Risk Management System

The Fuji Oil Group’s Sustainability Committee^*1 is an advisory body to the Board of Directors that is chaired by the President and CEO. It deliberates on and monitors the material ESG issue^*2 of Governance, risk, and compliance (GRC) from a multi-stakeholder perspective, and recommends the results to the Board. The ESG Division Officer oversees the progress of initiatives for Risk Management System, a priority action within this material issue.

Our Group has positioned the Management Committee Meeting as its Group-wide risk management body. The committee uses a variety of information sources that account for the circumstances surrounding the Group such as risks perceived by management, ESG materiality map and the risk assessment-based risk maps of each regional headquarters and Group company. The committee selects risks that are significant to the entire Group and establishes a Group-wide risk management system to plan, implement, check the progress of, evaluate and improve overall risk response measures. These are first investigated and discussed by the Subcommittee on Group Significant Risks, then the Management Committee Meeting deliberates on and identifies Group-wide significant risks that should be recognized and addressed, and recommends to the Board as the monitoring body.
For risks specific to each Group company, the risk management committees of each company lead risk assessments to create a risk map and identify their specific operational risks.

• *1 Governance, Strategy, Metrics and Targets, Risk Management > Governance

  https://www.fujioilholdings.com/en/sustainability/sustainability_management/

• *2 Governance, Strategy, Metrics and Targets, Risk Management > Strategy, metrics and targets

  https://www.fujioilholdings.com/en/sustainability/sustainability_management/

Our Group operates four business segments — vegetable oils and fats, industrial chocolate, emulsified and fermented ingredients, and soy-based ingredients — covering Japan, the Americas, Europe, Southeast Asia, and China. The Group’s value chain is exposed to a wide range of potential risks, including impacts on numerous fronts arising from changes in social issues, international relations and economic environments. Failure to recognize and respond to these risks may not only impact our business activities, but also have a variety of other effects such as harming our corporate brand.
Our Group has selected 12 items as significant Group-wide risks that need to be managed. We designated officers and formulated response plans for each of these risks in efforts to avoid and reduce loss. In addition, we created a framework for reporting and monitoring the status of our risk responses to the Board of Directors.

• * The identified significant Group-wide risks

  https://www.fujioilholdings.com/en/ir/policies_and_systems/risk/

Risk management method adopted by each Group company

PDCA

Our Group clearly defined the roles of Fuji Oil Holdings Inc., companies acting as regional headquarters and Group companies, 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 the risk assessment, the Risk Management Committee of each Group company identifies all potential 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 across the Group.

Business continuity plan (BCP)

In recent years, numerous natural disasters, pandemics, and rising geopolitical risks resulting from war and conflict cause damage and impact that hinder continued socioeconomic activity. As a company that supplies food products that are indispensable to daily living and serve life-critical functions, the Fuji Oil Group has a social responsibility to keep delivering products to customers even in the event of such damage or impact. To that end, a business continuity plan (BCP) is essential. We are developing our BCP and implementing 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.
For natural disasters, we carry out a range of measures including introducing a safety confirmation system for Group employees; safety confirmation training using the safety confirmation system and an emergency contact tree; conducting periodic disaster preparedness training for major earthquakes; and securing the continuity of information systems. To also reduce the impact of various geopolitical risks and improve the Group’s overall risk resilience, we work with relevant divisions based on the latest information received from regional headquarters and Group companies in order to construct and analyze risk scenarios from multiple perspectives and devise responses. Through activities like these, we strive to stage a rapid and appropriate first response in emergencies, ensure employee safety and business continuity, and minimize damage.

Education and awareness-raising

Analysis

The significant Group-wide risk items selected were discussed at the Subcommittee on Group Significant Risks and the risk management meetings with each regional headquarters and Group companies that were held on the basis of the risk assessments. Action was then promoted to help strengthen risk management throughout the entire Group.
For our TCFD disclosure, we gathered pertinent information and held discussions with the related divisions in order to specify the timing, duration and degree of impact of each risk and opportunity for each scenario. Our efforts received nominations in the FY2023 GPIF (Government Pension Investment Fund) Excellent TCFD Disclosure^*1 selected by domestic asset managers, and were praised as highly accurate, timely and relevant.
In accordance with TNFD official recommendations for disclosure, we collected a variety of information, conducted a detailed analysis of biodiversity issues within the Group’s business, and began disclosing the information in FY2024.^*2
Significant Group-wide risk items and TCFD and TNFD disclosure items are managed appropriately by the Chief Officer, who reports their statuses in a timely manner to the Management Committee Meeting (our Group-wide risk management body) and Board of Directors (our monitoring body) for approval.

• *1 https://www.gpif.go.jp/en/investment/202405_excellent_TCFD_disclosure_en.pdf

• *2 Environmental management > Risk management

  https://www.fujioilholdings.com/en/sustainability/environmental_management/

• Biodiversity conservation and restoration (results of biodiversity-related risk analysis for palm oil and cocoa)

  https://www.fujioilholdings.com/en/sustainability/biodiversity/

Next steps

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 FY2024.