Sustainable Procurement Management

Basic approach

The Fuji Oil Group's vision is to co-create a sustainable future for food, based on plant-based ingredients that are both delicious and healthy, together with our stakeholders. A responsible supply chain is essential to achieve this vision. We foster relationships of trust with suppliers to address environmental and social issues in the supply chain, and engage in environmental conservation, respect for human rights, fair business practice, risk management and other initiatives with the aim of achieving sustainable growth for all three parties: suppliers, the Group and society. In 2022 we resumed direct engagement activities in Malaysia and Indonesia, where palm oil is produced.
Group sustainable procurement began with our CSR Procurement Guidelines that were first formulated in 2012 and then revised in 2016 and 2021. Through this, we defined policies on the creation of food, consideration of human rights and the environment, human resource development, contribution to society and compliance. We then set KPIs and goals for sustainable raw material procurement with the Responsible Palm Oil Sourcing Policy in 2016, and the Responsible Cocoa Beans Sourcing Policy in 2018. As the global movements championing respect for human rights and action against climate change grew, we responded by enacting the Supplier Code of Conduct in 2021 to work out positions and policies for collaboration with all suppliers upon their agreement with Group sustainable procurement. We have also set further KPIs and goals in our Responsible Soybeans and Soy Products Sourcing Policy and Responsible Shea Kernels Sourcing Policy, and are always striving to achieve all KPIs and goals in line with our policies.

Management system

The Chief Strategy Officer (CSO) oversees the sustainable procurement of our main raw materials — palm oil, cocoa and soybeans — and the strategic raw material, shea kernels. We established a system for sustainable procurement at the business divisions headed by the CSO, and carry out measures in line with the roadmap for each raw material.
The Sustainability Committee,^*1 an advisory body to the Board of Directors, monitors the progress and results of initiatives as a material ESG issue.^*2

• *1 https://www.fujioilholdings.com/en/sustainability/sustainability_management/

• *2 https://www.fujioilholdings.com/en/sustainability/materiality/

Goals / Results

Commitments to sustainable procurement

We set medium- to long-term goals and KPIs for the sustainable procurement of palm oil and cocoa in June 2020 and of soybeans and shea kernels in June 2021.

• *1 Traceability to plantation
• *2 An oils and fats manufacturer wholly owned by the Fuji Oil Holdings Inc.
• *3 Roundtable on Sustainable Palm Oil
• *4 We plan to plant a variety of shade tree saplings, totaling one million trees over a 10-year period from 2021 through 2030.
• *5 The International Labour Organization (ILO) Convention No. 182, known as the Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, prohibits hazardous work that may harm the health, safety, or morals of children. This includes the sale and trafficking of children, debt bondage, forced or compulsory labor, prostitution and pornography, illegal activities such as crime, and recruitment of children for use in armed conflict.
• *6 Child Labour Monitoring & Remediation System
• *7 Round Table on Responsible Soy Association
• *8 We plan to plant mainly shea tree saplings at a pace of 6,000 trees per year starting in 2021.
• *9 Our KPIs for years 2021, 2022 and 2023 are 10%, 10% and 15%, respectively.
• *10 We use shea kernel meal, a byproduct of oil production, and other raw materials as non-fossil fuels.
• *11 Our current non-fossil fuel rate as of 2021 is 75%.

Sustainable procurement information by raw material

Follow the links below to learn more about the Fuji Oil Group’s sustainable procurement initiatives for our main raw materials — palm oil, cocoa, and soybeans — and our strategic raw material, shea kernels.

• Sustainable Procurement of Palm Oil

  https://www.fujioilholdings.com/en/sustainability/palm_oil/

• Sustainable Procurement of Cocoa

  https://www.fujioilholdings.com/en/sustainability/cocoa/

• Sustainable Procurement of Soybeans

  https://www.fujioilholdings.com/en/sustainability/soy/

• Sustainable Procurement of Shea Kernels

  https://www.fujioilholdings.com/en/sustainability/shea_kernel/

Engagement with suppliers

Suppliers are Fuji Oil Group's key partners in creating a sustainable society as described by the Sustainable Development Goals (SDGs). Through co-creation with our suppliers, we aim for sustainable growth of all three parties: suppliers, the Group and the whole society. This approach is also stipulated in the Fuji Oil Group Supplier Code of Conduct formulated and published in April 2021. We ask our suppliers in all countries and regions where we do business to comply with the Code and follow other applicable procurement policies of the Group. At the end of January 2023, we have received the signature of 71% of our suppliers. Going forward, the Group will continue to walk in step with suppliers who have agreed to work with us toward realizing a sustainable society. On the other hand, we will keep reaching out to suppliers who have not yet submitted their alignment.

Cooperation with suppliers in Japan

In FY2022, Fuji Oil Co., Ltd. conducted a survey among Japanese suppliers that do business with the Raw Materials Department of our Purchasing Division. The survey was based on the third edition of the CSR Procurement Guidelines (revised in November 2021), and assessed whether the products and services procured by the Group are produced in a way that considers compliance, human rights and the environment, and if there is a clear line of responsibility. There was a 96% response rate, with high ratings given to consideration of human rights and occupational health and safety, as well as corporate ethics and compliance. On the other hand, there were comparatively low ratings given to risk management and environmental considerations. As 38% of suppliers have not established their own procurement policy, we realized that knowledge and understanding of such policies is a challenge. We are currently discussing improvement plans on an individual basis, bearing in mind that each company is different in terms of size, type and affiliation. Moving forward, we will continue evaluating suppliers from a sustainability perspective. To address the shortage of drivers in Japan, since FY2021 we have shifted towards pallet delivery, which reduces the burden of unloading. We have also been looking into using films and inks with low environmental impact. After all tests are complete, we plan to introduce packaging that uses this film.