we have participated insurveys on the concentration of four kinds of surfactants inrivers near Tokyo and Osaka, as well as in ecological risk
assessments (four times a year), which are performed by theJapan Soap and Detergent Association.* Thus far, studies havefound that the risk of wildlife being harmed is extremely low.
As plant-based surfactants MES and MEE are substancesdeveloped by Lion, we have investigated and assessed theconcentration of these in the same public water areas and32

CSR Report 2014

verified that their impacts on ecological systems are immaterial.
Lion is not the only organization engaging in safetyassessment and confirmation. Besides acquiring and applying
the latest information and technology available in Japan andoverseas, we disseminate our own information, contributing tosafety advancements.
In 2013, we reported on the "Estimation of Aquatic
Environmental Concentration and Ecological Risk Assessmentof Methyl Ester Sulphonate(MES)" at the 47th conference ofJapan Society on Water Environment in Osaka.
*1: The latest data on river environment monitoring by Japan Soap
and Detergent Association
URL http://jsda.org/w/02_anzen/3kankyo_15.html*2: 47th annual conference of Japan Society on Water Environment held
under the auspices of Japan Society on Water Environment.
URL http://www.jswe.or.jp/eng/event/lectures/2012en.html

Biodiversity Conservation Activities
at Each Business Location● Conservation and Monitoring of Habitats on the● Reduction of Plant Wastes

Lion Chemical Co., Ltd's oleochemical production site converts
sludge into usable materials. Since land reclaimed to buryindustrial wastes are very few in Kagawa Prefecture in which thesite is located, sludge remaining from wastewater processing at
the plant is not processed as industrial waste, but is reused as
cement material. This way, industrial wastes are reduced andimpacts on natural environments and local communities areminimized.

Lion's CSR
Organizational Governance
Human Rights
Labor Practices

Chiba LEO TOP● Biodiversity Conservation Activities at Each Business Location

With cooperation of specialists in biodiversity, we ascertain thenatural environments surrounding all our sites including ofdomestic Lion Group sites to evaluate risks and opportunities
and to clarify targets of all of our biodiversity conservation
activities at our sites.

Information Exchange Meetings Regarding
Biodiversity Conservation Activities
In March 2014, employees that are in charge of initiatives topromote biodiversity conservation activities at our sites got
together to exchange information. The meeting provided an
opportunity to exchange information on biodiversity conservation
activities at individual sites, attend the lecture on biodiversity by Dr.
Fumiaki Nagaishi from Ecology
Pass Co., Ltd. (part-time teacher,
Department of Agriculture, Tokyo
University of Agriculture andTechnology), who is a specialist in
biodiversity, and exchange
opinions about activities at Participants at the informationexchange meeting
individual sites.

コミュニティへの参 画 および 発 展

Sludge being used as cement

In order to protect biodiversity in the areas in which the plant islocated, Lion's Chiba Plant built a biotope called Chiba LEO TOP
on its premises in October 2011 with advice from specialists inthe field. To build the natural environment, the plant employees
visited woodlands and rice fields in the neighborhood andcollected wild grass, aquatic plants, black snails, freshwater
mussels, etc. of Ichihara City and planted or released them in the
Chiba LEO TOP for cultivation. Two years have now passed, andwe observe the flora and fauna of thearea gradually increasing. Also, as partof our environmental education, theChiba LEO TOP is being fully used as astop along the plant tour.

The Environment

Hirose Valley No.3 Pond located near the plant

Support for Loggerhead Sea Turtle
Protection

Fair Operating Practices

by implementing purification technologies
on discharged wastewater
Ipposha Oil Industries' Ono Plant is surrounded by a rich naturalforest. The rainwater that is collected on the premises of theplant is purified to fall within the specified limits before being
released into a pond nearby. The pond is rich with aquaticorganisms like water shields. Since the neighborhood is where"Yamadanishiki," rice suited for sake brewing, is produced,
sufficient care needs to be exercised for water quality control.
The quality of water inthe pond is examinede v e r y m o n t h . We
submit the water
quality data to theadministrative agency,
and give explanations
at meetings of thelocal community so as
to gain the trust of thelocal community.

Consumer Issues● Conservation of river and other ecosystems

Community Involvement andDevelopment

All our sites are implementing activities to conserve biodiversity.
Notably, our plants take up large areas and use many different
raw materials, packages, and containers. Since the impact
rendered by those plants on the surrounding naturalenvironments and local communities may be significant, we areproactively implementing activities to conserve biodiversity in thesurrounding watersheds where plants are located, so that thebenefits of biodiversity can be received across the local society.

Watershed Where Factories are LocatedLion's Osaka Plant is located in the Sakai Senboku Coastal
Industrial Zone, which was developed from the 1950s. The
beaches that had been there before the development were thenesting place of loggerhead sea turtles, thus, Lion is engaged in
activities to protect loggerhead sea turtles. Under the guidanceof the nonprofit organization, Sea Turtle Association of Japan,
the Osaka Plant prepares the environment for nesting and takes
part in activities to survey the hatchingrate and DNA at Senrinohama inWakayama Prefecture, which is thelargest nesting place in the main islandof Japan for endangered loggerhead
sea turtles.

Introduction of websites● To protect the Earth's environment (The Environment)● Eco Every Day for Life

http://www.lion.co.jp/ja/csr/env/

http://www.lion.co.jp/ja/csr/env/ecolion/● Overview of environmental impact of Lion's business activities/environmental accounting/eco-efficiency● Environmental communication

http://www.lion.co.jp/ja/csr/env/products/

http://www.lion.co.jp/ja/csr/env/communication/

CSR Report 201433

Ideal目 指 すVision
姿

Fair Operating
Practices

Promoting CSR Activities throughout
the Value Chain

Basic Approach
The Lion Group Charter for Corporate Behavior stipulates thefollowing: "observing both the spirit as well as the letter of all the laws
and international rules"; "compliance with Public Rules"; "engaging
in fair, transparent and free competition and sound transactions"; and"maintaining sound and proper relationship with government andpolitical bodies." Also, in its Behavioral Guidelines, Lion clearly statesthat it respects intellectual properties of others and will never obtain or

use any of them illegally, and that it ensures its suppliers to observe
laws and regulations. The Lion Group Charter for Corporate Behavior
and the Behavioral Guidelines are found on our website and are also
accessible to our stakeholders in and outside of the company. Also,
Lion has expressed its support for the ten principles of the UN Global
Compact since 2009, and made it clear that the company is serious
about preventing bribery and corruption.

CSR Procurement Initiatives throughout Value Chains
In our initiative across the value chain, we believe it is one ofour material issues to enhance our partnerships with material
suppliers and outsourcing contractors. In order to alleviate
negative impact of our business activities on the environmentand society and sustainably develop mutual operations, both
our suppliers and our company need to revitalize CSR

activities.
Also, regarding the palm oils used in methyl ester sulfonate(MES), which is an environmentally-friendly surfactant andplant-based detergent material independently developed by
Lion, it is critical to promote replacement with palm oils thatcan be sustainably procured.

Aiming for Sustainable Procurement of Palm Oils
We are actively promoting the utilization of plant-basedmaterials as carbon neutral materials. As one of the plantbased materials, we are using palm oil that is being producedin the largest quantity of all globally. Palm oils are being
produced mainly in Malaysia and Indonesia.
Palm oil plants are productive and the oils can be harvested
throughout the year, with the production volume increasing
year after year. However, at the production origin, as a result of
the sudden explosion of production, a number of issues havearose such as the leveling of tropical forests for development of
new farms and the shrinking of wildlife habitat. Also, terrible
labor conditions with very little consideration for health andlabor safety in inappropriate farm operations, very low wage,
improper treatment of migrant workers, child labor and manyother labor-management issues lacking social fairness havebeen raised.
CERTIFICATERSPO SCCS

Lion has been a member of the Roundtable on Sustainable
Palm Oil (RSPO*1), which makes efforts toward solving all theabove-mentioned issues, from 2006. In 2012, Lion ChemicalCo., Ltd.'s oleochemical production site passed the supply
chain certification system inspection and was certified as aplant that is allowed to handle RSPO-certified palm oils. As aresult of this, Lion started procuring RSPO-certified palm oils in2012. In 2013, we procured 2,000 tons of certified palm oils by
the mass balance method,*2 which is one of the certified
methods. We have set as our goal to complete the switching of
all palm oils being used to certified palm oils by the end of
2015. We will continue with our effort to procure sustainablepalm oil into the future.
*1: RSPO (Roundtable on Sustainable Palm Oil)URL http://www.rspo.org/*2: For the certification of palm oils, there are three certification models and one
securitization model to reflect the complicated supply chain of palm oils. The massbalance method is a certification model for transactions in which certified palm oils
from certified growers are blended with non-certified palm oils. In physical terms,
the product contains non-certified palm oils, but the ratio is strictly recorded up to
the final stage. Thus, the initial purchase of certified palm oils is warranted.

CERTIFICATE CODE: CU-RSPO SCCS-826807
Based on an audit according to the regulations stated in the RSPO Supply Chain Certification
Systems, version November 2011 and a signed contract, Control Union Certifications herewith
certifies that the facility(s) listed below are found to be in compliance with the RSPO Supply Chain
Certification Systems, version November 2011. This guarantees that the criteria for processing RSPO
certified sustainable palm oil and palm kernel oil through one or more of the supply chain models as
stated in the RSPO Supply Chain Certification Systems have been met.

RSPO Certification

Certificate holder information
Company Name:
LION CHEMICAL CO., LTD. OLEOCHEMICAL DIVISIONRSPO member number:
4-0012-06-000-00
Company Address:
22-1, BANNOSUCHO, SAKAIDESHI, KAGAWA 762-0064
Contact manager*:
Mr. MINEO KAWASE
Contact Email:mkawase@lion.co.jp
RSPO registered parent company of which the certificate holder is a subsidiary (If applicable):
Company name:RSPO member number:* Contact details of management representative responsible for overseeing the certification process

Validity of certificate starts:
Validity of certificate ends:
Date of first RSPO certification:

20/12/2012
19/12/2017
20/12/2012

Issued by Control Union Certifications.
Meeuwenlaan 4-6, P.O. Box 161, 8000 AD Zwolle, The Netherlands.
Tel: 0031 (0) 38 426 01 00.

Storage tanks for certified palm oils

Certifier: Markus Fertig
Date:
20/12/2012
Certificate no: C826807CU-RSPO SCCS-01.2012

Signature of certifier:
On behalf of the Managing Director.
Control Union Certifications is accredited for ISO/IEC Guide 65:1996
Approved by the RSPO for RSPO SCCS on 03/06/2010

Page 1 of 2

34

CSR Report 2014RSPO supply chain certification
for Lion Chemical Co., Ltd.

RSPO sets forth 8 principles and 43 criteria that apply to sustainablepalm oil production, including with regard to "environmental
responsibility and conservation of natural resources and biodiversity,""responsible development of new plantations" and "responsible
consideration of employees and individuals and communities
affected by growers and mills," and only certifies palm oils producedin compliance with the principles set forth for sustainable palm oil.

Promotion of CSR with Material Suppliers and Outsourcing Contractors
Lion's CSR

aggregate results for comparison, and requested further
improvement if any areas to be improved have been found.
To promote CSR procurement on a continual basis, wewill work on the survey system to allow more efficiency inboth self-check and feedback of results.

Organizational Governance* Procurement Principles
URL http://www.lion.co.jp/ja/company/about/policy

Aggregate Results of Overall Self-checks Basedon the Lion Group Supplier CSR Guideline

Human Rights

Coverage: Total of 640 companies (Domestic : Overseas = 84 : 16)

Yet to respond

Requested
improvement

Labor Practices

No need for
improvement

Outline of Results
・78% of material suppliers have no need for further improvements in all
items. 8% needed improvement in more than one item. 14% did not
respond.
・Items that needed improvement were centered on the "environmental
management system" and "freedom of association for employees."
However, for items connected to human rights and compliance, none
was found to be in need of any level of improvement.
・Out of the 14% that did not respond, 47 companies of which information
on CSR could not be confirmed from CSR Reports, etc., will be further
approached for cooperation.

The Environment

We instituted the Basic Policy Regarding Purchasing in2005 and have since been procuring raw materials,
packages, and containers, and products as per such policy.
In 2008, we established the Procurement Principles thatclarified our social and environmental considerations andcommunicated them to material suppliers and outsourcing
contractors in and outside of the country. We also
conducted a questionnaire survey about their corporate
activities regarding compliance and legal compliance,
product service quality and safety, environmental
considerations, labor and human rights and fair business
transactions.
As a result of this survey, we decided that it is important
to share CSR information and know-how with our material
suppliers and outsourcing contractors and work on CSR
activities through mutual cooperation with them. Thus, werevised our Procurement Principles in 2013 and made clear
about our stance to include in our considerations legal
compliance, environmental conservation and respect forhuman rights in addition to product quality, cost anddelivery in choosing our material suppliers and outsourcing
contractors, and communicated such revisions to them.
Also, we established the Lion Group Supplier CSR
Guideline in relation to CSR activities performed by material
suppliers and outsourcing contractors, so that they could
use such guideline as a checklist to keep track of items. In
establishing the guideline, we narrowed down the selfcheck items to key items for ease of use, and established athree-stage checking criteria that correspond to the degreeof initiative. A glossary of terms was also provided. For
material suppliers and outsourcing contractors who
submitted their self-check results, we reported theAlso, to ensure full compliance with the Act against
Delay in Payment of Subcontract Proceeds, Etc. to
Subcontractors, we provide training for our employees in
the purchasing department. In addition, by participating
in external seminars on an on-going basis and sharing
the content thereof internally, we make sure that
accurate knowledge is being shared with our employees.

Consumer Issues

In choosing our outsourcing contractors and establishing
the terms of transactions and pricing, we enter into
agreements through negotiations based on fairness andtransparency. By maintaining and developing fair andgood working relationships through co-existence and coprosperity with outsourcing contractors, Lion delivers
products of even better quality in a timely manner.

Fair Operating Practices

Fair Transactions with Outsourcing Contractors

Respect for Intellectual Property Rights
thereof unlawfully.
Also, Lion has established a department that specializes
in intellectual property to ensure that intellectual property
rights are being exercised properly and that such rights ofothers are not being infringed.

Community Involvement andDevelopment

コミュニティへの参 画 および 発 展

As a basic policy regarding intellectual property rights,
Lion's Behavioral Guidelines sets forth provisions
regarding making efforts to create, properly protect andproactively use intellectual property, respecting
intellectual property of others and not acquiring or using
Introduction of websites● For correct business operations (Fair Operating Practices)

http://www.lion.co.jp/ja/csr/businesscustom● Joint delivery with our competitors/collaboration with wholesalers

http://www.lion.co.jp/ja/csr/businesscustom/valuechain/

CSR Report 201435

Ideal Vision

ConsumerIssuesPursuing Customer Satisfaction by
Creating Safe and Trustworthy Products

Basic Approach
Lion carries out quality assurance activities at all stages, from thevery beginning of the product creation process until customer
consumption of our products, in order to provide products thatwill satisfy our customers. Specifically, by identifying key
requirements for each stage of corporate activity — productplanning, product development, manufacturing, sales, andcustomer support — we are constantly pursuing new heights ofcustomer satisfaction.
During product planning, valuable opinions received from
customers are well understood to identify customers’ needs.
Product Development
Incorporating Customer
OpinionDuring product development, the quality of developed
products is verified in respect to seven metrics such as function
and performance. Furthermore, we endeavor to provide clear,easy-to-read-labeling for customers.
During manufacturing, thorough quality control is performed
within each process, and products that have passed inspections
are shipped with data identifiable for each lot, which is effective
for after-sale management.
A variety of information is relayed through explanations about
our products and providing samples to wholesalers and retailers.

Maximization of customers' satisfaction
Customers

Management

Customer support
Flow of developing safe, high-quality products

Product planning

Customer opinions and market
survey findings are reflected inplanning in the form of quality
objectives that will ensure
customers are fully satisfied.

Product development

Products are developed bytranslating quality objectives
into technical parameters fordesign quality.

Manufacturing

Raw materials and processes
are managed to leadmanufacture of productswith consistent quality.

Sales

Product information iscommunicated in an accessible
manner so that customers canascertain the product featuresand usage.

All employees acknowledge customer satisfaction as the starting point for realization of people's happierlifestyle. By responding to customer opinions and making ongoing improvements to products, Lion creates
products that heighten the satisfaction of customers.

Enhancing the Group-wide Quality Assurance System
To deliver on our promise of "offering superior productsthat are helpful in the daily lives of people," we arepromoting the manufacturing of safe and high-quality
products that can satisfy our customers by putting inplace a quality assurance structure based on the Quality
Policy that we established in 2008.
In the meantime, as Lion's functional food businessgrows and the business scale of our group companies
expand domestically and abroad, we need to build astructure that promotes the manufacturing of productsthat respond to customer needs in a broader range offields.
Also, because of the recent health damage caused by

36

CSR Report 2014

non-pharmaceutical and cosmetics products of othercompanies and due to false labeling of foods, the quality
requirements being sought by the society continue torise.
Against this backdrop, we consolidated ourpharmaceuticals division and quality assurance divisionand created a new division named the Pharmaceutical
Affairs and Quality Assurance Department in order tobuild quality assurance and development support
structures across all functions of Lion, so that our broad
range of fields from consumables and pharmaceuticals
to food, as well as our overseas companies, can deliversafe, high-quality products to our customers.

Developing Safe, High-quality Products

Product
Planning

Lion'sproposal

Product planning meeting

Preparing ofa product
proposalMarketing research

Executive Committee

・Marketing
research results

Marketanalysis・Concept

Customer
research

Product
Development

Human Rights

・Target quality level

Building safety and quality into products

Deliberation oncontents and containers
Quality verification

Deliberation on andchecking of labeling

Discussion and approvalof development results❶ Function/Performance❷ Usability❸ Safety❹ Product stability❺ Environmental friendliness❻ Appearance (including design)❼ Compliance with laws andLabor Practices

Production Engineering Meeting

Seven metrics

Discussion and approval of development results

Product Planning Meeting
Discussion and approval of commercialization of the productExecutive Committee

regulations and sself-imposed standards

Quality Verification Meeting
When starting development, the suitability At the completion of development,of quality objectives and matters deemed the validity of the developmental
crucial to development are confirmed.
product is confirmed.

Decision of commercialization
The Environment

2

Deliberation and approvalof the proposal

Organizational GovernanceAnalysis/
Deliberation

Customer
Opinions

Lion's CSR

Planning products that further satisfy our customers

Process Safety
Verification Meeting
Safety assurance in the manufacturing
process is confirmed.

Fair Operating Practices

1

3 Manufacturing Quality confirmation under mass production
Storage (shipment)

Quality of raw materials,
packages, andcontainers is confirmed.

Quality in trial manufacturing
is evaluated.
Market reception is surveyed.

4 Sales

Provision of information about product quality

Quality control is performed in each process.

Product freshness is managed.

コミュニティへの参 画 および 発 展

Information is provided to wholesalers
and retailers to ensure communicationof product features and usage tocustomers.

Consumer Issues

Manufacturing

Community Involvement andDevelopment

Preparation for initial
manufacturing

Information on products ismade available via displays
and samples at stores, andnewspapers, television, ourwebsite and other media.

CSR Report 201437

Consumer
IssuesApproach to Safety and Reliability
We evaluate the safety of our products at the raw materials,
packages, and containers stage and upon actual use so ourcustomers can use our products without any concern.
● Safety of Materials
We first examine the materials to determine their safety. As thenext step, we determine whether to use a particular material
after evaluating the sample and supplier in order to secure
quality above a certain level. In using the materials, they areclassified into "drugs and food," "quasi-drugs, cosmetics"
and "miscellaneous," and their quality is inspected based on
the inspection items and testing methods appropriate for eachclassification before they are actually accepted for use.
● Safety During Product Use
By considering the various uses of our products as well as
product use by vulnerable customers, we perform safety
evaluation of our products from the perspective of avoiding
risks at the stage of product design.
We use a checklist in such evaluation to determine whether
the product design ensures safety from "normal use" cases to"mistaken use" cases. We evaluate if risks can be alleviatedeven in the event of "irregular use," and also evaluate
whether risks can be tolerated. Such evaluations are reflectedin our measures to secure product safety, such as by providing
sufficient warnings as needed.
Also, in Quality Verification Meeting for quality confirmation
held with representatives of related functions, we perform
checks from the perspective of our customers during their
Scope of Safety
Confirmation

Recklessuse

Unforeseeable andunreasonable usage

Lower risk to acceptable Irregularlevel and provide warnings
use

Foreseeable usage, but defying
accepted norms (overly excessiveuse, or use for purposes very
different to those intended)

Mistakenuse

Usage not as intended
by Lion but whichmust be expected

Normaluse

Usage as intended
by LionRequired Safety
Assurance

actual use of our products, in order to prevent damage during
product use as well as failure to confirm all safety check items.
In preparation for product trouble possibly occuring, we havein place an internal system to quickly take countermeasures
such as product recall.

Structure for Centralized Management ofInformation on Physical Issues
Even after the inception of the Consumer Affairs Agency ofJapan in 2009, we see incident and accident cases caused bysome companies being reported in which consumers had
physical issues as a result of product use. Business operators
are being required to get information on physical issues from
customers as soon as possible and to centrally manage suchinformation so proper actions can be taken as promptly as
possible.
All information on physical issues reported by consumers of
our products is consolidated at our Customer Center for
centralized management. The information received is sharedwith multiple departments concerned, and a structure is inplace to respond promptly, including by reporting to top
management. We have also created a case list of inquiries
regarding the sense of use, safety and constitution of users inwhich ascertaining information on physical issues is difficult.
Furthermore, we have prepared interview questions for those
responding to customer inquiries to obtain information from
customers in detail so that any possible physical issues can bethoroughly ascertained without fail. Going forward, we willcontinue to educate those responding to customer inquiries of
the importance of centralized management of information,and collect and manage such information.

Labels in Local Languages
To help our customers accurately understand the features ofour products, we provide information on usage, ingredients,
etc. in the local language according to applicable laws andregulations of the country in which our products are sold.

Thai

KoreanLabel for Kirei Kirei Hand Soap

ChinesePromoting Information Security
For information security, besides the Basic Policy of Our Information
Management, the Information Management Regulations and theInformation Security Regulations, we have in place the Lion Group
Social Media Policy* and basic guidelines to be observed to makesure that we can disseminate appropriate information regarding our
employees' use of social media (social network service, blogs, etc.)
In addition, we provide education to our employees via e-learning
programs on an annual basis to prevent information leakage.
To protect our customers' personal information, we have the
Personal Information Management Regulations in place, which is in38

CSR Report 2014

conformance with the Act on the Protection of Personal
Information that became fully effective in 2005. Our Director of theBoard Responsible for Corporate Ethics is assigned as a manager of
personal information protection to supervise personal information
management of the company in line with such regulations. Also,
personal information managers are placed in each department tomanage information therein and we have them understand andcomply with such regulations.
* Lion Group Social Media Policy
URL http://www.lion.co.jp/smp.htm

Initiatives to Listen and Respond to Our Customers

Database
Flow of the voiceof customers

All companies

Information
sharing system* Product manufacturing that makes the most of the voice of customers
URL http://www.lion.co.jp/ja/support/voice/

Overview of Consultations in 2013

* List of contacts for inquiries
URL http://www.lion.co.jp/ja/support/contact/

Lion's CSR
Organizational Governance
Human Rights

Aiming at Offering Services that
Guarantees Satisfaction of Our Customers
Lion is providing training to employees in charge of responding tocustomer inquiries so that they can acquire better skill sets to findout any issues faced by our customers and guide them toward a
resolution, as well as broad knowledge about products andanything related to them. In the training, those in charge of
responding to customer inquiries discuss various cases andimprove the skills of each other, participate in a workshop on
health and living which provides the background for using our
products, and are given lessons on good articulation andappropriate wording that our customers feel comfortable listening
to, so better communications with our customers can be ensured.
To ascertain the level of customer satisfaction regarding our
support services, we have conducted a questionnaire survey every
year since 2006 with our customers who called in for our
assistance. In 2013, we asked around 190 customers bytelephone or email to evaluate the quality of our support services
and their satisfaction level. The result was that 90% of ourcustomers were satisfied in regard to both items above.
We will continue with our efforts to better communicate withour customers so as to maintain customer satisfaction.

Current Status of Recall of Varsan Hyosatsu Jet
Because the Varsan Hyosatsu Jet for Flying Insects and Varsan Hyosatsu Jet
for Crawling Insects led to accidents of catching fire, Lion has been
voluntarily recalling such products from August 27, 2007.
As of February 2014, 1.48 million (the rate of recalled products: 45.7%)of such products have been recalled. We would like to ask any of ourconsumers who still have any of these products to assist in such recall.

コミュニティへの参 画 および 発 展

In 2013, we had around 118,000 consultations (a 101%
increase compared to the previous year). With the start ofoffering toll-free telephone inquiries in January 2011, we had
an increase in the number of telephone inquiries in 2012 (by122% compared to 2011), which remained almost at the samelevel in 2013 as well.
Of such inquiries: 80% were related to product usage,
retailers of Lion products and product safety; 11% were related
to dissatisfaction with our products, including complaints about
the effect, fragrance and taste after product use; and 9% wererelated to product issues, including detergents which left stains
on the floor.
We will continue to create an environment where customers
can feel comfortable about consulting us, and we will be true
to our customers and respond promptly to customer
consultations.
Telephone numbers are also found on our website.

Labor Practices

VOC
reportingmeeting

The Environment

andExecutive Officers

Fair Operating Practices

Response

Boards of Directors,
VOC
Daily Letter Corporate Auditors

Product development and improvement

Inquiries
Comments
Requests

Customer Support

Customers

Flow of Customer Support

Lion focuses on creating a culture whereby all our employees
think and act in the customers' shoes.
In 2013, the president of the company, newly appointed
directors, middle management researchers and employees
from product planning and product packaging and label design
creation departments (total of 35 individuals) listened to therecordings of conversations with our customers and answered
telephone calls directly from our customers, in order to learn
about matters regarding product use that our customers did
not know as well as the customers' opinions. Also, in trainings
given to employees at the time of their promotion, 113
employees learned about the importance of thinking aboutbusiness from the customers' perspective through discussions
about the contents of customer consultations. Also, we makeefforts to share information by reporting the circumstances ofconsultations at each department's regular meetings.
We will strive to further improve the mindset of ouremployees so we can continue to offer services from thestandpoint of our customers.

Consumer Issues*Voice of Customers

Creating a Culture that Makes the Mostof the Voice of Customers

Community Involvement andDevelopment

The inquiries and points raised by the customers are registeredin a database under a stringent personal information
management structure and then shared at the corporate levelvia an information sharing system, excepting personal
information, so that such information becomes available for
product improvement and new product development.
Employees with access rights can confirm the content thereof
via the information sharing system.
Among such information, those considered to affectcustomer satisfaction are passed on to top management on adaily basis via a VOC* Daily Letter, and efforts are being madetoward quality enhancement by ascertaining the customers'
perspective and through early consideration and handling of
improvement measures led by the product planningdepartment. In 2013, we sent out 239 VOC Daily Letters.

Customer Hotline for recall of Varsan Hyosatsu Jet Sprays
Toll-free: 0120-670-225 Open: 9 a.m. to 5 p.m.
(Except Saturdays, Sundays, year-end/new year’s holidays and summer holidays)

CSR Report 201439

Consumer
IssuesProviding Information Useful for Daily Life and Promoting Educational Activities
The Lion Comfortable Lifestyle Laboratories is proactively
engaged in communications with consumers, aiming at
enhancing the provision of information that contributes to ahealthy and comfortable life according to lifestyle and life stages.
Led by Lion's unique specialists called the Meisters of Daily Life,
we have created opportunities to communicate with ourcustomers and delivered abundant life-related information
through events that we co-sponsored with other companies andour publications and websites. Also, we ascertained ourcustomers' needs through these activities so that such can betaken into consideration in creating information that is of further
use in their daily lives.

● Introduction of Activities by Meisters of Daily Life

① Oral Care Meister
Oral care seminars for parents
and children by using Clinica
which is one of the Lion's
toothpaste brands② Fabric Care Meister
Laundry workshops fornewspaper web community
members that are held under
the theme of Top HYGIA
which is the Lion's ultracompact liquid detergent

Information collection
and accumulation

Creation of
usefulinformation

Transmission ofnews③ Health Care Meister

Comfortable Lifestyle
Laboratories
EventsMedia, etc.

Consumers

Existing
functionsNewfunctions

Voice of the
Person in Charge

Meisters of Daily Life

Special workshops for juniorhigh school female students
by using Bufferin Luna J
which is Lion's analgesics forelementary and secondary
school students

Information
dissemination

Publications

Documents

Website④ Living Care Meister
Cleaning workshops for
consumers sponsored by theretailer by using the LOOK
brand

The Lion Comfortable Lifestyle Laboratories, Director, Mieko Inoha

Delivering information that is useful for comfortable lifestyles
The Lion Comfortable Lifestyle Laboratories is established with the purpose of not just sending out
product information for public relations purposes as in the past, but also offering information thatcan contribute to comfortable lifestyles of our customers and being useful to our customers. For the
point of emphasizing the intersection between Lion and our customers, this organization strongly
expresses the special characteristics of Lion.
Our customers’ various needs are being met through direct interaction by the Meisters of Daily
Life, experts on comfortable lifestyles information, with our customers, and we are able to extract
new issues that can be discovered only through direct interaction with our customers.
Also, we are always taking initiatives to improve lifestyles from the customers' perspective byoffering information such as at collaborative events with related companies.

40

CSR Report 2014

As a focus to minimize containers and packaging materials,
Lion is proactively promoting the 3Rs (Reduce, Reuse, Recycle).
For minimizing containers and packaging materials, we haveevaluation items established for each stage of "procurement of
packages, container materials," "distribution" and "disposal"
based on the Lion's eco-standards.

Changes in Usage of Lion's Containers and Packaging Materials(tons)
80,00064,642486
60,00060,841472

57,817440

56,442436

56,870
395

8,252

7,678

7,525

8,848

Metal
Glass

13,533

11,70010,147

8,867

7,772

Paperboard

25,53824,83824,412

23,466

23,687

Corrugatedfiberboard

15,296

15,57915,13916,14816,169

Plastic

2009

2010

2011

2012

2013 (year)

9,789

For related information, see p12-13

Organizational Governance

3Rs for Minimizing Containers and Packages

Lion's CSR

Offering Products and Information that Contribute to the Development of a Sustainable Society

20,000Make containers
and packages
more compact

Reuse

Recycle Wastes

Increase refill
products

Proactively use
recycled materials

0

Labor Practices

Reduction of
Usage

Human Rights

40,000Receipt of Booth Grand Award at Eco Products 2013

Fair Operating Practices

For related information, see p12-14

The Environment

The Eco Products Exhibition is one of the largest environmental
exhibitions in Japan, having 700 exhibitors and organizations, andthe exhibition in 2013 was its fifteenth. Since 2010, organizers of
the exhibition have been awarding the Eco & Design Booth GrandAward based on the result of overall evaluation, which includes
environmental considerations regarding materials used at thebooths and pamphlets to be distributed, booth design qualities andunderstandability of the content. In addition, a top prize is awarded
to one of the best booths of the Eco & Design Booth Grand Award.
Our booth provided exhibits under the theme of Environmental
Considerations throughout Product Life. Based on evaluation of thefollowing points, we were awarded the top prize. With ourcontinued focus on the environment, we aim to become "anenvironmentally advanced company."
Lion's booth

Points Evaluated

Consumer Issues① The booth was built with wood from the thinning of plantation
forests in the Lion Forest in Yamanashi* and also usedenvironmentally-friendly materials and paint.
② 98% of exhibits such as panels are reused or recycled after
exhibition.
③ Exhibits were consistent with Lion's business portfolio and theenthusiasm of employees providing explanation was felt.
Award ceremony for the Eco & Design BoothAward Top Prize

Community Involvement andDevelopment

コミュニティへの参 画 および 発 展* A forest in Yamanashi Prefecture. Lion has been engaging in forest
maintenance activities since 2006.
For related information, see p44

Introduction of websites● In collaboration with our customers (Consumer Issues)● The Lion Comfortable Lifestyle Laboratories

http://www.lion.co.jp/ja/csr/consumer/

http://kaiteki.lion.co.jp/

CSR Report 201441

Community
Involvement andDevelopment

Ideal Vision

Co-existing and Co-prospering with Society andCommunities/ Contributing to the Development ofSociety in Health, Comfort and Environment Areas

Basic Approach
strengths, and intend to take an initiative toward solving social
issues.
Also, we emphasize that all individual employees maintainstrong social awareness and communicate with society on theirown initiative, and we are starting many initiatives thatencourage our employees to participate in social contribution
activities.

Championing the spirit of our founder Tomijiro Kobayashi, whichis to "contribute to the society through business activities," Lion
engages in social contribution activities in order to realize
improvements in people's lives as well as a sustainable society.
In relation to the business, we focus on "cleanliness, health,comfort," the "environment" and "co-existence with
communities," as areas in which we can demonstrate ourLion's Social and Environmental Contribution Activities

Cleanliness, Health and Comfort

The Environment

Co-existencewith Communities

Oral Health Promotion Activities

Realizing
Realizing a Sounda Low Carbon Society Material-Cycle Society

Activities
at Offices and Plants

LDH
dental healthactivities→ p43

Kidzania *1
Academic
support*1(Lion Award)

Activities
by Meistersof Daily Life

p40←

Education Activities
for Hand Washing and Gargling
Hand washingeducation→ p10-11,44

Beautification
activities

Harmonizing with Nature(cleaning, etc.)

Biodiversity→ p32-33
Conservation Activities
Water Resource
Conservation Activities
Forest maintenanceactivities

Promotion of
rainwater utilization(Lion forest in Yamanashi
and Odawara)→ p44

Chura action*2→ p44

Support for academic
and civil activities*3(Japan Water Prize, Japan Society
on Water Environment)

Plant tour

Seminars,
Science classes→ p45

Support Activities
in Earthquake
Disaster Areas
love, Ishinomaki
Project(hand washing/
tooth brushing education,
Sale of products fromthe disaster areas)→ p45*1: Kidzania,Lion Award URL http://www.lion.co.jp/ja/csr/community/oral/*2: Chura action ("Chura" means beautiful or clean in a dialect of the Okinawa Prefecture of Japan) URL http://www.lion.co.jp/ja/csr/env/communication/*3: Support for water resource conservation, water environment researches, and civil activities URL http://www.lion.co.jp/ja/csr/community/conservation/● In Cleanliness, Health andComfort Fields
Along with our provision of products that
help build clean, healthy and comfortable
lifestyles, we are promoting educational
activities in areas of oral health, handwashing and gargling.
Our activities including the Oral Health
Promotion Projects mainly promoted by
the Lion Foundation for Dental Health(LDH) and the education activities forhand washing and gargling in which our
employees take part are centered on
educational activities for children who willlead the next generation.

42

CSR Report 2014

● In the Environmental

Field
In the three areas of "realizing low carbon
society," "realizing sound material-cycle
Society" and "harmonizing with nature,"
especially activities to achieve "harmonizing
with nature" are being promoted together with
Eco Vision 2020, which promotes
environmental activities toward achieving
advanced objectives.
As the company's business is constantly being
developed through "washing" under its deep
relationship with water, we are committed toeducating society on environmental awarenessthrough initiatives to use rainwater andinitiating "water resource conservation
activities" such as forest maintenance activities
and biodiversity conservation activities in which
our employees participate.

● In Co-existence with

Communities Field
We contribute to the sustained developmentof communities by valuing co-existence with
communities, especially ones deeply
connected with our sites. Our employees
coordinate with local administrations, NPOs
and NGOs to work on local issues.
Our activities to support the reconstruction
work after the Great East Japan Earthquake in2011 center on Ishinomaki city, Miyagi
Prefecture, where our founder got back on his
feet after overcoming difficulties.
With our main focus placed on "care forchildren," "support in forming a community"and "support in economic recovery," weengage in activities that draw from ourcorporate characteristics.

Social Contribution Activities via Foundation● Oral Health Event of Tooth Brushing for Children

The Oral Health Event of Tooth Brushing for Children, started in
1932, is held every year during a week in June (June 4th -10th),
which is designated as the "week of dental/oral health," topromote health awareness to children, including the importanceof dental/oral health and tooth brushing.
By its 70th time, which was held in 2013, the event grew into
an international event that was aired over the Internet to a totalof 902 primary schools across Japan and in all over Asia (China,
Hong Kong, South Korea, Philippines, Singapore, Thailand andVietnam) from the hall of the Tokyo Dental Association that wasused as the venue for the event. By live stream broadcasting,approximately 54,400 primary school students learned together
about "healthy gums" in a very pleasant environment.
Furthermore, new development was seen in South Korea, where
instructions were
given on toothbrushing that catered
to the oral conditions(risk of periodontal
disease is increasing
among young people)
based on the aired
event translated into
Thai primary school that participated in Oral Korean.

Lion's CSR
Organizational Governance
Human Rights
Labor Practices

Main Social Contribution Activities of LDH in 2013
Activities for oral healthpromotion for mothers and childrenChildcare support programs in the area of"dental and oral health" for expectant
mothers, infants, preschoolers and theirparents
Program: 174 venues, 177 times
Participants: 6,546 infants and preschoolers,
2,364 mothers

The Environment* Lion Foundation for Dental Health, a public-interest foundation
URL http://www.lion-dent-health.or.jp/english/

Introduction of our activities at the Asian
Conference on Oral Health Promotion for
School Children(Indonesia)

Activities for oral health promotion
for school children
Face-to-face educational activities withstudents and their parents, and provision of
support in activities run by health teachers
Program: 401 venues, 501 times
Participants: 33,412 students,
1,043 parents, 1,255 health teachers

Fair Operating Practices

1. Oral health promotion projects
Promotion activities of oral health at all life stages
2. Research and investigative project
Investigation/research into the importance of oral healthin prolonging healthspan, and provision of information
on research results obtained through business and otheractivities to specialists and consumers
3. Educational and training projects
Holding of various seminars and lectures for healthinstructors and dental specialists

LDH will continue communicating the importance of dental/oral
health and tooth brushing not only in Japan but to all people in
the world. LDH participated in the 7th Asian Conference on
Oral Health Promotion for School Children in September 2013
in Bali, Indonesia where it introduced its know-how that has
been accumulated and oral health activities and provided
guidance to the dental specialists in attendance. Moreover, LDH
also introduced their activities and participated in informationexchange in Jakarta,
Indonesia. We willcontribute globally while
actively ex-changing
information with dental
specialists especially inSoutheast Asia andother countries.

Activities for oral health promotionof adults (industry)
Education focused on prevention of periodontal
disease and instructions focused on
maintenance/improvement of teeth and oral
health provided to employees of various
companies
Sites: 259 venues, 501 times
Diagnosed: 29,977

Consumer Issues

Three Projects of LDH● Activities Overseas

Activities for oral healthpromotion for the elderly
Provision of supports to help maintain oral
functions to enable eating with one's own
teeth and mouth over a long time in the
future.
Program: 32 venues, 32 times
Participants: 759

Community Involvement andDevelopment

Lion has been consistently promoting awareness and education
activities of oral health since 1913 as mandated by ourphilosophy of "returning profit obtained by corporate activities
to the society," which has never changed since the foundationof the company. In 1964, Lion established a foundation called
the Lion Foundation for Dental Health (LDH), which wasapproved by the Ministry of Health and Welfare (as referred to at
the time). In 2010, the Cabinet Office approved the change inthe foundation's status to a public-interest corporation, and LDH
commenced operations as a public-interest foundation
thereafter. LDH has consistently been coordinating with theJapan Dental Association, universities and administrations tokeep and promote teeth and oral health of consumers, and iscontributing to the society at the forefront of oral health toimprove the quality of life of all people. Lion has full support toits activities.

Treatment activities
Implementation of high-quality treatment
and preventive dentistry activities based on
the concept of risk control dentistry*.
Diagnosed: 11,751*Customized dental treatment to change caremethods according to the risks of tooth
decay or periodontal disease of individuals.

Health Event of Tooth Brushing for Children

CSR Report 201443

Community
Involvement andDevelopment

Natural Protection Activities
Through "washing," we have always been deeply involved
with water. We believe it is our responsibility to protect water
environments, starting from considering the environment
through our products. Lion is actively involved in forest
maintenance activities at Lion Forest in Yamanashi and in the
promotion of and education on rainwater usage as part of ourwater resource conservation activities.

Forest Maintenance Activities at the Lion Forest
in Yamanashi
In 2006, Lion has designated Lion Forest in Yamanashi as thefield for nurturing environmental awareness, and has since
been engaging in improving the forest with the purpose ofconserving biodiversity and the forest as a water source, andrevitalizing the community. In 2013, a total of 148 employees
participated in new employee training and voluntary forest
improvement activities (which took place twice).

Rainwater Utilization Ideas Contest 2013
In order to get primary and secondary school students acrossthe country to think about the importance of water, theRainwater Utilization Ideas Contest 2013 was held, which was
the third time for such a contest. There were a combined totalof 5,738 entries in the four categories of essays, posters,
independent researches and slogans. In March 2014, an award
ceremony was held for the top nine entries at the Hirai ResearchInstitute. Also, a rainwater tank was awarded as a school
incentive prize to one primary school and one secondary schoolthat submitted many outstanding
pieces.

Best poster (primary school student)
Best poster (secondary school student)Award ceremony
for the Rainwater
Utilization Ideas
Contest 2013

Thinning of Lion Forest in Yamanashi as part of new employee training

Activities for Co-existence with Communities
Activities to Educate Sanitary Practices
in Sakaide City
Lion Chemical Co., Ltd.'s Oleochemical site located in Sakaide
city, Kagawa Prefecture, is the main factory for producing theKirei Kirei Hand Soap. In January 2014, for the purpose of
spreading sanitary practices to the citizens of Sakaide andhaving such practices take root, a coordination andcooperation agreement was executed regarding the Kirei Kirei
City – Sakaide Project, which was started jointly by Lion, Lion
Chemical Co., Ltd.'s oleochemical site and Sakaide City.
We will engage in activities of various kinds to spreadhygiene practices up to 2017, including offering of hand soaps
to kindergartens/preschools, primary schools, secondary
schools and public facilities and employee visits tokindergartens/preschools to teach correct hand washingtechniques through a fun event called "Everybody Let's Arautan".
In February 2014, at the Sakaide Rakuichi Rakuza event thatwas held in front of the Sakaide Station, an opening event toeducate hand washing was held. Hand-washing education
activities were also performed at kindergartens nearby.

44

CSR Report 2014

Agreement signingceremony

Hand washingeducational event at
Sakaide Rakuichi
Rakuza.

Lion performs activities to support the next generation's educationin chemistry through laboratory classes, exhibition facilities andtechnical information magazines.
The laboratory classes use daily commodities and are customized
according to the levels of participants, offering fun ways to learn forprimary and secondary school students and providing opportunities
to dig deep for greater knowledge to senior high school students.
At our communication center which is one of our exhibition facility
located in our research base, the Hirai Research Institute, we
provide information about our company's history of technologicaladvances over the years, developers' aspirations and initiatives
toward environmental considerations. Also, we publish atechnology information magazine called the Lion Science Journal,
which explains the latest technologies in a manner that can beeasily understood and distribute it mainly to the joint research
institutions etc.

Lion's CSR

Since 2011, Lion has been involved in the "love. Ishikinomaki"
reconstruction support project in Ishinomaki, a city very closely
connected to our founder. For activities relating to care for children,
Lion performs educational activities such as hand washing andtooth brushing to kindergarteners and preschoolers, provides arugby class for primary and secondary students, and etc. For
activities to support economic recovery, Ishinomaki Marche (a local
product fair) is held on our sites.
Ishinomaki Marche is an internal event that sells seafood
products from Ishinomaki, held as part of an effort to cultivate themarket for companies in Ishinomaki that were devastated by thedisaster. In 2012, this event was held on only three of our sites, but
it expanded to eight sites of our group companies ( i.e., ourheadquarter, Tokyo Office, the Hirai Research Institute, the Odawara
Plant/Research Institute, the Chiba Plant, the Sendai Office and Lion
Packaging Co., Ltd.'s Ichihara and Fukushima plants) in 2013, andprovided opportunities for many of our employees to participate inactivities to support the reconstruction by buying the products.

Organizational Governance

Activities to Support Education in Chemistry

Human Rights

Support Activities in Earthquake Disaster Areas

Receipt of Communication in Chemistry Prize

Labor Practices

In recognition of our activities to support education in chemistry
through the use of daily commodities, Lion was awarded with
the Communication in Chemistry Prize in 2013. We would liketo continue communicating the joy of chemistry to a wide
range of consumers.

Local food fair held at the Tokyo office

R&D DivisionCorporate Management
Department
Technology Public
RelationsKazumi Yoshii

Fair Operating Practices

Kindergartens and Preschools in Ishinomaki City
As part of our activities to support the reconstruction of
Ishinomaki, Lion is performing educational activities on toothbrushing at kindergartens and preschools in Ishinomaki by utilizing
our know-how in oral care products. By presenting a picture-story
show using a character called "Anpanman", reading pop-up books
to children and playing the Mushibalus (a mascot representing acavity) Target Hitting Game with children, we are teaching theimportance of tooth brushing in an enjoyable manner. This
program was started in December 2012, and, as of December
2013, we visited 18 places and 1,010 preschoolers participated in
the program.

The Environment● Tooth Brushing Educational Activities in[Communication in Chemistry Prize]
This award was created by the Japan Union of Chemical Science andTechnology* to commemorate the International Year of Chemistry of
2011, and recognizes and honors individuals and organizations that
contribute to promoting the society's understanding of chemistry.

Consumer Issues* Japan Union of Chemical Science and Technology, a generalincorporated association
URL http://www.jucst.org/

Details of Factory Tours in 2013
PlantsNumber ofstudy tours
Study tour
participants

Chiba

OdawaraOsaka

Akashi

Total

98

136

66

81

381

2,247

3,471

1,649

2,579

9,946
Community Involvement andDevelopment

Tooth brushing educational activities at Inai Kindergarten
Introduction of websites● Together with Community (Community Involvement and Development)● Lion Forest in Yamanashi

http://www.lion.co.jp/ja/csr/community/

http://www.lion.co.jp/ja/csr/social/forest/● Lion Rain's Gift Forum (Activities report on promoting rainwater utilization)

http://www.lion.co.jp/ja/csr/social/rain/● Lion's Initiatives to Support the Reconstruction Work after the Great East Japan Earthquake

http://www.lion.co.jp/ja/csr/reconstruction/

CSR Report 201445

Third-Party Review
Regarding the content of Lion Co., Ltd.'s Lion CSR
Report of 2014 (hereinafter, the "Report"), I would liketo comment as third party as I have done in the previous
year's Report. I have received necessary explanations
regarding the content of the Report and CSR initiatives ina meeting with managers of the CSR Promotion
Department. I have also visited the Odawara Plant where
toothpastes and pharmaceuticals are manufactured andtoured the manufacturing site thereof.

1. Management Vision and CSR
In its management vision, Vision 2020, the company isaiming to become a company that creates value and isadvanced in the area of environmental responsiveness.
Such is mentioned at the beginning of the Report as
Lion's CSR.
CSR is not an initiative derived from business, but hascome to subject the business itself. Consequently, thecompany's CSR policy only becomes clear when it asserts
such fact. Especially in regard to the Report CSR material
issues are identified at each stage of the CSR value chain,and the result of such activities are stated with figuresand narratives, which I think deserves high remarks. In
the future, I expect the company to provide moreobjective data that indicates the results of activities onmaterial issues.
Also, if the promotion of CSR is integrated into
management, specific explanations should be provided
in regard to the types of roles that corporate governanceand risk management structures, which contributetoward achieving management objectives, play inrelation to CSR activities so as to enable deeper
understanding of CSR.

2. Employees and CSR
The contents of the company's proactive initiatives
regarding human resource development, utilization anddiversity can be ascertained through detailed descriptions
thereof on the pages related to Labor Practices.
Especially, the disclosure of the company's extremely
detailed actions to improve work-life balance andemployee data are considered appropriate. Notably,regarding employee data, I expect that a broader range
of information including health management data will be
released. Moreover, I would like Lion to explain – before
other firms do – that such an attitude and information
can bring good results to managerial targets (healthy
management). Furthermore, it would be better if direct
opinions of and initiatives by employees are found in theReport. Notably, the increasing trend in average overtime
hours based on employee data is of concern.

3. Environmental Initiatives
In regard to environmental initiatives, Lion has
established Eco Vision 2020 as its management vision,
whereby it aims to become an "environmentallyadvanced company." By establishing an environmental
46

CSR Report 2014

management system, the company is striving to realize a"low carbon society" and a "sound material-cycle
society". Specifically, the company has set goals to beachieved by 2020 for each of the environmental items,
and has disclosed such goals and past achievements inrealizing such goals. For CO2 emissions per units of sales,
CO2 emissions from business activities decreased by 23%
in 2013 compared to the same in 1990 (down by 29%
on an absolute quantity basis), and CO2 emissions postproduct use decreased by 46% compared to the same in1990. Based on the above, it appears the reduction
activities are actually working and bearing fruit. Notably,
the absolute emission amount of CO2 at Lion's sites
overseas increased in this period as a result of an increasein production volume. I would like to see explanations on
initiatives for reducing CO2 emissions at Lion's sites
overseas similar to those for Lion's domestic sites.

4. Consumer Initiatives
The company considers the quality and safety that are
expected of its customers in each process from productplanning to selling so as to maintain customer
satisfaction. I understand that around 120,000 customer
consultations are centrally managed, and their content iscommunicated to top management so solutions can bereflected in the products. Especially in connection withsafety during product use by a diverse range ofconsumers, it is worth noting that risk control is in place
for misuse and even abnormal use. For explanations
regarding the seller of palm oils which I pointed out lastyear, more details are provided in the Report, which I
believe leads to consumer understanding.
Financial information is considered to be based on the
results of management activities. The society expects
CSR information to explain the process of financial
information, and the need thereof is becoming greater.
In the future, I believe that clarifying Lion's social
responsibilities in managerial activities and making thempublic in an understandable manner to gain society's
understanding and trust will serve as foundation to
support sustainable development of the Lion Group.
(Note) The above views do not represent any opinions as to the accuracy
and/or completeness of descriptions in the Report.

Certified Public Accountant

Yoshihito Nakamura
Adjunct Instructor of Toyo University
Adjunct Instructor of the Open University of Japan
Auditor of the Kawasaki City Council of Social Welfare
Auditor of the Supporting Organization of JOCV
Chairman of the Committee for Office Security
Management System, New Office Promotion Association

From Lion
In line with its Vision 2020, Lion aims to become "a company thatcreates value for lifestyle and spiritual fulfillment," "a company that is
advanced in the area of environmental responsiveness" and "acompany that continues to take on challenges, create and learn." Toremain as a company that is trusted by the society, we recognize that
CSR needs to be an integral part of the company's management
structure. With regard to CSR material issues identified fromunderstanding the social requirements, and considering them in lightof management issues, we will proceed with our initiatives byconsistently running the PDCA cycle.
In the Third-Party Review, we were evaluated favorably about manydifferent areas of efforts on our part, including our promotion of CSR
activities by clearly defining our own CSR material issues, ourextremely detailed initiatives for promoting work-life balance, ourefforts for environmental preservation with our sights set on 2020,and our risk management assuming misuse or abnormal use that cancompromise product safety. We will further proceed with all these
activities by integrating inputs from our stakeholders.
Separately, it was pointed out that specific explanations should be
provided in regard to the types of roles that corporate governanceand risk management structures, which contribute toward achieving
management objectives, play in relation to CSR activities so as toenable deeper understanding of CSR. In the areas of environmental
preservation and quality assurance, we have run PDCA cycles
through deliberations of our committee with the Director of theBoard Responsible as chairman and with the approval of andexecution by the executive board since the 1990's when the conceptof CSR was yet to be established. We accept the fact that the
explanations in the Report have been difficult to understand forreaders because our company policy and management philosophy
have been incorporated into our management as a matter of fact as
the DNA of Lion. In the future, we will make efforts to provide clear
explanations through specific examples based on the advice given.
Moreover, as decline in Japan's working population is expected, wewere advised that ascertaining the health management data andworking to improve on it as a management issue will lead to ourcompany's sustainable development. Currently, PDCA-based
improvement activities are being implemented on the basis of various
data regarding our employees. For example, in regard to mental
health initiatives, we conduct check-ups on its employees' stress level,and performs systematic activities based on data compiled andanalyzed by each department. In the future, we will make efforts tobe creative in communicating such activities externally in an easy-tounderstand manner, such as by including in the Report the voices ofour employees in relation to such activities.
Through dialogue with our stakeholders,we will make efforts to improve our CSR
Report and fulfill responsibilities that
correspond to the needs of our times.
Managing Director
Director of the board responsible for CSR

Takayasu Kasamatsu

Editorial Note
Since 2011, CSR activities have been systematized in accordance with ISO 26000. In the 2014 CSR Report CSR material issues
identified during 2013 are reported and full details of activities that have demonstrated more progress than others are provided as2013 Highlights.
As highlights, we have reported about our main CSR activities through our business. We have been performing various activities
to spread hygienic and sanitary practices and make them take root, as well as implementing new ways to communicate about theenvironment by attaching environmental logos and labels on Eco products so as to promote Eco activities together with
consumers. Furthermore, to respond to interests in dental and oral health, we not only have been selling oral care products but
also have introduced new initiatives for complete self-care as well as initiatives in which professional care is provided by dental
specialists. We hope to generate deeper understanding of Lion through the above.

CSR Report 201447

Corporate Message

For more than 120 years, we have engaged in business closely related to people s living.
In due course, we learned that the essence of happiness is
to live fulfilling everyday lives and to cultivate a positive attitude.
An accumulation of todays becomes your entire life, and a part of your life happens today.
Therefore, we believe that valuing each day of each person leads to valuing his or her life.
Lion s role is to provide support for this kind of daily living. Under these ideas,
we prepared our corporate message, resolving to continue to makenew proposals toward our customers valuable futures.

Published by: Lion Corporation
Published on: October 15, 2014
Inquiries : CSR Promotion Department, Lion Corporation
3-7, Honjo 1-chome, Sumida-ku, Tokyo 130-8644, Japan Tel: +81-3-3621-6611 Fax: +81-3-3621-6299
Website: http://www.lion.co.jp/ Tel: 03-3621-6611 FAX: 03-3621-6299
To be published next on: October, 2015

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