Introduction

Future Vision andPath to Achieve It

Value Creation
Strategy

Sustainable
Management

Governance

Financial
Performance

Approach to Sustainable Management

Sustainable Management
Approach to Sustainable Management

55

Promotion of Health Management

56

Sustainable Value Chains

58

Conserving the Global Environment

60

Initiatives for Human Rights

64

Machiko Miyai

The Morinaga Group will enhance its overall sustainability
management to achieve its Purpose and the 2030
Vision with “Altruism” as the foundation, a tenet
valued by the Company’s founder.

Director, Managing
Executive Officer
Responsible for Sustainable
Management Division

Sustainable Management and Promotion System
Currently in the global community, environmental changes, which are
impacting business activities and increasing uncertainty toward thefuture, are taking place at an unprecedented speed. Other changes
involve intensifying social issues including climate change and therapid advancement of digitization. Under such conditions, we must
work from a long-term perspective and follow clearly defined tasks
to reach the position we aim to achieve through our Purpose and the2030 Vision. The Morinaga Group has been conducting business witha strong conviction toward contributing to society since its inception.
We will take a more proactive approach toward efforts aimed atrealizing a sustainable society, including achieving the SDGs as amember of the global community.
As organizations to promote these efforts, we established the
ESG Committee, which is chaired by the Representative Director,
President, and the Sustainable Management Division to support andpromote the entire Group’s sustainability and ESG initiatives. The
Sustainable Management Division serves as the secretariat for the
ESG Committee, with the heads of departments working to attain our

long-term targets for 2030 serving as committee members. The
Committee reports on and shares the latest societal trends related
to sustainability, as well as deliberates necessary items on policy,
planning, and responses to issues to achieve our Purpose and the2030 Vision.
We have set up five subcommittees under the ESG Committee.
Each subcommittee is chaired by a Director and comprises members
from relevant departments. Furthermore, we established theSustainability Advisory Board, with the participation of three outside
experts, to qualitatively improve sustainable business management.
Aimed at achieving the Long-Term Targets for 2030, we will steadily
implement activities for sustainability.
The Morinaga Group will continue to disclose the status andprogress of its activities as appropriate through the Integrated Reportand its corporate website, enhance transparency throughout theGroup, and strengthen responses to requests for disclosure of ESG
information from external organizations and business partners.

<Schematics of Sustainability Promotion>
Board of Directors

ESG Committee(Chairperson: Representative Director, President)

Advisory Body:
Sustainability Advisory Board

Secretariat:
Sustainable Management Division“Health of Mind”
Subcommittee

Sustainable Value
Subcommittee

Sustainable
Procurement
Subcommittee

Environment
Subcommittee

TCFD/TNFD
Subcommittee
Second Meeting of the
Sustainability Advisory Board

Relevant Departments and Group Companies

Co-Creation with Stakeholders Aimed at
a Sustainable Society
Resolving social issues related to business requires consistent efforts involving the entire
value chain. We believe that co-creation with stakeholders is essential to address issues suchas health management, sustainable value chains, conserving the global environment, andhuman rights. The Group has identified six stakeholders: customers, employees, business
partners, shareholders and investors, local communities, and the global environment. We willcontribute to the realization of a sustainable society by engaging in two-way communication
with stakeholders through our corporate activities and promoting collaborative initiatives.

Customers

Globalenvironment

Employees

Morinaga
Group
Local
communities

Business
partners
Shareholders
and theinvestmentcommunity

Morinaga Group INTEGRATED REPORT 2023

55

Introduction

Employees

Basic Philosophy

Promotion Structure

Morinaga Group Declaration on HealthAs a sustainable company that keeps growing, we arecommitted to promoting the health of each and every
employee working for the Morinaga Group to create food that
benefits a healthy mind and body and to contribute to therealization of a sustainable society where everyone can smile.

We have established the position of Chief Health Officer, who is
the officer in charge of the Human Resources Division and reports
directly to the Representative Director, President, and the Health
Promotion Committee, whose members include industrial healthstaff in addition to representatives from the Human Resources
Division and the Morinaga Health Insurance Society. Together, they
make decisions on the formulation of philosophies and policies,
and the consideration and implementation of measures. Persons incharge of health management and industrial health staff assigned tomajor business sites nationwide in Japan are responsible for rollingout specific measures to continuously address health issues facing
employees and their families and improve their health.
Representative Director, President
CHO (Chief Health Officer)
Officer responsible for Human Resources Division

1. We support each and every employee so that they canenhance their health awareness and independently maintainand improve their own health.
2. We seek to increase employee engagement by promoting
diversity management and supporting employee efforts andtheir autonomous growth.
3. We provide a work environment where our employees canwork in safety and comfort.

Health Promotion Committee (Chairperson: CHO)
Committee members: Human Resources Division, Morinaga Health InsuranceSociety, and a general occupational health physician
Cooperation
Corporate Strategy Division
Sustainable Management DivisionCorporate Communications Division

Supervisors of business sites
Heads of divisions
Health management staff
Industrial health staff

Dissemination of health management
information to internal and external
parties

Sharing of issues with all employees,
implementation of measures,alignment of awareness/knowledge levels

Targets and Initiatives

Habit̶A Company-Wide Health Improvement Event

Voice of a Participant
Working to increase my sleep time and improve calorie intake during
Habit changed my perceptions of lifestyle habits and life rhythm. I willtake this opportunity to change my awareness from within myself andlead a healthier life.

■

Building Age-Friendly* Workplaces

The employees at our workplaces
represent a wide range of age
groups. The Group is focusing on
building age-friendly workplaces
where all employees, regardlessof age, can play an active role. For
Training for senior employees at a factory
example, to support the safety andfurther success of senior employees with a wealthof knowledge and experience, we are implementing
training and physical fitness measurement at the Group’s
factories, as well as our own fall prevention exercises,with the aim of ensuring that all employees can continue
to work safely and remain healthy for a long time.
*Age-friendly means that consideration is given to the uniquetraits of seniors and the elderly

80%

Health of Mind
Promotion of “health of mind”

The term Kokoroku is used at Morinaga to define
the six building blocks behind the ideal state of“health of mind.” We hold seminars for
employees to understand and promote Kokoroku.
■

Measures for Mental Health

Relaxing
andfeeling at
ease

Feeling a
sense ofaccomplishment

Smilingandfeelingenergetic

Health of
Mind
Feeling
fully
engagedFeeling a
sense ofmeaningin lifecan easily seek out consultation.
Feeling
connected
to people■

Kokoroku
Six building blocks of“Health of Mind”

To improve self-management skills and raise awareness of mental
health, we regularly hold training for managers (employee care) andself-care seminars for all employees. The uptake rate of stresschecks has remained at 95% or higher since the introduction of thesystem, and we are using the results to provide opportunities for
employees to take notice of their own stress level and to improve56

the work environment through group analysis. In addition, we haveestablished dedicated points of contact for consultation inside andoutside the Company to create an environment where employees

Morinaga’s own fall
prevention exercises

Voice of a Participant
Training and physical fitness measurement
for senior employees became a hot topic
among my peers of the same age, leading to
improved communication. We also take part infall prevention exercises conducted before thestart of work to help prevent occupational
injuries.

Employee Awareness Survey“Employees find their job meaningful and they are in goodmental and physical health at work.” Rate of positive responses:■

Financial
Performance

GovernanceLabor Environment

This year marks the 21st anniversary of the Morinaga Health
Insurance Society’s unique initiative called Habit,
in which employees set their own health-related
goals and improve exercise and dietary habits withthe aim of improving the health of employees andtheir families and improving their lifestyles. The
number of participants this year exceeded 1,900.

To continue to be a wellness company, we will work tocreate a work environment that maintains and improves
our employees’ “health of mind and body.”

Based on the Morinaga Group Declaration on Health, we support
efforts to maintain and improve employees’ “health of mind andbody.” By creating a work environment where employees canwork in good health and feel motivated, we aim to energize theorganization through improved employee vitality and productivity, as
well as to provide sustainable growth of the Group and better value
to society.

Sustainable
Management

Health of Body■

2030

Value Creation
Strategy

Relevant Stakeholders

Promotion of Health Management

TowardFuture Vision andPath to Achieve It■

Increasing Health Literacy

We hold our Health Forum every year with outside experts andoccupational physicians as speakers. In FY2022, we held the forum under
the theme of “exercise and health during the COVID-19 pandemic.”More than 80 employees from across Japan participated online, and theforum’s attempt to promote exercise on screen was well received.
■

Initiatives to Reduce Total Working Hours

We are implementing various measures toprevent prolonged working hours that
could have an adverse effect on health.
These include improving the accuracy of
Meeting with the labor union
working hour management. Together withthe labor union, we hold labor-management meetings on working
hour measures to understand the current situation and exchange
opinions on solutions to improve the working environment. We
recommend that the time gained by reducing prolonged working
hours be used to accumulate career capital* and improve the work-lifebalance, leading to the realization of healthier lives for employees.
*Career capital refers to business capital, social capital, and economic capital in our conceptof self-sustaining career development called the protean career.

Total Annual Working Hours and Acquisition Rate of Annual Paid Leave*(Days)
16(Hours)
1,970
1,961

1,960
1,950
1,940
1,930

14.1

11.7

Acquisition
rate of annual
paid leave(Average perperson)

14
12

12.1

1,946

1,945
2020

Total annual
working hours

10
8

2021

2022

(FY)

*Permanent employees of Morinaga & Co., Ltd. (non-consolidated), excluding forwarded employees■

Regular Interviews and Follow-up by Occupational Health
Physicians/Public Health Nurses for Expatriate Employees

Testing physical fitness

Occupational physicians and public health nurses regularly follow up
on the health of expatriate employees assigned to postings abroadso that they can play an active role with peace of mind in anenvironment and culture different from that of Japan. In addition, we
have established counseling services for expatriate employees andtheir accompanying families, provided by clinical psychologists andcounselors who have lived abroad.

Initiatives for Occupational Health and Safety
The Group conducts occupational health and safety activities, a foundationof corporate management, in accordance with the Occupational Health and
Safety Policy. Regardless of individual differences in age, experience, language,
employment relationship, or place of work, we aim to maintain and improve asafe and comfortable working environment for all. For example, we conduct
regular safety training with the highest priority given to the safety and health of
employees, thoroughly manage workplace safety, and engage in accident anddisaster prevention activities.

Frequency Rate
FY2020

FY2021

FY2022

LTIFR*

0.52

0

0.25

Number of occupational accidents
involving fatalities (persons)

0

0

0

*Frequency of occupational accidents indicates the number of
injuries/fatalities (not including sick or injured due to non-lost work time
accidents) due to occupational accidents per one million working hours.
(Figures for Morinaga & Co., Ltd., factories and production-related affiliatedcompanies)

Measures to Improve Stress Tolerance

We conducted training for increasing tolerance to stress using pulse
surveys with the expectation that it would lead to practical actions
by knowing about changes before and after the training. In addition
to the results of the pulse survey showing an improvement trend
in all items compared to before the training, more than 95% ofparticipants responded that they were “satisfied” with the content
of the training in the post-training survey.

External Recognition
We have been recognized as a 2023 Certified Health & Productivity Management Outstanding Organization(Large Enterprise Category), a program jointly run by the Ministry of Economy, Trade, and Industry andNippon Kenko Kaigi. This marks the sixth consecutive year that we have received this recognition.
In addition, we have been recognized as a Sports Yell Company by the Japan Sports Agency for being acompany that actively promotes and supports sports activities to improve the health of its employees.
Morinaga Group INTEGRATED REPORT 2023

57

Introduction

Future Vision andPath to Achieve It

Value Creation
Strategy

Sustainable
Management

Financial
Performance

GovernanceRelevant Stakeholders

Sustainable Value Chains

Customers Employees

Business
partners

Local
Globalcommunities environment

FY2021 Results of the CSR Procurement Survey

TowardNumber of
Ratio ofCompanies Receiving
Raw Material
the Survey
Transaction Value*1

Taking actions to address social issues relevant to our businesses
across the entire value chain in contributing to a sustainable society.

2030

SurveyResponse Rate

Average
Score*2

Raw materials 35 companies

81%

100%

83%

Materials

13 companies

81%

100%

88%

Total

48 companies

–

100%

85%

*1 Morinaga & Co., Ltd., in Japan (non-consolidated)*2 Evaluation of items such as the environment and human rights based on the Global
Compact Network Japan’s CSR Procurement Self-Assessment QuestionnaireLong-Term
Targets for2030

Sustainable procurement of raw materials: 100% for cacao beans, palm oil, and paper*1● CSR supply chain management: Implement for 80% or more of raw materials transaction value*2● Food loss and waste reduction: Food loss and waste reduced by 70% from receiving of raw
materials to delivery (distribution)*3●

our factories, we will strive to shift to more value-added recycling andpromote the effective use of resources.
The Sales Headquarters is also promoting multiple initiatives to reducefood loss and waste. The West Japan Branch Office is continuing towork with Osaka Prefecture as a member of the Osaka Food Loss andWaste Reduction Partnership System. At the 2nd Food Loss andWaste Reduction Network Roundtable held in February 2023, we
proposed recipes that consumers can easily use in their daily lives
as one of the methods for reducing food loss and waste. In addition,
we are cooperating withretailers to eliminate wastefrom the world by supplying
non-standard products
generated during
manufacturing at affordable
prices without discarding
them. We participatedin this initiative with
Recipe proposal at the 2nd Food Loss andnon-standard Potelong
Waste Reduction Network Roundtableof irregular lengths andreceived the Consumer Affairs Agency
Commissioner’s Award in the FY2022
Consumer-Oriented Management Excellent
Practice Awards.
We will continue to promote the recycling
and effective use of food resources throughthese initiatives, reducing the generation offood loss and waste, and donating to foodPotelong of irregular lengths
banks.

Food Loss and Waste Reduction Long-Term Target
and Progress**1 Group consolidated basis. Paper covers only product packaging. *2 Group consolidated basis*3 Domestic Group consolidated basis. Intensity; compared with FY2019

With the intensifying severity of social issues such as climate change,
all stakeholders are expected to address these issues in accordancewith their own abilities and responsibility. The Morinaga Group has

also been making efforts to realize “health of environment,” which willcontribute to the sustainability of society and the global environment
throughout our entire value chain.

Promote Sustainable Raw Materials Procurement
For main raw materials, including cacao beans, palm oil, and paper,
we aim to switch to sustainable sources by 2030.
Cacao beans, a key raw material for chocolate, are associatedwith a range of social issues including human rights issues such as
working conditions, poverty, and child labor, and environmental issues
such as deforestation. We began using certified cacao beans (Cocoa
Horizons*1–certified cacao supplied by the Barry Callebaut Group) insome of our chocolate products in FY2020, and we intend to switch
to 100% certified cacao beans by FY2025.
Illegal logging and human rights problems in producing regionsof palm oil, which is extracted and refined from oil palm trees, havebecome social issues. The Group will switch to certified palm oil(RSPO*2-certified raw materials) and aims to switch all its products
in Japan to certified palm oil by FY2023.
Sustainable procurement of timber resources for raw papermaterial is in demand as resources continue to decline worldwide
due to deforestation and illegal logging. The Group has beenprocuring FSC®-certified paper*3 (some specialty papers are recycled
paper or certified paper by a third-party organization) and othermaterials and has been working to switch all our products in Japan tosustainable paper. In FY2022, some materials could not be replaced,

resulting in a usage rate of 99.9%. We will continue to promote
initiatives to achieve our goals.
*1 Cocoa Horizons–certified cacao supplied by the Barry Callebaut Group are cacao beans
using the Cocoa Horizons Foundation’s mass balance method (certification model thatcombines certified and non-certified raw materials).
*2 RSPO: Roundtable on Sustainable Palm Oil. The RSPO is involved in the development andoperation of the sustainable palm oil certification scheme.
*3 FSC®N003064

Sustainable Procurement Medium-Term Targets and Progress*
Medium-Term Targets

Resultsfor
FY2022Single Month
Results for
March 2023

Cacao beans

FY2025 100%

34%

72%

Palm oil

FY2023 100%

9%

45%

Paper

FY2022 100%

99.9%

–

*Scope: Morinaga products in Japan. Paper covers only product packaging.

Procurement Policy ▶ https://www.morinaga.co.jp/company/english/sustainability/valuechain/procurement.html

Promote CSR Supply Chain Management
We are working together with our raw material suppliers to prevent
human rights, labor, and environmental issues within the supply
chain. The Supplier Guidelines formulated in June 2021 serve asa foundation for establishing a fair, just, and highly transparent
relationship with our suppliers in promoting procurement activities
with consideration to society and the environment.
To better understand the ESG measures of our raw material
suppliers, in March 2022, we conducted a CSR procurement survey
58

Reduction of Food Loss and Wasteof the 48 main business partners of Morinaga & Co., Ltd. (Japan). In
FY2023, we have been holding dialogues with suppliers to determine
the status of their initiatives and promote understanding of theGroup’s policies.
The Group will continue to conduct regular monitoring, build strong
long-term partnerships with suppliers, and engage in activities inaccordance with the Morinaga Group Supplier Guidelines, with theaim of realizing sustainable procurement.

Result for
FY2022

FY2030Target-49%-70%*Scope: From receiving raw materials to product delivery (distribution) (Domestic Group consolidated)
Intensity [Annual Food Loss and Waste Amount (t) ÷ Annual Production Weight (t)](Compared with FY2019)
Food loss and waste is defined as food that has been processed and disposed of byincineration, landfill, or other means, except for food waste that has been returnedto the circulation of food resources, such as feed and fertilizer.

As a responsible food company, we must address the issue of food loss
and waste. The Morinaga Group has established a long-term goal forfood loss and waste reduction, which we are now working to achieve.
The Production Headquarters has faced the challenge of reducing
food loss and waste on the frozen desserts production line of Takasaki
Morinaga Co., Ltd., that was newly installed in FY2021. In cooperation
with the factory and related departments, we installed equipment to
reduce defective products during production line operation and further
optimized manufacturing conditions, reducing food loss and waste by
838 tons compared with FY2022. We are also working to increase thefood recycling rate, and the Mishima Factory, Takasaki Morinaga Co.,
Ltd., and Morinaga Angel Dessert Co., Ltd., each have achieved a 100%
recycling rate. In addition to aiming for a 100% food recycling rate at all

15th anniversary of
One Chocolate for One Smile

Project for connecting smiles with chocolates

Cacao-producing countries face various social issues. One
action that the Morinaga Group is taking to address theseissues is the customer-led campaign called One Chocolate for
One Smile This activity marked its 15th anniversary in 2023.
In addition to donations made throughout the year, during
special periods, we run a campaign to donate one yen for eacheligible product purchased by customers, such as Morinaga
chocolates. The cumulative amount of donations up to FY2022
reached approximately 290 million yen, and through our support
partners Plan International Japan and the nonprofit organization
ACE, we are supporting children in cacao-producing countries

from various angles, such as prevention of child labor,
protection of children, school attendance support, and theconstruction of school classrooms.
From FY2021, we added frozen
desserts products such as Ita Choco
Ice to the target products. Ourcommitment is to “pave the roadto a future where people who eat
chocolate and the children learningin cacao-producing countries cansmile together.”

One Chocolate for One Smile (Japanese only) ▶ https://www.morinaga.co.jp/1choco-1smile/

Morinaga Group INTEGRATED REPORT 2023

59

Introduction

Customers Employees

Business
partners

Sustainable
Management

Governance

Financial
Performance

Local
Globalcommunities environment

Main Initiatives Aimed at Reducing Greenhouse Gas Emissions

To achieve the health of environment, we strive for the health ofsociety by minimizing environmental impacts in our businessactivities and conducting environmental conservation activities
from a medium- to long-term perspective.

2030

Value Creation
Strategy

Relevant Stakeholders

Conserving the Global Environment

TowardFuture Vision andPath to Achieve It

Details

Initiatives

Promote visualization of CO2 emissions● Establish a highly efficient production system by promoting a changeover to smart factories● Implement energy conservation initiatives (e.g., adopt high-efficiency and energy-saving equipment, operate air
conditioning efficiently)● Install a solar power generation system●

1

Reducing CO2
emissions at
production sites

CO2

Consider switching to alternative fluorocarbons with low ozone depletion potential and non-fluorocarbon materials
Strengthen preventive management of fluorocarbon leakage● Introduce natural refrigerant equipment with zero ozone depletion potential and low global warming potential(Morinaga Angel Dessert Co., Ltd., Morinaga Dessert Co., Ltd., and Takasaki Morinaga Co., Ltd.)●Long-Term
Targets for
2030●

Goal of net-zero GHG emissions by FY2050*●

30% reduction in CO2 emissions by FY2030*2●

Reduce the plastics used for in Jelly products by 25%*3 by FY2030

1*1 Group consolidated basis *2 Scope 1 + 2 (domestic Group consolidated basis; compared with FY2018)*3 Target: Amount of plastics used in packaging materials (intensity; compared with FY2019; including replacement with biomass plastics)

Global environmental issues, such as climate change andenvironmental pollution caused by plastic waste, could potentially
impact the Group’s business and performance over the medium
to long term. We will accelerate our initiatives on environmental
conservation appropriately and strategically following the Morinaga
Group Environmental Policy to achieve sustainable growth for theGroup and provide the “health of environment.”
To achieve this, the ESG Committee deliberates, formulates, andreviews progress on important policies and targets related to theenvironment. The Environment Integration Office was establishedby the Production Administration Division and the Sustainable

Reduce the weight and volume of plastic products
Pouches with thinner plastics

Intensity(t-CO2e/million yen)
0.5

0.48

FY2030Target

0.44
80
74.1

75.7

76.3

60

60

40

0.4

0.3

*Scope 1 + 2 (domestic Group consolidated basis; compared with FY2018)

To contribute to a decarbonized society, we are promoting carbon
management including energy conservation and the introductionof renewable energy to achieve the long-term goal of net-zerogreenhouse gas emissions by 2050. In FY2022, CO2 emissions
increased by 3% compared with FY2018 due to higher production
volume. Nevertheless, we are working to prevent energy loss byintroducing cameras that detect air and steam leaks from equipment
at domestic production sites, while Takasaki Morinaga Co., Ltd., ispreparing to install a solar power generation system expected tolower CO 2 emissions by more than 1,100 tons per year in the near
future. We will continue to work toward a decarbonized society fromvarious angles.

material for mainstay in Jelly products. With this long-term goal
as a starting point, we will promote initiatives toward achieving a
resource-recycling society.

in Jelly
Protein 5g

in Jelly
Multi Vitamin

Switch to eco-friendly materials for packaging

Promote recycling

Change straws to
5% biomass blended plastic

The in Jelly Recycling Program*
was launched in September 2021.

Cups withthinner plastics

Oishii Collagen
Drink Peach

ICEBOX

Oishii Collagen
Drink Lemon

Oishii Collagen
Drink Premio

A collection box was
set up at Hikarigaoka
Girls’ High School

Effective Use of Water Resources

CO2 Emissions (Scope 1 + 2)*

100

-30%

Improve the loading rate and reduce the number of vehicles by coordinating transportation and delivery with othercompanies in the industry*An initiative jointly led by Morinaga and TerraCycle Japan G.K. to collect empty jelly containers and recycle them into new plastic products.

(Thousand t-CO2)+3%●

Environmental Initiatives in the Containers and Packaging of Major Brands

Third-party assurance of CO2 emissions andwater usage data

■ Scope 1 ■ Scope 2

CO2

Initiatives in logistics

In recent years, marine pollution by plastic waste has become aserious issue that is attracting growing concern globally. The Group
believes its efforts through business activities are important and has
established a long-term goal to reduce plastic use in the packaging

Response to Climate Change Issues

Result for
FY2022

3●

Promotion of Environmental Consideration in Containers and Packaging

Management Division to exchange information with the Factory
Environment Management Committee and other organs, as wellas to promote continuous improvements to our environmental
management system
based on the ISO
14001 certificationand to reduce theenvironmental
impacts and increase
productivity.

Please see our corporate website for the Morinaga Group’s environmental policy, Environmental Management Promotion System,
and ISO 14001 certification status.
Environmental Policy ▶ https://www.morinaga.co.jp/company/english/sustainability/environment/#policy
Multisite Organization Chart and ISO 14001 Certification Status ▶ https://www.morinaga.co.jp/company/english/sustainability/environment/

CO2 Emissions Reduction: Long-Term Target and Progress*

2

Initiatives at facilities
using fluorocarbons

50.1

53.4

54.0
0.2

In recent years, there has been the growing risk of water resource
shortages due to rising populations and the frequent occurrence of
natural disasters caused by climate change. We believe that water
resources are essential to our Group’s business activities, and it isimportant to promote business activities that effectively assesswater stress*1 and utilize water resources. We assessed water
stress and conducted water withdrawal surveys in regions where

1,500

20

■ Domestic Group consolidated

2,000
1,771.8
169.7

1,778.4
179.4■ Overseas production sites

22.3

2018
(Baseline)

2021

2022

0

9%

1,602.1

1,599.0

1,706.1

Medium-high

500

0
(FY)

*Domestic consolidated basis. CO2 emissions are rounded up to the second decimal place.
Figures for FY2020 and onward are assured by a third party, LRQA Limited.
The Company applied the “Accounting Standard for Revenue Recognition (ASBJ Statement
No. 29, March 31, 2020),” and other regulations, from the beginning of FY2021. The
figures for FY2020 are from after retroactive application of the said accounting standard.

Extremely high

Low

9%

High

1,000

22.3

*1 A state in which water supply and demand is tight. Water stress occurs when the maximum
available water resources per capita fall below 1,700 m3.
*2 World Resources Institute’s Aqueduct Water Risk Atlas

0%

1,909.6
203.5

0.1
24.0

regions facing high water stress and water resources usage. We will
now strive to ascertain risks related to water resources to ensure
effective use of these resources.

Water Stress Evaluation of All Production Sites (FY2022)

Amount of Water Resource Usage*(Thousand t)

production sites are located using Aqueduct*2, which identified

Low-medium

27%

55%

0
2020

2021

2022

(FY)

*Domestic figures reflect Group consolidated figures. Overseas figures reflect figures at
production sites.
The domestic Group consolidated figures for FY2020 and later are assured by a third party,
LRQA Limited.

Scope: Four factories of Morinaga & Co., Ltd. (Yokohama, Kanagawa; Oyama, Tochigi;
Mishima, Shizuoka; Anjo, Aichi), four affiliated production companies (Takasaki,
Gunma; Yamato, Kanagawa; Tosu, Saga; Amagasaki, Hyogo), and three overseas
production sites (North Carolina, USA; Taipei, Taiwan; Zhejiang, China)

Morinaga Group INTEGRATED REPORT 2023

61

Future Vision andPath to Achieve It

Introduction

Value Creation
Strategy

Sustainable
Management

Financial
Performance

GovernanceConserving the Global Environment

Information Disclosures Based on the TCFD Recommendations

Initiatives for Natural Capital and Biodiversity

was established by the Financial Stability Board (FSB). Since then,we have been addressing the TCFD recommendations, including
conducting climate change scenario analysis.

The Morinaga Group recognizes that climate change is an important
issue that affects the continuity of its operations and sustainablegrowth. In April 2022, we endorsed the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD), which
Area

DetailsArea

The Morinaga Group’s analysis of risks and opportunities, target setting, and progress monitoring
Representative Director, President. Findings are then reported to the Board of Directors, which also

Board of Directors

supervises the status of activities. In FY2022, the ESG Committee convened eight times.

ESG Committee

The deliberations of the ESG Committee are considered in various aspects of decision-making
concerning management. To review climate change initiatives, we established the TCFD/TNFD
Subcommittee*1 under the ESG Committee. This subcommittee is responsible for analyzing the Group’s

TCFD/TNFD Subcommittee*1

Details
For governance information related to the Group’s sustainability, please refer to the governance section in “Information Disclosures Based on the TCFD

Review and Promotion System

concerning sustainability initiatives are deliberated on by the ESG Committee, which is chaired by theGovernanceto understand our corporate activities’ dependence and impact onnatural capital, and work to maintain and conserve it.

The Morinaga Group Environmental Policy clearly states that we will
deepen our understanding of biodiversity and strive to maintain andconserve biodiversity and protect ecosystems. We will make efforts

Chair
・Representative
Director,
President
Chair・Director,
Managing
Executive Officer

Recommendations” on page 62. Discussions on natural capital and biodiversity are conducted by the TCFD/TNFD Subcommittee, which operates under the
ESG Committee. Using the beta version v0.4 of the TNFD framework and the LEAP
approach advocated by the TNFD as a reference, we analyze the Group’s dependence andGovernance

Review and Promotion System

impact on natural capital, risks, and opportunities. The subcommittee is chaired by the

Board of Directors

Director, Managing Executive Officer in charge of the Sustainable Management Division.
Regarding the TNFD themes, we held four subcommittee meetings between April andrisks and opportunities and reviewing responses following the TCFD recommendations. It is chaired by

September 2023. The results of this review were deliberated on by the ESG Committee. In

the Director and Managing Executive Officer in charge of the Sustainable Management Division. Regarding the TCFD themes, we held two subcommitteeturn, findings are reported to the Board of Directors, which also supervises the status ofmeetings in FY2022. The results of this review process are reviewed by the ESG Committee and then reported to the Board of Directors, which supervises

activities.

Chair
・Representative
Director, President

ESG Committee

Chair・Director, Managing
Executive Officer

TCFD/TNFD Subcommittee*1

the status of activities.
In the process of identifying risks and opportunities of climate change, Morinaga established the 4°C, 2°C, and 1.5°C scenarios for its domestic food
manufacturing business. Based on the information released by the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency

Riskmanagement

Risks and opportunities related to natural capital and biodiversity are examined by the TCFD/TNFD Subcommittee, with the findings deliberated on by the
ESG Committee. The details of deliberations are reported to the Board of Directors, which supervises the status of risk management.

(IEA), we used these scenarios to analyze the impacts in Japan in 2030 and 2050. The table below contains a summary of the risks and opportunities, andresponses to them.

Dependence and Impacts on Natural Capital

Examples of the Morinaga Group’s Important Risks
Category Subcategory

Transition Policy andrisks
regulation

Strategy

Physicalrisks

Chronic

Risk Factors

Impact on Operations

ImportanceSpread of GHG emissions
Rising energy costs and logistics
pricing and stricter GHG
costs caused by the introduction ofemissions reporting obligations carbon taxes
Rising cost of capital investment for
manufacturing facilities due to theCompany’s response to energy conservation

Stricter energy
conservation policy
Changes in rainfall patterns
and extreme changes inweather patterns

Response

Promote initiatives aimed at the CO2 emissions reduction
Mediumtarget● Promote visualization of CO2 emissions at factories,
implement energy conservation measures, and establish ahighly efficient production system through reorganization
Large

Rising raw material and development
costs due to quality deterioration andyield reduction of crops●

Promote raw materials procurement in consideration of
the environment in line with the Procurement Policy andSupplier Guidelines● Purchase raw materials from multiple suppliers (or multiple sites)
●

Large

Examples of the Morinaga Group’s Important Opportunities
Category

Opportunity Factors

Impact on Operations

Importance

Response
Promote efficient production activities by rebuilding the production
system and creating smart factories*2● Establish more efficient system/transport logistics and deliveries
with fewer environmental impacts●

Resource
efficiency

Development and use of
efficient production anddistribution processes

Declining manufacturing andtransport costs

Large

Products
and services

Adaptation to climate

Rising demand for in Jelly andfrozen desserts due to global
warmingMedium●Increase sales of in Jelly and frozen desserts

The Group recognizes its dependence and impacts on natural capital
associated with corporate business activities as shown in the figure at right.
In addition, we confirmed the dependence and impacts of the Group’s
main business of food product manufacturing, and the Group’s main raw
materials, such as cacao, palm, and wood (paper). The figure below shows

Relationship between the Company and Natural Capital
Natural capital
Air

Fauna
Water

Soil

the results of our assessment on 25 items̶16 dependent items and nine
impact items̶using an external tool.
The production of food products is particularly dependent on the supplyof water. We understand that the production of cacao, palm, and wood(paper) depends on many forms of natural capital such as good quality soil,
water, and climate adjustment, and that the expansion of farmland anddeforestation might affect biodiversity.
For cacao beans, palm oil, and paper, the Group is working to procure
100% sustainable raw materials.
We will further deepen our understanding of the situation of natural
capital and strive to maintain and conserve natural capital and biodiversity.

Assessment of Dependence and Impacts on Natural Capital*2

Change inforest area

Change in concentrationlevel of pollutants

Impact ofbusiness
activities
on nature

The Company

2030

2050

*1 The TCFD Subcommittee was renamed the TCFD/TNFD Subcommittee in FY2022.
*2 Smart factory: Using IoT and AI technologies to integrate the technology and digital data of production equipment to ensure stable operations and increase production efficiency

(FY)

Palm

●

〇

Wood (paper)

●

〇

〇

●

●

〇

〇

●

〇

〇

〇

●

●

〇

〇

●

●

〇

〇

●

●

●

●

●

●

●

〇

〇

●

●

●

●

●

〇

〇

●

●

●

〇

●

〇

〇

〇

Pollution of soil,
water, and air●〇

Supply of wood

〇

〇

〇

Prevent harmful
insects and diseases●●

Prevent fires〇〇

Impacts on
ecosystems

2022

〇

Impacts on otherimportant regions

2021

●

Impacts on importantregions for biodiversity

2018(Baseline)

Cacao

Impacts on protectedareas and
conservation areas

Aim fornet zeroour shift away from fossil fuels. At the same time, we are considering the introduction of renewableenergy and implementing measures to achieve these targets.

62

51.8

Environmental factors

Deforestation

insulation) by upgrading our infrastructure and utilizing new and efficient equipment, thus highlighting〇

Food product manufacturing76.3 30% reduction

Pressure on
biodiversity
Changes in naturecaused by the expansionof farmland, the use ofrivers, and other factors

75.7

Supply of water

74.1

Note: Domestic
consolidated
basis

Prevent tropical
cyclones

We are actively improving energy efficiency at our production sites (e.g., preventing air leaks, adding

Business activities
depend on
ecosystem services

Dependence

Impacts

Provisioning
services

Regulating services
Prevent landslides(Thousand t-CO2)

Water
supplyImpacts

Prevent hightemperatures

and Targets

CO2 Emissions (Scope 1 + 2)

(Scope 1 + 2) by 30% from FY2018 in Japan by 2030 and to achieve net-zero GHG emissions by 2050.

Provisioning
services● Larger dependence/impacts 〇 Dependence/Impacts somewhat large

Ease of weeding

Indicators

To mitigate climate change risks, the Morinaga Group has established targets to reduce CO2 emissions

Pollination

Based on the above, management conducts business operations after carrying out appropriate oversight of company-wide risks.

Conserve
ecosystems

Category

Good quality water

addressed appropriately as management risks by the same committee. In addition, the TCFD/TNFD Subcommittee conducts reviews in line with the TCFD

Good quality soil

Supporting services &Regulating services

Directors, which oversees the progress of risk management.

Water
purification

Change inwater volume

Ecosystem services

reviews countermeasures against these risks, monitors progress, and manages and addresses risks appropriately. Climate change risks are managed andrecommendations, with the results deliberated by the ESG Committee. The details of discussions held by both committees are reported to the Board ofRegulating
services(e.g., ecosystem, species, genes)

Changes in thenatural situation

DependenceManagement

Maintenanceofecosystems

For details on the promotion of the procurementof sustainable raw materials, see page 58.

The Morinaga Group’s Total Risk Management Committee, which is chaired by the Representative Director, President, identifies risks, evaluates the severity,

Risk

Supporting
services

Flora
Biodiversity

For more detailed information, please refer to “Information Disclosure based on the TCFD’s Recommendations” on our corporate website.
▶ https://www.morinaga.co.jp/company/english/sustainability/environment/climate-change/tcfd/
We will also address other risks and opportunities deemed important as appropriate.

Ecosystem services〇●*1 The name of the TCFD Subcommittee was changed to the TCFD/TFND Subcommittee in FY2022. *2 A total of 25 items were assessed, with 19 listed as having a high degree of dependence or impact.

Morinaga Group INTEGRATED REPORT 2023

63

Relevant Stakeholders

Initiatives for Human Rights

Toward2030

Customers

Employees

Business partners Local communities

We will engage in business while respecting global
principles and guidelines so that everyone in the world
can leverage their individuality and protect their rights.

Human Rights Management System
We have established the Morinaga Group Code of Conduct andStandards of Behavior, the Morinaga Group Human Rights Policy,
and the Morinaga Group Supplier Guideline. We are working to share
our philosophy on human rights defined in these policies throughcompliance training sessions for all employees and supplier briefings.
In the unlikely event of a concern about respect for human rights,
the Compliance Committee and the ESG Committee discuss how to
respond, and a system has been put into place whereby the Board of
Directors receives reports from both committees and then provides
supervision and gives instructions.

Human Rights Management System Diagram
Board of Directors
Reports on Plans,
Progress, Responses, etc.

Compliance Committee
ReportingMonitoring

Inquiries

ESG Committee
ReportingMonitoring

General Affairs Division

Sustainable Management DivisionHelpline (accepts anonymous reports)
Human rights informationin the GroupJaCER (accepts anonymous reports)
External human rights information
including the value chain

Reinforce Human Rights Management
Revised the Human Rights Policy
In 2023, after consulting with experts and professionals, we revised
the Morinaga Group Human Rights Policy and declared that wewill respect international frameworks and norms, including the UN
Guiding Principles on Business and Human Rights. In addition toeliminating discrimination, harassment, child labor, forced labor,
and human trafficking, we have made it clear that we will pay what
is considered a living wage; eliminate discrimination, including
gender-based, in recruitment and treatment; and avoid
advertisements that have a negative impact on children.
Morinaga Group Human Rights Policy▶ https://www.morinaga.co.jp/company/english/ir/policy/pdf/humanrights.pdf

Road Map to Reinforcing Human Rights Management
Results for FY2021• Started initiatives on human rights due diligence• Completed the Supplier Guideline• Commenced the CSR procurement survey based on the Supplier Guideline• Conducted stakeholder engagement with NGOs and NPOs
• Promoted internal training and education (e.g., basic approach torespecting human rights and prevention of harassment)

Results for FY2022• Became a signatory to the UN Global Compact• Developed raw materials procurement guidelines for cacao beans, palm oil,and paper• Conducted a theoretical evaluation of the negative impacts our businesshas on human rights• Joined JaCER and began using its grievance platform• Held the “Business and Human Rights Seminar” for executive officers

FY2023

Assessment of Human Rights Issues (Negative impacts)
As part of our human rights due diligence initiatives, we conducted atheoretical evaluation on the negative impacts of the Group’s businesson human rights. At present, we have reaffirmed that considerationfor occupational health and safety and the rights of foreign workers
is required more than ever in manufacturing processes inside andoutside the Group, and that there are various issues related to
wages and working hours in raw materials other than child labor incacao-producing areas. While verifying the results of this assessment,
we will continue to work to identify specific negative impacts.

Grievance Mechanism
We joined the Japan Center for Engagement and Remedy on
Business and Human Rights (JaCER), which was established in 2022,
64• Revise the Morinaga Group Human Rights Policy• Expand internal training and education (e.g., global approaches to businessand human rights)• Respond to issues identified (starting with urgent issues)• Review the progress of responses to issues and report those in the
integrated report and other public documents

Up to 2030
• Increase trust and brand value/corporate value through initiatives forbusiness and human rights

as a founding member, and have begun utilizing its grievancereporting system and professional advice. Through the “Engagement
and Remedy Platform” provided by JaCER, which complies with the
UN Guiding Principles on Business and Human Rights, it is now
possible to accept reports from outside the Company and overseas
in addition to the existing internal helpline. We will strive to respond
appropriately to whistleblowers while receiving advice fromprofessionals, which will lead to the resolution of business andhuman rights issues.