Climate Change Data

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
• Draft and implement 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)
• COVID-19 pandemic impacting sales and operations

Mitigation Strategies

• Diversified production sites for major ingredients such as tomatoes and carrots to stabilize procurement
• Created global procurement network
• Consolidated tomato primary processing centers in Europe, Australia, etc.
• Provided safe and secure products based on the concept of “Quality First”
• Consolidated production centers, expanded production capacity, improved production efficiency
• Optimized mix of in-house and outsourced manufacturing
• Used new logistics company F-LINE Corp. to construct an efficient logistics structure
• Created demand by selling Yasai Seikatsu 100 Smoothie and seasonal limited-time only series
• Developed new sales channels including EC and direct marketing
• Flexible demand/supply adjustments based on future environment predictions
• Develop sales tools to replace visitation-based sales
• Carefully select new products to launch and expand routes through EC and direct marketing
• Provide products that contribute to improved health and immune system
• Strengthen menu proposals to meet eat-at-home demand
• Offer virtual plant tours, etc. to create new opportunities for communication with consumers
• Conducted campaigns that generate demand for vegetables
• Engaged in various food education activities
• Engaged in communication with Kagome Fan Shareholders who make up consumers
• Strengthening of supply chain management
• Sustainable procurement
• Build an efficient logistics network on a nationwide scale
• Enhance product inventory capacity by using Kagome plant space
• Global dispersal of procurement sites
• Cost Competitiveness Improvement Project
• Develop value-added products, strengthen solutions proposal abilities and Group partnerships, develop new customers
• Diversify raw material centers, optimize processing scope, strengthen cost competitiveness, use climate data analysis to establish advanced tomato cultivation technology
• Farm management support business for commercial tomatoes based on AI developed in collaboration with NEC
• 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
• Implement additional measures, such as linking procurement prices to market prices and promoting cost reductions at agricultural sites
• Search for new vegetables and increase our processing formats
• Engage in open innovation and form external partnerships to increase the speed of our initiatives
• Address climate change risks by strengthening our platform for the stable provision of raw material vegetables and fresh produce in Japan

Supply Chain Management

Supplier Audits: Annual visits to major suppliers

Responsible Procurement

• Sustainable procurement
• Clearly communicating expectations to suppliers
• Establishing mid- to long-term transactions at appropriate prices

Climate-Related Risks & Opportunities

Physical Risks

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

Transition Risks

• Rising carbon taxes
• Changing consumer behavior

Opportunities

• Develop and sell vegetable varieties that can withstand climate change
• Roll out a tomato cultivation system worldwide that makes it possible to grow tomatoes with less water
• Shift to service business (Shift to service business unaffected by cost price fluctuations)

Reporting Standards

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

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 SDGs through sustainable agriculture, water conservation, biodiversity protection, promoting women's participation, improving water quality, and protecting water-related ecosystems.

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 Environmental Rating
• Certified Health and Productivity Management Organization White 500

Environmental Metrics

ESG Focus Areas

• Longer, healthier lives
• Agricultural development and regional revitalization
• Sustainable global environment

Environmental Achievements

• Reduced water intake per production volume by 1% at domestic plants in FY2021
• Achieved 100% renewable energy use at two plants in Japan and overseas as of January 2022
• Reduced CO2 emissions by implementing energy conservation measures and using renewable energy

Social Achievements

• Launched the Let’s Eat Vegetables Campaign in January 2020 to increase vegetable consumption
• Launched the Vegetable Intake Promotion Project in collaboration with 19 companies
• Increased female employees to 30.7% of the total workforce in FY2021

Governance Achievements

• Established the Enterprise Risk Management Committee in 2021
• Increased the ratio of external directors on the Board
• Established the Remuneration and Nomination Advisory Committee

Climate Goals & Targets

Environmental Challenges

• Difficult-to-predict market environment due to the COVID-19 pandemic
• Rising costs of raw ingredients, energy, and logistics
• Climate change impacting raw material procurement and production

Mitigation Strategies

• Close collaboration between sales, supply chain management, production, and procurement departments
• Developing and procuring proprietary raw materials to suppress costs
• Diversifying global procurement bases
• Investing in production for improved environmental performance
• Building a system to reduce logistics costs
• Implementing CO2 reduction initiatives to meet the Science Based Targets (SBT) initiative

Supply Chain Management

Responsible Procurement

• Kagome CSR Procurement Policy
• Kagome Supplier CSR Action Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Water stress

Transition Risks

• Rising carbon prices

Opportunities

• Development of climate-resilient vegetable varieties
• Development of water-efficient tomato 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

Sustainable Products & Innovation

• Hatakeumareno Yasashii Milk (plant-based milk)

Awards & Recognition

• A List company in CDP Climate Change 2021
• A List company in CDP Water Security 2021

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” initiative.
• Increased engagement survey score from 70 in 2021 to 70 in 2022.
• Implemented various training activities including team building exercises at HIT in Portugal.

Governance Achievements

• Established the Sustainability Committee and Enterprise Risk Management Committee.
• Revised the Code of Conduct.
• Introduced a Clawback & Malus clause.

Climate Goals & Targets

Environmental Challenges

• Rising prices of raw ingredients due to the situation in Ukraine, sharp depreciation of the yen, and declining yields of natural farm-produced ingredients resulting from climate change.
• Increased costs for packaging and energy.
• Shortage of raw ingredients attributed to sudden spikes in demand or shortages of seedlings or other raw ingredients.
• Declining scale and abandonment of cultivation of processing tomatoes caused by an aging agricultural workforce and labor shortages in Japan.
• Worldwide supply chain disruptions.
• Labor shortages in the logistics industry.
• Rising capital procurement costs or deteriorating liquidity caused by fluctuations in foreign exchange rates or interest rates.

Mitigation Strategies

• Implemented price revisions for approximately 150 consumer products and approximately 178 institutional and industrial use products.
• Implemented additional measures to reduce cost of sales and conducted promotions based on changes in the purchase behavior of customers.
• Further strengthened its expansive domestic and global procurement network and enhanced stable procurement capabilities.
• Increased planted area with mechanical harvesting and cultivation.
• Securing stable production and supplies of tomato paste by utilizing the resources of Group companies.
• Extending delivery lead time and product date labeling.
• Increased storage capacity at its plants.

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
• Increased CO2 reduction targets and initiatives to achieve them
• 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), TCFD

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

UN Sustainable Development Goals

• Goal 7
• Goal 13
• Goal 2
• Goal 3
• Goal 8
• Goal 12
• Goal 17

Kagome's initiatives contribute to these goals through sustainable agriculture, reduced environmental impacts, and social responsibility.

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 in 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