Response to TCFD recommendations

Sustainability
Our priorities
Global environment
Response to TCFD recommendations

Working with society to create shared value

The Nisshin OilliO Group is dedicated to achieving sustainability—the sustainable growth of the Group and the sustainable advancement of society—by working with society to create shared value through solutions to societal issues. Because our business operations are based on plant resources, and because climate change has a significant impact on plant growth, responding to climate change is an important management theme. With that in mind, we endorsed the TCFD recommendations in March 2021, and since fiscal 2022, we have disclosed information through analysis of climate change-related risks and opportunities, financial impact simulations, and other aspects. In light of the recent development-oriented transfer of climate-related disclosure regulation duties from the TCFD to the ISSB, we will continue to enhance our disclosures related to climate change response and closely monitor upcoming trends in the introduction of IFRS S1 and S2 in Japan.

(1) Governance

Important management issues are deliberated and decided by the Board of Directors. Basic policies, strategies, and measures regarding climate change and other sustainability issues are approved by the Board of Directors after deliberation by the Management Sustainability Committee (“Sustainability Committee” through fiscal 2022; name changed in fiscal 2023) established by the Board of Directors. Notably, in fiscal 2022, the Management Sustainability Committee met twice and reported to the Board of Directors twice.
The Board of Directors is responsible for resolving climate change issues and supervising progress toward goals. The Board of Directors also collaborates with the Management Sustainability Committee to proactively resolve issues, obtaining sufficient insight from outside experts when necessary.
Incentives provided for contributions to resolving climate change issues are reflected in the payment standards for compensation for Officers (excluding Outside Directors) based on the extent to which ESG targets are achieved.
To address climate change, we have established Environmental Targets for 2030 as well as specialized departments (Sustainable Business Management and Environment Solutions Office).
In terms of separating supervision and execution, the Board of Directors is responsible for supervising climate-related issues, while departments, offices, Group companies, and other entities are responsible for implementing solutions for climate-related issues.

▼ Figure 1: Sustainability promotion structure (from the corporate governance structure chart)

1. Full-time Audit & Supervisory Board Members attend Management Sustainability Committee and Risk Management Committee meetings as well as Business Strategy Meetings as observers.
2. In addition to the above, meetings are established to ensure the effectiveness of audits, including regular information exchange and sharing between full-time Audit & Supervisory Board Members and corporate staff departments.
3. The Management Sustainability Committee comprises seven Directors and one Managing Officer, and is chaired by the Representative Director and President.

(2) Strategies

In fiscal 2021, the Group launched The Nisshin OilliO Group Vision 2030—our vision to be realized by 2030—and Value Up+, our medium-term management plan for the first four years of efforts toward achieving Vision 2030. Under Vision 2030, we will further utilize oils and fats based on plant resources—the core of the Group’s strengths—to drive growth and create diverse value in the form of good flavor, health, and beauty. To that end, we will strive to conserve and restore the global environment that underpins our business, and take steps to make the sustainability of raw materials as far-reaching as any other company. We are also looking to establish a long-term strategy to achieve carbon neutrality by 2050.

To further improve the resilience of these strategies, we are continually considering ways to identify, assess, and respond to climate-related risks and opportunities.
Our approach to these considerations is to start by identifying climate-related risks and opportunities, and then qualitatively evaluate their impact and other aspects before proceeding to more detailed analysis, taking into account the relative importance, availability of analytical data, and other factors.
In this series of processes, we consider how things will unfold by comparing two scenarios: a world where climate change is limited (a world where the global mean temperature increase since the Industrial Revolution is limited to around 1.5°C to 2°C (the 1.5°C/2°C scenario)) and a world where climate change continues to progress (a world where the global mean temperature increase since the Industrial Revolution is around 4°C or higher (the 4°C scenario)). In general, under the 1.5°C/2°C scenario, carbon taxes and other laws and regulations are strengthened and consumer preferences change notably, while under the 4°C scenario, climate change becomes more severe, and windstorms, floods, and other natural disasters increase in intensity and frequency.

(2-1) Identifying and assessing climate-related risks and opportunities

First, we identified short-, medium-, and long-term climate-related risks and opportunities for the Group and qualitatively assessed the financial implications thereof (Table 1).
Potential risks with significant impact on our business operations include increased costs due to carbon taxes, expenses from purchasing CO₂ allowances, increased capital investment costs associated with decarbonization, increased raw material procurement costs due to more prevalent sustainability-conscious buying behavior and more frequent and severe natural disasters, decreased sales due to declining consumer spending caused by dwindling product value, and decreased product supply capacity and sales when production plants are damaged.
Potential opportunities with significant impact on our business operations include reducing production costs through improved efficiency in energy, water, and other resources, and increasing sales by developing and selling products that accommodate changes in consumer and customer buying behavior.

▼ Table 1: List of climate-related risks and opportunities

Definition of terms

Timing: Indicates the shortest timeframe in which the risk/opportunity could occur. The timing is a qualitative judgment based on short-term meaning less than five years, medium-term meaning five to no more than 10 years, and long-term meaning 10 or more years. Notably, risks and opportunities that have already emerged are marked as short-term. This definition of timing is consistent with the timeframe of the Group’s management strategies (Value Up+ for short-term strategy through 2024, and The Nisshin OilliO Group Vision 2030 for medium-term strategy through 2030).
Likelihood: Indicates the likelihood or probability that the risk/opportunity will actually occur, rated qualitatively on one of three levels (high/medium/low). Notably, risks and opportunities that have already emerged are marked as high.
Impact: The extent to which the risk/opportunity, once realized, would affect the Company, primarily in terms of financial impact, rated qualitatively on one of three levels (large/medium/small).
★: Indicates a trial quantification of impact (in monetary terms).

Classifications			Financial impact	Impact	Likelihood	Timing
Classifications			Financial impact	Impact	Likelihood	Short-term	Medium-term	Long-term
Risks	Transition	Policy and legal	Higher carbon taxes could increase the cost of energy, containers, transportation, and the like. Additionally, introducing a corporate CO₂ emissions trading scheme could trigger expenses from purchasing allowances. (★)	Large	High
			Stricter traceability-related laws and regulations could result in greater demand for certified raw materials, causing raw material prices to increase, trigger capital investment expenses, increase administrative costs, and result in fines or negatively impact sales due to violations.	Medium	High
			Changes in the social environment caused by climate change and the impact of stricter laws and regulations could give rise to legal action in response to violations, deforestation, and human rights issues in the supply chain.	Medium	Low
			A shift away from conventional, environmentally taxing farming methods and an increase in land use regulation strictness could result in lower production volumes and higher labor costs, leading to higher raw material prices. (★)	Large	High
		Technology	The development and diffusion of decarbonization technologies could require businesses to introduce large-scale facilities to decarbonize production systems, increasing capital investment expenses. Additionally, investments might not be as effective as expected, and new breakthrough technologies might not be introduced due to lack of funds.	Large	High
		Market	The price of environmentally friendly raw materials—namely soy, rapeseed, and palm—could increase due to more prevalent sustainability-conscious buying behavior. Additionally, if sustainability cannot be guaranteed, sales could decrease due to declining consumer spending caused by dwindling product value.	Large	High
		Reputation	As ESG investments accelerate, the Group’s stock price or financing could stagnate if the Group’s ESG efforts are delayed or its disclosures are inadequate. Additionally, the unintended spread of rumors could reduce corporate value.	Medium	Low
	Physical	Acute	Areas where raw materials are produced could suffer due to increasingly frequent and severe natural disasters, reducing yields and causing raw material prices to soar. Additionally, if production plants are damaged, sales could decrease due to the temporary reduction in the production, sales, and logistics capacity. (★) Also, the unintended spread of rumors could reduce corporate value.	Large	High
	Physical	Chronic	Changes in weather patterns (e.g., rising temperatures, changes in precipitation) could negatively impact the growth of soy and palm, reducing production volumes and increasing raw material prices. These changes could also negatively impact the quality and safety of raw materials and the stability of the supply of products. Additionally, the unintended spread of rumors could reduce corporate value.	Large	Medium
Opportunities		Resource efficiency	Improved resource efficiency (e.g., introducing more efficient equipment in terms of energy and water consumption, advanced production management) could reduce production costs.	Large	High
		Resource efficiency	Promoting resource recycling by promoting plastic recycling and switching to containers made of bioplastics and plastic alternatives could help stabilize procurement for containers and packaging materials and add value to products, thereby improving customer assessment.	Medium	High
		Energy source	Selling products with lower CO₂ emissions (Scope 1 and 2) and promoting added value through the use of renewable energy could lead to greater satisfaction and increased sales to customers looking to reduce supply chain emissions.	Medium	High
		Markets of Products/services	Sales could increase through the development and sale of products (e.g., plant-based cosmetics, functional foods, certified palm oil) that accommodate changes in consumer and customer buying behavior (e.g., ethical consumption, health- and nature-oriented behavior).	Large	High
		Resilience	Widespread adoption of drought- and heat-tolerant agricultural products could stem reductions in raw material production volumes and supply instability due to climate-related damage (e.g., heat waves, droughts).	Medium	Medium
		Resilience	Strengthening the BCP—even if natural disasters become more frequent and severe due to climate change—could allow the Company to maintain its system for supplying products during emergencies, helping stabilize and increase sales, improving its social value, increasing its stock price, and facilitating fundraising.	Medium	High

Of the risks identified above, we have analyzed three in detail this year: (1) Changes in raw material yields and prices, (2) Cost increases due to carbon taxes, ETS, and the like, and (3) Decrease in profits due to shutdowns caused by meteorological disasters. For specific considerations, we referred to qualitative and quantitative information (e.g., grain price forecasts) under the scenarios published by the IPCC, IEA, FAO, NGFS, and other international organizations.

Abbreviations
IPCC: Intergovernmental Panel on Climate Change, an intergovernmental organization that aims to provide a scientific basis for national governments’ climate change policies.
IEA: International Energy Agency, an international organization established in the wake of the 1973 oil crisis to cover energy security and all other aspects of energy policy.
FAO: Food and Agriculture Organization of the United Nations, a UN agency that promotes food security and nutrition, agriculture (including crops, livestock, fisheries, and aquaculture), and rural development.
NGFS: Network for Greening the Financial System, an international network of central banks and financial supervisory agencies for considering financial supervisory responses to climate change risks.

(ⅰ) Changes in raw material yields and prices

First and foremost, the following table shows the projected changes in yields for each major raw material. Essentially, yields appear to trend upward for each raw material.

	Soy	Rapeseed	Palm	Cacao
Total global yield under the business-as-usual (BAU) scenario through 2050, indexed to the most recent results (2012 = 100)	143	150	158	126

Next, to understand the differences in impact under the 2°C and 4°C scenarios, we created Figure 2 using changes in yield per unit through 2050 under the 2°C and 4°C scenarios, indexed to the BAU scenario through 2050 (set to 100) from FAO. The legend in the upper right part of the figure shows the classifications.

▼ Figure 2: Risk of changes in raw material yields

* Analysis based on FAO yield scenario values.
* Locations on the map in North America, South America, and Southeast Asia do not refer to specific countries.

The analysis shows that yields will essentially increase worldwide through 2050; however, comparing the 2°C and 4°C scenarios to the BAU scenario, the analysis shows that soy and rapeseed yields will hold steady or increase in some areas under the 4°C scenario, but the yields for all raw materials will decrease in all areas under the 2°C scenario. This is presumably due to policy factors (e.g., land use regulations and restrictions on environmentally taxing farming methods) having a greater impact than worsening climate conditions in some regions and countries, despite the combined impact of the various factors included in the scenarios. Notably, in the future, we will consider demand trends as well as supply trends, and delve deeper into our analysis from both perspectives.

Regarding changes in the price of raw materials, the annual increase in procurement costs due to changes in soy prices between 2030 and 2050 was calculated for the United States and Brazil—major producers of soy, one of the main raw materials—using the NGFS 1.5°C scenario. Changes in prices under this scenario reflect the cost of carbon pricing and production efficiency improvements, and the calculations show the financial impact of transition risk.

▼ Table 2: Financial calculations of raw soy price increases due to decarbonization in agriculture

Scenario	Country	2030 procurement cost increase (billion yen/year)	2050 procurement cost increase (billion yen/year)
1.5°C	USA	13.1	21.0
1.5°C	Brazil	3.4	4.9

Financial impact of changes in prices based on mean annual purchase amount in 2020–2022

As for prices, the price of soy from both the United States and Brazil will increase under the 1.5°C scenario, representing the largest impact among risk items for which financial impacts were calculated (totaling ¥16.5 billion/year in 2030 and ¥25.9 billion/year in 2050). We plan to examine the impact of changes in the prices of rapeseed, palm oil, and other raw materials in the future.

(ⅱ) Cost increases due to carbon taxes, ETS, and the like

We used carbon pricing from the Announced Pledges Scenario (2.0°C) and the Net Zero Emissions by 2050 Scenario (1.5°C) in the IEA’s World Energy Outlook 2022 to calculate the annual financial burden posed by carbon pricing in 2030 and 2050 for both The Nisshin OilliO Group, Ltd. (Japan) and ISF (Malaysia), the largest greenhouse gas emitters in the Group. These two companies account for more than 96% of the Scope 1 and 2 emissions managed by the Group.

▼ Table 3: Financial calculations of cost increases due to carbon taxes, ETS, and the like

Scenario	In-house measures	Company name	2030 financial burden (billion yen/year)	2050 financial burden (billion yen/year)
2.0°C	Status quo	The Nisshin OilliO Group, Ltd.	2.7	4.0
	Status quo	ISF	0.84	3.3
	Achieving reduction targets	The Nisshin OilliO Group, Ltd.	1.6	0
	Achieving reduction targets	ISF	0.4	0
1.5°C	Status quo	The Nisshin OilliO Group, Ltd.	2.8	5.0
	Status quo	ISF	1.9	4.2
	Achieving reduction targets	The Nisshin OilliO Group, Ltd.	1.7	0
	Achieving reduction targets	ISF	0.91	0

Status quo: Calculated based on FY2022 CO₂ emissions
Achieving reduction targets: Calculated with a 50% reduction in emissions in 2030 (compared with 2016), zero emissions in 2050
Carbon pricing: See WEO 2022, IEA

	2030		2050
	2.0°C	1.5°C	2.0°C	1.5°C
The Nisshin OilliO Group, Ltd.	$135	$140	$200	$250
ISF	$40	$90	$160	$200

The above analysis of the risk of cost increases due to carbon taxes, ETS, and the like suggests that the financial burden in 2030 can be roughly halved by achieving the reduction targets under both the 2.0°C and 1.5°C scenarios. If the reduction targets are achieved, the total financial burden for the two companies in fiscal 2030 would be ¥2.0 billion/year under the 2.0°C scenario and ¥2.61 billion/year under the 1.5°C scenario.

(ⅲ) Decrease in profits due to shutdowns caused by meteorological disasters

For this analysis, we envisioned shutdowns of our domestic operations due to flooding. Additionally, since physical risks are long-term, the analysis only covers 2050. We calculated the annual decrease in operating profit due to shutdowns under the IPCC’s 4°C and 2°C scenarios.

▼ Table 4: Financial calculations of decrease in profits due to shutdowns caused by meteorological disasters

Scenario	Country	Annual decrease in operating profit due to shutdowns in 2050 (million yen/year)
4.0°C	Japan	176
2.0°C	Japan	132

Annual decrease in operating profit = Frequency of disasters x Number of shutdown days x Annual operating profit ÷ 245 days
The frequency of disasters is based on the number of occurrences of daily precipitation of 200 mm or more on the east side of East Japan (0.4 times/year under 4.0°C scenario; 0.3 times/year under 2.0°C scenario) according to “Climate Change in Japan 2020, Detailed Version” by the Ministry of Education, Culture, Sports, Science and Technology and the Japan Meteorological Agency.
The number of shutdown days is based on the corresponding figure (10 days) for below floor-level inundation according to the “Manual for Economic Evaluation of Flood Control Investment” by the Ministry of Land, Infrastructure, Transport and Tourism.

The above analysis of the risk of a decrease in profits due to shutdowns caused by meteorological disasters suggests that even under the 4.0°C scenario—considered to have a large impact from meteorological disasters—the impact is only 176 million yen/year, the smallest among the risk items for which financial impacts were calculated. For future analysis, we plan to consider expanding the number of countries and the impact of property damage (e.g., repair costs) resulting from disasters.

(2-2) Measures to address climate-related risks and opportunities

Given the risks and opportunities we have identified, we believe the impact will be substantial regardless of whether we move toward a world where climate change is limited or a world where climate change continues to progress, making it necessary to further enhance the resilience of the Group’s strategy for the medium and long term.
Accordingly, we will take the following measures to address risks and opportunities that substantially impact the Group’s business operations, from upstream to downstream in the supply chain. We believe these measures will help improve the resilience of the Group’s strategies.

▼ Table 5: Measures to address climate-related risks and opportunities

Process	Classifications	Detailed description	Risks/opportunities to address
			Transition risks				Physical risks		Opportunities
			Policy and legal	Technology	Market	Reputation	Acute	Chronic	Resource efficiency	Energy source	Products/services	Markets	Resilience
Raw material production and procurement	■ Sustainable agriculture	Obtaining RSPO certification and supporting farmers’ commitment to NDPE. Supporting and adopting drought- and heat-tolerant plant resource production. Supporting and adopting plant resource production adapted to climate change.
	■ Sustainable procurement	Expanding traceability to plantations through stronger relationships with suppliers (especially for palm oil). Regular inspections to strengthen cooperation with plantations and oil mills and ensure compliance with laws and regulations. Expanding the scope of RSPO supply chain certification and preparing to acquire MSPO and ISPO certified oil to achieve 100% certified palm oil. Promoting sustainable procurement of major raw materials other than palm oil (e.g., soy, rapeseed, cacao).
	■ Stabilizing raw material prices and supply	Diversifying suppliers, deconcentrating, and developing new raw material production areas, and promoting multiple varieties of raw material crops. Strengthening relationships with farmers and oil mills by working together to adapt to climate change and improve raw material quality. Asking suppliers to take measures against wind and flood damage and establish BCPs, and conducting support activities. Considering cost control through joint transport of imported raw materials.
Research and development	■ Researching and developing alternatives and new functions	Establishing an Incubation Center (tentative name) to accommodate changing customer and consumer needs. Acquiring new oil and meal resources and functional materials (microalgae and other non-grain meal resources). Researching and developing products that can contribute to measures against lifestyle diseases, undernutrition, and frailty. Researching and developing meat and milk substitutes made from vegetable oils, fats, and proteins. Promoting reduced plastic usage and volume, plastic recycling, and development of alternative containers.
Manufacturing	■ Resource efficiency in production processes	Transitioning to rigorous energy conservation activities and energy-efficient equipment, and increasing the ratio of non-fossil energy use. Considering and preparing to adopt new technologies (e.g., hydrogen energy) that contribute to decarbonization. Introducing internal carbon pricing and reflecting it in decision-making for capital investment and the like. Reducing water consumption (intake, use, and discharge) through rigorous water conservation and introducing water recycling systems.
	■ Expanding sustainable products	Increasing production capacity of value-added esters and establishing facilities adapted for cosmetics certification. Expanding production of plant material-based UV care products and other related products. Expanding market size and production volumes by expanding items and promoting the functions of long-lasting products based on CFP.
	■ Measures against wind and flood damage for production plants	Reinforcing production facilities and upgrading shore protection in preparation for major climate disasters. Regularly reviewing and continuously strengthening BCPs.
Logistics	■ Reducing greenhouse gas emissions	Promoting joint delivery of products by cooperating with other companies and a modal shift in consideration of transport efficiency. Reducing the number of shipments by improving loading rates and optimizing plant delivery networks.
Sales	■ Fostering customer and consumer understanding	Promoting sales strategies that reflect the added value and brand value of certified oils. Enhancing product competitiveness by increasing product sustainability and visualizing CFP and other environmental impacts. Raising awareness of certified raw materials through public education activities in collaboration with government and industry associations. Promoting proactive marketing activities advocating decarbonization.
Waste	■ Promoting resource recycling	Investing in companies that develop recycling technologies for plastic raw materials. Utilizing food by-products as renewable energy sources (biomass fuel, methane gas). Reducing waste by managing supply and demand balance based on analysis of consumer preferences.

* Detailed descriptions include actions in progress and under consideration

In all processes from producing to procuring raw materials, we promote the production of certified oils and other sustainable raw materials and the expansion of traceability by strengthening engagement with local farmers. We also strive to improve sustainability in our purchasing activities by hedging risks through diversification of suppliers and using plant resources adapted to climate change.
In research and development, we will establish an “Incubation Center” to accommodate customer and consumer needs, look beyond existing raw materials to acquire new meal resources and functional materials, and develop health-enhancing products, food products made from vegetable proteins, and alternatives to plastic containers for fossil-free raw materials.
In manufacturing processes, we promote the efficient use of energy, water, and other resources, reinforce production to accommodate changing customer and consumer needs, and strengthen measures against windstorms, floods, and other natural disasters, which are becoming more severe and frequent due to climate change.
In logistics processes, we make efforts to reduce greenhouse gas emissions by expanding joint delivery networks utilizing networks with other companies and promoting energy-efficient rail transportation and other modal shifts to achieve carbon neutrality and comply with carbon taxes and other laws and regulations.
In sales processes, we promote proactive marketing utilizing environmental value, and improve the Group’s brand image by visualizing the environmental impact of our products and services and by promoting and educating the public about sustainability-conscious certified raw materials.

(3) Risk management

The Risk Management Committee established by the Board of Directors selects major financial and strategic risks to our business and manages physical and transition risks associated with climate change.
The committee evaluates major risks by analyzing the level of impact and likelihood of occurrence for the entire Group, classifying their findings into three levels of importance for each. The committee also considers short-, medium-, and long-term timelines. Figure 3 below shows the Group’s major risks selected by the Risk Management Committee. Accordingly, the committee manages climate change-related risks together with other risks.

▼ Figure 3: Risk map

Relevant departments are identified for significant risks and undergo the PDCA cycle to manage them and respond in emergencies. The status of risk response is evaluated through reporting by the Risk Management Committee to the Board of Directors and monitoring by the Audit & Supervisory Board.

(4) Indicators and goals

The Group’s existing climate-related goals include CSV goals and Environmental Targets for 2030.
We have identified reducing greenhouse gas emissions as a measure against climate change, and have set new goals in 2023: reducing Scope 1 and 2 emissions by 50% by fiscal 2030 (compared with fiscal 2016) on a total volume basis, and reducing Scope 3 emissions from purchased products, services, transport, and delivery (upstream) by 25% (compared with fiscal 2020). These goals align with the Paris Agreement and Japan’s nationally determined contribution (NDC) thereunder. We underwent third-party verification of greenhouse gas emissions in 2022, and will continue and expand efforts in the future.
Based on our roadmap for decarbonization to achieve carbon neutrality, we are aiming to reduce Scope 1 and 2 emissions by introducing high-efficiency equipment and converting to solar, hydrogen, and other non-fossil energy sources, and Scope 3 emissions through supply chain initiatives. We disclose our Scope 1, 2, and 3 emissions and the assumptions used to calculate them in our Integrated Report (Sustainability Data Book). Notably, we have taken internal carbon pricing (ICP) into account in decision-making for capital investment and the like since fiscal 2021.
As for other climate-related goals, we control water quality in accordance with laws and regulations and aim to reduce our water consumption per unit in production activities by 16% by 2030 compared with fiscal 2016. Regarding waste reduction, we are limiting waste through the environmentally friendly development of various products such as lightweight containers and long-lasting products, and we are recycling waste by introducing biomass boilers that run on production process by-products and striving for zero actual emissions.

▼ Table 6: Environmental Targets for 2030

Theme	Goal
Theme	Goal			FY2022 actual	FY2030 goal
Preventing global warming	Reduce greenhouse gas emissions in the supply chain
		• Reduce Scope 1 and 2 CO₂ emissions		-8.6% compared with FY2016	-50% compared with FY2016
		• Reduce Scope 3 CO₂ emissions		Collaborated with the Japan Oilseed Processors Association to promote setting numerical goals for CO₂ reduction in Canada–Japan Canola Consultations and Japan–US partnerships	-25% (starting with Categories 1 and 4) compared with FY2020
		• Implement environmental education and promote the reduction of CO₂ emissions through business operations by each and every employee
	Promote the use of renewable energy
		• Promote the use of renewable energy at the Sakai Plant		• Installed a solar power generation system at the Sakai Plant	100%
		• Expand efforts led by the Sakai Plant to other plants and Group companies		• Installed solar power generation systems at the Yokohama Isogo Plant, Nagoya Plant, and IQL (Spain)	–
Establishing resource recycling	Promote recycling in production processes
		• Recycling rate in production processes		99.8%	At least 99%
		• Effectively use by-products from edible oil production		• Installed a biomass boiler at the Sakai Plant	–
	Efficiently use water resources for production
		• Reduce our water consumption intensity in production activities		-15.6% compared with FY2016	-16% compared with FY2016
Plant resources/nature conservation	Promote sustainable raw material procurement
		• Promote sustainable palm oil procurement
			• Establish a system to ensure traceability to plantations, aiming for 100% traceability	Palm oil: 90.9%	Palm oil: 100%
			• Increase the percentage of certified palm oil	59.6% (Jan–Dec 2022)	100%
			• Increase the SG ratio of RSPO certified oil	51.1% (Jan–Dec 2022)	50%
		• Promote sustainable soy procurement		• Formulated Soybean Procurement Policy, published in July	Sustainable soy procurement predicated on stable supply
		• Promote sustainable cacao procurement		• Formulated Cacao Procurement Policy, published in July	Sustainable cacao procurement predicated on stable supply
	Promote natural conservation activities
		• Promote afforestation, etc.		• Planted mangrove trees (2 ha, 2,500 trees) in Malaysia	–
Promoting environmentally friendly development	Reduce plastic containers and packaging and promote resource recycling
		• Develop product designs and new containers that reduce plastic use		• Strengthened production system for environmentally friendly containers	To be determined
		• Develop easily recyclable containers and technologies to facilitate recycling, and establish a local recycling system		• Collaborated with the City of Kawasaki on an experiment to collect used plastic containers for edible oil and seasonings from households
		• Promote the use of recycled materials and plant-derived materials as alternatives to facilitate recycling		• Introduced biopolyethylene in products in the household-use category (1,000-g polyethylene bottles)
	Develop products and services that utilize plant resources and have a positive impact on the environment
		• Develop products and applications that have a positive impact on the environment in the food and industrial domains		• Developed 27 products that have a positive impact on the environment (food loss prevention, environmentally friendly industrial oils and fats, high value-added products)	To be determined

▼ Figure 4: List of climate-related indicators and goals

Regarding the transition plan for decarbonization, we have formulated a strategic roadmap to promote decarbonization (Figure 5), and will achieve carbon neutrality by 2050. Our plan reflects our efforts, including using renewable energy for energy reduction, preparing hydrogen infrastructure, and improving production efficiency.

▼ Figure 5: Strategic roadmap to promote decarbonization (transition plan)