Initiatives for Sustainability

2019
June
Managing Director
Atsushi Katsuki

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

Policy for Sustainability Initiatives

Eliminating the negative impact:
Promoting response to various changes in external
environment
Formulated “Asahi Group Environmental 2050”. Aiming for zero environmental
burden in our business activities through such means as making our domestic
breweries water neutral and reaching zero CO2 emissions by 2050.

Increasing the positive impact:
Value creation utilizing strengths of the Asahi Group
Improving both financial and social values by efforts to resolve social issues
through our business activities. Those activities include the contribution tosustainable agriculture which ensures safety and security and reduces greenhousegas emissions. To this end, we have leveraged agricultural materials harnessing
the ability of beer yeast cell walls, a by-product of the beer brewing process.

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

1

Revising Our Material Issues
Eliminating the negative impact

Human rights
and human
resourcemanagement• Developing human resources on aglobal basis• Enhancing diversity• Upholding respect for human rights

Responsible
business practice• Implementing effective supply
chain management• Securing food safety and reliability• Promoting responsible drinking• Pursuing social responsibility
through products and services• Reducing food loss

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

Value creation utilizing strengths of theAsahi GroupEnvironment

Responding to climate change
Ensuring stable procurement of materials
Promoting sustainable water resources
Circular resources and preventingpollution• Providing environmentally and socially
responsible products••••

Increasing the positive impact• Resolving social issues throughnew drinking opportunities• Providing products utilizing
yeast and lactic acid bacteria• Developing products with
reduced sugar• Expanding health-based
business and business that
contributes to a recycling-basedsociety• Resolving social issues in theagricultural field throughagricultural materials using
yeast cell wall2

Material Issue: Environment“Asahi Group Environmental Vision 2050”
Passing the Gifts of Nature to Future Generations with the“Neutral and Positive” Concept

NeutralPositive１２

３

４

Response toclimate change

Sustainable useof resources

Utilize
microorganisms
and fermentation
technologies

Process
innovation

Leverage Group
strengths to create
new environmentalvalue

Create groundbreaking
technologies andframeworks(agricultural raw
materials, packaging,and water)

Aim for zeroCO2 emissions

Reduce businessrisks

Participated in “TCFD consortium” on 27 th May, 2019
Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

3

Material Issue: Environment“Asahi Group Environmental Vision 2050”
Passing the Gifts of Nature to Future Generations with the“Neutral and Positive” Concept

NeutralPositive１２３４Response toclimate change

Sustainable useof resources

Utilize
microorganisms
and fermentation
technologies

Processinnovation

Leverage Group
strengths to create
new environmental
value

Create groundbreaking
technologies andframeworks(agricultural raw
materials, packaging,and water)

Aim for zeroCO2 emissions

Reduce businessrisks

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

4

Initiative example: Response to Climate Change

Utilizing Renewable Energy
Sales volume ofbeer-typeproduced byGreen Power

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

More than13.0 billioncans5

Material Issue: Environment“Asahi Group Environmental Vision 2050”
Passing the Gifts of Nature to Future Generations with the“Neutral and Positive” Concept

NeutralPositive

１２３

４

Response toclimate change

Sustainable useof resources

Utilize
microorganisms
and fermentation
technologies

Process
innovation

Leverage Group
strengths to create
new environmental
value

Create groundbreaking
technologies andframeworks(agricultural raw
materials, packaging,and water)

Aim for zeroCO2 emissions

Reduce businessrisks

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

6Initiative example: Sustainable use of resources

Reduction of Environmental Burden
in Containers and Packaging

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

7

Material Issue: Environment“Asahi Group Environmental Vision 2050”
Passing the Gifts of Nature to Future Generations with the“Neutral and Positive” Concept

NeutralPositive

１２

３

４

Response toclimate change

Sustainable useof resources

Utilize
microorganisms
and fermentation
technologies

Process
innovation

Leverage Group
strengths to create
new environmentalvalue

Create groundbreaking
technologies andframeworks(agricultural raw
materials, packaging,and water)

Aim for zeroCO2 emissions

Reduce businessrisks

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

8

Initiative example: Utilize microorganisms andfermentation technologies

Agricultural Materials of Beer Yeast Cell Wall

Beer brewing

By-productBy-product utilization

Malt feed(malt)
Surplusyeast
Diatomaceous
earth

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

Feed
EBIOS
tablets
Beer yeast
cell walls
Yeast extract

Agriculturalmaterials

Seasonings
Fertilizers

9Material Issue: Environment“Asahi Group Environmental Vision 2050”
Passing the Gifts of Nature to Future Generations with the“Neutral and Positive” Concept

NeutralPositive１２３４

Response toclimate change

Sustainable useof resources

Utilize
microorganisms
and fermentation
technologies

Processinnovation

Leverage Group
strengths to create
new environmental
value

Create groundbreaking
technologies andframeworks(agricultural raw
materials, packaging,and water)

Aim for zeroCO2 emissions

Reduce businessrisks

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

10Initiative example: Process innovation

Fuel Cell Power Utilizing Drainage
from Breweries
Brewery•••••

Drainage

Drainagetreatment

Gas
Purified bioBiopurification
methane gas
methane gas

Fuel cellpower

Success for purifying high-purity bio-methane gas
Continuous power generation for over 6,000 hours
Carbon neutral power generation in Asahi Group factories
Low cost and widely applicable system
Won Nikkei Global Environmental Technology Awards

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

11

Material Issue: Human Rights and Human Resources
Management/Upholding Respect for Human Rights

Outline of the Asahi Group’s Human Rights Policy
Approach torespecting humanrights

Commitment to respecting human rights and position of policies,targets (directors, employees, business partners), awareness of scopeof impact, responsibilities of the Board of Directors, adherence tointernational rules, and policies related to discrepancies between laws

Carrying out humanrights due diligence

Implementation of human rights due diligence, prevention, mitigation,and correction of adverse impacts, and dialogue with stakeholders

Human rights-related
issues for the Asahi
Group’s businessactivities

Discrimination, harassment, forced labor and child labor, freedom ofassociation and right to collective bargaining, occupational safety andhealth, working hours and wages, impact on supply chain, impact on
local communities

Mechanisms forhandling complaints

Contact point and response structure inside and outside the Company

Education andtraining

Target: Officers and employees
Language: Language spoken in each country and region of operations

Monitoring andreporting

Tracking of progress and disclosure via the Company’s corporatewebsiteCopyright © ASAHI GROUP HOLDINGS. All rights reserved.

12

Material Issue: Human Rights and Human Resource
Management/Developing Human Resource

Glocal Talent Management
Global～Think Globally～

Local～Act Locally～

Formulating human rights
policies and frameworks thatare shared on a global basis• Formulating compensation
system based on AGP• Unifying mobility policies

Promoting localization ofhuman resource systems anddevelopment policies• Sharing recognitions
between Asahi Group
Holdings and overseas
operating subsidiaries

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

Systems to connect
both global andlocal activities• Regular meetings of globalHR• Officers in charge of HR in
holding company’s
participation in humanresource and remunerationcommittees in overseassubsidiaries

13Material Issue: Responsible Business Practice
Promoting responsible drinking

Promoting Glocal Initiatives•Global•～Think Globally～•Local••～Act Locally～

Promoting collaboration with industrial groups and otherorganizations in each country and region
Execute the Global Industry Commitment by The International
Alliance for Responsible Drinking（IARD)
Promoting efforts and disclosures on a Group-wide and global
basis

Promoting efforts to reduce inappropriate alcohol use
Expanding the non- and low-alcohol product portfolio in eachcountry and region

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

14

Material Issue: Value Creation Utilizing Strengthsof the Asahi GroupThe Asahi Group’s CSV Positioning Strategy
CSV targets todate

New CSV targets
Food-related raw materials and ingredients

Products of theAsahi Group

Products of theAsahi Group

Areas in which
we have beenpromotingongoing efforts

Gradually expand the lineup oftargeted products in the domains ofagricultural and livestock materials
Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

15

ESG Evaluations

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

16

The Asahi Group’s Corporate
Governance

2019
June
Chairman of the Board
Naoki Izumiya

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

Today’s Agenda①

Basic concept of governance reform②

Continuous Initiatives to Date③

Reform Efforts from Last Year④

Future Direction

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

1

Basic Concept of Governance Reform①

Discipline for the Company and Managements②

Sustainability of the Company and Business③

Trust Relationship with Shareholders

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

2

Basic Concept of Corporate Governance

Asahi Group Philosophy＜Key Priorities＞
strengthen groupmanagement

enhance the trust
relationship withsociety

improve the sociality andtransparency of thegroup companies＜Basic concept＞①Respect for All Stakeholders②Ensuring Proper Information Disclosure and Transparency Thereof③Appropriate Dialogues with Shareholders and Investors④Appropriate performance of the duties of the Board of Directors, Audit &Supervisory Board Members, and the Audit & Supervisory Board.

corporate value enhancement by“growth-oriented corporate governance"over the medium- to long-term
Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

3

Continuous Initiatives to Date

Appointment & Resignation of the CEO & Directors① （Succession）② Compensation System for CEO & Directors
Step-by-step Separation of the Role of Business③ Supervision and Execution

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

4

Continuous Initiatives to Date
＜Efforts for Enhancing Corporate Governance (2015～2019)＞
2015～2017

2018

2019

＜2015＞・ Corporate Governance Guidelines
were formulated
・ Evaluations of the effectiveness of
the Board of Directors werecommenced

・ Title of CEO transferred fromchairman and representative
director to president andrepresentative director to improvethe effectiveness of management
supervision from operationalexecution.

・ The Company transitioned to a
structure in which the chairman of
the Board of Directors does notserve concurrently as arepresentative director.

＜2017＞
・Performance-Linked Stock
Compensation Plan wasintroduced for Internal Directors.

・ Majority of Outside Officers wereappointed as members of theNomination Committee andCompensation Committee.
・ Third-party evaluations of theeffectiveness of the Board ofDirectors were introduced.

・ Evaluation of the effectiveness ofthe Audit & Supervisory Board
were commenced and third-party
evaluations were introduced.

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

・ Standard and guidelines wereformulated for the resignation ofthe CEO, the appointment ofrepresentative directors, term ofoffice for officers, and specialadvisers.
・ The number of Outside Directors
on the Board of Directors wasraised, now constituting one-thirdof total Board members.
・ The overall functions ofremuneration systems werestrengthened to provide incentiveto Internal Directors.

5Appointment & Resignation of the CEO & Directors＜Nomination Committee＞ Red: Outside Directors Blue: Outside Audit
Committee
chairperson
KosakaCommittee members
ShingaiSaito

IzumiyaKoji＜Succession Plan＞
Succession Plan
Training a successors

GlobalStandard andguidelines for theresignation of the CEOLocal

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

6Compensation System for CEO & Directors＜Point of This Review＞①Establishing a new “Medium-Term Bonus Plan (Cash-Based)”②Annual Bonus: Adding consolidated core operating profit as a new performance indicator③Medium-term bonus: Introducing social value indicators④Annual and medium-term bonus: Introducing frameworks for reflecting individual evaluations⑤Stock compensation: Focusing on sharing benefit and risks with shareholders.

【Composition of Remuneration for the Directors】※Remuneration model when achieving 2019 performance targets of president and representative director

Fixedremuneration
Basicremuneration

Breakdown

38％

Period-Performance
Indicators(weighting)
Individual
valuation-Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

Variable remuneration
Bonuses（medium-term）

Bonuses（annual）

48％

Stock
compensation

14％

Single fiscal year

Three years

・ Core operating profit（50％）
・ Profit attributable toowners of parent（50％）

・Financialvalue indicators（60％）
・ Social value indicators
（40％）

Yes

Yes

Three years

No7

Reform Efforts from Last Year①

Absolute Separation of the Role of BusinessSupervision and Execution②

Standard and Guidelines for the Resignationof the CEO③

Diversity of the Board of Directors

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

8

Corporate Governance System Chart

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

9

Diversity of the Board of Directors＜Members of the Board of Directors＞
Sex

Nationality

Total
MaleFemaleJapanese

NonJapaneseTotal

981

72Internal66-51

Outside32121Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

10

Future Direction①

Enhancing the Effectiveness ofthe Board of Directors②

Project for Enhancing the Effectiveness ofthe Board of Directors③

Less Ceremonial and More Meaningful, andEnhancing the Best Practices

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

11

Enhancing the Effectiveness of the Board of Directors＜Initiatives for “Evaluation of the Effectiveness of the Board of Directors”＞

2021~
2020
2019

2017
2015~16

Plan• Response to the 2018 management strategy andmanagement environment• Response to matters to be considered extracted in
the 2017 evaluation of effectivenessDo• Execution of the Board of Directors activities
based on the plan

Check

• Checking the status of response andimprovements to matters to be considered in2017• Evaluation of the effectiveness of the Board of
Directors activities in 2018, and extraction ofmatters to be considered• In comparison to the previous year, the expansionof evaluation methods, more concrete and more
finely grained evaluation items, increase of thenumber of questions, and setting of higher
standard of requirements

Act• Consideration and putting into practice ofmeasures in response to matters to be considered
extracted from 2018 evaluation of effectiveness

Past initiatives

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

Continuousand sustained
improvements
ineffectiveness12Less Ceremonial and More Meaningful, andEnhancing the Best Practices＜”Evaluation of the Effectiveness of the Board of Directors”
Initiatives going forward ＞①Strengthening the Effective Corporate Governance System・Establishing a shared understanding with regard to matters that should be handled by the Board of Directors, mattersthat should be handled by the executive side, and matters to which a cooperative approach should be taken
・Setting out matters for the jurisdiction of the Board of Directors, and the Nomination/Compensation Committees②Putting in Place a Risk Management System in Preparation for theStrengthening of Group Governance・Arranging supervision by the Board of Directors of the succession of the top management for Asahi Group HD andother key group companies
・Setting out and finalizing the risks to be recognized and monitored by the Board of Directors, and drawing up methods
for their monitoring③Reinforcing ESG Initiatives
・Clarifying the role taken by the Board of Directors with regard to ESG initiatives
・Building a mechanism to monitor the state of ESG initiatives

Copyright © ASAHI GROUP HOLDINGS. All rights reserved.

13

Information in this material is not intended to solicit sale or purchase of shares in Asahi Group Holdings.
The views, estimates and other information expressed in this document are based on the company's judgment at
the time of publication, and no guarantees are provided regarding the accuracy of such information. This
information is subject to change without notice.
The company and its officers and representatives accept no responsibility or liability for any damage orinconvenience that may be caused by or in conjunction with any part of these materials.