ASD Member Profile: NIKKOL Group: ‘The supply chain in Japan needs to do more to substantiate their sustainability efforts’

Yuri Troitsky, General Manager of Purchasing Headquarters, Nikkol Group

As one of ASD’s newest members – and the first Japanese company to join the collaboration – the NIKKOL Group is keen to enhance supplier engagement and boost transparency within its home markets.

Here, General Manager of Purchasing Headquarters, Yuri Troitsky, explains the key challenges he hopes ASD membership will help to overcome.

What’s your role and responsibility at the NIKKOL Group?
As General Manager of Purchasing Headquarters, I am responsible for the procurement of raw materials for NIKKOL Group. Nikko Chemicals serves as the core branch of the NIKKOL Group.

Explain a bit more about the NIKKOL Group.
We are a private company, and we manufacture mainly specialty ingredients for personal care, including surfactants, esters and vitamin derivatives.

Our main business is with skincare and makeup manufacturers globally, with our biggest markets in Japan, North America, France, Italy, China and Korea.

The NIKKOL Group employs around 600 people, with two factories in Japan and one in Singapore. 

What are the key pressures, challenges and concerns companies like Nikko have when it comes to sustainably sourcing palm derivatives?
We use more than a hundred ingredients derived from palm, including glycerin derivatives, alcohols and fatty acids. In 2017, we joined the Roundtable on Sustainable Palm Oil (RSPO) and until now we managed to convert more than 90% of our products to RSPO Mass Balance.

However, we still have challenges with some suppliers when it comes to RSPO compliance. Another challenge is a lack of transparency in the supply chain in Japan. Japanese companies, in general, are more reluctant to provide traceability information compared with European or North American manufacturers.

What are the key challenges that membership in ASD will help you to address?
We need to convey the message of sustainability and traceability of personal care raw materials to our supply chain. In respect to palm, the existence of RSPO is very well acknowledged in Japan. But right now, most chemical companies in our country do not go beyond RSPO compliance in their sustainability efforts. For example, we still have to illuminate our supply chain about the need to create and publish sustainability and responsible sourcing policies, and policies regarding human rights.

 It's also important to convey the message about lifecycle assessments and other specific indicators for carbon emissions reduction. We feel that the supply chain in Japan still needs to do a lot more to substantiate and make public their efforts when it comes to environmental protection and sustainability.

What are the key achievements for Nikko and sustainability in the last 12 months?
Since we became a member of ASD in December 2022, we have made a lot of progress in engaging our supply chain in Japan – especially in the palm derivatives sector where we’ve encouraged suppliers to be more open and to comply with the ASD surveys.

We’ve also managed to explain to our supply chain the principles of ASD, and we feel that now the ASD sustainability guidelines are much more known and accepted in Japan.

Thanks to the SPI assessment run by ASD, we were able to collect much more information from our suppliers regarding palm traceability to mills and plantations.

What is the thing you most value about being a part of ASD?
ASD membership gives us access to the most up-to-date information about sustainability, certifications, grievances, new policies and regulations. When we’re not sure which certification is preferable, we can always inquire with ASD and receive clear guidance. Also, ASD membership gives us clarity in the direction of our own sustainability action. Now we understand much better the necessity of having a No Deforestation, No Peat and No Exploitation (NDPE) commitment, and human rights policies based on the UN Guiding Principles (UNGPs) on Business and Human Rights, for example.

How are you using ASD tools, guidance and support to achieve your objectives?
We spend a lot of time communicating with our supply chain in Japan using the ASD tools.

Currently, our major target is to make sure that 100% of our supply chain is completely engaged with Supply Chain Transparency Template surveys and to make sure that all of our suppliers are compliant.

What comes next for you? What are the programmes you’re working on right now – and what do you hope to achieve?
We strongly feel that our major customers (global cosmetic brands) are evaluating direct suppliers not only based on innovation and quality, but also based on a solid and substantiated sustainability policy. We are working now on updating our CSR and responsible sourcing policies which should incorporate a clearer vision of NDPE compliance. One of our challenges is a lack of transparency in the Japanese chemical industry, so we feel we need to spend more and more time conveying the message that a lack of transparency may result in loss of business in the current global environment.