For a Sustainable Future
Sustainability Report 2024

Sustainability Report 2024

first time we held a seminar for a local public body as part of
our CSR activities, I would be most happy if such activities
allowed the Group’s eco-friendly agritechnologies to help
energize local agricultural promotion and urban planning

あたりまえにする
Atarimae ni suru (Make it commonplace)
テクノロジーTechnology

increase by roughly 70% to accommodate this population

Just as UN Secretary-General António Guterres predicted whencore domains: crop protection (chemicals for plants) against

he stated “the era of global warming has ended; the era of global

pests, fertilizers and drip irrigation (nutrients for plants) that

Focusing on growth drivers to achieve steadybusiness growthboiling has arrived,” many cities in the northern hemisphereprovide the minimum amount of fertilizers and water required

The Strategy for Sustainable Food Systems established by Japan’s

have experienced unprecedented heat waves, leading to what

to help nourish plants according to their growth stage, andMinistry of Agriculture, Forestry and Fisheries in 2021 sets thehas been considered the warmest year in recorded human his-

biostimulants (increasing plants’ immunity to diseases) that

goals of reducing agrochemical use by 50% on a risk-equivalent

tory during 2023. Rising ocean temperatures brought about byenhance crop immunity against environmental changes andbasis and chemical fertilizer use by 30% by 2050. In line with thisthe El Niño weather pattern that triggered these heat waves

pests. By spreading the prevalence of these three agritechnolo-

road map, the OAT Agrio Group is also working to promote andare also causing more intense tropical cyclones and hurricanes,

gies to increase food production in a way that does not succumb

expand the use of Green Products, fertilizers and drip irrigation,

Realizing sustainability

as well as inviting higher temperatures around the globe. A

to climate change, we will contribute to communities through-and biostimulants. As far as Green Products (plant protection

At the time OAT Agrio was founded in 2010, the term sustain-

major market for the OAT Agrio Group, Central and Southout the world.

materials derived from natural and food additives) are concerned,

ability was not as common as it is today, yet even at that time I

sales of Suffoil, a plant protection material that employs both

felt a sense of crisis regarding the sustainability of the global

activities.

growth. The OAT Agrio Group’s agritechnologies cover three

OAT Agrio’s hope is to provide
all people everywhere with thejoy of cultivating, the emotionof watching, and thecontentment of eating.

Brand videos
now available

environment and water resources. We have therefore raised thegrown ever since its release as an insecticide for tomatoes,

three concepts of environmental conservation, eradication ofeach country’s history books. Even in Europe, Spain is experienc-

Our employees must without question grow if we are to sus-

citrus, and strawberries that targets hard-to-control pests. It wasfamine, and improvement in resource efficiency as our goals foring large-scale droughts. Under an environment where thesetainably expand our business in a way that achieves our man-also adopted as the pest control program for the ZEN-NOH

contributing to the SDGs. However, simply converting forests

climate change risks have manifested, determining how to sus-

agement philosophy. Likewise, actively investing in human

ICHIGOHADANI ZERO PROJECT. As for biostimulants, Lidavital,

and grasslands into cropland, or introducing greater amounts

tainably provide safe, secure food has been a fundamental

resources and training personnel to enhance their appeal will

which is produced by LIDA, a Group company based in Spain,of fertilizer, for the purpose of increasing food production will

theme of our business since our founding in 2010. Despite theserve to create an attractive company. To become attractive

has seen increasing sales following its recognition as an effective

result in higher greenhouse gas emissions. In other words, sus-

importance of an increase in food production, there are limits topersonnel, however, employees must possess an interest in

biostimulant for budding among tea farmers in Shizuoka

tainability and these approaches to increasing food production

how much land can be cultivated for agriculture. The questionand understand their surroundings, in addition to deepening

Prefecture. In addition, Fullbody, also produced by LIDA, has

contradict one another. The three agritechnologies possessed

then is “how can we improve the yield per unit of land area?” The

their expertise and skills in the fields related to their own duties

been adopted by many lettuce growers in Nagano Prefecture,by the Group will function as a breakthrough for achievingtrue value of the Group’s agritechnologies is now truly coming

as professionals. I believe that curiosity and new knowledge

the largest lettuce producing region in Japan, as a means of pre-these contradictory goals at the same time. By skillfully combin-

into question. And I am certainly not the only one who feels awill open the door to communication and that recognizing thisventing continuous cropping damage and of strengthening root

ing crop protection against pests, fertilizers and drip irrigation,stronger sense of mission and pride than ever before in thewill lead to something new. In this sense, the Group is focusing

spreading. In the greenhouse horticulture field, we have pro-and biostimulants, the Group will serve as a growth driver forGroup’s management philosophy of “contributing to people

its energies on contributing to local communities through CSR

moted widespread participation in smart agriculture since 2022

Green Products, biostimulants, greenhouse horticulture, andaround the world with our agritechnology and sincerity.” In fact,

activities. Since 2013, the third year of our founding, we haveby offering Agrio Ichigo Master, a comprehensive cultivation

the development of products globally as the fields that can

I keenly hear about the intentions and passion of every employee

engaged in hands-on educational programs for kindergartens

solutions service using an AI-based automated growth diagnosis

exhibit the greatest outcomes while still considering the envi-

at the OAT Agrio Group on a daily basis, which has given me aand elementary schools in the Naruto region of Tokushima

system. By quantifying and visualizing experienced-based rulesronment. And in this way, we are working to increase food pro-strong sense of confidence. The world’s population is projected

Prefecture, where our factory, research facility, and Cultivation

used by growers, we aim for a scenario in which new farmers canduction in the field of agriculture as an indispensable part of

to exceed nine billion by 2050. Against this backdrop, in 2010,

Research Center are located. Specifically, these activities

steadily secure higher yields under the concept of cultivating

realizing a sustainable society. Moreover, we will continue tothe same year the Group was founded, the Food and Agriculture

include flower seedling planting, as well as soil preparation

products without a physical presence in each facility. Agrio Ichigo

convey the joy of cultivating, the emotion of watching, and theOrganization (FAO) announced that food production needs toand rice planting for bucket rice cultivation. Our younger

Master has also been adopted by tourism farms in Ibaraki, Chiba,

contentment of eating to everyone through the OAT Agrio cul-

employees have taken the lead and actively engage in these

Fukui, and Nara prefectures. In fact, a tourism farm (0.8acres oftivation media site and Instagram. Three years after its launch,

activities. I am convinced that coming into direct contact withacreage under cultivation) in Yasato, Ibaraki Prefecture, that

our Instagram account reached 50,000 followers. Although thisthe soil and experiencing cultivation together with the chil-began regular operations in December 2022 received 7,000 visi-

is still just a small first step, people around the world are review-

dren who will take responsibility for the future will connect totors in 2023, more than 1.5 times that of an average year. The farming their relationships with food and agriculture from thesignificant growth for both these children and our employees.

successfully allowed every visitor to fully enjoy delicious straw-

standpoint of sustainability, which I believe will have a major

In July 2023, we held a seminar and Cultivation Research Center

berries and has produced significant results where strawberry

impact on achieving sustainability if we can reach a common

facility tour for those from the Community Design Department

growth has nearly outstripped harvesting capacity. In addition toawareness. OAT Agrio will continue to make steady progress,of the Matsushima City government in Tokushima Prefecture.

the yield, the strawberries have been well-received for the

one step at a time, toward achieving sustainability together

President, CEOThis event was initiated after the members of the department

strength of their quality, with entries at the National Strawberrywith everyone around the world. We therefore ask for yourHisashi Oka

read the CSR activity report on our website and became

Competition receiving prizes.

continued support.

Message from the President, CEOContributing to local communities andemployee growthsafflower and cottonseed oils as its main ingredients, haveas well as suffering from droughts on a scale that will remain in

Panama Canal due to insufficient rainfall during the rainy season,
Message from the President, CEOお
いしいを
Oishii wo (Delicious)

Using agritechnology to address the world’s
food issues

America saw restrictions on the passage of ships through the01

OAT アグリオ

Realizing sustainability through food and agriculture with pridein our management philosophy

interested in our eco-friendly products. Although this was the02

Sustainability Report 2024

We at the OAT Agrio Group contribute to people around the world
with our agritechnology and sincerity.

Progress and Targets for Important CSR Issues
In addition to widely proposing the OAT Agrio Group’s(E), social (S), and governance (G) perspectives into our manage-technologies and product functions, we will contribute toment. We believe that the corporate activities of the Group will

Under the philosophy that “We contribute to the people intechnology” based on our accumulated technology andhuman- and eco-friendly sustainable agriculture by undertak-help build a sustainable future together with society and re­­the world with our agritechnology and sincerity,” the OAT

know-how, we aim to resolve food issues and support aning active product releases while working to enhance our cor-present the very embodiment of the Sustainable Development

Agrio Group develops and systematizes a comprehensive

ever-increasing world population, as well as to obtain highporate value. We will also actively incorporate environmental

Goals (SDGs).

technology set that contributes to increased crops throughtrust and evaluation from stakeholders and society overall,

the development, manufacturing, and marketing of agro-

thereby maximizing our corporate value as our basic manage-

chemicals, fertilizers, and proprietary cultivation systems. By

ment policy.

ESG Important Issues

Plant protection
products

Fertilizers anddrip irrigation

Research on safer and more
effective chemicals for plants

Development of nutrients for plantsthat promise abundant harvests• Research at two laboratories• Cultivation technology• Fertilizers for hydroponic culture(Naruto and India)• Discovery of new highly safe,
effective substances(largest share in the Japanesemarket)Table of Contents
01 Message from the President, CEO
03 Philosophy / Table of Contents
04 Progress and Targets for Important
CSR Issues

03

05 A
 bout the New Medium-Term
Management Plan

07 Environment
10 Society

11 Corporate Governance
13 P erformance Highlights /Environmental Conservation Reports

14 C ommunication with Stakeholders /Societyagainst diseases, pests, andenvironmental stress• Respect for the environment andbiodiversity that boosts theimmunity of crops against
diseases and pests

Governance• Boosting the immunity of crops

2024 Targets

Reduction andrecycling of waste• Reduction of waste and plastic
trash, reduction of production loss
• Naruto Factory Management:
Waste down 17% YoY• Naruto Factory Management: Waste down
17% YoY
Down 4.4% YoY per 1 ton of production• Naruto Factory Management:
Waste down 3% per 1 ton of
production compared with 2023

Use of renewableenergy and reduction of emissions ofgreenhouse gases• Promotion of renewable energy
use• Setting and implementation ofgreenhouse gas reduction targets• Calculation and publication of Scope 1, 2, and 3
emissions for the Group• Implementation of comparative investigations of
reduction measures for the setting of reduction
targets• Implementation of comparative
investigations of renewableenergy introduction costs• Setting and implementation of
reduction targets

Management ofemissions andwater discharge• Management of consumption anddischarge of water at factories• Setting and implementation of
reduction targets
Naruto AL Factory :Continued strengthening of rinse water
quality management• Naruto Overall: Amount of wastewater generated
down 38.3% YoY• Amount of outsourced wastewater treated down
25% YoY (Fertilizer factory up 2.5% YoY on a
non-consolidated basis)• Naruto AL Factory:
Continued Continued strengtheningof rinse water quality management• In addition to the management of
nitrogen emissions, consideration
given to the management ofphosphorous emissions

Labor environment

Safety of workplaces with zeroaccidents• Implementation of regular education on health and safety/Accidentfree days: 661 consecutive days

Naruto Factory: 290 zero accident days (up to
December 31, 2022)(In 2023, an accident occurred on March 16;
otherwise, the year was accident-free)

Implementation of regular education
on health and safety/Achievement of
366 accident-free days/Prevention of
accidents year-round and continuation into the next fiscal year

Quality of products

Strengthening of the quality assurance system/Human resource
development and improvement/
Renewal of ISO 9001 quality
management• Implementation of ISO internal audit personnel
training,/increase in the number of auditors• Renewal screening approval for ISO9001

Management of safety for products/
Preparation and provision of SDSs foreach product based on legal systems
for appropriately controlling chemical
substances/Renewal of ISO9001 status

Personnel affairs

Setting of new work styles and evaluation systems/Observance and promotion of the Act
on the Promotion of Female Participation andCareer Advancement in the Workplace/Malechildcare leave acquisition rate of 20%/
Employee eligibility expansion for staggered
commuting/Introduction of no overtime days

Holding of information exchange meetings for balancing workand child-rearing once every three months/Holding of asset formation seminars to support child-rearing/Male childcare leaveacquisition rate of 33%/Implementation of initiatives for healthimprovement (certification as an Excellent Health and Productivity
Management Organization by the Health Insurance Association)/
Establishment of every Wednesday as no overtime days

Consideration given to measures aimed
at promoting female participation andcareer advancement in the workplace/
Support for life planning among older
generations/Creation of stress-free work
environments (child care and family careissues)/Promotion of health management

Training anddevelopment of
personnel

Support in obtaining qualifications
and training under each theme

Implementation of management training and evaluator training for those in management positions/Implementationof training between departments and by age group/
Implementation of compliance and risk management training/Implementation of anti-harassment training, defined
contribution (DC) pension training, and health-related training/Implementation of TOEIC testing (held in-house)Ongoing implementation of management
training and evaluator training for those inmanagement positions/Implementation of
reskilling training (e.g., DX application)/
Ongoing implementation of various training programs/Ongoing implementation of
TOEIC testing (held in-house)

Supply chain
management

Establishment of a distribution system/
Ensuring the responsible procurement ofmaterials/Ongoing implementation of
joint procurement of raw materials withassociated companies/Implementationof procurement source diversification

Purchase of certain raw materials from two or morecompanies as part of risk management/Ongoing
consideration given to further procurement source
diversification

Ongoing investigation of procurement
source diversification/Investigation of
joint shipping for products/Preparation
for the responsible procurement of raw
materials

Corporate
governance

Tightening of governance and internal controls/Securing managementtransparency by disclosing information/Promotion of stakeholder
engagement

Sustainability Report 2023 (published in March
2023)/Ongoing activities by the Sustainability
Committee/CDP Survey Responses (scores
released February 2024) following on 2022 survey

Continuation of sustainability management/Tightening of governance andinternal controls/Maintenance of management transparency by disclosing
information/Aiming for a higher CDP
score

Risk management• IT controls• Strengthening the security of coresystems

Completion of server replacement/Completion ofcore system version updates/Formation of business improvement project teams/Promotion of thecustomization of certain core systems andimprovements to business efficiency

Establishment of a Group-wide risk
management system/Analysis of theeffectiveness of AI introduction andconsideration toward introduction/
Promotion of further DX as led by the
project teamCompliance

Promotion of compliance• Adherence to compliance• Implementation of anti-harassment training andcompliance and risk management training

Adherence to compliance/
Elimination of harassment/
Ongoing implementation ofcompliance training

Biostimulants
Increasing plants’ immunity to diseases,
pests, and environmental stress2023 Results

Progress and Targets for Important CSR Issues

Philosophy / Table of Contents

Environment

continuously developing “new increasing food production

Initiatives for 2023

Editorial Policy04

Sustainability Report 2024

Corporate Philosophy and Innovation

Taking on challenges in a period of change(Innovation)

potential crop growth. At the same time, we will continue to

Our Group has been announcing its medium-term manage-

ponic cultivation for which organic fertilizer is used) aimed atment plans since 2021. Guided by our 2021 New Medium-Termrealizing a recycling-oriented society, labor savings andManagement Plan (2021–2023), 2022 New Medium-Term

improving efficiency in the field of greenhouse horticulture,

Management Plan “Further Challenges” (2022–2024), andproviding total cultivation services toward the implementa-

2023 New Medium-Term Management Plan “Toward the Newtion of big data–based smart agriculture, and the upgrading

Challenges” (2023–2025), we have been steadily progressing

and spreading of our Agrio Ichigo Master solutions service.

through each phase. In February 2024, we formulated ourCurrently, we are facing many issues, including frequent

New Medium-Term Management Plan “Active Investment for

abnormal weather events, the depletion of water resources,

Further Growth” (2024–2026). To contribute to sustainable

and repeated occurrences of damage from pests and dis-

agriculture that is friendly to people and the environment, weeases, as global agricultural challenges. Overcoming these

focus on highly safe new plant protection materials and Green

challenges necessitates the acquisition of cutting-edge agri-

Products—plant protection products with no restrictions on

cultural technologies, such as AI, robot/sensing technologies,

the number of times they can be used, such as natural/foodand genome editing, and the bringing about of innovation.

additive–derived or organic, JAS-compliant pesticides—andSeeing this as a period of change (innovation), our Group willon the research and development of biostimulant products,

accelerate its investments in R&D to realize its ideal vision forwhich enhance the natural immunity of plants and promote

2030 by facing the world’s agricultural challenges head on

their resistance to cold, heat, diseases, and pests, as well as

and devoting all our efforts to solving them.

Visionfor 2030

work on the demonstration testing of probioponics (hydro-

Realization of
corporatephilosophy

Intensive investment in R&D to
innovate for sustainable agriculture.

OAT Agrio’s hope is to provide
all people everywhere with thejoy of cultivating, the emotionof watching, and thecontentment of eating.

Business Indicators
FY2023 Results

FY2024 Plan

FY2025 Plan

FY2026 Plan

Net sales (Billions of yen)

26.96

28.99

29.30

30.20

31.70

“A company involved not only in increasing food production and eco-friendly
agriculture but also in health.”

Operating profit (Billions of yen)

3.35

3.77

3.15

3.40

3.80

“A company that delivers the joy of cultivating, the emotion of watching, andthe contentment of eating”

Ordinary profit (Billions of yen)

3.39

3.80

3.00

3.30

3.65

Profit attributable to owners of parent(Billions of yen)

2.26

2.49

1.92

2.15

2.41

Operating profit margin

12.4%

13.0%

10.8%

11.3%

12.0%

Consolidated ROE

23.4%

20.0%

13.2%

13.6%

13.8%

To realize its vision for 2030, OAT Agrio will concentrate its investment in R&D towardinnovation over the next three years.
We plan to invest more than 10% of sales on an ongoing basis.
We will also invest 10% of our R&D costs in cutting-edge agricultural technologies.

Summary of Fiscal 2023

Contributing tohuman- and ecofriendly, sustainableagriculture
R&D Investment

To possess cutting-edge
agricultural technologies

Proposals for
smart agriculture
in greenhousehorticulture

Reduction offood loss

Green Products that lead to zero CO2emissions
Biostimulant products
Creation of total solution services

Phenotyping
Real-time sensing
Image analysis

Disease prevention/
prediction
Labor savings/
Improving efficiency

Freshness-preservative technology
Big data analysis technology
Platform system development in the valuechain

OAT Agrio’s Vision for 2030

Acquiring the latest technologies and creating new businesses
Proposing profitable agriculture

05

Innovation

We contribute to the people in theworld with our agritechnology andsincerity.

FY2022 Results

Investing 10% of R&D costs in cutting-edge agricultural technologies• AI data analysis• Automatic harvesting robot• Sensing technology• Genome editing technology• Clone seedlings• New cultivation methods• Prediction technologies toprevent pest outbreaks• Retail platform app
development

Corporate Philosophy

About the New Medium-Term Business Plan

About the New Medium-Term Business Plan

About the New Medium-Term Business Plan

In fiscal 2023, the Japanese economy continued to experience

title “Toward the New Challenges.” To achieve our long-terma decline in personal consumption due to the significant

vision, which we have clarified, and in turn to realize our man-depreciation of the yen caused by the strong U.S. economy

agement philosophy—“We contribute to the people in theand price hikes, despite signs of a recovery in inbound tourism

world with our agritechnology and sincerity”—we have been

demand amid a gradual return to normal in social activities

working together to lay the groundwork for taking on newwith the legal reclassification of the novel coronavirus diseasechallenges. Through the realization of our Group’s manage-(COVID-19). When viewing the world as a whole, the future

ment philosophy, we see it as our mission to deliver “the joy ofremains uncertain due to the prolonged situation in Ukraine,

cultivating,” “the emotion of watching,” and “the contentment

as well as the outbreak of armed conflict involving Israel,of eating” to people around the world. Furthermore, we

supply chains that have been disrupted due to armed attacks

believe that the Group’s activities will contribute to achievingon commercial shipping in the Red Sea, the sluggish European

the Sustainable Development Goals (SDGs), such as “environ-economy, and other factors. It was under such business condi-

mental conservation,” “improvement of resource efficiency,”

tions that in February 2023 the OAT Agrio Group announced its

and “eradication of hunger,” and we will continue to take on

New Medium-Term Management Plan (2023–2025) under thechallenges in the next fiscal year and beyond.

06

Sustainability Report 2024

Environment
Greenhouse Gas (GHG) Emissions Calculation and Reduction Initiatives(1) Background
Having engaged in sustainability management since its founding, the OAT Agrio Group has calculated its GHG emissions
since fiscal 2020. Collaborative calculation efforts among
Group companies serve to assist internal education on environmental issues and in instilling sustainability management.
In addition to helping achieve carbon neutrality by 2050, we
will analyze and consider how the Group’s agritechnology cancontribute to the resolution of the environmental problems
adopted in the SDGs and actively communicate this to ourstakeholders.

remained unchanged from the previous year at 98%, thedecrease in Category 1 led to decreases in Categories 4 and 12.

Results of Scope 1, 2, and 3 Emissions (t-CO2)
FY2021

Environment

07

Composition
Ratio

1,048

1,059

0.9%

Scope 2

2,451

2,456

1,934

1.6%

3,495

3,504

2,993

2.5%

123,708

141,018

115,404

97.5%

Category 1

102,106

116,008

95,135

80.4%

Category 4

10,755

12,219

9,335

7.9%

10,847

12,791

10,9349.2%

127,203

144,522

118,397

100.0%

Scope 1 + 2
Scope 3

Total of Categories 2,
3, 5, 6, 7, 9, 11, and 12

Scope 1 + 2 + 3

Note: As far as the Chrysal Group of affiliated companies is concerned, theshipping and transportation of Category 4 shippers is excluded from calculation due to the complexity of distribution channels. Plans are in place toremedy and refine in the future.
(t-CO2)5,000

141,018

4,500
4,000

115,404
3,495

3,000

3,504

120,000
100,000

2,993

2,456

2,451

2,500

1,934

2,000

80,00060,000

1,500
1,000

1,059

1,048

1,044

40,000500

20,0000

FY2021
Scope 1

FY2022
Scope 2

FY2023
Scope 1 + 2(1) Governance
The Board of Directors determines materiality relating toCompany-wide management. To promote sustainability initiatives to help solve social issues through agribusiness and to
improve corporate value over the medium to long term, we
have established the Sustainability Committee, chaired by thepresident, which reports to the Board of Directors. The
Sustainability Committee receives instructions from its chairperson and formulates policies and necessary strategies
related to sustainability, including climate change, as well as
confirms the status of each initiative. By reporting risks andbusiness opportunities related to climate change to the Boardof Directors, we have put in place a system to ensure appropriate oversight of progress.

(2) Strategy
160,000
140,000

123,708

The Group is moving forward with efforts in response to the
TCFD recommendations. Based on the TCFD framework, wewill analyze the impact of climate change on the Group’s business as well as the risks and opportunities it presents, reflectthat in our management strategies and risk management, andappropriately disclose progress with the aim of achieving thesustainable development of society and enhanced corporate
value over the medium to long term.

0

Scope 3 (right axis)

In promoting sustainability management, we believe it isimportant to analyze the impact of climate change in terms ofrisks and opportunities on business and to reflect appropriate
analysis-based responses in corporate management. Based on
this idea, climate-related scenarios assume two worlds: a scenario in which climate change countermeasures are promoted(below 2 degrees Celsius, including 1.5 degrees Celsius) and a
scenario in which no countermeasures are taken (4 degrees
Celsius). Proceeding with the quantification of both theextracted risks (transition risks, physical risks) and newly anticipated business opportunities, we are considering countermeasures based on scenario analyses.

(3) Risk Management and business opportunity
recognition
To build a Company-wide risk management system, theSustainability Committee regularly identifies and evaluatesrisks that the Group faces or that might arise, prioritizes anddevelops risk response plans, and checks on their progress. We
have a system in place to regularly report and make recommendations to the Board of Directors on the impacts andcountermeasures for newly anticipated business opportunities
as well as identified climate-related risks, and to integratethem into Company-wide management.

(4) Metrics and Targets
Having set the goal of reducing GHG emissions to zero by 2050,
the Group is aiming to achieve carbon neutrality. To achievethat goal, we are actively working to install solar panels andswitch manufacturing and air-conditioning equipment toenergy-saving models. We are also working to improve theaccuracy of Scope 3 data, which is currently in its fourth year of
calculation, considering multiple specific reduction measuresfor large-volume Category 1 emissions, and are endeavoring
to set specific numerical targets.

Environment

In fiscal 2023, Scope 1 did not change significantly year on year.
However, the increases at OAT & IIL India Laboratories Private
Limited (OAT & IIL) and other Group companies were largely
offset by the decrease at Chrysal International (Chrysal), which
was due to the installation of new equipment that increased
thermal efficiency and reduced LNG consumption. There wasno significant year-on-year change in fuel consumption fortransport, but we believe there remains a need to continue
promoting the conversion to EVs and low-carbon vehicles.
Scope 2 GHG emissions decreased 21% year on year. A major
factor was the reduction in steam usage at OAT Agrio’s Naruto
Factory, but the increase in power consumption at OAT & IIL
offset some of the effect. As regards electricity, however,Chrysal continues to use zero carbon electricity, other Group
companies are converting to renewable energy, and we are
gradually starting to see results. Scope 3 GHG emissions
decreased 18% year on year. A major factor was that Category
1, which accounts for 80% of total emissions, decreased 18%
year on year. Although the proportion of total emissions

FY2023

1,044

3,500

(3) Analysis of results and improvement measures

FY2022

Scope 1

(2) Method of calculation
We have calculated Scope 1 and 2 at our major business sites
since fiscal 2020. With regard to Scope 3, the fiscal 2020 calculations were limited to OAT Agrio’s headquarters, but having
ascertained the overall GHG emission trends we identified
Categories 1, 4, and 5 as being of particular importance. Since
fiscal 2021, we have undertaken Scope 3 calculations at major
business sites within the Group, and for Category 1 “Purchased
Goods and Services” have accurately determined and refined
the quantities and amounts from purchasing information. For
Category 4 “Upstream Transportation and Distribution,” weuse raw material quantities and distances that are in line withactual conditions. For other categories, we calculate GHG
emissions that are as close to reality as possible using physicalquantity data.

Response to the Task Force on Climate-related Financial Disclosures (TCFD)

Ratio of Scope 1, 2, and 3 Emissions
Scope 1

(0.9%)

Scope 2

(1.6%)

Scope 1 0.9%
Scope 2 1.6%

Scope 3 (97.5%)
Category 1(80.4%)

Category 4(7.9%)

Total of Categories 2, 3, 5,
6, 7, 9, 11, and 12 (9.2%)

118,397
t-CO2

Scope 3 97.5%

Notes:
1. Of the 15 categories in Scope 3, Categories 8, 10, 13, 14, and 15 are not subject to calculation.
2. Figures in parentheses above are percentages using the total value of
118,397 t-CO2 of Scope 1 through 3 as the denominator.

Responding to CDP and Evaluation
Targeting companies, organizations, cities, and others, CDP is a
nonprofit organization that asks them questions about theirenvironmental impact, encompassing climate change, andevaluates and scores their responses for disclosure to investors
around the world. In 2023, the Group responded to a CDP
questionnaire, as it had in 2022. In 2023, in addition to the previous “Climate Change” field, a “Water Security” field wasadded, but the Group’s score was B- for Climate Change, thesame as last year, and C for Water Security. The Group will continue to promote sustainability activities, including the reduction of GHG emissions, using the CDP score as a benchmark
while striving to expand its information disclosure. The Group’s
responses to and scores from the CDP Climate Change
Questionnaire are available on the CDP website.
https://www.cdp.net/

08

Sustainability Report 2024

Society
Chrysal’s efforts to realize a zero-impact flower industry
A major Netherlands-based OAT Agrio Group company, Chrysal,
has been developing products to improve the quality of cut
flowers and potted plants for more than 95 years. Through its
worldwide distribution network, the company offers products
in major markets for cut flowers and potted plants, from SouthAmerica and the United States to Africa, Western Europe andAsia, including Japan. Having been implementing its Chrysal
Cares sustainability program since 2009, sustainability lies atthe very heart of Chrysal’s business activities. As a market
leader in flower food, the company aims to work towards a

Message from a Director

zero-impact flower industry, in which flowers can be enjoyedwithout causing harm to the environment or people. Creating
a caring workplace for its employees and working to share its
values with them, Chrysal would also like to use its knowledge
and experience to help all its partners within the flower chain
reach their sustainability ambitions. Together, we can build an
innovative flower industry. With zero impact on the planet, thebest care for flowers, happy customers and, in the end, a more
beautiful world.

Excerpt from Chrysal’s sustainability report

1 Our presence in the entire
chain:
our customer base consists of growers,
bouquet makers, supermarkets, florists,
wholesalers & e-commerce business, allaround the globe, so we are present
everywhere. We are spreading thismessage with our partners and arecontinuously looking for collaborations.

2 Our products and services,

3 Our sustainability program

to increase vase life of flowers, to prevent
waste, with as little resources as possible.
The main focus of our innovations is toimprove the sustainability aspects of our
products and to increase sustainable
practices throughout the chain. For
example, with our sea freight service weare making sea shipment of flowers
possible and thereby significantly
lowering the CO2 impact.

Chrysal Cares, where we are improving
the way we do business, are integrating
sustainability in the organization and theprocesses and are making sure thateveryone in the company is on board.
This way, we want to realize a flower
industry with zero impact on the planet.

Our 4 ways towards a zero impact flower industry

Director, Board Member, Executive Officer,
Personnel Division

Itoko Watanabe
Attracting diverse human resources centered on
the management philosophy
With businesses deployed across the globe, more than 60% of all
Group employees hail from countries beyond Japan, and excel
regardless of their nationality and gender given their diverse rangeof skills. The core element that links this diverse range of humanresources together is the Group’s management philosophy of contributing to people around the world with our agritechnology andsincerity. As part of personnel recruitment, we employ a detailed
approach to ensure that candidates sympathize with the Group’s
corporate culture and appeal, including offering explanations on
career development on an individual basis. Similarly, we have current
employees meet with candidates who fully understand and agreewith our management philosophy, and provide them with workplace
tours before entering the Company. A recent powerful undercurrent
among candidates is their particular focus on the degree to which
companies contribute to society when determining future employers, which has allowed us to recruit many human resources who
empathize with the Group’s management philosophy, as our goal is
to contribute to society. Having attracted a diverse range of extremely
talented personnel, my mission as part of the Group is to ensure that
all employees demonstrate their abilities and value to the greatest
extent possible. And I am committed to fulfilling my role in a way thatseeks to deepen communication between employees, that focuseson improving work environments and enhancing employee benefits, and that improves the well-being of employees.

Focusing on personnel training and normalizing
flexible work styles

1 Fighting climate changeThis pillar is about reducing ourCO₂ emissions, increasing energy
efficiency and the use of sustainable energy sources, like solar
panels and wind energy. This pillar
also focuses on reducing our
impact in transport, by contributing to innovative transport, like oursea freight service, and byenabling smart mobility, which is
employee travel. Our aim is to be
climate neutral by 2030 and
striving for a positive environmental impact afterwards.

09

2 Contributing to asustainable economy

This pillar is about contributing toa sustainable economy, for us thatmeans a circular economy, inwhich we minimize waste,maintain water quality, develop
circular packaging and improve
the sustainability of our ingredients. Next to that, we focus on a
responsible supply and value chain
and on operating as transparently
as possible. We want to be 50%
circular by 2030 and 100% circularin 2040.

3 Caring for people
Our third pillar is about caring forpeople. This means a caring
workplace, so improving employee
health and safety, but also
ensuring equality and diversity.
Next to that, we support thedevelopment of the communities
we are active in.

4 Striving for a positiveenvironmental
impactOur fourth pillar is about striving
for a positive environmental
impact. With the first two pillars
we are reducing our negative
impact on the environment, but
within this pillar we are also
contributing positively, by forexample supporting biodiversity.

The Group’s employees are the source of its growth potential,
which is why we are particularly focused on personnel training. In
2023, we conducted training for all management positions aimed
at facilitating a proper understanding of basic and applied management practices, as well as of important internal systems andevaluation systems. Likewise, ensuring those in management
positions rediscover the importance of goal setting, progress
management, and feedback will help energize employee careerdevelopment, employee training, and communication between
employees. We are also conducting ongoing training to fully
ensure that employees do not engage in, allow for, or become
subject to different types of harassment with a sense of ownership in order to eliminate this issue. Along with personnel

training, we are also focused on normalizing more flexible work
styles. In Japan, we have newly established no overtime days, inaddition to staggered commuting and remote work systems,with the intention of constraining and reducing the chronic issueof working extra hours. In particular, staggered commuting hashelped employees pursue their duties in a more balancedmanner than before and is steadily reducing overtime work.
Along with promoting work-style reforms, in 2023 we launched abusiness improvement project. In working together with individual employees, we are now promoting reforms that seek to maximize business performance, including revising and improving
upon duplicate work, as well as investigating the use of data
conversion, systemization, and other forms of DX.

Supporting employee life planning efforts
I also believe it is important for companies to support the life planning efforts of their employees. From October 2022 to February
2023, we therefore held information exchange meetings once every
three months for employees in child-rearing generations. Female
participation and career advancement in the workplace and participation in child-rearing by men, however, cannot be considered as
separate issues. We therefore also shared child-rearing information
at these meetings attended by everyone in child-rearing generations, which served to expand the breadth of communication
between employees who had no previous interaction in terms ofwork. This also helped us achieve a male employee childcare leaveacquisition rate of 33% in fiscal 2023, far above the initial target of
20%. Moreover, these information exchange meetings allowed us
to discover that many of the participants were worried about
future asset formation, in response to which we held an asset formation seminar for child-rearing generations. Asset formation is acommon concern among all generations, however. We will therefore go beyond providing regular training regarding corporate
pensions that cover defined contribution pension systems on an
ongoing basis. Specifically, we will seek to expand educational
opportunities for employees and stimulate their desire to engage
in asset formation by incorporating products employees desire, as
well as by providing information regarding public pension systems, as part of this training.

Society

Environment

There are three ways in which we can influence the movement towards a more sustainable flower industry:

Aiming to enhance well-being in a waythat enables diverse human resources tofully demonstrate their abilities

Aiming to enhance employee well-being
We are also fully engaged in health management intended toenhance the well-being of our employees. In 2023, we acquired
silver certification as an Excellent Health Company from ourhealth insurance association and held training regarding mental
health issues following the implementation of stress checks. We
intend to regularly implement health-related training and help
improve the health of our employees with the goal of becoming
a certified Health & Productivity Management Outstanding
Organization.

10

Sustainability Report 2024

Corporate GovernanceCorporate Governance Structure

Message from an Outside Director

Guided by our management philosophy of contributing to thepeople in the world with our agritechnology and sincerity, theOAT Agrio Group aspires to an approach that is capable ofcontributing to human- and eco-friendly sustainable agriculture, and engages in business activities with the mission ofenhancing corporate value while contributing to the advancement of society. The Sustainability Committee with the president as its chair is responsible for promoting sustainability
management across the entire Group with the aim of enhancing sustainable corporate value and developing a sustainable
society through corporate activities. Under the direction of thepresident, this committee deliberates on basic management
policies regarding sustainability, including the issue of climatechange, and planning regarding business activity policies andstrategies. It also discusses the results of these deliberations
with the Board of Directors. In addition, the Risk Management
Committee deliberates on matters involving the issue of climate change that could have a material impact on the business
continuity, financial standing, management performance, andcash flows of affiliated companies, and reports on the results ofthese deliberations to the Board of Directors in conjunction
with Group-wide risk. Matters resolved by the Board of
Directors are then deployed and promoted Group-wide incooperation with each business unit under the leadership of
the Sustainability Committee.

Shareholders’ meeting
Dismissal

Election

Dismissal

Election

Dismissal

Board of Directors
Directors(Excluding Directors Who Are Audit andSupervisory Committee Members)
Appointment/OversightAdvisory Units

Audit
Cooperation

Reports

Instructions
Reports

Compliance Committee
Risk Management Committee
Internal Controls Committee
Sustainability Committee
Reports

Reports

Representative Directors

Management Committee
Nominations andRemuneration Committee

Audit andSupervisory Committee

Oversight

Reports

Instructions

Instructions

Internal Audit
Section

Secretariat &Cooperation

Accounting audit

Internal audit

Independent
Accountant

Instructions

Business units and Subsidiaries

Risk Management
The Sustainability Committee identifies risks with which the OAT
Agrio Group is currently faced, or those with the potential toarise in the future, and implements systematic and appropriate
preventive measures. The Committee similarly analyzes, evaluates, and recognizes matters relating to climate change that
hold the potential to materially impact the business continuity,
financial standing, management performance, and cash flows ofaffiliated companies. In addition, the Committee broadly classifies risks into short-, medium-, and long-term categories from astandpoint specific to sustainability, and analyzes, evaluates,
and recognizes each from both qualitative and quantitative
perspectives.

11

Concrete Process
Identify and evaluate risk for the purpose ofsustainability promotion at each Group company,
deliberate and request reevaluation as necessary,redesign countermeasures as required

Select countermeasures

Deploy and execute selected countermeasures at eachdepartment, verify and report on progress

The OAT Agrio Group has focused on research and development
since its establishment and remains a company that aims to allocate 10% of its net sales to R&D expenses. In addition to supervising management from an objective perspective, since joining theCompany as an outside director in 2015, I have always regarded
contributing to the sustainable growth of the Group by expressing my opinions and recommendations from a professional
standpoint as an agricultural researcher as one of the roles
expected of me by all stakeholders. The microorganisms that I
am researching on a daily basis play a key role in resource recycling on our planet, and in the Group I am also thinking from theperspective of how human, financial, and other corporate
resources can be more effectively utilized and sustainablegrowth achieved. When engaged in discussions, so that my wayof thinking is not limited by time or space, I remain aware of thedepth and breadth of the discussion from a long-term timelineand global perspective.

because I can empathize with this stance. Nowadays, amid theworldwide trend to get back to the workings of nature, artificial
technologies are required to remain close to and accompany
nature. One of the Group’s major appeals is that this perspectiveof being “close to nature” is never lost. For example, biostimulants that improve plant immunity are not only a promising technology for the future but also stand out as a unique technology of
the Group among the many agrochemical-related companies.
Thus, the OAT Agrio name has also attracted wide attention both
domestically and internationally. A hydroponic technology utilizing organic fertilizers, Probioponics, is a recirculating hydroponic
technology in which the biomass-derived nitrogen sources areused and natural nitrification reproduced in water. A demon­
stration experiment has begun in Shintomi Town, Miyazaki
Prefecture. Representing a new approach to agriculture that does
not cause the destruction of ecosystem communities, high hopes
are being held for this technology. The Group’s research and sales
staff visit the cultivation site to experience for themselves the
product and technical capabilities together with producers. Overthe past few years, the Company has encouraged all employees
to gain experience in cultivation, creating a corporate culture thatnaturally fosters a feeling of being close to nature. The Company
has an earnest corporate culture, and thus there are many aspectsof the Group’s initiatives and appeals that are not being sufficiently communicated. I think that in that sense the Company
could strengthen its public relations efforts a little more.

OAT Agrio Group governance

Toward sustainable growth

From the beginning of my involvement, the Group has maintained a firm vision and philosophy of what OAT Agrio should
ideally be aiming for as a company, and that has not changed tothis day. This means that the long-term management direction
has remained unchanged, which from a governance perspective
also represents an important factor. Discussions at Board of
Directors’ meetings are lively, with each outside director actively
making statements and recommendations from their professional standpoint. Board of Directors members and their number
are flexibly reviewed in response to changes in the businessenvironment, and my feeling is that this enables discussions toalways remain fresh and lively.

To achieve sustainable growth, it is important to create a foundation that circulates management resources, such as people,
goods, money, and information. If the manufacturing industry isconcerned with the circulation of goods, we have to think about
what to make from which raw material and where to send it. For
example, by adding organic fertilizer to chemical fertilizer, microorganisms create a “loop” that causes organic matter to circulate.
When it comes to the rotation of people, it is essential to properly
develop the next generation of human resources and create
environments in which knowledge and techniques can be passed
down. Currently, our company has a business scale that allows it
to maintain a high level of mobility and a culture that allows
people to work on future technologies with a high degree of
freedom, which will be attractive to ambitious young people.
However, if an organization becomes rigid as business grows,
corporate value might decline. Therefore, I hope that theCompany will continue to actively incorporate new technologies
and move forward over a long period of time toward realizing its
vision. To that end, I would like to fulfill my duties to the best of
my ability.

Outside Director(Audit and Supervisory Committee Member)

Jun OgawaRole as an outside director

The OAT Agrio Group’s appeal
The most appealing thing about the Group is that while it is acompany dealing with pesticides and chemical fertilizers, theamounts of agricultural chemicals used are carefully consideredwith an eye toward eco-friendly agriculture of the future. The
point is that the Company is sincerely tackling issues that havecontradictory directions. This is an extremely important perspective when considering the future of agriculture, and one of themain reasons why I accepted the position of outside director was

Corporate GovernanceCorporate GovernanceElection

Opening up the future of agriculture bymeans of “close to nature” perspectives
and R&D capabilities

12

Sustainability Report 2024

Communication with Stakeholders

Performance Highlights
Sales
■ Net
売上高

(Millions of yen)

30,000■ Ordinary
経常利益 Profit(Millions of yen)

3,500
3,000

25,0002,500

20,000“Vegetable Cultivation Hands-on Experience”
sessions carried out

1,500(Okra)” sessions on three occasions from May to July at the

1,000

OAT Agrio Cultivation Research Center in Naruto, Tokushima

5,000

500

Prefecture. The first session included tours of the information

00

10,00010th

Dec 2019

11th

Dec 2020

12th

Dec 2021

13th

Dec 2022

14th

Dec 2023

community.

OAT Agrio held “Vegetable Cultivation Hands-on Experience

2,000

15,000to implement projects to bring enjoyment to all in the local

10th

11th

Dec 2019

Dec 2020

12th

Dec 2021

13th

Dec 2022

house and the greenhouse cultivation of tomatoes, as well as

14th

Dec 2023

a lecture on how to grow okra. In June, we carried out workthat included removing the lower leaves and side buds from■ Shareholders’
自己資本比率 Equity Ratio

(%)

50
40
30

the okra, feeding them fertilizer and heaping up the earth

Assets■ Total
総資産額(Millions of yen)

35,00030,000cultivation management that had been carried out and then

25,000the harvesting work took place. We were able to harvest a lot

20,000of okra, and happy smiling faces abounded. We will continue

15,00020

around them. In July, we gave a lecture that summarized the

10,000

0

5,000

10th

Dec 2019

11th

Dec 2020

12th

Dec 2021

13th

Dec 2022

0

14th

Dec 2023

10th

Dec 2019<Formula> Shareholders’ equity ratio = Equity capital / Total assets × 100; Equity
capital = Net assets – Subscription rights – Share options – Noncontrollinginterests

11th

Dec 2020

12th

Dec 2021

13th

Dec 2022

Event held jointly with DO!NUTS TOKYO

14th

On July 22, 2023, we held a joint event with DO!NUTS TOKYO,

Dec 2023

Note: OAT Agrio has applied the Accounting Standard for Revenue Recognition
effective from the fiscal year ended December 31, 2022. Data for the fiscal year ended
December 31, 2021, are presented after retrospectively applying the said Standard.

which aims to create a consumer behavior reform movement
toward the realization of a “zero emission Tokyo,” to shareideas on fun ways people can easily grow crops, even in a city,while thinking about sustainable eating habits. While enjoypresentations on the experience of the “Home Garden Set”
provided by our group to DO!NUTS TOKYO youth ambassa-

Energy Consumption■ Steam
蒸気のエネルギー消費量(m2)30,000(kL-crude oil)

400
350

25,000continue holding events at which people can learn about safe

200

and eco-friendly agriculture and ways to achieve sustainable

150

10,000technology to increase food production and the joy of grow-

250

アタリ

15,000dors, a talk session that showcased OAT Agrio’s efforts ining plants, as well as a nature quiz competition. We plan to300
20,000Part 2 SORAMIDO BBQ in Kasai Rinkai Park
There were about 50 participants, with whom we were able to havemeaningful interactions. Thanks to all who took part.

ing a barbecue made with sustainable ingredients, we gave

Environmental Conservation Reports (Naruto Factory)
Consumption■ Water
水使用量

Event Report
Part 1 Nature study session
We were blessed with fine weather!

Communication with Stakeholders /Editorial Policy

Performance Highlights /Environmental Conservation Reports

10eating habits.

100
5,000
0

50

2019

2020

2021

0

2023

2022

Waste,
Recycling,and Landfill■ Industrial
産廃排出量、
再資源化量、
埋立量
(t)

1,200
1,000

2019

2020

2021

2022

2023

Transfer and Release of Class I Pollutant
Release and Transfer Register (PRTR)■ System–designated
PRTR第一種指定化学物質の移動・排出量
Chemical Substances
20,000800

16,00014,00012,000400

10,000

200

8,000
6,000

2019

2020
Industrial waste

2021
Recycling

2023

2022
Landfill

Reported Organization
The Group (our company and its associated companies) consists of
OAT Agrio Co., Ltd., 26 consolidated subsidiaries (including Asahi
Chemical Manufacturing Co., Ltd.; Runhe (Zhoushan) Plant Science
Co., Ltd.; OAT & IIL India Laboratories Private Limited; Asahi
Chemical Europe s. r. o.; PT.OAT MITOKU AGRIO; Lida Plant Research,
S.L.; Inplanta Innovations Inc.; and Blue Wave Holding B.V.), 1 nonconsolidated company, and 2 associated companies.

4,000
2,000
0

FY2018All PRTR-designatedsubstances

13

(kg)

18,000600

0Editorial Policy
The OAT Agrio Group has published the Sustainability Report since2022, showcasing its initiatives for the environment (E), Social (S),and Governance (G) aimed at the establishment of a sustainable
society, as well as its management plans and other information.
We hope that this report will help communication with the supply
chain and other stakeholders and enhance the understanding of
our company and Group companies throughout society. We willcontinue to improve the report referring to your input and advice.

FY2019FY20201,2-dichloroethane

FY2021
Triethylamine

FY2022
XyleneReported period
January to December 2023

Published
March 202414https://www.oat-agrio.co.jp/en/top-page-english/