Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Resource Conservation
• Environmental Conservation
• Human Rights
• Work-style Reform
• Health and Productivity Management
• Corporate Governance
• Compliance

Environmental Achievements

• Launched the “My SDGs Declaration” project
• Established the Sustainability Promotion Department
• Announced support for TCFD recommendations and clarified the Company’s disclosure policy
• Reduced energy consumption by 17% at the Kitakyushu Animal Feed Factory
• Successfully realized fully-farmed Pacific bluefin tuna
• Developed low fish meal feed for trout
• Developed Feed Care, synthetic milk for pigs

Social Achievements

• Introduced a life event system and a pair transfer system for employees
• Increased the number of users for existing systems, such as the job return system
• Introduced a health and productivity management app
• Released the Health and Productivity Management Strategy Map
• Increased the ratio of female employees to 22.4%
• Disclosed the Human Rights Policy
• Held food and nutrition seminars for students
• Provided genomic analysis service for dairy cows
• Developed dedicated feed for automatic milking system (AMS)

Governance Achievements

• Established the ESG Committee
• Complied with all the principles of Japan’s Corporate Governance Code
• Established a structure for the Board of Directors with five External Directors
• Introduced an executive officer system
• Adopted the Board of Corporate Auditors system
• Established the Nomination and Remuneration Committee

Climate Goals & Targets

Environmental Challenges

• Escalating raw material costs
• Escalation in energy and distribution costs
• Labor crunch
• Changes in the business environment
• Market price fluctuations
• Environmental concerns about the livestock industry
• COVID-19 pandemic impact on overseas businesses
• Competition in the aquatic feed market
• Shortage of human resources in the livestock industry

Mitigation Strategies

• Strengthening procurement capability
• Securing procurement routes independent of the United States
• Utilizing domestic raw materials
• Developing high value-added products and services
• Reducing environmental footprints
• Reducing manpower and labor for users
• Improving profitability
• Overhauling marketing strategy in Vietnam
• Boosting profits by making manufacturing processes more efficient
• Implementing improvement measures for achieving targets
• Introducing energy-saving equipment
• Utilizing IoT technology
• Visualizing waste volumes at factories
• Providing genomic analysis service for dairy cows
• Marketing feed specifically for automatic milking
• Research into switching from raw to formula feed for Pacific bluefin tuna
• Developing low fish meal and fish meal-free feeds
• Developing products that contribute to the growth of young livestock
• Strengthening global raw material procurement network
• Establishing an optimal supply structure
• Developing frozen food products
• Increasing the numbers of seconded employees and local sales staff members in India
• Preparing production facilities for supplying flake feed for dairy cattle in Vietnam
• Implementing a sustainability-linked loan
• Establishing a capital efficient management framework
• Improving and expanding disclosure information and initiatives related to climate change
• Formulating a roadmap and action plan for CO2 emission reduction
• Gaining an understanding of Scope 3 emission volumes

Supply Chain Management

Responsible Procurement

• Securing stable supplies through partnership with Mitsui & Co., Ltd.
• Diversifying producers
• Using domestic feed rice
• Developing low fish meal and fish meal-free feeds
• Monitoring the supply condition of producers

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters (typhoons, floods)
• Heat stress impacting livestock and farmed fish

Transition Risks

• Carbon tax implementation
• Shift in demand toward sustainability-conscious products
• Rising raw material costs

Opportunities

• Reduced energy usage
• Development and sale of sustainable feeds

Reporting Standards

Frameworks Used: IIRC

Certifications: ISO 22000, ISO 9001 (discontinued in FY2021)

UN Sustainable Development Goals

• Goal 7
• Goal 12
• Goal 13
• Goal 8
• Goal 17

Initiatives contribute to these goals through various environmental, social, and governance efforts

Sustainable Products & Innovation

• Feed Care
• Low fish meal feeds
• Feed to reduce methane emission from cattle

Awards & Recognition

• 2021 and 2022 Certified Health & Productivity Management Outstanding Organizations Recognition Program
• Yokohama Health and Productivity Management Certification 2021 (Class AA), 2022 (Class AAA)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Resource Conservation
• Environmental Conservation
• Biodiversity
• Human Rights
• Work-style Reforms
• Health and Productivity Management
• Corporate Governance

Environmental Achievements

• Installed LNG-based cogeneration systems at Kitakyushu Animal Feed Factory and Kitakyushu Aquatic Feed Factory to improve energy efficiency.
• Developed a high-performance fish meal-free feed for red sea bream.
• Launched Madai DP Sustena ZERO, a fish meal-free feed for red sea bream.
• Developed low fish meal feeds for trout and sea bream.
• Supported the production of organic livestock products using organic JAS-certified feed.
• Reduced rendering shipment volume and food packaging materials.

Social Achievements

• Implemented the first base pay increase since the company's foundation.
• Improved paid leave utilization rates and reduced overtime.
• Increased the ratio of female full-time employees to 20%.
• Maintained 100% female childcare leave uptake and increased male uptake to 34.8%.
• Introduced pair transfer and life event systems.
• Held food and nutrition seminars for the young generation.
• Implemented a work experience program for middle and high school students.
• Introduced genomic analysis service for dairy cows.
• Instituted the Human Rights Policy.

Governance Achievements

• Established the ESG Committee.
• Declared support for TCFD recommendations and disclosed a TCFD report.
• Appointed five External Directors and two External Corporate Auditors.
• Established the Nomination and Remuneration Committee.

Climate Goals & Targets

Environmental Challenges

• Significant increase in cost of sales due to rising energy and raw material prices (corn and fish meal).
• Unstable supply of raw materials due to geopolitical risks and weather events.
• High market prices for livestock products (pork and eggs).
• Increased reserve contributions to the Formula Feed Price Stabilization System.
• Chronic labor shortages.
• Depreciation of the yen against the dollar.
• Risk of disease outbreaks in livestock and farmed fish.
• Climate change risks (physical and transition risks).

Mitigation Strategies

• Revised sales prices to reflect changes in raw material prices.
• Worked to reduce costs.
• Strengthened relationships with business partners and diversified producers.
• Developed and expanded sales of sustainable feeds (low fish meal and fish meal-free feeds).
• Implemented energy-saving measures (LNG cogeneration, boiler pressure regulators, LED lighting).
• Strengthened efforts towards logistics efficiency enhancements (tank level monitoring systems).
• Developed a business continuity plan (BCP).
• Secured long-term sustainability-linked loans.
• Accumulated cash and deposits and secured commitment line agreements.
• Implemented human rights due diligence and formulated action policies.

Supply Chain Management

Responsible Procurement

• Procuring competitively priced, profitable raw materials from various domestic and international sources.
• Communicating procurement policies to suppliers.
• Assessing human rights risks within the supply chain.

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters (typhoons, floods, landslides) impacting livestock farmers, farms, and factories.
• Heat stress impacting livestock and farmed fish.

Transition Risks

• Rising cost of carbon tax.
• Shift in demand toward sustainability-conscious, plant-based meat alternatives.

Opportunities

• Increased demand for sustainable feed and use of sustainable raw materials.
• Improved energy efficiency through IoT technology.

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IIRC)

Certifications: FSMS (Food Safety Management System), JAS organic standards

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)
• Goal 8 (Decent work and economic growth)
• Goal 17 (Partnerships for the goals)

Various initiatives contribute to these goals through environmental conservation, resource recycling, climate change mitigation, human rights respect, and collaborations with various stakeholders.

Sustainable Products & Innovation

• Low fish meal and fish meal-free feeds.
• Feed to reduce methane emission from cattle.
• Feed to reduce manure.

Awards & Recognition

• Certified Health & Productivity Management Outstanding Organizations Recognition Program (2021, 2022, 2023)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Resource Conservation
• Biodiversity
• Human Rights
• Employee Well-being
• Corporate Governance

Environmental Achievements

• Adopted renewable energy at our manufacturing sites (Kitakyushu Aquatic Feed Factory in April 2024)
• Installed an automated control device in the steam system at the Chita Factory to reduce heat loss.
• Installed a heat pump at Shibushishiryo Co., Ltd. to reduce fuel consumption.
• Launched Sustena ZERO, a fishmeal-free feed.
• First in Japan to adopt GreenFeed methane measurement system to research feed that lowers cattle methane emissions.

Social Achievements

• Improved employee wellbeing through various initiatives (85.9% of employees like the company, 77.9% find their work fulfilling).
• Implemented work style reforms, including staggered working hours, telecommuting, and support for employees with childcare and nursing care responsibilities.
• Increased wages by more than 12% over two years for non-management employees.
• Promoting women's participation through the Women Shine at FEED ONE Project.

Governance Achievements

• Established a Sustainability Committee (formerly ESG Committee) to oversee sustainability initiatives.
• Transitioned to a company with an Audit and Supervisory Committee.
• Introduced a stock-based remuneration plan for internal directors.
• Revised the remuneration system to link performance to short-term and long-term goals, including ESG metrics.

Climate Goals & Targets

Environmental Challenges

• Aging of production facilities.
• Human capital management (outdated practices, labor shortages).
• Digital transformation of business.
• Developing environmentally friendly feed and expanding sales.
• Volatility in raw material prices.
• Supply chain disruptions due to geopolitical risks and climate events.
• Declining domestic farming population.
• Rising awareness of food safety and ethical consumption.
• Human rights risks in the supply chain.

Mitigation Strategies

• Planned 80 billion yen investment in Phase 2 for facility upgrades, human capital development, and R&D.
• Implementing digital technologies (new backbone system, sales activity management system).
• Researching and developing feed that reduces methane emissions and fishmeal usage.
• Diversifying raw material supply sources.
• Using domestically produced raw materials.
• Strengthening HSE measures.
• Promoting labor-saving measures.
• Implementing a business continuity plan.
• Conducting human rights due diligence.

Supply Chain Management

Supplier Audits: 20/year (FY2022 & FY2023)

Responsible Procurement

• Sustainable Supply Chain Policy

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters impacting livestock farmers and farms, disruptions to distribution networks.
• Impact on livestock and farmed fish from rising sea water temperatures.

Transition Risks

• Rising costs from carbon tax introduction.
• Shift in demand toward plant-based meat.

Opportunities

• Development of energy-efficient products.
• Development and sales of sustainable feed.
• Expansion of land-based recirculating aquaculture.

Reporting Standards

Frameworks Used: Integrated Reporting Framework (IFRS Foundation), Guidance for Collaborative Value Creation (METI)

Certifications: ISO 22000 (feed factories), ISO 22000/FSSC 22000 (food companies), ISO/IEC 17025 (Research & Development Center)

UN Sustainable Development Goals

• Goal 2 (Zero Hunger)
• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 15 (Life on Land)

The company's initiatives contribute to these goals through sustainable feed production, renewable energy adoption, responsible resource management, and human rights respect.

Sustainable Products & Innovation

• Sustena ZERO (fishmeal-free feed)
• Feed to reduce methane emissions from cattle (under development)
• Nori Nori Pork (feed for improving thin-fat pork)

Awards & Recognition

• 2024 IPPS Award (Nori Nori Pork)
• Three-star rating in the 5th Nikkei SDGs Management Survey
• Selected as an organization having outstanding health and productivity management (large company category)