Onward Holdings Co., Ltd.
Climate Impact & Sustainability Data (2022, 2023-03 to 2024-02)
Reporting Period: 2022
Environmental Metrics
Total Carbon Emissions:4,411 thousand tons CO2e
Scope 3 Emissions:3,689 thousand tons CO2e
Renewable Energy Share:17%
ESG Focus Areas
- Health and Well-Being
- Community Engagement
- The Environment
- Responsible Alcohol Producer
Environmental Achievements
- Reduced GHG emissions by 13% (Scope 1+2) and 12% (Scope 3) from 2019.
- Achieved 100% renewable energy at several plants.
- Received SBT’s net zero certification.
- Launched XXXX Zero, the first carbon-neutral alcohol-free beer.
Social Achievements
- Launched Kirin Oishii Immune Care to expand the immune care market.
- Renewed KIRIN naturals service for corporate consumers.
- Actively promoted support for rare and intractable diseases.
- Strengthened human rights initiatives in its global supply chain.
Governance Achievements
- Increased frequency of Group CSV Committee meetings (from one to three times a year).
- Established a regular CSV staff meeting.
- Established the Group Environmental Meeting.
- Linked non-financial targets to Senior Executive Officers' remuneration.
Climate Goals & Targets
Long-term Goals:
- Net zero emissions by 2050.
Medium-term Goals:
- Generate positive free cash flow in FY2024 (Health Science domain); achieve 50% reduction in Scope 1+2 GHG emissions and 30% reduction in Scope 3 GHG emissions by 2030; 100% renewable energy by 2040; 50% recycled materials in PET bottles by 2027.
Short-term Goals:
- Improve shareholder value by growing normalized EPS; ROIC of 10% by 2024; average annual growth rate of at least 11% in Normalized EPS by 2024.
Environmental Challenges
- Soaring raw materials and fuel prices.
- Changes in market environment and consumer preferences.
- Geopolitical risks.
- Pressure to lower medical costs.
- Supply chain disruptions.
- Risk of not being able to provide differentiated products and services related to social issues.
- Risk of delayed response to changes in the external environment.
Mitigation Strategies
- Improved profitability through productivity improvements and product price revisions.
- Strengthened brand system and expanded products/services with new value propositions.
- Implemented initiatives to spur market uptake and expand business reach.
- Strengthened product quality assurance system and stable production and supply system.
- Improved supply and demand forecasts, strengthened logistics capacity, and considered alternative strategies.
- Accelerated collaboration and synergies within the Group.
- Enhanced organizational capability and strengthened governance.
Supply Chain Management
Responsible Procurement
- Kirin Group Sustainable Supplier Code
Climate-Related Risks & Opportunities
Physical Risks
- Decline in yields of barley due to extreme weather; shutdowns due to floods and droughts.
Transition Risks
- Carbon pricing; financial impact of carbon pricing.
Opportunities
- Development of energy-efficient products; expansion of immune & health supplement markets; drinks for heatstroke prevention.
Reporting Standards
Frameworks Used: TCFD
Certifications: SBT net zero
Sustainable Products & Innovation
- XXXX Zero; Kirin iMUSE Morning Immune Care; Kirin Nama-cha (label-free); SPRING VALLEY Silk Ale [White]; Kirin GREENS FREE; Mercian Wines.
Awards & Recognition
- AA rating in MSCI ESG Ratings; A-List in CDP's climate change and water security ratings; highest overall ranking in Nikkei SDGs Management Survey; SDGs Strategy and Economic Value Award at Nikkei SDGs Management Grand Prix; 46th Kinoshita Award for Packaging Technology; gold awards at 46th Challenge International du Vin 2022; highest score for a Japanese wine at International Wine Challenge (IWC) 2022; 26th Ando Hyakufuku Award; Agricultural Chemistry Technology Award; 2022 Award for Female Corporate Researcher in Agricultural Chemistry; 2021 Research Encouragement Award from the Japanese Society of Anti-aging Medicine; Topic Award.
Reporting Period: 2023-03 to 2024-02
Environmental Metrics
Total Carbon Emissions:203,930 tCO2e/year
Scope 1 Emissions:1,187 tCO2e/year
Scope 2 Emissions:5,522 tCO2e/year
Scope 3 Emissions:197,221 tCO2e/year
ESG Focus Areas
- Environmental
- Social
- Governance
Environmental Achievements
- Reduced GHG emissions (Scope 1 and 2) by 45.7% and 52.2% respectively compared to FY02/20.
- Reduced Scope 3 emissions by 14.5% compared to FY02/20.
- Improved clothing item circulation rate to 9.2% in FY02/24 from 5.8% in FY02/20.
- Introduced PLM system in 25 partner companies to improve traceability.
Social Achievements
- Increased proportion of male employees taking childcare leave to 66.7% in FY02/24.
- Increased ratio of female employees in leadership positions to approximately 30% as of the beginning of FY02/25.
- Awarded “Best Workplace” in the “D&I Awards 2023” for initiatives in empowering female employees and supporting work-life balance.
- Implemented a 10% average salary increase for 2,500 sales staff.
Governance Achievements
- Established Sustainability Committee to promote sustainability initiatives.
- Endorsed TCFD recommendations in 2022.
- Appointed two female executive officers in FY02/25.
- Improved ROE and ROIC to 8.6% and 6.9% respectively as of FY02/24.
Climate Goals & Targets
Long-term Goals:
- Effectively zero emissions in Scope 1 and 2 by FY02/51.
Medium-term Goals:
- Achieve net sales of ¥300 billion and operating profit of ¥25 billion by FY02/31.
- 50% reduction in Scope 1 and 2 GHG emissions by FY02/31 (compared with FY02/20).
- 20% reduction in Scope 3 GHG emissions by FY02/31 (compared with FY02/20).
Short-term Goals:
- Increase Onward Members to 10 million by FY02/31.
- Achieve ¥100 billion in e-commerce sales by FY02/31.
- Achieve ¥30 billion or more in overseas business sales by FY02/31.
Environmental Challenges
- Declining population and limited expansion potential in the Japanese fashion industry.
- Risks associated with changing intellectual property rights, overseas operations, consumer needs, weather conditions, and business partners.
- Climate change risks (carbon tax, increased costs due to renewable energy, stricter regulations).
- Maintaining profitability while expanding overseas business.
Mitigation Strategies
- Expansion of e-commerce, effective use of M&A, and efficient overseas business development.
- Strengthening growth infrastructure for overseas business, focusing on profits.
- Implementing appropriate business risk management to avoid and mitigate risks.
- Promoting loss-free production system, high-efficiency distribution system, and sustainable products.
Supply Chain Management
Supplier Audits: 173 audits in FY02/17, 51 in FY02/24; 94% pass rate in FY02/24.
Responsible Procurement
- Suppliers’ Code of Conduct based on international standards.
- Sustainable procurement of materials.
Climate-Related Risks & Opportunities
Physical Risks
- Increased natural disasters
- Sea level rise
- Changes in rainfall
- Average temperature increase
- Damage due to store closures
Transition Risks
- Carbon tax
- Increased costs due to renewable energy
- Stricter GHG emissions controls
- Decreased demand for non-environmentally conscious products
Opportunities
- Reduced energy consumption through new technologies
- Increased demand for recycled products
- Creating new businesses through increased clothing item collection
Reporting Standards
Frameworks Used: Guidance for Collaborative Value Creation 2.0 (Ministry of Economy, Trade and Industry), Integrated Reporting Framework (IFRS Foundation)
Sustainable Products & Innovation
- Made-to-order suits (KASHIYAMA)
- Products using recycled materials (e.g., Doutor Coffee uniforms)
Awards & Recognition
- Best Workplace, D&I Awards 2023