Environmental Management

Managing climate- and nature-related impacts, risks and opportunitiesGRI：2-24, 27, 3-3, 101-1, 4, 201-2

TCFD (Climate) TNFD (Nature) Relevant webpages
Policy The Fuji Oil Group established the Basic Policy of Environmental Integrity in 2015, and accelerated our efforts in 2018 with the establishment of the Environmental Vision 2030, in which we commit to achieving reduction targets for CO2 emissions, water use, and waste across the Group. Additionally, we formulated the Fuji Oil Group Policy on Biodiversity in March 2023 to announce our basic approach and code of conduct for conserving and restoring biodiversity.
Governance

The Group’s Sustainability Committee*1 is an advisory body to the Board of Directors of Fuji Oil Holdings Inc. It deliberates on and monitors the Group’s response to environmental and social issues, including climate- and nature-related issues, and recommends and reports the results to the Board. Chaired by the President and CEO, the committee is composed of chief officers with voting rights, other executive officers, heads of each business division, outside directors, and the ESG advisor, and meets at least twice a year. The ESG Division Officer and the Chief Strategy Officer (CSO) oversee initiatives across divisions for material ESG issues.*2 The ESG Division Officer is responsible for Climate Change, Water Resources, Circular Economy, and Biodiversity, while the CSO is responsible for Sustainable Procurement.
Under this committee, the Subcommittee on Group Significant Risks discusses and manages Group-wide risks and opportunities related to climate change and nature. Their results are reported and approved in the Management Committee Meeting and the Board of Directors meeting at least once a year.
Moreover, in order to realize a sustainable future for food, we follow the relevant policies in responding to Indigenous Peoples, social minorities, local communities, and other groups who may be affected by our business operations, and strive to build a foundation for ongoing dialogue and collaboration with our stakeholders.
Strategy
GRI：2-24

In recent years, escalating climate change and biodiversity loss have led to a decline in the ecosystem services that society relies on and which underpin all economies. The global deterioration of the natural environment is seriously impacting corporate business operations and people’s lives. Forest and soil degradation, biodiversity loss, higher water stress, and more frequent extreme weather events are interfering 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.
Our Group’s businesses are benefitting from nature and ecosystem services while also affecting them through the global value chain, which includes raw material production, procurement, transportation, and product processing. We believe that changes in climate and nature are critical to our businesses in terms of both risks and opportunities. For these reasons, we strive to face these risks appropriately by working to reduce CO2 emissions, conserve natural ecosystems, and use natural capital sustainably. At the same time, we have incorporated the concept of nature-positive future*1 in developing our technologies and products with a positive impact on the natural environment to open up better business opportunities in the future.
With the goal of reducing our negative impacts and creating positive impacts, we will accelerate our sustainability initiatives at each Group company based on material ESG issues*2 and co-create the solutions with our stakeholders.

  • *1 Halt and reverse biodiversity loss in order to put nature on a path to recovery
  • *2 Climate change, water resources, circular economy, biodiversity, sustainable procurement, and creation of sustainable food resources

We performed the TCFD-recommended climate change scenario analysis to select 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 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 more aggressive climate intervention.

In FY2022, we set out to understand how all of our activities are related to biodiversity throughout the value chain, and identified biodiversity issues*1 relating to our Group’s business as a whole. We then identified and compiled a list of potential nature-related risks and opportunities. In FY2023, based on the LEAP approach*2 recommended by the Taskforce on Nature-related Financial Disclosures (TNFD), we used Geographic Information Systems (GIS) to analyze our dependencies and impacts on nature and ecosystem services using various indicators, and assessed our nature-related risks*3 and opportunities*4 in countries where our Group sources our key raw materials, palm oil and cocoa. Palm oil and cocoa were selected for analysis based on the following points:

  • They are closely related to the biodiversity issues we identified in FY2022
  • They are the main raw materials for the Group’s main businesses, vegetable oils and fats and industrial chocolates, and have relatively high traceability
  • Oil palm and cocoa are included in the High Impact Commodity List of the Science Based Targets Network (SBTN)
  • *1 Habitat loss due to conversion of forest to agricultural land, impact on ecosystems in areas surrounding farmland, climate change, and water resources
  • *2 An integrated approach developed by the TNFD for assessing nature-related issues including interfaces with nature, nature-related dependencies, impacts, risks and opportunities
  • *3 Potential threats posed to an organization that arise from its and wider society’s dependencies and impacts on nature
  • *4 Activities that create positive outcomes for organizations and nature through positive impacts or mitigation of negative impacts on nature
Risk management
GRI：2-27		 The Group has positioned the Management Committee Meeting as its Group-wide risk management body. The committee uses information sources that reflect the Group — including risks identified by executive teams, our material ESG issues, and operational risks — to comprehensively determine the level of impact on Group business, likelihood of occurrence, and time of onset, and to select the risks that are significant to the entire Group. We have developed a Group-wide risk management system aimed at managing these risks through a process of developing and implementing responsive measures, monitoring progress, evaluating results, and making improvements.
Risks related to climate change, biodiversity and the natural environment are also identified as significant Group-wide risks. These risks are managed through the Group-wide risk management system by assessing their degree of significance, assigning priorities to initiatives, and planning and implementing responsive measures, which are reported to the Board of Directors at least once a year.
Assessment of risks and opportunities
See the section below “Assessment of climate change-related risks and opportunities and their financial impact on the Fuji Oil Group” for details. Using the assessment of dependencies and impacts on nature and ecosystem services, we comprehensively identified the nature-related risks and opportunities that our Group needs to address. See the section below “Nature-related risks and opportunities across the Fuji Oil Group’s value chain.”
Environmental audits
The Fuji Oil Group strives to promote, improve and enhance our environmental conservation efforts across the Group by referring and conforming to international standards such as ISO 14001: Environmental management systems. Every year 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. 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 in Japan. No environmental nonconformities were found in the FY2023 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 for employees’ further understanding. Through internal 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 FY2023, we conducted environmental audits in seven out of our Group’s 20 production sites outside Japan.
Acquisition of management certifications
Training
The Sustainability Development Group and Production Productivity Management Group at Fuji Oil Holdings Inc. jointly provide regular training on safety, quality, and the environment among management and staff in relevant departments of Fuji Oil Group companies outside Japan. In FY2023, the team held awareness-raising activities at seven production sites of Group companies outside Japan. These activities are scheduled such that all sites are visited in a three to four-year cycle. In Japan, we publish a monthly environment and energy newsletter on our internal messaging board and display monitors in our cafeteria to raise employee awareness.
Compliance with environmental laws and regulations
In FY2023, there were no serious environmental legal violations in the Fuji Oil Group.
Metrics and targets Environmental Vision 2030
2030 targets*1 FY2023 results*1 Progress
CO2 emissions Scopes 1*2 & 2*3: 40% reduction in total CO2 emissions (All Group companies) 29% reduction 73%
Scope 3*4 (Category 1*5): 18% reduction in total CO2 emissions (All Group companies*6) 27% increase Not achieved
Water use 20% reduction in water intensity*7 (All Group companies) 33% reduction 166%
Waste 10% reduction in waste intensity*8 (All Group companies*9) 15% reduction 153%
Resource recycling Maintain a recycling rate of at least 99.8% (All Group companies in Japan) 99.85% Achieved
  • *1 Base year: FY2016
  • *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 to 15)
    Recalculated emissions for FY2016, FY2022, and FY2023 using emissions factors of IDEA ver. 3.3 and LULUC (land use, and land-use change) Regulations.
  • *5 Category 1: Purchased goods and services
  • *6 Excluding Industrial Food Services (Australia) and Fuji Brandenburg GmbH (Germany)
  • *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) and Fuji Brandenburg GmbH (Germany)
Nature-related targets in countries producing our major raw materials
2030 targets FY2023 results (relevant webpages)
No Deforestation, No Peatland Development and No Exploitation (NDPE) Traceability to plantation (TTP): 100%
Reforestation One million trees planted in cocoa growing regions
No deforestation, no exploitation Traceability achieved to the community level, or 100% procurement of RTRS*-certified products or products certified to equivalent standards
Forest conservation 6,000 trees planted/year in shea kernel growing regions
  • * Round Table on Responsible Soy Association
Analysis
CO2 emissions (Scope 1 & 2)
Scope 1 and 2 emissions in FY2023 were 29% lower than the baseline, an improvement of three points from the previous fiscal year’s 26% reduction. This represents a 73% achievement rate relative to our 40% reduction target by FY2030. In Japan, our operating sites have been switching to carbon-free electricity, with 50% of our electricity purchases now carbon-free. Group companies outside Japan are also continuing to reduce energy use through activities such as power saving and facilities maintenance.
CO2 emissions (Scope 3 Category 1)
At the result of recalculating emissions for FY2016, FY2022, and FY2023 using emissions factors of IDEA ver. 3.3 and LULUC (land use, and land-use change) Regulations, scope 3 emissions in FY2022 were changed from a 12% increase to a 30% increase, and scope 3 emissions in FY2023 were 27% higher than the baseline, an improvement of three points from the previous fiscal year. This represents a 0% achievement rate relative to our 18% reduction target by FY2030. We conducted engagement with suppliers in and outside Japan with the aim of reducing scope 3 emissions.
Water use (intensity)
Water use intensity in FY2023 was 33% lower than the baseline, an improvement of six points from the previous fiscal year’s 27% reduction. This represents a 166% achievement rate relative to our 20% reduction target by FY2030. We reviewed our water use optimization at production lines in Japan. We also improved water recycling systems and revised the cleaning frequency of production facilities at Group companies outside Japan. All these actions contributed to the reduction in our water usage.
Waste (intensity)
Waste intensity in FY2023 was 15% lower than the baseline, an improvement of 10 points downward from the previous fiscal year’s 5% reduction. This represents a 153% achievement rate relative to our 10% reduction target. At Fuji Oil Co., Ltd., improvement in dewatering rate of scum sludge using the dewatering equipment introduced in FY2020 has contributed to a reduction in waste. Spent bleaching earth (SBE) at Fuji Oil Europe (Belgium) and waste oil at Fuji Oil (Singapore) Pte. Ltd. have been converted into valuable raw materials for biofuel, thereby reducing our volume of waste.
Resource recycling
The resource recycling rate in FY2023 was 99.85%, an increase of 0.16 points from the previous fiscal year’s 99.69%. This means that we achieved our target of 99.8% or higher. We will continue to promote recycling by sorting waste more thoroughly.
Reforestation and forest protection & conservation
Visit the following links for details on ensuring traceability of our raw materials and tree planting in countries producing these raw materials.
External recognition
  • “A-” rating from CDP in 2023 for forests, climate change, and water security
  • Selected among the top 350 Asia-Pacific Climate Leaders 2024 in a joint survey by the Financial Times and Statista

Assessment of climate change-related risks and opportunities and their financial impact on the Fuji Oil GroupGRI：201-2

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 Based on carbon tax data for each country in 2030 taken from the Global Energy and Climate Model Documentation 2023 by the International Energy Agency (IEA) (developed countries: USD 140/tonne, emerging countries: USD 90/tonne)
  • *2 Based on carbon tax data for each country in 2030 taken from the IEA’s World Energy Outlook 2020 (OECD member countries: USD 34/tonne, other countries: not adopted)
  • *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 Scope 3: Emissions from the activities of non-Group companies in our value chain (Categories 1 to 15)
  • *6 Category 1: Purchased goods and services
  • *7 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.

Nature-related risks and opportunities across the Fuji Oil Group’s value chainGRI：304-2

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