Green, greener, the greenest: How Japanese companies seek sustainability

Elena Vardanian
5 min read

Companies worth $15 trillion revealed on CDP 2020 ‘A List’ of environmental leaders. 66% of Asian companies in the CDP’s ‘A list’ are from Japan. Significant part of these companies are representing the Food, Beverage and Agriculture industry sector for e.g. Ajinomoto Co.Inc., Asahi Group Holdings, Ltd., Fuji Oil Co.Ltd., Suntory Beverage & Food, Kirin Holdings Co.Ltd. and Kikkoman Corporation.

Fuji Oil and KAO are 2 of only 10 companies that achieved a triple 'A', out of 5,800+ companies that were scored in 2020. Through convincing demonstrable actions on climate change, deforestation and water security, these companies are leading on corporate environmental ambition, action and transparency worldwide.

CDP: What & Where

The CDP (formerly the Carbon Disclosure Project) is an international non-profit organisation based in the United Kingdom, Germany and the United States of America that helps companies and cities disclose their environmental impact (1). It aims to make environmental reporting and risk management a business norm, driving disclosure, insight, and action towards a sustainable economy. Each year, CDP collects, analyzes and evaluates information on the environmental activities of major companies around the world and selects the most outstanding companies in terms of climate change-related initiatives and information disclosure for its Climate Change A List. (2)

This year 313 companies scored the highest “A” marks (that is 45% up on last year) allowing us to pin our hopes on a progressing environmental awareness, despite the challenges faced in 2020. Most significantly, the proportion of A List companies based in Asia increased to 32%, now Asia (100) is second after Europe (132) and far ahead of North America (61). The top countries for A List headquarters are Japan (66), US (58), UK (21), Germany (19) and France (18). Last year Japan overtook the US and Asia overtook North America for the first time, with this solidifying further this year. (3)

Why Japanese companies?

Japanese companies have been performing very well according to the CDP’s climate change scoring methodology. This year we can see 66 japanese companies promoted to A List. Last year, only 38 out of 578 Japanese companies obtained the highest score A (4).In comparison, only 20 Japanese companies were given an "A" score for their 2018 survey responses. (5)

This year was even more fruitful because CDP added to the growing triple A List two Japanese companies. Among “godzillas” are Fuji Oil Holdings and KAO Corporation. 

Fuji Oil Holdings (triple A)

Fuji Oil Holdings is a nationwide food ingredient manufacturer with headquartered in Izumisano-shi, Osaka, Japan.

The Fuji Oil Group is a B-to-B food ingredient manufacturer that has four businesses: Vegetable Oils and Fats Business, Industrial Chocolate Business, Emulsified and Fermented Ingredients Business, and Soy-Based Ingredients Business. Company develops, manufactures, and sells various food ingredients, including hard butters for chocolate, industrial chocolate, whipping cream, margarine, and soy protein ingredients, mainly made from agricultural products, such as palm, cacao, and soybeans. Their customers range widely from B-to-C food manufacturers to restaurants, convenience stores and retail stores.

Fuji Oil has participated in the CDP scoring since 2016. In 2019, the company scored A for Forests on Palm oil, and A- for Climate change and Water security. Fuji Oil became the first Japanese company selected as A list of CDP Forests on Palm oil in 2018. (6) The Fuji Oil Group demonstrates that it is well on track to become a corporate sustainability leader, securing a place in the prestigious triple A list.

Based on the Fuji Oil Group Management Philosophy, the Group promotes ESG management to achieve sustainable growth while contributing to realizing a sustainable society through the creation and offer of Plant-Based Food Solutions. As a solution to food resources shortage, they promoted plant-based protein ingredients, which can replace animal protein sources. In September 2019 in Osaka City, Fuji Oil Group had opened temporary restaurant “UPGRADE Plant based kitchen," a delicatessen store that sells hamburger, deep-fried chicken, lasagna, dessert, and other foods made only from plant-based food ingredients, such as soy meat and cheese-like soy milk (7). 

What does Fuji do for the environment?

As a food ingredient manufacturer, the Fuji Oil Group recognizes that its own operations and the operations in its supply chains can have an impact on the environment. So the list of activities to preserve nature is long as your arm: Sustainable Procurement (Main Raw Materials — palm oil, cacao and soybeans),  conservation of water resources, CO2 emission reduction, environmentally friendly manufacturing,  food loss reduction and resource efficiency and waste reduction.

In the middle of last year,  the Fuji Oil Group announced a sustainable procurement commitment to eliminate child labor and prevent deforestation, covering cacao, palm oil and soy. (8) Company also formulated the Environmental Vision 2030, to be achieved in 2030. Regarding global warming and the reduction of CO2 emissions, they received the Science Based Target (SBT) certification in March 2020. The target is a 40% reduction in total volume for Scopes 1 and 2 and a target of a 18% reduction in total volume for Scope 3. Group companies’ energy-saving activities, introduction of renewable energy and other efforts enabled the Group to reduce its total CO2 emissions to 429,606 t-CO2 in FY 2019, down by 2% (9,048 t-CO2) year on year and by 16% (81,345 t-CO2) from the base year. (7)

Today, Fuji Oil Group can trace up to 100% of their palm oil mills, their  water usage is getting lower each year. Also, in 2019 by adding Blommer Chocolate Company (U.S.) to the Group, they kept supporting cacao farmers together with a pioneer of sustainable cacao procurement. (9) 

KAO Corporation (triple A)

Kao Corporation is a chemical and cosmetics company headquartered in Nihonbashi-Kayabacho, Chūō, Tokyo, Japan.

Despite being a leading manufacturer of personal care, household and cosmetics products, KAO used to produce food (Econa) and keep producing non-alcoholic beer and teas (Healthya).

In April 2019, Kao launched the Kirei Lifestyle Plan, its ESG strategy, which incorporates 19 key leadership actions targeted on customers’ and company long term goal of a cleaner and healthier world (10) At the same time Kao focused on alternative ingredients research to procure more sustainable raw materials. For example, palm oil is a necessary ingredient in food production so they are looking into using algae as a viable substitute for it.

Now, nearly one third (31%) of KAO global power consumption is renewable energy. This led to the drastic annual reduction in their CO2 emissions (95,000-ton). They also implemented a new wastewater treatment technology aimed to utilize the food chain  in treating chemical wastewater. (11)

By integrating ESG into the core of its company management, Kao expects to drive business growth and better serve consumers and society through its products and services. 

Honorable mentions

Kirin Holdings Co Ltd (climate change & water security - A) 
Kirin Holdings Company, Limited produces beer, soft drinks, food products, whisky, and pharmaceuticals. 
Kirin earned the highest rank of “Supplier Engagement Leaderboard” in the supplier Engagement Rating conducted by the CDP. This is the second year in a row for the company to be named to the “Leaderboard”. In addition, along with earning the highest rank of “A List” in climate change and water security, the company has been awarded the highest rank in 3 categories in 2019. (12)
Suntory Beverage & Food (climate change & water security - A) Suntory Beverage & Food (SBF), established in 2009 as a member of the Suntory Group, is a global company overseeing mainstay businesses in the non-alcoholic beverages and food product categories.
Five years in a row SBF receives such high marks from CDP.  Suntory Group shows a unique efforts at combining research and production through “Mizu To Ikiru,” including not only the group’s water conservation activities based on their Sustainable Water Philosophy, such as the hydrological cycle surveys and the use of water cascading at our plants, but also our efforts in local communities. Likewise, SBF also has a goal of reaching zero green-house gas emissions across the entire value chain (13).
Ajinomoto Co.Inc. (climate change - A)
Ajinomoto Co., Inc. is a Japanese food and biotechnology corporation which produces seasonings, interlayer insulating materials for semiconductor packages for use in personal computers, cooking oils, frozen foods, beverage, sweeteners, amino acids, and pharmaceuticals.
This is the first time Ajinomoto Co. has been on the A List. Company sees climate change as both a risk and an opportunity, and has set a target of reducing greenhouse gas emissions 50% from their 2018 level by 2030. As a member of the international environmental initiative RE100, the Ajinomoto Group is proactively using renewable energy such as biomass and solar power, and will continue to steadily take actions to decarbonize its business operations, including the introduction of internal carbon pricing. (14)
Asahi Group Holdings, Ltd. (climate change - A)
Asahi Group Holdings, Ltd. is a Japanese global beer, spirits, soft drinks and food business group headquartered in Sumida, Tokyo.
One of the principles under the Asahi Group Philosophy is to “contribute to a sustainable society through our business.” Also, under the Asahi Group Environmental Vision 2050, they had established Asahi Carbon Zero, a medium- to long-term targets in addressing climate change, with the aim of achieving zero CO2 emissions by 2050. (15)