The Takasago Group has set Sustainability Promotion as the Basic Policy of its medium-term management plan NGP-1. As a member of society, the Group is sincerely addressing the challenges faced by society and actively engaging in activities aimed at solving these challenges. The group also aims to enhance non-financial corporate value through sustainable management. In the below, I would like to share the progress of our sustainability activities in the second year of NGP-1.

Climate change caused by global warming has various impacts, such as an increase in the frequency and intensity of extreme weather (hurricanes, floods, droughts, etc.), coastal flooding due to sea level rise, impacts on ecosystems, and negative effects on agriculture. Takasago is addressing adaptation to and mitigation of climate change through an international framework. In April 2020, we disclosed information in line with the TCFD recommendations, publicly announcing the Group’s policy and strategy. In May 2021, we made the Group’s GHG emissions reduction targets official, certified by the SBTi.

Last year, we were selected to participate in a support program hosted by the Ministry of Environment of Japan to reduce Scope 3 GHG emissions and given an opportunity to work closely with BCG for about five months on how to reduce Scope 3 GHG emissions." Through the collaboration, we looked into a more systematic approach toward reducing the GHG emissions of procurement activities, which account for 90% of Scope 3 emissions, such as replacing synthetic raw materials with sustainable raw materials, and began requesting LCA disclosure and collaborating with major suppliers on emissions targets.

As for our efforts to reduce Scope 1 and 2 emissions, as Takasago Japan has a big Energy-saving Management Committee in Japan, we conducted sessions to share its activities with affiliates outside of Japan, exchanged thoughts and opinions on reduction measures, and sought improvement plans for the energy-efficient manufacturing of powdered flavors, operation of wastewater treatment plants and other endeavors. We are also planning to globally install monitoring meters in appropriate places to understand actual energy usage. Additionally, we are looking at its systems to calculate the LCA of our products and have it ready when required by our customers. The group will continue to focus on developing environmental products and processes, using continuous flow production processes centered on the fine chemicals business and CIT, which joined the group in 2016 to strengthen manufacturing in the biotechnology field, and collaborating with R&D to develop bio-based flavors and fragrances ingredients.

Human rights are guaranteed by international laws, but in reality, there are problems around the world where people's basic rights and dignity are violated. The Takasago Group conducts corporate activities with respect for human rights, and in 2019 we formulated the Takasago Group Human Rights Policy and established a system for human rights due diligence* with reference to a guidebook published by the Japan Federation of Bar Associations. Subsequently, we organized a wide range of human rights issues and summarized them as Key Human Rights Issues which were appended to the Policy. At the same time, we have incorporated these Key Human Rights Issues into the Takasago Group Supplier Code of Conduct and share it with our suppliers, requesting their compliance with the code of conduct. In terms of raw material procurement, we do business with more than 1,000 different suppliers. Since these suppliers are spread all over the world, it is difficult to conduct on-site audits for all of them. Therefore, we effectively utilize SEDEX, an ethical audit platform, to conduct ethical audits. In this way, the Takasago Group ensures responsible procurement.

In addition to our regular practice of annual human rights due diligence, last year, referring to the List of Goods Produced by Child Labor or Forced Labor made by the U.S. Department of Labor, Takasago conducted human rights due diligence regarding its suppliers of the specified materials and in the specified areas.

■ Human rights due diligence

A process starting with identifying human rights risks, responding to issues, and disclosing information.