Climate Change Data

FREUND CORPORATION

Climate Impact & Sustainability Data (2022-03 to 2023-02, 2023-03 to 2024-02, 2025-2027)

Reporting Period: 2022-03 to 2023-02

Environmental Metrics

ESG Focus Areas

  • Sustainability
  • Diversity & Inclusion (D&I)
  • Food safety
  • Human rights

Environmental Achievements

  • Developed eco-conscious food preservatives
  • Initiatives to reduce food loss by extending the best-before period of bread

Social Achievements

  • Revised human resources system focusing on employee growth and development
  • Introduced Restricted Stock Unit Plan for Executive Directors
  • Collaboration with Japan Institute of Baking on bread preservation
  • Promotion of Diversity and Inclusion (D&I) activities

Climate Goals & Targets

Environmental Challenges

  • Pricing competition
  • Raw materials procurement
  • Industry trends
  • Foreign exchange fluctuations
  • Human resources
  • Business partner relationships
  • Impairment risk for non-current assets
  • Client company credibility
  • Intellectual property
  • Product liability
  • Public regulations
  • Information leakage
  • Natural disasters
  • Overseas business operational risks
  • COVID-19 related risks
  • Supply chain disruptions
  • Rising raw material prices
  • Labor shortage (especially in the U.S.)
  • Prolonged lead times
  • Decreased profit margins
Mitigation Strategies
  • Strengthening sales capabilities
  • Improving structure to respond to client needs
  • Global structure improvement
  • Expanding into India and Italy
  • Establishing a joint venture in China (Shanghai FC Center)
  • Strengthening understanding of country/region conditions
  • Drafting strategies and monitoring individual transactions
  • Risk management system
  • Compliance and Risk Management Committee
  • Internal Control Committee
  • Organizational restructuring (March 1, 2023)
  • Establishment of Quality Assurance Division
  • Uniforming quality assurance functions

Supply Chain Management

Climate-Related Risks & Opportunities

UN Sustainable Development Goals

  • Goal 3: Good Health and Well-being
  • Goal 2: Zero Hunger
  • Goal 9: Industry, Innovation and Infrastructure
  • Goal 12: Responsible Consumption and Production

Initiatives related to food safety, health foods, sustainable products, and reduction of food loss contribute to these goals.

Sustainable Products & Innovation

  • Eco-conscious food preservatives

Reporting Period: 2023-03 to 2024-02

Environmental Metrics

Total Carbon Emissions:Not disclosed
Scope 1 Emissions:Not disclosed
Scope 2 Emissions:Not disclosed
Scope 3 Emissions:Not disclosed
Renewable Energy Share:Not disclosed
Total Energy Consumption:Not disclosed
Water Consumption:Not disclosed
Waste Generated:Not disclosed
Carbon Intensity:Not disclosed

ESG Focus Areas

  • Environment
  • Social
  • Governance
  • Diversity & Inclusion

Environmental Achievements

  • Commenced a modal shift in the transportation of pharmaceutical excipients, reducing greenhouse gas emissions by approximately 5.8 tons p.a., or 70%.

Social Achievements

  • Launched products conscious of environmental issues; strengthened development of orally disintegrating tablet (ODT) related products for easier drug ingestion; developed industry’s first safe drug ingestion concept involving a new generation tablet printing/inspection machine and specialized inks to prevent medical mistakes; using advanced drug formulation technologies to promote the function of effective food ingredients and enable easier ingestion in health foods; expanding aftersales service to help customers achieve stable operation of their production equipment; improving drivers’ work environments through modal shift.

Governance Achievements

  • Reorganized operations according to each business segment; established the Machinery Division; combined excipients and food preservatives development teams into the Development Section; implemented “ONE FREUND” initiative to visualize and share supply chain; strengthened understanding of conditions by country/region, drafting strategies, and monitoring individual transactions for overseas business expansion.

Climate Goals & Targets

Long-term Goals:
  • Consolidated net sales of ¥40 billion, operating profit of ¥3.2 billion, and an ROE of at least 10% by FY2033.
Medium-term Goals:
  • Consolidated net sales of ¥25 billion and operating profit of ¥1.6 billion by FY2026; invest approximately ¥5 billion in facilities, ¥2.5 billion in R&D, and ¥0.7 billion in human capital during the New Medium-term Management Plan period.
Short-term Goals:
  • Construct a new plant for pharmaceutical excipients by 2026

Environmental Challenges

  • Supply chain disruptions and raw material price increases (global markets excluding Japan); difficulties in procuring some parts and materials, such as semiconductors, increasing lead time from procurement to shipment; delays in raw material procurement causing problems related to changing suppliers and adjusting production; Japan’s “2024 problem” and a BCP perspective requiring supply chain platform rebuilding.
Mitigation Strategies
  • Strategic parts inventory to deliver to customers as planned; optimizing supply chain to reduce costs and maintain quality (food preservatives); constructing a new plant for pharmaceutical excipients by 2026 to improve quality management system and stable product supply; developing an overseas production and supply function; pursuing a modal shift in collaboration with MEDICEO CORPORATION; implementing “ONE FREUND” initiative to visualize and share supply chain.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement
  • Optimizing supply chain to reduce costs and maintain quality (food preservatives); rebuilding entire supply chain platform; working to change suppliers and adjust production accordingly.

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

  • Environmentally friendly food preservatives; new spherical granule excipient; direct compression tablet production excipients.

Awards & Recognition

  • Not disclosed

Reporting Period: 2025-2027

Environmental Metrics

Total Carbon Emissions:Not disclosed
Scope 1 Emissions:Not disclosed
Scope 2 Emissions:Not disclosed
Scope 3 Emissions:Not disclosed
Renewable Energy Share:Not disclosed
Total Energy Consumption:Not disclosed
Water Consumption:Not disclosed
Waste Generated:Not disclosed
Carbon Intensity:Not disclosed

ESG Focus Areas

  • Environment
  • Social
  • Governance

Environmental Achievements

  • Lowered greenhouse gas emissions by about 5.8 tons through the development and sale of environmentally responsible food preservatives (Antimold-Mild EF) with a biomass content ratio of over 80%.
  • Modal shift for shipments of pharmaceutical excipients.
  • Development of machinery and systems that use less labor and help protect the environment.

Social Achievements

  • Increased percentage of female managers from 14.7% to at least 20%.
  • Increased use of available childcare time off by men from 33% to at least 50%.
  • Granting restricted stock to increase employee participation in management.
  • Holding monthly "One Freund Meeting" to explain management's stance.
  • Implementing health management activities.

Governance Achievements

  • Not disclosed

Climate Goals & Targets

Long-term Goals:
  • Not disclosed
Medium-term Goals:
  • Increase the pace and magnitude of group synergies primarily involving sales, marketing and product strategies
  • Expansion of the coverage of business activities to more regions of the world
  • Supply a larger volume of products while making more improvements concerning quality, delivery times and cost
  • Ensure the trouble-free operation of Freund machinery and be a source of new value and solutions for customers
  • Stable supply and increased production of excipients (new factory scheduled for completion in spring 2026)
  • Combine drug formulation technologies to cut manufacturing expenses of customers (shorter production time)
  • Increase job satisfaction and motivation of employees and cut costs by making production operations more efficient
  • Use the Freund Group’s five-region global network to meet the increasingly diverse needs of customers, mainly in the pharmaceutical industries of emerging countries.
  • Move faster globally to be a source of solutions concerning batteries and energy
  • Further upgrade quality management and maintain a reliable supply of products
  • Make manufacturing operations less labor-intensive and more automated
  • Reduce time needed to develop drug formulations and make manufacturing operations more efficient
  • Lower food loss and protect the global environment
Short-term Goals:
  • Not disclosed

Environmental Challenges

  • Aggravating global environmental problems
  • Diversified work styles and lifestyles
  • Human resource management
  • Requirements for more rigorous governance and compliance
Mitigation Strategies
  • Develop machinery and systems that use less labor and help protect the environment
  • Modal shift for shipments of pharmaceutical excipients
  • Develop environmentally responsible food preservatives
  • Increase hiring of new graduates and people with prior work experience
  • Expansion of education and training programs
  • Job rotations to give people multitasking skills
  • Grant restricted stock (more sense of participation in management)
  • Hold One Freund Meeting (every month to explain stance of management)
  • Health management activities
  • Increase pct. of female managers from the current 14.7% to at least 20%
  • Increase use of available child care time off by men from the current 33% to at least 50%

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

  • Antimold-Mild EF
  • Tablet Coater "HICOATER HV"
  • Tablet Automatic Coating Tool "TACT"
  • Titration Image Automation System “HIPPO SCAN”

Awards & Recognition

  • Not disclosed