Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Switched pollinators in directly managed greenhouses from Bombus terrestris to the native Bombus ignitus.
• Established Kagome Standards for Pesticide Usage in 2003 to minimize pesticide use and reduce environmental impact.
• Employs eco-friendly packaging for beverage products, including FSC-certified paper packaging and a message encouraging recycling.
• Kagome Australia Pty. Ltd. is 100% compatible with Unilever's sustainable agricultural standards.

Social Achievements

• Launched Tomato Juice with functional claims, boosting sales by 30%.
• Launched Yasai Seikatsu 100 Smoothie and Yasai Seikatsu Peel & Herb, expanding the beverage concept.
• Established the Diversity Committee in January 2016 to promote diversity and revitalize workplace communication.
• Established the “MICHINOKU Future Fund” in 2011 to support orphaned children of the Great East Japan Earthquake.
• Launched agri-support business to help revitalize agriculture in Japan.

Governance Achievements

• Transitioned to a corporate structure with an audit and supervisory committee in March 2016.
• Appointed three external directors in 2014 to enhance transparency and accountability.
• Established the Remuneration and Nomination Advisory Committee in 2014 to enhance transparency and objectivity in determining director compensation.

Climate Goals & Targets

Environmental Challenges

• Sluggish sales in the core domestic vegetable beverage business in 2014.
• Increased raw material prices due to yen depreciation in 2014.
• Declining population and aging society in Japan leading to a shrinking market.
• Shortage of truck drivers, rising distribution costs, and environmental protection measures (CO2 emissions reduction) in food distribution.
• Low liquidity of company shares due to long average holding period.

Mitigation Strategies

• Implemented reforms to lower the break-even point, improve marginal profits, and reduce fixed costs.
• Formulated a new Mid-term Management Plan (2016-2018) to accelerate reforms.
• Set a long-term vision of transforming from a “tomato company” to a “vegetable company.”
• Established F-LINE, a joint venture distribution business, to improve efficiency and stability of distribution.
• Introduced telework and a staggered commuting hours system to improve work-life balance and productivity.
• Set a target of 70% paid holidays taken to improve employee well-being.
• Promoting dialogue with institutional investors to address concerns about low liquidity and profit targets.

Supply Chain Management

Responsible Procurement

• Annual meetings with suppliers to discuss quality and production processes.
• Inspections of overseas suppliers' facilities.
• Compliance Hotline for suppliers.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IIRC)

Certifications: ISO 17025 (analysis department)

UN Sustainable Development Goals

• Goal 2: Zero Hunger
• Goal 3: Good Health and Well-being
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action

Kagome's initiatives contribute to these goals through sustainable agriculture, healthy food products, reduced environmental impact, and community engagement.

Sustainable Products & Innovation

• Tomato Juice with functional claims
• Yasai Seikatsu 100 Smoothie
• Yasai Seikatsu Peel & Herb
• Eco-friendly packaging

Environmental Metrics

ESG Focus Areas

• Longer, healthier lives
• Agricultural development and regional revitalization
• Global food problems
• Quality
• Environment
• Supply chain
• Diverse Human Resources
• Corporate Governance

Environmental Achievements

• CO² emissions reduction initiatives
• Water usage reductions based on Water Conservation Policy, water risk analysis and countermeasures
• Conservation activities based on Biodiversity Policy
• Reduction of plastic
• Achieved FSSC 22000 certification at all plants in Japan

Social Achievements

• Launched Yasai Seikatsu 100 Vegetore, a food education program for increasing the number of children who like vegetables
• Began supporting children’s cafeterias through cooperation with NPO Musubie
• Received the 13th Kids Design Award for Oishii! Vegetable Challenge, a food education project conveying the appeal of vegetables
• Established Veggie Kids Nursery, which teaches children to love vegetables
• Promoting diversity via the Diversity Committee
• Provide opportunities for self-expression and growth by soliciting new business plans
• Promoting active roles for women

Governance Achievements

• Strengthening Corporate Governance
• Initiatives to increase efficacy of the Board of Directors
• Communication with stakeholders
• Promoting compliance
• Drafted and implemented shared Group policies on accounting, taxes, and financial management
• Strengthen governance of overseas subsidiaries
• Introduced a new system and process for the election of the new president, which increased transparency and objectivity.

Climate Goals & Targets

Environmental Challenges

• Declining vegetable consumption in Japan
• Intensifying competition on health beverage market
• Skyrocketing raw materials prices due to global climate instability
• Accelerating decline in food expenditures due to population decline and population aging
• Product development restrictions related to reliance on natural produce for raw materials
• Dispersal of marketing investments due to diverse business structure
• Decline in relative value of Kagome products due to the emergence of high-quality private brands
• Lack of agricultural successors and increase in dilapidated farmland
• Increased need for processed vegetable products due to labor shortages
• Intensifying competition among vegetable processing businesses
• Accelerating population aging resulting in decrease in farm operators
• Global warming and other climate change resulting in decline in suitable cultivation land and emergence of new pests
• Lack of prediction accuracy and ability to adjust supply/demand in response to market price fluctuations for fresh tomatoes
• Lack of consumer recognition for new fresh produce such as baby leaf lettuce
• Lack of breeds and production sites for vegetables other than tomatoes and baby leaf lettuce
• Increase in raw material production losses due to global climate change
• Emergence of structural market decline due to growing competition for primary processed tomatoes
• Damage to tomato farmland due to worsening water shortage in California, the world’s largest producer region
• Lacking in total cost competitiveness (including logistics)
• High level of dependence on specific high-volume customers
• Lack of brand recognition on consumer market (B to C)
• Driver shortage from an aging population and declining rate of people seeking employment as drivers
• Increased number of vehicles needed because of the split-use of pallets at intermediaries
• Prolonged working hours and inefficient logistics

Mitigation Strategies

• Conducting climate change scenario analysis
• Implementing the Paris Agreement
• Formulating the Three-year Environmental Management Plan
• Establishing benchmarks for CO2 emission reduction
• Working with other food manufacturers to streamline logistics
• Participating in the “White Logistics” promotion campaign
• Establishing F-LINE Co., Ltd., a nationwide joint venture logistics company
• Introducing day-after-next delivery to extend delivery lead time and improve the logistics environment
• Strengthening our platform for domestic source vegetable procurement and for ensuring the stable supply of fresh vegetables
• Linking procurement prices to market prices and promoting cost reductions at agricultural sites
• Creating a structure for the seamless provision of various vegetable products, from fresh produce to processed goods
• Engaging in open innovation and forming external partnerships to increase the speed of initiatives
• Strengthening cost competitiveness by applying Japan’s cost reduction knowhow to group companies
• Diversifying raw material centers, optimizing processing scope, strengthening cost competitiveness, using climate data analysis to establish advanced tomato cultivation technology
• Form brand strength by enhancing sales promotions for the vegetable beverage business in collaboration with Nissin Foods (H.K.) Co., Ltd.
• Create commercial tomato cultivation platforms, manufacture and sell processed tomato products in future growth markets Senegal and India
• Implementing additional measures, such as linking procurement prices to market prices and promoting cost reductions at agricultural sites
• Searching for new vegetables and increasing processing formats
• Addressing climate change risks by strengthening platform for the stable provision of raw material vegetables and fresh produce in Japan
• Advancing the shift to delicious-tasting breeds and restoring competitiveness at mass retailers while continuously engaging in revenue improvement policies, including linking procurement prices to market prices and expanding farm-direct sales
• Increasing vegetables that promote a seamless supply structure for everything from fresh produce to processed goods
• Increasing ability to use vegetables to provide vegetable solutions that meet the needs of customers
• Strengthening every aspect of value chain from seeds to produce and by responding to changes in Japan’s agricultural industry
• Responding to farmer aging and labor shortages and strengthening seed collection and sapling cultivation functions, the foundation of domestic source vegetables procurement, by collaborating with overseas subsidiaries to build a global seed collection network
• Using latest technology to increase accuracy of harvest predictions, research and development in areas such as harvesting robots
• Strengthening ability to control yield without engaging in selloffs
• Consolidating knowledge and human capital cultivated through fresh and commercial tomato procurement, providing vegetable solutions that take advantage of existing domestic sales network
• Creating a network linking collaborative sales activities for consumer use, food service use, and agri-business (fresh vegetables) products with vegetable production sites and processing plants
• Partnering with research and development department to develop new high-function vegetables

Supply Chain Management

Supplier Audits: Annual visits to suppliers

Responsible Procurement

• Clearly communicating expectations to suppliers
• Establishing mid- to long-term transactions at appropriate prices
• Selection of suppliers who can work together with Kagome to improve quality
• Checking quality controls, from cultivation to manufacturing processes

Climate-Related Risks & Opportunities

Physical Risks

• Water shortages
• Growing intensity of unseasonable weather
• Rising average temperatures
• Changing rainfall and weather patterns
• Declining biodiversity
• Declining production yield caused by water stress

Transition Risks

• Rising carbon taxes
• Changing consumer behavior

Opportunities

• Developing and selling vegetable varieties that can withstand climate change
• Rolling out a tomato cultivation system worldwide that makes it possible to grow tomatoes with less water

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, Guidance for Collaborative Value Creation

Certifications: ISO 9001, FSSC 22000, ISO 14001

UN Sustainable Development Goals

• 2.4
• 2.a
• 12.2
• 5.5
• 6.3
• 6.6

Kagome's initiatives contribute to these goals through sustainable food production, water resource management, biodiversity conservation, women's empowerment, and improved water quality.

Sustainable Products & Innovation

• VegeCheckTM
• Vegetable Stock Seasoning (Condensed Type)
• Kalish®

Awards & Recognition

• Minister of Agriculture, Forestry and Fisheries Award at the Rural Agricultural Development Contest
• 13th Kids Design Award for Oishii! Vegetable Challenge
• DBJ Employees’ Health Management Rating (highest rank)
• Certified Health and Productivity Management Organization (White 500) program

Environmental Metrics

ESG Focus Areas

• Sustainable agriculture
• Circular economy
• Reduced environmental impacts
• CSR in the supply chain
• Longer, healthier lives
• Agricultural development and regional revitalization
• Sustainable global environment

Environmental Achievements

• Achieved certification from the Science Based Targets initiative (SBTi) for its 2030 greenhouse gas emission reduction target.
• Selected as an A-List company in CDP Climate Change 2022 and CDP Water Security 2022.
• Reduced smoking rate among employees from 19.5% in 2020 to 15.1% in 2022.

Social Achievements

• Launched the Let’s Eat Vegetables Campaign, sharing information with 35 million people and providing hands-on experiences to 21,000.
• Launched “food education beginning with growing” to increase future vegetable fans.
• Established Kagome Kitchen Farm to foster empathy in products and services by connecting with local consumers.
• Increased engagement survey score from 70 in 2021 to 70 in 2022.

Governance Achievements

• Established the Sustainability Committee to discuss and review matters with a longer-term perspective.
• Established the position of CRO (Chief Risk Management Officer) and the Enterprise Risk Management Committee.
• Revised the Code of Conduct with three pillars: “mutual support,” “respect for human rights,” and “fairness.”

Climate Goals & Targets

Environmental Challenges

• Unprecedented cost increases due to rising raw ingredient prices, energy costs, and yen depreciation.
• Supply chain disruptions due to climate change and geopolitical risks.
• Declining yields of natural farm-produced ingredients due to climate change.
• Tougher competition in the vegetable beverage market.
• Labor shortages in agriculture and logistics.

Mitigation Strategies

• Implemented price revisions for approximately 150 consumer products and 178 institutional and industrial use products.
• Implemented additional measures to reduce cost of sales and conducted promotions based on changes in customer purchase behavior.
• Strengthened exploration of businesses that will become new growth pillars.
• Further expanded global procurement network and enhanced stable procurement capabilities.
• Increased storage capacity at plants to optimize inventory levels and ensure stable supply.

Supply Chain Management

Responsible Procurement

• Kagome CSR Procurement Policy
• Kagome Supplier CSR Actions Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather and changing weather patterns
• Declining production yield caused by water stress

Transition Risks

• Rising carbon prices
• Changing consumer behaviors
• Loss of biodiversity

Opportunities

• Acquisition and sales of vegetable varieties that can withstand climate change
• Development and usage of tomato cultivation system that can produce tomatoes with the fewest amount of water
• Active development of environmentally friendly products and certified products
• Proposals and promotion of agriculture in symbiosis with living organisms

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IIRC), Guidance for Collaborative Value Creation (METI)

Certifications: ISO 14001, ISO 9001, ISO 17025

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)
• Goal 3 (Good health and well-being)
• Goal 8 (Decent work and economic growth)
• Goal 15 (Life on land)

Kagome's initiatives contribute to these goals through various sustainability efforts.

Sustainable Products & Innovation

• Plant-based omelet rice
• SOVE® Cereal
• Kagome Plant-based Food Series

Awards & Recognition

• A-List company at CDP Climate Change 2022
• A-List company at CDP Water Security 2022
• Highest rank by the Development Bank of Japan (DBJ) under its DBJ Employees’ Health Management Rating
• Recognized under the Certified Health and Productivity Management Organization (large corporations) 2022 program

Environmental Metrics

ESG Focus Areas

• Sustainable Global Environment
• Product Safety and Security
• Respecting Diversity and Expanding Human Capital
• Establishing a Sustainable Supply Chain
• Agricultural development and regional revitalization
• Longer, healthier lives

Environmental Achievements

• Launched a new Sustainability website in July 2023.
• Selected for inclusion in the FTSE Blossom Japan Index for the first time.
• Reduced energy used in Japan.
• Reduced water used in Japan.
• Reduced GHG emissions in Japan.
• Introduced biomass energy at Fujimi Plant.
• Phased out straws in Plant-based lactic acid Labre series.
• Achieved third-party verification of greenhouse gas emissions (Scope 1, 2, and 3).

Social Achievements

• Selected as a Health and Productivity Management Outstanding Organization White 500 (Large Enterprise Category).
• Established the Kagome Group Human Rights Policy.
• Established the Kagome CSR Procurement Policy and Kagome Supplier CSR Actions Guidelines.
• Improved engagement survey scores.
• Increased the percentage of women in managerial positions.
• Expanded assistance for transfers involving relocation.
• Changed contract formats in reemployment system to allow extension up to age 70.
• Launched the GoVivid communication program to acquire new consumers of vegetable beverages.
• Held Kagome Rice Omelet Stadium® 2023.

Governance Achievements

• Established the Sustainability Committee in October 2022.
• Launched the 2050 Vision Formulation Project.
• Revised the Code of Conduct.
• Established the Kagome Compliance Hotline.
• Introduced an overseas internal reporting system.
• Established a Group-wide accounting, tax and financial management policy in 2019.
• Introduced ROIC management in FY2021.
• Introduced a BIP trust in FY2020 as a medium- to long-term performance-linked remuneration.

Climate Goals & Targets

Environmental Challenges

• Rising raw materials prices.
• Climate change impacts on agricultural production.
• Supply chain disruptions.
• Labor shortages.
• Shrinking domestic market.
• Water shortages in some regions.
• Maintaining profitability in the Domestic Agri-Business.
• Securing processing tomatoes and primary processed products affected by climate change.

Mitigation Strategies

• Increased agricultural research and established the Global Agri Research & Business Center.
• Consolidated Ingomar Packing Company, LLC.
• Implemented price revisions.
• Implemented measures to spur demand.
• Revamping the entire supply chain IT system.
• Developing plant varieties that are adaptable to water shortages and climate change.
• Establishing cultivation technologies.
• Strengthening cooperation among Group companies.
• Implementing cost reductions.
• Improving productivity.
• Developing a sustainable tomato processing business.

Supply Chain Management

Responsible Procurement

• Kagome CSR Procurement Policy
• Kagome Supplier CSR Actions Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Water stress

Transition Risks

• Rising carbon prices
• Changing consumer behaviors

Opportunities

• Development of climate-resilient plant varieties
• Development of water-efficient cultivation systems
• Development of environmentally friendly products

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IIRC), Guidance for Collaborative Value Creation (METI)

Certifications: ISO 14001, ISO 9001, ISO 17025, Science Based Targets (SBT) initiative

Third-party Assurance: Japan Management Association

UN Sustainable Development Goals

• SDG 2
• SDG 3
• SDG 6
• SDG 8
• SDG 12
• SDG 13
• SDG 17

Kagome's initiatives contribute to these goals through sustainable agriculture, promoting vegetable consumption, reducing environmental impact, and respecting human rights.

Sustainable Products & Innovation

• Products with long use-by dates
• Products using recycled or plant-based materials

Awards & Recognition

• Good Design Award (KAGOME Building)