Suntory Group Corporate Social Responsibility Report 2011 CONTENTS Suntory Group CSR Report 2011

Suntory Group Overview 03 Top Message 07 The Suntory Group Philosophy on CSR 09 Editorial Policy Feature 1 Water Resource Cultivation Aimed at “Water Sustainability” 11 To the Readers of the Suntory Group Feature 2 Activities by “Sharing the Profit with Society” 15 Every year, the Suntory Group publishes its Corporate Social Responsibility (CSR) Report to inform and gain the approval of Responding to Our Stakeholders 19 our stakeholders regarding what the Group thinks of the advances in social responsibility it must make toward the goal of CSR Report 2011 achieving a sustainable society. “The Suntory Group CSR Report 2011” at the outset introduces the philosophy of the ● Relations with Customers company toward CSR before going on to present some of the projects that Suntory has worked particularly hard at pursuing in recent years, as well as report on its responsibilities and conduct toward the various stakeholders around the Suntory Quality Assurance 21 Group. The report was produced with the aim of conveying in an easily understood way the sort of activities in which the Communication with Customers 25 Group engages in its efforts to coexist with nature and society. We would appreciate, for future reference in our business Editorial Policy Measures for Healthy and Comfortable Lifestyles 26 activities, if you would give us your opinions and impressions using the attached survey form or by sending them through Tackling Alcohol-related Issues 27 the company's website. Every year, the Suntory Group publishes its Corporate Social Responsibility (CSR) Report to inform Activities of Overseas Businesses 28 and gain the approval of our stakeholders regarding what the Group thinks of the advances in social responsibility it must make toward the goal of achieving a sustainable society. “The Suntory Group CSR ● Relations with Business Partners Report 2011” at the outset introduces the philosophy of the company toward CSR before going on to Fair Dealings/Cooperating with Business Partners 29 present some of the projects that Suntory has worked particularly hard at pursuing in recent years, Activities of Overseas Businesses 30 as well as report on its responsibilities and conduct toward the various stakeholders around the Suntory Group. The report was produced with the aim of conveying in an easily understood way the sort of ● Relations with the Local Community activities in which the Group engages in its efforts to coexist with nature and society. We would appreciate, for future reference in our business activities, if you would give us your opinions and impressions by Contributions Rooted in the Local Community 31 sending them through the company’s website. Cultural Activities and Contributions to Society 32 Activities of Overseas Businesses 34

● Relations with Employees Scope of Subjects Covered Guidelines Referenced

Basic Philosophy of Human Resources, and Hiring and Employment Situation 35 ● Subject Organizations ● Global Reporting Initiative (GRI)*, “Sustainability Reporting Guidelines 2006” Development of Human Resources 36 Suntory Holdings Limited and 195 Group companies in Japan and ● Ministry of the Environment, “Ministry of the Environment Promoting Diversity 38 overseas Reporting Guidelines (2007 edition)” Promoting the Work-Life Balance 39 ● For environmental data, focused on domestic manufacturing * GRI is an international organization that creates global guidelines for Creating Employee-Friendly Workplaces 40 group companies (25 plants in all) reports that have environmental as well as social and economic ● For personnel data, focused on employees who have dimensions. ● Coexisting with the Global Environment employment contracts with Suntory Holdings Limited Scope of Subjects Covered Guidelines Referenced (See p.35) Contact for inquiries regarding Environmental Management 41 ● Subject Organizations ● Global Reporting Initiative (GRI)*, “Sustainability Reporting the CSR Report Water Sustainability and Preserving Biodiversity 43 ● Time Frame Published Guidelines 2006” Suntory Holdings Limited and 195 Group companies in Japan Commitment to Being a Low-Carbon Company 45 The data covers performance from January 1 to December 31, ● Ministry of the Environment, “Ministry of the Environment CSR Department, June 2011 (next edition scheduled for publication June 2012) and overseas Reporting Guidelines (2007 edition)” Suntory Holdings Limited Effective Use of Resources 48 2010. The activities covered include some of the most up-to- ● For environmental data, focused on domestic manufacturing date events. * GRI is an international organization that creates global guidelines for Daiba 2-3-3, Minato-ku, Tokyo, Coexisting with the Community through Environmental Activities 51 Group companies (25 plants in all) reports that have environmental as well as social and economic 135-8631, Japan Activities of Overseas Businesses 52 ● For personnel data, focused on employees who have dimensions. employment contracts with Suntory Holdings Limited (See p.35) TEL ：+81-3-5579-1536 FAX：+81-3-5579-1755 ● CSR Management Responsible publisher: ● Time Frame Corporate Governance 53 Takeji Kitamasu Contact for inquiries regarding the CSR Report The data covers performance from January 1 to December 31, Published Compliance/Risk Management 54 2010. The activities covered include some of the most up-to- October 2011 (next edition scheduled for publication October 2012) CSR Department, Suntory Holdings Limited date events. Third Party Opinion 55 Daiba 2-3-3, Minato-ku, Tokyo, 135-8631, Japan TEL：+81-3-5579-1536 FAX：+81-3-5579-1755 Responsible publisher: Takeji Kitamasu

01 Suntory Group CSR Report 2011 CONTENTS Suntory Group CSR Report 2011

● Relations with Employees Scope of Subjects Covered Guidelines Referenced

Suntory Group CSR Report 2011 02 Suntory Group Overview Right from its founding in 1899, Suntory has worked to expand its business. Operating today as the Suntory Business Overview Group, the company is active across a broad range of fields that include not only the alcoholic beverage, non-alcoholic beverage, and food businesses, but also health foods, restaurants, and flowers. ● Food and Non-alcoholic Beverage Business ● Alcoholic Beverage Business The company has further been expanding its operations across the world, conducting business in Asia, Oceania, Europe, and North America. We deliver a variety of products ranging from soft Suntory blazed the trail for Western liquor culture in drinks to health foods so that we may contribute to our Japan with the production of the sweet-tasting fruit wine customers leading healthy lives of abundance. Akadama Port Wine. We also launched the first whisky Corporate Overview The company has been rounding out its lineup in the business in the country, and today we not only beverage category with many different items that include manufacture and sell beer and various other alcoholic green tea, Suntory Oolong Tea, coffee, carbonated drinks, beverages, but also deliver to our customers some of the ● Suntory Group and mineral water. For many years, we have also been most famous liquors in the world. We are also expanding Group companies 195 (as of December 31, 2010) developing a health food business in which we have our business overseas, in China and elsewhere in Asia, Employees 25,103 (as of December 31, 2010) made use of biotechnology and scientific research on as well as in the U.S., Europe, Australia, and Russia. Consolidated sales ¥1,742.4 billion (January 1 to December 31, 2010) foods. Furthermore, we have been making efforts to When it comes to wine, we are engaged in winemaking actively expand our businesses in, for example, foods, of the highest quality domestically and have also linked Consolidated ordinary income ¥100.8 billion (January 1 to December 31, 2010) soft drinks, and other non-alcoholic beverages overseas up with noted wineries around the world to develop ● Suntory Holdings Limited in the U.S., Europe, and the Asia-Oceania region. a wine business that is based on a global perspective. Head Office Dojimahama 2-1-40, Kita-ku, Osaka City, Osaka, JAPAN Suntory World Headquarters Daiba 2-3-3, Minato-ku, Tokyo, JAPAN Inauguration of business 1899 Establishment February 16, 2009 President Nobutada Saji Capital ¥70 billion

● Consolidated sales ● Sales by business segment (FY2010) ● Sales by geographic region (FY2010) (unit: billion yen) Others (Food services,sports, flower and seedlings, etc.) Europe The Americas 1,800 1,742.4 1,513.0 1,550.7 ¥126 billion ¥135.6 billion ¥71.9 billion 1,494.8 (8%) (4%) 1,413.9 (7%) Foods and non-alcoholic Asia and Oceania 1,200 Consolidated beverages Consolidated Alcoholic beverages sales (Non-alcoholic ¥145.3 billion sales (8%) (Beer, western ¥1,742.4 beverages, ¥1,742.4 liquors, shochu, billion health drinks billion 600 ready-to-drink and foods, (RTD) beverages, processed wine, etc.) foods, etc.) Japan billion ● Restaurants, Sports, Flowers, and Services ● Cross-functional Companies 0 ¥576 ¥1,040.4 billion ¥1,389.5 billion ‘06 ‘07 ‘08 ‘09 ‘10 (33%) (60%) (80%) We are developing our restaurant business both in Suntory has established cross-functional companies that ● Consolidated operating income ● Consolidated ordinary income ● Consolidated current net income Japan and overseas, operations that include the work of bring together operations that crosscut all Suntory Group (unit: billion yen) (unit: billion yen) (unit: billion yen) the Dynac Corp. that handles bars and restaurants, companies, such as quality assurance, technological 40.0 120 120 40 106.7 our development of fast food chains, and our work in the development, supply chain management, and business 100.8 32.1 32.7 restaurant business centered on Mexico and Asia. We are systems. Among the other tasks they handle are 83.5 77.9 81.3 79.2 81.8 30 80 75.3 80 75.6 75.8 24.1 also engaged in a variety of other business activities advertising and design, consumer relations, and the

20 17.8 centered on the three themes of health, nature, operation of cultural facilities. Our goal is to provide our

40 40 and comfortable living; these include the fitness business, customers with even better products and services by 10 flowers, greenification, promotional support, applying our expertise as professionals while further and providing reception services for cultural facilities. improving the efficiency of group management. 0 0 0 ‘06 ‘07 ‘08 ‘09 ‘10 ‘06 ‘07 ‘08 ‘09 ‘10 ‘06 ‘07 ‘08 ‘09 ‘10

● Employees ● Employees, by business (FY 2010) ● Employees, by region (FY 2010) (Persons) Others Company-wide (Joint) The Americas Europe 28,000 24,960 25,103 5,776 466 3,180 2,178 employees employees employees employees 20,790 21,845 21,000 20,206 (23%) (2%) (12%) (9%) Total number Total number of employees of employees 14,000 25,103 25,103 employees employees Foods and 7,000 non-alcoholic Alcoholic beverages beverages Asia and Oceania Japan

0 6,560 12,301 6,520 13,225 ‘06 ‘07 ‘08 ‘09 ‘10 employees employees employees employees (26%) (49%) (26%) (53%)

03 Suntory Group CSR Report 2011 / Suntory Group Overview Suntory Group Overview Right from its founding in 1899, Suntory has worked to expand its business. Operating today as the Suntory Business Overview Group, the company is active across a broad range of fields that include not only the alcoholic beverage, non-alcoholic beverage, and food businesses, but also health foods, restaurants, and flowers. ● Food and Non-alcoholic Beverage Business ● Alcoholic Beverage Business The company has further been expanding its operations across the world, conducting business in Asia, Oceania, Europe, and North America. We deliver a variety of products ranging from soft Suntory blazed the trail for Western liquor culture in drinks to health foods so that we may contribute to our Japan with the production of the sweet-tasting fruit wine customers leading healthy lives of abundance. Akadama Port Wine. We also launched the first whisky Corporate Overview The company has been rounding out its lineup in the business in the country, and today we not only beverage category with many different items that include manufacture and sell beer and various other alcoholic green tea, Suntory Oolong Tea, coffee, carbonated drinks, beverages, but also deliver to our customers some of the ● Suntory Group and mineral water. For many years, we have also been most famous liquors in the world. We are also expanding Group companies 195 (as of December 31, 2010) developing a health food business in which we have our business overseas, in China and elsewhere in Asia, Employees 25,103 (as of December 31, 2010) made use of biotechnology and scientific research on as well as in the U.S., Europe, Australia, and Russia. Consolidated sales ¥1,742.4 billion (January 1 to December 31, 2010) foods. Furthermore, we have been making efforts to When it comes to wine, we are engaged in winemaking actively expand our businesses in, for example, foods, of the highest quality domestically and have also linked Consolidated ordinary income ¥100.8 billion (January 1 to December 31, 2010) soft drinks, and other non-alcoholic beverages overseas up with noted wineries around the world to develop ● Suntory Holdings Limited in the U.S., Europe, and the Asia-Oceania region. a wine business that is based on a global perspective. Head Office Dojimahama 2-1-40, Kita-ku, Osaka City, Osaka, JAPAN Suntory World Headquarters Daiba 2-3-3, Minato-ku, Tokyo, JAPAN Inauguration of business 1899 Establishment February 16, 2009 President Nobutada Saji Capital ¥70 billion

20 17.8 centered on the three themes of health, nature, operation of cultural facilities. Our goal is to provide our

0 6,560 12,301 6,520 13,225 ‘06 ‘07 ‘08 ‘09 ‘10 employees employees employees employees (26%) (49%) (26%) (53%)

Suntory Group Overview / Suntory Group CSR Report 2011 04 The Suntory Group Around the World

The Americas Europe ●Pepsi Bottling Ventures LLC The Americas ●Suntory International Corporation ● Orangina Schweppes Group ●Suntory Mexicana, S.A. de C.V. ● Suntory Europe PLC Europe 18 companies ●Restaurant Suntory Mexico Group ● Morrison Bowmore Distillers Limited Japan 41 companies ● Suntory France S.A.S. 3,180 employees ● Louis Royer S.A.S. 71 companies 2,178 employees ● Lejay Lagoute S.A.S. ● Mozart Distillerie GmbH 13,225 employees ● Grands Millésimes de France S.A. (GMdF) ● Château Lagrange S.A.S. ● Château Beychevelle ● Château Beaumont ● Barrière Frères S.A. Japan ● W eingut Robert Weil

● Suntory Beverage & Food Limited ● Suntory Liquors Limited ● Izutsu Maisen Company, Limited ● Suntory Foods Limited ● Suntory Beer & Spirits Limited ● Tipness Limited Asia and ● Hokkaido Pepsi-Cola Sales Company, Limited ● H.B.I. Incorporated ● Suntory Flowers Limited Number of related Companies Oceania ● Touhoku Pepsi-Cola Sales Company, Limited ● Suntory Allied Limited ● Suntory Midorie Limited Employees ● Nihon Pepsi-Cola Sales Company, Limited ● Okinawa Suntory Limited ● Suntory Shopping Club Limited 65 companies ● Chubu Pepsi-Cola Sales Company, Limited ● Kyushu Suntory Techno Products Limited ● Suntory Service Limited Food and Non-alcoholic Beverages Companies ● Kinki-Chugoku Pepsi-Cola Sales Company, Limited ● Sungrain, Limited ● Suntory Publicity Service Company, Limited Alcoholic Beverages Companies 6,520 employees ● Minami Kyushu Pepsi-Cola Sales Company, Limited ● Myu Planning & Operators Incorporated ● Suntory Investment and Development Limited Restaurants, Sports, Flowers, and Services Companies Cross-functional Companies ● Okinawa Pepsi-Cola Beverage Company, Limited ● Suntory Wine International Limited ● Sun-Ad Company, Limited ● Suntory Products Limited ● Fwines Company, Limited ● Suntory Business Expert Limited ● Suntory Food Industries Company, Limited ● Iwanohara Vineyard Company, Limited ● Suncafé Limited ● Nihon Pepsi-Cola Production Company, Limited ● Monte Bussan K.K. ● Kanbaku Company, Limited ● Suntory Wellness Limited ● Dynac Corporation ● Suntory Logistics Limited ● Connecto Company, Limited ● Pronto Corporation ● Sunmoretec Corporation Group Organizational Diagram ● Häagen-Dazs Japan, Incorporated ● First-Kitchen Limited ● Suntory Corporate Business Limited ● Subway Japan Incorporated ● Sunlive Company, Limited Suntory Beverage & Food Limited Suntory Foods Limited Suntory Products Limited Group companies in Japan Frucor Group Orangina Schweppes Group Cerebos Pacific Limited Asia and Oceania Pepsi Bottling Ventures LLC Tipco F&B Company, Limited Frucor Group Suntory Liquors Limited Suntory Beer & Spirits Limited ● ● Suntory (Shanghai) Marketing Company, Limited ● Cerebos Pacific Limited ● Suntory Brewing (Shanghai) Company, Limited Suntory Holdings Limited Group companies in Japan ● Tipco F&B Company, Limited ● Suntory Brewing (Kunshan) Company, Limited Group companies overseas ● Suntory (China) Holding Company, Limited ● Suntory Guangming Brewing (Shanghai) Company, Limited Suntory (China) Holding Company, Limited Group liquor companies in China ● Suntory (Shanghai) Foods Marketing Company, Limited ● China Jiangsu Suntory Foods Company, Limited Group food companies in China ● Suntory (Shanghai) Foods Marketing Company, Limited Beijing Branch ● Wuxi Zhentai Winery Company, Limited Suntory Wine International Limited Group companies in Japan ● Suntory (Shanghai) Foods Company, Limited ● ASC Fine Wines Holding Limited Suntory Wellness Limited Group companies overseas ● Suntory (Aust) Pty Limited ● Suntory F&B International Group Other Operating Companies ● Suntory Taiwan Limited ● Gold Knoll Limited Suntory Business Expert Limited Cross-functional Group Companies ● Suntory (China) Holding Company, Limited Suntory Corporate Business Limited Sunlive Company, Limited

05 Suntory Group CSR Report 2011 / Suntory Group Overview The Suntory Group Around the World

Suntory Group Overview / Suntory Group CSR Report 2011 06 Top Message Strive to Become a Company “Growing for Good”

The Great East Japan Earthquake struck the country on March 11 of this year, leaving tremendous damage in its wake. I pray from the bottom of my heart that those who lost their lives may know eternal peace, and humbly offer my condolences to everyone who has suffered from the disaster. The Suntory Group is directing all of its energies to providing support for reconstruction and revitalization. We provided disaster areas with one million bottles of mineral water and 300 million yen in donations immediately after the earthquake. In addition, one yen from every can of soft drink and beer will be donated generating roughly 4 billion yen for revitalization efforts. This donation will provide hope and contribute to society in the future including the children and fisheries industry afflicted by the disaster. ● Internationally, a sense of uncertainty is increasing when it comes to the political and economic situation, global competition is growing ever more fierce, and difficulties are arising in the business environment that surrounds the company. There has been heightened debate around the world surrounding renewable energy and the pros and cons of promoting nuclear power after the accident resulting from the Great East Japan Earthquake. We will confront the new challenges that arise to generate a more sustainable society. ● Inspired by its motto of “Yatte Minahare—Go for it!” the Suntory Group has constantly challenged itself to explore new frontiers of value since its founding in 1899. Today, it is growing as a multi-faceted food and beverage company developing a variety of business such as liquors, soft drinks, health foods, restaurants, and flowers. Furthermore, to accelerate our globalization, we bolstered our structure by founding Suntory Beverage & Food Limited and Suntory (China) Holding Company, Limited in January of this year. As the business of the Group grows worldwide, we seek to achieve coexistence with people around the world and with nature, based on our corporate philosophy of “In Harmony with People and Nature.” I believe that the mission of the Suntory Group is not Nobutada Saji only to deliver goods and services of the highest quality Chairman of the Board based on what our customers want, but also to pass on Suntory Holdings Limited in a sustainable fashion to our children and the

07 Suntory Group CSR Report 2011 / Top Message generations to come the irreplaceable global environment As a company whose core business is delivering as well as culturally rich lifestyles. the blessings of water in the form of alcoholic and ● non-alcoholic beverages, we have a particularly heavy Shinjiro Torii, the founder of Suntory, strongly believed responsibility when it comes to this irreplaceable resource. that “We are able to run our business smoothly thanks Since 2003, the Suntory Group has been making concerted to stakeholders and society. This helps us not only efforts to maintain its Natural Water Sanctuaries, which to provide services to our customers and business are forests for water resource cultivation, in order to partners and reinvest in our business, but also to make create supplies of groundwater beyond the volume used a contribution to society.” On that basis, he took on social in our plants. We expect to expand the total area to 7,000 welfare activities with a passion. Hojukai got its start in hectares during 2011, which has been designated the 1921 as a free clinic; now celebrating its 90th anniversary, International Year of Forests by the United Nations. That it remains a going concern today. would constitute an area even greater than that of inner This belief has been developed further over the years Tokyo, a district whose boundaries are marked by the and is with us today as the spirit of “Sharing the Profit famous Yamanote loop train line. Furthermore, we are with Society” which underpins the CSR activities of moving ahead in this effort with our eyes focused decades the Suntory Group. and even centuries into the future. Cultural contribution activities whose intent is to help Suntory Group is also fleshing out various other people to have spiritually rewarding lives have also been approaches to Water Sustainability. These include being actively promoted based on the spirit of “Sharing the scrupulous about quality assurance with respect to Profit with Society.” We are pursuing such activities water, conserving the water used in plants, strict waste with a new resolve this year, which marks the 50th water management, and implementing environmental anniversary of the Suntory Museum of Art and the 25th education activities for children to convey to them the anniversary of the Suntory Hall. importance of water. We have also carved out a fresh start by following up When it comes to ingredients and energy, as well, on the creation of the Suntory Foundation for Arts in Suntory is strengthening its drive to promote 2009 with the change of corporate status of the Suntory “the Three Rs” (Reduce, Reuse, Recycle) through Foundation to a public interest incorporated foundation constant technological innovation and is working on in May of last year, and with the incorporation of the the thoroughly efficient use of resources. Every company Suntory Institute for Bioorganic Research under the new in the Group is also bolstering its approach to global corporate status and name Suntory Foundation for Life warming policies that call for a reduction in carbon Sciences this January. We reorganized their structures emissions, not only by reducing direct outputs at plants so they could stand on their own as corporations and and other sites, but also by setting emission reduction make even greater contributions to promoting the arts, targets throughout the value chain, running from the humanities, and life sciences. procurement of ingredients to sales. I hope we will continue to provide abundant pleasure ● to society through our various cultural activities and The Suntory Group is striving to be a company contributions to the community. “Growing for Good” that coexists in harmony with people ● and nature while creating new value. It is my hope—and, It is the obligation of all companies as global citizens I believe, the social responsibility of the Group—that to take equal responsibility for reducing global Suntory continues to grow sustainably as a company environmental impact that comes with developing so it can offer the best products and services yet, and their businesses. Most of our businesses at Suntory also contribute to comfortable lifestyles and help the Group are supported by such natural bounties as environment on a global scale. water and agricultural crops, and we are promoting We will continue to listen to what our stakeholders environmental management geared toward sustainability have to say as we steadily engage in activities that based on our esteem and gratitude for the enormous are rooted in our CSR vision of “Bringing Water blessings of nature. Under the guidance of the to Life.” I hope that we can count on your continued Environmental Sustainability Strategy Division that advice and support. was founded last year, we are engaged in a variety of approaches that bring the Group together with the aims of achieving “water sustainability,” “efficient use of resources,” and a “low-carbon corporate structure.” June 2011

Top Message / Suntory Group CSR Report 2011 08 The Suntory Group Philosophy on CSR The Suntory Group sees it as its responsibility to undertake a variety of activities under the slogan of “Bringing Water to Life,” the CSR vision statement which was adopted with an eye to Suntory becoming a truly valuable company that will achieve coexistence with nature and society.

The reason for the existence of the Suntory Group that the Suntory Group has the corporate social and its ultimate goal have both been set down in its responsibility to direct itself to bringing this corporate corporate philosophy of “In Harmony with People philosophy to fruition: as a company supported by its and Nature.” Running through our philosophy is the customers that is “Growing for Good,” we must aim enduring spirit of “Harmony with Nature” and “Harmony for the development of comfortable living and healthy with Society” which has continued unchanged since conservation of the global environment, and continually the company was founded in 1899. We believe take on new challenges to achieve this.

Mission, Vision & Values

Our Mission In Harmony with People and Nature

Our Vision Growing for Good The Suntory Group promotes corporate activities that delivers the highest quality products and services to its customers, contributes to the fruitful development of culture and lifestyles as well as to the achievement of a global sustainable environment. We will continue to strive for worldwide growth by providing better products and services. Our further contributions to achieve rich cultures and lifestyles as well as to the environment will progress on a global scale.

Our Values Yatte Minahare—Go for it ! Continuing in the spirit of taking on new challenges exemplified by our founder who trailblazed the way for Western-style liquors such as whisky in Japan, we have broken new ground as a multi-faceted food and beverage company in a variety of new areas of businesses including beer, soft drinks, and health foods. This spirit has been a motivator for our open-minded corporate culture and the challenges we set ourselves to create new value.

Suntory’s Spirit of “Sharing the Profit with Society” Following the philosophy of Suntory’s founder, we believe that business profits should not only be used for reinvestment into the business and providing services to clients and business partners, but for making a contribution to society. Carrying on in his spirit, we are aiming for sustainable growth with our stakeholders.

Coexisting with Nature Many of our products, including whisky, wine, beer, and non-alcoholic beverages, are created thanks to such natural bounties as water and agricultural products. With a spirit unchanged since our founding, we fervently promote environmental management, maintaining respect and gratitude for the great workings of nature.

09 Suntory Group CSR Report 2011 / The Suntory Group Philosophy on CSR CSR Vision: “Suntory, Bringing Water to Life”

Our slogan “Suntory, Bringing Water to Life” arose because we broadly share with society the activities we undertake based on our corporate philosophy of “In Becoming Like Harmony with People and Nature.” It means that as a Water for Society —Coexisting company that delivers the blessings of water and nature to with Society— our customers in the form of whisky, beer, wine, soft drinks, Living Together with Water Suntory, and health foods, we are going to work to protect both —Coexisting Bringing Water to Life the water that is a precious resource for the world and the with Nature— environment that produces that water. This means that we will continue to deliver those pleasures to society just like water satisfies the thirst of all living things. It also means Powerfully and Adaptable, we will continue to be a company where every single Like Water employee can take on new challenges powerfully and —Together with adaptable like water. Seeking to achieve coexistence with Our Employees— nature and society, the Suntory Group puts “Bringing Water to Life” into practice.

Stakeholders around the Suntory Group

The Suntory Group pursues its business activities amid to clarify the responsibilities we have toward these a range of connections with a variety of stakeholders. stakeholders and ensure that various opinions and social To continue being a company that will put “Suntory, needs are reflected in our corporate activities, while Bringing Water to Life” into practice and contribute to also continuously working to build deeply trusting and achieving a better society, we have made it our goal collaborative relationships with them.

Making “customer satisfaction” our top priority, we deliver safe and reliable products Customers and services that our customers trust and enjoy. We also put a premium on two-way communications with our customers and work to make our business activities reflect P. 21 their views and wishes.

Business Business partners, such as suppliers and distributors supporting our business activities, work with us to mutually grow by improving quality and ensuring safety based on Partners P. 29 fair competition, evaluation, and selection.

So that Suntory may continue to be a company that coexists with society, based The Local on the spirit of “Sharing the Profit with Society,” we are engaged in a variety of efforts—such as ongoing social welfare activities and providing support through Community P. 31 cultural and sports activities—that run alongside our social contribution activities which are rooted in local communities around the world.

We are making efforts to improve the various policies and systems designed to support the “Yatte Minahare—Go for it!” spirit among employees so that Suntory will Employees continue to be a fresh and vital company where each and every employee is able to P. 35 take on new challenges.

Suntory works to protect the global environment as a company that is “Bringing Global Water to Life.” With environmental management providing the linchpin for business activities, various projects are being pursued throughout the whole Group that will Environment P.41 make it possible to pass on to the next generation a sustainable society filled with the radiance of life.

The Suntory Group Philosophy on CSR / Suntory Group CSR Report 2011 10 Feature 1 Water Resource Cultivation Aimed at “Water Sustainability”

The businesses of the Suntory Group are supported by water. Many of the products we deliver to our customers would not be possible without pure water. We are engaged in a project to protect forests in areas of water resource cultivation so that this water will be handed down to coming generations, forever safe, delicious, and in sufficient amounts. This is the Suntory Natural Water Sanctuary Project. It supports the notion of water sustainability which is a lifeline for our business and is positioned as one of our core activities.

The Suntory Natural Water Sanctuary Project

The Suntory Natural Water Sanctuary Project involves the company cultivating large forests capable

of creating groundwater in water resource cultivation areas for our plants around the country.

In order to create more groundwater than the volume used by our plants,

we are seeking to expand the total area for water resource cultivation to 7,000 hectares by the end of 2011.

An ideal forest for creating ample groundwater is one that has “good quality soil” that can store water adequately.

However, this “good quality soil” disappears rapidly when forests are damaged.

The capacity that a forest inherently has to store water and draw it deeply underground

(its capacity for water resource cultivation) also fades quickly when the soil is washed away after a big rainstorm.

Creating forests that are rich in biodiversity is indispensable if

this essential soil is to be protected and cultivated well.

1111 Suntory Group CSR Report 2011 / Feature 1 Currently around 5,223 hectares. Targeting Water Resource As of April 2011 Cultivation Areas Totalling 7,000 hectares by the End of 2011.

Subject area ［Natural Water Sanctuary ［Natural Water Sanctuary Komochiyama］ 1 Gifu Higashi-Shirakawa 3］ Length of contract* * 5 hectares 35 years 358 hectares 2 years

2 ［Natural Water Sanctuary ［Natural Water Sanctuary Akagi* ］ Kyoto Minami-Yamashiro］ 1,310 hectares 100 years 870 hectares 30 years ［Natural Water Sanctuary ［Natural Water Sanctuary Okudaisen］ Minami Alps］ 359 hectares 30 years 180 hectares 30 years

［Natural Water Sanctuary Mt. Monryu ［Natural Water Sanctuary Okutama］ in Nishiwaki, Hyogo］ 44 hectares 30 years 1,053 hectares 30 years

［Natural Water Sanctuary Aso］［Natural Water Sanctuary Tanzawa*2］ 272 hectares 60 years 577 hectares 100 years

［Natural Water Sanctuary Omi］［Natural Water Sanctuary Yunomine］ 191 hectares 30 years 4 hectares 10 years

*1: In those cases on the above map where there are multiple contracts and agreement durations, only the longest of those is given *2: Automatically renewed every 5 years *3: Scheduled for renewal over several decades

Protect and Nurture Restoring Nature in Forests According to Plan

● Creation of soil with rich water resource cultivation capabilities ● Forest maintenance in collaboration Thinned-out trees. with specialists Being able to make use of trees is also very ● Creation of forests rich in biodiversity important for fixing CO2 over the long term. ● Participation of employee volunteers

Cultivating the ideal soil must make use of the power of Vegetation will grow even trees, grass, animals, and microbes. We lend a hand to on the ground of a dimly lit forest when light can these “natural powers of a forest” and guide them in ways penetrate following thinning. that lead to the creation of good soil. For example, some forests have too many conifers, making it difficult for light to penetrate. If vegetation does not grow on the forest floor, rain does not get stored in the soil and instead washes away the top soil. Also, the number of forests in Employees getting first-hand which plants have been spoiled by deer and insect pests experience with forestry. and which are unable to return on their own to their Clearing dead branches and improving the light original state has been increasing in recent years. We help environment. to maintain these forests, turning them back into healthy forests that have a great capacity to store water. A healthy forest is one inhabited by a good balance of Installing protection barriers various trees, plants, and living things and which has to protect plants from being abundant biodiversity. Rich soil is created when a variety spoiled by deer. (Photo source: Tanzawa Oyama of seeds that have been naturally cultivated get mixed Nature Restoration Committee) together, resulting in a strong forest that will recover naturally even from the depredations of insect pests.

Feature 1 / Suntory Group CSR Report 2011 12 Theん target of 7,000 hectares for water resource cultivation is only the first step in Settle on a Maintenance Plan Suited to a Given Forest a project that will continue for decades and even centuries. Plan Our work is continuing with one ear bent to hear the voices of the earth and its flora and fauna ● Environmental studies in collaboration with specialists so that we may achieve the ideal symbiotic relationship with nature. ● Experimental implementation ● Settle on a maintenance plan focused 10, 50, and 100 years into the future

Once the location and size of the forest have been Undertake Sufficient Scientific Research on Water, Soil, and Forests determined, we formulate the maintenance plan for Survey Forest vegetation the way forward. Surveys are also indispensable for this surveys. Determining undertaking. We survey the forest environment with ● Institute for Water Science the varieties and the help of specialists in various fields. We then make a hydrological survey conditions of trees in detail. comprehensive judgement based on what sort of soil ● Computation of the area needed covers the area, what type of plants grow there, and what kinds of living things are present, and create a A Suntory Natural Water Sanctuary Project begins plan that focuses 10, 50, and 100 years into the future. with a thorough survey of the area around one of our Forests are faced with a variety of problems that differ plants. To create a forest that will generate more from one forest to another. We divide the forest up into Hydrological survey conducted groundwater than our plant uses, we first need to numerous test areas based on the problems identified by the Institute for Water designate the area for water resource cultivation, and conduct studies to compare various management Science. Identifying water consider the water resource cultivation capacity of that resource cultivation areas methods. These are not implemented all at once. based on various surveys. land and the volume of water used in our plants, and Rather, while determining the test results, we take the then settle on the area to be cultivated. time to ascertain which method is ideal. Many months The surveys are handled by the Suntory Institute for and years are needed to nurture a healthy forest. Water Science. The institute looks at data on the For that very reason, we create forestry maintenance constituent parts of the water found in the area, its Repeatedly carrying out experimental management approaches. Investigating optimal plans for the Suntory Natural Water Sanctuaries that geographical and geological features as well as maintenance methods. run for long periods of time, on the order of decades. geological formation, and the plants and wells in the Making our way vicinity. It also makes inferences about where the water ■ Important Considerations when Formulating the Plan into the forest to comes from, what sort of geological formations it passes survey the volume and quantity of through, how much time it takes, and how it flows. Hydrology Vegetation Forest Biology Soil Erosion Control river water available. Based on the survey results, it identifies where the We analyze the flow First, we survey We survey the birds, Soil is the most We search for the water resource cultivation area for the plant should be. and quality of water current vegetation animals, insects, and important thing for best methods for After the cultivation area has been determined, we in the ground under conditions and look soil organisms that groundwater preventing soil next consult with national and local governments as the forest, and for the ideal live in the forest, protection. We denudation and well as local residents about the area, move through the evaluate the impact managerial approach and investigate the sample soil and landslides that result that changes in that corresponds to effects that analyze it from in precious soil forest surveying the river water available, and move vegetation have the vision we have biodiversity has on various aspects, being washed away Component analysis forward on detailed surveys. In addition, we conclude a on the quality and for the future of groundwater. including those of by rain. of water Natural Water Sanctuary agreement and begin to help volume of each forest. physics, chemistry, with maintaining the area. groundwater. and microbiology.

Work begins after we consult with the right specialists about solutions to the various problems the forest faces. Abandoned artificial forests, oak wilt, pine wilt, growing bamboo groves, deer-inflicted spoilage... Our most important job is to ask the best scholars for research on solutions to the various problems that forests in Japan face and apply those research solutions in parallel with the maintenance work being done in Natural Water Sanctuaries around the Connect Expanding Projects to Promote the Health of All the Forests in Japan country, adjusting these solutions as necessary to suit individual forests. We make public via our website and publications all of the research results Deer that we and specialists have obtained in our explorations together. It is our Pine wilt Oak wilt spoilage hope that the findings will be actively used by people around the country including volunteer groups, corporations, and government authorities who are focused on water resource cultivation forests and environmental forests. We also hope that not only the Suntory Natural Water Sanctuaries but all of the forests in an area will be revived, with everyone involved in forestry Takeshi Yamada putting into practice the new techniques developed at the Natural Water Pine wilt caused by an exotic Oaks throughout the country Biodiversity in the mountains is Senior Specialist Sanctuaries in efforts to revitalize the region. species, the pinewood are threatened with extinction directly threatened by excess Environmental Sustainability With our projects as starting points, it is our hope that the forests of Japan nematode (Bursaphelenchus due to a massive oak ambrosia deer population. Strategy Department xylophilus). beetle (Platypus quercivorus) Suntory Holdings Limited will be reborn as healthy and rich forests that will last for hundreds and In April 2011, we convened a Water Sciences outbreak. thousands of years to come. We are continuing to expand these projects even Forum on the topic of “Undertaking Scientific further in the future as a company that is “Bringing Water to Life.” Research at Natural Water Sanctuaries.”

13 Suntory Group CSR Report 2011 / Feature 1 Theん target of 7,000 hectares for water resource cultivation is only the first step in Settle on a Maintenance Plan Suited to a Given Forest a project that will continue for decades and even centuries. Plan Our work is continuing with one ear bent to hear the voices of the earth and its flora and fauna ● Environmental studies in collaboration with specialists so that we may achieve the ideal symbiotic relationship with nature. ● Experimental implementation ● Settle on a maintenance plan focused 10, 50, and 100 years into the future

Feature 1 / Suntory Group CSR Report 2011 14 Searching for a New Vision for the Art Museum 50th Anniversary 1961 Suntory Museum of Art The Suntory Museum was reopened in Tokyo Midtown in the world. Approaches that take advantage of these local 2007 with the goal of providing a comfortable and relaxing peculiarities and work to revitalize art in the area are also space whose underlying tone is that of “Japanese Modernism,” moving ahead. Marking its 50th anniversary, the museum will uniting Japanese tradition with the modern. The museum engage in such activities as collaborations around the continues with its basic principle of “Art in Life,” which has neighborhood, education programs for the coming generations, been retained since its opening, and now also carries out and making contributions to the field of research to accompany various projects under a new message for the museum, the various exhibitions and acquisition activities focused on that of “Art Revisited, Beauty Revealed.” This new message Japanese art into which it has poured its energies to date. incorporates our hope that even more people will experience As people seek out a new vision for the art museum in the firsthand the pleasures of discovering and sensing new 21st century, our goal is to hear what visitors and experts beauties that transcend time, location, and field. have to say as we strive to create a comfortable museum, an The Roppongi neighborhood in Tokyo Midtown is one that “parlor of the city” that creates feelings through the medium has many museums and receives many visitors from all over of art and offer space for many people to gather and relax.

The museum interior, with the National Treasure: “Box with Partner shop inside the museum Education Program underlying tone of “Japanese Fusenryo design in mother-of-pearl modern sentiment” inlay and maki-e”

In 2011, the Suntory Museum of Art marked its 50th anniversary and the Suntory Hall its 25th. In addition Cultural Activities and Contributions to the social welfare activities it has engaged in since before the Second World War, Suntory has sought to be Feature 2 a corporation that works to enrich the spirit and lifestyles by engaging in cultural activities based on the notion to Society that Carry on the Spirit of of wanting to contribute to the development of comfortable living by promoting the arts and scholarship, focused mainly on the fine arts and music. “Sharing the Profit with Society” The spirit of “Sharing the Profit with Society” of our founder Shinjiro Torii continues to be handed down across the generations even as the projects we pursue evolve in response to changing times.

Seeking to Be the Greatest Concert Hall in the World 25th Anniversary 1986 Suntory Hall Suntory Hall was opened in 1986 as the first dedicated bring together some of the best performers in the world, concert hall in Tokyo, with the concept that it would provide while the Suntory Hall Chamber Music Garden event set for the world’s most beautiful sounds. In the years since, the hall early summer is designed to transmit the innate pleasures of has presented creative, high quality concerts and also chamber music and spread and develop the genre further. implemented various education programs for the coming In addition, we will open a chamber music academy that generations, including a joint program with Carnegie Hall —together with the Opera Academy (opened in 1993) that and exchange projects with overseas colleges of music. has produced singers who perform around the world—will As the hall marks its 25th anniversary, we have created two provide young performers with the opportunity to interact new programs under the theme of “Music Moves our Hearts with top-flight musicians and gain experience on the stage as One” with the aim of delivering music to an even wider as professionals. audience and reaffirming the hall’s role in creating the history The Suntory Hall aims to make music into something that of classical music. is even more firmly rooted in everyday life by continuing to The Suntory Hall Festival scheduled for this autumn will offer programs that are creative and appealing.

Blue Rose (Small Hall) Carnegie Kids 2010 Vienna Philharmonic Week Pipe organ in Japan 2010

15 Suntory Group CSR Report 2011 / Feature 2 Searching for a New Vision for the Art Museum 50th Anniversary 1961 Suntory Museum of Art The Suntory Museum was reopened in Tokyo Midtown in the world. Approaches that take advantage of these local 2007 with the goal of providing a comfortable and relaxing peculiarities and work to revitalize art in the area are also space whose underlying tone is that of “Japanese Modernism,” moving ahead. Marking its 50th anniversary, the museum will uniting Japanese tradition with the modern. The museum engage in such activities as collaborations around the continues with its basic principle of “Art in Life,” which has neighborhood, education programs for the coming generations, been retained since its opening, and now also carries out and making contributions to the field of research to accompany various projects under a new message for the museum, the various exhibitions and acquisition activities focused on that of “Art Revisited, Beauty Revealed.” This new message Japanese art into which it has poured its energies to date. incorporates our hope that even more people will experience As people seek out a new vision for the art museum in the firsthand the pleasures of discovering and sensing new 21st century, our goal is to hear what visitors and experts beauties that transcend time, location, and field. have to say as we strive to create a comfortable museum, an The Roppongi neighborhood in Tokyo Midtown is one that “parlor of the city” that creates feelings through the medium has many museums and receives many visitors from all over of art and offer space for many people to gather and relax.

Blue Rose (Small Hall) Carnegie Kids 2010 Vienna Philharmonic Week Pipe organ in Japan 2010

Feature 2 / Suntory Group CSR Report 2011 16 The Spirit of “Sharing the Profit with Society” A Company that Promotes Comfortable Living Suntory Music Foundation 1969 Suntory Hall 1986

The starting point for the cultural activities and Keizo Saji, Suntory’s second president, carried on the Suntory celebrated its 70th anniversary in 1969 by The Suntory Hall was opened in 1986 in response to calls contributions to society in which the Suntory Group has aims of his predecessor Shinjiro Torii by bringing the spirit establishing the Suntory Music Foundation. The Foundation’s from people in the music world for the Japanese music world continued to engage across the generations has its roots in of “Sharing the Profit with Society” into the cultural sphere. purpose was to develop Western music in Japan. The to have a dedicated concert hall with good sound. Two the spirit of “Sharing the Profit with Society” in which Saji thought that the job of promoting the arts and Foundation has created three awards—the Suntory Music aspects of the hall were groundbreaking developments at the founder Shinjiro Torii believed. This idea holds that the scholarship was becoming more important for producing Award, the Keizo Saji Prize, and the Akutagawa Award for time. One was the scrupulous attention paid to sound, with profits earned through business will be useful not just for a richness of the spirit in a country that had become Music Composition—to honor individuals and groups who the goal of creating a dedicated concert hall that offered the reinvesting in our business and in services to our customers materially rich. have made remarkable achievements in the world of classical most beautiful sounds in the world. A “vineyard” style hall and clients, but also for contributions to society. At the On this basis, Suntory has engaged in various cultural music. One of the major features of these awards is that not was employed—a first for Japan—that made it possible for Suntory Group, we continue on in our founder’s spirit of activities with the goal of being a company that promotes only are the recipients honored, but the Foundation also both performers and listeners to share a musical experience “Sharing the Profit with Society” by engaging in many comfortable living. The company has launched a succession provides a lively place for them to hold commemorative overflowing with a unified ambience. Second is that the hall cultural and social activities in which our employees actively of new projects that include the Suntory Museum of Art, concerts to introduce some of their accomplishments and introduced services for people to enjoy before the performance participate. the Suntory Music Foundation, the Suntory Foundation, commission new works. In addition to bestowing public and during intermissions, based on the idea that Suntory Given the circumstances during the period in which our and the Suntory Hall, and is carrying on projects to the honors, the Foundation is engaged in a wide range of other wanted to implant in Japan the culture of enjoying a concert founder lived, Torii directed his enthusiasm in particular to present day with the aim of promoting the arts and activities including projects and publishing with the goal of itself. The hall also offered receptionists who would guide charitable activities and social welfare projects for people in scholarship. promoting the work of Japanese composers. Beginning in concertgoers and cloakroom and bar services, and created underprivileged circumstances. 2009, through its Music Business Division, the Suntory new pleasures as a space for adults to meet socially. Foundation for Arts works to contribute to the development The hall also holds performances of original programs in its Suntory Museum of Art 1961 of the classical music world and the improvement of culture. role as a base for providing information about music. The hall Hojukai 1921 The motive for establishing the Suntory Museum of Art takes on projects with a global perspective, as seen in its The first project for contributing to society that founder partnership with the Vienna Philharmonic Orchestra and its came from the profound impression that the art museums Suntory Foundation 1979 Shinjiro Torii carried out based on his deep religious beliefs of Europe left on the president at that time, Keizo Saji. collaboration with Carnegie Hall on an education program. was Hojukai. The Hojukai project began with the opening of He came to believe that the Japanese people also needed The Suntory Foundation was established in 1979 to Since its opening 25 years ago, the hall has welcomed Imamiya Clinic in Nishinari Ward, Osaka in 1921, and to protect the art that had been handed down to them celebrate the 80th anniversary of the company. Its goal is to performers from around the world on a daily basis, offering in provided free examinations and medication to the poor. The from their ancestors and pass it on to future generations. nurture people and support international and scholarly this time around 14,000 performances heard by more than project continued during the Second World War. After the In contrast with western culture where works of art are research related to society and culture, as well as to 14 million people. war, Suntory opened Hojukai dormitories for people who meant to be seen and enjoyed, the applied fine arts are a contribute to the development of Japanese and world had returned from overseas and needed a place to live, as strong point in Japanese art and the culture is such that scholarship and culture. The motive for establishing the Based on the spirit of “Sharing the Profit with Society,” well as the Akagawa Home for war widows. works of art are made to be things used in ordinary life. foundation lay in the need to improve the ability of people since the company’s founding, at the Suntory Group we have Later, seeking to help an even wider range of people, Based on the idea of having as many people as possible working in the humanities and social sciences in Japan to carried out a variety of cultural activities and made Suntory opened Takadonoen, Osaka’s first facility for seniors experience the wonders of traditional Japanese arts, the disseminate information about the work, at a time when contributions to society that range from social welfare (1974) as well as the Tsubomi Nursery School (1975), the museum takes “Art in Life” as its theme and, as an art internationalization was becoming an issue in Japan. activities to promotion activities for the arts, scholarships, low-cost Amanoen facility for seniors (1976), and the museum that has no standing exhibitions, focuses on The Suntory Prize for Social Sciences and Humanities and sports. To contribute to the development of comfortable integrated welfare facility Domyoji Takadonoen (2008). exhibition planning and presentation methods. The works awarded to young researchers and the Suntory Prize for living, we think it is necessary to respond to what the times Hojukai has been continuously active now for some that the museum began to collect soon after its founding Community Cultural Activities awarded for activities that call for; efforts are also needed to get things across more 90 years. Today, responding to the increasing diversity in today constitute a 3,000-piece collection that includes one contribute to community development through culture easily and more interestingly so that even greater numbers of people’s lives, it also offers inhome care services, including National Treasure and 12 Important Cultural Properties. have been well received as projects unique to the people will take pleasure in the arts. Nurturing the children the provision of care attendants, ambulatory care, and other With the 50th anniversary serving as a good opportunity, Foundation and have honored many individuals to date. who represent the coming generation and collaborating with support for care in the home. the museum is engaged in various projects based on its The Foundation also works to promote research and local communities is also becoming increasingly important. message of “Art Revisited, Beauty Revealed” and constantly publications abroad related to the humanities and social The Suntory Group will continue to carry on the spirit of strives to present a new and interesting face to visitors. sciences, and carries out surveys and research itself. The “Sharing the Profit with Society,” aim toward creating a truly Foundation will continue contributing to the development affluent society, and engage in a variety of cultural activities of scholarship and culture in coming generations. to contribute to society.

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❶Our founder Shinjiro Torii ❷The Akagawa Day Care Center, inside 2 4 7 the Akagawa Home ❸Inside Takadonoen and Tsubomi Nursery School operated by the social welfare organization Hojukai ❹The integrated welfare facility Domyoji Takadonoen, opened in Osaka prefecture in 2008 ❺The Suntory Museum of Art moved to Tokyo Midtown (Roppongi) in 2007 ❻The Summer Festival held by the Suntory Foundation for Arts ❼The 32nd Suntory Prize for Community Cultural Activities presented by the Suntory Foundation ❽Finale of the gala concert ❾Begun in 1983, the “Suntory Presents Beethoven’s 9th with a Cast of 10,000” concert continues to be widely enjoyed

17 Suntory Group CSR Report 2011 / Feature 2 The Spirit of “Sharing the Profit with Society” A Company that Promotes Comfortable Living Suntory Music Foundation 1969 Suntory Hall 1986

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Feature 2 / Suntory Group CSR Report 2011 18 Responding to Our Stakeholders We are holding dialogues with various stakeholders to further enhance the CSR of the Suntory Group as it works toward realizing a sustainable society.

Aiming toward Broader “Water Sustainability” Water Resource The Suntory Group’s water resource cultivation activities are very cutting-edge among Cultivation Aimed Japanese companies. In the midst of what is being labeled “Japan’s forestry in ruins,” Suntory at Realizing “Water is figuring out what that situation is, as well as taking countermeasures through forestry improvement activities. We can also appreciate this from the viewpoint the company must Sustainability” take to conduct business, that to protect water, we must nurture the forests that nurture the water, and specifically that the core of these activities are tightly bound to Suntory’s business. April 11, 2011 In addition to these activities, Suntory is working closely with external experts and Suntory World Headquarters specialists, placing a clear emphasis on moving in the direction of regional activities as (Daiba, Minato-ku, Tokyo) closely as possible. In-house development departments are tasked with promoting scientific In April 2011, we extended research and evaluating Suntory’s business advancement and water resource cultivation an invitation to hear again this activities, as well as promoting community conscious activities that place emphasis on year from Mr. Riichiro Oda, consensus building. As can be seen from Suntory’s building of strip roads, for example, a specialist in the fields of their developing of human resources for appropriate care of local areas and their global environment and developing of activities for our own forests as well as those of others will likely expand biodiversity. As part of his greatly with a further increase in human resources assigned to such activities. report on the progress of the In times to come, we hope that Suntory will strive to expand its water sustainability Suntory Group’s water resource measures, which in connection with its business activities should go beyond water resource cultivation activities, he kindly cultivation and be applied to the entire life cycle. One example is the water footprint in shared his opinions with us. the acquisition of raw materials. I look forward to seeing Suntory’s efforts toward constructing a three pillar infrastructure—which takes into account philosophy, content, and practice—being smoothly put into practice, while effectively conveying the meaning and positioning of the phrase “Bringing Water to Life” and what Suntory must do to realize this. Riichiro Oda, CEO, Change Agent, Inc.

● Profile From 2002, Mr. Oda has been involved in the administration as well as the planning and operation of event projects in his role as the General Manager of Japan for Sustainability. In 2005, he established Change Agent, Inc., which provides consultations to companies on how to pursue their social missions and to NGOs on businesses management assistance.

Suntory’s Response

We have had consistent results from our water resource cultivation efforts and we are continuing to move closer to our goals in Japan. We have also reached the stage of being able to release our research on functional improvements in water resource cultivation for forestry outside of the company. Life cycle measures, starting with ingredients, and efforts abroad are certainly the next stages to move on to. In the future, as we expand globally, we will continue to evaluate what is necessary in order to pursue “Water Sustainability” and we will promote our activities even further as a company that is “Bringing Water to Life.” Kenji Naiki, Executive General Manager, Environmental Sustainability Strategy Department, Suntory Holdings Limited

2010 CSR Report Questionnaire Results 31 54 13 2 Understandability 39 50 10 1 We received responses from a total of 245 people regarding the Suntory Fullness of content Group 2010 CSR Report (as of the end of May 2010). We were delighted 32 48 14 51 Readability to receive so many valuable opinions and such high commendations. We 51 43 6 Suntory Group’s look forward to receiving more of your opinions and thoughts through our CSR activities 025 50 75 100 website so that we can continue to reflect these in the company’s activities （％） and in the annual publications. Very satisfied Satisfied No opinion Somewhat dissatisfied Dissatisfied

19 Suntory Group CSR Report 2011 / Responding to Our Stakeholders

31 54 13 2 わかりやすさ 39 50 10 1 内容の充実度 32 48 14 51 読みやすさ 51 43 6 当社のCSR活動 025 50 75 100 （％）大変満足満足どちらともいえないやや不満不満 Realizing “Suntory’s Identity,” and Expectations for Pioneering Activities Suntory Group’s As part of the diverse economic activities that make up business, company culture is Measures for “Cultural reflected in a company’s social contribution activities, and the performance of these activities Activities and Social that reflect the company’s identity is extremely important. I respect the fact that, based on Suntory’s spirit of “Sharing the Profit with Society” which has existed from the time of Contributions” Suntory’s founding, the company has developed unique, forward-looking activities and has continued on with that spirit throughout the years. This year marks the 50th anniversary April 12, 2011 of the Museum of Art and the 25th anniversary of the Suntory Hall, and as Suntory faces Suntory Museum of Art the challenge of developing pioneering activities that will bring a wider and larger group of people to enjoy the arts, I am looking forward to Suntory’s efforts to make complex In 2011, we will celebrate concepts entertaining. the dual milestones of 50 years since the opening of the Kiyokazu Washida, President of Osaka University Suntory Museum of Art and ● Profile Mr. Washida is a philosopher specializing in clinical philosophy and ethics. He is currently 25 years since the opening involved in a clinical philosophy project to tie together philosophical thinking with the of Suntory Hall. Mr. Kiyokazu various problems society has embraced. Washida and Ms. Miyuki Shiraishi shared their opinions Anticipating New Art and Cultural Possibilities, Including through with us on Suntory’s the Union of Music and Art “Cultural Activities and Social Since the time of its establishment, Suntory has been consistently involved in cultural Contributions,” which are activities and social contributions and at present, these cover very broad ground, from music, based on Suntory’s spirit art, academia, and sports through to social welfare. Understanding the needs of the times, of “Sharing the Profit with Suntory takes the standpoint of its customers and empathizes with the desire of many to lead Society.” an affluent and comfortable life. In the future, too, and no matter the economic times, I would like to see Suntory put more effort into education and enlightenment activities for the coming generations, such as for children, and for the company to seek challenges in new art and cultural possibilities, including looking at the union of music and art. Miyuki Shiraishi, Professor at Musashino Art University

● Profile Professor Shiraishi is a musicologist and music critic, specializing in 20th century music. Starting with John Cage, her research encompasses a broad range of contemporary music.

Suntory’s Response

Upon reaching the 50th anniversary of the opening of the Suntory Museum of Art, and based on the museum’s message of “Art Revisited, Beauty Revealed,” we would like to reveal a new world of beauty by freely and boldly uniting art and beauty without being bound by cultural categories. We intend to take on the challenge of representing new art in the future through, for example, the union of the old and the new and the union of art with music. In our contributions to the development of the arts, we will keep uppermost in our minds the proposal to make complex concepts entertaining. Tetsuji Katsuta, Senior Director, Suntory Foundation for Arts/Manager, Suntory Museum of Art

Looking ahead to the next 25 years, to help people feel closer to classical music, we are taking a new approach under the theme of “Music Moves our Hearts as One.” We are now preparing a variety of programs, which include sharing the enjoyment of chamber music, holding a spectacular autumn festival, putting into effect pioneering plans to explore the possibilities for music, and educating the coming generations. Into the future, we will continue our endeavors to make high quality music enjoyable for many. Tomomi Fukumoto, Manager, Suntory Hall

Responding to Our Stakeholders / Suntory Group CSR Report 2011 20 Relations with Customers

Quality Assurance We are deeply committed to quality assurance in all of our processes, from product planning and development to material procurement, manufacture, distribution, sales, and services, in order to offer safe and reliable products to our customers.

Promoting Quality Assurance throughout the Group ○ Quality Management System Audits for Group Companies We also began in 2009 to carry out quality management We are working to provide enhanced quality assurance system audits of each of our operating companies, conducted throughout the Suntory Group, both in Japan and overseas, by the Executive General Manager of Suntory Holdings Ltd.’s in order to offer products that are safe and reliable. Quality Strategy Planning Division. These audits verify the quality management situation among executives and staff who ● Our Philosophy Underpins Quality Assurance handle quality issues in each company. Through these audits we The Suntory Group has worked to ensure the quality of its determine the quality control situation in each company and the products and services ever since its founding, taking the position steps being taken to improve it. We are also striving to make that “the customer is number 1.” everyone fully aware of the Suntory Group Quality Management In 2004, we established the Suntory Group’s Quality Policy to Code we established in 2009. During the coming year and clarify our position on quality. All of our employees are constantly beyond, we plan to carry out these audits vigorously, particularly working to guarantee and improve quality. at major Group companies both in Japan and overseas.

The Suntory Group’s Quality Policy We continue to satisfy customers’ desires and maintain their trust by providing products and services that are safe and resonant with customer needs. 1. Each member of the Suntory Group places him/herself in the Meeting with Tipco F&B position of the customer and provides products and services in good faith. ○ Improving Global Quality Assurance 2. We provide our customers with accurate and clear information, listen sincerely to their opinions, and reflect their feedback in our As the sphere in which the Suntory Group conducts business products and services. extends even further around the world, we are concentrating heavily on improving quality assurance. In 2010, we expanded the 3. We observe laws and regulations. capabilities of our quality assurance center in China (Shanghai), 4. We place priority on the safety of our products and services. created the Monozukuri Center in Europe with the goal of 5 . I n t h e 2 1 st century, an era of globalization, we continue to improving quality levels at Group companies and with suppliers pursue the highest quality products and services by adopting in that region, and began preparations for creating a dedicated international standards. organization that will develop the Suntory brand overseas.

○ Quality Management System for Group Companies In 2009, we created the Suntory Group Quality Management Code as part of our Group Governance initiatives. We have also created Quality Policy Guidelines that indicate the approaches, actions, and judgment criteria that each company in the Group should maintain. We are steadily making them a matter of common knowledge among all Group companies in Japan The quality assurance center Technology guidance being given and overseas. in China (Shanghai) at a plant in Europe

● Groupwide Commitment to Quality Assurance Thorough Quality Control in All Processes We established a Quality Assurance Committee to promote quality assurance throughout the Group. The Committee works Grounded in the Suntory Group’s Quality Policy, our to identify and reduce major quality risks, and to move forward employees are continually working to maintain and improve on key strategic challenges related to quality. The Committee’s the quality in all of our process, from product planning and discussions are reported as appropriate to the Group Business development to material procurement, manufacture, distribution, Strategy Board and it shares and resolves quality issues faced by sales, and services. group management.

21 Suntory Group CSR Report 2011 / Relations with Customers ● Overview of the Process In 2010, we reviewed the assurance system in place for measuring the chemical Procurement residues from coffee beans used as an ingredient in BOSS canned coffee. Water

Production site visits Product planning and development Ingredients Manufacturing Delivery ○ Containers and Packaging: Strictly Assessing Components We have established our own strict standards for ensuring the Premium gifts safety of our containers and packaging. When procuring materials, Containers and packaging we obtain them from packaging manufacturers who themselves have obtained a certificate of analysis from an official body, Scientific evaluation (testing and analysis) and the Safety Science Institute also conducts test to make certain that the constituent materials comply with the relevant Traceability regulations. We carry out multifaceted assessments of performance and safety using cutting-edge testing and analytic technology. In addition, we conduct detailed analyses and tests to determine ● Plan and Development: Design Stage Check whether the container might affect a product’s flavor, whether We carry out scientific research and investigations along a product’s constituent parts might be absorbed by the container, with rigorous analysis and testing when planning and developing and the possibility of oxygen or ambient light affecting the quality a product, thoroughly confirming that it is safe and in full of the contents. All such activities are connected to the selection compliance with regulations so the customer can enjoy it in full and development of safe containers and packaging. peace of mind. ● Manufacturing: Conforming to International Standards ● Procurement: Evaluating All the Risks of Ingredients We employ testing equipment in all parts of the manufacturing ○ Water: Analyzing and Testing All Water Used to Check Safety process, including preparation, mixing, packing, and packaging. The Safety Science Institute is charged with scientifically assuring We also carry out multilayered quality checks, making sure that no the quality of Suntory Group products. Institute staff take regular foreign substances get into either the containers or their contents, samples of all the water used for products as well as the water and looking for container damage and leaks. We also firmly used in processes like cleaning from plants in Japan and overseas believe that using the correct processes to make products lays the to conduct analyses and tests to confirm its safety. foundations for quality assurance. Accordingly, we make note of and manage the details of all the jobs performed in each process. Additionally, to strengthen our “food defenses” (defenses against food terrorism) in our manufacturing plants, we have been gradually implementing the Food Defense Guidelines created in 2009 at our food and non-alcoholic beverage plants as well as our alcoholic beverage manufacturing plants. In 2010, we also started implementing the guidelines at distribution-related sites Regular testing by like our product storage warehouses. the Safety Science Institute As a company that conducts global business, the Suntory Group is united in its current efforts to obtain such certifications as the ○ Ingredients: Analyzing Every Imaginable Risk internationally recognized ISO 9001 standard for quality management. We have created Safety Risk Management Groups for handling each ingredient individually. They analyze all of the risks that can be envisaged at every stage from the production of the ingredients to the time of their final use. We are compliant with all laws and regulations and ensure safety. In regard to quality assurance of agricultural chemical residues in particular, we ascertain which agricultural chemicals are in use and also send away samples in advance of the purchase of ingredients so Shining a flashlight down Using computer If a defect is found, air shoots they can be analyzed, in order to confirm that they satisfy legal to photograph a can’s image analysis to from the nozzle (upper right) standards on chemical residues. inner surfaces check for defects to remove the can

Relations with Customers / Suntory Group CSR Report 2011 22 ● Premium Gifts: Ensuring the Safety of Premium Gifts ● Scientific Evaluation: Product Analyses and Tests We take the same position when it comes to confirming the The Safety Science Institute is a cross-functional organization safety of the premium gifts we use in sales promotions for our that addresses analytical science, microbial guarantees, products as we do with the products themselves. The teams we and biological safety. Using its expertise in these areas, it assesses organize to inspect premium gifts are composed of experts from the safety of the products that the Suntory Group manufactures 4 divisions. They apply their expertise in the advice they give and sells. The Institute analyzes and tests everything from the to Suntory’s Product Planning and Development divisions, and to ingredients, finished products, and their flavors to the containers the premium gift manufacturers. They also work together with the and packaging, processing aids, and the quality of the materials gift manufacturers to inspect the plants where the premium gifts in the production equipment that comes into contact with the are manufactured and to verify the ingredients, manufacturing contents of the products themselves. It checks the safety of those processes, and methods used for inspecting the finished products. items based on standards Suntory has set—standards that are In 2010, we established mechanisms and systems to check more exacting than the relevant laws. premium gifts from the customer’s perspective, ahead of every promotional campaign we conduct.

Safety Science Institute Examples of premium gifts attached to products ● Traceability: Instantly Checking a Product’s History We have been rolling out a traceability system at all our plants. ● Delivery: Commitment of Our Business Partners This system uses QR codes* (two-dimensional codes) that can Because we pay such particular attention to quality, we do what track the history of a product from its raw materials through to its we can to ensure that this level of attention reaches our customers manufacture and distribution. This enables us to instantly check in just the way we intend it to be. the history of a product that has been delivered to the customer as necessary. Then, if a potential issue is found with the ingredients, ○ During Transport container, labeling, or other aspects after the product has been We work to increase awareness at all of the companies who shipped, we have a system in place to immediately identify the assist us with distribution so that they understand our needs and shipping destination and take measures. work with us when it comes to transport and storage. Suntory *QR codes is a registered trademark of Denso Wave Incorporated. staff also make site visits to product warehouses and check how products are managed and stored there. ● Traceability System

○ At the Point of Consumption Ingredient manufacturer Suntory Group Distribution Consumer

We hold draft beer seminars for restaurant and bar operators so Temporary that consumers will enjoy tastier draft beer. Suntory staff also pay Ingredients Packaging storage Transportation Shipping regular visits to restaurants and bars to help ensure product quality warehouse at the point of consumption. In 2010, we created mechanisms and systems for bringing together and analyzing all the data coming into the Draft Beer Call Center that was established for consultations with businesses Trace ingredient and production history Track distribution history and shipping destinations that serve our draft beer. Trace back Trace forward

Draft beer seminars

23 Suntory Group CSR Report 2011 / Relations with Customers

Appropriate Information Disclosure ○ Disclosing Information That Is Accurate and Easy to Understand In our ongoing efforts to release appropriate information so that The Suntory Group believes information should be disseminated the information we provide to our customers is accurate and easy about quality assurance and related activities in an appropriate to understand, we give close attention to the wording used on our and easy to understand way to ensure customers’ peace of mind products and in our advertising. The Quality Policy Guidelines we and trust in the products and services we provide. formulated in 2009 set down our policy and stance regarding the disclosure of quality information. ● Easy to Understand Product Labeling In December 2010, we revamped our Japanese-language Our Quality Assurance Development Department reviews and website on Suntory’s Commitment to Safety and Reliability, checks product labels, as well as the language and depictions used the aim of which is to provide reliable information in a more in promotional materials and advertising, to ensure that they are approachable fashion. appropriate and comply with the law. It also keeps allergies in mind when investigating ingredients. Product labels on food contain not only the 7 items we are obliged to display under the Food Sanitation Law, but also another 18 recommended items.

Case Study: Preventing Illegal Consumption Website: Suntory’s Commitment to Safety and Reliability (in Japanese only) Containers display the “Alcohol” logo so that low-alcohol drinks like Chu-Hi are not mistaken for soft drinks. In addition, ● Voluntary Recalls we label our major products with the words “Contains Alcohol” While we do our utmost to assure quality, we also disclose on the lid and “Alcohol” written in Braille. information as appropriate when problems do arise. Voluntary product recalls are announced by posting notices Can lids display the words “Contains Alcohol” in newspapers. There were no recalls announced between so they are not mistaken for soft drinks. January 2010 and May 2011. The lid has “Alcohol” written in Braille so that persons with impaired vision do not mistake them for soft drinks. Commitment to High-Quality Ingredients: Häagen-Dazs Japan, Inc.

Containers display the Häagen-Dazs Japan, Inc. runs checks on and analyzes “Alcohol” logo so they everything from the milk that is the prime ingredient of its ice are not mistaken for cream to the components of the pasture and soil that will govern soft drinks. the makeup of that milk. We also search the world for and use stringently selected auxiliary ingredients such as fruits, nuts, The “Recycle” and chocolate that give our products their rich flavors. logo is displayed to promote recycling.

Consideration is given to the cattle-rearing environment

2010 ■ Deployed a quality management system 2011 ■ Improve quality governance for the entire Group ■ Improve quality assurance overseas ■ Boosted quality assurance overseas ■ Further improve quality at the point of consumption ■ Further improved quality at the point of consumption ■ Further enhance safe and reliable procurement ■ Enhanced safe and reliable procurement of main ingredients of main ingredients ■ Bolstered food defenses

Relations with Customers / Suntory Group CSR Report 2011 24 Communication with Customers Since our founding, we have given top priority to customer satisfaction. We value regular communications with our customers and reflect their feedback in our corporate activities.

Reflecting the Voice of Our Customers programs for all employees, including those in divisions that have few opportunities to hear the views expressed directly by our The Suntory Group values two-way communications with its customers. Our Discover the Customer’s Perspective Courses customers in the belief it has held since its founding that customer and Experience the Customer’s Perspective Program form the satisfaction should be given top priority. In 1976, we created the core of the project. In 2010, we increased the number of times Consumer Department to handle inquiries from customers. courses were offered and expanded our programs, resulting in the The office now operates as the VOC* Department under the participation of approximately 2,230 employees. Customer Relations Division. This has further improved our ability to deal with customer feedback in earnest and ensure that their views are reflected broadly in our corporate activities. *VOC: Voice of the Customer

● Flow of Customer Information

Customer Relations Division Related divisions Complaint Customer Discover the Customer’s Experience the Customer’s VOC Department Inquiry feedback Perspective Courses Perspective Program Suggestion Customer Analyze Center Consider Making Use of Customer Opinions measures Customer Response Sales Office/Branch We take customer feedback into account when it comes Investigate to quality improvements, new product development, and

Improve quality/Develop new products Develop improving our ability to provide information. We are also committed to offering products and services that are simple for all of our customers to use. We use customer feedback to make ● Details on Customer Inquiries, Feedback, and Complaints improvements in a wide range of fields, from designing containers (109,612 communications in 2010) and packaging for everyone to the equipment and services Management and Advertising provided at our facilities. business activities 6% Complaints*1 6% 13% Purchasing methods Making Expiration Date Labeling Easier to Understand 11% Products 52% Inquiries Promotional 2 campaigns In response to feedback from customers that they do not and feedback* Sales % know how to interpret expiration date labels, we changed the 87% 12 13% labeling on PET bottles and cans for soft drinks to make them Breakdown of Details of Feedback easier to understand. Customer Feedback

*1 Complaints: Includes expressions of dissatisfaction by customers about ● PET bottle labels products or corporate activities *2 Inquiries and feedback: Includes a wide range of questions and opinions expressed by customers other than complaints

● Customer Satisfaction Project The Customer Satisfaction Project is our attempt to nurture a corporate culture in which all of our employees keep the Before revision After revision customers’ perspective in mind in their work. We hold training

2010 ■ Improved customer satisfaction through accurate 2011 ■ Further improve quality and services for customers information disclosure throughout the Group ■ Strengthened our capacity for making checks ahead ■ Continue to promote corporate activities based on of time from the customer’s perspective prior to the customer’s perspective introducing new containers ■ Improve capacity to share and make use of customer ■ Bolstered the system for responding to customers feedback (VOC) in-house throughout the Group, implemented a customer support management system (JIS Q 10002)

25 Suntory Group CSR Report 2011 / Relations with Customers Measures for Healthy and Comfortable Lifestyles The Suntory Group offers a variety of products and services that help customers to lead lives that are healthier and richer.

Contributing to Health Program for Creating New Value Suntory is working broadly to help our customers lead healthier Suntory’s Institute for Health Care Science is at the center of our and richer lives by offering products and services matched to their research and development projects related to foods for specified needs and preferences, ever mindful of their health. health uses and health foods. Its mission includes searching for We develop food for specified health uses (FOSHU) and materials that will contribute to health, scientifically demonstrating health foods bearing in mind that these products and services their beneficial properties, and delivering high-quality, safe, with scientifically demonstrated effects and safety are meant to and reliable products that can help even just one person to lead contribute to people staying healthy. Accordingly, we have been a bright, healthy, and richer life. Furthermore, our specialized working to verify through up-to-date scientific means and clarify research divisions such as the Safety Science Institute and our using established technologies the usefulness of the natural effects Frontiers of Value Centers (the Institute for Microbial Science, of foods that humans have long consumed. the Institute for Plant Science, and the Institute for Water Science) The basis for the Suntory Group’s philosophy of “In Harmony apply their distinctive fields of expertise and unique technologies with People and Nature” lies in the belief that “Wellness Life” to work together horizontally across the Group with the research —a life that is healthy, beautiful, and spiritually rich—is supported and development divisions at each of our business enterprises. by the fact that human beings draw on their inherent ability to stay healthy as they live in harmony with nature and take ● Announcing Research Results advantage of nature’s powers. The research and development divisions in the Suntory Group collaborate on research with Japanese and overseas universities as ● Sales of Food for Specified Health Uses well as external research organizations. Their results are released to We released Kuro Oolong Tea OTPP in 2006, after applying the world at large through presentations at academic conferences research showing that the polymerized polyphenols peculiar to and in scholarly publications. oolong tea have a potent ability to inhibit fat absorption. In 2007, we released Goma Mugicha, a sesame barley tea suitable for people with high blood pressure that contains sesame peptides Contributing to Healthy and Comfortable Living: Tipness Ltd. extracted from sesame seeds. Tipness Ltd. is responding to the growing interest in health among people of every generation by offering up-to-date training gyms and a full line of studio conditioning programs that help with everything from fat burning to conditioning and dance programs. The company also operates Tipness Kids, a fitness school brand for children, and the Tipness e-Method health and exercise support service for companies.

Kuro Oolong Tea OTPP and Goma Mugicha

● Unraveling the Function of Sesamin Taking on the challenge of finding the scientific basis for why Pursuing programs that sesame is good for our health, we successfully determined contribute to human health the workings of sesamin, a microscopic component of sesame. We brought it to market in 1993 in the form of our first health Dedicated to Safety and Reliability: Suntory Wellness Ltd. food product. In 2003, we released Sesamin E-Plus, which was even more effective due to the combination Suntory Wellness Ltd. obtains the ingredients for its products of vitamin E and tocotrienol. from around the world. It employs a traceability system that can determine exactly which materials are being used from which producing region, at which plant a product was made, and when. It enables us to check and control quality carefully at every step of the way, from the procurement of ingredients and manufacturing in plants to the shipping and delivery of products.

Sesamin E-Plus

Relations with Customers / Suntory Group CSR Report 2011 26 Tackling Alcohol-related Issues We have the responsibility as a company that manufactures and sells alcoholic beverages to actively deal with alcohol-related issues.

A Dedicated Body for Addressing Issues Awareness-raising Initiatives with Industry Partners

In 1976, the Suntory Group formulated the Suntory Advertising In Japan, we are a member of the Brewers Association of Code, making it an industry leader in exercising self-regulation Japan, the Japan Spirits and Liquor Makers Association, and other in its promotions and advertising related to alcoholic beverages. bodies. As a member of these organizations, we create posters We subsequently established the ARP* Committee dedicated against underage drinking that target junior and senior high school to addressing alcohol-related issues and the ARP Bureau (now students, organize campaigns soliciting slogans, run awareness- the ARP Department). We are working to raise awareness about raising advertisements responsible drinking both within and outside the company, in newspapers and conduct in-house checks on how alcohol is sold and advertised, magazines, and add and have joined, work with, and support research organizations warning labels to that deal with the matter. product packaging *ARP: Alcohol-related problems aimed at preventing drinking by pregnant and nursing mothers. STOP! Underage Warning labels on Raising Awareness of Responsible Drinking Drinking logo product packaging Since 1986, we have been running a moderation advertising campaign in Japan’s major national newspapers urging customers Global Initiatives to Reduce Alcohol Issues of all legal ages (20 or older) to exercise moderation in drinking alcohol. The advertisements appeared more than 110 times The World Health Organization (WHO) regularly holds by the end of 2010. discussions with national governments and specialists from public health organizations about how to reduce alcohol-related problems. In 2010, the alcoholic beverage industry as a major stakeholder adopted a global strategy aimed at reducing harmful uses of alcohol. As a member of the Global Alcohol Producers Group (GAP)*, we are partnered with major manufacturers of alcoholic beverages around the world. In anticipation of a WHO review to be conducted in 2013 of how our strategies are being Moderation advertising campaign implemented, we are pursuing a variety of CSR initiatives such (December 2010 version) as working to prevent drunk driving in developing and newly emerging countries, setting our own standards, and working to Raising Awareness and Preventing Drunk Driving deal with illegal drinking. *GAP is an alliance of major manufacturers of alcoholic beverages around The Suntory Group is strengthening its efforts to prevent drunk the world that aims to resolve alcohol-related problems. driving. These include advertisements that warn people not to drink and drive, special websites, and posters for restaurants and bars. We have also introduced a designated driver program—an area Raising Awareness of Responsible Drinking: Dynac Corp. in which the U.S. and Europe have taken the lead—for when we Dynac Corp. posts stickers prohibiting give tours of our plants. We double check which people will be underage drinking and drunk driving at driving when they arrive and again in the tasting room, and give all its restaurants. non-alcoholic drinks to the drivers. We no longer hold tastings of alcoholic beverages at shops in line with industry standards to ensure that we are engaging in responsible advertising and sales of alcoholic beverages.

2010 ■ Changed the times when we refrain from airing TV 2011 ■ Promote appropriate responses to alcohol-related commercials for alcohol-related products problems throughout the Group ■ Added warning labels aimed at preventing drinking by ■ Step up the dissemination of information about pregnant and nursing mothers responsible drinking ■ Participated in initiatives dealing with alcohol-related ■ Continue to participate in initiatives dealing with alcohol- problems in 18 developing and newly emerging nations, related problems in developing and newly emerging nations to reduce the damage caused by harmful uses of alcohol

27 Suntory Group CSR Report 2011 / Relations with Customers Activities of Overseas Businesses

United Kingdom France Morrison Bowmore Distillers Ltd. Orangina Schweppes Group

イギリスフランス ■ Obtained ISO 9001:2008 Certification ■ Helping Customers with Their Diets by Supplying Information Morrison Bowmore Distillers has received ISO 9001:2008 for It is key for customers to have optimal nutritional information our quality management system. The system focuses on continual so that they can better control their overall diet. Accordingly, we improvement and customer satisfaction by ensuring our products, display nutritional information and manufacturing processes, and Guidelines for Daily Calorie Intake services surpass our customers’ Amounts on all our products. expectations. This is achieved Our products have a role to play through rigorous implementation in helping customers to achieve of our quality control procedures. a balanced diet when consumed in a reasonable way and integrated into a healthy lifestyle.

Quality assurance at Display of nutritional product packaging information and Guidelines for Daily Calorie Intake Amounts

Mexico Singapore Suntory Mexicana, S.A. de C.V. Cerebos Pacific Ltd.

シンガポール ■ Obtainedメキシコ ISO 9001:2008 Certification ■ Playing a Role in Customers’ Lives through Our Products We are constantly working to maintain and improve quality We held a variety of events in 2010 to celebrate with our through quality training for employees customers the 175th anniversary of our BRAND’S line of health and other initiatives based on the supplements. We continue to supply products with scientifically Suntory Group’s Quality Policy. demonstrated effects that help our To maintain and control our quality customers in how they live. assurance system at the highest level, We are continuing our pursuit in we obtained the international all regions of customer satisfaction ISO 9001:2008 certification for quality through customer relationship management systems in February 2011. management (CRM) initiatives to predict what customers will want. Approximately 130,000 people visited the BRAND’S Health Museum in celebration of ISO 9001 certification the line’s 175th anniversary

Germany New Zealand Weingut Robert Weil Frucor Group

ドイツニュージーランド ■ Uncompromising Pursuit of Quality as a Manufacturer ■ Conducting Customer Satisfaction Surveys Annually Ever since our founding in 1868, Weingut Robert Weil has Customer satisfaction surveys—known as Coal Face surveys been highly praised for its pursuit of high quality. We have (surveys on the actual frontlines)—are conducted annually reduced the volume of grapes we harvest at these high-quality for our sales staff. These surveys are an important feedback tool Grafenberg vineyards to 40 hr/ha*—less than half the average for us to understand what the wholesalers, retailers, and bars yield for Germany—in order to and restaurants who are our customers perceive in working maintain quality. Additionally, we with us. The results of these surveys are a way for us to collect maintain the quality of our wines information that can be used in helping the Frucor Group at the fermentation stage by taking improve its services. the time to ferment the grapes carefully in large tanks specific to each vineyard. *A unit for expressing labor efficiency Harvesting grapes by hand

Relations with Customers / Suntory Group CSR Report 2011 28 Relations with Business Partners

Fair Dealings/Cooperating with Business Partners We are supported in our business activities by our business partners. Accordingly, we work with these partners to mutually improve quality and ensure safety based on a foundation of fair competitive opportunities, evaluation, and selection.

Ensuring Fair Dealings with Suppliers of new standards. In addition, we began in 2009 to provide management assistance to farmers who grow hops—one of the The Suntory Group has explicitly laid out Standards for Business principle ingredients of beer—to ensure that this ingredient Conduct that governs relations with business partners. These is stably procured. standards strongly prohibit employees from accepting gifts, entertainment, or other actions that violate social mores. We offer fair competitive opportunities to each company in accordance with our Purchasing Control Regulations and Business Partner Selection Standards. At the same time, we evaluate each of our business partners fairly on such points as the quality of their Supporting farmers who products and services, supply capacity, finances, safety assurance, grow hops, the main and environmental initiatives. We then make our decisions on ingredient of beer whether or not to select or continue doing business with each partner based on those evaluations. Strengthening Partnerships to Improve Quality We also actively collaborate with our business partners to ensure safety and environmental protection initiatives. We value the opportunities to carry out dialogues with individual business partners, aiming at enabling our business partners ● Complying with the Subcontracting Law and the Suntory Group to mutually improve their quality We architect and operate our accounting system in compliance and business processes. Once a year, we evaluate our business with the Act against Delay in Payment of Subcontract Proceeds, partners and notify them of the results of these evaluations. Etc. to Subcontractors (the Subcontracting Law)*. This system In addition, we provide information and exchange views on an registers information regarding payment and other conditions at ongoing basis, in order to implement improvements. We also the time an order is placed for materials and product ingredients. hold separate Quality Conferences where we discuss quality If payment procedures are not in accordance with the original improvements and other matters, and we select materials schedule, then an alert is displayed on the management screen, and advance joint development in order to reduce environmental preventing issues due to late payments and other problems. We impact and promote universal design. had no violations of the Subcontracting Law in 2010. *As of December 2010, Suntory Business Expert Ltd.’s Purchasing Department (Raw Materials) has 47 business partners (suppliers) applicable under the Subcontracting Law (about 19% of its business dealings by value), and the Packaging Material Development Department has 24 (about 2% of its business dealings by value)

Onsite inspections ● Introducing Electronic Billing for Business Partners of oolong tea fields In 2010, we introduced an electronic billing system with almost all of our business partners. The introduction of this mechanism ● Reflecting Feedback from Business Partners will contribute much to diversifying the ways in which our business In addition to our daily business interactions, we have set up partners raise funds (early capitalization). We are also working opportunities for regular dialogues with our business partners. to reduce the risk that a response will be missed by unifying We explain the Suntory Group's philosophy at policy briefing the way we deal with payment conditions for the companies sessions and quality workshops, and have our business partners to whom we subcontract. answer questionnaires to let us know the degree to which they understand our thinking and give us their thoughts.

Building Trading Frameworks with Attention to CSR The questionnaires are thoroughly analyzed and their content reflected in our business activities. The Suntory Group’s Business Partner Selection Standards also touch on CSR issues such as consideration for the environment and compliance. However, we now need to create specific, Safe and Eco-friendly Distribution clearly documented standards and regulations in order to clarify The Suntory Group created the Safety Committee in partnership our social responsibility in procurement. with the distribution affiliates to which we contract transportation To promote procurement based on CSR principles, in 2010 operations. As of the end of 2010, the Committee had 250 we created a body of standards for evaluating the activities of members from 60 companies. The Committee promotes initiatives our business partners and selecting them from the perspective of in such areas as safety assurance, environmental concerns, CSR, and developed a framework for considering the formulation and risk management.

29 Suntory Group CSR Report 2011 / Relations with Business Partners ● Enhancing Safety at Partner Companies This greatly exceeds the 18% certification rate (according to The Safety Committee has published Five Principles for a December 2010 Japan Trucking Association survey) for the Distribution Safety. We ensure that all employees at each trucking industry as a whole. company are aware of these principles. Additionally, the In 2008, we expanded the scope of certification from direct committee’s administrative bureau* visits the sites of each contractors to include secondary affiliates, and we are striving to company and inspects the state of their safety measures. enhance safety management in dispatching and transport. *The bureau is made up of managers and operators from the Distribution Service & Ordering Department of Suntory Business Expert Ltd., and the ● Green Management Certification at Partner Companies Safety Department of Suntory Logistics Ltd. As part of our commitment to reducing our environmental impact from distribution, we are encouraging our affiliates to gain ● The Safety Committee’s Joint Activities certifications for Green Management*, as well as ISO 14001, Each year, we hold a Safety Promotion conference attended by Eco Stage, and other certifications. As of the end of 2010, safety representatives from 120 sites nationwide. The conference 77 of our distribution affiliates’ total of 87 sites (89%) have is used to promote safety at each company by sharing information obtained these certifications. We will continue to promote through the showcasing of outstanding initiatives and making sure obtaining certification. We also collect data on CO2 emissions people are thoroughly educated in safety through study groups and by our distribution affiliates in accordance with the revised Law contests, to say nothing of deploying alcohol detectors at all sites. Concerning the Rational Use of Energy. The emissions data is based on distances traveled, fuel used, load volumes, and other data for our distribution affiliates, by month and by vehicle. We then use this data to set reduction targets. *Green Management is a certification promoted by the Foundation for Promoting Personal Mobility and Ecological Transportation, in accordance with the Environmental Action Plan of the MLIT.

● Preparing for Disasters and Emergencies 10th Safety Promotion Conference (2010) Alcohol detector installation We have created a project with our distribution affiliates in order to respond to disasters and emergencies. The project includes ● Enhancing Safety Management at Partner Companies establishing the operational level of the “171” emergency hotline We are pursuing certifications under the Top Safety Site Program phone number at all sites. We have also created an action plan being led by the Ministry of Land, Infrastructure, Transport and for an earthquake with an epicenter directly below the Tokyo or Tourism (MLIT). Our goal in doing this is to maintain a minimum Kinki metropolitan areas. This plan includes making use of the standard in the safety management organizations of our distribution “171” emergency hotline and satellite telephones, arranging for affiliates at all times and continually improve these systems. emergency shipments of Suntory Natural Mineral Water to affected Certifications have been obtained for 78 of the 83 dispatching areas from sites other than the ones that would normally serve and shipping sites operated by the Suntory Group’s distribution their location, and also ensuring shipments to non-affected areas. affiliates (as of the end of 2010), for a certification rate of 94%.

2010 ■ Created a mechanism for drafting the CSR 2011 ■ Launch a project to promote CSR in procurement procurement policy ■ Maintain and enhance the promotion of safety ■ Worked toward being certified to a Top Safety Site, in distribution Green Management, ISO 14001, and Eco Stage

Activities of Overseas Businesses

New Zealand ■ Working with Suppliers to Ensure the Quality of Raw Materials Frucor Group Frucor Group requires all suppliers to adhere to social principles with regard to their employees and to comply with local environmental policies and standards. All raw materials procured by the Frucor Group ニュージーランド undergo a rigorous inspection process, as do the manufacturing processes at the suppliers, to ensure compliance with our quality standards.

Relations with Business Partners / Suntory Group CSR Report 2011 30 Relations with the Local Community

Contributions Rooted in the Local Community We are intent on continuing to exist as a company in harmony with the local community. As such, we value initiatives and communications as a member of that community.

● Major Charitable Donations Coexisting with Communities around Our Plants We are making efforts to engage in dialogue with local 2011 residents through resident’s associations in those areas where ○ Great East Japan Earthquake the Suntory Group’s main plants are located. We also work to Donations totaling 300 million yen to Iwate, Miyagi, provide venues for interacting with the local community, such and Fukushima prefectures as by opening parks and trails created on the grounds of some *Additional assistance plans are noted below. of our plants to local people. We have third parties conduct ○ 2011 Christchurch (New Zealand) Earthquake environmental impact assessments when we construct new plants Donated 6.2 million yen to the New Zealand Red Cross and work to get the understanding of the people who neighbor ○ Flood disaster in Queensland, Australia the site. We also make efforts to harmonize the plants with nature Donated 8 million yen to the State of Queensland by preserving the sites’ biodiversity and pursuing greenification initiatives on their grounds. Our plants and offices around the country engage in environmental beautification efforts by cleaning 2010 up the vicinity and participating in garbage cleanups organized by ○ 2010 Canterbury (New Zealand) Earthquake local governments. Additionally, we hold parent-child tours and Donated 3.25 million yen to the Christchurch Earthquake Appeal fund other events at our plants and continue with promotional activities ○ Foot-and-mouth disease outbreak in Miyazaki prefecture that involve both having fun and learning. Donated 10 million yen to Miyazaki Prefectural Community Chest

● Dialogue with Customers through Plant Tours ○ Chile Earthquake Made a 5 million yen donation to the Chilean Embassy We offer plant tours of our breweries, whisky distilleries, wineries, and natural mineral water plants so that more people ○ Haiti Earthquake can become familiar with our dedication to good taste and safety, Made a 10 million yen donation to the Japan Red Cross our concern for the environment, and the approaches we take through our products. Responses to the Great East Japan Earthquake Suntory Holdings Ltd. assisted with the rescue and reconstruction activities in the disaster area following the Great East Japan Earthquake of March 2011. This assistance was in the form of Natural Mineral Water contributions totaling 300 million yen to Iwate, Miyagi, Tour of the Minami Alps and Fukushima prefectures, and providing approximately 1 million Hakushu Water Plant 550 mℓ PET bottles of Suntory Natural Mineral Water (Minami Alps) as relief supplies. Support for Disaster Zones If the area is to achieve a robust revival, we also believe that it is important to provide it with relief in ways that will contribute The Suntory Group provides help to the people and places to building hopes for the future, such as by helping local industry afflicted by disasters by providing disaster relief contributions and to revive and new businesses to start, as well as by providing drinking water when large disasters strike Japan or other countries. children with educational support. Accordingly, we decided to set Suntory Foods Ltd. has also installed approximately 4,200 aside one yen from each can of soft drinks or beer (a category that emergency beverage vending machines at government facilities includes beer, happoshu, and newer genres) sold, as a contribution and hospitals that dispense products free of charge during expected to total approximately 4 billion yen*. emergencies such as disasters. We will We will continue to make every effort to provide help to be working to increase the number of everyone in the disaster area. these machines we have installed. *Provisional calculations based on 2010 sales performance.

Emergency beverage vending machine

31 Suntory Group CSR Report 2011 / Relations with the Local Community Cultural Activities and Contributions to Society Since its founding, the Suntory Group has contributed to culture and society with the aim of enriching lives and culture based on the spirit of “Sharing the Profit with Society.”

Ongoing Social Contributions ● Suntory Hall In the spirit of our founder, Shinjiro Torii, who called for “Sharing Suntory Hall opened in 1986 as Tokyo’s the Profit with Society,” we have maintained his principle by first dedicated concert hall. To mark the returning profits to society. We have been particularly active when Hall’s 25th anniversary, we have further it comes to charitable and social welfare activities directed toward enriched our lineup of performances by the people from less fortunate circumstances. Suntory has been world’s leading musicians and of diverse programs of our own design, all under the ever mindful of changing social needs in the social contribution theme of “Music Moves our Hearts as One.” activities it has continued carrying out to this day.

● Suntory Foundation for Arts ● Support through the Social Welfare Organization Hojukai The Suntory Foundation for Arts was established in 2009 with the Hojukai was founded in 1921 as a free clinic. In 2011, it celebrated goal of creating synergy between activities conducted in the fields its 90th anniversary. Now incorporated as a social welfare of music and the arts by the Suntory Music Foundation and Suntory organization, it operates Tsubomi Nursery School (established in Museum of Art, as well as to make new contributions to society. 1975), a special care facility for seniors called Takadonoen (1974), a low-cost facility for seniors called Amanoen (1976), and the 〇 Suntory Museum of Art general-purpose welfare facility Domyoji Takadonoen (2008). The Suntory Museum of Art opened in The organization has responded to more current needs in 1961 with a basic principle of Art in Life. This recent years by also providing in-home care services such as year, 2011, it celebrates its 50th anniversary home-visit care (helpers), ambulatory care (day services), and will hold exhibitions centered on its and in-home care support (care plan). collection, which includes national treasures and important cultural assets, under the theme of “Art Revisited, Beauty Revealed.”

〇 Music Division The Music Division was established in 1969, with the aims of developing Western music in Japan and improving music culture. The division promotes classical music and nurtures budding composers through such Domyoji Takadonoen, Socializing at Takadonoen programs as the Suntory Music Award, the operated by Hojukai and Tsubomi Nursery School Keizo Saji Prize, and the Akutagawa Award for Music Composition.

Helping to Enrich Lives and Culture ● Suntory Foundation The Suntory Group’s dedication to enriching lives and culture The Suntory Foundation was established continues to this day. Our first step in that direction was the in 1979. It awards grants for international Suntory Museum of Art, which opened in 1961 and celebrated its and high-caliber academic research, and 50th anniversary in 2011. Also in 2011, Suntory Hall, which opened nurtures and provides grants to outstanding in 1986, marked its 25th anniversary. The Suntory Group has made individuals, through such programs as the Suntory Prize for Social Sciences and great efforts to support culture in a variety of ways, including the Humanities and the Suntory Prize for operation of these 2 facilities. In addition to operating cultural Community Cultural Activities. facilities, today we also conduct a diverse range of other activities such as providing support for the arts, scholarships, and sports. ● Suntory Foundation for Life Sciences Preceded by the Institute of Food Chemistry, which began operating in 1946, the Suntory Foundation for Life Sciences was established in 1979 as the Suntory Institute for Bioorganic Research. The Institute was renamed in January 2011 and incorporated. In addition to its research activities, the foundation also awards grants for young researchers.

Relations with the Local Community / Suntory Group CSR Report 2011 32 Sporting Activities That Inspire and Excite Employees Support for Social Contribution We participate in corporate sporting events and support sports In 2010, 11 employees took advantage of our Volunteer Leave promotion activities. We have our own rugby and volleyball sports Program to take part in voluntary activities at senior facilities teams that compete in league games. Both teams place special operated by Hojukai and other programs. We have also created a emphasis on promotional activities targeting youths, planning and Volunteer Activity Support Program which subsidizes the purchases carrying out community-based activities such as holding rugby and of equipment, materials, and other items by NPOs at which our volleyball classes mainly during the off-season. employees volunteer. These NPOs work in such areas as social welfare, environmental conservation, and international exchange. The Suntory Group also encourages its employees to participate in the various activities the Group operates and is working to raise their awareness about activities that contribute to society.

Rugby team Sungoliath Volleyball team Sunbirds

Strengthening Support for Youth Education The Suntory Group’s cultural facilities and sports teams provide children with opportunities to meet top athletes and come into Volunteer activities at Hojukai Gardening volunteers at Amanoen contact with genuine works in fields such as sports, music, the arts, and the environment. Since Japan’s birth rate is declining, it is increasingly important to help coming generations in their Supporting Park Greenification: Suntory Flowers Ltd. development. Given such circumstances, we are enhancing our activities in this area and helping to form the characters and Suntory Flowers Ltd. collaborates on greenification programs individuality of children. by supplying and planting flower seedlings at various public parks in order to give people in their local community Suntory Hall hosts a joint program with New York’s Carnegie “lives with flowers.” Hall called “Carnegie Kids at Suntory Hall.” Under this program, children aged 3 to 6 years old can spread themselves out freely on a carpet and listen to music performed by leading musicians.

Park greenification

Supporting the Kiritappu Wetland Trust: Häagen-Dazs Japan, Inc. Carnegie Kids 2010 Since 2007, we have been providing support to the Kiritappu Wetland Trust located in the town of Hamanaka in the heart of The Suntory Museum of Art operates an education program that the Konsen district in Hokkaido, a producer region for the milk provides a venue for exchanges linking visitors with the museum, that is the key ingredient of our product. In addition to providing and also holds a variety of other programs tied into individual financial support, every October, alongside local residents, exhibitions such as lectures and workshops. Additionally, we are employees have been taking part in volunteer activities designed also actively working to provide guidance about sports through to preserve the scenery of the wetlands. our rugby and volleyball teams.

Supporting the Kiritappu Wetland Trust

A workshop for parents and children under our Rugby classes program for handing down Japanese culture

33 Suntory Group CSR Report 2011 / Relations with the Local Community Activities of Overseas Businesses

Mexico Thailand Suntory Mexicana, S.A. de C.V. Tipco F&B Co., Ltd.

タイランド ■ Receivingメキシコ Plant Facility Tours ■ Contributing to the Local Community in a Variety of Ways Suntory Mexicana is actively working to promote better Since 2008, we have been providing beverages to the Red communications with the local community by, for example, Cross for blood donors. We have also conducted a range of offering plant tours to local university students. Such initiatives other activities such as providing scholarships to schools in areas should help give people a better understanding of the Suntory neighboring our plants, helping children with disabilities through Group’s business in Mexico. various programs, providing medical equipment to hospitals, and participating in local religious ceremonies.

Local university students on Supplying drinks to a blood a plant visit donation drive

France France Louis Royer S.A.S. Orangina Schweppes Group

フランスフランス ■ Contributing to Local Cultural Activities ■ Support for the EPODE Program Louis Royer supports many local cultural activities, including We support the EPODE Program for preventing childhood the Cognac Marathon, La Route des Tonneaux (a festival that obesity. EPODE is a community-based obesity prevention recreates how cognac barrels were shipped in the past), La Part program that works to promote the adoption of healthy diets des Anges (a charity auction), and the Cognac Blues Passion and active lifestyles. The program provides guidance with the Festival (a music festival). aim of identifying issues in individual households and improving dietary habits.

Demonstration of traditional EPODE Program barrel making

Singapore France Cerebos Pacific Ltd. Château Lagrange S.A.S.

シンガポールフランス ■ Helping Impoverished Households through Glass Bottle Recycling ■ Interactions with Local Communities at Special Events In 2010, we launched the Hope in a Bottle Project as one We strive to interact with the local community through our of the activities we undertook to commemorate the 175th participation in a charity auction and by donating prizes to local anniversary of our main product, BRAND’S. Under this project, sporting events and organizations. Château Lagrange also helps at the glass bottles used for BRAND’S products are reused as the internationally famous Medoc Marathon by setting up water building materials for the homes of impoverished households dispenser stations for the approximately 8,000 runners who take in Thailand’s Pathum Thani and part every year. In September China’s Guangdong provinces. 2010, we participated in the 26th Employees in both countries Medoc Marathon. have participated as volunteers and lent their hands to the construction work.

The Hope in a Bottle Project The Medoc Marathon

Relations with the Local Community / Suntory Group CSR Report 2011 34 Relations with Employees

Basic Philosophy of Human Resources, and Hiring and Employment Situation We are committed to creating an organization where everyone works autonomously as a professional and continues to create new value for our customers and stakeholders.

Basic Philosophy of Human Resources ● Average age and average length of employment (as of December 31, 2010) (years) We are committed to creating an organization where everyone 2008 2009 2010 works autonomously as a professional and continues to create new value on the basis of the “Yatte Minahare—Go for it!” spirit. Average age 39.3 38.6 38.3 The Suntory Group is committed to the development of both our Average length of employment 16.7 16.0 15.4 employees and the company, recruiting widely for employees with entrepreneurial spirit who want to broaden their own potential ● Number of employees and providing them with opportunities to make maximum use of (Persons) their capabilities. To achieve this, our fundamental approach to 2008 2009 2010 human resources is: Male 130 155 161 ●hiring on the basis of the individual without regard to New graduates nationality, gender, age, disability, or other factors, Female 50 59 27 ●assigning the right person to the right job in order to Male 51 44 18 New hires get the most out of each individual’s capabilities, Female 10 8 5 offering compensation based on performance, in accordance ● Total 241 266 211 with each employee’s role and results.

● Number of resignees and reasons A Committee to Promote Human Rights (Persons) 2008 2009 2010 The Suntory Group has banned all forms of discrimination and abuse under its corporate behavior standards. We have created Retirement age*1 128 208 166 the Committee to Promote Human Rights Education, whose goal Personal reasons 44 38 25 is to promote respect for human rights and eliminate all forms of Company reasons 0 0 0 discrimination, including those based on nationality, gender, age, Other 2 6 7 and disability. Suntory has also created human rights education and awareness programs at all levels and is continually engaged in Total*2 174 252 198 consciousness-raising efforts throughout the company so that all Turnover rate*3 (%) 0.90 0.78 0.51 employees will have a proper awareness of human rights. *1: Retirement age includes people who chose to retire themselves *2: Includes regular employees only Hiring and Employment *3: Turnover rate is calculated based on resignees excluding retirees

● ● Employee data (as of December 31, 2010) (Persons) Retention rate of new graduate hires (%) 100.0 99.3 2008 2009 2010 97.8 95.4 92.7 100 90.8

Male 35 39 41 80

Female 0 0 0 60 Directors 35 39 41 40 Male 1,339 1,407 1,408 20 0 Female 84 96 109 012345 (number of years elapsed) Manager level 1,423 1,503 1,517 Male 2,605 2,521 2,512 *Calculated based on new graduate hires from 2003 to 2005 Female 835 859 860 Non-manager level 3,440 3,380 3,372 *This applies to 4,889 employees who have an employment Employees 4,863 4,883 4,889 contract with Suntory Holdings Limited and work at such Group Male 281 351 435 companies as Suntory Holdings, Suntory Beverage & Food Ltd., Female 168 94 90 Suntory Products Ltd., Suntory Wellness Ltd., Suntory Liquors Ltd., Contract employees* 449 445 525 Suntory Beer & Spirits Ltd., Suntory Wine International Ltd., and Suntory Business Expert Ltd. Temporary employees − 719 743

*Contract and temporary employees: includes non-regular and part-time staff

35 Suntory Group CSR Report 2011 / Relations with Employees Development of Human Resources Based on a fair and reasonable human resource system, we are working to create an environment where employees can develop and harness their capabilities to the full.

Develop and Harness Capabilities from Group companies overseas were invited to attend a Global Human Resources Meeting, marking the start of activities that will The Suntory Group’s human resource system focuses on lead to exchanges and even better use of personnel. developing and harnessing the capabilities of each and every employee. Our philosophy is to offer fair and reasonable compensation in accordance with the employee’s stage of capability development, and the results shown from harnessing those capabilities. The following 3 themes are central to this basic philosophy. ●Each employee takes on increasingly difficult targets and challenges, with a spirit of improvement ●The company offers employees opportunities for skill and Global Human Resources Meeting career development, and supports their self-actualization ●Compensation is fair, and clearly reflects the employee’s role ● “Global Challenge” Internal Open Recruiting System and results In 2010, we implemented the “Global Challenge” internal open recruiting system with the objective of developing human Fair and Reasonable Evaluations resources with a global perspective. 29 of the 107 people who applied in 2010 were accepted and are now studying in their Four times a year, the Suntory Group holds interviews between respective programs. Starting in 2011, we plan to have employees superiors and subordinates where we strive to provide evaluations from Group companies overseas participate in the system in that each employee can agree with. Based on individual Work Plans addition to their peers in Japan. created at the beginning of the year, our employees are evaluated by reviewing their levels of achievement and the process of their ● Global Challenges efforts. Feedback interviews that follow the evaluations are used to Name Details pass on the results, discuss expectations and areas for improvement, and encourage understanding of both the evaluation and further Global Leadership Acquire the skill kit needed by managers development and growth in their capabilities. Training who will be active globally Career Challenge Acquire the skills needed to do Evaluation System by Labor and Management Program business globally Company-Sponsored Acquire an M.B.A. at a business school in The labor union at the Suntory Group surveys its members Business School Japan or overseas on the 4 rounds of interviews held each year to examine how reasonable they were for each employee, ask whether the Overseas Trainee Go to a Group company, or participate in Program a program from an outside institution or interviews were conducted fully, and if employees were able to school in an unadvanced area (a developing understand the evaluation results. The results of the surveys are nation, etc.), and acquire language skills, communicated to executive management, and are used to manage communication abilities, or knowledge of and revise the human resources system. Additionally, if any a foreign culture shortfalls in the interviews were seen, management questions the superior who conducted the evaluation and provides guidance. Supporting Career Development Developing Human Resources Worldwide We place emphasis on the chain of human resource As a truly global multi-faceted food and beverage company, it development in career development. In this chain, people grow is crucial that the Suntory Group develops human resources who in a process in which each person helps in the development of can do excellent work globally so the company may achieve even another, and we focus on training on the actual frontlines. In greater things. addition to this frontline training, we have created a core training The Group is united in its efforts to improve its systems for program for each stage of the human resource management cycle developing human resources to engage in global business. from hiring to the end of employment, and provide in-service These efforts include implementing our new Global Challenge training in all divisions including sales and manufacturing. training program. Furthermore, in 2010 human resource managers

Relations with Employees / Suntory Group CSR Report 2011 36 ● Career Development Support for All Employees ● Common Programs for Group Companies in Japan We have in place a Career Support Section that puts itself A SUNTORY Self Development Program was established that into the shoes of individual employees to help them develop can be enrolled by all employees. All Group company employees autonomous careers, by providing individual consultations and in Japan can choose and enroll from approximately 450 courses workshops with expert advisers. Workshops are conducted on offered in the common program. an application basis for all employees at 4 years and 10 years after joining the company, and for employees in their 40s and 50s. ● Employee Awareness and Corporate Culture Surveys The Section helps employees to reexamine their careers at To find out about each employee’s current work conditions and milestones in their company lives and in turning their futures into confirm their awareness towards work, Suntory implements a Self something even more positive. Reporting/Assessment survey for all employees at the beginning of the year. We also monitor the consciousness of members at work ● Assign the Appropriate Person for the Right Job through our employee awareness survey and use the results for Based on our Self-Reporting Program that allows employees management initiatives. to request transfers once a year, we have built an internal open recruiting system that recruits specific personnel from within ● Awareness towards work in 2010 the company. We also created the Career Challenge Program (from the Self Reporting/Assessment survey) (implemented in 2008) through which employees gain in- Not much None Not very Not challenging service experience in year-long training programs. Through these interest 0.4% challenging 0.7% 1.7% 2.8% programs, we support and promote more autonomous career Average Average 15.2% 16.9% trajectories for our employees. Also, to broaden the possibilities Very Very interested challenging of our younger employees, we have introduced a rotation program Interested 51.0% Challenging 46.1% 31.7% under which, in principle, they gain experience working at three 33.5% different divisions during the first 10 years after being hired. One-on-one interviews are also conducted between the Human Resources Department and employees during their 4th year with Interest towards work Feel that work is challenging the company and again in their 9th year so as to get even better fits of the right person in the right job.

● Career development structure

Tentative Joining Transfers, promotions Retirement job offer Suntory

Fundamental skills Mind-setting programs for Mind-setting Induction program Programs for & knowledge Training in year 4 new “Plant Leader” grade programs for new for new graduates new managers (HR Basic Training) (T-course upper certification) “Professional” grade

Support programs for individual careers ● 4th year (all employees) ● 10th year (all employees) ● 40s and 50s Supporting self-development SUNTORY Self Development Program ● Workshops ● Distance learning ● e-learning ● Schooling

Systems and Global Challenge Program programs ● Overseas Trainee Program ● Career Challenge Program supporting talent ● Company Sponsored Business School ● Global Manager Training management Self-Reporting and Assessment System

2010 ■ Implemented the Global Challenge Program to develop 2011 ■ Further improve programs for training global human global human resources resources (including exchanges of human resources by ■ Shared information at meetings between human resource bolstering collaboration with overseas Group companies) managers from overseas Group companies ■ Systematize human resources basic training ■ Increased the number of trainees and students by fostering the culture of studying at your own pace

37 Suntory Group CSR Report 2011 / Relations with Employees Promoting Diversity We are focused on creating workplaces that not only promote diversity in the nature of our workforce, but also are accepting of differences and make the most of them so that our diverse workforce can demonstrate their “Yatte Minahare—Go for it!” spirit to the fullest.

● Number of employees with disabilities and employment rate Establish a Diversity Promotion Section (as of June 1, 2010)

For Suntory to ceaselessly create new value, it is important Employees with disabilities Employees with severe disabilities that we actively adopt and make the most of our diverse human Employees with disabilities employment rate resources and diverse sense of values without regard to nationality (Persons) (%) 80 75 4.0 70 or age. In each Group company and division, the Suntory Group 67 67 created project teams in 2010 that work from both top-down and 62 60 3.0 bottom-up perspectives to deduce problems and explore ways to resolve them. We also convene lecture meetings and study groups, 1.81 40 1.73 1.74 1.67 1.72 2.0 and are working to increase transparency broadly throughout the company. Moreover, we created a Diversity Promotion Section in 20 1.0 April 2011 that is working to accelerate the promotion of diversity. 22 23 21 21 22

0 0 ’06 ’07 ’08 ’09 ’10 The Advancement of Female Employees

The Suntory Group actively hires ambitious and skilled Expanding Programs for Rehiring Retirees employees, with no distinctions made with respect to gender in hiring or compensation. As a result of this policy, as of December The Suntory Group has introduced its Elder Partner Program 2010, 7.2% of our managerial positions are filled by female for rehiring mandatory retirees, offering positions for everyone employees. Additionally, one of the Diversity Project Teams who wants one and who meets certain conditions regarding their formed in 2010 addresses issues related to making the best use state of health and commute to work. Approximately 80% of of our female employees and continually looking into ways to mandatory retirees in 2010 desired reemployment, and 98% achieve ever greater job satisfaction. (127 persons) were rehired. In accordance with revisions to the Law Concerning Stabilization of Employment of Older Persons, in ● Female employment data 2006 we began a phased increase of the rehiring period to extend Female managers Female managers it to 5 years. Mindful also of the health of those we rehire, we Number in positions (persons) Percentage in positions (%) provide for them a day-long, full physical examination at a reduced 120 7.2 8 expense as well as more paid holidays than is legally required. 6.4 5.9 90 6 ● Rehiring of mandatory retirees 4.5 Rehired employees (persons) Reemployment rate (%) 60 3.6 4 97.7 97.7 92.9 96.7 54 68 84 96 109 200 100 30 2 98.0 160 148 80 0 0 127 ’06’07 ’08’09 ’10 120 60

85 78 80 40 Employing Persons with Disabilities 48 40 20 The Suntory Group is working to expand the possibilities for persons with disabilities by hiring without setting limits on the 0 0 ’06 ’07 ’08 ’09 ’10 scope of an employee’s responsibilities. As of June 1, 2010, we have 75 employees with disabilities (22 of whom have severe disabilities). Although our employment rate of 1.81% satisfies the legally mandated employment rate, we will work toward creating a more disability friendly workplace by expanding further our employment of persons with disabilities.

2010 ■ Pushed to resolve issues by forming project teams aimed 2011 ■ Bolster efforts through establishment of the Diversity at promoting diversity Promotion Section ■ Promoted workforce diversification (advancement of ■ Promote workforce diversification (hiring of persons women, etc.) with disabilities, etc.)

Relations with Employees / Suntory Group CSR Report 2011 38 Promoting the Work-Life Balance We strive to create employee-friendly workplaces mindful of the balance between work and personal lives where a diverse workforce can fully demonstrate their capabilities.

Ensuring Reasonable Working Hours recognize our corporate social responsibilities when it comes to addressing Japan’s low rates of childbirth and aging population, As part of our efforts to create a corporate culture in which and we are providing support in accordance with workplace employees can work in the best of physical and mental health, environments and employee needs. labor and management are working together to reduce long working hours. We ensure that rules on when to turn out all lights ● Supporting Working with Child and Nursing Care are enforced throughout the company, we have abolished unpaid We have instituted programs that exceed the legal requirements overtime, and we are further revising our business procedures to for childcare leave and shortened and staggered working hours. create more leeway and improve productivity. We also ensure that In 2010, 44 employees took childcare leave (100% of those eligible everyone is familiar with the Working Hours Handbook which took it, with a return-to-work rate of 98%), while 77 employees summarizes measures and information about reasonable working newly took advantage of the Shortened and Staggered Working hours. Additionally, we use a system that monitors when computers Hour Program. Mindful that childcare leave rates for men remain are being used and take measures when necessary, such as providing low, we are looking into ways to provide partial compensation guidance on areas for improvement. In 2009, we introduced a for childcare leave. Additionally, 294 employees used our Planned Annual Vacation Program to allow employees to take more Telecommuting Program. annual paid vacation. Labor and management have begun working together on the issue. The proportion of planned annual vacation ● Overview of policies to support child and nursing care taken in 2010 was 56.5%. Can also be used for reasons other than child or nursing care Elementary Elementary Junior school school high school ● Total actual annual working hours Childcare Pregnancy Birth 3rd birthday 1st grader 4th grader student Official working hours–vacation hours taken Overtime working hours Maternity and childcare leave Annual working hours (hours) Shortened and Staggered Working Hour Program Females only 2,100 2,025 2,015 2,011 2,001 1,999 Flexi-time Program Females only 1,900 Telecommuting Program 283 278 274 272 268 Childcare leave 1,700 Babysitter employment assistance When minding is needed 1,74211,737 ,738 1,729 1,731 1,500 Need for Nursing nursing arises 3 years 9 years 0 ’06 ’07 ’08 ’09 ’10 Nursing leave Shortened and Staggered Working Hour Program S-Style Work Practices Initiative Flexi-time Program Telecommuting Program In 2010, we launched our Suntory-Style (S-Style) Work Practices Special leave initiative. Its goal is to revolutionize work styles through the use Home helper employment assistance of information technology, by helping employees to achieve a balance between work and life while achieving further growth in our business activities. Reassessing conventional ways of ● Supporting a Return to Work after Childcare and Nursing Leave performing jobs, we have been promoting the use of flexi-time We have developed measures designed to reduce anxiety about and telecommuting* with the aim of producing the greatest returning to work, such as arranging for face-to-face talks with performance possible in a fixed period of time. the supervisor of the returnee before their leave and return to *Telecommuting: Working at home or otherwise outside the office work, and providing access to the company’s intranet from the individual’s computer at home while they are on leave. Promote the Work-Life Balance We have also introduced a Job Return Program for rehiring employees who resigned for reasons of pregnancy, childbirth, We have long worked toward expanding our programs that help childcare, and nursing and wish to return to the workplace. Since employees to maintain the balance between work and personal the introduction of the program in 2007 up until 2010, 14 people life while being responsive to individual circumstances, such as had signed up for the program and, as of April 2011, one person through the creation of the abovementioned benefit programs had returned to work. and providing beyond that which is legally required. We also fully

2010 ■ Stepped up efforts to ensure reasonable working hours 2011 ■ Further develop the S-Style Work Practices (time (introduced a new system that monitors how many hours management training, etc.) computers are being used, including telecommuting usage) ■ Expand programs to support nursing care (nursing leave, ■ Launched the S-Style Work Practices initiative to Shortened and Staggered Working Hours Program, and revolutionize work styles lengthen the amount of time that can be taken as flexi-time)

39 Suntory Group CSR Report 2011 / Relations with Employees Creating Employee-Friendly Workplaces We strive to create relaxed, employee-friendly workplaces in the belief that there is a connection between the vitality of the company and employees being happy and healthy at work.

Commitment to Workplace Safety Introducing Programs to Prevent Lifestyle Diseases Safety is one of our criteria for evaluating worksite performance Lifestyle diseases are on the rise due to changes in diet and at our plants. Our Health and Safety Committee plays a central exercise habits. The Suntory Group has introduced a Lifestyle role in our efforts, which are matched to the characteristics of the Program (Walking Program) with the goal of preventing and business processes and the circumstances of each worksite. In ameliorating lifestyle diseases. The program provides employees 2010, we had 26 work-related accidents, with a frequency rate*1 with opportunities to reexamine their daily lives and improve them of 1.94% and a severity rate*2 of 0.002%. We continue working to on their own. We have also been working together with health increase employee awareness and to improve the safety regime we insurance associations to provide specialized examinations and have in place for when employees are making their commutes and health guidance for employees aged over 40 as required by law when they are in the workplace. since 2008. *1 Frequency rate: (number of deaths and injuries) ÷ (total number of work hours) × 1,000,000 ● Initiatives for Preventing Mental Health Problems *2 Severity rate: (number of days employees cannot work) ÷ (total number of We have created two mental health management initiatives for work hours) × 1,000 the prevention and early detection of mental health problems: our self-care initiatives which aim to make employees aware A Variety of Programs to Promote Employee Health of stress and take appropriate measures to counter it, and our line-care initiatives in which managers strive to improve the Consideration of the physical and mental health of employees working environment and provide individual counseling. We also is a company’s most important responsibility. We conduct encourage employees to make use of consultations with in-house comprehensive health examinations and have established a follow- specialist physicians and outside counselors as needed, as well up program so that our employees can thrive in their work. as to engage in mental-health self checks. We are also putting into place systems related to prevention and early detection of ● Providing Comprehensive Health Examinations mental health problems. We have further developed programs to We provide health examinations that include detailed medical help employees who have taken time off for mental health issues tests in excess of legal requirements. Employees aged 40 and to return to work, through such means as improved support by older are required to take a day-long, full physical examination in specialist physicians. addition to the regular annual check-up. We also offer telephone and face-to-face counseling on health issues. We are further Creating Employee-Friendly Workplaces working toward improving the prevention of lifestyle diseases, and helping our employees to maintain and improve their health. We have various councils that meet regularly to enable labor and management to study and discuss key management challenges. ● Health programs These include the President’s Council, the Finance Reporting Council, and division and topic-specific councils. These councils Various programs hear statements from the labor union about shopfloor conditions Special leave program Employees can save up to 10 days per year for long-term injury/ of paid vacation they could not take, up to a and both parties debate the management policies of the Suntory Illness, disease and care maximum of 60 days Group. We operate and revise our programs involving human injury, resources and labor based on thorough consultations rooted in and Assistance paying a disaster portion of hospital bed Assistance with 70% of hospital room mutual awareness of the issues. Corporate operations have been charges not covered by charges not covered by health insurance made more objective and transparent and the effectiveness of our insurance various measures increased thanks to this relationship between Employees aged 40 or older must attend labor and management. one as their regular physical exam, at no charge if it is less than 55,000 yen ● Promoting Labor-Management Cooperation Day-long, full physical examinations Employees aged 30 or older (dependents also included) can use the program at a charge The councils meet regularly to take up topics of shared of 5,000 yen for a day-long examination, importance to labor and management. Councils met some or 10,000 yen if the examination chosen 45 times during 2010. requires an overnight stay Dental examination Once per year

2010 ■ Introduced Lifestyle Habits Program to prevent 2011 ■ Revise mental health support systems lifestyle diseases ■ Labor-management councils will meet to discuss important issues

Relations with Employees / Suntory Group CSR Report 2011 40 Coexisting with the Global Environment

Environmental Management The entire Suntory Group is committed to environmental management in order to pass on to coming generations a global environment that is an important business resource for the Group.

Group-Wide Commitment Setting Mid-Term Targets and Progress Reports With the awareness that coexistence with nature is one of the In 2009, we set two medium-term targets aimed at improving most important issues facing all of humankind, back in 1991 the our environmental management. One target is to expand our Suntory Group established the Environmental Department and water-resource cultivation areas (expanses of forest promoting the Environment Committee. In 2010, Suntory Holdings Limited creation of water), and the other is to reduce CO2 emissions. created the Environmental Sustainability Strategy Division, whose ● Expand the total area of Natural Water Sanctuary forests purpose is to ensure that business and ecology are promoted by for water resource cultivation to around 7,000 hectares by the entire Group. The Division seeks to reinforce environmental the end of 2011 management in each Group company on the foundation (approximately 1,795 hectares in place as of 2008) (see p. 43) provided by the Basic Principles of Suntory’s Environmental ● Reduce CO2 emissions from all domestic business activities by Policy. Additionally, we are committed to creating a worldwide 20% from 2007 levels by 2012 (see p. 45-47) environmental management regime based on the environmental We have been steadily expanding our water resource cultivation management initiatives that have thus far been operated only at areas, with approximately 5,223 hectares of forests in place as of Group companies in Japan. April 2011. Our efforts are continuing toward achieving our goal of 7,000 hectares by the end of 2011. Owing to production increases that far exceeded what had been planned, we reduced CO2 Basic Principles of Suntory Group’s Environmental Policy emissions by only 1% compared to 2007 (our goal is to achieve (Established in 1997, Revised in 2010) a 20% reduction by 2012). However, we will be stepping up the As a group of companies that shares with its customers in the efforts of the entire Group in this direction in the years to come. blessings of water, the land, and the sun, the Suntory Group positions environmental management as the foundation of its business activities, and is committed to passing on a sustainable and vibrant Reducing Products’ Environmental Impact society to future generations. The Suntory Group generates a wide variety of waste and 1. Achieving water sustainability by-products across its diverse range of businesses. Throughout In line with our corporate message, “Bringing Water to Life,” we the entire lifecycle of each product, from its planning and take great care in our use of water, which we recognize as the development to its disposal, we strive to quantitatively assess source of all life and the substance upon which our own business its effects and reduce its impact on the environment. is based. We return water to the natural environment only after Furthermore, as we expand our business overseas, we are it has been thoroughly purified and ensure we protect forests and committed to examining and determining the environmental other natural ecosystems so that they can produce even more of impact of our overseas manufacturing sites so as to assess how the water than we use. much of an environmental impact we have worldwide. 2. Maximizing resource usage by promoting the 3Rs through innovative technologies Aiming to help bring about a sustainable society, we promote the Environmental Management 3Rs (reduce, reuse, recycle) of raw materials and energy resources, ● Obtaining ISO 14001 Certification as a Group at all levels throughout our organization, by continuously refining our technologies. We also work in other ways to develop our The Suntory Group has been actively pursuing ISO 14001 business in a sustainable manner. certification for all Suntory Group companies in order to improve environmental management for the entire Group. In 2010, 3. Mobilizing group-wide efforts to become a low-carbon company As a global citizen, we approach environmental conservation from we obtained certification for Suntory Products Ltd.’s Okudaisen Bunanomori Water Plant and Kanagawa Ayase Plant, and for a global perspective and make efforts to reduce CO2 emissions along our entire value chain. Suntory Wine International Ltd. and Sungrain Ltd., completing the process of obtaining certifications for all of the Group 4. Maintaining dialogue with society and educating companies in Japan*. Certifications were obtained at Group the future generations To protect our precious natural environment so that we can pass companies overseas* for 12 sites, mainly manufacturing facilities it on to future generations, we are engaged in an ongoing dialogue (as of December 2010). with society, disclosing information appropriately, and providing *Group companies subject to Japan’s SOX law environmental education for young people. 5. Constantly striving to be a “Good Company” By constantly raising the eco-consciousness of our employees, we strive to become a company “Growing for Good” that makes efforts to conserve biodiversity in harmony with people and nature and continues to create new value.

41 Suntory Group CSR Report 2011 / Coexisting with the Global Environment ● Environmental Risk Management Strategies ● Introducing Environmental Accounting The Suntory Group carries out environmental impact We use and disclose the content of environmental accounting assessments in accordance with ISO 14001 standards on the that conforms to the Environmental Accounting Guidelines 2005 actual frontlines of its businesses. We identify priorities and of the Ministry of the Environment. Environment accounting develop measures to prevent in advance risks that might otherwise serves as an important tool for quantitatively evaluating our arise. In particular, we are working at risk management in the environmental-conservation initiatives in our business activities. manufacturing process, having completed and put into use (In 2010, we made environmental investments of 3.5 billion yen, an operations manual that has paid close attention to the and had environmental costs of 9.1 billion yen.) surrounding environment.

● Overview of environmental activities and environmental impact (for the period January 1 to December 31, 2010, domestic production sites [excluding contracted sites])

INPUTS Business Processes OUTPUTS

● Packaging materials 395,000 t ・Glass bottles 114,000 t ・Aluminum cans 36,000 t ・Steel cans 61,000 t ・PET bottles 61,000 t Procurement ・Cardboard boxes 97,000 t ・Others 26,000 t

● Ingredients 369,000 t

Production volume 3,440,000 kℓ ● Waste water 16,140,000 m3 ● Water 20,186,000 m3 (alcoholic and non-alcoholic beverages) ● BOD*1 released into public water bodies 32 t 2 ● Electricity 279 million kWh Production ● Air emissions ・CO2* 317,000 t ・SOx 2 t ● Fuel (converted to crude oil) 106,000 kℓ ・NOx 100 t ● Waste and by-products 210,000 t

● Air emissions ・CO2 95,000 t Distribution ・NOx 251 t

● Containers 6,330 million ・Glass bottles 362 million Consumption ・Aluminum cans 2,109 million ・Steel cans 1,783 million ・PET bottles 2,076 million

Promoting container reuse and recycling

*1 BOD (biochemical oxygen demand): an indicator of water pollution *2 CO2 emissions from electricity are calculated using an emission coefficient based on the actual emissions of each electric power company

2010 ■ Obtained ISO 14001 certification at Suntory Products 2011 ■ Consolidate ISO 14001 certification for all Suntory Group Ltd.’s Okudaisen Bunanomori Water Plant and Kanagawa businesses in Japan Ayase Plant, and at Suntory Wine International Ltd. and Sungrain Ltd.

Coexisting with the Global Environment / Suntory Group CSR Report 2011 42 Water Sustainability and Preserving Biodiversity The Suntory Group is committed to business activities that give consideration to biodiversity and do not have an impact on the natural cycle of water, so that we may leave for the future the water resources that are the lifeline of the Group’s business.

Commitment to Water Sustainability Efficient Groundwater Cultivation Using “Fuyumizu Paddyland” The bounty of nature—water and agricultural products— underpin the main businesses of the Suntory Group. As a company We broke ground in winter 2010 on the Fuyumizu paddyland that is “Bringing Water to Life,” above all else we prioritize using 3 hectares of paddy field in Kamimishiki Town, Kumamoto carrying out business activities in a way that does not stress the prefecture. Fuyumizu, or “winter water,” paddyland refers to a traditional Japanese farming method in which water is left all water cycle. The most important concerns we have in our business over a rice paddy in winter when it lies fallow. This has the effect activities are that we protect the forests that create water, that we of both controlling weeds and fertilizing the soil. The Fuyumizu use water with care, and that we achieve water sustainability that paddyland is located atop an alluvial fan from the Kanayama will return it to its pristine state. River that flows from the Natural Water Sanctuary Aso; it has a topography that allows water to permeate easily. In this new Expanding Water Resource Cultivation experiment, we have altered conditions on the mountain upstream to increase We use large amounts of groundwater in every step of the volume of water that flows down the manufacturing process of our products. To maintain the during the winter; this pristine water sustainability of that groundwater, we signed long-term contracts is then spread for optimal effect across that last decades with forest owners and in 2003 began the paddyland. Fuyumizu paddyland developing forests that create water. Centered on the water- resource cultivation areas around our plants, our Natural Water The Wisdom of Water (Suntory) Corporate Sponsored Research Program Sanctuary Project is conducted in collaboration with national and local governments, local communities, and experts. Under this The Wisdom of Water (Suntory) Corporate Sponsored Project, we are carrying out water-resource cultivation activities Research Program was launched in April 2008 in collaboration at 12 locations in 11 prefectures nationwide. The Project entails with the University of Tokyo. The goal of this program is to carrying out thorough surveys before beginning work, giving full combine the knowledge of both parties to give structure to consideration to the natural environment and ecosystem peculiar the wisdom of water; increase societal interest in water through communication, to the area, and developing forests with a great capacity for educational activities, and human resource cultivating water resources. development; resolve water issues; and create a rich aquatic environment. ● Objectives of Suntory’s Natural Water Sanctuary Project Symposium We aim to develop: 1. forests with a great capacity for cultivating water resources 2. forests rich in biodiversity Further Reducing Water Usage 3. forests well able to withstand flooding and landslides The Suntory Group’s plants use a great deal of water in, for 4. forests with great CO2 absorption capabilities 5. beautiful forests where visitors can encounter nature in all its example, cleaning production equipment and cooling, in addition abundance to that used as an ingredient in our products. Each plant sets medium-term goals for the reduction of water usage in order to get the most out of this finite resource. We also promote effective ● Expanding the Area of Natural Water Sanctuaries water use through the introduction of technologies for reusing to 7,000 Hectares and recycling water. Although our water usage increased in 2010 In 2010, we concluded agreements for approximately 2,880 as production increased, we actually reduced per unit production hectares of new water resource cultivation forests in seven usage through water conservation efforts at our plants. locations: Natural Water Sanctuary Kyoto Minami-Yamashiro, Natural Water Sanctuary Okutama, Natural Water Sanctuary ● Water usage (at 25 plants in Japan) Mt. Monryu in Nishiwaki, Hyogo, Natural Water Sanctuary Omi, Usage (1,000 m3) Per unit production (m3/kℓ) and Natural Water Sanctuary Gifu Higashi-Shirakawa. The total 25,000 15.0 12.3 20,427 20,346 20,075 20,186 area covered as of April 2011 is approximately 5,223 hectares. 20,000 12.0 We are making great efforts toward achieving the expansion 15,000 9.0 of our Natural Water Sanctuaries to 7,000 hectares by the end 12,385 of 2011, which continues to be our medium-term goal. Our aim 10,000 7. 0 6.0 6.5 6.2 5.9 is to create more groundwater than the volume of groundwater 5,000 3.0 used by our plants. 0 0 ’90 ’07 ’08 ’09 ’10 *Usage per unit of production is the water used per kℓ of product manufactured

43 Suntory Group CSR Report 2011 / Coexisting with the Global Environment

7.0 6.5 6.2 5.9 ● Using Cascades of Water ● Business Activities with Consideration to Biodiversity We classify water into 5 graduated levels of purity at the Suntory We give consideration to biodiversity in our business activities. Products Ltd.’s Minami Alps Hakushu Water Plant. Cascades are As an example, we study and analyze the impact on the used for the water that will be reused stepwise from the processes surrounding ecosystem when we build our plants. that require the greatest purity to those requiring the least. By doing so, we have achieved the industry’s highest levels of ● Activities to Protect Unique Local Ecosystems water usage per unit production. One of the goals in developing the Natural Water Sanctuary forests for water resource cultivation is to restore the rich biodiversity in these areas. We are protecting the unique local biodiversity even on the grounds of our plants, by conducting activites suited to their particular characteristics such as carrying out observational surveys and protecting endangered and rare plants.

Storage tanks for recovered water

Comprehensive Waste Water Management We set voluntary standards for waste water that are stricter than the legal regulations and manage its quality so that we may release Wild birds live in the waste water in a state as close to nature as possible. Waste water valleys and fields from our plants is first purified using anaerobic waste water treatment facilities and other equipment before it is released into ● Nature Conservation by Protecting Wild Birds sewers and rivers. Inspectors use measuring equipment to take Based on the concept of “Today Birds, Tomorrow Man” (issues daily readings of water quality and temperature under a 24-hour for birds today may become issues for people tomorrow), we monitoring regime. began our Save the Birds! campaign in 1973, with the aim of protecting nature by protecting wild birds. We opened the first Preserving Biodiversity bird sanctuary by a private enterprise that year at our Hakushu Distillery, carrying out such activities as conducting surveys of the The Suntory Group uses water and agricultural products as bird population and hanging boxes for bird nests. ingredients in its products; consequently, its business activities are We also conduct activities together with our customers and local underpinned by a healthy ecosystem. We consider the protection communities, including collecting donations for the recovery of of this ecosystem to be our rightful responsibility. Based on this the short-tailed albatross—an endangered species—and producing recognition, we have set down under the Basic Principles of and selling leaflets that raise awareness about protecting wild birds. Suntory’s Environmental Policy our intention to work toward preserving biodiversity and create new value. We are pursuing a number of projects tied to biodiversity and protecting the environment that supports it. We also added our name in January 2011 to the list of “The Declaration of Biodiversity by Nippon Keidanren” Promotion Partners. We are taking the lead in working toward the creation of society rich in biodiversity. Hanging boxes in the Hakushu Awareness-raising leaflet Distillery Bird Sanctuary

2010 ■ Created Natural Water Sanctuaries with a total area of 2011 ■ Increase total area of our Natural Water Sanctuaries approximately 2,880 hectares in Tokyo, Gifu, Shiga, Kyoto, to 7,000 hectares or more Hyogo, Tottori, and Kumamoto prefectures ■ Move steadily forward with scientifically ■ Gradually built up a research framework together with grounded development experts, promoting scientific forestry management ■ Improve getting the word out about our water resource ■ Water used per unit production in domestic production cultivation activities activities: 5.8% reduction from the previous year ■ Strive to reduce the amount of water used in domestic production activities

Coexisting with the Global Environment / Suntory Group CSR Report 2011 44 Commitment to Being a Low-Carbon Company We have set reduction targets throughout the entire value chain and are working hard to combat global warming as a Group.

● Switching to Fuels Low in CO2 Emissions Reducing CO2 Emissions throughout the Value Chain We have completed the switch at most of our plants from using We have set challenges for each division to reduce CO2 heavy oil to city gas and liquid natural gas (LNG). These gas fuels emissions throughout the value chain, from product development have fewer CO2 emissions per unit of heat and they contain almost and manufacture to distribution and sales. no sulfur. In 2009, we set a new medium-term target: to reduce emissions of CO2 from all business activities in the Suntory Group ● Promoting the Use of Renewable Energy in Japan by 20% from 2007 levels by the year 2012. To meet We are working to use renewable energy (clean energy) sources this target, in 2010 we reduced the weight of our packaging such as solar, micro hydraulic, and snow-ice sources. For example, materials, installed heat pump-equipped vending machines, and at the Suntory Products Ltd.’s Okudaisen Bunanomori Water made efforts to employ renewable energy in our manufacturing Plant, we have introduced snow rooms where we accumulate processes, all of which led to a 9% reduction compared to 2007. winter snow and use it to reduce some of the cooling load However, owing to production increases that far exceeded the in springtime. planned amounts, the total volume of emissions was reduced Another example is the Suntory Products Ltd.’s Minami Alps by only 1% (value chain CO2 emissions per unit production were Hakushu Water Plant, where they are making effective use of reduced by 10% compared to 2007). We will continue striving the coolness of groundwater, which holds practically the same to reduce CO2 throughout the value chain. temperature throughout the year, in the cooling of manufacturing equipment. We have been able to reduce CO2 emissions by approximately 1,300 tons through these means. At the same plant, Reducing CO2 at Our Plants we have also installed solar power panels capable of generating We are committed to energy efficiency at Suntory Group plants roughly 490 kW of power, the largest amount in the industry.* through production activities harmonized with the environment. On clear days, the panels supply about 20% of the electricity used by Making records of and managing the operational status centrally the plant, reducing its CO2 emissions by about 205 tons compared is useful for establishing energy efficient activities in the to when the power is purchased from the power company. production process. Furthermore, we are working to combat *As of March 2010 global warming from a variety of angles, including by switching to low CO2 emitting fuels and by using renewable energy. Every plant has a council of engineers that meets regularly, and activities are conducted across the board in all Group companies equally. Although CO2 emissions increased in 2010 accompanying the rise in production, per unit production was reduced thanks to switching fuels and making construction improvements at our plants. Solar power at the Minami Alps ● CO2 emissions (at 25 plants in Japan) Hakushu Water Plant Emissions (1,000 tons) Per unit production(kg/kℓ)

350 317 300 253.8 306 302 2 285 Reducing CO in Distribution 280 255 240 We are striving to reduce the environmental burden imposed 210 180 by our distribution and shipping operations, too, in everything from procuring ingredients and packaging materials to delivering 140 97.8 93.7 92.2 120 products to consumers. We also have a highly efficient truck 98.2 70 60 transport system in place thanks to a computerized system we developed in-house and our progress toward a modal shift. 0 0 ’90’07 ’08’09 ’10 In 2010, our CO2 emissions rose 8% over the previous year by approximately 95,000 tons as a result of a sales volume increase ● Reductions Made by Introducing Cogeneration Systems due to the effects of a heat wave and an increase in long-haul We are introducing cogeneration systems into our production shipping routes. activities. As of December 2010, we have introduced the systems at 4 plants in all, at our Haruna Plant, Tonegawa Beer Plant, Kyoto Beer Plant, and Osaka Plant.

45 Suntory Group CSR Report 2011 / Coexisting with the Global Environment ● Trends in CO2 emissions from transport ● Transporting a Variety of Cargo through a Single Shipper

CO2 emissions Sales volume Transport volume The Suntory Group has introduced an Integrated Transportation ® (1,000 tons) (%) Arrangement System for calculating the optimal combination of 113 240 107 108 109 120 trucks and routes for various types of cargo and shipping centers. 100 We are working to reduce the number of trucks used as well as 108 103 180 100 98 100 90 the distances and times trucks run without any load. The goal is to further reduce our environmental impact by cutting down on 120 60 93 94 89 88 95 losses in transportation time such as by sharing cargo information with other companies in order to combine cargo from several 60 30 companies on one vehicle.

0 0 ’06’07 ’08’09 ’10 ● Conceptual image of Integrated Transportation *Setting sales volume and transport volume from 2006 as 100 Arrangement® System *Period covered: 12 months, from April to the following March Suntory Group Packaging manufacturer Other companies ● Switching to the Use of Larger Vehicles Transport request Transport request Transport request information information information The Suntory Group is switching over to using larger vehicles (Western liquors, beers, (Cans, bottles, cardboard, etc.) (Electronics, etc.) in order to reduce the number of vehicles we have on the road. wines, soft drinks) Our plan is to switch more to larger vehicles by using trailer rigs in conjunction with our Integrated Transportation Arrangement system, particularly when it comes to truck transportation from our manufacturing plants to local product warehouses. Suntory Integrated Transportation Arrangement® System

● Modal Shift Searches the best shipping route based on the following four points: Rail and sea transport produces fewer CO2 emissions than trucks ① Uses fewer vehicles when transporting over medium to long distances. We are thus ② Vehicles travel shorter distances/spend less time empty ③ Higher sales per vehicle shifting from using truck to rail and sea transport. This process is ④ Uses the shortest route to the final destination called a “modal shift.” In 2010, sea transport remained the same as the previous year while rail transport rose by 1%, lifting our Optimum cargo mix and route are determined Shipping companies notified of dispatch modal shift ratio by 1% to 35%. We also achieved a modal shift ratio of 71% for transportation over 500 km or more, greatly exceeding the Ministry of Land, Infrastructure, Transport and Real-time management Tourism (MLIT) target (50% by 2010). Shipper A Shipper B Shipper C Shipper D using the ITA control In March 2011, Suntory Liquors Ltd., screen Suntory Wine International Ltd., and Suntory Foods Ltd. received an Eco-Rail Mark certification from the Ministry of Land, Round Use of Maritime Containers Infrastructure, Transport and Tourism (MLIT) for being companies making active use of In February 2011, we joined with other companies and began Round Use in Japan of containers that were used for eco-friendly rail transport and actively grappling Eco-Rail Mark imports and converted them for export cargo. We have been with global environment problems. able to ship cargo more efficiently, leading also to a reduction in our CO2 emissions, by making effective use of containers that ● Trends in modal shift ratio until now would have been sent back to the port empty. Sea transport Rail transport Truck transport （%） 100

50 35% 33% 33% 34% 35% 6 25 7 8 10 11 29 26 25 24 24 0 ’06’07 ’08’09 ’10

Coexisting with the Global Environment / Suntory Group CSR Report 2011 46 Installing Eco-Friendly Vending Machines December 2010. Additionally, we have been aggressively making use of Internet teleconferencing since 2010 to reduce the CO2 The Suntory Group views the electricity usage of vending emissions generated when employees travel on business. machines as one of our key challenges for reducing CO2 emissions in the value chain. In 1995, we introduced a peak-cut feature Using Green Electricity that cuts off the cooling equipment for a fixed period of time at peak times during the summer. Since 2007, we began installing In January 2011, Suntory Hall and the Suntory Museum of Art heat-pump*1 vending machines that give due consideration to introduced a green electricity system. This system makes use of the the environment. These machines can reduce power usage by Green Power Certification system made by Energygreen Co., Ltd. approximately 37% compared to conventional vending machines All 2.5 million kWh of electrical energy the two facilities use each (2007 models) and with that also reduce our CO2 emissions. year is regarded as having been provided using green energy, Nearly all of the vending machines we put into use in 2010 were the effect of which is to reduce CO2 emissions by approximately heat-pump models, and in 2011 we will install all heat-pump 960 tons per year. vending machines as new machines (excluding certain specific Additionally, green energy was also used for some of the games machines). Through this, we project that by the end of 2011 heat- played by the Suntory Sunbirds volleyball team and the Suntory pump vending machines will account for approximately 20% Sungoliath rugby team. (around 100,000) of the 480,000 or so vending machines that the Suntory Group operates. Starting in 2011, we will also be steadily putting into use heat-pump vending machines equipped with LED lighting, improving energy conservation. Green Energy logo Additionally, we will be gradually introducing extreme energy conservation machines*2 whose annual energy consumption is less than half that of conventional vending machines (2007 models). *1 Heat-pump make effective use of heat by recovering heat from the Reducing Lighting at 104 Group Facilities refrigeration chamber and radiating it into the heating chamber. *2 Power consumption for extreme energy Responding to an appeal from the Ministry of the conservation machines=less than 700 kWh Environment, from June 20 to July 7, 2010, the Suntory Group conducted a CO2 Reduction and Lights Down campaign. One hundred and four Suntory Group facilities participated. Subway Japan Inc. and Häagen-Dazs Japan, Inc. reduced lighting in their shops for the first time. The suburban Tokyo home grounds for the Suntory Sungoliath also joined in for the first time, reducing the lighting inside the clubhouse. Heat-pump vending machine

Conserving Energy in Offices and Labs At our Odaiba office, we have implemented solar power, the Reduced lighting at a Häagen-Dazs shop use of recycled water, automatic lighting adjustment systems, and human sensors for lavatory lighting and escalators. We also introduced solar power equipment at our Products Solar panels at the Products Development Center in Development Center

2010 ■ Reduced CO2 emissions per unit production at production 2011 ■ Promote the reduction of CO2 emissions related to sites by 1.7% compared to the previous year packaging, production facilities, and vending machines ■ Participated in joint-distribution activities with other ■ Push further ahead in making our modal shift companies, by reusing containers that were used for ■ Move forward with using heat-pump vending machines importing cargo when putting out new vending machines ■ Made progress in the use of heat-pump vending machines

47 Suntory Group CSR Report 2011 / Coexisting with the Global Environment Effective Use of Resources The Suntory Group is strengthening its commitment to the effective use of resources through practicing the Three Rs of “Reduce, Reuse, and Recycle” when dealing with the waste and by-products generated by containers and packaging. We also contribute to the building of a recycling-oriented society in the manufacturing process.

Three Rs for Containers and Packaging Recycle: From Container Design to Collection We work on designs that take into account usability from the We pay attention to a variety of things from the moment we moment of consumption by the customer to recycling also focus start designing our containers in order to maintain the quality on designs that are lighter, use materials that have a lower impact of the containers we make from the recycled packaging materials on the environment, and are easier to recycle. We also work we have collected. We collaborate with local governments to in collaboration with various recycling organizations and local make the most of efficient collection routes since many different governments to promote recycling. types of containers flow together and get mixed up with The Suntory Group works to develop containers and packaging containers from other companies when they are collected. that gives consideration to the environment, based on the Three For glass bottles in commercial channels that are disposed Rs of “Reduce, Reuse, and Recycle.” of by liquor stores, restaurants, and bars, specialist companies developed a collection route for us in 1974 that helps when it Reduce: Making Containers Lighter comes to collections from the distribution channel. We are striving to reduce weight in many ways as part of our ● Developing Easy-to-Remove Labels efforts to conserve resources and conserve energy during transport. We introduced easily removable Roll Labels for use with We are working to reduce the weight of containers such as PET smaller containers like 280 mℓ PET bottles. They promote and glass bottles, as well as other items such as caps, labeling, recycling by reducing the work customers have to do when and the cardboard boxes in which we pack our products. disposing of the bottles.

● Blow Molding PET Bottles In-House The Suntory Group is increasing the number of plants equipped for the process of inflating the preforms that provide the pattern for PET bottles and making them into PET bottles. Additionally, at some plants we are blow molding preforms from PET resin. This enables us to design and control everything from bottle blow molding to filling the contents, thus reducing our resin An easy-to-remove Roll Label usage and making it easier to reduce bottle weight. We have also been able to reduce the fuel needed for transport and our Innovative Approaches to the Three Rs CO2 emissions compared to when we were purchasing PET bottles as completed products. Along with existing approaches to the Three Rs, we have also been pushing forward with innovative approaches by aggressively taking on the challenge of developing new technologies, such as those that make use of renewable resources.

● P-ecot Bottles Easily Crushed by Hand Suntory Natural Mineral Water products that went on sale in PET resin Preform blow molded Blow molded March 2011 in 550 mℓ containers make use of P-ecot Bottles, from resin PET bottle which can be easily crushed by hand. These bottles weigh 13.5 grams each, or about 40% less than conventional bottles. In terms Reuse: Collecting and Reusing Containers of raw materials, we reduced the amount of petroleum-based resin used by approximately 40%, which we expect will reduce On our routes, we collect, clean, and put back into use our CO2 emissions by approximately 7,600 tons per year. returnable containers used for soft drinks for restaurants and for We were mindful when developing the P-ecot bottles beer (the amount collected and reused in 2010 reached 117 of providing a design that customers would find easy to use million units). We have also been working to improve bottle and a container that would not generate problems when quality, for example, by creating shapes with mouths that will not it came to recycling. chip when they have been opened using a bottle opener.

The P-ecot bottle

Coexisting with the Global Environment / Suntory Group CSR Report 2011 48 ● Using the Plant-Derived Ingredients Reducing and Recycling Waste We have been using plant-derived ingredients for the labels on some of our Nacchan 1.5ℓ PET bottle products since February We are committed to reducing the by-product and waste 2011. Polyactic acid—the principal ingredient of which is starch— emissions generated in the manufacturing processes at Suntory makes up approximately 70% of the material used to make Group plants in Japan, and recycling resources 100%. In 2010, these labels, lowering their environmental impact compared to our plants in Japan (including Group companies) generated conventional labels. 210,053 tons of by-products and waste. This was a 1% year-on-year increase, but a 5.4% decrease per unit production. We also ● Introducing the RePET Bottle*1 achieved a 100% resource recycling rate. Suntory Beverage & Food Ltd., in conjunction with Kyoei Industry Co., Ltd., has created the first “bottle-to-bottle”*2 ● By-product and waste emissions and per unit production mechanical recycling*3 system in the Japanese beverages industry. (25 domestic plants) Using this system, in May 2011 we introduced for some of our By-products and waste (1,000 tons) Per unit production (kg/kℓ) products the use of RePET bottles in which new PET bottles are 400 80 made using PET bottles collected from the marketplace as the raw 64.9 66.4 64.2 64.6 61.1 materials for new ones. 300 60

*1 RePET Bottle: PET bottles made from old PET bottles. A new-style eco-bottle. 208 210 193 201 *2 Bottle-to-Bottle: Also “B to B,” it refers to recycling an old PET bottle so it 200 183 40 can be reused as a new one. *3 Mechanical recycling: A method for removing impurities in reused materials 100 20 by further processing—for a fixed period of time at a high temperature and under low pressure—the resin recovered in material recycling (processing 0 0 a used product by pulverizing and cleaning it and then turning it into the ’06’07 ’08’09 ’10 raw materials for a new product). ● By-product and waste emissions breakdown (2010) Collaboration for Container Recycling Metals 1.3 % Other Cask materials, 1.0 % We are committed to recycling containers in collaboration with wooden pallets 1.7 % industry organizations and local governments, as well as with Glass bottles 2.3% Vegetable waste the assistance of consumers. The Suntory Group—which naturally Plastic 2.5% 75.9% abides by the Container and Packaging Recycling Law and meets Wastepaper 2.6% its recycling obligations as a business operator—is working hard Excess sludge 12.7% to create an efficient recycling system.

● Trends in container collection rates ● Pioneering Uses for Each Type of Recycled Resource (based on data from industry groups) A variety of by-products and waste are generated in the

PET bottles Glass bottles Aluminum cans Steel cans manufacturing process. The largest source of waste is vegetable (%) 96.7 97.6 waste derived from produce used as ingredients in our products. 100 94.0 95.6 90.4 90.7 91.3 77.8 82.0 83.3 Next largest is the sludge from our waste water treatment 91.7 93.4 80 86.1 90.9 92.7 87.3 processes. We pay special attention to ensure that these 2 types 83.1 88.7 88.1 82.8 81.8 87.1 85.1 80.6 85.2 86.1 87.5 88.5 89.1 of waste are recycled. We recycle the waste and by-products 84.2 77.9 77.5 60 66.3 69.2 that the Suntory Group generates for the uses listed in the figure 61.0 62.3 61.7 53.4 on the next page. 40 44.0 34.5 20

0 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09

Furniture made from whisky cask materials

49 Suntory Group CSR Report 2011 / Coexisting with the Global Environment ● Reducing Sludge Volumes by More than Half We have introduced anaerobic waste water treatment facilities Reducing Materials at First-Kitchen Ltd. for processing waste water generated from cleaning production equipment and other processes. Anaerobic treatment uses In November 2010, First-Kitchen Ltd. reduced the varieties microbes called anaerobic bacteria that are active when there is of cup they use from 4 to 3 at certain stores by combining the no oxygen. This method breaks down water contaminants and M-size cold drink cup with the float cup. Additionally, the mouth size for all cups was made uniform, and the number of lids in makes it possible to generate less than half the sludge of aerobic use reduced from 5 to 2. In so doing, they were able to reduce waste water treatment, which uses aerobic bacteria (that require their CO2 emissions by approximately 260 tons per year. oxygen). Our plants also make effective use of the methane gas They also reduced paper usage by approximately 30% by generated from this treatment as fuel. changing the standards for paper napkins in July 2010 from a 1/6-fold to a 1/4-fold type.

Cups with uniform mouth sizes

● Flow for reuse of by-products and waste generated at each step in manufacturing

Western Preparation Fermentation Distillation Casking Aging Blending Bottling Boxing Shipping liquors Canning

Plant waste Consumer water Bottling Beer Preparation Fermentation Aging Filtration Boxing Shipping Canning Plant waste water Leaf Bottling Foods Extraction Mixing Sterilization PET bottles Boxing Shipping (Oolong Tea) separation Canning

Waste water treatment

Mash Tea Cask Label PET Glass Aluminum cans, Plastic Wooden Methane Waste Yeast Cardboard Sludge dregs leaves materials scraps bottles bottles Steel cans crates pallets gas

Reuse Animal feed Toilet paper Glass bottles, Plastic, Chips for plywood Organic fertilizer applications Tiles Pallets, Solid fuel PET bottles, Aluminum cans, Organic fertilizer Furniture Textile products, Steel cans, Recycled steel Fuel etc. Recycled cardboard

2010 ■ Reduce: Reduced PET bottle weight (weight reduction 2011 ■ Continue pushing to develop eco-friendly products ratio 89%, volume of PET resins reduced by 18,891 tons) focusing on handling of containers ■ Reuse: Maintained returnable bottle system ■ Continue promoting the Three Rs ■ Recycle: Worked to construct efficient, effective container ■ Maintain the 100% resource recycling rates in recycling system production and at the Odaiba and Osaka offices ■ Achieved 100% resource recycling rates in production and ■ Set targets for each company in line with the Food at the Odaiba and Osaka offices Recycling Law ■ Finished setting numerical targets at all companies in line with the Food Recycling Law

Coexisting with the Global Environment / Suntory Group CSR Report 2011 50 Coexisting with the Community through Environmental Activities We are striving to spread information about the environment out in the world, by raising awareness and getting the word out about environmental issues.

Promoting Litter Control for Empty Containers ● Outdoor School of Forest and Water This hands-on nature course geared to elementary school students We are carrying out litter control activities for empty containers from grades 3 through 6 and their parents is held in the home regions of in order to beautify the environment and promote effective use Suntory Natural Mineral Water. Participants experience for themselves of resources. We place one empty container collection box at the importance of water and of the forests that every vending machine. We are also making efforts to raise produce it amid the great outdoors at Hakushu awareness about recycling by affixing a Beautification Mark (Yamanashi prefecture), Okudaisen (Tottori on vending machines as a way to prevent littering. prefecture), and Aso (Kumamoto prefecture). The Suntory Group is also one of six beverage industry Around 11,000 students and their parents had organizations participating in the Beverage taken part in the program by 2010. Industry Environment Beautification Association. ● Study Support Program We travel to elementary schools to tell students in grades 4 through 6 about the importance of water. We have conducted programs around the Tokyo and Kyoto-Osaka-Kobe areas, as well as in Yamanashi, Tottori, and Kumamoto prefectures where we have Natural Mineral Water plants. Through experiments and games, students have fun thinking about the relationship between the water cycle and their lives as well as the Empty container collection box role of the forests that create water. Programs had been carried out at 408 schools for more than 30,000 children by 2010. Disclosure Information and Communication The Suntory Group values dialogue on the environment and discussions with all of its stakeholders. The opinions and requests we receive are linked to improvements in our activities. We also Greening Systems: Suntory Midorie Ltd. actively communicate information about the environment through such means as publishing CSR Reports and via our website. Suntory Midorie Ltd. won the selection committee president’s special prize (incentive prize) in the eco-products division of the 7th Eco Products Awards. The Awards are given to products and Environmental Education for Coming Generations services that have excelled in giving consideration to lowering their environmental impact. The company also exhibited at Eco Products To protect our rich natural environment and live in harmony 2010, Japan’s largest environmentally with nature, there are many issues that will need to be solved, themed convention and the setting of the including global warming and the depletion of resources. It is the awards ceremony. It supplied information to mission of those of us who are alive today to actively educate the the public at large about its technologies for children representing the next generation about the environment greening the walls and rooftops of buildings in order to build a sustainable future. without the use of soil. Eco Products convention booth ● Suntory Water Education P Love Green Declaration: Pronto Corp. The Suntory Group’s independently developed program of Water Education takes a hands-on approach to learning so that In April 2010, Pronto Corp. issued its P Love Green Declaration, our rich natural environment and the water resources borne of it announcing plans to conduct exciting programs that would be may be handed down to future generations. The goal is to raise respectful of people and nature. The first program was its P Love children who will realize the importance of water and instill in Green Campaign. Pronto donated around 7.1 million yen derived from some of the sales of its products, made using them the ability to think and act for themselves to protect water domestically produced materials, to Tokyo’s by giving them information about it. The 2 main programs we are Umi-no-mori (Sea Forest)* Project. pursuing in this area are the Outdoor School of Forest and Water *Umi-no-mori: A project that calls for planting and the Study Support Program. saplings on reclaimed land on the inside of the central breakwater in Tokyo Bay created using garbage and construction waste soil. The goal is to Products used in the turn the land into a beautiful forest. P Love Green Campaign

2010 ■ Outdoor School of Forest and Water, convened 40 times, 2011 ■ Outdoor School of Forest and Water, plan to convene 1,340 participants 33 times with 1,200 attendees expected ■ Study Support Program conducted at 106 schools for ■ Study Support Program, plan to conduct sessions at approximately 8,200 children 100 schools for 7,000 children

51 Suntory Group CSR Report 2011 / Coexisting with the Global Environment Activities of Overseas Businesses

China New Zealand Suntory (China) Holding Co., Ltd. Frucor Group

ニュージーランド ■ Leading Chinese Companies Introduce Once-through Boilers ■ Reducing Waste and Promoting Recycling In June 2010, The Suntory Shanghai Brewery installed 12 small The Frucor Group’s recycling rate has greatly improved once-through boilers that use natural gas for fuel in its beer over the last 3 years to reach approximately 90%. Frucor has plants. This represented an advance for China, where coal-fired been working on various approaches toward reducing its boilers predominate. The number of units in operation can be waste emissions and improve its recycling rate. These include adjusted in response to the steam load, and operating efficiency participation in numerous trade has been improved to 95% from organizations in New Zealand and the less-than-80% figure posted Australia, promoting recycling at when using large coal-fired boilers. public facilities and event spaces, Additionally, by no longer using improving packaging design, and coal they reduced their CO2 funding research and development emissions by more than 60%. into container recycling that is based in the local community. Packaging designed with Once-through boiler eliminating waste in mind

United Kingdom France Morrison Bowmore Distillers Ltd. Château Lagrange S.A.S.

イギリスフランス ■ Using Waste Heat from the Distillation Process ■ Ecological Designation: Awarded Terra Vitis Certification Water in the community swimming pool at Bowmore is In 2005, Château Lagrange received Terra Vitis certification in heated using waste heat resulting from the distilling process. recognition of its efforts to protect the environment and human That waste heat is also used to kiln dry green malts, preheat health while producing high-quality grapes using ecologically charges to the stills, and heat to our Visitor Centre. Resulting sustainable methods. This is a designation for agriculture as waste heat contributes to reducing a whole. Thirty vintners including Château Lagrange who are CO2 emissions not only at our obligated to adhere to strict distilleries, but also for the town standards and annual inspections of Bowmore. are participants in this environmental initiative.

Public swimming pool heated with waste heat Terra Vitis certification

France Singapore Louis Royer S.A.S. Cerebos Pacific Ltd.

フランスシンガポール ■ Effective Use of Water Resources in the Manufacturing Process ■ Environmentally Conscious Plant Completed Louis Royer has been reexamining the water it uses in the In 2010, Cerebos Pacific opened new plants that give due blending and bottling processes, and working to reduce its water consideration to the environment in Thailand and Malaysia. usage and control the quality of its waste water. Additionally, The 2 plants use solar cells and energy-saving light bulbs as well to protect the environment and conserve energy, the cold water as natural lighting. They have also installed low-energy utility needed in the distillation process systems for managing boilers and is coming from the hot water air-conditioners, and have adopted generated during distillation, which mechanisms for reusing the water is briefly stored in large tanks and used on the production line in their chilled before it gets reused. sanitary systems. The plants are particularly noteworthy for their energy efficiency. Storage tank for distilled New environmentally conscious cooling water plant in Thailand

Coexisting with the Global Environment / Suntory Group CSR Report 2011 52 CSR Management Corporate Governance We are striving to enhance our corporate governance to ensure we continue to be a company that is trusted by our customers.

Suntory Group’s System of Management We also have a Group Auditing Department which acts as our Internal Audit Division, auditing and verifying matters including The Suntory Group is introducing a new management system the operational status of each of our Group companies. The Group based on a pure holding-company system separated into “group Auditing Department works to maintain appropriate and sound management” and “business operations.” To achieve the Group’s operations in accordance with our internal regulations. company vision of “In Harmony with People and Nature,” we must continue to have the trust of society and be needed by ● Enhancing Our Internal Control System society. To that end, we have improved our operational efficiency The Board of Directors of Suntory Holdings Limited has adopted and preserved our good relationships with various stakeholders the “Basic Policy on Internal Control Systems.” We are committed including local communities, customers, and business partners, to building a more effective governance structure by enhancing while striving to enhance our corporate governance, so that we our compliance, information management, risk management, may fulfil our social responsibilities as a company. and other initiatives.

● Various Boards Responsible for Group Management ● CSR Management The Board of Directors of Suntory Holdings Limited has 8 We have created a dedicated CSR Department to promote CSR members. The board’s role is to make decisions on issues relating management in the Suntory Group. The CSR Department raises to group management, and to supervise the operations of each awareness of our CSR vision of “Bringing Water to Life” across the Group company. There is also a Group Business Strategy Board Suntory Group. Through these actions, the department works to under the Board of Directors. The Group Business Strategy Board, raise the awareness of all Group employees and promotes various whose members are drawn from top management, manages the activities such as environmental preservation, cultural activities, Group efficiently through specific consideration and discussion of and contributions to society in each of our Group companies. management issues for the Group as a whole. The department also coordinates organized, group-wide We have also introduced an executive officer system, creating initiatives to resolve critical CSR issues, and it has various a structure that enables swift decision making and operations. specialized committees that coordinate with each department.

● The Audit System Monitors/Supervises Management Suntory Holdings Limited has a Board of Auditors consisting of 4 Statutory Auditors, 2 of whom are external auditors. The Board of Auditors audits the state of the internal-control system (including the operations of the Directors), and the operations of group management in general. The external auditors also audit our accounts, verifying the appropriateness and legality of our accounts and internal accounting systems from a third-party perspective.

● Corporate Governance Structure

Suntory Holdings Limited

General Meeting of Shareholders

Appoint / Remove Appoint / Remove

Committees Board of Auditors Board of Directors Quality Assurance Committee Accounting Auditor Group Risk Management Internal Audit Division Committee Group Business Strategy Board (Group Auditing Department)

Group Companies

Food and Non-alcoholic Alcoholic Beverage Restaurants, Sports, Flower, Cross-functional Companies Beverage Companies Companies and Service Companies

53 Suntory Group CSR Report 2011 / CSR Management Compliance/Risk Management We are building group-wide systems to meet the expectations of our customers and society, and maintain continuous business operations.

Compliance by Code of Business Ethics Total Risk Management System In 2003, we created the Suntory Group’s Code of Business The basic principle of risk management at the Suntory Group Ethics to enable all Group employees to carry out their duties is self-management at operational level by each Group company. with common values and standards of conduct. We put in We have also created a Group Risk Management Committee and place a compliance regime based on this code and from a Quality Assurance Committee which are dedicated to resolving a cross-group perspective. issues related to risk, in order to strengthen our group-wide total risk management system. ● Hotline Operations We have created a Compliance Hotline in our Compliance ● Strengthening Group Risk Management Department and at an external law office. The Compliance Our Group Risk Management Committee analyzes and Hotline is a common group-wide point of contact for quickly assesses group-wide risk relating to compliance, information discovering and resolving actions that are in conflict with our security, disaster response, and other critical group-wide issues. Code of Business Ethics. We have also set up independent points It also enhances our risk management from the perspective of of contact within the 18 companies in our national group. In the entire Group. 2010, the hotline received 105 calls across the Group. These calls included consultations about labor relations and human resources. ● Strengthening Our Response to Quality Risk The Compliance Department and the departments in all of the We recognize that offering safe and reliable products and Group companies respond to calls to the hotline by, for example, services is our most fundamental responsibility and we have issuing notifications of need for improvement, which are based therefore created a Quality Assurance Committee. The Quality on investigations that take into account the privacy of all persons Assurance Committee works to identify and reduce quality risk for involved. We also ensure that issues are resolved or mitigated, the entire Suntory Group and promotes information disclosure. and that comprehensive actions are taken to prevent recurrence.

● Ensuring Transparent and Well-Established Compliance Information Security Certification: Suntory Wellness Ltd. We are continually employing measures to ensure that compliance is transparent and well-established in our company, In December 2010, Suntory Wellness Ltd. obtained ISO 27001 such as through various training courses for our Group employees certification for information security. This certification verified that and by uploading information to our intranet. In 2010, we in carrying out its health food and beauty product mail-order put efforts into conducting public activities aimed at our business, Suntory Wellness Ltd. is managing customer information employees. We will also enhance the spread of information details at a high level of security. in the future by directing efforts toward employees of our Group companies overseas.

Awareness Survey for Stronger Compliance We conduct a Compliance Awareness Survey targeting all Group employees every other year (the latest one was conducted in June 2010). Based on the results of this survey, we track issues ISO 27001 Certificate affecting the company as a whole and those affecting individual departments and divisions, and use this information to improve our policies and future initiatives.

2010 ■Training and an Awareness Survey were conducted and 2011 ■Continuing group governance is enhanced group-wide compliance promotion was enhanced ■Group-wide compliance promotion activities and support ■The group-wide PDCA cycle for major operating risks was for each Group company are strengthened maintained and promoted ■Further reinforcements are made to the risk management system of the entire Group, both in Japan and overseas

CSR Management / Suntory Group CSR Report 2011 54 Third Party Opinion This year we received a third party opinion from Mr. Yoshiki Midorikawa, who reviews the CSR reports of various companies from an expert perspective. We have reflected his opinion, which was communicated to us over two reviews, as closely as possible in this report. ● CSR-related information is publicized through the following websites

Corporate Responsibility In the section on Human Resources, the establishment of a Yoshiki Midorikawa Diversity Promotion Section is of particular note. We can infer http: //www.suntory.com/csr/ Co-chair of the Valdez Society and Representative that the issue of diversity is being practically addressed, as is of the Green Consumer Research Group apparent in the specific measure of appointing higher numbers In addition to introducing the contents of the of women to managerial positions. In terms of the labor force Suntory Group’s CSR Report 2011, various participation rate for women, which for Japan is repeatedly other information such as the Group Company’s The inclusion in this CSR report of Feature 1, “Water Resource reported by the OECD to be low compared with other developed CSR are also described on our website. Cultivation,” which presents how the Suntory Group puts into countries, I would like in the future to see Suntory promote practice its CSR vision of “Bringing Water to Life,” is what diversity still further through, for example, increasing the sets this report apart. Suntory is pursuing, with substantial proportion of female employees. momentum, a medium-term objective laid down at the end of Furthermore, as an overall issue, since information disclosure is 2008 to expand the area of land for water resource cultivation limited, as a medium-term task, I hope that Suntory moves closer Suntory, Bringing Water to Life by approximately four-fold, to 7,000 hectares by the end of to maximizing its consolidated results. 2011. This endeavor shows just why Suntory’s CSR activities are The support activities undertaken by the Suntory Group in http://www.suntory.com/corporate/water/ valued so highly. Looking at environmental practices overall, we response to the Great East Japan Earthquake have been highly In addition to introducing the belief for can clearly see progress being made, such as the setting of CO2 proactive. These activities are getting some media coverage, but emission reduction targets, Three Rs practices being implemented I ask that Suntory increases its efforts including strengthening “Bringing Water to Life” and the history of for containers and packaging, and new developments to move business continuity plans and enhancing energy saving measures. Suntory using videos, information including away from creating PET bottles from PET bottle materials. In the midst of Suntory firmly establishing its CSR activities, our initiatives toward environmental quality Feature 2, which celebrates Suntory’s cultural activities and social in November 2010, the ISO 26000 Guidance was published, based on “Bringing Water to Life” is also contributions that embody the spirit of “Sharing the Profit with calling for the social responsibility of all organizations, not only described on our website. Society,” represents a critical juncture that relates to the Suntory companies. Of the seven core subjects in the Guidelines, new Group’s vision of harmoniously coexisting with society. I wish to issues were raised including the problem of human rights. In convey my respect for Suntory’s continuous efforts in this sphere. order to resolve social issues, the responsibilities of government The report contains information important for evaluating and administrative bodies in policy making, the social Suntory’s CSR activities and provides it in greater detail than responsibilities of organizations including companies, and the before; for example, in “Quality Assurance,” we can read about responsibilities of individuals must be sufficiently fulfilled. Suntory’s dedication to product quality. The activities of Suntory’s I hope that Suntory takes the opportunity presented by the overseas companies are mainly presented on the website, but it is publication of these Guidelines to once again review its social also possible to read the important points in this report. responsibilities and make new developments.

Suntory’s Response

Satoshi Hamaoka the Profit with Society” that it has held since its establishment. The clear appreciation of our activities is encouraging and we Executive Officer Executive General Manager, Public Relations Department, will be proactive in promoting further efforts. Meanwhile, CSR Department, Suntory Holdings Limited your proposals reflect precisely the suggestions we have received about CSR issues and we will continue to reflect these in our future activities. In particular, we recognize that, alongside the I wish to convey my sincere condolences to the people affected expanding globalization of our business, efforts towards CSR by the Great East Japan Earthquake. It is our intention as a Group activities that are in accordance with international standards to take measures to support the earliest possible reconstruction are increasingly important. and regeneration of the earthquake region. Continuing into the future, and aiming to become a company Based on our CSR vision of “Bringing Water to Life,” the “Growing for Good,” we will strive to enhance our Group’s CSR Suntory Group is promoting environmental management activities and information disclosure, and we will most assuredly centered around sustainability of the important global resource fulfill our social responsibilities. I am looking forward to receiving of water, as well as proactively developing cultural and social candid assessments and opinions from everyone with regard to contribution activities based on Suntory’s spirit of “Sharing this report.

55 Suntory Group CSR Report 2011 / Third Party Opinion ● CSR-related information is publicized through the following websites

Corporate Responsibility http: //www.suntory.com/csr/

In addition to introducing the contents of the Suntory Group’s CSR Report 2011, various other information such as the Group Company’s CSR are also described on our website.

Suntory, Bringing Water to Life http://www.suntory.com/corporate/water/

In addition to introducing the belief for “Bringing Water to Life” and the history of Suntory using videos, information including our initiatives toward environmental quality based on “Bringing Water to Life” is also described on our website.

Suntory Group CSR Report 2011 56