Asahi Group

TCFD REPORTThe Asahi Group’s Initiatives
toward Climate Change

May 2022

1

Asahi Group TCFD REPORTContents and Editorial Policy

Contents and Editorial Policy

1

Introduction

2

Editorial Policy

The Asahi Group’s Initiatives toward Climate Change

3

In this report, we analyze and report on the risks and opportunities

History of Scenario Analysis

5assessments, and report the initiatives formulated in response. In this

Applying Scenario Analysis to the Strategies

7

way, we hope that this report serves as an engagement tool for our share-

Scenario Analysis for 2021

8

Asahi Group endorsed the recommendations of the Task Force on Climate-

1. Impact on Procurement Costs Due to Reduced Yields of Agricultural Products

9

2. Impact of Carbon Tax Introduction on Production Costs(Scope 1 and 2) and on Scope 3

12

3. Business Impact Assessment of Water and Other Damage andRisk Assessment of Raw Material Producing Areas

15­presented by climate change, report the results of our business impact

holders, other investors, and all of our other stakeholders. In 2019, therelated Financial Disclosures (TCFD). Since then, w­ e have disclosed relevant information in our integrated reports and on our corporate website.
This report provides a summary and history of our TCFD-related efforts
and discloses the results of our scenario analysis for 2021. To help deepen
understanding of the Asahi Group among an even wider range of readers,mainly our shareholders and other investors, we will further enhance thecontent of our information disclosure going forward.

Opportunities

18

Issue Date

Closing 			19

May 2022
Scope of Report
Asahi Group Holdings, Ltd. and Group companies
The Asahi Group has carried out a scenario analysis in phases, grouping the product categories
of Alcohol Beverages, Non-Alcohol Beverages, and Food. Previously, these categories were classified as the Alcohol Beverages Business, the Soft Drinks Business, and the Food Business.
However, following a change in the Group’s reportable business segments, this report refers tothese segments as “­categories” rather than “businesses.”

Asahi Group
TCFD REPORT2Asahi Group TCFD REPORT

Introduction

The Reasons Why the Asahi Group Is Working to Respond to Climate Change
Global warming has caused abnormal weather conditions all over the world, greatly ruining lives and damaging

Asahi Group Environmental Vision 2050: Overview

properties. Phenomena include unprecedented changes to the climate, drought caused by heat waves, and flooding

Asahi Group Environmental Vision 2050

caused by typhoons and torrential rain. Climate change is an important social issue for the Asahi Group, which
operates businesses using the blessings of nature, and is a significant threat to business continuity.

Pass on the nature’s gifts to the next generation based on the “Neutral and Plus” concept

To fulfill our mission of “Deliver on our great taste promise and bring more fun to life,” which we declared in the
By 2050:

Asahi Group Philosophy (AGP), we aim to pass on a sustainable global environment to future generations, nurturing
the blessings of nature.

Aim to achieve zero environmental

Under Asahi Group Environmental Vision 2050, we have declared our commitment to helping to realize a

impact in business activities

Utilize the Group’s proprietary
technologies to create moreenvironmental value in societysustainable society alongside the growth of our businesses. This will be accomplished by pursuing the two goals of“achieving zero environmental impact in the business activities (neutral)” by 2050 and “utilizing the Group’s proprietary technologies to create more environmental value (plus).”With a view to realizing carbon neutrality by 2050, we formulated Asahi Carbon Zero, a medium- to long-term target
for reducing CO2 emissions, and acquired 1.5ºC certification from the Science Based Targets (SBT) initiative for the Scope

1

2

3

4

Respond toclimate change

Make sustainable
use of resources

Utilize microbe
and fermentation
technologies

Process
innovation

Create new environmental
value by leveraging
Group strengths

Create groundbreaking
new technologies andsystems

1 and 2 target by 2030. Furthermore, in October 2020 we became the first company in the Japanese beverage industry
to join RE100 and have since been promoting a broad range of initiatives including the utilization of renewable energy.

(Crops and cultivated raw materials,
containers and packaging, water)

Reduce CO2

Reduce businessemissions to zerorisks

In addition, we aim to create even more environmental value for society (“plus”) by leveraging our proprietary
technologies to help promote the transition to a low-carbon society and resolve other social issues. Through thisaim, we believe we can create various business opportunities.
To pass on the blessings of nature to future generations based on the “neutral” and “plus” concept, we will

Zero environmental impact

Creating environmental value(Neutral)(Plus)

appropriately respond to the risks and opportunities presented by climate change while comprehensively examining
matters on which climate change will likely have an impact, such as raw material procurement, containers andpackaging, and water resources.

Initiatives toward the TCFD Recommendations
2021

The Asahi Group understands that evaluating the impact of climate change-related risks and opportunities on its

2020

businesses and drafting appropriate response measures are important matters in terms of realizing a sustainable
society and ensuring business continuity. To that end, the Group endorses the recommendations of the Task Force2019

on Climate-related Financial Disclosures (TCFD).
We conducted a scenario analysis in the Beer Category in 2019 and expanded the scope of this analysis to the
Non-Alcohol Beverages and all Alcohol Beverages categories, including the Beer Category, in 2020. In 2021, we
conducted a scenario analysis for the third year in a row, this time covering all major categories, including theFood Category. By clarifying the impact of climate-related risks and opportunities on our business operations andtaking measures to resolve those issues, we will make our business operations more sustainable and promote dialogue with investors to enhance social sustainability and our corporate value.

Commencement of
scenario analysis on
the Beer Category

Implementation of
scenario analysis on all
Alcohol Beverages categories
and the Non-Alcohol
Beverages Category

Implementation of
scenario analysis on
the Food Category

3Asahi Group TCFD REPORTThe Asahi Group’s Initiatives toward Climate Change

We thoroughly recognize that climate change represents an impor-discussed by the GS Committee are deliberated on by thetant management issue which directly impacts our business. To

Corporate Strategy Board and reported to the Board of Directors.

that end, we have established a governance structure that centers

In 2020, the GS Committee held discussions on Asahi Carbon

on the supervision of the Board of Directors and the participation

Zero, our target that aims to achieve net zero CO2 emissions byof the Global Sustainability Committee (hereinafter, the GS

2050. Through these discussions, we decided on making a

Committee). Based on the commitment of our management, we

significant upward revision to Asahi Carbon Zero, raising theare executing investment in climate change countermeasures andtargeted reduction for 2030 to 50% in Scope 1 and 2 compared

are promoting relevant efforts on a Group-wide basis.

with 2019.

In terms of specific strategies, we have been evaluating the

The risks, opportunities, and financial impacts of climate change
identified through scenario analysis are also discussed by the
Corporate Strategy Board and reported to the Board of Directors.

Risk Management
The Asahi Group has adopted climate change as a main risk forWith the initiatives we implemented since making this upward

the Group within its ERM system and set a PDCA cycle in motion

business risks and opportunities presented by climate change overrevision, we greatly improved the certainty of achieving ourunder this management system with the Sustainability Director as

the medium to long term and developing strategies to address

targeted values. We also saw an increase in ambition within thethe risk owner.

climate change-related issues after confirming the impact such

Group to adopt and actively pursue ambitious targets. In light ofAt the same time, the Sustainability Section further examines

issues have on our business. Additionally, we believe it is impor-these circumstances, we decided to upwardly revise the targetedclimate change-related risks in more detail, implements responsetant to formulate and promote climate change countermeasures.

reduction values in Scope 1 and 2 to 70% compared with 2019 atmeasures, and issues regular reports to the Board of Directors.

We will therefore establish indicators and targets with a view toa meeting of the Corporate Strategy Board held in 2021.

Additionally, we are taking initiatives to address the issue of

realizing a carbon-free society in an effort to reinforce our overall­plastic, another main risk for the Group, which is widely linked toinitiatives toward climate change going forward.

climate change.

With regard to climate change-related business risks, in particular, we have adopted such risks as main risks for the GroupManagement System

Asahi Group ERM Structure

within our overall risk management framework. Under our enterAsahi Group Holdings

prise risk management (ERM) system, we have set a PDCA cycle
in motion with the Sustainability Director as the risk owner.

Board of Directors

Board of Directors

supervise sustainability strategies, including climate change. The

io
n

Mo
n

nd

The Asahi Group has established the GS Committee to draft and

in
g

n

iti
Prior

Risk Management Committee

Group Risk Officer
Group Function
Committee

Group Companies

GS Committee is chaired by the CEO of Asahi Group Holdings,
Ltd., and comprises the Sustainability Director, the heads of
relevant departments, and the CEOs and Sustainability Directors
Oceania, and Southeast Asia. The strategies and targets

President

President

President

Business
ERM

Business
ERM

Business
ERM

Sustainability Execution Conferenceat each Regional Headquarters (RHQ) located in Japan, Europe,
Sustainability Task Force

Audit

z

Global Sustainability Committee
Chairperson: CEO, Asahi Group Holdings, Ltd.

President andRepresentative Director

Audit & Supervisory
Board MembersoRespGovernance

Asahi
Group
ERM

tion

Corporate Strategy Board

Ide

i ca
tif

ment,” “strategies,” and “indices and targets.”

g
rin
ito

at

This section explains the four key themes we have identified
based on TCFD recommendations: “governance,” “risk manage-

Function
ERM

4

Asahi Group TCFD REPORT

Strategies

Indices and Targets

reducing CO2 emissions at each RHQ and shares issues, in addition
to adopting key performance indicators (KPIs) at each RHQ.

Every year since 2019, we have been conducting a scenario

We have established Asahi Carbon Zero as a medium- to long-

Furthermore, we have adopted measures and are reinforcing initia-

analysis to reconfirm the Group’s resilience to climate change andterm target for reducing CO2 emissions. Under Asahi Carbon

tives to realize the sustainable utilization of related agricultural raw

examining response measures to the risks and opportunities that

Zero, we aim to achieve net zero CO2 emissions in Scope 1, 2,

materials, containers and packaging, water, and other materials.

have been clarified. In 2021, we implemented more extensive

and 3 by 2050. As an interim target for 2030, compared withand accurate scenario analysis aimed at expanding the scope of

2019, we aim to reduce Scope 1 and 2 emissions by 70% andand enhancing our scenario analysis. We will take measures for

Scope 3 emissions by 30%.In addition, we have set anotherthe major risks and opportunities that have been clarified throughinterim target of 40% reduction by 2025 in Scope 1 and 2.

this analysis to ensure that we steadily reduce risks and seize
opportunities.

Updated Targeted Values under Asahi Carbon Zero

2030: Reduce CO2 emissions by 70%

In addition, we have acquired SBT 1.5ºC certification fromthe SBT initiative for the Scope 1 and 2 target by 2030. In

In particular, we will invest over 50 billion yen by 2030 as a

October 2020, we joined the RE100 renewable energy initiative.

measure to reduce CO2 emissions based on Asahi Carbon Zero in

By joining this initiative, we aim to realize a shift to 100% renew-

order to reduce impacts, such as the impact of a carbon tax onable energy by 2050.

production costs.

To increase the probability of achieving these targets, theSustainability Task Force manages the progress of the road map for
Acquiring SBT 1.5°C
Certification

Group-wide Target Asahi Carbon Zero and Targets at Each Regional Headquarters

Formulation of goals basedon scientific evidence

Asahi Carbon Zero—The Asahi Group’s Medium- to Long-Term Target for Reducing CO2 Emissions

Group-wide• Use renewable energy for 100% of electricity purchased at all production bases by 2025

Southeast Asia

Scope 1 and 2 CO2 Emissions (Compared with 2019)(Kilotons of CO2)
1,200

921

858

744

276

0

−7%

−19%

Achievementof Asahi
Carbon Zero:−70%

Achievementof Asahi
Carbon Zero

2020

2021

2030

2050

900

neutral by 2030
• Shift to 100% renewable energy for the electricity used at plants by 2025

Oceania

TCFD• Reduce CO2 emissions every year by 1% or more over the previous year
• Reduce CO2 emissions in Scope 1 and 2 to zero by introducing renewable energy at plants, thereby becoming carbon

EuropeInternational initiative toincrease the reliability of
our goals

2050 Reduce our CO2 emissions in Scope 1, 2, and 3 to zero, thereby becoming carbon neutral*1
2030 Reduce CO2 emissions in Scope 1 and 2 by 70% (compared with 2019)*2
Reduce CO2 emissions in Scope 3 by 30% (compared with 2019)*1

Japan

Participating in RE100

600• Reduce CO2 emissions in Scope 1 and 2 by 50% by 2025 (compared with 2019)• Shift to 100% renewable energy for the electricity used in Australia and New Zealand by 2025
• Reduce CO2 emissions in Scope 1 and 2 every year by 2% or more over the previous year

*1 Applicable companies: Asahi Breweries, Ltd., Asahi Soft Drinks Co., Ltd., Asahi Europe and International Ltd., and Asahi Holdings (Australia) Pty Ltd*2 Applicable companies: Asahi Group Japan, Ltd., Asahi Europe and International Ltd., and Asahi Holdings (Australia) Pty Ltd

300
0

2019

Note: Covers Japan, Europe, and Oceania

5Asahi Group TCFD REPORTHistory of Scenario Analysis

The Asahi Group has mainly been operating in the Alcohol
Beverages Category, Non-Alcohol Beverages Category, and Food
Category. Scenario analysis began with analysis of the Beer

Begin analysisof the Beer Category

Expand scope toall Alcohol Beverages and
Non-Alcohol Beverages Categories

Implement analysis of
all three categories

Enhance analysis of
all three categories(Alcohol Beverages, Non-Alcohol Beverages, and Food)(Alcohol Beverages, Non-Alcohol Beverages, and Food)

2019

2020

2021

2022

Identify risks

Evaluate impacts on businesses

Define scenarios

Examine response measures

Category, which has the most impact, and we have gradually
expanded, refined, and enhanced the scope of analysis.
In 2021, the third year of analysis, we added the Food
Category to the scope of the 2019 and 2020 analysis, becoming the first time we analyzed all the categories. From 2022
onward, we will continue to refine and enhance the analysis of
all three categories.

Beer Category

Identify risks

Evaluate impacts on businesses

Define scenarios

Examine response measures

2019 Scenario Analysis
2020: Begin evaluation of financial impact

The scenario analysis in 2019 examined the Beer Category.

Other Alcohol Beverages and
Non-Alcohol Beverages Categories

Identify risks

Evaluate impacts on businesses

Define scenarios

Examine response measures

Food Category

Climate change clearly had a major impact, such as reduced
yields of agricultural products that are important for our businesses, a rise in production costs due to the introduction of acarbon tax, and the exacerbation of risks of water stress andflooding in agricultural producing areas and at production sites.
In particular, we analyzed the environmental impact of the

Increase in Raw Material Costs Due to Decrease in Yield

Impact on Production Costs (Scope 1 and 2) Due toof Agricultural Raw Materials

Introduction of the Carbon Tax

Impact on yield under the 2ºC Scenario and the 4ºC Scenario

main agricultural raw materials used in the Beer Category(%)(barley, hops, corn, and rice) and have come to understand that120

there is a risk that yields will decrease due to climate change.
We have also estimated the financial impact of the introduction(Estimated figures for 2050, with the 2018 supply amount as 100)

97
83

90

93

91

that we can seize opportunities by reinforcing mitigation andadaptation measures.

87

98

8.0
6.0

65

of the carbon tax on the Asahi Group. As we discuss measuresagainst these impacts, we are beginning to see the possibility

99

Impact amount of the carbon tax under the 2ºC Scenario(¥ billion)

7.0
5.7
4.3

60

4.0

30

2.0

0

0

0
Barley2ºC Scenario

Hops

Corn

Rice

4ºC Scenario

2030

No CO2 emissions reductions

2050
CO2 emissions reductions

Barley and corn show a large decrease in yield

Reduction of carbon tax if Asahi Carbon Zero is implemented

under the 4ºC Scenario compared with the 2ºC Scenario

2030: ¥1.4 billion; 2050: ¥7.0 billion

6Asahi Group TCFD REPORT

2020 Scenario Analysis

the carbon tax to a greater extent than other materials in theof raw materials to the manufacturing of PET resin is included

Non-Alcohol Beverages Category’s supply chain. The Asahi Group

entirely in the purchase price, the cost increase would be 6.23

In 2020, we expanded the scope of analysis to the Non-Alcohol

experimentally calculated the financial impact of the introduction

billion yen according to the experimental calculation.

Beverages Category and all Alcohol Beverages categories,

of a carbon tax on the PET bottles that it uses. Assuming that theincluding the Beer Category.

impact of a carbon tax on the processes involving the extraction

We are identifying and engaging in response measures for the
results of each of the above estimations.

The scope of analysis was expanded to include coffee, milk,
and sugar as primary raw materials in the Non-Alcohol Beverages
Category (e.g., carbonated beverages, dairy beverages, coffeebased beverages) and the Non-Beer Alcoholic Beverages Category(¥ billion)(e.g., Western liquors, shochu). To predict yields in 2050, the8.0Asahi Group analyzed numerous books on the impact of climatechange on farm produce and experimentally calculated impacts
by agricultural product type and production area to carefully
identify changes in harvest yields. It was learned that the 4ºC
Scenario would significantly reduce harvest yields in many production areas, particularly of corn and coffee.
Furthermore, we estimated the future prices of corn andcoffee, which are high-risk agricultural materials used in the
Non-Alcohol Beverages Category, to experimentally calculate
their financial impact on the position of the Group. We experimentally calculated the financial impact of climate change basedon the amount of raw materials purchased for the current Non-

Impact of Fluctuating PET Bottle Prices

Impact on Production Costs¥ 6.47 billion¥ 6.43 billion

CO2 Weight
Conversion

Amount of
Financial Impact
for the Company

Weight ofPurchase

3.6

Carbon Tax

Amount purchased inJapan, Oceania, andSoutheast Asia in 2019

CO2 emissions factor per
ton of PET

Amount multiplied by
CO2 cost per ton of PET

112,600

405,360¥ 6.23billionCalculating the

6.0

monetary impact of

4.0

CO2 emissions on
production phases

2.00

Amount of PET
Bottles Purchased

2030

2050

Carbon tax

Carbon tax

100 dollars/ton 144 dollars/ton
Alcohol Beverages Category (Scope 1)
Alcohol Beverages Category (Scope 2)
Non-Alcohol Beverages Category (Scope 1)
Non-Alcohol Beverages Category (Scope 2)

tons

tons

Alcohol Beverages Category. This revealed a potential 1.97 billion
yen increase in the cost of corn, and a potential 2.66 billion yen
increase in the cost of coffee.
Additionally, we calculated the impact of the introduction ofa carbon tax on our production operations for 2030 and 2050.

Increase in costs due todecreased yields of main
agricultural raw materials¥1.97 billion¥2.66 billion

144 dollars/ton in 2050, the carbon tax liability of the Alcohol

Corn
CoffeeBeverages and Non-Alcohol Beverages categories combined(In 2050, under the 4ºC Scenario)

Assuming the carbon tax would be 100 dollars/ton in 2030 and

Increase in production costs(Scope 1 and 2) due tothe introduction of carbon tax

2030
2050

¥6.47 billion¥6.43 billion

Increase in cost of PET bottles
when the cost of carbon
tax is transferred¥6.23 billion(In 2050)

would be 6.47 billion yen in 2030 and 6.43 billion yen in 2050.
The increasing use of renewable energy leads the Asahi Group to
expect that the goal of zero CO₂ emissions from electric power
will be achieved by 2050. However, the total carbon tax liability
will be nearly unchanged due to the increase in the carbon tax.
It has been estimated that PET bottles will be impacted by• Cooperate with suppliers in response to
climate change• Support local farmers in response to
climate change• Reduce amount of CO2 emissions• Utilize in-house technology throughco-creation with stakeholders• Switch to recycled PET bottles• Reduce the weight of PET bottles

7

Asahi Group TCFD REPORT

Applying Scenario Analysis to the Strategies

From global common social issues, the Asahi Group has identified

The Asahi Group has established KPIs for each theme and isrisks and opportunities related to its business activities and has

closely monitoring the progress of efforts to address these themes.

established the following four themes to direct its response efforts:

Specifically, the Sustainability Task Force carries out the formula-“Respond to climate change,” “Respond to plastic issue,”tion of Group-wide targets, applying them to the targets of each

“Sustainable raw material procurement,” and “Preserve sustainable

RHQ and closely monitoring the progress of their road map.

water resources.” We have engaged in comprehensively discussing

The results of the scenario analysis are shared within thethe major issue of climate change from the perspective of each ofEnvironment Task Force, which handles environmental themes,

these themes.

and we discuss in detail the realization of response measures forthese themes within the Environment Task Force.

As a result of endorsing the recommendations of the Task

Scenario Analysis Steps
STEP1

STEP2

STEP3

STEP4

Evaluating

Examining

Business

Response

Impacts

MeasuresDefining a Group of Scenarios
Evaluating
the Significanceof Each Risk

Setting the scenarios in which the earth’s
temperature rises by 2ºC and 4ºC,
respectively, by the end of the 21st century
compared with temperatures before theIndustrial Revolution

RCP Scenarios Adopted by the IPCC

Force on Climate-related Financial Disclosures (TCFD) in 2019, we

For example, the results of the 2020 scenario analysis were(°C)

have reevaluated the risks and opportunities of climate change, setshared with each RHQ within the Environment Task Force to discuss

6.0

out specific scenarios, and visualized the quantitative impact on

response measures and meticulously monitor progress. Additionally,

the entire business. As a result, we reconfirmed the Asahi Group’s

the results of the 2020 scenario analysis were reported to the Board

resilience to climate change and have been able to share the needof Directors. As a result, we confirmed the increased probability offor further response measures with the entire Group.

achieving Asahi Carbon Zero and adopted ambitious targets that

4.0
2.0

Scenario of a
4ºC increase

Model resultsof past periods

0.0

Scenario of a
2ºC increase

Since then, we have implemented scenario analysis on aincrease the momentum within the Group to actively engage its

yearly basis to renew a shared awareness of the risks and opportu-

achievement, leading to the upward revision of its interim targets.

nities of climate change, continued to promote existing strategies,

In this way, we can create specific response measures by

and further expanded and enhanced strategies for climate change

visualizing the realistic quantitative impact for the future in 2030

Source: Created by the Asahi Group based on the IPCC’s Fifth Assessment Report
Summary for Policymakers (Figure SPM.7)

issues based on the results of scenario analysis.

and 2050 through scenario analysis.

Scenario analysis refers to RCP2.6 (under 2ºC) and RCP8.5 (4ºC)

–2.0

1950

2000

2050

2100

scenarios developed by the Intergovernmental Panel on Climate
Change in customer
awareness anddemand forenvironmental
considerations

Respond to Climate Change
NeutralPlus

Scope 1 and 2: Promoting energy conservation
and utilizing renewable energy
Scope 3: Working with suppliers, industries,
and others involved in the production,purchase, and transportation of raw materials
generating the highest emissions

Improvement
in renewableenergy solutions

Tighter
restrictions on
Introduction
the use ofof a carbon
energytax

NeutralRespond to Plastic Issue
NeutralTighter
restrictions on
the use ofplastics

Plus

Sustainable Containers/Packaging
Promoting reduce, reuse, recycle forcontainers and packaging;
3R + Innovation (plastic containers
and packaging)

LegendRisks
Impact on the Asahi
Group
Opportunities
Impact on the Asahi
Group
Social issues

Climate change
due to increased
CO2 emissions

Sustainable Raw Material
Procurement
Understanding the environmental
risks of key agricultural raw materials
and implementing countermeasures

Mandatory
switch toalternative
materials

Expectations for
new technologies
and new ideas

Decreased
quantity andquality of raw
materials

Environmental
pollution
caused bywaste

Extreme weather
due to climate change(rising temperatures,
drought, heavy rains,
floods, typhoons, etc.)

Preserve Sustainable
Water Resources
NeutralTighter
restrictions onwater use

 ositive impact of theP
Asahi Group’s efforts

Tighter
regulations
on waste

Reducing water consumption at
manufacturing bases;
Water neutrality;
Understanding and eliminating water
risks

Themes of Asahi Group’s
environmental initiatives
Zero environmental impact
NeutralCreating environmental value
Plus

Change (IPCC) and the scenario created by the International
Energy Agency (IEA). We have established the following two
scenarios as the Asahi Group. (STEP 2)
Under 2ºC Scenario• Global average temperature rises are kept under 2ºC by the end of the
21st century• Bold political measures and technological innovations are promoted toachieve sustainable development• Businesses are likely to be impacted by social changes associated withthe shift to a decarbonized society

4ºC Scenario• Global average temperature rises are kept at approximately 4ºC by theend of the 21st century• Businesses are likely to be impacted by changes to climate, such astemperatures rises

8Asahi Group TCFD REPORT

Scenario Analysis for 2021

We identified various climate change-related risks and opportuni-

risks and opportunities identified, the increase in raw material

have a particularly significant impact. The Asahi Group imple-

ties such as transition risks and physical risks in 2021. Amongprices due to the reduction of agricultural materials’ harvest

mented the following business impact evaluations and derived

these, the risks and opportunities shown in the table below areyields, the increased cost of water-related risks, and the

key response measures for each.

particularly important to the Asahi Group. Among the important

increases in costs due to the introduction of a carbon tax may

STEP 1: Evaluating the Significance of Each Risk

Production(In-House)

Increased procurement costs due toreduced yields of agricultural productsContainers
andPackaging(Scope 3)

Since containers and packaging, which make up approximately 40% of Scope 3,
are mainly manufactured with fossil fuels, the introduction of a carbon tax is
expected to have a significant impact on procurement costs.

Regulations on
Water Use

Since water is indispensable to our raw material production and factory operation, we anticipate that the introduction of additional regulations on water use
will have a significant impact on our business continuity and financial position.

Market andTechnology

Changes in Customer
Behaviors

Heightened environmental awareness of consumers has the potential to becomea new factor that impacts net sales.

Chronic

Rising Price of
Raw Materials

If a rise in raw material prices and the resultant transition to alternative raw
materials become necessary, we will incur significant financial impact and thismay affect the continuity of our business operations.

Rise in Global
Average Temperature

Various costs of cooling products are expected to increase.

Changes inPrecipitation Patterns

If our agricultural land and production bases were impacted by severe
water shortages, it could potentially become difficult to continue ourbusiness operations.

Intensification ofAbnormal Weather

In the event that damage from heavy rains and typhoons, which are
occurring more frequently in recent years, were to become more severe, ourvalue chain may suffer significant harm, making it difficult to continue ourbusiness operations.

Acute

Opportunity Categories

Opportunities

Main Impacts of Risks

Products
and Services

EnergySources

Opportunities

Water-Related
Risks
Risks

and Legal

Expected Impacts

Expected Impacts• Heightened environmental awareness of consumers has the potential to
become a new factor that impacts net sales.
• Heightened awareness of disaster prevention following the intensification of
Changes in Customer
climate change is expected to increase demand for products suitable for
Behaviors
stockpiling.
• Demand is expected to increase for products that lessen the impact of climatechange on people’s health.

Changes in ProductMarkets

Temperature increases are expected to have a major impact on beer andbeverage consumption during the summer.

Utilization of New
Technology

Development of technology that contributes to decarbonization has the potential
to become a new factor that impacts net sales.

Response Measures to Reduce Risks

Pages 9–10

• Share information with suppliers• Conduct business with operators thathave acquired third-party certification• Directly procure raw materials fromfarmers• Support farmers

Water-related risks
in raw material
production areas(drought, etc.)

Page 16

Halt to operations at
production bases anddamage to equipment
due to flooding

Page 15

Impact on Production
Costs (Scope 1 and 2)

Page 12Impact on Scope 3

Page 13

Key Impacts of Opportunities

STEP 4: Examining
Response Measures

Business Impacts

Introduction of
Carbon Tax

Opportunities

PolicyCarbonTax

STEP 3: Evaluating Business Impacts

Under Asahi Group Environmental Vision 2050, we are taking steps to achieve
Asahi Carbon Zero, an initiative that aims for zero CO2 emissions within ourvalue chain. However, while circumstances vary by country and region, we
anticipate a significant financial impact from the introduction of a carbon tax.

Risks

Defining a Group of Scenarios (page 7)

Physical

Risks

Transition

Risk Categories

STEP 2Business Impacts• Countermeasures for heavy rain,equipment, etc.
• Assessment and elimination of water
risks• Reduce CO2 emissions based on Asahi
Carbon Zero
• Utilize in-house technology (beerby-products, etc.)

Initiatives for Opportunities

Increase in demand for emergency
supplies

Page 18

Provide goods suitable for ­emergency
supplies and stockpile

Increase in demand for products that
reduce health impacts

Page 18

Provide heatstroke prevention products

Development of technology that­contributes to decarbonization

Page 18

Develop and expand sales channels forhighly resilient agricultural materials

9Asahi Group TCFD REPORT

1. Impact on Procurement Costs Due to Reduced Yields of Agricultural Products

common raw materials in each category and the main raw(barley, hops, corn, and rice), and it learned that climate changematerials in the Non-Alcohol Beverages Category.

created the risk of a reduction in harvest yields. In 2020, theRegarding the main agricultural raw materials in the Food

scope of analysis was expanded to include coffee, milk and sugar

Category, despite a downward trend in palm oil yields, cacao is

as primary raw materials in the Non-Alcohol Beverages Category

expected to increase and soybean is also expected to increase in(e.g., carbonated beverages, dairy beverages, coffee-basedsome areas.

beverages) and the Non-Beer Alcohol Beverages Category (e.g.,

Additions in 2021

Western liquors, shochu). To predict harvests in 2050, the Asahi
Group analyzed multiple books on the impact of climate change

More than a 15% decrease compared with current yields

Country of
Production

Under 2ºC
Scenario

4ºC
Scenario

cultural product type and production area to carefully identify

Canada (Spring)

+1%

+2%

changes in harvest yields. We also estimated future prices andFrance (Spring)

–10%

–18%

Item

experimentally calculated the financial impact of climate change.
In 2021, we added palm oil, cacao, and soybean to the scopeof analysis. These are important raw materials used in the Food
Category that are thought to have a major impact on business
continuity due to their high procurement volume and cost.
Additionally, in a continuation from 2019 and 2020, we expanded
the geographical areas of analysis for barley and corn, which arevital for the business continuity of the Asahi Group. We further
refined the analysis of barley by estimating its future price andcalculating its financial impact.

Main Raw Materials of Beer Category

on farm produce and experimentally calculated impacts by agri-

Hops

in the Beer Category, has decreased in some areas. As for new
areas in the scope of analysis in 2021 (Hungary, the Northern andSouthern regions of Italy, and Poland), yields are expected todecrease in Poland and the Southern region of Italy.
Under the 4ºC Scenario, yields are expected to decrease

Common Raw Materials of Each Category

 ield Forecasts for Each Scenario in 2050
Y
(Compared with Current Yields)
It has become clear that the yield for barley, the main ingredient

BarleyCorn

France (Winter)

–5%

–10%

Eastern Region ofGermany (Winter)

+8%

+19%

Australia

–7%

–13%

Czech Republic (Spring)

+18%

+7%

Hungary (Spring)

+4%

+9%

Northern Region of
Italy (Winter)

+10%

+14%

Southern Region of
Italy (Winter)

–8%

–11%

Poland–9%–15%

Czech Republic (Yield)

–5%

–7%

Czech Republic (Quality)

–13%

–25%

United States

–12%

–24%

Brazil–3%–9%

Argentina

–9%

–16%

China

0%

–10%

Ukraine

–17%

–26%

Germany–2%–4%Australia

–13%

–27%

Item
Raw Materials of Non-Alcohol Beverages and Other Alcohol Beverages Categories

significantly in numerous production areas for corn and coffee,

on the main agricultural materials used in the Beer Category

Main Raw Materials of the Food Category

In 2019, the Asahi Group analyzed the impact of climate change

Sugar

Raw milk

CoffeePalm oil

Cacao

SoybeanCountry of
Production

Under 2ºC
Scenario

4ºC
Scenario

Australia

+1%

+2%

Brazil

+3%

+12%

India

0%

–3%

Japan

+2%

+21%

Thailand

–26%

–45%

Australia

–9%

–19%

United States

–6%

–11%

Japan

–2%

–3%

New Zealand

–2%

–2%

Brazil–8%–23%

Colombia

–4%

–15%

Guatemala

–11%

–17%

Tanzania–2%–9%Ethiopia

–8%

–25%

Vietnam–9%–24%

Indonesia

–10%

–30%

Indonesia(Suitable Areas)

+1%

–1%

Malaysia

–3%

–13%

Ghana

+4%

+11%

Côte d’Ivoire

+1%

+12%

United States

–5%

–10%

Canada

+16%

+28%

China

0%

+5%

Japan (Hokkaido)

+6%

+9%

10

Asahi Group TCFD REPORT

1. Impact on Procurement Costs Due to Reduced Yields of Agricultural Products
Future Prices Outlook and Financial Impact
The Asahi Group estimated the future prices of corn, coffee, andForecast for Price of Coffee(Dollars/kilogram)
8

sugar, which are high-risk agricultural materials used in the NonAlcohol Beverages Category, to experimentally calculate their finan-Calculation Methods
Average price under the 4ºC Scenario

Basis of costs calculation: From historical price trends, weAverage price underthe 2ºC Scenario

derived a formula to identify variables (balance of production
and consumption, GDP per capita, previous year’s market

6

price, and the proportion of ethanol raw materials [corncial impact on the position of the Group.
The Asahi Group experimentally calculated the financial impact
of climate change based on the amount of raw materials purchased

4
Approx.

2

1971

2020

2030

only]) and used regression analysis to reproduce past prices.
Predictions of future production and consumption, GDP per
capita, and the proportion of ethanol raw materials (corn

Future outlook

Past results0

76 %Average price for maintaining 0.6ºC

for the current Non-Alcohol Beverages Category. This revealed apotential 1.97 billion yen increase in the cost of corn and a potential

16 %Approx.

2050

only) were entered into the formula to estimate future prices.

2.66 billion yen increase in the cost of coffee. Meanwhile, the financial impact of sugar is expected to decrease since the price has
fallen due to an increase in production volume.
The financial impact of barley, which was added to the research,is expected to be approximately 400 million yen. Despite the pricerising due to a decrease in production volume in some areas, this is

Forecast for Price of Corn
(Cents/bushel)

Coffee prices are expected to rise by an average of approxAverage price under the 4ºC Scenario

800

Corn prices are expected to rise by an average of approxi-

600

minor compared to price fluctuations due to factors other thanchanges in production volume. The financial impact of palm oil andsoybean is also expected to be minor.

400

Approx.

18 %Approx.

59 %Average price for maintaining 0.6ºC

Meanwhile, the prices of cacao and sugar are expected to fall
due to an increase in production volume following rises in the global

imately 16% in 2030 and approximately 76% in 2050 underthe 4ºC Scenario, compared to maintaining 0.6ºC.

Average price underthe 2ºC Scenario

mately 18% in 2030 and approximately 59% in 2050 underthe 4ºC Scenario, compared to maintaining 0.6ºC.

200

Past results0temperature. The procurement cost of sugar is expected to fall to1971

Future outlook
2020

2030

2050

approximately 2.5 billion yen in 2050.

Experimental Calculations of Financial Impact in 2050
Item

Palm oil

4ºC Scenario

Forecast for Price of Barley(Dollars/ton)400

Past results¥20 million

Cacao–¥60 million

Soybean¥4 million

Future outlook
Average price underthe 2ºC Scenario

300

Barley prices are expected to rise by an average of

Average price underthe 4ºC Scenario

200

Barley¥400 million

100

Sugar

–¥2.48 billion

0

Average price for maintaining 0.6ºC
1971

2020

2030

2050

approximately 4% in 2030 and approximately 2% in 2050
under the 4ºC Scenario, compared to maintaining 0.6ºC.

11Asahi Group TCFD REPORT

1. Impact on Procurement Costs Due to Reduced Yields of Agricultural Products
Response Measures

1. Directly procure barley from farmers

2. “FOR HOPS,” a project that supports hop farmers

To stabilize the procurement of raw materials that are

Asahi Beverages Pty Ltd. purchased approximately 70,000

In the Saaz hops growing region of the Czech Republic, we are introducing support throughessential to the Asahi Group’s businesses, we aim totons of barley directly from farmers in Victoria andsmart agriculture that utilizes AI technology in order to increase the resilience of hops

cooperate with and support farmers in all areas where

Queensland. Amid wildfires, droughts, and other natural

production against climate change.

raw materials are sourced. Additionally, we aim todisasters caused by climate change, we are monitoring

optimize procurement by promoting countermeasures, such as sharing the results with suppliers on
future risks. Below, we will introduce some of the
products we are working on in each area.
	More details can be found in Asahi Group Sustainability“Sustainable Raw Material Procurement”
Data Book

A team comprising Agritecture Consulting, TENSOAI, Hop Growers Union of the Czech

agricultural processes and investing in new technology to

Republic, hop research institutes, major producers, and Asahi Europe and International Ltd.

improve the sustainability and efficiency of barley cultivation

launched the project in June 2021 with a 190,000-dollar subsidy from Microsoft’s AI for

together with farmers.

Earth program.

In the Northern

In order to further enhance stability and pre-Region of Australia, we

dictability of hops production in the Saaz region, weare promoting theutilize real-time data at farms that use big data,

introduction of a soil

past data, information from satellites, and IoT

improvement program

sensors, and which have identified methods ofand launching initiatives

mitigating the impacts of climate change on agricul-

aimed at increasing yield.

tural products, such as administration of water andfertilizer and countermeasures against damage from
disease and harmful insects, and which have developed smart agriculture that advises farmers througha mobile app.

3. Share information with raw­material suppliers

4. Conduct business with agricultural product operators that have acquired
third-party certification

Based on risk evaluation experimental calcula-Asahi Group Holdings, Ltd. joined the Roundtable on Sustainable Palm Oil (RSPO) in December 2016 andtions, we share information on environmental andbecame a full member of this group in July 2019 with the aim of being able to take environmental,

human rights risks with raw material suppliers,

human rights, and other issues into account when procuring palm oil.

which have a significant impact on the procure-

In addition, from 2019, we have been purchasing certified credits under the Book and Claim certifi-

ment of agricultural raw materials. We will con-cation method for some of the palm oil procured by the Group, and Asahi Group Foods, Ltd. plans totinue to check local information as it becomes

purchase certified credits for 50% of its total palm oil procurement in 2022.

available, while further strengthening information
sharing with raw material suppliers.

We will continue our efforts to procure sustainable palm oil in accordance with the Asahi Group
Sustainable Procurement Principles.

12

Asahi Group TCFD REPORT

2. Impact of Carbon Tax Introduction on Production Costs (Scope 1 and 2) and on Scope 3
Under Asahi Group Environmental Vision 2050, we are taking

2030

steps to achieve Asahi Carbon Zero, an initiative that aims for

Scope 2 electric
power CO2
emission factor

zero CO2 emissions within our value chain. However, while­circumstances vary by country and region, we anticipate a­significant financial impact from the introduction of a carbon tax.
We therefore calculated the impact of a carbon tax on our­production operations for 2030 and 2050.

Scope 1 and 2

Experimental
calculation for2021–69.1%

Experimental
calculation for
2020

–51%

Amount ofcarbon tax$130* $90 in
Southeast Asia

Calculation Method

2050
Total financial
impact¥8.02 billion

Financial
impactAmount ofcarbon tax

In 2020, we calculated the impact of acarbon tax introduction on our production
operations based on the assumption that$250

¥12.23billion* $200 in
Southeast Asia

the carbon tax would be 100 dollars/ton in
2030 and 144 dollars/ton in 2050. We also
used a Scope 2 emission factor for electricity that is 51% lower than our current$100¥6.47 billion$144¥6.43 billion

emission factor. The scope that this calculation covered included the Alcohol
Beverages (Japan, Europe, and Oceania)

The Asahi Group calculated the financial impact of the introduction of a carbon tax on its production operations for 2030 and
2050, specifically toward its Scope 1 and 2 emissions in the
Alcohol Beverages (Japan, Europe, and Oceania), Non-Alcohol

Notes:
1. The impact amount is calculated from the volume of CO2 emissions during manufacturing.
2. The Scope 2 emissions factor for electricity comes from the International Energy Agency (IEA)’s “Net Zero by 2050: A Roadmap
for the Global Energy Sector (NZE).”
3. The amount of carbon tax (unit price per ton) is independently estimated and set according to the forecast figures by the
IEA NZE.

Beverages (Japan, Oceania, and Southeast Asia), and Food (Japan)

the estimated financial impact of a carbon tax introduction
increased from the trial calculation we performed in 2020.
However, we have confirmed that if we reach Asahi Carbon

and the entire cost amount of 12.23 billion yen if we achieve

Meanwhile, in 2021, we calculated theimpact based on the assumption that the
carbon tax would be 130 dollars/ton (90dollars/ton (200 dollars/ton in Southeast

Experimental Calculation of Total Financial Impact of Carbon Tax for 2021

Asia). We also expanded the scope to cover
Scope 1 and 2 CO2 emissions in the Alcohol(¥ billion)

Beverages (Japan, Europe, and Oceania),

15.0

Non-Alcohol Beverages (Japan, Oceania,

12.23

Zero’s interim target of a 70% reduction of CO2 emissions by2030, this would result in a reduction of 4.08 billion yen in 2030

Oceania, and Southeast Asia) categories.

dollars/ton in Southeast Asia) and 250

categories.
Accordingly, as carbon tax amounts are likely to increase,and Non-Alcohol Beverages (Japan,¥–4.08 billion
10.0

and Southeast Asia), and Food (Japan)¥–12.23 billion

categories. Furthermore, we used a Scope 2
emission factor for electricity that is 69.1%

8.02

lower than our current emission factor.

zero CO2 emissions in 2050.
3.94

5.0

0
0

No response Asahi Carbon ZeroNo response Asahi Carbon Zero

2030

2050

Note: D etails of Asahi Carbon Zero target: 70% reduction (compared with 2019) by 2030 in 2021; 50% reduction(compared with 2019) by 2030 in 2020

Scope 1
Scope 2

13

Asahi Group TCFD REPORT

2. Impact of Carbon Tax Introduction on Production Costs (Scope 1 and 2) and on Scope 3
Scope 3 (Containers and Packaging)
In regard to 2030 and 2050, the targeted years of Asahi Carbon
Zero, we calculated the financial impact of the introduction of acarbon tax on containers and packaging in 2021, which accountfor approximately 40% of the Scope 3 emissions of the Asahi

Scope of Experimental Calculation

Forecast Carbon Tax Amounts(CO2 emission comparisonsby container and packaging)(Dollars/tons)

Paper cartons
10%

Plastic bottles
1%

Glass bottles
24%

Group. The scope of this calculation covered six varieties ofrepresentative containers: PET bottles, aluminum cans, steel
cans, glass bottles, plastic bottles, and paper cartons. This differsfrom the calculation from 2020 in which we only calculated thefinancial impact of PET bottles, which, among all the containers

duction of a carbon tax.

250

200

130

Pet bottles
20%

144

100
100

Steel cans
2%

Aluminum cans
43%

we use within the supply chain of the Non-Alcohol Beverages
Category, are believed to be significantly impacted by the intro-

300

0

2030

2050

Targets for 2020 analysis

2020 estimated cost

Added targets for 2021 analysis

2021 estimated cost

As we expanded the varieties of containers and packaging
used in this trial calculation and based it on the assumption thatthe forecast for the carbon tax will be higher than the previous
year, the calculated amount rose significantly year on year.

Financial Impact of Carbon Tax Introduction

Accordingly, the amount of the carbon tax, which is now

Calculation Method

2030

2050

¥32.25 billion¥62.01 billion

expected to cover all containers, is forecast to be 32.25 billion
yen in 2030 and 62.01 billion yen in 2050. Through this calculation, we confirmed that PET bottles would account for 49.5% andExperimental­calculation for 2021

covered PET bottles in 2020, it was expanded

off a particularly large amount of CO2 emissions.

to cover six varieties of major containers andpackaging in 2021.

aluminum cans 28.7% of the additional cost compared to the
procurement cost of 2020, respectively, as these containers give

While the scope of the trial calculation only

Furthermore, the assumed amounts for the

Experimental­calculation for 2020

¥4.33 billion¥6.23 billion

carbon tax used in the 2020 trial calculation
were 100 dollars/ton for 2030 and 144 dollars/
ton for 2050, with the targeted areas being

Notes:
1. The impact amount is calculated from the volume of CO2 emissions during manufacturing.
2. The amount of carbon tax is independently estimated and set according to the forecast figures by the IEA’s“Net Zero by 2050: A Roadmap for the Global Energy Sector (NZE).”
3. In 2020, the scope covered Japan, Europe, Oceania, and Southeast Asia. In 2021, the scope covered Japan(Alcohol Beverages and Non-Alcohol Beverages), Europe, and Oceania.

Japan, Europe, Oceania, and Southeast Asia.
Meanwhile, the assumed amounts for the 2021
trial calculation were 130 dollars/ton (90 dollars/
ton in Southeast Asia) for 2030 and 250 dollars/ton (200 dollars/ton in Southeast Asia) for 2050,
targeting Japan (Alcohol Beverages and NonAlcohol Beverages), Europe, and Oceania.

14

Asahi Group TCFD REPORT

2. Impact of Carbon Tax Introduction on Production Costs (Scope 1 and 2) and on Scope 3
Response Measures

1. Use of green heat in the Netherlands and the Czech Republic

2. Demonstration testing of biomethane

The Asahi Group has formulated a broad range ofWe are currently proceeding with the gradual transition to renewable energy for electricity at our European

fuel cell power generation system

initiatives to reduce CO2 emissions with a view toplants. At the same time, we are undertaking efforts toward sustainable heat, in addition to electricity, inAt the Ibaraki Brewery of Asahi Breweries, Ltd., weachieving Asahi Carbon Zero. These include introduc-order to further accelerate our initiatives for achieving carbon neutrality. To that end, we have commenced

are carrying out a demonstration test of power

the use of “green heat,” which is generated from the renewable energy used during the brewing process.

generation through fuel cells that utilize biomethane

In 2021, Koninklijke Grolsch N.V. in the Netherlands, which operates under the corporate umbrellagas derived from wastewater treatment processes.

ing renewable energy, capturing and reusing steam
and other waste heat given off during the manufac-of Asahi Europe and International Ltd., concluded a heat supply contract with Twence, a regional

We believe that the widespread use of this system inenergy supplier, and subsequently commenced the use of green heat in 2022. Through the use ofsociety will contribute to the reduction of the whole

and transitioning to alternative fuels. Going forward,

green heat, Koninklijke Grolsch N.V. is expected to be able to reduce its CO2 emissions from naturalof society’s CO2 emissions. Accordingly, we intend to

the Group will invest over 50.0 billion yen in similar

gas usage by approximately 5,500 tons a year.

promote the popularization of the newly ­developed

turing process, introducing cogeneration facilities,

initiatives in an effort to reach its CO2 reduction
targets for 2030.
	More details can be found in Asahi Group“Respond to Climate Change”
Sustainability Data Book

Also, in the Czech Republic, Plzeňský Prazdroj, which operates under the same corporate umbrella,system by disclosing as much information as pos-entered into a long-term contract with the energy company Plzeňská

sible, without

teplárenská for the supply of green heat, running up to 2028. Basedobtaining aon this contract, Plzeňský Prazdroj commenced the use of green heatpatent for it.

that utilizes wood chips as a raw material in 2021.
Going forward, we will continue to reinforce our initiatives toutilize renewable energy in Europe with the aim of achievingcarbon neutrality.

Additionally, we engage in activities to ensure ourcontainers and packaging are more sustainable,
striving to conserve resources as well as reduce theweight and improve the recyclability of our containers

3. Expanding the introduction of renewable energy
through PPA

4. Commencing delivery of major brand
Victoria Bitter via electric truck

and packaging from a 3R (reduce, reuse, recycle)

In 2019, Karadoc Solar Farm, one of the largest solar power plants in Victoria,

In July 2021, Asahi Beverages Pty Ltd., a subsidiary of Asahi Holdings

perspective. These efforts extend to all kinds of con-

Australia and built by Australian energy solutions provider BayWa r.e., officially com-

(Australia), introduced an electric truck for the delivery of its mainstay

menced its commercial operations and began supplying electricity to Carlton & United

brand Victoria Bitter. The truck is powered entirely by 100% solar

Breweries Pty. Ltd. (CUB), a subsidiary of Asahi Holdings (Australia) Pty Ltd. Upon the

power drawn from Asahi Beverages’ solar farm and is able to run up toplant’s completion, CUB entered into a 12-year power purchasing agreement (PPA)

250 km off a single charge. The electric truck delivers over 100,000

with BayWa r.e. to receive an annual supply of 74,000 MWh of electricity. Not only

cans and bottles each week from Asahi Beverages’ distribution centerers aimed at changing the consumer behavior ofdoes this PPA allow CUB to procure renewable energy, it will also reduce purchasing

in west Melbourne to stores across the city. The introduction of thethrowing containers away after one use.

costs and secure power supply over the long term, thereby bringing the company

electric truck was made possible through the cooperation of Linfox Pty

much closer to its goal of sourcing

Ltd., a major logistics company, and100% of its purchased electricity

Volvo Group Australia, which pro-from renewable sources by 2025. Asvides vehicles to Linfox. By expand-of 2020, CUB’s classic beer brand,

ing the use of electric trucks moving

Victoria Bitter, is brewed with 100%

forward, Asahi Beverages aims tosolar electricity.

realize its targets for CO2 reductions.

tainers and packaging materials, including PET bottles, cans, glass bottles, caps, labels, and cardboards.
We also engage in efforts toward innovating contain-	More details can be found in Asahi Group“Respond to Plastic Issue”
Sustainability Data Book

15

Asahi Group TCFD REPORT

3. Business Impact Assessment of Water and Other Damage and Risk Assessment of Raw Material Producing Areas
Water Risks in Raw Material Production Areas

For the Asahi Group, which makes use of the blessings of nature

As a result of our analysis, five bases are at risk of damage

in its business activities, water is an indispensable and valuable

to property, plant, and equipment and inventory assets due toresource. It is also a precious resource for all people and theflooding above floor level, with an estimated damage amount of

We have identified regional raw material production risks throughglobal environment.

approximately 1.73 billion yen.

survey indicators*1 and have also identified major suppliers andFloods and other natural disasters are currently occurring on

We have also identified 10 production bases where suspen-

production areas that have significant business impacts by con-a global scale, as are issues related to water resources. Demandsion of operations is highly likely and which face approximately

ducting evaluations through a combination of water risk survey

for water has been growing each year, and there is a risk that the6.72 billion yen in loss of opportunities if suspension of businessindicators and business characteristic indicators.*2 The results

number of areas facing water shortages will increase going for-were to continue.

showed that the Group faces the following risks in each of theward. In 2021, the Asahi Group implemented water risk analysis

areas where it procures raw materials.

and estimated the impact on its businesses. This analysis identified risks including operational impact on production bases andNumber of
Risk

Survey item

impacted

impact on the procurement of raw materials.

Operational Impact on Production Bases
We estimated the impact of typhoons, floods, and other natural
disasters on all Group production bases under a scenario that

Suspension ofoperations anddamage to bases
due to typhoons,floods, and othernatural disasters*1

assumes a 4ºC rise at the end of the 21st century by utilizing theWorld Resources Institute tool Aqueduct Floods, which investors
use to conduct flood risk analysis due to the impact of climatechange. Assuming the occurrence of a once-in-a-century flood,
we analyzed the risk of flooding at each production base from theperspectives of river flooding and coastal flooding.

bases

Damage toproperty, plant,
and equipment*2

5

Opportunity loss
due to suspensionof operations*3

10Impactamount¥1.73
billion¥6.72
billionCalculation Method*1 Calculation targeted property, plant, and equipment and inventory assets ofproduction bases in 2020.
*2 We determined damage percentages specific to depth of flooding and estimated theamount of damage to property, plant, and equipment and inventory assets ofproduction bases while taking into account the insurance coverage ratio.
*3 We calculated the financial impact of opportunity loss by determining the average
number of days of suspended operations specific to depth of flooding and thenumber of days of suspended operations at each impacted production base.

*1 Survey indicators: water stress, future water stress, flood risks, drought risks,regulatory risks, and risk to reputation. These risks were evaluated using the fivegrades of “extremely low,” “low,” “moderate,” “high,” and “extremely high.”*2 Business characteristic indicators: procurement amount and water
consumption amount16

Asahi Group TCFD REPORT

3. Business Impact Assessment of Water and Other Damage and Risk Assessment of Raw Material Producing Areas
Analysis Results

Extremely high 

Raw material• Current and future water stress is extremely high in China andthe United States. Such risk increases when irrigation water isPalm oil• In the United States, where soybeans and corn are produced,• Flood risks are extremely high in the Czech Republic, where
barley is produced. Concerns of business impact would arise inFood Category

the business impact of future water stress is extremely high inrisk to reputation is extremely high in Illinois.

the event of floods or other water-related disasters affecting

Soybean

Cacao• In Brazil, where coffee is produced, risk to reputation isBeer Categoryarise in the event that our reputation were damaged due to

Non-Alcohol Beverages
and Other Alcohol
Beverages categories

Commonin eachcategory

misinformation. Furthermore, in Queensland, there are concerns of business impact from flood risks.

Drought

BarleyRegulatory

Reputation

High

High

High

Extremely high

The Philippines

High

High

High

High

Extremely high

China

High
High

Extremely highCanadaThe Netherlands

High
Extremely highExtremely high

High

High

High

High

Ghana

High

Côte d’Ivoire

Italy

Extremely highExtremely high

High
High

Extremely high

High

High
High

Poland

Hops

Flood

High

Czech Republic

extremely high in Minas Gerais and flood risks are extremelytion is extremely high. A significant business impact would also

Future water stressIndonesia

United Statesrisks and risk to reputation were also high in the country.

• In Australia, where sugarcane is produced, the risk to reputa-

Water stressJapan

Raw milk

farmland, storage facilities, or transportation methods. Drought

high in São Paulo.

Risk typeMalaysia

being used.

Michigan while the business impact of future water stress and

Raw material
producing countries
with high risks

High

High

High

Germany

High

High

Rice

Japan

High

High

Corn

United States

Extremely highExtremely highCoffeeBrazilExtremely highExtremely high

High

High

High

Extremely highSugarcane
Skim milk andwhole milk powder

ThailandAustralia

High

17

Asahi Group TCFD REPORT

3. Business Impact Assessment of Water and Other Damage and Risk Assessment of Raw Material Producing Areas
Response Measures

1. Countermeasures for heavy rain,

2. Reduction of water usage, assessment, and elimination of water risks

Based on these trial calculations, the Asahi Group will

equipment, etc., due to the oper-

We are reducing water consumption at the water recycling facility at the Yatala Brewery of Carlton &implement the assessment of water-related risks andational risks at production bases

United Breweries Pty. Ltd. by utilizing high-quality recycled water in various aspects of manufacturing

the reinforcement of response measures, while pro-

When a large-scale natural disaster occurs, there

moting the further reduction of water usage in plants,

may be risks to suspension of operations resulting

in order to realize the use of sustainable water
resources. Additionally, we will conduct initiatives torealize the sustainable procurement of raw materials.
	More details can be found in Asahi Group
Sustainability Data Book
“Preserve Sustainable Water Resources”
	
More details can be found in Asahi Group
Sustainability Data Book
“Sustainable Raw Material Procurement”

from the inability to secure personnel and thestagnation of product supply due to damage to
production and logistics functions. Accordingly,
the Asahi Group is creating systems that minimize
the impact on Group business activities by undertaking the development of various action manuals,
ensuring the maintenance of facilities and equipment, and the holding of emergency drills onthemes such as ensuring the safety of employees(and their families) and business continuity.
In anticipation of large-scale natural disasters, especially in earthquake-prone Japan, we areformulating business continuity plans (BCPs)(excluding any processes that come in contact with product), such as cleaning steam generators andproduction tanks and creating steam used for heat sterilization. Furthermore, we are reducing thevolume of water we use by reviewing the manufacturing process.
In the evaluation of water stress risks (the degree of stress between water supply and demand),
we found that two of our production plants in Italy qualify as extremely high risk. We have examinedsurvey results for past water risk (vulnerability) surveys in Europe and begun considering possible
countermeasures against such risks.
At production sites in Japan, no sites were found to be high risk under the above water risk assessment criteria. However, we conducted ourown more detailed water risk (vulnerability) surveys at two plants in Japan during2020 and confirmed that there were noserious risks. Additionally, we have started
conducting surveys of plants at otheroverseas sites, such as those in Oceania.

based on the results of previous earthquake
countermeasures and the experience of the Great
East Japan Earthquake (March 11, 2011).

3. Implementation of water risk surveys for suppliers
As a result of water risk surveys of agricultural production sites, we recognized the need for on-site checks. Accordingly, from 2017 we have been conducting interviews on the circumstances of water risks when implementing supplier quality audits.
Between 2017 and 2021, we conducted supplier quality audits at the factories of the total 131 suppliers and conducted interviews on the circumstances of water risks.
• Procurement of raw materials impeded by water shortages: 129 factories not impeded; two impeded• Operation of factories impeded by water shortages: 131 not impeded
The two factories which answered that procurement of raw materials was impeded by water shortages have experienced severe droughts in the past, resulting in crop failure of agricultural products. As a response to this, agricultural producers at Factory A have prepared numerous water sources, and the procurement
division of Asahi Group Holdings, Ltd. has carried out a decentralization of procurement areas in response to risks. Suppliers at Factory B are examining multiple
agricultural raw materials.
Going forward, we will implement appropriate countermeasures that are relevant to the situation and surroundings if it becomes clear that water-related risks exist.

18

Asahi Group TCFD REPORT

Opportunities

The Asahi Group is aware of the importance of seizing business opportu-

evaluation tests, we expanded the area of the tests to a total of 12 hect-Freeze-dried products are also suitable for the rolling inventory

nities that contribute to resolving climate change while assessing theares of paddy fields belonging to JA Gifu’s Sunami Agricultural Association.

method of building up stock while enjoying them as regular food items.

related risks and opportunities. We will not only reduce the environmental* Scientific name: Pomacea canaliculata

Moreover, we can contribute to the maintenance of the mental andimpact by utilizing the Group’s proprietary technologies but also create aphysical health of highly stressed evacuees suffering from nutritional

cycle that is positive for the environment by creating environmental value

deficiencies by enabling them to bring a variety of foods to stays inin society and having a positive impact on the environment. Furthermore,evacuation centers.
There is an increasing frequency of natural disasters and an increas-

we aim to realize a sustainable society while achieving business growth

ing demand for preparing for prolonged stays in evacuation centers.

through the support of a rich diet.

Accordingly, we will expand sales of freeze-dried products in combination
with Asahi Group Foods’ dietary supplements, which can provide nutri- xpansion of Sales Channels for Agricultural
E
Materials Derived from Brewing Yeast
Cell Walls
With expectations to respond to environmental issues, including climatechange, new food system strategies are being conceived in countries
around the world and the reduction in volume of chemical fertilizer andtional support during a disaster, and Asahi Soft Drinks’ Asahi OISHII
Paddy fields that did not use the fertilizer
raw materials suffered approximately
20% crop damage due to golden apple
snails (September 2020).

Paddy fields that used the fertilizer raw
materials reduced crop damage(September 2020).

Sales Expansion of Freeze-Dried Products

agrochemical use has been set as one of the targets for achieving this.

MIZU long-life mineral water (for emergency stockpiling).

 evelopment of Products That Contribute to
D
Heatstroke Countermeasures
Amid predictions of temperature rises due to climate change, there are

Amid an increase in the risk of damage to agriculture, a decrease in

Natural disasters, such as heavy rain and drought, are expected toconcerns about the impact on health, such as heatstroke. The Asahi

brewing yields of agricultural products, and a decrease in quality due togradually increase in strength and frequency due to climate change. The

Group is developing products that contribute to countermeasures

climate change, an increase in demand is predicted for agricultural mate-Cabinet Office of Japan has indicated its direction to formulating andagainst heatstroke.

rials derived from brewing yeast cell walls (fertilizer raw materials) that

promoting disaster plans in preparation for severe meteorological disas-

are expected to improve crop growth. The agricultural materials derived

ters. They have also recognized the need to increase stockpiles of emer-from brewing yeast cell walls developed by the Asahi Group have been

gency food and prepare for prolonged stays in evacuation centers due toconfirmed to have positive effects including the enhancement of crop

an increase in awareness of natural disasters.

immunity against disease, increase in yield, and increase in quality of

There is a need to provide high-added value and functionality due

agricultural products. These agricultural materials can also be utilized into the diversification of emergency foods and stockpile food for people

diverse crops and are expected to reduce agrochemical use and reduce­requiring special attention, such as the elderly, infants, and people with

the CO2 emissions corresponding to yield.

chronic illnesses, and for the reduction of stress when staying in evacua-

It is said that minerals (salt) are lost together with water whensweating, so salt intake is recommended while rehydrating.
Products such as CALPIS THE RICH and DODECAMIN, sold by Asahi
Soft Drinks Co., Ltd., are part of our heatstroke countermeasure designs,
and we plan to develop other products in summer 2022.
Asahi Group Foods, Ltd. also offers a selection of products, including
candy that enables easy salt intake.
We will utilize the Asahi Group’s combined strength of the Non-tion centers. Due to this need, the rolling inventory method is being

Alcohol Beverages Business and the Food Business to continue developing

JA Gifu (located in Gifu, Gifu Prefecture, Japan) to confirm whether we canwidely publicized by the government and local authorities, which areproducts that contribute to countermeasures against heatstroke.

reduce damage to rice plants from golden apple snails,* by using agricultural

encouraging the regular purchase of food for stockpiling. Accordingly,

materials derived from brewing yeast cell walls in rice cultivation.

freeze-dried food products are attracting attention since they can be

Asahi Biocycle Co., Ltd. carried out evaluation tests in collaboration with

Golden apple snails are an invasive species of shellfish that are

enjoyed as regular food, are lightweight without taking up space, can be

known for causing damage to crops in paddy fields, such as rice, andstored for a long time at room temperature, and are less likely to lose

thrive in warm regions. Furthermore, the expansion of their habitat due

their nutritional components.

to the impact of global warming is becoming a serious agricultural issue.
In June 2020, we used agricultural materials derived from brewing

Asahi Group Foods, Ltd. aims to support a rich diet through freezedried products that boast advanced technological strength, have a pro-yeast cell walls (raw materials in fertilizer) in conjunction with the trans-

duction line, have an overwhelmingly wide lineup, and boast the top

plantation of rice seedlings in approximately five hectares of paddy fields inshare of the market. In addition to the Japanese staple miso soup, we

Mizuho, Gifu Prefecture, Japan. After using these fertilizer raw materials,

have developed products including curry, rice bowl dishes, pasta, chilled

we observed very little damage to the rice plants compared with adjacentsoup that can be rehydrated with cold water, and low-sodium products.

fields that did not use the fertilizer. In 2021, the second year of the19Asahi Group TCFD REPORT

ClosingAiming to Increase the Resilience of the Asahi Group
When responding to the serious risks and opportunities we have identified so far, the Asahi Group will­continue to implement and accelerate existing initiatives. At the same time, we will further strive to develop
new initiatives, reduce the risks of climate change, and endeavor to seize opportunities.

For the Asahi Group, which is a business that uses the blessings ofclarified the risks and opportunities of climate change throughplace importance on co-creation together with all our stakeholders

nature, climate change is a serious threat to the continuity of ourscenario analysis. We will continue to discuss and implement

to realize Asahi Group Environmental Vision 2050.

business activities. Responding to climate change issues contrib-

response measures that increase the degree of resilience to cli-

utes to both the sustainability of the Asahi Group and the creation

mate change, enhance the sustainability of our business ­activities,­reinforce our initiatives across the entire value chain throughof a sustainable society.

and further contribute to the sustainability of society.

co-creation together with all our stakeholders.

After announcing our endorsement of recommendations by the
Task Force on Climate-related Financial Disclosures (TCFD), we

Under the Asahi Group Philosophy, we have adopted “building
value together with all our stakeholders” as Our Principles. We

When implementing response measures, we will furtherAsahi Group Holdings, Ltd.
https://www.asahigroup-holdings.com/en/
1-23-1 Azumabashi, Sumida-ku,
Tokyo 130-8602, Japan

Sustainability Section