Risks and Opportunities

About the Fuji Oil Group risk management structure

The Fuji Oil Group conducts business activities in various areas of Japan, the Americas, Europe, Southeast Asia, and China. In these areas, our business expands across four segments: Vegetable Oils and Fats, Industrial Chocolate, Emulsified and Fermented Ingredients, and Soy-Based Ingredients. As a result of these global operations, the Fuji Oil Group’s value chain is impacted by social issues and changes in the socioeconomic environment, and this also means that there are various latent risks associated with the Group’s value chain. In response to these risks, we have established a Groupwide risk management structure for comprehensive risk management. Under this structure, we position the Management Committee as the body in charge of risk management for the entire Group. We analyze risks, including risks identified by management (strategic and financial risks), risks associated with our ESG materiality map, and operational risks, based on information sources covering the Group’s various operating environments. Based on that information, we make comprehensive judgments on the impact on operations, the possibility of occurrence, and the potential timing of manifestation. From those judgments, we then draft and implement countermeasure proposals, confirm progress, and conduct assessments to make improvements.

Sustainability Committee and ESG Materiality

We established the Sustainability Committee as an advisory body to the Fuji Oil Group Board of Directors to promote and supervise Group sustainability. This committee works to identify ESG materiality from the perspective of medium- and long-term and multiple perspectives. The committee identifies the direction of universal initiatives, targets, and KPIs and monitors the progress of themes related to materiality. We analyze the importance of social issues related to ESG materiality from two perspectives: the impact the Fuji Oil Group has on society and the impact social issues have on the Fuji Oil Group. Based on this analysis, we identify high-priority matters.

Subcommittee on Group Significant Risks and Fuji Oil Group significant risks

During the implementation of business strategy aligned with the Group’s medium- and long-term direction, we identify risks recognized as having a serious impact on the Group as significant risks, and we engage in risk mitigation. Since fiscal 2022, we have worked to reduce the risk of damage to our corporate value by evaluating risk proposals and assessing and confirming the adequacy of response measures via the Subcommittee on Group Significant Risks. The subcommittee is established as a subordinate organization to the Sustainability Committee and involves participation from a diverse range of members.

Operational risks

We have established risk management committees within each of our Group companies. These committees implement a PDCA cycle consisting of risk assessment, risk response, self-checks, and improvement (plan proposals for the next fiscal year). These committees work with the Fuji Oil Groupheadquarters, regional headquarters, and Group companies to identify and respond to operational risks. During risk assessments, these committees identify risks within their own companies and use risk maps (vertical axis: company losses/impact level, horizontal axis: possibility of occurrence) to evaluate and designate risks with the potential of significant losses or a serious impact as “significant risks.” The committees determine response methods for significant risks and work to mitigate these risks.

Group significant risks

1. Risk identification

Group companies create risk maps to identify the operational risks of each company. Companies also determine strategic and financial risks at the Management Committee Meeting. The Board of Directors determines particularly significant risks by comprehensively assessing risks together with ESG materiality themes recognized as social issues that impact the Fuji Oil Group.

2. Risk response and monitoring

The Management Committee is positioned as the Group risk management body. The Management Committee Meeting designates officers in charge of each risk and outlines responses for addressing Group significant risks identified through the process described above.
The committee also receives progress reports from officers in charge and reviews and selects significant risks. These risk management processes are managed by the ESG Representative, who issues regular reports to the Board of Directors. As the monitoring body, the Board of Directors confirms reports from the Management Committee and issues instructions. Furthermore, the Board of Directors deliberates on response policies for risks with the potential to have a serious impact on the Group and emerging risks, and it issues response guidelines to the Management Committee.

3. Monitoring of results in Fiscal 2022

Each designated CxOs advanced response measures for the 12 significant risks identified in fiscal 2022. Reports on progress and issues were discussed by Subcommittee on Group Significant Risks and then submitted to the Board of Directors to promote risk mitigation, when necessary.

Fuji Oil Group significant risks (for Fiscal 2023)

We selected the following 12 items as significant risks requiring management. For each risk, we designate a chief officer and draft response plans. Response status is reported to the Board of Directors to establish a system of monitoring. Furthermore, forward-looking statements constitute reasonable judgments made by the Fuji Oil Group based on information available as of March 31, 2022.