Ⅰ. Our Approach to Biodiversity
The Ajinomoto Group sells products in more than 130 countries and regions, and our entire business activities, from procurement of raw materials to manufacturing and sales, are heavily dependent on the various bounties of nature, otherwise known as ecosystem services. These services include agricultural, livestock, and fishery resources, genetic resources, water and soil, and pollinators such as insects. These natural bounties come from healthy biodiversity shaped by the diversity of living organisms and their connections.
However, biodiversity is currently being lost at an unprecedented rate, making biodiversity conservation a pressing issue worldwide. The Ajinomoto Group recognizes the importance of reducing its impact on biodiversity and protecting the global environment while sustaining its business. Since issues related to biodiversity are also closely related to environmental boundaries and social issues such as climate change, water and soil, waste, and human rights, we will work to resolve these issues so as to create mutual benefit. In conserving biodiversity, we believe it is necessary to establish a system of action to halt and reverse the loss of biodiversity through our business. Accordingly, we will support the Kunming-Montreal Global Biodiversity Framework*1 adopted at the 15th Conference of the Parties to the Convention on Biological Diversity (COP 15) in 2022 and contribute to its achievement.
In the Ajinomoto Group, we honestly comply with the Ajinomoto Group Policies (AGP) that shows the ideal way of thinking and action that the Group companies and their officers and employees should comply with, continue to develop and properly operate our internal control system, strengthen our system that considers sustainability as an active risk-taking system, and continuously enhance our corporate value.
The Board of Directors
The Board of Directors has established the Sustainability Advisory Council, creating a system for making recommendations on the Group’s approach to sustainability and ESG. The board determines materiality items related to sustainability that serve as guidelines for ASV management and supervises the execution of initiatives related to sustainability including biodiversity.
The Executive Committee
The Executive Committee has established the Sustainability Committee as a subordinate body, which selects and extracts risks and opportunities based on materiality and assesses the degree of impact, formulates strategies to combat these, and manages their progress.
Sustainability Advisory Council
Beginning April 2023, the Second Term Sustainability Advisory Council will continue its work to enhance the Ajinomoto Group’s corporate value from the viewpoint of sustainability. The Second Term Sustainability Advisory Council consists of four external experts, primarily investors and financial market specialists, and is chaired by an external expert. After receiving consultation from the Board of Directors, the council will investigate the implementation of materiality, disclosure and dialogue on its progress, and building relationships with stakeholders through these activities, in the interest of stronger monitoring of the Board of Directors, and issue a report in response to the Board of Directors. The Second Term Sustainability Advisory Council meets at least once a year and report the results of its deliberations to the Board of Directors.
In order to promote medium-term ASV initiatives in accordance with materiality, the Sustainability Committee formulates sustainability measures, proposes them to the Executive Committee, and manages their progress. In addition, the Sustainability Committee formulates risk countermeasures for Companywide management issues and manages their progress. It also formulates the entire Ajinomoto Group’s sustainability strategy, promotes action themes (nutrition and environment, which includes biodiversity) based on this strategy, makes proposals and provides support for business plans from a sustainability viewpoint, and compiles internal information on ESG.
Biodiversity initiatives comprise a critical issue for the Ajinomoto Group. We believe that sustainable raw material procurement, climate change adaptation and mitigation, waste reduction, and human rights, which we are already working on, are all activities closely related to biodiversity. Recognizing the interrelationships among these environmental and social initiatives, we will advance them in a way that is effective.
The AGP states that we work with the community and customers to contribute to harmonious coexistence with the Earth, in order to realize a sustainable “Recycling-Oriented Society.” Based on this “Group Shared Policy on Environment,” in July 2023, the Ajinomoto Group established and announced the Ajinomoto Group Biodiversity Guidelines to recognize issues related to biodiversity, as well as its approach, action guidelines, and targets.
We also see biodiversity as deeply related to environmental and social issues such as deforestation and other land modification in the production of raw materials, pesticide use and waste, child labor, and forced labor in our sustainable procurement efforts. In addition to our existing procurement guidelines on palm oil and paper procurement guidelines, we restructured our coffee and soybean procurement guidelines in July 2023. In addition, our Policy Guidelines for Suppliers require suppliers to comply with laws and regulations, and to give consideration to and endorse the Ajinomoto Group's policies on human rights and the environment.
Ⅲ. Assessing Risks and Opportunities with the LEAP Approach
1. The LEAP Approach
We used the TNFD beta framework to start a risk and opportunity assessment based on a dependency and impact analysis for some of the Ajinomoto Group's products. The LEAP approach is guidance proposed by the Task Force on Nature-related Financial Disclosures (TNFD) that provides a process for the systematic, science-based assessment of nature-related risks and opportunities within corporations and financial institutions. LEAP is an acronym for the four phases of Locate, Evaluate, Assess, and Prepare.
2. Targets and Scope
(1) Selection of Target Products
We selected a model case comprised of three items with high procurement values and volumes (in tons): AJI-NO-MOTO®, coffee, and HONDASHI®, which uses natural ingredients .
|Product||Main raw materials|
|AJI-NO-MOTO®||Sugarcane, cassava, corn, beets|
|HONDASHI®||Salt, sugars (sugar), sugars (lactose), skipjack|
(2) Scope of Assessment
The assessment covered all portions of the value chain listed below.
|Procurement (raw material production)||Manufacturing and processing||Distri-bution||Usage||Disposal|
|Target countries for assessment||Major countries of origin of 9 main raw materials||Countries with Ajinomoto Group manufacturing bases||Countries where the Seasonings Business and Coffee Business are active|
|Data used||Past procurement data||Sales data by business||Sales data by business|
3. LEAP Approach Processes
We examined the points of contact between the Ajinomoto Group's business and nature, such as the origin of raw materials, the location of business sites where products are manufactured, and the countries where the products are consumed, based on procurement data and other sources.
To determine the degree to which our businesses are dependent on nature, and the degree to which our businesses impact nature, we used publicly available tools such as ENCORE, AQUEDUCT, and the National Biodiversity Index to quantify magnitudes and identify high priority areas.
1) Business Impact on Nature
An assessment of the impact of the entire value chain on nature found that the Ajinomoto Group has the potential to have an impact on nature because of its procurement of diverse agricultural products and its operations in areas of high ecological importance. In the overall value chain, the highest chances of impact came from the "soil contamination" item. The results also showed very high chances of impact from "land modification" for coffee.
|Procurement (raw material production)||
|Manufacturing and processing||
|Distribution, usage, and disposal||
2) Business Dependence on Nature
An assessment of the dependence on nature throughout the value chain revealed the highest dependence in procurement (production of raw materials). This implies that agricultural production is highly dependent on ecosystems in many ways. In procurement, results show high dependence on items related to water and pollinators necessary for crop cultivation, soil conditioning, flood mitigation functions important for stable cultivation, and climate regulation.
|Procurement (raw material production)||The high procurement of agricultural raw materials confirms that our business relies heavily on flood mitigation functions.|
|Manufacturing and processing||Our manufacturing bases were found to be dependent on water supply. This was true regardless of whether the manufacturing was based in a developing or developed country.|
|Distribution, usage, and disposal||Distribution is highly dependent on nature, as it can be affected by factors such as flooding and climate change.|
(1) For the items with high impact and dependence as presented above, we identified areas where there is room to further reduce risk in the future by comparing nature-related risks with the Ajinomoto Group's existing initiatives.
From this review, the following six items were determined to have room for further risk reduction.
For raw materials where risk has been identified, we will conduct further in-depth analysis to reduce risk, manage opportunities, and formulate and implement strategies to achieve these.
Although only three products are in scope for this assessment, we plan to expand the scope of our analysis in the future.
|Impact/dependency items||Procurement (raw material production)||Manufacturing and processing||Distribution||Usage and disposal|
|Land alteration and soil contamination (including freshwater region use)||Sugarcane, cassava, coffee
Physical and transition risks related to soil and land alteration impacts
Physical and transition risks related to soil contamination and water use impacts
|Water supply and water conditioning||Sugarcane, cassava
Physical and transition risks related to water resource use impacts and dependence
Physical and transition risks related to direct resource extraction impacts
|Pollinators and disease suppression||Coffee
Physical and transition risks related to pollinator service dependence
|Invasive species, etc.||Though Ajinomoto Group's business is also relevant here, this area is excluded due to limited scope of responsibility|
|Solid waste||AJI-NO-MOTO®, coffee
Transition risk related to solid waste impacts
The Ajinomoto Group has established the Group Shared Policy on Environment, the Ajinomoto Group Biodiversity Guidelines, and various procurement guidelines to ensure sustainable procurement and efficient use of water. We have also worked to resolve issues of natural capital and biodiversity, including skipjack ecological surveys and plastic waste reduction.
Particularly with regard to sustainable procurement, which we consider to be closely related, we are working with our suppliers to develop a system to confirm that we procure raw materials that do not pose significant environmental or human rights issues. While ensuring traceability, procuring from low-risk countries, and purchasing certified products, we will still take measures to resolve issues faced by producers for products recognized as risky, and contribute to solving social issues such as biodiversity, environmental challenges, and human rights.
We will continue to reduce risks at each stage of the value chain identified in our risk assessment based on the LEAP approach, as well as identify and capture nature-related opportunities.