Sustainability

Effective Risk Management

Basic approach

The Fuji Oil Group believes that risk management*is management itself. Risk management is essential for the Group to continue contributing to society through delicious and healthy food, ; from the perspectives of business continuity, legal compliance, and meeting the expectations and demands of society, our shareholders and investors.
By promoting Risk Management, we aim to become a highly reliable enterprise that earns the trust of society.

*Risk Management: Preventing the occurrence of risks related to corporate management and minimizing losses and impact when risks occur, to achieve business plans and targets

Positioning of Risk Management in the Fuji Oil Group

Positioning of Risk Management in the Fuji Oil Group

Objectives

  • By 2020, each group company should independently and autonomously go through the PDCA cycle for Risk Management and each function of FUJI OIL HOLDINGS INC. should provide comprehensive support for optimal response to risks by each group company, based on the holding company structure.
  • By 2020, main group companies should complete the formulation of BCP.

Progress

Fuji Oil Holdings held a risk management meeting with each Group company to understand the implementation status of risk management, propose measures for the Fuji Oil Group's common risks, and share information regarding crises.
Regarding BCP formulation, Fuji Oil Holdings selected major Group companies that should formulate BCP, and explained to them the significance of this.
Also, safety confirmation drills and other emergency drills were conducted at business sites in Japan to strengthen response capabilities in emergency situations (such as large-scale disasters).

Promotion System

Risk Management Promotion System

To promote ESG management, Fuji Oil Holdings established the ESG Committee as an advisory body to the Board of Directors. The ESG Committee meets regularly to discuss important matters relating ESG, including risk management, and make reports and proposals to the Board of Directors.
The Fuji Oil Group promotes Group-wide risk management initiatives under the overall control of the officer in charge of risk management and compliance at Fuji Oil Holdings.

PDCA

The Fuji Oil Group established a global risk management system, as one of the foundations for the holding company structure to which the Group shifted in October 2015.
Fuji Oil Holdings Inc., the regional headquarters (representative companies) and each Group company; and established a Risk Management Committee at each Group company. Each Risk Management Committee plays a leading role in the annual implementation of the PDCA cycle: Plan (identify all possible risks and select major risks) → Do (implement countermeasures) → Check (conduct checks) → Act (take improvement action toward the next fiscal year). The Fuji Oil Group promotes risk management through close collaboration among Fuji Oil Holdings, regional headquarters (representative companies) and each Group company.
In the event of an emergency, an Emergency Headquarters will be established based on the Risk Management Committee, which promotes risk management activities in ordinary times, so that we can respond to an emergency quickly and appropriately as the Fuji Oil Group.

The Fuji Oil Group's Risk Management

The Fuji Oil Group's Risk Management

Risk assessment method

The Risk Management Committee of each Group company takes the central role in identifying as many of its own company's risks as possible and assessing them by plotting them on a risk map (vertical axis: degree of damage to/impact on the company; horizontal axis: possibility of occurrence). As a result of the assessment, the Committee specifies risks that would cause a significant degree of damage to/impact on its company as "significant risks," and decides how to respond to all "significant risks" to mitigate the potential impact. Through this process, each company conducts risk management that makes clear which risks it should manage on a priority basis and works to prevent risks, minimize loss when risks occur, and maintain business continuity.

Topics: Effects of Risk Management
A Group company in the United States, which introduced a risk management system, identified hurricane-related damage (injuries to employees, damage to plant and production equipment, etc.) as significant risk; and formulated procedures for employee evacuation and plant operation suspension to mitigate risks.
Although this Group company was hit by two large hurricanes in FY 2018, thanks to the formulated procedures, they were able to respond efficiently and effectively to emergency situations, and minimize negative impact on stakeholders.

Education and awareness-raising activities

We conduct risk management education and awareness-raising activities for our group companies through regular visits, video conferences and other measures, to firmly establish the PDCA cycle for risk management and improve the quality of risk management at each group company. In addition, we educate employees being newly posted abroad on the fundamentals of risk management and the risk management system of the Fuji Oil Group in their pre-assignment training.

Incentives

In 2016, we established a CSR category in our management awards program to recognize departments and Group companies that have made outstanding efforts to contribute to society through their business activities. In this category, we present awards to Group companies and departments that have fulfilled their social responsibilities by effectively conducting risk management.

Response to Specific Risks

Identification of the Group's Significant Risks

Based on the results of annual risk assessments of Group companies, we identify significant risks common to the Fuji Oil Group as "common Group risks." For the significant risks identified as common Group risks, the person in charge of each risk at Fuji Oil Holdings manages the relevant risk as a management theme, and supports Group companies in taking measures to address risks.
For example, for information security risk, one of the common Group risks, the responsible department is the ICT Group of Fuji Oil Holdings. The ICT Group provides regular e-learning courses and visits Group companies to increase employee understanding and awareness of information security.

[Fuji Oil Group's Significant Risks]

  • Fluctuations in raw material prices
  • Fluctuations in currency market
  • Risks inherent to engaging in overseas markets
  • Capital expenditure recovery risks
  • Risks related to food safety
  • Supply chain environmental and social risks
  • Risks related to disasters and accidents
  • Risks related to information systems and information security
  • Risks related to human resource hiring and development

Climate change and water risks

Fuji Oil Holdings, which is responsible for formulating the Group's overall management strategy, manages the risks and opportunities associated with climate change and water. The C"ESG"O is responsible for climate change issues and the use of water resources. Under the leadership of the C"ESG"O, through their expert perspectives, relevant divisions, including the CSR/risk management division and the environmental division, collect information on climate change and water from publicly disclosed data and through dialogue with industry groups and stakeholders.
The Group's climate change and water strategies are developed based on the collected information. These strategies are reported at meetings of the ESG Committee, which is an advisory body to the Board of Directors, and proposed to the Board of Directors. Climate change- and water-related risks are managed through the Group-wide risk management system.
Regarding climate change risks, the Fuji Oil Group declared its support for the Task Force on Climate-related Financial Disclosures (TCFD) on May 2019. In the future, we will work to visualize the degree of impact of climate change risks on our business, through participation in the TCFD Consortium and dialogues with stakeholders.

Climate change-related risks (FY 2018)

スクロール

Regulatory risk Risk of decreased production at some group companies in China because of operational restrictions from the local administrative authorities
Physical risk Risk of injury to employees, damage to equipment and suspension of production if a hurricane directly hits the operating area of a group company in the United States

Climate change-related opportunities (FY 2018)

スクロール

Regulations Local governments in some parts of the West Opportunity to increase demand for Fuji Oil soy protein ingredients due to promotion of "Meatless Mondays" by some local governments in Europe and the United States and expansion of plant-based protein market
Physical impact Opportunity for increased demand for the Fuji Oil Group's soy protein products such as soy meat if beef cattle production declines due to a livestock feed shortage caused by drought or other factors

Major water-related risks (FY 2018)

The risk of Group companies in China receiving production suspension orders due to discharging wastewater that fails to meet the effluent quality standards stipulated in the effluent regulations in China

Major water-related opportunities (FY 2018)

Opportunity for increased demand for the Fuji Oil Group's soy protein products such as soy meat if beef cattle production declines due to livestock feed shortages caused by drought or other factors

Business Continuity Plan (BCP)

Basic approach

The Fuji Oil Group Management Philosophy sets forth its Vision to "contribute to society by creating the future of delicious and healthy foods." We believe that business continuity is a prerequisite to achieving our vision, and that a business continuity plan (BCP) is vital to ensure the continuity of operations.
We will promote our BCP under the following basic policies to ensure employee safety and minimize damage to business assets in order to enable the continuation or early restoration of core businesses.

Basic BCP Policy

  • Give priority to the lives of employees and visitors.
  • Prevent secondary disasters and do not disturb local communities.
  • Fulfill our responsibility as a company to supply products.

Initiatives

Revision of BCP based on a major disaster scenario

Fuji Oil Co., Ltd. is working to revise and restructure existing BCPs to make them more effective. The revisions are scheduled to be completed by the end of FY 2019. Major Group companies outside Japan are promoting the formulation of BCPs. The formulation of BCPs at major overseas Group companies is scheduled to be completed by the end of 2020.

Ensuring information system continuity in the event of a natural disaster (ICT-BCP)

In the event of a natural disaster or other incident, information systems are the foundation of business continuity.
The Fuji Oil Group has established a robust data center to operate core systems and other important operational systems.
In addition, assuming a scenario of damage to the data center, we have secured operating system continuity with the construction of a DR site* at a remote location. As a result, even if the data center is affected, operations can resume at the DR site within a few hours to half a day. Moreover, we are preparing for prompt response in the event of a disaster by conducting DR site switchover exercises once a year.

See "Sustainable Procurement" for our response to procurement risks due to climate change or large-scale disasters.
https://www.fujioilholdings.com/en/csr/sustainable/

*DR site: Disaster Recovery site

Information security

Basic approach

The Fuji Oil Group is working to improve its security level to safeguard against threats surrounding information systems, and protect and maintain the confidentiality, integrity and availability of information assets. We have formulated Information Management Regulations, Information Security Regulations, and Information Security Guidelines, and provided employee education on a continual basis to ensure that all employees understand and follow these regulations.
Technically, we are taking multilayered measures including mechanisms to prevent unauthorized access from outside the Group's information systems and to protect against computer viruses. We will further raise our information security level through a process of review, verification and improvement.

Information security management system

To address threats to information assets, the Fuji Oil Group established an information security management system under the Risk Management Committee. We appointed a Chief Information Management Officer and CSIRT (Computer Security Incident Response Team) at Fuji Oil Holdings. We also appointed a person in charge of information management and a person in charge of information security at each Group company to ensure quick response in the event of an emergency and promote employee awareness-raising activities in ordinary times.

Information security education for employees

In FY 2018, the Fuji Oil Group designated October and November as Group Governance and Information Security Reinforcement Months, and conducted e-learning training for all Fuji Oil Group members. Furthermore, we held briefing sessions for managers on information management regulations at each Group company. We will continue working to improve employee information security literacy through education, training and other measures.

Protection of Intellectual Property

Obtaining intellectual property rights and setting a system to prevent the Fuji Oil Group's infringement of such rights owned by other companies

Based on the Fuji Oil Group Management Philosophy, the Group set forth rules on handling of intellectual property rights associated with inventions and other creative works made by its employees while on duty. These rules are set in the Regulations on the Handling of Employee Inventions and the Fuji Oil Group Regulations on Intellectual Property Management. We protect intellectual property by obtaining patents and other intellectual property rights for employee inventions and other creative works and by strictly managing our technological know-how to ensure its confidentiality. We also routinely keep a close watch on information regarding patents and other intellectual property rights of other companies to avoid infringing on them.

Educational and awareness-raising activities

Fuji Oil Co., Ltd. holds study sessions whenever necessary as part of its efforts to spread correct understanding of intellectual property.
During FY 2018, a training seminar on intellectual property was held in February 2019 for new research and development employees who had joined the company six months earlier. The intaention was to spread basic knowledge regarding intellectual property. The participants were briefed about intellectual property rights and their significance, as well as rules applied to in-house inventions.
Moreover, intellectual property training was held in October 2018 for general managers and group leaders in the development divisions to deepen their understanding of the regulations regarding the certification of and compensation for inventors.

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