55

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

56

Part 4

Risk Management
57

Business Resilience Strategy

59Managing Risk and Leveraging Opportunities

65

Disclosure Based on TCFD Recommendations

Kakogawa Parking, Akashi Truck Depot,
Kakogawa City in Hyogo Prefecture
Photo by Mitsuo Tajima
SCM Logistics Division
Coca-Cola Bottlers Japan Inc.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

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Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

58

Business Resilience Strategy

Actively pursuing opportunities by empowering leaders
The world is changing at a lightning pace, creating complexities
that carry uncertainty and opportunity, and to grow we need tobe agile and innovative, creating an environment thatencourages our people to take informed risks. Our growthmindset and empowerment of our leaders to take smart risks,

Taking smart risks
for business resilience
Gerold Knight

enables us to actively chase opportunities. When we take smart
risks, we need to accept that things may not always work out
as planned, and when this happens, we need to embrace
failure and learn an important lesson: how to grow without
repeating the error.

Head of the Risk Management Senior Group
Coca-Cola Bottlers Japan Inc.

Aligning risk to strategy to enable rapid response in times of crisis

Creating growth opportunities through risk management
Resilience is a leadership orientation that forward-thinking
companies like ours have embraced in response to a disruptive
and volatile business environment. Our resilience orientation has
moved us away from a narrow crisis-response reflex to agility
and innovation, where we identify and respond to risks, absorb
shocks, and pivot to respond to new growth opportunities.
We are focused on identifying both current and over thehorizon risks with a focus on climate change; implementing

appropriate countermeasures and risk transfer strategies;
maintaining agility to leverage opportunities, while having strong
crisis response capabilities. To enhance our response, we havebrought together several specialist resilience streams thatenable us to leverage synergies to drive growth while protecting
the business. Ultimately being business resilient is acompetitive advantage.

In a business world subject to constant disruption, superior risk
management, embedded across our business, creates acompetitive advantage. Our Risk Management Group has
created a holistic resilience framework, embraced by ourpeople, focused on anticipating changes in our businessenvironment and with identifying emerging threats.
Our ongoing focus on traditional Coca-Cola system risks,such as product quality, combined with a focus on newer
topics such as climate change, TCFD reporting, ESG, cyber,and geopolitical changes create potential first-moveradvantages for us. Of priority is identifying and responding toclimate change risks, both physical and transitional, to ensurethat we understand and disclose mitigation plans, proposed
investments and the metrics and targets used to assess andmanage these climate-related risks and opportunities.
By aligning risk to strategy, we can exploit valuablebusiness insights. Supporting this are our strong response
processes in crisis management and business continuity, whichenable us in times of crisis, to find agile ways to make key
moves early and then accelerate into the new realities.

Fostering a culture in which we learn how to grow from failure
Most importantly, with smart risk taking we acknowledge that
we might fail, and this is okay if we learn from it. A smart risk isbased on sound risk evaluation, an understanding of market
sensitivities, and transparency. Transparency is a key pillar andinvolves stakeholder engagement, continuous communication,and seeking endorsement when required. A smart risk always

has a backup plan so we can quickly recover and learn from a
failure. Poor risk is the opposite and can be unlawful and as
integrity is a core value at CCBJI we will not take risks that areeither unlawful or could be seen as unlawful.
Together we are working together in an agile andinnovative way to imbed resilience into our business.

Adopting a “smart risk” approach according to the business environment
In business, risk management helps us to manage uncertainties
and we are all risk managers. These uncertainties can have
either positive or negative consequences and by making themost of the opportunities, while managing the downside, we
become a resilient business.
We know the speed at which new risks emerge in our
dynamic environment, so they and their potential impacts need
to be discovered and responded to fast. At the same time, wetake smart risks to grow as by being forward looking, aligningrisk to strategy, and taking the right type of risk we set
ourselves apart from our competitors.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Smart risk is linked to our growth mindset and is anevolution in the way that we manage risk. Traditionally, likeother Japanese companies, we were focused on managing thedownside of risks and being prepared for disasters. We know
this is no longer enough, and as we innovate and grow, weneed to develop more sophisticated over the horizon
risk-identification processes while at the same timeencouraging informed risk taking. Supporting this we havecreated solid risk management practices and procedures that
we are embedding throughout the company.

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Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Managing Risk and Leveraging Opportunities

Governance

Financial /Corporate Information

60

Details of our risk management system
https://en.ccbji.co.jp/csv/risk/

Creating a resilient business
At CCBJH we have implemented an overarching businessresilience program that integrates the ways in which we manage
risk and opportunity to enable profitable growth; protect ourpeople and assets; enhance our capabilities to respond in acrisis; and the way we transfer risk through insurance.
Our Board of Directors has overall responsibility for risk
management and sets the risk appetite of the business. They
are closely involved in oversighting risks and the strategic
response to them, and monitoring management actions toachieve its strategic objectives.
In support, risk management is being firmly embedded
within our everyday business activities and culture. Our
Enterprise Risk Management (hereafter ERM) PDCA framework
is based on COSO*1 and ISO 31000 and provides a framework

to drive profitable growth by leveraging opportunities andpromoting appropriate risk-based decision-making, as well as
strong capabilities in the identification and response toforeseeable risks. Our business resilience programs are led by
our Head of the Risk Management Senior Group (HRM), who asa member of the ELT *2 works in close collaboration with thefunction heads and risk owners across our business on the
response to specific business risks. The HRM is tasked withmaintaining a wide-angled view of all business streams for
emergent risks and opportunities and through regular reporting
ensures that risk visibility is provided to the ELT and our Board.
*1 An abbreviation for Committee of Sponsoring Organizations of the Treadway
Commission. An organization that issues global frameworks for internal control.
*2 An abbreviation for Executive Leadership Team. Management organization in CCBJI
Group including CEO and function heads.

initiatives are constantly evaluated. The Audit and Supervisory
Committee are provided quarterly updates on the full programwith the Board of Directors receiving biannual updates. The
program is annually audited by our Internal Audit team andexternal auditors against global best practice.
During 2022, we continued our focus on strengthening the
integration of ERM and Smart Risk program into our corporate
culture through the creation and delivery of training andawareness courses. We have maintained the visibility of risks

and opportunities through monthly ELT dialogue and senior
manager participation in facilitated functional risk identification
and review sessions.
A robust crisis management program with associatedbusiness continuity plans provides us with the capability toeffectively respond to a crisis. These programs are subject toannual review with crisis training provided to our leadershipteams who are tested through interactive crisis simulations.

Enterprise Risk Management (ERM) processes
ELT Focus
ELT discusses risks and opportunities as part ofregular business routines. Senior leaders undertake
timely responses.

Business resilience program
Integrating Smart Risk into our business

Risk Management Forum

Annual Business Plan/
Strategic Business Plan

ELT Monitor

Deep Dives

Scenario Planning
Risks identified, assessed,
and understood

SystemComparisons

Smart Risk decisions made,and best practices shared

Active System
Risk Monitoring

External risk monitoring supported by regular discussions
within The Coca-Cola system in Japan.

BOD Oversight

Leadership and Oversight

Smart Risk
Culture Risk
Governance

Bottom up review through HRM facilitated sessions withsenior leaders to identify risks and mitigations together
with potential opportunities. 1:1 ELT deep dives provided
top down evaluation.

Functional Business
Reviews and ELT
1:1 Deep Dives

Risk Intelligence
In quarterly ELT updates, members engage in detailed
review and discussion to validate the key risks andimplemented mitigations.

Quarterly the HRM briefed the Committee on material
risks, management actions, and process compliance withthe risk management elements of regulatory Code.

Quarterly ELT
Risk Updates

Review by the Audit
and Supervisory
Committee

Enterprise risk management (ERM) systems and program
The ERM program incorporates a variety of elements thatenable us to ensure alignment to our business strategies,
objectives, and principles; drive integration in our strategic
direction, ethics and values; link into the business planning
cycle; continually monitor our internal and external environment
for factors that may change our risk profile and create

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

opportunities; and an annual evaluation of the type and amountof insurance we should purchase. In a hardening insurance
market, our approach to insurance risk transfer is influenced by
the availability of insurance cover and cost, measured against
the probability and magnitude of the relevant risks.
Our risks and the associated mitigation and response

Biannual briefings provided by the HRM ensuring fullvisibility of the business resilience processes.

Review by
Board of Directors

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Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

62

Managing Risk and Leveraging Opportunities

Reportable risks
The cyclic review of our key risks involves an assessment of thelikelihood of their occurrence and their potential consequences
to confirm our level of exposure and evaluate the strategies tomanage them. The list does not include all risks that canultimately affect our Company as there are risks that are not yet
known to us, and risks currently evaluated to be immaterial that
could ultimately have an impact on our business or financial

performance. By leveraging our robust risk management
program, which is integrated into business routines andevaluates risks against our business and strategic priorities, we
remain vigilant to the uncertainty in our operating environmentand can react with agility. The program enables us to proactively
identify new risks and opportunities which enable us tounderstand threats to our business viability.

High risks
Risk category

People(attraction andretention)

High risks
Risk category

Commodity pricing

Macroeconomic

Description and potential impacts

Key mitigations

Risk of procurement costs increasing due tofluctuations in exchange rates, raw material
shortages, and commodity prices.

ҋ Mitigate the impact of exchange rate and productprice fluctuations through the uses of derivativetransactions
ҋ Procure raw materials at lower costs throughcollective multi system company purchases
leveraging Coca-Cola system

ҋ0UJYLHZLKJVZ[IHZL
ҋ9LK\JLKWYVK\J[Z\WWS`
ҋ3PTP[H[PVUZ[VWYVK\J[WVY[MVSPVRisk of volatile and challenging
macro-economic conditions caused by key
global events including conflict, inflation, andforeign currency fluctuations.
ҋ+L[LYPVYH[PVUVMMPUHUJPHSJVUKP[PVUZ
ҋ9LK\JLKJVUZ\TW[PVUZWLUKPUN
ҋ*OHUNLZPUJVUZ\TLYZWLUKPUNWH[[LYUZ

Risk of business activities being suspended,
and confidential information leaking caused bysystem failures or cyber incidents

Cyber security andsystem availability

Changing consumer
mindsetCoca-Cola Bottlers Japan Inc. Integrated Report 2022

ҋ3VZPUN[Y\Z[MYVTJVUZ\TLYZHUKJ\Z[VTLYZҋ+L[LYPVYH[PVUVMMPUHUJPHSJVUKP[PVUZ

Risk of changes in consumer preferencesJH\ZLKI`*6=0+ NYV^PUNJVUJLYUZV]LYsugar consumption and increased healthawarenessҋ(JX\PZP[PVUVYSVZZVMJVUZ\TLYIHZL
ҋ>PUUPUNVYSVZPUN[Y\Z[MYVTJVUZ\TLY
ҋ+PZJYPTPUH[VY`[H_H[PVUҋ Enhanced strategic and operational risk identification
enabling the group to grasp the changes inmacroeconomic landscape more quickly and prepare
better for the future by improving the ability to predict
the future demand and trends more accurately
ҋ Monitoring and responding to changes in status tocustomers’ business operations
ҋ Strong crisis response practices that focus on
employee, customer and consumer safety
ҋ Prepare the response plans to mitigate thedamages caused by system failures (such as, bysetting up backup sites overseas)ҋ0TWYV]PUNHUKZ[YLUN[OLUPUNZ`Z[LTZLJ\YP[`I`
proactive threat identification and conducting
simulation tests of cyberattacks
ҋ Complying with laws and regulations on information
management
ҋ Establishing internal regulations related to
information security supported by related employee
training programs
ҋ+L]LSVWHUKTHPU[HPUHZ`Z[LT^VYRMVYJL^P[O[OLability to respond to cyber incidents
ҋ Focus on product innovation and portfolio
expansion
ҋ Strengthen range of low and no calorie beverages.
ҋ+P]LYZPMPJH[PVUPUWHJRZPaLZ
ҋ Promote active lifestyles through consumer
engagement program

Description and potential impacts

Key mitigations

Risk of not being able to secure, retain anddevelop enough human resources and build
constructive relationships with labor unions
due to poor business performance and acompetitive employment environment.

ҋ0TWSLTLU[Z[YH[LNPJWLVWSLKL]LSVWTLU[WSHUZHUK
develop a new salary payment structureҋ Recruit diverse talent and commitment to people
development (including overseas)ҋ0TWSLTLU[\UTHUULKWSHU[VWLYH[PVUZVUSPULtransactions, and outsourcing of shipping operations
ҋ Enhance the workplace environment to improve
employee satisfaction
ҋ Strengthen communication between top management
and employeesҋ:SV^KV^UVYZ\ZWLUZPVUVMI\ZPULZZ
activities
ҋ:SV^KV^UVYZ\ZWLUZPVUVMZ\WWS`JOHPU
operations
ҋ0UHIPSP[`[VHJOPL]LNYV^[OWSHUZ

Risk of death and injury of employees anddamage to business facilities for production,
logistics and sales operations caused bysevere natural disasters, such as
earthquakes and floods
Natural disasters

Evolving commercial
and competitive
landscapeGrowth strategies

ҋ:SV^KV^UVYZ\ZWLUZPVUVMI\ZPULZZ
activities
ҋ:SV^KV^UVYZ\ZWLUZPVUVMZ\WWS`JOHPU
operations
ҋ9LK\JLKZHSLZVWWVY[\UP[PLZ
ҋ(KKP[PVUHSJVZ[ZYLX\PYLKMVYYLJV]LY`

Risk of changes in the retail market
environment led by a surge in online
ordering and a change in spending behavior
driven by the external macro environment.
ҋ(JX\PZP[PVUVYSVZZVMJVUZ\TLYIHZL
ҋ>PUUPUNVYSVZPUN[Y\Z[MYVTJVUZ\TLYZ
ҋ9LK\JLKZHSLZWYVMP[ҋ9LK\JLKWVY[MVSPVH]HPSHIPSP[`

Risk of failing to implement measures toimprove our competitive advantage andgrow the business (through businessintegration, capital investments, productdevelopment, etc.).
ҋ+L[LYPVYH[PVUVMMPUHUJPHSJVUKP[PVUZ
caused by loss due to impairment
ҋ3VZPUN[Y\Z[MYVTZOHYLOVSKLYZ

Financial risks

Risk of deterioration in financial conditions
cause by an increase in funding costs andretirement benefit obligations.
ҋ0UJYLHZLKJVZ[IHZL
ҋ3VZZVMZ[HRLOVSKLY[Y\Z[ҋ Strong Business Continuity Plan (BCP) and crisis
response capabilities enabling structured andstreamlined responses
ҋ Regular crisis and disaster response training andsimulations
ҋ0KLU[PMPLKHS[LYUH[P]LZOPWWPUNSVJH[PVUZHUKZLJ\YLtransportation capacity in preparation for a disasterthat damages the logistics centersҋ Secure earthquake coverageҋ9LKLZPNUVM+PZHZ[LY*VU[YVS/LHKX\HY[LY+*/8
model to enable enhanced regional response andspeed of responseҋ Enhancing the product portfolio and accelerated
productivity further to deliver products that meet theneeds of the retailers
ҋ,UOHUJPUN9PNO[,_LJ\[PVU+HPS`9,+[VKYP]Loperational excellenceҋ Expanding the online channels to respond to the
Z\YNLPU0U[LYUL[THPSVYKLYZҋ Building a robust system that enables the group to
respond readily and flexibly to various circumstancesҋ Formulate business integration strategies that takemultiple scenarios into consideration
ҋ:\WLY]PZPVUI`)VHYKVM+PYLJ[VYZHUK,_LJ\[P]LOfficers

ҋ Promote growth of cash flow through sales activities
to maintain and improve creditworthinessҋ Establish Pension Governance Committee tostrengthen the monitoring function of retirement
benefit obligations

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Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Financial /Corporate Information

64

Managing Risk and Leveraging Opportunities

Medium risks
Risk category

Sustainability

Medium risks
Description and potential impacts

Key mitigations

Risk of increased stakeholder concerns
caused by caused by negative consumer
sentiment over the use of plastics and thetoughening of government regulations onplastics.

ҋ(JOPL]PUN*:=NVHSZJVU[YPI\[PUN[V[OLKL]LSVWTLU[of a sustainable society
ҋ “>VYSK>P[OV\[>HZ[L” initiatives including, increasing
the use rate of recycled PET resin, developing more
light-weighted packages and collecting used PET
bottles more effectively
ҋ7YVHJ[P]LYLZWVUZLPUSPUL^P[O,:.HUK;*-+
reporting requirementsҋ(JX\PZP[PVUVYSVZZVMJVUZ\TLYIHZL
ҋ>PUUPUNVYSVZPUN[Y\Z[MYVT
shareholders
ҋ0UJYLHZLVMJVZ[ZMVYYLZWVUKPUN[V
environmental and social issues
ҋ+PZJYPTPUH[VY`;H_H[PVU

The risk of product-related quality and foodsafety incidents.
Quality andfood safety

Regulatorycompliance andethicsManufacturing,logistics &infrastructure

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

ҋ3VZPUN[Y\Z[MYVTJVUZ\TLYZ
ҋ+LJSPULPULHYUPUNZK\L[VWYVK\J[YLJHSS
or mass disposal of defective products
ҋ3VZZVMVWWVY[\UP[PLZK\L[VJ\Z[VTLY
penalties

Risk of violations of laws, internal
regulations, and our code of ethicalconduct.
ҋ3VZZVMJ\Z[VTLYHUKJVUZ\TLY[Y\Z[ҋ+HTHNL[VIYHUKHUKJVYWVYH[L
reputation
ҋ9LN\SH[VY`WLUHS[PLZҋ,JVUVTPJSVZZ[OYV\NOMYH\K

Risk of the stable supply of goods being
impeded due to issues in production andlogistics operations, or changes in weather
and consumer behaviors
ҋ+YVWPUZHSLZ]VS\TLHUKYL]LU\Lҋ3VZPUN[Y\Z[MYVTJ\Z[VTLYZҋ Supplier quality audits and quality certifications
ҋ Employee awareness of quality control in all processes
from manufacturing to sales
ҋ Enhance the quality control and reporting system sothat consumer/customer complaints receive a timely
responseҋ Robust identification and response programs thatenable us to quickly and efficiently deal withquality/food safety issues

Risk category

Risk of raw material shortages including
water and agricultural products oroperational impacts due to adverse
weather associated with climate change.
Climate change

Health and safety

ҋ Strong Tone from the Top and continued internal
communication on corporate behaviors
ҋ Ethics & Compliance Committee meetings held
regularlyҋ4PUPTPaPUNLTWSV`LLMYH\KVWWVY[\UP[PLZI`YLI\PSKPUN
[OLI\ZPULZZWYVJLZZLZVYNHUPaH[PVUHSZ[Y\J[\YLHUK0;Z`Z[LTZ

ҋ Building a flexible supply system to respond tochanges in the market environment
ҋ0U]LZ[TLU[PUPUMYHZ[Y\J[\YLWYVK\J[PVUSPULZL[J[OH[will enable the group to respond to the increase indemand during the peak seasons more readily
ҋ Systems enhancements to enable timely sharing of
inventory statusҋ Strengthen supplier management and supervision

Description and potential impacts

Franchiserelationships

ҋ9LK\JLKJVTTVKP[`H]HPSHIPSP[`HUK
product supply
ҋ0UJYLHZLVMWYVK\J[PVUJVZ[Zҋ3PTP[H[PVUZ[VWYVK\J[WVY[MVSPV0TWHJ[[V
operations (e.g. damage to facilities)
ҋ+PZJYPTPUH[VY`[H_H[PVU

The risk of serious work-related health andsafety incidents (i.e. serious injury or death)
including transportation accidents.
ҋ+LH[OVYZLYPV\Z0UQ\Y`ҋ9LW\[H[PVUKHTHNLҋ7YVZLJ\[PVUHUKMPULZ

Risk related to our high dependency on, orchanges to our relationship with The Coca-Cola
Company and Coca-Cola Japan as
trademark owners in respect to contract /relationship terms and renewals, concentratepricing, support for product promotions.

Key mitigations

ҋ Focus on sustainable procurement
ҋ Engagement with stakeholders
ҋ Sourcing alternative suppliers, and strengthening
the selection of suppliers and their management by\[PSPaPUN[OLWLYMVYTHUJLKH[Hҋ(KQ\Z[[OLHTV\U[VMYH^TH[LYPHSZ[OH[HYLKPMMPJ\S[to procure, and shift to other raw materials whennecessaryҋ Crisis response and business continuity planningҋ Risk engineering in support of insurance coverage

ҋ*VU[PU\L0:66JJ\WH[PVUHS/LHS[OHUK
:HML[`*LY[PMPJH[PVU0U[LYUHS(\KP[6JJ\WH[PVUHS
/LHS[OHUK:HML[`Z[YH[LNPLZҋ Continue implementing mental health survey

ҋ Maintaining and improving cooperative relationships
with The Coca-Cola Company and Coca-Cola Japan

ҋ+LJYLHZLPUZHSLZMYVTHU`Z\ZWLUZPVUPU
the use of TM rights and/or decline inproduct development capabilities andbrand power.
ҋ0UJYLHZLK*6.:K\L[VJVUJLU[YH[LWYPJLҋ0UJYLHZLKZHSLZWYVTV[PVUL_WLUZLZPU
event of any decrease in sales support.

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

65

Introduction

Value Creation Story

Financial &Non-Financial Strategy

Sustainability

Risk Management

Governance

Disclosure Based on TCFD Recommendations

https://en.ccbji.co.jp/csv/tcfd/

Climate change-related risks and opportunities and major actions

TCFD initiatives
In 2021, we published greenhouse gas (GHG) reduction targets
in alignment with the Paris Agreement and scientific evidence.
Our targets involve reducing Scope 1 and 2 emissions by 50%
and Scope 3 emissions by 30% by 2030 (compared to 2015),
while striving for carbon neutrality by 2050. In February 2022,
we endorsed the Task Force on Climate-related Financial

Disclosures (TCFD) recommendations. Furthermore, we joined
the TCFD Consortium and Climate Change Initiative, andimplemented these measures to cut GHG emissions. We willcontinue to advance our initiatives and disclosure for climatechange mitigation and adaptation through studies in line with
the TCFD framework.

Governance

Our new Sustainability Committee, comprised of ELT* members discusses and formulates
strategies on sustainability issues, including climate change. The final decisions on
strategies are made after approval by the Board of Directors.

Details on page 39
Sustainability Strategy

Strategy

We explore actions to address risks and opportunities revealed by scenario analysis.

Details on this page
TCFD Disclosure

Risk Management

The ELT meets weekly to discuss risks that arise in the course of business. Risks andopportunities are not only analyzed at the ELT’s weekly discussions, but also at quarterly
Risk Management Forums, where they are analyzed in detail with feedback provided backto the ELT and Audit and Supervisory Committee.

Details on page 59
Managing Risk andLeveraging Opportunities

Metrics & Targets

We have set our own medium- to long-term targets called CSV Goals, to reduce GHG
emissions across the entire supply chain by 2030 and achieve net zero emissions by 2050.
We take concrete actions toward achieving these targets while monitoring progress rates.

Details on page 41
Initiatives Based on CSV Goals

Transition Risks
Transition risks of high importance

Details

Main mitigation plans

Cost increase due to introduction ofcarbon pricing• Cost increase due to introduction ofcarbon tax and strengthening ofemissions trading system, etc.
• Increased costs due to price shifting ofcarbon tax at suppliers• Active adoption of recycled materials, promotionof weight reduction• Reduction of raw material consumption throughlighter containers/packages, etc.

Cost increase due toenergy conservation and
GHG emission regulations• Cost increase due to capital investment
for energy conservation and renewableenergy, etc.
• Increased procurement costs due toincreased production costs at suppliers• Reduce dependence on external power supply byintroducing renewable energy• Shift to use of alternative raw materials (in collaboration
with Coca-Cola Japan)

Cost increase due to tighter
plastics-related regulations• Increase in procurement costs forrecycled PET resin, etc.

• Shift to use of alternative materials active use ofrecycled materials• Promote lighter containers

Cost increase due to water
use regulations• Increase in procurement costs due tointroduction of groundwater tax• Reduce water usage• Strengthening cooperation with local governments

Decline in sales due to an
inadequate response to changes incustomer behavior• Decrease in sales due to shelf drop andcustomer defection from retailers, etc.

• Expansion of products in accordance with sustainableprocurement• Promote environmentally friendly products (e.g., 100%
recycled PET/labelless)

Loss of reputation among investors
and financial institutions due toinadequate response• Decrease in stock price andincrease in financing costs in caseof inadequate response• SBT certification and participation in RE100 (TBC)• Proactive and continuous disclosure and disseminationof information based on TCFD-related and other factors

Physical risks of high importance

Details

Main mitigation plans

Decrease in manufacturing efficiency
and manufacturing volumes due toextreme weather conditions• Increased procurement costs of
raw materials• Increased response costs due toincreased risk of infectious diseases• Diversification of procurement sources• Strengthening of BCP response

Business shutdown due to extreme
weather conditions• Impact of restoration cost and lost sales
due to shutdown of factories and othercompany-owned facilities due tohazardous weather conditions• Identify and prioritize wind and flood risks in
manufacturing sites, sales/distribution sites, and supply
chain, and enhance mitigation plans

Supply risk due to extreme weather
pattern changes• Increased procurement costs of
raw materials• Diversification of procurement sources• Collaboration with suppliers (e.g., development ofagricultural methods, TBC)

Increased asset deterioration andenergy costs due to extreme
weather pattern changes occurring
over time, etc.

• Increase in utility and other costs due torising temperatures• Reduce dependence on external power supply byintroducing renewable energy* An abbreviation for Executive Leadership Team. Management organization in CCBJI Group including CEO and function heads

Addressing climate change-related risks and opportunities
In 2021, our TCFD Working Group, collaborated with the Boardof Directors and each division to conduct a scenario analysis
for the year 2030, covering all regions. We considered both a
1.5°C/2°C and 4°C rise in global temperatures, respectively,
and studied actions to address the risks and opportunities
revealed by the analysis.
Our analysis considered that the 1.5/2°C scenario
assumes a society where climate change response progresses,

intensifying transition risks including regulatory risks, and where
social changes associated with the transition to a decarbonizedsociety are likely to affect business. In contrast, the 4°C
scenario assumes a society where climate change response isdelayed, natural disasters and other physical risks intensify, andwhere rising temperatures and other climate changes are likely
to significantly impact business.

Key risks and opportunities
Agriculture
Ingredients(Transition Risks)

Packaging

Manufacturing

Distribution

Sales Equipment

Cost increase due to introduction of carbon pricing
Cost increase due to energy conservation, GHG emission regulations
Cost increase due to tighter plastics-related regulations
Cost increase due to water use regulations

Acute(Physical Risks)

Decrease in manufacturing efficiency and manufacturing volumes due to extreme
weather conditions

Collection
Recycling

CustomerCommunity

Market (Transition Risks)
Decline in sales due to an
inadequate response tochanges in customer behavior(Physical Risks)

Supply risk due toextreme weather
pattern changes
Increased asset deterioration and energy costs due to precipitation, weather pattern changes, etc.

Resource
Efficiency(Opportunities)

Cost and GHG emissions reduction through efficient use of renewables

Coca-Cola Bottlers Japan Inc. Integrated Report 2022

Physical Risks

Reputation (Transition Risks)

Opportunities

Loss of reputation among
investors and financial institutions
due to inadequate response

Opportunities of high importance

Details

Main mitigation plans

Customer demand increase for
products that contribute to energy
conservation and GHG reduction• Increase in sales due to environmentallyfriendly raw materials and packaging• Develop and expand environmentally friendly products(e.g., 100% recycled PET bottle, labelless, reusable,
package-less)

Changing customer preferences due
to global warming• Increase in sales of heat stroke
prevention and healthy beverages• Develop and promote heat stroke prevention andhealthy beverage products

Cost and GHG emissions reduction
through efficient use of renewables• Reduction of electricity costs and GHG
emissions by introducing renewableenergy and energy-saving equipment(facilities, logistics, etc.)• Cost reduction through enhanced
water efficiency• Installation of manufacturing equipment equipped withthe latest technology, Continuous improvement of
manufacturing processes and plant equipment throughmonitoring• Further promotion of water source replenishment
capacity improvement

Business shutdown due to extreme weather conditions

Chronic

66

Details of TCFD

The CCBJH Group considers Mitigation of and Adaptation to Climate Change as a material issue and iscarrying out initiatives based on the TCFD recommendations with reference to updated TCFD guidance
released in October 2021.

Regulations

Financial /Corporate Information

Product/Service (Opportunities)
Customer demand increase for products that
contribute to energy conservation and
GHG reduction
Changing customer preferences due toglobal warming

Coca-Cola Bottlers Japan Inc. Integrated Report 2022