Environmental Management

Management information

Basic approach

Worldwide environmental issues such as global warming and climate change are intensifying, seriously impacting people's lives and corporate business activities. In particular, increasing extreme weather events and biodiversity loss caused by accelerating climate change interfere with the stable supply of the agricultural products we use as key raw materials to make our products, and are becoming a threat to our business operations. For these reasons, it is now essential for our company to embed global environmental considerations into our business practices.
The Fuji Oil Group established the Basic Policy of Environmental Integrity*1 in 2015, and accelerated our efforts in 2018 with the announcement of the Environmental Vision 2030, in which we commit to reducing CO2 emissions, water use and waste across the Group. Our reduction targets for CO2 emissions have been approved by Science Based Targets initiative (SBTi).*2
We also recognize the importance of understanding the climate impacts of our business and disclosing them to stakeholders in a timely manner. In May 2019, we announced our support for the Task Force on Climate-related Financial Disclosures (TCFD) and are committed to disclosing proactively information on four areas: governance, strategy, risk management, and metrics and targets.

Management system

Group-wide environmental management is promoted by the Sustainability Development Group under the supervision of ESG Division Officer of Fuji Oil Holdings Inc. The Sustainability Committee,* an advisory body to the Board of Directors, monitors the progress and results of initiatives.

Goals / Results

Environmental Vision 2030

  2030 targets*1 FY2022 results*1 Progress
CO2 emissions Scopes 1*2 & 2*3: 40% reduction in total CO2 emissions (All Group companies) 26% reduction 65%
Scope 3*4 (Category 1*5): 18% reduction in total CO2 emissions (All Group companies*6) 12% increase Not achieved
Water use 20% reduction in water intensity*7 (All Group companies) 27% reduction 135%
Waste 10% reduction in waste intensity*8 (All Group companies*9) 4.7% reduction 47%
Resource recycling Maintain a recycling rate of at least 99.8% (All Group companies in Japan) 99.69% Not achieved
  • *1 Base year: 2016
  • *2 Scope 1: Direct emissions of greenhouse gases from our own operations
  • *3 Scope 2: Indirect emissions of greenhouse gases from the use of electricity, heat and steam supplied by third parties
  • *4 Scope 3: Emissions from the activities of non-Group companies in our value chain (Categories 1-15)
  • *5 Category 1: Purchased goods and services
  • *6 Excluding Industrial Food Services (Australia) and Fuji Oil New Orleans, LLC (U.S.)
  • *7 Water use per unit of production
  • *8 Amount of waste per unit of production
  • *9 Excluding waste volume generated at Industrial Food Services (Australia)

Analysis

CO2 emissions (Scope 1 & 2)

Scope 1 and 2 emissions in FY2022 were 26% lower than baseline, an improvement of five points from the previous fiscal year's 21% reduction. This represents a 65% achievement rate relative to our 40% reduction target. Decreased production levels compared to the previous fiscal year and reducing activity at each company contributed to this decline in CO2 emissions. In Japan, we used the findings from the FY2021 steam loss inspection conducted at Fuji Oil Co., Ltd. to make improvements to plants and productivity. We also completely eliminated scope 2 CO2 emissions at the Fuji Oil Co., Ltd. Kanto Plant and Fuji Tsukuba Foods Co., Ltd. by switching to carbon-free electricity at the sites. Group companies outside Japan made efforts to reduce energy use through activities such as power saving and facilities maintenance, while a solar photovoltaic generation system was installed at Fuji Oil (Zhang Jia Gang) Co., Ltd.

CO2 emissions (Scope 3 Category 1)

Scope 3 emissions in FY2022 were 12% higher than baseline, an improvement of three points from the previous fiscal year's 15% increase. This represents a 0% achievement rate relative to our 18% reduction target. Production levels have increased 15% over our base year, resulting in an increase in scope 3 category 1 emissions. We will continue our supplier engagement in efforts to reduce the CO2 emissions stemming from raw material procurement.

Water use (intensity)

Water use intensity in FY2022 was 27% lower than baseline, an improvement of two points from the previous fiscal year's 25% reduction. This represents a 135% achievement rate relative to our 20% reduction target. Decreased production levels have resulted in a decline in water use compared to the previous fiscal year. In Japan, production facility cleaning methods were revised, which led to reductions in rinsing water use. Group companies outside Japan revised the cleaning frequency of production facilities and addressed water leaks. These actions all contributed to the reduction in water usage.

Waste (intensity)

Waste generation intensity in FY2022 was 4.7% lower than baseline, a change of 1.4 points downward from the previous fiscal year's 6.1% reduction. This represents a 47% achievement rate relative to our 10% reduction target. In Japan, introduction of new dewatering equipment at Fuji Oil Co., Ltd. has helped reduce scum sludge and turn it into valuables, contributing to overall waste reduction. Group companies outside Japan also made efforts to reduce waste, but waste intensity still increased over the previous year, impacted by an increase in waste due to production issues. We will continuously work to raise awareness and promote waste reduction activities throughout the Group.

Resource recycling

The resource recycling rate in FY2022 was 99.69%, an increase of 0.22 points from the previous fiscal year's 99.47%. This means that we did not achieve our target of 99.8% or higher. We will continue to promote recycling by sorting waste more thoroughly.

Response to the TCFD recommendations

In May 2019, the Fuji Oil Group declared our support for the Task Force on Climate-related Financial Disclosures (TCFD). Based on recommendations by the TCFD, we are committed to proactively disclosing information on four areas: governance, strategy, risk management, and metrics and targets.

Information disclosure based on the TCFD recommendations

Governance

Under the supervision of the ESG Representative, the Fuji Oil Group manages climate change risks and opportunities through a Group-wide risk management structure that handles significant Group-wide risks. We perform scenario analysis based on the TCFD recommendations, and the results are reported and approved in the Management Committee Meeting and the Board of Directors meeting at least once a year.

Strategy

We performed the TCFD-recommended climate change scenario analysis, selected climate change risks and opportunities, and qualitatively assessed their financial impact for a major Group company in Japan in FY2019, and for eight major Group companies outside Japan in FY2020. In FY2022, we conducted a quantitative assessment of the financial impacts*1 of climate-related risks after conducting the scenario analysis based on 1.5°C/4°C climate scenarios instead of 2°C/4°C, with the goal of achieving a more aggressive climate intervention. Going forward, we will advance our efforts to save energy and promote use of renewable energy to continue reducing CO2 emissions in line with the Fuji Oil Group Environmental Vision 2030.*2
Moreover, the market for plant-based foods, one of the Group's strengths, is expected to grow as concerns rise over practices that negatively affect climate change such as the conversion of forest to farmland and livestock fattening. The Group will continue to work on solutions to global issues and for a decarbonized society. We will do so by conserving the environment through sustainable procurement and by supplying plant-based food ingredients.

  • *1 Refer to “Assessment of Climate Change Risks and Opportunities and their Financial Impact on the Fuji Oil Group” for details.
  • *2 Refer to “Environmental Vision 2030” for details.

Risk management

We identify significant Group-wide risks, including climate change risks, considering a comprehensive list of factors including the level of impact on Group business, likelihood of occurrence, and time of onset. This is done based on information sources that reflect the Group's operating environment, including risks identified by executive teams, our ESG materiality map, and risk maps created by individual Group companies. We have developed a Group-wide risk management system led by the Management Committee Meeting aimed at managing these risks through a process of developing and implementing responsive measures, monitoring, evaluating results, and making improvements. Climate change risks are considered as one of the significant Group-wide risk, and are managed through the Group-wide risk management system. The details of discussions and responses are reported to the Board of Directors at least once a year.

Metrics and targets

In Environmental Vision 2030, the Fuji Oil Group committed to a 40% reduction in Scope 1 and 2 CO2 emissions by 2030 compared to 2016. Going forward, we will proactively engage in energy conservation initiatives, introduce new facilities that use less energy, and use renewable energy at production sites to achieve the targets of the Vision.
To reduce Scope 3*1 Category 1*2 emissions, which account for the largest percentage of Group emissions in Scope 3, we created a survey form that assesses suppliers' progress in reducing their CO2 emissions and began the process of engaging several suppliers to our production sites in Europe. We will continue to work to reduce CO2 emissions across the Group value chain.

2030 CO2 emissions reduction targets (base year: 2016)

  • Reduce Scopes 1*3 and 2*4 emissions by 40%
  • Reduce Scope 3 (Category 1) emissions by 18%

To drive further emissions reductions, we also explored the adoption of an internal carbon pricing system*5 based on carbon pricing and emissions trading systems (ETS) around the world. We began trialing the system at Fuji Oil Co., Ltd. in FY2022, and are moving to a full-scale introduction in FY2023 with the internal carbon price set as 10,000 yen per metric ton of CO2. This will be used as a reference for investment decision-making. We will also pilot the system at Group companies outside Japan.

  • *1 Scope 3: Emissions from the activities of non-Group companies in our value chain (Categories 1–15)
  • *2 Category 1: Purchased goods and services
  • *3 Scope 1: Direct emissions of greenhouse gases from our own operations
  • *4 Scope 2: Indirect emissions of greenhouse gases from the use of electricity, heat and steam supplied by third parties
  • *5 An internal scheme for promoting low-carbon investment and initiatives by placing a price on carbon based on estimates conducted within the organization.

Assessment of Climate Change Risks and Opportunities and their Financial Impact on the Fuji Oil Group

Level of impact

The level of impact categories — small, medium, and large — refer to the magnitude of financial impact that is projected to occur around the year 2050 based on estimates that assume a certain set of conditions, including but not limited to the Fuji Oil Group's current business portfolio, financial condition, and business performance. This financial impact assessment is based on these impact categories and therefore is subject to change.
Large: Potential profit impact of 10 billion yen or more
Medium: Potential profit impact of 2 billion yen to less than 10 billion yen
Small: Potential profit impact of less than 2 billion yen

Risks

  • *1 The level of financial impact of “increased cost due to adoption of carbon taxes” associated with “risk of increased cost of complying with environmental regulations” was calculated for around the year 2030 based on carbon tax projections published by the IEA, IPCC, and other third-party entities and on projections of the Group's CO2 emissions.
  • *2 Scope 1: Direct emissions of greenhouse gases from our own operations
  • *3 Scope 2: Indirect emissions of greenhouse gases from the use of electricity, heat and steam supplied by third parties
  • *4 Scope 3: Emissions from the activities of non-Group companies in our value chain (Categories 1–15)
  • *5 Category 1: Purchased goods and services
  • *6 An internal scheme for promoting low-carbon investment and initiatives by placing a price on carbon based on estimates conducted within the organization.

Opportunities

  • *1 PBF: Plant-based food
  • *2 One Health: A concept recognizing the fact that safeguarding the health of ecosystems and animals serves the health of humans as well, inviting everyone to think of and work to protect the health of people, animals and ecosystems as one living system.

Specific initiatives

Environmental audits

The Fuji Oil Group strives to promote and improve environmental conservation efforts across the Group by referring and conforming to various standards such as ISO 14001, an international standard for environmental management systems.
ISO 14001-certified operating sites undergo verification by external audits and conduct their own internal audits on safety, quality, and the environment. Operating sites outside Japan undergo safety, quality, and environmental audits by Fuji Oil Holdings Inc. By verifying, evaluating, and encouraging improvements at these companies, we strive to raise environmental performance across the Group.
Fuji Oil Co., Ltd., a Group company in Japan, undergoes both external and internal audits of its environmental management. External audits are conducted annually in accordance with ISO 14001 (surveillance audit for years one and two and a recertification audit for year three). Internal audits are conducted annually and include safety, quality, and environmental checks at ISO 14001-certified operating sites to improve production management at Group companies. No environmental nonconformities were found in the FY2022 external audits and internal audits.
Our internal audits do not simply check for compliance or conformity with all relevant environmental laws, regulations and internal rules. They also serve as opportunities for auditors to explain important environmental matters. Through environmental audits, we examine and evaluate each Group company's environmental efforts and give advice on areas needing improvement, thereby promoting and improving the Group's environmental conservation activities.
Outside Japan, the Production Productivity Management Group of Fuji Oil Holdings Inc., a strategy development unit with specialized knowledge in the fields of quality and safety, and Sustainability Development Group conduct safety, quality, and environmental audits to examine and evaluate each Group company's environmental efforts and give advice on areas needing improvement. This helps to raise management standards for the entire Group. In FY2022, seven production sites outside Japan were audited.

An environmental audit at a Group company outside Japan (Fuji Oil (Thailand) Co., Ltd.)

Acquisition of management certifications

Training

The Sustainability Development Group at Fuji Oil Holdings Inc., together with the company's Production Productivity Management Group, periodically visits Fuji Oil Group companies outside Japan to provide training and raise awareness on safety, quality, and the environment among management and staff in relevant departments. In FY2022, the team held briefings and discussions on Environmental Vision 2030 and other topics via both onsite and video conferencing due to COVID-19. The team also conducted training and awareness activities at seven production sites at Group companies outside Japan. These activities are scheduled such that all sites are visited in a three to four-year cycle.

Compliance with environmental laws and regulations

In FY2022, there were no serious environmental legal violations in the Fuji Oil Group.

External recognition

  • “A” rating from CDP in 2022 for water security and forests, and “A-“ rating for climate change
  • Selected as a Supplier Engagement Leader in the CDP Supplier Engagement Rating 2022
  • Selected among the top 200 Asia Pacific Climate Leaders in a joint survey by Nikkei Asia, the Financial Times (UK), and German research agency Statista

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