Climate Change Data

Environmental Metrics

ESG Focus Areas

• Food safety
• Response to health-conscious and diversifying lifestyles
• Sustainable agriculture
• Sustainable procurement of raw materials and logistics
• Environmental protection (caring for the earth)
• Community engagement
• Employee diversity and inclusion
• Corporate governance

Environmental Achievements

• Reduced greenhouse gas emissions by 2.8% (Scope 1) and 0.6% (Scope 2), while Scope 3 increased by 2.7%
• Switched to carbon-offset electricity at five business sites
• Joined the RSPO and started purchasing Book & Claim credits for palm oil
• Kiyohara Smart Energy Project achieved 20% energy savings and CO2 emission reductions

Social Achievements

• Launched Calbee New Workstyle, standardizing mobile telework for 800 office workers
• Increased female manager ratio to 20.4% (as of April 2020)
• Launched Granola Plus, a new cereal brand focusing on protein and iron
• Donated products to medical facilities, food banks, and single-parent family support organizations
• Held online food education event, "How to Get Along with Snacks"

Governance Achievements

• Established a Sustainability Committee advised by outside experts
• Increased the number of outside directors to five
• Established the Nominating Committee/Compensation Committee, chaired by an outside director
• Implemented a system where approximately two-thirds of internal director remuneration is variable (performance-based)

Climate Goals & Targets

Environmental Challenges

• Lower demand for gift snack items due to less travel
• Accelerating changes in consumer lifestyles and food needs
• Concerns around raw material procurement due to export restrictions and lockdowns
• Risk of disease spreading in factories
• Risk of production stoppages due to infection clusters
• Concerns about securing equipment supplies due to export restrictions and lockdowns
• Risk of production not accommodating sudden demand fluctuations
• Fewer opportunities for business discussions and in-store events due to restrictions
• Potential labor shortages due to shrinking working-age population
• Frequent natural disasters impacting supply chains
• Intensifying global competition for resources
• Negative attitudes toward snack foods with high salt content
• Fiercer competition in the Chinese market due to the emergence of new companies

Mitigation Strategies

• Product development in response to changing consumer behavior
• Reviewing optimal stockpile sizes for raw materials
• Diversifying procurement sources
• Implementing movement restrictions between factories
• Creating a factory operation decision manual for infection clusters
• Raising productivity by increasing production shifts
• Conducting business discussions using IT tools
• Planning and conducting online promotions
• Creating new communication methods such as online food education
• Expanding sales outlets via e-commerce
• Implementing Calbee New Workstyle
• Building a new factory in Hiroshima Prefecture with automated equipment and improved efficiency
• Expanding product portfolio via synergies with Warnock Food Products
• Leveraging Calbee brand recognition to grow business in Greater China
• Strengthening quality assurance systems at overseas factories

Supply Chain Management

Responsible Procurement

• Sustainable, environmentally conscious procurement
• Stable procurement of potatoes
• Promoting development of potato varieties and scientific cultivation
• Reducing agricultural labor
• Dispersing production areas and diversifying suppliers
• 100% use of certified palm oil by 2030

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters (typhoons, torrential rain)
• Climate change impacts on crop yields and quality

Transition Risks

• Increases in cost burden due to carbon tax introduction

Opportunities

• Development of new pest-resistant potato varieties
• Development of energy-efficient products

Reporting Standards

Frameworks Used: Ministry of Economy, Trade and Industry (METI): Guidance for Integrated Corporate Disclosure and Company-Investor Dialogues for Collaborative Value Creation, International Integrated Reporting Council (IIRC): International Integrated Reporting Framework

Certifications: FSSC 22000

Sustainable Products & Innovation

• Granola Plus
• Thin Potato
• Potato Deluxe
• Cal-bits Frugra
• Japota

Environmental Metrics

ESG Focus Areas

• Food safety
• Health-conscious lifestyles
• Sustainable agriculture
• Sustainable raw material and logistics
• Environmental protection
• Community engagement
• Employee diversity and inclusion
• Corporate governance

Environmental Achievements

• Scope 1 emissions reduced by 2.3%
• Scope 2 emissions reduced by 17.3%
• 4.3% reduction in total waste generated (compared with FY2019/3)
• Began purchase of mass balance certified palm oil (July 2021)

Social Achievements

• Increased female manager ratio to 21.8% (April 2021)
• 107,714 participants in food communications activities (since 2020)
• 2.58% rate of employment of people with disabilities

Governance Achievements

• Establishment of corporate governance organizations and frameworks
• Bolster compliance and risk management

Climate Goals & Targets

Environmental Challenges

• Climate change impact on potato crops
• Decreasing number of potato farmers
• Labor shortages
• Rising health consciousness and changing consumer needs
• COVID-19 pandemic impact on sales

Mitigation Strategies

• Development of climate-resistant potato varieties
• Decentralization of potato production areas
• Support for potato cultivation and harvesting
• Automation of potato processing
• AI utilization for production line optimization
• Expanding e-commerce
• Developing healthier snack options
• Developing new products and sales opportunities

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Sustainable, environmentally conscious procurement; Stable procurement of potatoes; Promote development of potato varieties and scientific cultivation; Reduce agricultural labor; Disperse production areas and diversify suppliers; Use of certified palm oil

Climate-Related Risks & Opportunities

Physical Risks

• Climate change impact on potato crops

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: RSPO supply chain certification (March 2021)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Thin Potato chips
• miino bean-based snacks
• Karitto Ringo apple-based snacks
• Frugra Less Carbohydrates cereal
• Granola Plus cereal
• Frugra Bits cereal
• Frugra Bits Box for Rolling Stock emergency ration product

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Contribute to healthy and diverse lifestyles
• Progress of sustainable agriculture
• Co-create a sustainable supply chain
• Caring for the earth
• Promote active roles for all employees based on diversity

Environmental Achievements

• Reduced petroleum-based plastic packaging (40.4-ton reduction compared with FY2019/3)
• Switched all domestic factories to certified palm oil using the mass balance method in April 2022
• Displayed the RSPO Label on sixteen products as of July 2023

Social Achievements

• Launched Body Granola, a direct-to-consumer sales service that tests consumers’ intestinal flora and provides a tailored granola product based on the findings in April 2023
• Launched Calbee New Workstyle for office staff in 2020, empowering them to choose the location and hours of their work
• Implemented the Core Employee Globalization Program and the Global Mindset Building Program in FY2023

Governance Achievements

• Adopted a corporate governance system with a majority of outside directors and an executive officer system to separate business execution and supervisory functions
• Conducted an annual assessment to evaluate the effectiveness of its Board of Directors
• Formulated Calbee’s Corporate Governance Code

Climate Goals & Targets

Environmental Challenges

• Declining demand due to low birthrate and aging population
• Potato procurement jeopardized by natural disasters and declining number of farmers
• Soaring cost of raw materials, energy, etc.
• Reduced consumer confidence due to inflation
• Insufficient investment of resources in new growth fields due to excessive allocation of resources domestically
• Business base and initiatives were insufficient to enact reforms due to a conservative, inward-facing corporate culture and weak ability to effect change
• Excessive number of SKUs and insufficient production capacity in domestic core businesses

Mitigation Strategies

• Change 2025 three-year transformation plan focusing on strengthening profitability in domestic business, transforming business portfolio, and strengthening business foundation
• Reducing SKUs by about 200 to 300
• Building a new Setouchi Hiroshima Factory scheduled to begin operations in FY2025
• Investing in marketing and branding to properly convey value to customers
• Optimizing sales, operation, and supply to maximize profits
• Proactive resource investment in overseas markets (North America and China), agribusiness, and food and health
• Developing and strengthening human resources
• Leveling up sustainability management

Supply Chain Management

Supplier Audits: 53 major suppliers evaluated in 2022

Responsible Procurement

• Calbee Group Procurement Policy (respecting human rights and conserving/protecting the environment)
• Use of certified palm oil

Climate-Related Risks & Opportunities

Physical Risks

• Intensifying natural disasters causing damage to factories and raw materials production areas
• Insufficient hours of sunlight impacting potato yields

Transition Risks

• Increase in carbon pricing
• Changes in customer behavior due to increasing environmental awareness
• Regulations on petroleum-derived plastics

Opportunities

• Development of products to address ethical consumption
• Conversion to packages that utilize environmentally friendly materials
• Development of and conversion to potato varieties that can respond to climate change
• Discovery of sustainable raw materials and development of products that utilize them

Reporting Standards

Frameworks Used: TCFD

Certifications: RSPO

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Products with RSPO Label, products using biomass PET packaging

Awards & Recognition

Not disclosed

Environmental Metrics

ESG Focus Areas

• Contribute to healthy and diverse lifestyles
• Progress of sustainable agriculture
• Co-create a sustainable supply chain
• Caring for the Earth
• Promote active roles for all employees based on diversity

Environmental Achievements

• Reduced Scope 1 and 2 emissions by 27.5% in FY2023/3
• Completed switch to certified palm oil at all factories in Japan by April 2022
• Displayed RSPO label on 30 products by March 31, 2024
• Reduced total product food loss by 10.6% compared with FY2019/3

Social Achievements

• Launched Body Granola, a personalized granola service tailored to individual intestinal flora in April 2023
• Increased ratio of women in management to 22.6% in FY2024/3
• Food communication participants 416,384 people in FY2024/3
• Increased amount of protein-rich products sold by 111.8% compared with FY2023/3
• Increased amount of salt-free/low-salt/reduced-salt products sold by 110.1% compared with FY2023/3

Governance Achievements

• Established the Calbee Group Human Rights Policy in March 2024
• Endorsed the UN Global Compact

Climate Goals & Targets

Environmental Challenges

• Declining birthrate and aging population in Japan impacting domestic market demand
• Shrinking workforce in Japan
• Potato supply risks due to natural disasters and fewer producers
• Increased raw material, energy, and logistics costs
• Reduced consumer spending due to inflation
• Climate change impacting potato crops
• Challenges in North America (sluggish OEM business) and China (business standstill due to customs regulations)
• Excessive number of SKUs (Stock Keeping Units)

Mitigation Strategies

• Price and specification revisions to absorb rising costs
• Unified production and sales organizations into a region-based system
• Developing a new Sales & Operations Planning (S&OP) system
• Expanding the sweet potato business
• Developing new potato varieties resistant to climate change and pests
• Developing a contractor business to support farmers
• Investing in new business models in Agri-business and Food and Health
• Improving the efficiency of existing facilities in North America
• Promoting local manufacturing on an OEM basis in China
• Using Thailand as a global production hub
• Expanding production lines and making strategic investments in Indonesia
• Streamlining the range of SKUs and focusing on higher-value products
• Advancing digital transformation (DX) initiatives

Supply Chain Management

Responsible Procurement

• Promoting procurement that takes into account the environment and human rights through supply chain assessments
• Switching to RSPO-certified palm oil
• Engaging with oil suppliers to build a due diligence system

Climate-Related Risks & Opportunities

Physical Risks

• Insufficient yields and quality degradation of potato crops due to weather instability

Transition Risks

• Carbon tax introduction

Opportunities

• Measures against global warming and the preservation of natural capital

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IIRC), TCFD recommendations

Certifications: FSSC 22000

Sustainable Products & Innovation

• Body Granola
• Products with RSPO-certified palm oil
• Super Thin Potato Chips (using proprietary production method)

Environmental Metrics

ESG Focus Areas

• Greenhouse gas emissions reduction
• Water consumption reduction
• Product food loss reduction
• Workforce diversity (women in management)
• Community engagement (Calbee Snack School)

Environmental Achievements

• Scope 1 greenhouse gas emissions reduced by 11.6%
• Scope 2 greenhouse gas emissions reduced by 57.3%
• Total water consumption reduction rate of -3.8%
• Product food loss reduction rate of -10.6%

Social Achievements

• Increase in the ratio of women in management to 22.6%
• Calbee Snack School reached 416,000 participants (five-year cumulative)

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed