Materiality

Identification process of important issues (Materiality) for the Ajinomoto Group
Important issues (materiality) for the Ajinomoto Group
Risks and opportunities relating to important issues (Materiality) for the Ajinomoto Group
Key initiatives, goals, and KPIs related to risks and opportunities relating to important issues (Materiality) for the Ajinomoto Group

Identification process of important issues (Materiality) for the Ajinomoto Group

The Ajinomoto Group identifies its important issues (Materiality) that have a substantial impact on our ability to create value in the short, medium, and long term through ASV management, taking into account changes in the macro environment for 2050. Once we identify opportunities and risks from materiality, we clarify their importance and priority, and then reflect these matters in our business activities.

Important issues (materiality) for the Ajinomoto Group

Important issues (Materiality) for the Ajinomoto Group are essential to the Group’s ability to continue co-creating social and economic value over the long term. The Group identifies important issues (Materiality) through a process that reflects the thoughts and ideas of management and employees and the expectations from external stakeholders. The important issues (Materiality) are deeply embedded in our business strategies, our on-site operations, and our Purpose.

What the Value Creation Framework Shows

The Value Creation Framework illustrates our approach to sustainable growth as a cycle that connects the power and potential of “AminoScience” (Scientific Possibilities) with the power of stories (Story of Well-being) that contribute to the well-being of all human beings, society, and the planet. The cycle is (1) honing our co-creation capabilities, (2) taking the seikatsusha perspective (3) while achieving wellbeing, and (4) through our business activities return cocreated shared value.
These follow an infinite loop continuously moving from (1) through (4), meaning that it will sustainably co-create social and economic value.

Risks and Opportunities Related to Important Issues (Materiality) for the Ajinomoto Group

The Ajinomoto Group has identified Group-wide risks and opportunities that require cross-organizational management by comprehensively taking into account macro changes in the business environment, the probability of manifestation (low, moderate, high), and the magnitude of the impact (low, moderate, high), the details of which are as below.
Although the Group has developed various responses and mechanisms not only to minimize such management and operational risks but also to capitalize on these as opportunities, the list below is not all-inclusive and may be affected in the future by risks that are currently unforeseeable or which are not presently deemed material.
Forward-looking statements in the text below are based on the Group’s assessments as of March 31, 2024. In the table below, ● indicates risks and ○ indicates opportunities.
In the previous fiscal year, “Finance-Related Opportunities and Risks” and “Risks and Opportunities Related to Material Issues (Materiality) for the Ajinomoto Group” were disclosed separately. However, from this fiscal year, they are combined and disclosed as business risks and opportunities for the Group.

Risks and Opportunities Related to Important Issues (Materiality) for the Ajinomoto Group

Major risks and opportunities		Probability of manifestation	Magnitude of impact	Comprehensive assessment
Category	Details	Probability of manifestation	Magnitude of impact	Comprehensive assessment
#1 "AminoScience"	Opportunities for business growth by anticipating the evolution of modalities and leveraging the Ajinomoto Group’s strengths in “AminoScience” Risk of stagnation in the evolution and expansion of “AminoScience” or failure to fully utilize “AminoScience” in the ecosystem and cocreation, resulting in a failure to scale its value and a slowdown in the competitive advantage and growth of the business	High	High	Very material
#2 IT security, intellectual property	Opportunities to build an intellectual property (IP) portfolio by linking IP strategy with business and R&D strategy, leading to competitive advantage and business growth through active use of IP in businesses Opportunities for enhanced IT security toward streamlined, speedy, and secure communication and decision-making, leading to greater customer trust and growth in business transactions Risk of impaired technical and/or business competitiveness due to leakage of technical expertise or business trade secrets to competitors Risk of more sophisticated cyberattacks, including misuse of AI technology and ransomware attacks Risk of government dispositions and loss of stakeholder confidence due to leakage of personal information	High	High	Very material
#3 Brand	Opportunities to maintain and enhance our position as a leading sustainability company through management mindful of the well-being of our society and our planet, proactive response to nonmandatory sustainability-related requests, and leveraging our strong, locally rooted brand power Risk of brand damage due to lack of resonance with business activities amid diversifying values of various stakeholders Risk of negative information about MSG and sweeteners spreading, leading to damage to the corporate brand Risk of brand damage due to the ease of generating and proliferating false information via the misuse of AI technology, as well as counterfeit products and increasingly sophisticated websites and social media accounts that impersonate the Company or individual Group companies	High	High	Very material
#4 Technological innovation	Opportunities to automate, accelerate, and streamline various business activities through DX, create new business models and customer contact points, and anticipate the evolution of modalities through advanced technologies, leading to productivity improvements, business and technological innovation, and the creation of new businesses and value across the value chain Opportunities to advance solutions in the agriculture and food sectors with the evolution of green transformation (GX), and with expansion in technological innovation, deregulation, market creation, and financing related to global sustainability and biodiversity, including in areas such as the circular economy, precision fermentation, and regenerative agriculture Risk of failure to capture new value creation and business opportunities due to delays in responding to advancing innovations Risk of missing business opportunities due to delays in utilizing AI technology, or risk of problems emerging such as violation of laws and regulations, ethical issues, and poor accuracy, etc. of AI judgment due to hastily utilizing AI technology	High	High	Very material
#5 Human capital and human rights	Opportunities to scale co-creation value through proactive investment in human resources and diversification of work styles, with a focus on diversity and taking on challenges Risk of loss of corporate value due to delays in responding to developments in laws and regulations and information disclosure standards related to respect for human rights Risk of inability to secure human resources needed for innovation and business activities due to insufficient human resources in the labor market	High	High	Very material
#6 Climate change, natural capital and biodiversity, resource depletion	Opportunities to facilitate the creation of resilient food systems through establishing a holistic approach to environmental and food issues as a common approach and through the growing momentum for co-creation of sustainable solutions with other companies and institutions Opportunities to support the creation of resilient food systems with low environmental impact through climate finance and increased policy support for farmers Opportunities for increased demand for products and solutions that contribute to regenerative agriculture and a sustainable livestock industry due to increased focus on natural capital and biodiversity Risk of difficulty in procuring raw materials and providing food to consumers due to the inability to ensure global sustainability as a result of climate change, damage to natural capital, water shortages, and the emergence of animal resource depletion issues (the protein crisis, infectious diseases in livestock, etc.) Risk of incurring or increased costs due to new and/or increasingly stringent laws and regulations (decarbonization, natural capital and biodiversity, packaging, water, greenwashing) in Japan and abroad and renewable energy procurement requirements	High	High	Very material
#7 Conflict/war, terrorism, riots, social unrest	Opportunities for stable procurement of better raw materials through consideration of alternative raw materials Risks that export restrictions, tariffs, financial sanctions, or the use of force will restrict the procurement of raw materials (including raw materials for livestock feed), the supply of other commodities, information sharing across countries, or the transfer of funds, which may disrupt the penetration of Group-wide and business strategies, development, or manufacturing Risk of a significant drop in product demand due to being perceived as a company from a hostile country group Risk that the safety of local executives and expatriates may be threatened or that they may be restrained, and that business activities in particular countries may be impeded and prevented from continuing Risk of increased social unrest due to conflict, inflation, etc., and increased repression of expression and assembly and violation of women’s rights, making it difficult to conduct business activities in some countries Deteriorating profits due to rising raw materials and fuel costs as a result of inflation Financial country risk due to expropriation risk or the outbreak of war, conflict, etc.	High	High	Very material
#8 Finance, accounting, and taxation	Risk of increased tax burden, or opportunities for decreased tax burden, from changes in tax systems and deferred tax assets/liabilities Impairment risk due to failure of acquired subsidiaries, etc., to fulfill business plan, or sharp increases in the cost of capital or interest rates Depletion of capital due to the financial crisis, risk of difficulty in procuring major currencies such as U.S. dollars due to factors such as decline in circulation mainly in emerging countries, and financing risk due to ratings downgrade Risk of unforeseen bankruptcies of customers, including overseas customers Risk of impact on business profits from sharp fluctuations in foreign exchange and interest rates (slowdown in overseas business activity, impact of converting overseas subsidiary earnings into yen, increased interest expenses)	High	High	Very material
#9 Utilization of nonfinancial data	Opportunities for facilitating the collection of non-financial data that could not be measured or analyzed in the past through technological innovation, the development of quantification methods, and the creation and development of effective standards, making it easier to convert environmental and social value into financial value Opportunities for technological advances in the field of natural capital to make it easier to obtain the data needed to build resilient food systems Risk of missing business opportunities due to delays in addressing increasing social value and human rights risk assessment/measurement levels (social demands)	Moderate	High	Material
#10 Pandemics, natural disasters	Opportunities for building a resilient and flexible organizational structure by evolving to an all-hazards BCP that can respond to crises other than pandemics and natural disasters Risk of difficulty in promoting innovation and conducting business activities due to shortages of supplies and damage to human resources resulting from pandemics, large-scale/wide-reaching natural disasters, etc.	Moderate	High	Material
#11 Consumer preferences and values	Opportunities for expanding business by responding to changes in consumer values, such as increased awareness of sustainability and emphasis on emotional enrichment Risk of missing business opportunities due to delays in developing businesses, services, and products that respond to growing social and environmental awareness and personalized healthcare preferences among consumers, resulting in delays in acceptance by consumers and society	Moderate	High	Material
#12 Population growth, aging populations, capital inflows to developing countries	Opportunities for increased demand for solutions helping to resolve health and nutrition issues due to global population growth and capital inflows from public institutions to developing countries, opportunities for significant expansion of the healthcare market Risk of missing business opportunities due to delays in business development in some developing countries/areas, as population growth in Japan and Europe is unlikely	Moderate	High	Material
#13 Governance and compliance	Opportunities that arise from the accumulation of trust from stakeholders through the continuation of safety, quality, and environmental management activities that are unique to our company as a result of stronger governance Opportunities to enhance business sustainability by fostering a better corporate culture through enhanced governance, including AGP penetration among employees and proper understanding and implementation of policies and rules and regulations Risk of criminal or administrative action due to non-compliance (including religious regulations, animal protection regulations, etc.) or inadequate quality or safety management (contamination of unexpected ingredients, etc.), or loss of stakeholder confidence	Moderate	High	Material
#14 Economic security (semiconductors)	Opportunity for easier technology development within Japan as a result of the Japanese government restoring domestic production of semiconductors as an economic security measure Risk of supply chain disruptions and increased market competition due to governments’ economic security measures for semiconductors	Moderate	Moderate	Material

Initiatives and Targets/KPIs for Risks and Opportunities Related to Important Issues (Materiality) for the Ajinomoto Group

The following are initiatives and targets/KPIs for the six Material Themes currently being addressed by the Ajinomoto Group ((1) Achievement of a sustainable global environment, (2) Achievement of well-being through food, (3) Contribution to advanced medicine and prevention, (4) Contribution to the evolution of a Smart Society, (5) Respect for diverse values and human rights, (6) Reinforcement of our management foundation). The risks and opportunities presented here are a simple summary of the major risks and opportunities provided above, and the numbers in parentheses indicate the corresponding category numbers for the same.

Major risks and opportunities, initiatives, targets, and KPIs related to Material Themes

(Numbers in parentheses indicate the corresponding category numbers for the aforementioned major risks and opportunities)

Material Themes	Risks and Opportunities (Risk/opportunity category number)	Initiatives	Targets/KPIs
Achievement of a sustainable global environment	Supporting the construction of ecofriendly and resilient food systems and increasing demand for related products and services through technological innovation, increased deregulation and policy support, capital inflows, and increased momentum for co-creation with other companies, etc. Loss of business opportunities due to difficulties in procuring raw materials and stricter related laws and regulations and social demands resulting from climate change, damage to natural capital, and depletion of animal resources, as well as delayed utilization or hasty implementation of advanced technologies such as cultured meat, packaging material recycling, and AI （#1, #4, #6）	1Challenge to Net Zero	Reduce GHG emissions (vs. 2018) 2030: 50% reduction in Scope 1 and 2, 24% reduction in Scope 3 2050: Achieve net zero and 100% use of renewable energies Advance biodiversity initiatives (Assessment of risk opportunities and promotion of initiatives including mutual solutions to climate change and other issues in raw materials selected for the LEAP approach) LEAP approach: A process in guidance proposed by the TNFD for the sciencebased assessment of nature-related risks and opportunities. Plastic waste 2030: Zero waste Reduce food loss (vs. 2018) 2025: 50% reduction (from receiving raw materials to customer delivery) 2050: 50% reduction (overall product lifecycle) Cooperate with each region on social applications for reducing food loss, recycling plastic, etc. Reduce water consumption (vs. 2005) 2030: 80% reduction in water consumption Sustainable procurement of raw materials 2030: 100% sustainable procurement ratio of key raw materials Animal welfare improvement
Achievement of a sustainable global environment		2Contribute to the transformation of a resilient food system that supports 10 billion people	Contribute to the creation of a society with a circular resource system by expanding the biocycle Contribute to sustainable agriculture through biostimulants (Contribute to climate change mitigation and adaptation by increasing yield per unit area, increasing tolerance to environmental stresses, etc.) Provide products using cattle raised by more sustainable methods utilizing amino acids; build an ecosystem through collaboration with dairy and meat manufacturers Promote practical implementation of on-site production of ammonia with low environmental impact
Achievement of well-being through food	Expanding business by offering products and services that meet the preferences of consumers in each region and their growing awareness of sustainability and health, and enhance the brand through management mindful of the well-being of our society and our planet Loss of business opportunities and brand damage due to delays in responding to changes in consumer values and lack of understanding of products and business activities amid changing and diversifying values and inappropriate use of advanced technologies such as AI （#1, #3, #9, #11）	3Respect food culture and create an environment that supports people in making healthy food choices, for humans and the planet, that do not compromise on taste	Expand provision of solutions for commercial (B2B) customers Collaborate with local stakeholders to solve food and health issues Provide nutritionally balanced products and services based on the Ajinomoto Group Nutrition Profiling System (ANPS) and other nutrition assessment technologies, and support healthy eating behavior among consumers Providing healthy products as part of our Nutrition Commitment — By 2030, 60% of our products will have improved nutritional value — By 2030, we will provide products that promote delicious salt reduction and protein intake optimization to 400 million people a year — By 2030, we will double the availability of products that utilize the physiological and nutritional functions of amino acids (compared to 2020) Provide foods and ingredients made with materials and production methods with low environmental impact (cultured meat, plantbased foods, etc.)
		4By encouraging the joy of cooking and eating together, contribute to emotional enrichment	Quantify how much cooking and eating together contribute to well-being (study the relationship) and expand products that have high contribution
		5Contribute to self actualization by providing products and services tailored to each individual	Develop a personalized experience for consumers through a deep understanding of their needs and behaviors KPI (1): 10 million POND* customers (number of common IDs) (2030) KPI (2): 2-3 new products annually with sales over ¥1 billion (2030) * POND: Company-wide customer base Evolve value provided in the core cold business category among frozen foods (gyoza and peripheral dumpling products)
Contribution to advanced medicine and prevention	Provide new value by continuously anticipating the evolution of modalities and delivering advanced medicine to customers through the use of DX Delayed response to technological advances in the medical field, or risk of stagnation in the evolution and expansion of “AminoScience” or failure to fully utilize ecosystem and co-creation opportunities, resulting in a failure to scale value and furthermore limited expansion of business and corporate value （#1, #4）	6Contribute to the creation of advanced medical modalities	Advance treatment and prevention, and expand provision of solutions to extend healthy life expectancy Strengthen and expand business domain for biopharmaceutical manufacturing services Evolve into a business that provides service solutions for culture media and advanced medical materials Strengthen the medical food domain
Contribution to the evolution of a Smart Society	Advanced development of semiconductor-related technologies in Japan due to progress in restoring domestic production of semiconductors, influenced by economic security policies Disruption of the value chain as governments regulate trade in semiconductor-related products as part of their economic security measures, and intensified competition as trade partner countries with frictions begin to produce related products domestically （#1, #14）	7Develop and expand the provision of advanced materials and co-creation of sustainable business models through continuous innovation to create a sustainable and comfortable ICT society	Strengthen the co-creation ecosystem in the semiconductor value chain, accelerate generating innovations that help evolve semiconductors, and expand the provision of advanced materials Achieve development of technologies and materials in the field of advanced semiconductors, such as optoelectronic integration
Respect for diverse values and human rights	Encouraging management decision making from a long-term perspective and from both financial and nonfinancial perspectives by making it possible to collect non-financial data on topics such as human rights through technological innovation, and participation in the creation of various standards that will lead to competitive advantage by leveraging Ajinomoto's environmental and social values. Loss of business opportunities and corporate value due to delays in responding to requests for assessment and measurement of nonfinancial data on topics such as human rights （#5, #9）	8Promote human rights initiatives in the value chain and foster multistakeholder resonance	Steadily promote human rights and environmental due diligence in accordance with international standards; taking a two-pronged approach as below through dialogue with stakeholders: (Deep dive approach) Conduct human rights impact assessments based on the results of country-specific human rights risk assessments (once every four years), and carry out preventive and corrective measures and monitoring (Comprehensive approach) Accompany and monitor suppliers to identify and improve their actual status based on the Guidelines for Group Shared Policy for Suppliers (scheduled to be completed by 2024 for domestic primary suppliers, and to be started by 2025 for overseas primary suppliers)
Reinforcement of our management foundation	As the importance of intangible assets in management increases, vitalizing creative activities by diversifying human resources and encouraging them to take on challenges, and strengthening our competitive advantage by enhancing intellectual property and IT systems and strengthening our financial strategy Expanding multifaceted threats to business infrastructure due to severe changes in the business environment, including demographic changes, conflicts, pandemics, gaps in supply and demand for human resources, more stringent laws and regulations, and threats to IT security （#1, #2, #5, #7, #8, #10, #12, #13）	9Improve employee well-being and create innovation through DE&I initiatives that serve as a model for local communities and human resource investment that encourages challenge, and work to build a Group where all employees feel fulfilled working at their respective companies	ASV realization process engagement survey score (global) 80% (2025) ⇒ 85% (2030) Diversity in leadership (global) 20% (FY2025) ⇒ 30% (FY2030) Ratio of female managers (global) 35% (2025) ⇒ 40% (2030) Employees joining as mid-career hires as a share of all employees (Ajinomoto Co., Inc. non-consolidated) 20% (2025) ⇒ 30% (2030) * Every year, we target a 50% or higher recruitment rate of mid-career hires among all new employees joining Ajinomoto Co., Inc. in a single year. Promote ASV Awards (global) and open recruitment transfers and cross-divisional project participation (Ajinomoto Co., Inc. non-consolidated)
		10Strengthen resilience to changes in the business environment	Strengthen resilience by building a global quality assurance system and global strategic IP portfolio Carry out ongoing measures to improve compliance awareness Continuously carry out assessments, audits, and inspections related to health and safety Identify management risks and consider countermeasures (annually) Conduct future projections, identify opportunities, and discuss portfolio strategy (as appropriate) Minimize risk of impairment and fluctuation in foreign exchange and interest rates, and mitigate risk through effective use of intra-Group funds and flexible financing
		11Increase employee literacy	Deploy literacy improvements measures for the environment, human rights, DX, etc. 100,000 employees receiving nutrition training (2025)