Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment, Health, and Safety (EHS)
• Social
• Governance

Environmental Achievements

• CO2 emissions decreased 0.2% compared to 2018 through efforts to increase the use of renewable energy.
• 20 production sites, Corporate Research & Development Division, and EHS Department at Headquarters acquired ISO 14001 certification.
• Synthetic menthol received USDA Certified Biobased Product certification.

Social Achievements

• Formulated a human rights policy and conducted Human Rights Due Diligence at all sites, confirming the absence of human rights violations.
• Launched various safety training programs (Takasago Safety Day) and initiatives to improve workplace safety.
• Engaged in community investment activities in various regions (e.g., mangrove planting, school donations).

Governance Achievements

• Implemented a Global SAP Project to integrate IT systems and unify workflows.
• Established a compliance hotline for reporting violations.
• Disclosed information on governance, risks and opportunities, strategy, and metrics and targets in line with TCFD recommendations.

Climate Goals & Targets

Environmental Challenges

• Increase in raw materials prices impacting profitability.
• Global tightness in raw materials.
• COVID-19 pandemic significantly hindering growth in the global economy.

Mitigation Strategies

• Addressed raw material price increases through procurement, production, and sales optimization.
• Implemented work from home arrangements and safety precautions to mitigate the impact of the COVID-19 pandemic.
• Developed alternative sourcing strategies.

Supply Chain Management

Supplier Audits: Around 180 major suppliers assessed on Sedex by 2019.

Responsible Procurement

• Corporate Procurement Policy
• Corporate Procurement Guidelines
• Takasago Supplier Code of Conduct
• TAKASOURCE (sustainability assessment tool)
• TaSuKI (sustainable sourcing initiative)

Climate-Related Risks & Opportunities

Physical Risks

• Heavy rains, floods
• Influences on supply chain including factory operations

Transition Risks

• Not disclosed

Opportunities

• Improvement of energy efficiency
• New products and technologies through innovation
• Development of low carbon products and technologies

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001, ISO 45001 (in progress)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• 3, 6, 7, 8, 9, 11, 12, 13, 15, 17

Various initiatives contribute to these goals through environmental conservation, responsible sourcing, human rights, community engagement, and innovation.

Sustainable Products & Innovation

• ℓ-Menthol (from renewable myrcene)
• Biomuguet®
• Biocyclamol®
• Dextramber®

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Rights
• Responsible Sourcing
• Digitalization
• Green Chemistry

Environmental Achievements

• 27.5% reduction of GHG emissions by 2030 vs 2019 (target)
• 1% reduction of water usage by 2022 (target)
• 0.5% reduction of waste generation by 2022 (target)
• Improved productivity by 12% by optimizing distillation conditions for aroma ingredients
• Reduced organic solvent usage by 48% in pharmaceutical intermediate manufacturing

Social Achievements

• Established Takasago Group Diversity Equity & Inclusion Policy in 2022
• Selected as a Health and Productivity Management Organization 2022
• Implemented various wellbeing initiatives in Brazil, Mexico, and Spain
• Strengthened partnerships with local communities in Madagascar and France for vanilla and lavandin production
• Implemented the Takasago Responsible Sourcing Policy, obtaining agreement forms from approximately 750 of 1,100 suppliers (68%)

Governance Achievements

• Established a compliance hotline
• Conducted SMETA ethical audits at 10 main manufacturing sites
• Implemented the Takasago Group Anti-Bribery Policy
• Regularly conducts evaluations of the effectiveness of its Board of Directors

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events (flooding of the Rhine River)
• Soaring raw material and energy prices
• Supply chain disruptions
• Global economic uncertainty
• Severe competitive environment in the flavor and fragrance industry

Mitigation Strategies

• Formulating Business Continuity Plans (BCPs)
• Strengthening business continuity management
• Improving energy efficiency
• Strengthening supply chain resilience
• Implementing various measures to increase operating income
• Developing alternative sourcing strategies
• Implementing a Global SAP Project for core system integration

Supply Chain Management

Supplier Audits: Approximately 260 suppliers linked with Sedex (2023)

Responsible Procurement

• Takasago Responsible Sourcing Policy
• Takasago Group Supplier Code of Conduct
• Corporate Procurement Policy
• Corporate Procurement Guidelines
• SEDEX
• RSPO certifications

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Natural disasters

Transition Risks

• Changes in consumer preferences
• Changes in international and local regulations
• Geopolitical risks

Opportunities

• Development of low-carbon products and technologies
• Improving energy efficiency and profits by reducing the cost of energy
• Strengthening the resilience of our energy supply

Reporting Standards

Frameworks Used: GRI Standards, TCFD recommendations

Certifications: ISO 14001, ISO 45001, Greenhouse Gas Protocol (GHG) certification from SBTi

Third-party Assurance: Third-party assurance for GHG emissions

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation, and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

The report details how various initiatives contribute to these goals.

Sustainable Products & Innovation

• Vivid Flavors® Retroma™
• BIOSWITCH® aroma ingredients
• New Japanese herb fragrances

Awards & Recognition

• Best presentation award at the 2022 Annual Conference of the Japanese Society for Sensory Evaluation

Environmental Metrics

ESG Focus Areas

• Climate Change
• Safety
• Human Rights
• Responsible Procurement
• Digitalization
• Green Chemistry
• Diversity, Equity & Inclusion
• Local Communities

Environmental Achievements

• 4.7% decrease in GHG emissions compared with the base year (FY2019)
• 12.0% decrease in GHG emissions compared with the base year (FY2019)
• 4.0% decrease in water usage compared with the base year (FY2020)
• Waste generation intensity decreased 6.1% compared with the base year (FY2020)
• 1.34% of waste generated disposed to landfills (0.98% in the previous year)
• 24.6% of electricity from renewable energy sources

Social Achievements

• 73.7% of suppliers agreed to the Takasago Responsible Sourcing Policy
• Conducted group-wide human rights due diligence in 2023. No human rights violations were reported.
• Implemented a diversity and inclusion human rights e-learning program in 2023
• Held the 10th Takasago Safety Day in 2023
• Various community investment activities in Japan, Singapore, Spain, and Brazil

Governance Achievements

• Regular evaluations of the effectiveness of the Board of Directors
• Established a compliance hotline
• Conducted SMETAs at 10 manufacturing sites in 2023
• Implemented competition law e-learning training program for manager-level employees

Climate Goals & Targets

Environmental Challenges

• Climate change impacts on raw material availability and prices
• Supply chain disruptions due to geopolitical risks and natural disasters
• Maintaining biodiversity
• Reducing Scope 3 emissions
• Ensuring responsible procurement across a global supply chain
• Cybersecurity threats

Mitigation Strategies

• Formulating business continuity plans (BCPs)
• Strengthening business continuity management
• Supplier engagement activities, including collection of LCA information
• Implementing the Takasago Responsible Sourcing Policy
• Utilizing SEDEX platform for ethical audits
• Strengthening IT security measures, including multi-factor authentication and vulnerability assessments
• Regular security training and phishing email training for employees

Supply Chain Management

Supplier Audits: 300 suppliers linked via Sedex platform; SMETA audits conducted at 10 manufacturing sites

Responsible Procurement

• Takasago Responsible Sourcing Policy
• Takasago Group Supplier Code of Conduct
• Supplier engagement activities
• Use of Sedex platform
• Collaboration with third-party organizations for human rights due diligence

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Natural disasters

Transition Risks

• Changes in consumer preferences
• Changes in international and local regulations

Opportunities

• Improvement of energy efficiency
• Expanding sales of low-carbon products and technologies

Reporting Standards

Frameworks Used: GRI Standards, TCFD Recommendations, SBTi

Certifications: ISO 14001, ISO 45001, FSSC 22000, ISO 9001, RSPO

Third-party Assurance: Third-party assurance for GHG emissions and water withdrawal

UN Sustainable Development Goals

• Not disclosed

The Takasago Group’s business activities are aligned with many aspects of the United Nations Sustainable Development Goals (SDGs).

Sustainable Products & Innovation

• TAKAPS® 5G biodegradable fragrance capsule
• BIOSWITCH® bio-based and biodegradable aroma ingredients

Awards & Recognition

• Hot Topics Award at the 2024 Annual Meeting of Japan Society for Bioscience, Biotechnology, and Agrochemistry