Social Impact and ESG Materiality

Fuji Oil in society

Fuji Oil Group’s value chain

The Fuji Oil Group is a B-to-B food ingredient manufacturer that has four business segments: Vegetable Oils and Fats Business, Industrial Chocolate Business, Emulsified and Fermented Ingredients Business, and Soy-Based Ingredients Business. We develop, manufacture, and sell various food ingredients, including oils and fats for chocolate, industrial chocolate, whipping cream, margarine, and soy protein ingredients, mainly made from agricultural products, such as palm oil, cocoa and soybeans. Our customers range widely from B-to-C food manufacturers to restaurants, convenience stores and retail stores.

Our positive impacts and negative impacts

The Fuji Oil Group recognizes the following positive and negative impacts of its business.

Positive impacts (examples)

Addressing food shortages and supporting healthy lives with plant-based food ingredients
Improving sustainability in the supply chain of raw materials
Reducing impacts on the global environment by reducing consumption of energy, water, and other natural resources and the generation of CO₂, waste, and other emissions at Group companies, primarily in their manufacturing processes

Negative impacts (examples)

Environmental degradation and human rights violations in the value chain
Impact on the global environment through the consumption of energy, water and other natural resources and the generation of CO₂, waste, and other emissions by Group companies, primarily in their manufacturing processes

Four areas of ESG activity

The Fuji Oil Group classified the activities contributing to the promotion of ESG management into the following four areas. Activity guidelines were set for each area.

Advancing the SDGs

At the Fuji Oil Group, we understand that private business has a vital role to play in advancing the Sustainable Development Goals (SDGs), the international goals adopted by the UN in 2015. We also recognize that our business activities can directly and indirectly impact the SDGs in positive and negative ways. We strive to solve social issues through plant-based food ingredients and to create a world where no one is left behind.

Our material ESG issues

Basic approach

The Fuji Oil Group identifies material ESG issues as areas where we can contribute, through our business activities, to the sustainable development of society, our own sustainable growth and the creation of value for society. Material ESG issues contribute to two of the four activity areas for promoting ESG management: “Creation of positive impact” and “Reduction of negative impact.”

Material ESG issues for FY2021

Our material ESG issues for FY2021 are listed below. Please refer to the relevant webpages for details on our basic approach, goals and the status of initiatives concerning each issue.

Areas to create initiatives that lead the industry, leveraging our business strength

Priority Area 1: Creative food solutions

Priority theme	Our vision	FY2021 Goals	CxO in charge	Relevant page
Solutions to Food Insecurity	Establish alternative technologies and disseminate environment-friendly plant-based food ingredients—a substitute for animal protein and dairy products—to address the concerning issue of food resource shortages in the future	Develop delicious soy meat ingredients and products that look and taste like real meat Develop plant-based milk	CTO	Solutions to Food Insecurity
Provision of healthy food	Contribute to wellbeing among seniors by addressing health issues and removing lifestyle limitations	Verify the functional effects of next-generation core technologies that help to solve health issues in aging societies Prepare an action plan for delivering wellbeing solutions to aging societies	CTO	Provision of healthy food
Reduction of sugars intake	Provide nutritionally balanced food products that help prevent lifestyle-related diseases by replacing certain sugars with plant-based protein ingredients	Develop food ingredients to increase percentage of protein in staple foods (to help customers reduce their products’ sugar content) Provide protein-fortified staple food ingredients	CTO	Reduction of sugars intake
Reduction of trans fatty acid content	Reduce the amount of trans-fatty acids (TFA) contained in products in compliance with the WHO’s recommendations and the laws and regulations of each country	Woodlands Sunny Foods (Singapore), Freyabadi Indotama (Indonesia), and Harald (Brazil): Reduce TFA in all products (to less than 2g-TFA/100g-oil)	CSO	Reduction of trans fatty acid content

Priority Area 2: Sustainable procurement

Priority theme	Our vision	FY2021 Goals	CxO in charge	Relevant page
Sustainable procurement of palm oil	Achieve “No Deforestation, No Peatland Development, No Exploitation (NDPE)” throughout the supply chain Achieve 100% traceability to plantation (TTP) by 2030 Implement the Labour Transformation Programme (LTP) at all suppliers of Palmaju Edible Oil by 2025	Traceability to mill (TTM): 100% Traceability to plantation (TTP): 73% Conduct regular monitoring using satellite images to prevent deforestation; use results to improve the supply chain and respond to grievance list Implement the Labour Transformation Programme （LTP）at Palmaju Edible Oil (Malaysia)	CSO	Sustainable procurement of palm oil
Sustainable procurement of cocoa	Promote Responsible Cocoa Beans Sourcing Policy Plant one million trees on cocoa-growing regions by 2030 End the “worst forms of child labour” defined by ILO Convention by 2025	Plant 100,000 trees in cocoa-growing regions of Ghana Increase transparency by GPS mapping of cocoa farms Conduct support program for 2,350 cocoa farming families in Ghana Begin gathering information on the family conditions of farmers participating in the program, to prepare for child labor monitoring Provide farming assistance by introducing GAP^* and market the beans produced in the program to Japan and the U.S.	CSO	Sustainable procurement of cocoa
Sustainable procurement of soybeans (including GMO issues)	Promote sustainable procurement of soybeans and soy protein raw materials	Set traceability goals and KPIs (completed in June 2021) Finalize the definition of “community” in 2030 targets	CSO	Sustainable procurement of soybeans

* Good Agricultural Practices

Business foundation areas

Priority Area 3: Assurance of product quality and safety

Priority theme	Our vision	SDGs we aim to support	FY2021 Goals	CxO in charge	Relevant page
Ensuring food safety and quality	Ensure that the Fuji Oil Group is never a cause for complaints for any of the products it manufactures		Raise quality awareness of employees in order to achieve zero serious quality-related complaints Encourage use of the quality-related information platform, which is directly accessible to quality control managers, and strengthen relationships between quality control managers	C“ESG”O	Ensuring food safety and quality

Priority Area 4: Occupational health and safety

Priority theme	Our vision	SDGs we aim to support	FY2021 Goals	CxO in charge	Relevant page
Promoting occupational health and safety	Place top priority on safety and respect for humanity. Keep all Group companies accident free by creating safe and comfortable workplaces		Study measures to introduce the pointing and calling method, as well as to establish and maintain awareness programs Continue programs that promote understanding of the effectiveness of risk prediction training Launch initiatives that help raise safety awareness, such as by adopting safety simulators using virtual reality (VR)	C“ESG”O	Promoting occupational health and safety

Priority Area 5: Climate change mitigation and adaptation

Priority theme	Our vision	SDGs we aim to support	FY2021 Goals	CxO in charge	Relevant page
CO₂ emissions reduction	Environmental Vision 2030 Reduce Scope 1 and 2 CO₂ emissions (total volume) by 40% and Scope 3 (Category 1) emissions by 18% by 2030 (base year: 2016) Note: Approved by the Science Based Targets initiative (SBTi)		Make sure all employees are familiar with Environmental Vision 2030 Take CO₂ emissions reduction efforts to the next level through environmental audits Support Group companies in putting together a CO₂ emissions reduction strategy (e.g., introduce data collection systems that make it easier for managers to check their CO₂ data quickly and easily; share best practices, such as solar installation projects, between Group companies) Start a questionnaire survey of suppliers (supplier engagement) as a Scope 3 (Category 1) emissions reduction initiative	C“ESG”O	CO₂ emissions reduction

Priority Area 6: Conservation of water resources

Priority theme	Our vision	SDGs we aim to support	FY2021 Goals	CxO in charge	Relevant page
Water use reduction	Environmental Vision 2030 20% reduction in water intensity by 2030 (base year: 2016)		Make sure all employees are familiar with Environmental Vision 2030 Take water use reduction efforts to the next level through environmental audits Support Group companies in putting together a water use reduction strategy (e.g. introduce data collection systems that make it easier for managers to check their water data quickly and easily; share best practices, such as water recycling methods and installation of water-efficient equipment, between Group companies)	C“ESG”O	Water use reduction

Priority Area 7: Resource circularity

Priority theme	Our vision	SDGs we aim to support	FY2021 Goals	CxO in charge	Relevant page
Waste reduction	Environmental Vision 2030 10% reduction in waste intensity by 2030 (base year: 2016)		Make sure all employees are familiar with Environmental Vision 2030 Take waste reduction efforts to the next level through environmental audits Support Group companies in putting together a waste reduction strategy (e.g. introduce data collection systems that make it easier for managers to check their waste data quickly and easily; share best practices, such as ways to make use of animal and plant byproducts^* and convert industrial waste into salable material, between Group companies)	C“ESG”O	Waste reduction
Food loss and waste reduction	Contribute to reducing food loss and waste throughout the value chain through technology innovation		Develop and propose technologies that maintain product quality (extend freshness) and technologies for secondary processing (repurposing)	CTO	Food loss and waste reduction

* Such as processing residues and product samples

Priority Area 8: Environmentally conscious manufacturing

Priority theme	Our vision	SDGs we aim to support	FY2021 Goals	CxO in charge	Relevant page
Reduction of the environmental impact of products and raw materials	Advance Environmental Vision 2030 by finding and using alternative raw materials and developing new technologies that reduce environmental impact		Develop manufacturing methods that achieve higher efficiency and reduced environmental impact through the application of a new enzyme-based oil and fat processing technology in commercial production Conduct a survey on the environmental impact of our granulated soy protein products. Draft a strategy to reduce lifecycle impact	CTO	Reduction of the environmental impact of products and raw materials

Priority Area 9: DE&I^*

Priority theme	Our vision	SDGs we aim to support	FY2021 Goals	CxO in charge	Relevant page
Diversity management	Provide fulfilling workplaces free of discrimination and harassment and where the basic human rights, diversity, character, and individuality of every associate is respected		Instill the Fuji Oil Group Management Philosophy Seek to understand region-specific issues and current status of initiatives Select and train future/successive managerial talent Appoint more local staff to positions outside Japan previously filled by employees dispatched from Japan Develop executive candidates outside Japan who are fit for a global business environment Japan: Encourage diverse work styles Japan: Ensure equity Japan: Support long-term, meaningful employment of people with disabilities	CAO	Diversity management

* Diversity, equity and inclusion

Priority Area 10: GRC^*

Priority theme	Our vision	FY2021 Goals	CxO in charge	Relevant page
Risk management system	Earn the trust of society by demonstrating high reliability and risk management capability	Properly manage 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 and prepare and disclose information on realistic climate change scenarios for embedding a climate strategy into our business and operations	C“ESG”O	Risk management system
Information security management	Reform processes through the use of information and communications technology (ICT) and create corporate value Facilitate the achievement of Group governance through the use of safe and secure ICT	Continue to conduct internal security audits that reflect risk trends and expand the scope of audited systems under the control of the IT Division	CFO	Information security management
Compliance	Earn the trust of all stakeholders by conducting business fairly, transparently, and with integrity	Strengthen collaboration with the Legal Affairs Department of Fuji Oil Holdings Inc. by appointing staff responsible for legal affairs at the regional headquarters or their subsidiary Group companies Have regional headquarters or their subsidiary Group companies conduct a self-assessment on compliance management, and have the Legal Affairs Department of Fuji Oil Holdings Inc. review the results Conduct compliance training	CAO	Compliance
Group governance	Enhance corporate value through the establishment of an effective Group governance system	Amend Group policies to clarify the responsibilities and scopes of authority of supervisory and executive roles in the Fuji Oil Group Reset communication methods with regional headquarters for instilling the Group Management Philosophy and ensuring implementation of Group strategies Strengthen coordination with the Internal Audit Group for confirming the status of management execution (execution monitoring)	CSO	Group governance
Corporate governance	Improve corporate value through appropriate functioning of the Board of Directors	Establish the Board of Directors as a function focused on supervising (monitoring) corporate management	CAO	Corporate governance

* Governance, risk, and compliance

Process of selecting material ESG issues for FY2021

The Fuji Oil Group reviews and selects its material ESG issues once a year based on new social issues and input received from stakeholder dialogue.
In FY2020, the secretariat of the ESG Committee created a list of social issues taking into consideration the GRI^*1 and SASB^*2 disclosure items, the WBA^*3 benchmarks, the SDGs, ESG themes promoted by industry groups, and expert guidance. It then grouped together similar social issues and gauged their importance by plotting them on two axes, stakeholder interest and impact on the Fuji Oil Group’s business, creating a draft ESG materiality map for FY2021.
The ESG Committee — which has around 30 members, including Group chief officers in charge of specific ESG issues, the managers responsible for promoting ESG initiatives in FY2020 (selected from corporate, business, and R&D divisions), and experts — then reviewed the validity of the materiality map.
Based on the ESG Committee’s conclusions, the committee’s secretariat reported the ESG materiality issues for FY2021 to the Fuji Oil Holdings Inc. board of directors for approval.
As a result of this process, the Fuji Oil Group decided to shift from managing “packaging materials reduction,” a ESG material issue selected for FY2020, on a Group level to managing it at the level of each company,^*4 and to add two new material issues: “provision of healthy food” and “compliance.”

*1 Global Reporting Initiative
*2 Sustainability Accounting Standards Board
*3 World Benchmarking Alliance
*4 For details, see “Plastic Use Reduction” following the link below.

https://www.fujioilholdings.com/en/sustainability/environment/packaging_materials/

Identification and selection process

Examples of Stakeholder Advice

Providing healthy foods and preventing corruption are in the interest of society

STEP 1

Comprehensive listing of social issues for evaluation

STEP 2

Evaluation with the use of the materiality map

STEP 3

Discussion by the ESG Committee

STEP 4

Approval from the Board of Directors

FY2021 ESG materiality map

*1 “Sustainable procurement” includes important issues such as respect for human rights, biodiversity conservation, and forest conservation.
*2 Diversity, equity and inclusion
*3 “GRC” includes corporate governance (e.g. improving the effectiveness of the board of directors) and internal control (e.g. Group governance, risk management). The ESG Committee is in charge of monitoring internal control. The board of directors is in charge of monitoring corporate governance.