Risk Management System
Relevance to our business
As a business operating throughout the world, the Fuji Oil Group faces a wide range of risks inherent in the scope of its operations. We have developed a risk management structure in order to deal with these risks.
The Fuji Oil Group has selected 12 items as significant risks that need to be managed. We designated Chief Officers and formulated response plans for each of these risks. In addition, we created a framework for reporting and monitoring the status of our risk responses to the Board of Directors.
|1||Risks related to fluctuations in raw material prices|
|2||Financial and tax risk|
|3||Legal and compliance risk|
|4||Management risk of Group companies|
|5||Risks related to food safety|
|6||Supply chain-related risk|
|7||Risks related to disasters, accidents, and infectious diseases|
|8||Information system and security-related risk|
|9||Risks related to human resource hiring and development|
|10||Business transformation and reform-related risk|
|11||Environmental and human rights risks|
|12||Country risks of regions comprising the Group’s global network|
* Follow the link below to learn more about the identified Groupwide significant risks.
Each Group company creates a risk map and identifies their specific operational risks. At the same time, the Group determines strategic and financial risks through the Management Committee Meeting. After comprehensively identifying all the risks through these measures, the Board of Directors decides which risks are of particular significance.
For each significant risk identified through the abovementioned process, a Chief Officer is designated and response measures are established. In addition, the Chief “ESG” Officer (C“ESG”O) in charge of risk management supervises the monitoring of these risks and reports regularly to the Board of Directors.
The C“ESG”O oversees initiatives in this area. The ESG Committee,*1 an advisory body to the Board of Directors, monitors the progress and results of initiatives as a material ESG issue.*2 The ESG Committee reports insights to the Board of Directors for review.
*1 Follow the link below to learn more about the ESG Committee.
*2 Follow the link below to learn more about material ESG issues.
Goals / Results
At least 90% complete At least 60% complete Less than 60% complete
|FY2020 Goals||FY2020 Results||Self-assessment|
|Promote risk management throughout the Group||Reported the significant Groupwide risks for FY2020 at the Management Committee Meeting and obtained approval of the report from the Board of Directors; risks were managed appropriately|
|Support the recommendations of the TCFD||Assessed the financial impact of climate change risks and opportunities|
|Institute BCPs at main Group companies||Created BCP manuals at main Group companies|
Beginning in FY2020, we selected 12 significant risk items that need to be managed, appointed Chief Officers in charge of each of these risks, and have taken appropriate responses under the Group’s risk management system. These have led to the achievement of all our goals.
We recognize that properly managing risks using the PDCA method and disclosing relevant information are crucial to creating a functioning risk management system and to making a risk-proof, trusted company, which is an integral part of society. To address these issues, we set the following goals for FY2021.
- Manage properly significant Groupwide risks and disclose information in a manner that is easy for stakeholders to understand
- Following TCFD recommendations, select appropriate climate risks and opportunities for the Group, prepare and disclose information on realistic climate change scenarios for embedding a climate strategy into our business and operations
Risk management method adopted by each Group company
The Fuji Oil Group clearly defined the roles of Fuji Oil Holdings Inc., companies acting as regional headquarters and each Group company, and established a Risk Management Committee at each company. The Risk Management Committee takes the lead in managing the risks at each Group company by implementing the PDCA cycle, going from assessing risks (Plan), implementing countermeasures (Do), conducting self-checks (Check), and to making improvements and developing a plan for the next fiscal year (Act). It also promotes risk management through close collaboration between Fuji Oil Holdings Inc., companies acting as regional headquarters, and Group companies. In risk assessment, the Risk Management Committee of each Group company identifies all possible risks for the company and assesses them by plotting them on a risk map (vertical axis: degree of damage to/impact on the company; horizontal axis: likelihood of occurrence). Based on the assessment, the Committee specifies risks that would cause a significant degree of damage to/impact on the company as “significant risks.” It then decides on how to respond to all “significant risks” to mitigate their potential impact.
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 the emergency quickly and appropriately as the Fuji Oil Group.
Fuji Oil Group’s risk management
Response to the TCFD recommendations
In May 2019, the Fuji Oil Group declared its support for the Task Force on Climate-related Financial Disclosures (TCFD). Based on recommendations by the TCFD, we are committed to promoting actively the disclosure of information on four areas: governance, strategy, risk management, and metrics and targets.
Information disclosure based on the TCFD recommendations
Under the supervision of the C“ESG”O, the Fuji Oil Group manages climate change risks and opportunities through a Groupwide risk management structure that handles Groupwide significant 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.
Furthermore, we established the ESG Committee as an advisory body to the Board of Directors of Fuji Oil Holdings Inc. with the aim of enhancing ESG management. It is chaired by the C“ESG”O and meets at least twice a year. The Committee identifies material ESG issues, studies and holds discussions on sustainability strategies, and reviews the progress on material ESG issues. We have identified “climate change mitigation and adaptation” as one of the material ESG issues and are working to reduce CO2 emissions by advancing our Environmental Vision 2030. Details of our activities are reported to the Board of Directors each time the Committee meets.
We performed the TCFD-recommended climate change scenario analysis, selected climate change risks and opportunities, and assessed their financial impact* for Group companies in Japan in FY2019 and in FY2020 for major Group companies outside Japan. The Fuji Oil Group will further encourage ongoing initiatives that are being carried out by the whole Group to reduce CO2 emissions. This includes energy conservation initiatives and renewable energy use, with the goal of achieving carbon neutrality and creating a positive impact on the company, society and the Earth. On the other hand, as the global community moves towards decarbonization, the market for plant-based foods, which is one of the Group’s strengths, is expected to grow due to increasing concerns about the adverse effects of livestock fattening on climate change. The Group will continue to work on solutions to global issues for a decarbonized society by providing plant-based food ingredients under the concept of Plant-Based Food Solutions (PBFS).
* Refer to “Assessment of Climate Change Risks and Opportunities and their Financial Impact on the Fuji Oil Group” below for details on the financial impact assessment.
Using information sources that take into account the Group’s unique circumstances, such as the risk awareness of management, materiality maps, and risk maps of Group companies, the Fuji Oil Group selected climate change risks and other significant Groupwide risks based on our overall judgment of the level of impact on management, likelihood of occurrence, and timing of emergence, among others. The Group formulates plans, implements, tracks progress, evaluates and improves countermeasures to these risks through a Groupwide risk management system developed to oversee significant Groupwide risks through the Management Committee Meeting. Climate change risks are considered as a significant Groupwide risk, and are managed through the Groupwide risk management system. The details of risk responses and their discussions are reported to the Board of Directors at least once a year.
Metrics and targets
In the Environmental Vision 2030, the Fuji Oil Group states its commitment to a 40% reduction in total 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 our Environmental Vision 2030 targets. Furthermore, we will work on improving the accuracy of our Scope 3*1 emissions data, devise ways to reduce the large volume of Category 1*2 emissions, and conduct briefings and information campaigns within the Group to achieve our targets approved by the Science-Based Targets initiative (SBTi), in order to promote further reduction of CO2 emissions throughout the Group.
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%
* Follow the link below to learn more about the Environmental Vision 2030.
- *1 Scope 3: Emissions from the activities of non-Group companies in our value chain (Categories 1–15)
- *2 Category 1: Raw materials
- *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
Business continuity plan (BCP)
As a company engaged in the food industry, which is vital to human life and indispensable to daily living, it is the Fuji Oil Group’s social responsibility to keep delivering products to customers even in crisis. To that end, a business continuity plan (BCP) is essential. We will promote our BCP initiatives under the following BCP Policy in order to ensure employee safety, minimize damage to business assets, and enable the continuation or early restoration of our core businesses. More specifically, we review our BCP in anticipation of natural disasters, major accidents, and epidemics or pandemics, and strive to formulate a BCP for ICT (ICT-BCP) to ensure the continued functioning of information systems in the event of natural disasters.
- 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.
Education and awareness-raising
The Production Productivity Management Group’s Risk Management Team at Fuji Oil Holdings Inc. conducts risk management education and awareness-raising activities for our Group companies through regular visits, video conferences, etc. In this way, we firmly establish the risk management PDCA cycle and improve the quality of risk management at each Group company. With the spread of COVID-19 pandemic in FY2020, we conducted reviews together with each Group company to see whether the company’s response was adequate in terms of ensuring employee safety and business continuity. Based on the results, we formulated a BCP for infectious diseases. In addition, we provided training to newly posted overseas employees on the fundamentals of risk management and the risk management system of the Fuji Oil Group. This is done as part of their pre-assignment training. Through these activities, we strive to raise our employees’ risk awareness and their sensitivity to risks.