KIRIN GROUP SUSTAINABILITY REPORT 2012

For inquiries, contact : CSR Management DepartmentKirin Holdings Company, Limited

2-10-1 Shinkawa, Chuo-ku Tokyo 104-8288, Japan www.kirinholdings.co. jp/english/ ■ Published August 2012 Next report to be published May 2013 Table of Contents

KIRIN GROUP SUSTAINABILITY REPORT 2012 About Kirin Group Sustainability Report 2012 2 About Kirin Group Sustainability Report 2012 Reporting Period 3 Company Profile January 1, 2011 to December 31, 2011. Please note that The Kirin Group operates in the food and health industries. Whatever we do, we strive to environmental performance data for the Kyowa Hakko Kirin Group 4 Top Management Commitment ensure that the natural environment will continue to be the source of food; wherever we cover the period April 1, 2010 through March 31, 2011, with the 6 Special Report: Better Prepared for Natural Disasters operate, we seek to help society achieve sustainable development. That is why we call this exception of energy-use data that cover the period January 1, 2011 through December 31, 2011. 8 Feature Story: Kirin Group Extends Assistance in Reconstruction a sustainability report. In this report, we share with you and update you on our philosophy, Efforts for Communities Affected by the Great East Japan Earthquake policy, and initiatives to carry out our corporate social responsibility (CSR). Scope of Reporting and Data Compilation —Kirin KIZUNA Relief-Support Project Where applicable, this report covers activities and accomplishments 12 About Kirin Group by Kirin Holdings Co., Ltd. and its 263 consolidated subsidiaries 16 Our Philosophy Toward CSR Editorial Policy in Japan and abroad (as of December 2011), which collectively constitute the Kirin Group. On matters where group-wide 22 Customers: Delivering on the Brand Promise information is unavailable, names of companies for which 24 Keeping Up with the Growing Health Needs The Kirin Group is structured around Kirin Holdings Company, Limited, a holding company that information is compiled are specified. manages operating companies in the Group. Kirin Holdings plays a central role in establishing broad 26 Universal Design Pharmaceutical and Biochemical Business CSR policy and guidelines for the entire Group, and each Group company implements CSR initiatives Environmental performance data for the Group's operations in 28 Food Safety in a manner that meets its business needs and community requirements. This report is published by Japan are a compilation of data from: Kirin Brewery Co., Ltd.; Kirin Distillery Co., Ltd.; Ei Sho Gen Co., Kirin Holdings on behalf of the Kirin Group, and it discusses the Group's philosophy toward CSR, what 30 Global Environment: Promoting Environmental Sustainability Ltd.; Kirin City Co., Ltd.; Kirin Merchandising Co., Ltd.; Kirin & its high-priority CSR initiatives strive to accomplish, and how Group companies implement these Communications Co., Ltd.; Kirin Logistics Co., Ltd.; Kirin Engineering 32 Promoting Environmental Stewardship across the Entire Value Chain initiatives. The report comprised six parts: Customers; Global Environment; Communities; Employees; Co., Ltd.; Kirin Techno-System Corp.; Diageo Kirin Co., Ltd.; Heineken Kirin K.K; Mercian Corp.; Mercian Feed Corporation.; Mercom Corp.; Business Partners; and Shareholders and Investors. Each part includes many examples and cases that 34 Helping Make a Zero-Waste Society a Reality Nippon Liquor Ltd.; Daiichi Alcohol Co.,Ltd.; Kirin Beverage Co., illustrate and reflect the Group's CSR policy. Please note that several Group companies publish their Ltd.; Kirin Chilled Beverage Co., Ltd.; Shinshu Beverage Co.,Ltd.; 36 Conserving Biodiversity own CSR reports (see Page 71) that provide more detailed information about their activities. Kyowa Hakko Kirin Co., Ltd.; Kyowa Medex Co., Ltd.; Kyowa Hakko 38 Mitigating Global Warming Bio Co., Ltd.; Daiichi Fine Chemical Co., Ltd.; Kirin Kyowa Foods Co., We referred to the guidelines listed at the bottom of this page when compiling this report. The Kirin 40 Conserving Water Resources Ltd.; Koiwai Dairy Products Co., Ltd.; Yokohama Arena Co., Ltd.; Group will continue to review what to include in future sustainability reports. Yokohama Akarenga Inc.; Kirin Echo Co., Ltd.; Kirin Holdings Co., 41 Environmental Risk Management and Material Balance Ltd.; Kirin Group Office Company.Limited.; Kirin Business Expert Co., 42 Communities: Coevolving with Communities Ltd.; Kirin Business System Co., Ltd.; Kirin Real Estate Co., Ltd. 44 Socially Responsible Alcohol Beverage Company Environmental performance data for the Group's operations 48 Addressing Food-Related Issues Reporting Kirin Group's CSR Activities outside Japan are a compilation of data from: Kirin (China) Investment Co., Ltd.; Kirin Brewery (Zhuhai) Co., Ltd.; 49 Exploring the Future Lifestyle of Food Lion Corporation; Kirin Kunpeng (China) Bio-Pharmaceutical 50 Investing in the Development of Children Corporate Web Site Co., Ltd.; BIOKYOWA INC.; Shanghai Kyowa Amino Acid Co., Ltd. Providing updates on the Group's CSR initiatives and performance (Company names current as of December 31, 2011) 51 Supporting Sports, and the Arts and Culture Investing in Communities Environmental Performance 52 Employees: Valuing Our People Sustainability Report 2012 Data Book Company Profile in PDF in PDF (available only in Japanese) 54 Embracing Diversity and Inclusion Trade Name 56 Developing Employees' Competencies Reporting what the Group Kirin Holdings Company, Limited accomplished in 2011 Date of Incorporation 57 Respecting Human Rights February 23, 1907 *On July 1, 2007, pursuant to the transition to a pure holding company 58 Business Partners: Developing Collaborative Relationships structure, Kirin Holdings Company, Limited changed its name from Kirin Kirin Group's web site on CSR: http://www.kirinholdings.co.jp/english/csr/ Brewery Company, Limited. 60 Case Studies of Collaborative Projects Paid-in Capital 62 Partnership in Manufacturing, Distribution, Sales, and Medical Research 102,045,793,357 yen 64 Shareholders and Investors: Number of Employees Timely and Fair Disclosure of Information Reference Guidelines: 251 ・G3.1 Sustainability Reporting Guidelines, published by the Global Reporting Initiative (GRI) in 2011 (Number of employees of Kirin Holdings' consolidated subsidiaries: 40,348) 66 Accountable Management ・Environmental Reporting Guidelines (Fiscal Year 2007 Version), published by the Ministry of the Head Office 68 Risk Management Environment of Japan 2-10-1 Shinkawa, Chuo-ku Tokyo 104-8288, Japan Telephone: +81-3-5541-5321 69 Compliance *A list of indicators based on GRI G3.1 Guidelines is available on Kirin Holdings' web site. Sales 70 Third-Party Opinion Forward-Looking Statements: 2,071,774million yen 71 Kirin Group's Sustainability Information Statements in this report that are not historical facts are forward-looking statements based on the (Consolidated sales from January through December 31,2011) current beliefs, estimates, and expectations of management, and include risks and uncertainties Main Businesses associated with changes in domestic or overseas economic or market conditions, and changes in Strategic management and oversight of the Group, and provision laws, regulations or policies in any of the countries in which the Kirin Group operates. of specialized services (As of December 2011)

2 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 3 Top Management Commitment Bonding and Coevolving with All Our Stakeholders

The Kirin Group focuses on people, nature, and craftsmanship to redefine the joy of food and health. Under the theme of bonding and coevolving with all our stakeholders, we devote group-wide resources to address challenges society faces today.

Supporting Reconstruction from the Great and health to serve customers and society. As a corporate are right on track toward reducing environmental loads East Japan Earthquake group whose core business is to manufacture and market throughout our value chain—continuing to curb carbon alcohol beverages, we tackle head-on alcohol-related emissions and conducting the biodiversity-friendly sourcing The year 2011 saw a series of devastating natural disasters problems (ARPs) in society. To address ARPs through of raw materials. around the globe—earthquakes in Japan and New product innovations, we have been undertaking two efforts. Zealand and floods in Australia and Thailand. The Kirin First, Mercian has been marketing the non-alcohol, wine- Group reaffirmed its commitment to fulfilling its social Global Corporate Citizenship tasting beverage Mercian Free Sparkling—co-developed responsibilities by extending assistance and relief to people Our employees are, by far, the most important driving force with Kirin Brewery—to resounding success since 2011. hit hard by these disasters. We hope communities in the behind the Kirin Group's expanding global operations. In Second, Kirin Free—a non-alcohol, beer-tasting beverage— affected areas are on the fast road to recovery. recognition of this, we will step up our efforts to foster an has become so popular among Japanese customers that After the Great East Japan Earthquake struck in March 2011, organizational culture that encourages our people to have it is now served in more than 100,000 bars and restaurants the Kirin Group launched the group-wide Kirin KIZUNA open and frank exchanges with each other. We will create around the country. We are also making Kirin Free available (bonding) Project1 to support reconstruction efforts in the an environment in which all employees develop a sense of in wider markets in the United States. We will globally step Senji Miyake Tohoku region, which was the most seriously damaged by togetherness and belonging, live up to the values and basic up our crusade against drunk driving and expand our public the earthquake and tsunami. The KIZUNA Project comprises action stance embodied in the KIRIN WAY, and are motivated to President and CEO campaign for responsible drinking. three pillars of activities: (1) helping restore the local food achieve professional growth. We will also continue to embrace Kirin Holdings Company, Limited For health-conscious customers, we are marketing health culture and food industry; (2) bringing smiles to children; diversity and inclusion in the workplace, including offering and functional beverage and food products under the Kirin and (3) helping people enhance their mental and physical wider career opportunities to female employees. All these Plus-i brand to create value by offering not only great taste wellness. These activities are intended to help the region's approaches will enable us to lay the groundwork for recruiting and joy but also health-related benefits. industry return to what it used to be, which will encourage and nurturing global managers capable of understanding and The Kirin Group maintains a comprehensive quality- people to start thinking about the future again, invigorate managing business across borders and cultures. management system that extends from the sourcing of the entire communities, and eventually lead to sustained As part of our role as a responsible global corporate citizen, raw materials through manufacturing to distribution and growth in the region. we have signed the United Nations Global Compact and sales so as to provide only safe and reliable products to In the second year of the project, we are continuing to have incorporated its principles—respecting human rights, customers. In the wake of the incident at the Fukushima stand by affected people and communities in their times eliminating unfair labor practices, promoting environmental Daiichi Nuclear Power Plant that followed the Great East of need. We are also playing our role in helping keep the responsibility, and working against corruption—into the Kirin Japan Earthquake, we established stringent safeguards momentum going for the nationwide campaign to assist Group Compliance Guidelines, a binding framework we adhere against radioactive contamination2 of water, raw materials, the Tohoku region. On a side note, I am pleased to report to in our global operations. and products, and have since been voluntarily and regularly that Kirin Brewery's Sendai Plant and other Kirin Group The Kirin Group focuses on people, nature, and craftsmanship testing them to ensure safety. By cooperating with the facilities that sustained damage from the earthquake and to redefine the joy of food and health. Driven by this Japanese regulatory authorities and keeping track of new tsunami are back in normal operations. On behalf of all Kirin philosophy, we connect with all our stakeholders and strive developments, we will maintain a tight rein on product Group companies, I would like to take this opportunity to to coevolve with communities in which we operate—firmly safety and quality so that customers buy our products with thank you for the moral support and encouragement you committed to working toward making a sustainable society a complete confidence. gave us during the hard times. They meant much to us. reality. In the area of environmental stewardship, Kirin Holdings We hope our group-wide endeavor will meet your ranked top of Japan's 500 largest companies for the quality Committed to Serving Customers and Society expectations. and completeness of the information we disclosed about True to its brand slogan "Good taste makes you smile," the our climate-change management, according to a report Kirin Group is committed to delivering the new joy of food published by the Carbon Disclosure Project3 in 2011. We

1. See Feature Story on Page 8 2. See Pages 7 and 29 3. See Page 33

4 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 5 Special Report

Better Prepared for Natural Disasters The Kirin Group is reviewing and upgrading its preparedness for natural disasters to enhance its ability to handle disaster recovery and maintain business continuity. In addition, we remain committed to playing our part in addressing social challenges in the event of a disaster. Conserving Electricity

The Kirin Group spares no efforts to conserve electricity in its Kirin Beverage stepped up its operations to deal with the inconsistent supply of electricity already aggressive efforts to reduce Aftermath of the Great East Japan Earthquake in the wake of the incident at the Fukushima Daiichi Nuclear power use for its thousands of Power Plant that followed the Great East Japan Earthquake. vending machines. At the request Kirin Group companies sustained a wide range of facility the first of many steps to support reconstruction efforts for Kirin Brewery used, to the full, the power-generation of the Japan Soft Drink Association, damage from the Great East Japan Earthquake, which struck affected areas. facilities that seven of its nine plants had on their premises the company cut power use by the on March 11, 2011. Furthermore, a seriously disrupted In the aftermath of the earthquake, we have reviewed as an alternative source of electricity, reducing dependence machines by more than 25% from supply of materials and subsequent power shortages the Group's risk management policy and procedures to on power companies. Its Yokohama Plant even supplied 9:00 AM to 8:00 PM in the areas hurt the Group’s ability to continue operations in some of bring them up to date. Designated Group companies to Tokyo Electric Power Company up to 10,000 kilowatts of served by Tokyo Electric Power Company and by more than its plants. In the wake of the earthquake, the Kirin Group and departments are reviewing an initial-response plan electricity generated by its power generator running at full 15% in the areas served by Tohoku Electric Power Company established a crisis-response headquarters that coordinated against natural disasters and are implementing solutions to capacity. from July to September 2011 compared with the same group-wide efforts to recover from the earthquake and enhance the Group's business continuity. All these revisions Mercian's Fujisawa Plant also ran its own power generator period the previous year. During winter, Kirin Beverage bring its operations back to normal. In addition, the Group and updates are incorporated into the Kirin Group Risk to keep its production lines running and to power the conserved electricity by turning off nonessential lights in its immediately donated 400 million yen (including the 100 Management Policy for 2012. Yokohama Akarenga commercial complex at the peak of vending machines. million yen donated by Kyowa Hakko Kirin) to relief funds as electricity use.

Recovery Operations at Kirin Brewery's Sendai Plant Upgraded Safeguards to Prevent Radioactive Contamination

The Sendai Plant sustained serious damage from Immediately after the incident at the Fukushima Daiichi continue to enhance our quality the earthquake and tsunami on March 11, 2011: four Nuclear Power Plant, the Kirin Group established stringent assurance so that customers feel bright beer tanks (pictured) collapsed; the packaging safeguards against radioactive contamination of its products confident about the safety of our facility and warehouse were flooded; and thousands of and materials it uses for them to ensure safety. products they buy. products and pallets were washed away. By maintaining contact with the regulatory authorities on See Page 29 for details of the While electricity remained cut off, preparations for food safety and by keeping a close watch on developments Group's safeguards against at the damaged nuclear plant and elsewhere, we will radioactive contamination. Testing food materials for cleanups and recovery operations started on March 21. radioactive contamination Section leaders reported to work for the first time after the earthquake on April 10, and all employees were back in the plant on May 11. When Plant Manager Noriya Yokota The Asia-Oceania region, in which the Kirin Group operates, was hit hard by a series of major told employees about a plan for recovery operations and Disaster Relief natural disasters in 2011. Here are three examples of disaster relief efforts the Group made the roles they would play, everyone had a determined operation in August. On September 26, preparations Efforts Overseas overseas during the year. look on her or his face to work together to bring the were made for brewing, for the first time since plant plant back to what it used to be. Plant employees and operations had resumed, of the special edition of Kirin those of affiliated companies worked side by side for Ichiban (pictured) using hops freshly harvested in Tono, Queensland Flood in Australia Christchurch Earthquake in New Zealand nearly 100 days, picking up damaged products in and one of the communities in the Tohoku region struck by In response to the floods The earthquake that struck around the plant premises and cleaning the shipping the earthquake. that devastated Queensland, in February 2011 damaged facility. The plant resumed the shipping of canned beer and Australia, in January 2011, Lion Lion’s Canterbury brewery and Electricity was finally restored in July, and the draft beer in kegs on November 2, and resumed the donated more than 400,000 offices beyond repair. Lion New wastewater-treatment facility in the plant was back in production of bottled beer on February 15, 2012, Australian dollars in cash and Zealand committed funding which was the day the plant fully returned to normal products to affected people and resources to the city and operations. and those who volunteered to help them. Lion employees coordinated these through official channels in Christchurch. Looking back on the long and hard recovery also donated 86,500 Australian dollars to the Premier’s Lion estimates their contribution to date is in excess of operations, Yokota said, "Our employees' Disaster Relief Appeal. 200,000 New Zealand dollars through a combination of cash, undivided dedication and product donations, fresh water, and other supplies. Many of commitment helped us overcome Lion’s Christchurch-based employees also volunteered their the enormous challenges during See Lion's Sustainability Report 2011 for details about its disaster relief efforts. time and resources to help people in need. the hard times." Every employee is now back in the plant, busy keeping Flood in Thailand Kirin Holdings, on behalf of the entire Kirin Group, donated five million yen to the Thai Red Cross in the wake the production lines running. of the devastating flood that swept the country in autumn of 2011.

6 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 7 Kirin Group Extends Assistance in Reconstruction Efforts for Communities Affected How Funds Are Used for by the Great East Japan Earthquake the Kirin KIZUNA Relief-Support Project The Kirin KIZUNA Relief-Support Project raised Providing Continued and Fair Support 1,882,297,310 yen in fiscal 2011, out of which 1,321,190,796 yen was spent on the three Kirin KIZUNA Relief-Support Project To spearhead the Group's relief-support efforts, we have pillars of project activities. The balance will established cross-functional project teams comprising be used to fund activities scheduled for fiscal members of various Kirin Group companies and divisions. 2012 and beyond. The Kirin Group is committed to contributing six billion yen over three years When the project teams develop action plans, they sit Funds raised in 2011 included part of the down with external project partners to learn what affected to reconstruction efforts in the Tohoku region, proceeds from the sales of Kirin products, a communities need the most. When implementing the plans, donation of 12,539,902 yen by Kirin Group which was struck hard by the Great East Japan the teams seek insights and advice from experts outside employees and their families around the the Group. This helps us carry out the KIZUNA Project in a Earthquake and tsunami, and is carrying out the world through the Kirin KIZUNA Fundraising fair and reasonable manner. In addition, we regularly review Drive, and the same amount matched by the Kirin KIZUNA (bonding) Relief-Support Project, with project partners how effectively the project funds are Company. used to date and update action plans where necessary. in which all Group companies participate. Amount of Money Spent (yen)

Helping restore the local food culture When the region's industry gets back on its feet, we hope children will feel and food industry secure in the knowledge that they Three Pillars of Activities Borne Out of have a bright future ahead. ● Helping restore local agriculture 420,966,051 Our Attachment to the Tohoku Region ● Helping restore local aquaculture 403,000,000 The Kirin Group takes delight in turning the bounty of the region's industry get back to normal and create jobs, ● Donation to a project initiated by Tohoku University to help restore the Tohoku region's agriculture and nature into products and delivering them to customers so which will stimulate the regional economy and make fishery 20,000,000 that they live happy and healthy lives. children feel that they have a bright future ahead. This will We have been closely associated with and attached to in turn brighten up the entire communities and help them ● Donation to the "Eat and Energize the East" project the Tohoku region, where Kirin Brewery—one of the sustain growth. 1,500,000 Group's core companies—has been producing beer at its Helping restore Bringing smiles Sendai Plant for 88 years, and Koiwai Dairy Products has the local food culture to children Bringing smiles to children been operating its key Koiwai Plant for 120 years. Driven and food industry by a strong desire to repay the people in the region for Support the medium-term Support the long-term objective ● Kirin-SCJ KIZUNA Scholarship Program for high school their years of support to us, Kirin Group companies are objective of laying the of nurturing children to become students studying agriculture 145,890,509 economic foundation for the next generation of leaders committed to providing assistance in reconstruction reconstructing communities for communities ● Cheering up children through table tennis 6,207,423 efforts to encourage affected people to foster stronger bonds with their communities and families. ● Support to science education 10,000,000 The Kirin KIZUNA Project comprises three pillars of ● Cheering up children with music: concerts given activities: (1) helping restore the local food culture and by Les Freres and Kenichiro Kobayashi 9,868,950 Helping people enhance food industry that transforms the blessings of nature into their mental and physical wellness food; (2) bringing smiles to children who will grow to Support in uplifting communities Helping people enhance their mental become the driving force behind the local food industry; on a daily basis and physical wellness and (3) helping people enhance their mental and physical ● Uplifting communities through soccer: JFA-Kirin Smile wellness in everyday life. We use our assets and resources When the Field soccer class 288,862,560 communities become We hope the smiling faces of children will to support these activities intended to be a catalyst for the vibrant, we hope this Collaborative support programs with local will invigorate local brighten up the ● region's reconstruction and subsequent growth—helping culture and industry. communities. governments 14,895,303

8 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 9 Activities in the Kirin KIZUNA Relief-Support Project Volunteer Relief Work The project runs for three years.

Helping Restore the Local Food 1 Culture and Food Industry Many farmers in Iwate, Miyagi, and them with farming equipment supplied by farmers in other parts of Kirin Group employees volunteer to Fukushima Prefectures lost their the country. We hope this will help foster a bond between farmers take part in relief work in affected Restoring local farming equipment in the Earthquake in the affected areas and those in other areas, and that it helps keep agriculture communities. and tsunami. We work with the Japan the legacy of traditional agriculture going uninterrupted in the Agricultural Cooperatives to provide Tohoku region.

We assist in restoring aquaculture in the in Fukushima. Our support is focused mainly on restoring damaged Donating farming equipment to the Restoring local Shichigahama Farmers Association three prefectures: wakame seaweed in aquaculture equipment, a matter which is a frequent request of people fishery Iwate, oysters in Miyagi, and green laver in the region's fishery industry.

2 Bringing Smiles to Children We work with Save the Children Japan students a year who are studying agriculture and are in need of financial (SCJ), an NGO advocating children's rights, support in Iwate, Miyagi, and Fukushima Prefectures. We hope the Scholarships for to run the Kirin-SCJ KIZUNA Scholarship scholarships will help them continue their studies in preparation for Volunteer work in the first round of the project high school students Program. We offer a non-repayable becoming ready to drive restoration efforts for agriculture and related in Miyagino District studying agriculture scholarship of 30,000 yen a month for up industries within their communities. In 2011, 598 students from 12 high to three years to up to 600 high school schools received scholarships. In 2011, 176 employees provided volunteer services in two cities in Miyagi Prefecture. Seven teams of 56 Competitive table tennis players Miyagi, and Fukushima Prefectures. In 2011, they gave five sessions of employees worked in the Miyagino A table tennis class from Kyowa Hakko Kirin as well as a the Kyowa Hakko Kirin Table Tennis Class to 1,500 students. In technical and Wakabayashi districts in Sendai in Cheering up former employee of the company and sessions, participating students, eager to improve their skills, asked a lot the first round of the project, and 15 children through professional table tennis player hold of questions. We left the table tennis tables and paddles behind after teams of 120 employees in Ishinomaki table tennis table tennis classes for elementary, junior the classes so that people in local communities could continue to enjoy in the second round. At the request Les Freres giving a piano concert to children high, and high school students in Iwate, playing the sport. of local communities, they shovelled mud off driveways and sidewalks and provided assistance to fishers. We hope that children come to enjoy schools, and high schools in the affected areas and to donate music Kirin employees will continue to music and nurture their dreams. We instruments to them. We also sponsored their relief-support concert in participate in volunteer work in Cheering up worked with the professional piano Sendai. In addition, we sponsored a two-day concert by an orchestra response to local needs and the children with music Orchestra conducted by Kenichiro Kobayashi duo Les Freres to give concerts in day- conducted by the world-renowned Kenichiro Kobayashi in Kitakami, to progress of reconstruction. care centers, kindergartens, elementary which we invited people with intellectual disabilities.

Helping People Enhance their Mental 3 JFA-Kirin Smile Field and Physical Wellness We work with the Japan Football coach children in schoolyards, and we donate goals and balls to the Association in presenting the JFA-Kirin schools after the classes so that children can continue to enjoy playing Smile Field soccer class, a three-year soccer. By the end of March 2012, 12,091 children participated in these program for elementary students in soccer classes, some of whom sent us letters to say they had come to Iwate, Miyagi, and Fukushima Prefectures. like playing soccer because of the classes. Uplifting Former members of Japan's national team Volunteer work in the second round of the project communities in Ishinomaki through soccer Japan National Team soccer games Working with JFA and soccer associations junior high, and high school students and their parents from among and the governments of prefectures those who had been evacuated from their homes after the Earthquake where Japan National Team soccer games to Japan National Team soccer games in Kirin Cup Soccer 2011 and the Children participating in a JFA-Kirin Smile Field soccer class were held, we invited 1,520 elementary, third Asian qualifying round for 2014 FIFA World Cup Brazil.

10 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 11 About Kirin Group

Kirin Group's Global Operations Business Segments

The Kirin Group is engaged in the manufacture and sales unconsolidated subsidiary, and 18 affiliates accounted for by We pride ourselves on offering products based on what customer expectations. And naturally, we do not stop there. As of alcohol beverages, non-alcohol beverages, foods, and the equity method. people want. We pride ourselves on our ability to harness we look forward with vision and dreams, we aim to continue pharmaceuticals in Japan, the Asia-Oceania region, and other We are striving to become a leading company in Asia and the goodness of nature through innovative technology. We offering food and health products that bring new joy to parts of the world. Oceania under the Kirin Group Vision 2015 (KV2015) long-term pride ourselves on delivering tangible satisfaction and quality people's lives everywhere. Always a step ahead, the Kirin Group As of December 31, 2011, the Group had more than 40,000 business plan. in everything we make. All of which ensures that we exceed supports health, pleasure and comfort in your life. employees, and comprised 263 consolidated subsidiaries, one Domestic Alcohol Beverages Business

Domestic Alcohol Beverages Business Overseas Beverages Business Other Business We deliver great taste that makes people smile. Domestic Non-Alcohol Beverages Business Pharmaceuticals and Biochemicals Business

Jeil-Kirin Pharma, Inc. Kirin Holdings Co., Ltd. The Coca-Cola Bottling Company of Kirin Brewery Co., Ltd. Northern New England, Inc. Kirin Beverage Co., Ltd. Kirin Beer & Spirits of America, Inc. Kyowa Hakko Kirin China Pharmaceutical Co., Ltd. Kyowa Hakko Kirin Co., Ltd. Kirin (China) Investment Co., Ltd. Mercian Corp. BioWa, Inc. Kyowa Hakko Kirin Pharma, Inc. Four Roses Distillery LLC

Pro Strakan Group plc Kirin Europe GmbH Hematech, Inc. Kirin-Amgen, Inc. Kyowa Hakko Kirin California, Inc. Domestic Non-Alcohol Beverages Business China Resources Kirin Beverages (Greater China) Co., Ltd. Kirin Brewery (Zhuhai) Co., Ltd. Kyowa Hakko Kirin (Taiwan) Co., Ltd. We create a new soft-drink culture and add value to exceed customers' expectations. Kyowa Hakko Kirin (Hong Kong) Co., Ltd. Taiwan Kirin Co., Ltd.

Kyowa Hakko Kirin（Singapore）Pte. Ltd. Siam Kirin Beverage Co., Ltd. PT Kirin-Miwon Foods Fraser and Neave Ltd. Kirin Holdings Singapore Pte. Ltd. Interfood Shareholdings Company San Miguel Brewery, Inc. Schincariol Participacoes e Representacoes S.A. Indústria Agrícola Tozan Ltda. Lion Pty Ltd. Overseas Beverages Business

We expand our beverages business in the growing Asian and Oceania markets to create new value.

Group Structure As of January 1, 2012 Kirin Holdings Functional companies Lion Holdings Singapore Kirin Interfood (Greater China) Co., Ltd. China Resources Kirin Beverages AgrícolaIndústria Tozan Ltda. San Miguel Brewery * Brewery Miguel San Kirin (China) Investment Co., Ltd. New England Northern Coca-Cola Company Bottling of Schincariol Kirin Brewery Kirin Mercian Beverage Kirin Shinshu Beverage Kyowa Kirin Hakko Inc. * Kirin-Amgen, KyowaKirin Foods Products Koiwai Dairy Fraser and Neave * Echo Kirin Yokohama Akarenga Yokohama Arena Group Oce Kirin Business Expert Kirin Business SystemKirin Pharmaceuticals and Biochemicals Business Other Businesses

We leverage our technical ingenuity and prowess to help people We assist people to maintain healthy and happy around the world enjoy healthy, fulfilling lives. dietary lifestyles.

Domestic Domestic Pharmaceutical Alcohol Non-Alcohol Overseas Beverages Business and Beverages Beverages biochemical Other businesses Business Business business

*Aliate accounted for by the equity method

12 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 13 About Kirin Group Medium-term Business Plan

The Kirin Group states in its group vision (KV2015) the goals it strives to achieve by 2015. Promoting In the medium-term business plan currently under way, we are implementing CSR initiatives as one of the three basic CSR is one of the basic policy initiatives outlined in this vision. policies outlined in the plan.

Long-term Business Plan Kirin Group Vision 2015 (KV2015) 2010-2012 Medium-term Business Plan (KV2015 Stage II, unveiled in October 2009)

The Kirin Group fosters a close relationship with customers through products that bring them the joy of food and health. We Positioning of 2010-2012 Medium-term Business Plan (MTBP) integrate our expertise in fermentation and biotechnology, manufacturing, research and marketing to pursue distinctive value Long-term Business Plan (KV2015) and the highest quality in alcohol beverages, soft drinks and pharmaceuticals businesses with the goal of becoming a leading company in the Asia-Oceania region. Stage III Stage II 2013-2015 MTBP 3 strategies to achieve growth The Kirin Graoup Vison for 2015 Consolidated targets Stage I 2010-2012 MTBP Promote the integrated beverages Enhance the corporate value Sales Group strategy Realize growth 2007-2009 MTBP of the KIRIN Group ¥3.0 trillion(inc. alcohol tax) “Three years to implement key initiatives Promote globalization ¥2.5 trillion(exc. alcohol tax) “Three years and achieve a qualitative expansion” Create a health and functional foods business as a new business pillar next to A trusted corporate group Standard Group attitude 3C to kick-start growth” alcohol, beverages and pharmaceuticals Operating income ratio: Over 10%

Follow through on key initiatives and continually shift strategic focus from a quantitative expansion Overseas sales ratio and Strengthen foundation A corporate Group based on its strengths operating income: to a qualitative expansion as a critical step toward achieving long-term management vision (KV2015) Approx. 30% (sales excl. alcohol tax) Further growth in the domestic Technical expertise Customer intimacy alcohol business Under the 2007-2009 MTBP, which was the first stage of KV2015. Specifically, we will achieve significantly higher KV2015, we laid solid groundwork for achieving quantum- profitability and greater operational efficiency across the Group Increased cost competitiveness Establish Group management structure leap growth in revenue by: bringing the alcohol beverages by undertaking a continuous structural reform and facilitating Group management structure Reorganization into low cost Change of corporate structure business in Japan back to growth; implementing a strategy for deeper group synergy. Furthermore, we will remain committed business model Reform organizational climate Strengthen management Strengthen and adjust Group becoming an integrated beverage group in Japan and abroad; to creating new value to meet diverse customer needs and Continuous Kaizen People-focused management head o‰ce functions and allocating substantial management resources to capital to deliver a greater joy of food and health, and also to playing investment in building a foundation for a sustained growth. an active role in the sustainable development of a safe and What We Strive to Accomplish by 2015 Under the 2010-2012 MTBP, we will follow through on key comfortable society in all aspects of our business operations. initiatives that will bring us closer to the goals outlined in ●We aim to enhance the value of the Kirin brand both as a brand of trust and as a brand of innovation. 2011 Results 2012 Plan Change 2010-2012 MTBP ●We will implement three growth strategies built on the strengths of our core businesses. Sales ●Become an integrated beverage group by leveraging the synergy between the alcohol beverages and soft drinks businesses (billions of yen) Liquor tax excluded 1,748.3 1,905.0 +9.0% 2130.0 ●Establish the foundation for business growth in the Asian market outside Japan by facilitating greater synergy among group companies and collaborating with external business partners Operating Before amortization of goodwill 189.8 213.2 +12.3% 231.0 income ●Use a wealth of technical expertise to establish another core business in the food and health market that bridges the beverage business and (billions of yen) After amortization of goodwill the pharmaceutical business 142.8 162.0 +13.4% 188.0 +0.3 ●As a corporate group that uses what nature has to offer to conduct business, we are committed to the sustainable development of a safe and Operating Liquor tax excluded. Before amortization of goodwill 10.9% 11.2% percentage points 10.8 comfortable society and proactively fulfill our social responsibilities including the preservation of the global environment. Income ratio +0.3 Liquor tax excluded. After amortization of goodwill 8.2% 8.5% percentage points 8.8 We will help all employees fulfill their true potential and make it a source of competitive advantage, driven by the Basic Action Stance ● +4.7 10 of challenge, commitment and collaboration (3Cs). Cash ROE Before amortization of goodwill 6.9% 11.6% percentage points or more

1 Enhance the Kirin Group's strengths built on technical expertise and customer-relationship excellence 1 Increase the Group's corporate value by facilitating the growth of group operating companies as well as synergy among them 2 Encourage group companies to make a tangible contribution to enhancing the Kirin brand ・ Keep pursuing a strategy for becoming an integrated beverage group Basic Policy 3 Implement three strategies for strengthening the business foundation and achieving quantum-leap Basic Policy ・ Generate group synergy ・ Implement lean management principles and practices growth ・ Establish technical prowess and customer-relationship excellence 4 Establish a new group management structure based on a pure holding company structure 2 Implement a financial strategy to increase the Group's corporate value 5 Implement group-wide CSR initiatives and enhance organizational management of the Group 3 Pursue harmonious coexistence with society through CSR activities

Financial Consolidated Sales Consolidated Operating Income Percentage of Sales Segment Information Percentage of Sales by Business Segment Percentage of Operating Income by Business Segment Billions of yen Billions of yen from Overseas Operations (Liquor tax included) Other FY2011 Other FY2011 Highlights 2,400.0 2,278.4 2,177.8 2,071.7 150.0 151.6 142.8 in Fiscal 2011 FY2011 businesses businesses (Liquor tax excluded) Domestic Domestic 128.4 5% Alcohol Beverages 4% Alcohol Beverages Business Business Pharmaceutical Pharmaceutical 1,600.0 100.0 Overseas sales and biochemical and biochemical business 42% business 49% % 2,071.7 142.8 800.0 50.0 31 16% 34% billion yen Domestic billion yen Overseas Non-Alcohol Overseas Domestic Sales in Japan Beverages Beverages Business Beverages Non-Alcohol Business Business Beverages Business 0 0 15% 2009 2010 2011 2009 2010 2011 69% 22% 11% 2% （scal year） （scal year）

14 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 15 Domestic Domestic Alcohol Non-Alcohol Overseas Beverages Business Other businesses Beverages Beverages Business Business Pharmaceutical and biochemical business Our Philosophy Toward CSR

Kirin Group’s Corporate Philosophy and CSR Kirin Group's CSR Framework

The Kirin Group Identity Statement calls for us to focus on The Kirin Group’s CSR activities are guided by these The Kirin Group engages in two broad categories of CSR leveraging their core competencies. people, nature, and craftsmanship to redefine the joy of food philosophies and policies. As a corporate group focused on activities to help make a sustainable society a reality: activities CSR activities we carry out as a corporate citizen include social and health. food and health, we must operate and grow our business in we conduct as part of our business operations, and those we and community outreach programs born out of dialogues with The KIRIN WAY defines the values we hold most dear and the harmonious coexistence with the global environment and carry out as a corporate citizen. stakeholders associated with the Group's business, and the guiding principles to which all Kirin employees are expected society. To help achieve a sustainable society, we have given CSR activities integrated into our day-to-day business Kirin Group has been committed to these programs for many to adhere. In the Group Action Declaration, we entered into CSR a high priority in our long-term business plans (Kirin Group operations represent the majority of our CSR efforts. All Group years. promises with each of the four classes of our stakeholders— Vision 2015) and medium-term business plans, and have been companies undertake them in the medium and long terms, customers, employees, shareholders, and society. following through on our commitment.

Kirin Group Identity Statement Sustainable Society The Kirin Group-Focused on people, nature and craftsmanship to redene the joy of food and health Customer Employees Shareholders Society

THE KIRIN WAY Group Action Declaration

Values Basic Action Stance To use Kirin's own technology to provide safe, Group Identity The things we each The “3Cs” that govern the actions of high-quality products and services that o‚er value The Kirin Group - Focused on people, nature, and craftsmanship to redene the joy of food and health hold important all Kirin employees Customers and assurance to customers Statement (Creation of value for customers) A customer-focused approach Challenge To create a workplace in which each employee can Striving to understand our customers better (Endeavour, risk-taking, action) Strive to become a “low-carbon corporate group” that helps create an environmentally friendly societies exhibit his or her independence and creativity, than any competitor; remembering the Taking individual initiative without fearing the taking pride in the job and enjoying a sense of importance of communication with customers results; responding with change and Employees meaning and purpose Proposal of new values Respect for diversity Corporate governance Environmental management to better meet their hopes and expectations innovation CSR through Ensuring of food safety Creation of lively workplaces Investor relations Public education on (Respect for human nature) Business A steady focus on quality Approaches to food culture responsible drinking Relentlessly pursuing quality while perfecting Commitment To fulll out responsibility to shareholders from a our own unique technology with (Thinking it through, going the distance) long-term, global perspective, continuously Compliance practices , conforming to social rules and expectations uncompromising attention to detail Giving serious thought to all matters to see Shareholders striving to elevate our corporate value their true nature; assuming responsibility for (Increase value for shareholders) Innovation meeting goals and fullling the roles assigned Thinking freely and with vision to generate to us CSR as Activities to protect water resources , United Nations University-Kirin Fellwship Program , sports sponsorship , support new,exciting ideas; having the courage to To contribute to the sustainable development of for the arts , encouragement for employees’ volunteer activities actively propose new value a Corporate Citizen Collaboration society while carrying out business activities in an Society environmentally-conscious manner; to contribute Integrity (Concerted action, mutual assistance) to a better quality of life for people around the Maintaining a fair-minded and earnest stance Working together as a team; joining forces to world Group Action Creation of value Respect Increasing value Contributing to society; toward all business activities cooperate and connect Declaration for customers for human nature for shareholders concern for the environment (Contributing to society; concern for the environment)

How We Select High-Priority CSR Initiatives The Makeup of This Report Broken Down into Six Stakeholder Groups The Kirin Group selects its high-priority CSR initiatives in the following manner. The Kirin Group Action Declaration First, we assess a wide range of social issues based on four criteria to narrow Assessment criteria Priority defines the Group's stakeholder groups Customers See Page 22 them down to those we should address in our business operations. The four as customers, employees, shareholders, criteria are: (1) whether addressing them is in line with the thrust of our corporate Four criteria for assessing issues Impact on society and society. and expectations Global environment See Page 30 philosophy and KV2015; (2) how much necessity and urgency exist for resolving In this report, we have redefined the Compatibility of addressing them with from society Group's stakeholder groups as customers, them; (3) whether the Group can leverage its core competencies to resolve 1 our corporate philosophy and KV2015 them; and (4) whether the Group as a whole is poised to make a long-range Social High CSR the global environment, communities, Communities See Page 42 issues activities employees, business partners*, and commitment to addressing them. Second, we prioritize selected social issues 2 Level of necessity of resolving them shareholders and investors, so as to based on the extent of their impact on society and the degree of expectation report more effectively on what we Employees See Page 52 from society—and finally, we pick out high-priority CSR initiatives on which to Leverage of the Group’s strengths 3 in resolving them have been striving to achieve to meet focus. See Pages 18 and 19 for lists of initiatives selected for 2011 and 2012. expectations and demands from society. Business partners See Page 58 Social issues do not remain static as the years go by. They change shape and 4 The Group’s long-term commitment Low scope at an accelerated pace—propelled by globalization. We will review high- priority CSR initiatives from time to time so as to keep our CSR efforts relevant to *Business partners include suppliers, Shareholders and investors See Page 64 distributors, and other external parties anticipated changes in society. associated with the Kirin Group's value chain.

16 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 17 What Kirin Group Strives to Accomplish with its CSR Initiatives 2011 2012 Corresponding Corresponding Core Kirin Group's High-Priority Stakeholders Social Challenges Goals Major Accomplishments Kirin Group's CSR Initiatives Principles of Subjects Addressed CSR Initiatives Global Compact in ISO 26000*

Continue to upgrade safeguards against radioactive Consumers are stepping up their demands In the wake of the incident at the Fukushima Daiichi Nuclear Power contamination of raw materials and products, and to for the safety and reliability of the products Customers Ensuring food safety Plant that followed the Great East Japan Earthquake, we established place the highest priority on ensuring product safety. they buy as well as for accurate and Provide safe, high-quality products to customers ― Consumer issues stringent safeguards against radioactive contamination of raw Take customer feedback seriously and proactively comprehensive product information. materials and products to ensure their utmost safety. provide accurate and comprehensive product information from customers' perspectives

Reduce value-chain environmental loads by 2 emissions from our manufacturing, distribution, and A multitude of environmental issues— Achieving We reduced CO global warming, growing risks to conserving energy and resources and by oering o˜ce operations. We quanti•ed how much CO2 we had emitted in the a low-carbonsociety Coordinate and direct the entire Group's eorts to Environment Global biodiversity, natural resources running dry, eco-friendly products to customers value chain back in 1990. reduce value-chain environmental loads by Principles 7 to 9 and water scarcity—are threatening the Environment Take biodiversity into greater consideration in continuing to reduce CO2 emissions and to conduct sustainability of society and having a Fair operating practices Conserving biodiversity business operations to help society achieve a We continued to make the biodiversity-friendly use of resources. biodiversity-friendly sourcing of raw materials profound impact on our value chain. harmonious coexistence with nature

We oered customers products and experiences intended to promote Promoting health Help people enhance their mental and physical community wellness. To meet customers' growing health needs, we and nutritious diet wellness introduced functional yogurt and RTD tea with health bene•ts. Consumers have a growing awareness of food-related issues in society, such as We conducted multifaceted research on what people eat and how children eating alone at home, obesity, and they eat it and published the •ndings in Kirin Institute of Food and Provide customers with opportunities for sociability; starvation. Promoting food cultures Help customers enjoy ful•lling dietary lifestyles Lifestyle Reports. In a Kirin Group employees forum on the future of provide educational support to children; invest in the food and health, we presented the •ndings from a study on projected development of children; support the promotion of Community involvement Once-strong people-to-people bonds are consumer trends for 2025. sports, the arts, and culture; and help resolve and development Communities ― wearing thin within families, communities, food-related issues and alcohol-related problems, all Play the role of a good corporate citizen by investing and organizations. Nurturing We carried out social outreach programs in the •elds of food with the goal of strengthening bonds with Consumer issues in the development of children and communities in the young generation education, soccer, science education, the arts, and culture. communities and assisting with their sound and Irresponsible drinking poses health risks which we operate sustainable development and leads to drunk driving and other social We established the ARP O˜ce in Kirin Brewery in February 2011 to problems. Promoting responsible Promote responsible drinking to prevent alcohol step up our eorts to address the social issues and health risks drinking abuse and its toll on society associated with drinking, as part of our ongoing crusade against the harmful use of alcohol.

We updated human rights provisions in the Kirin Group Compliance Guidelines so as to bring them closer in line with the principles on Valuing employees Guided by respect for employees' human rights, human rights set forth in the United Nations Global Compact, and communicated the new provisions to all Kirin Group employees and embracing diversity create a corporate culture that values employees' around the globe. We continued to oer wider career opportunities to and inclusion hard work and individuality and in which employees female workers. We also drew up the Kirin Group Charter for Hiring of Respecting employees' human rights and from diverse backgrounds can œourish in their job People with Disabilities to broaden employment opportunities for maintaining fair labor practices have people with disabilities. considerable social and economic relevance Guided by respect for employees' human rights, to corporations. We implemented measures to keep employees working for Group foster a sense of togetherness and belonging among Human rights Enhancing occupational Keep workplaces safe and clean so that employees Employees companies in Japan from having mental health issues and to assist employees and value them with the goal of creating a Principles 1 through 6 safety and health feel comfortable working in them Corporations need to—more than ever— employees with those issues. corporate culture in which employees feel motivated Labor practices tap employees' full potential while retaining to exercise initiative and creativity, and feel proud their commitment to the organizations for Create a workplace environment in which and enthusiastic about their job which they work. Supporting employees' employees can maintain a healthy work-life balance, Based on the Kirin Group Charter of Work-Life Balance, we continued work-life balance feel motivated to exercise initiative and creativity, to help employees to maintain a healthy work-life balance. and feel proud and enthusiastic about their job

Assist with employees' professional growth and We implemented upgraded programs for nurturing global managers Investing in employees' enhance the Group's organizational strengths as a capable of understanding and managing business across borders and professional growth basis for the Group's sustained growth cultures.

Corporations are under increasing pressure to take action toward achieving a Conducting Conduct socially-responsible, fair, and equitable Human rights Business sustainable society throughout their entire socially-responsible sourcing practices to maintain collaborative We drew up the Kirin Group Supplier CSR Guidelines to step up our Continue to work with business partners to help Principles 1 though 10 Partners eorts for socially responsible sourcing. value chains that involve not only sourcing practices relationships with suppliers make a sustainable society a reality Fair operating practices themselves but also their business partners.

Establish a sound internal control system, including We enhanced corporate governance throughout the Group. We Keeping the company a viable corporate governance structure, as the upgraded preparedness against natural disasters in the aftermath of Continue to enhance the corporate governance Organizational Corporations are under increasing pressure on track foundation to achieve quantum-leap growth called the Great East Japan Earthquake. structure and assume accountability so as to ful•ll governance Shareholders to achieve greater eectiveness in for by KV2015 obligations with shareholders and to continually Principle 10 and Investors organizational governance as well as in Disclose information in a transparent, fair, and increase the corporate value from the long-term and Fair operating decision-making for all stakeholders. Keeping shareholders We followed this policy in disclosing information. Our top consistent manner and communicate directly with global perspective practices informed management became more heavily involved in IR activities. shareholders and investors.

*Core subjects with relevance to Kirin Group's initiative are listed here.

18 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 19 CSR Management

PDCA Cycle for CSR Management Concerted CSR Efforts across the Kirin Group

The Kirin Group has established the PDCA (Plan-Do-Check-Act) CSR policy and strategy; and in the bottom layer are Group The Kirin Group has been expanding its business globally. To Top executives of main Kirin Group companies from around cycle to manage its CSR activities. companies that implement them. In between, a lead unit has remain socially responsible wherever we operate, we strive to the world meet annually to exchange insights and ideas about We use the KISMAP1 management system to monitor the been set up for each CSR theme—such as environmental keep abreast of the mainstream of CSR policies and practices management strategies and global challenges. progress of CSR activities conducted as an integral part of our management and ensuring food safety—that leads and evolving in the global arena and to adopt them.We play our In November 2010, the ISO 26000 international guidance business operations. We continually improve and upgrade the monitors CSR activities carried out by Group companies under part, inside and outside the food and drink industry, in global standard on social responsibility was released. We are using compliance management system and quality management each theme. In this three-layered system, the Group CSR initiatives and collaborative projects to achieve a sustainable this standard as a basis for reviewing and improving the Kirin system—both fundamental to our business operations. Committee, lead units, and Group companies promote and society. Group's CSR initiatives. The Group CSR Committee develops a medium- and long-term monitor CSR activities using the PDCA cycle, individually and We participate in cross-industry initiatives such as the United CSR policy and strategy. jointly. Nations Global Compact. We work with other multinational A PDCA-based, three-layered management system keeps CSR The CSR Management Department of Kirin Holdings works with alcohol companies to provide policy recommendations to activities conducted by Group companies on track. In the the company's Strategy Planning Department to keep track of the World Health Organization in its effort to formulate a top layer, we have the Group CSR Committee, which sets a how the high-priority CSR initiatives are implemented. strategy for addressing alcohol-related problems, which affect the entire alcohol industry. As a member of the board of the 1. KISMAP : Kirin Innovative & Strategic Management Action Program, the Kirin Group's performance management system based on the balanced scorecard method. Consumer Goods Forum (TCGF), a global network of retailers and manufacturers of consumer goods, we assisted with the Group CSR Committee Reorganized to Become More Responsive and Effective launch of Japan TCGF in 2011. In CSR areas where Japanese companies are lagging behind We reorganized the Group CSR Committee in 2011 to make it a Kirin Holdings director in charge of Group CSR strategy and their counterparts in other countries, we visit overseas deliberative body to develop the Group's CSR policy, strategy, consists of members considered best suited to fulfill the companies that lead in those area to exchange ideas and and initiatives based on information and issues shared among committee's new mandate. The committee submits matters of information. These exchanges make us better poised to Group companies and departments. Prior to that, the biannual significant implications to the Kirin Holdings Board of Directors, upgrade our CSR activities to the global level. committee had comprised the president of Kirin Holdings, which includes external directors and auditors, for review the Kirin Holdings director in charge of CSR strategy and and approval, so that the committee's policy decisions are other directors, and the presidents of main Group companies. effectively followed up by Group companies and departments. The revamped committee, held quarterly, is chaired by the Kirin Group Participates in the United Nations Global Compact

Three-Layered CSR Management System The United Nations Global Compact is a voluntary, global table on Page 19 shows how the Kirin Group's high-priority initiative for companies committed to exercising creative CSR initiatives correspond to the UN Global Compact's 10 Monitoring Reporting leadership in maintaining responsible business practices and principles. sustainability. The Compact asks participating businesses to Kirin Group employees Board of Directors accept, support, and practice the 10 universally accepted participate in working groups principles outlined below in the areas of human rights, labor, organized by theme in the Submitting a proposal for review and approval Kirin Holdings environment, and anticorruption. The Kirin Group announced Global Compact Japan Network (Group CSR Committee) Group CSR Committee2 its participation in the Compact in September 2005, and has and discuss common issues since been working to align its employee relationships and with representatives of other Administrative Oce Conrming the direction (CSR Management Department) of the Group's CSR policy its business operations ranging from procurement and R&D member companies. and strategy to manufacturing and marketing with the 10 principles. The ●▶ See Page 19 Monitoring of KISMAP performed Working primarily by the Strategy Planning together Department and secondarily Incorporating them into by the CSR Management Department Group policies and strategies The UN Global Compact's 10 Principles

Lead unit Lead unit Lead unit Lead unit Principle１ Businesses should support and respect the protection of internationally proclaimed human rights; and Kirin Holdings and Human Rights Valuing employees Building a low-carbon other Group companies Promoting Ensuring food safety and embracing diversity society … Principle２ make sure that they are not complicit in human rights abuses. (Lead units) responsible drinking and inclusion Conserving biodiversity Principle 3 Businesses should uphold the freedom of association and the eective recognition of the right to collective bargaining;

Principle 4 the elimination of all forms of forced and compulsory labor; Working together Labor Principle 5 the eective abolition of child labor; and

Principle 6 the elimination of discrimination in respect of employment and occupation. CSR management departments Principle 7 Businesses should support a precautionary approach to environmental challenges; Kirin Group companies Environment Principle 8 undertake initiatives to promote greater environmental responsibility; and Department Department Department Department Principle 9 encourage the development and diusion of environmentally friendly technologies. 2 Members of Group CSR Committee ●Chairman: Kirin Holdings director in charge of Group CSR strategy ●Committee members: Heads of CSR management departments of main Group companies and persons designated by the committee chairman Anti-Corruption Principle10 Businesses should work against corruption in all its forms, including extortion and bribery.

20 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 21 Delivering on the Brand Promise Customers

Dialogue with Customers

Customer Centers Play a Pivotal Role in Eliciting Product Improvement Communicating with customers is an integral part which were brought to fruition. Customer Center Customers of developing and delivering safe, high-quality managers of all Group companies meet once products and services that they can trust and enjoy. a month to share VOC, and hold joint training Delivering on the Brand Promise In 2011, Kirin Brewery received 37,000 inquiries, sessions for their staffers to improve their skills in requests, and comments about its products and handling customer calls.

services from customers by phone and email. Global Environment Kirin Beverage received 42,000; Mercian 4,400; and Koiwai Dairy Products 5,500. We realize that Our Goal when customers contact us they do so out of expectations of our products and services. The Kirin Group delivers on its continually evolving Comfort: Comfort as we see it comes from the sense Kirin Brewery holds a Customer Feedback Meeting yet enduring brand promise to customers in of closeness, ease, warmth, and pleasure customers every month, in which Customer Center staffers and four key aspects: health, happiness, comfort, and experience when the Kirin brand is part of their daily those from the Marketing, Sales, Production Control, uncompromised quality. lives. It includes not only the serenity that comes Technical Development, and CSR Departments Communities Health: We appreciate and care for the splendid gifts from solitude, but also the warmth and closeness share VOC and brainstorm actions to be taken for of nature, and we spare no effort in building on these customers feel in the company of people to whom improvement. In 2011, the center proposed at benefits with what we know to be good for the body they feel truly connected. these meetings 88 ideas for improvement—30 of Kirin Brewery's Customer Center and mind. Drawing on the power of nature, we help Uncompromised quality: With our long history customers develop fit energetic bodies and minds. of tradition and achievements, we continually Happiness: We believe that happiness comes from perfect and refine our products to deliver the Acting on VOC for Product Improvement different angles, different points of view, different uncompromised quality that customers have come values, and always with a sense of expectation. We to expect. Customers are not looking for fanciness, The Kirin Group takes customer feedback seriously and uses it to improve products and services. Below are two of examples of how we acted on requests that the Customer Center received from customers. deliver a happiness that is not merely of the moment but for the ultimate craftsmanship that only the

but one that is driven by the anticipation of what is highest ideals, attention to detail, and technical Employees to come. prowess can realize.

Customer feedback Customer feedback

Our Approaches "The plastic seal around the cap of Kirin "I find it hard to tell an aluminum can Whisky Fuji Sanroku Tarujuku 50° is so The Kirin Group takes comments and requests products and services that meet customers' from a steel can when separating used tight that I have a hard time removing from customers seriously. We incorporate expectations. beverage cans for recycling. Can you it, although it has perforations. Can you customer feedback into the entire process that This customer feedback cycle engages the entire mark them more clearly?" ranges from product development and sourcing Kirin Group, enabling us to continually improve make the seal easier to break?" of raw materials through manufacturing, in the four key aspects of our brand promise to Business Partners shipping, and distribution of products to customers—health, happiness, comfort, and marketing and sales, all in an effort to deliver uncompromised quality.

The Customer Center and the Market Research Section What we did about it What we did about it of each Group company routinely collect voice of the customer (VOC) and share it with top management Customers Health Happiness Comfort Uncompromised quality and other departments in the company to initiate a customer feedback cycle. Direct interaction with customers through factory tours Product Sourcing of Manufacturing Sales and Kirin Brewery's nine beer R&D Distribution plants and Kirin Distillery’s development raw materials and shipping marketing Kirin Brewery markets beer in steel cans Customer feedback prompted us to add Fuji-Gotemba Distillery in

Japan are open to public Shareholders and Investors and aluminum cans in some parts of perforations to the plastic seal in 2010 tours, giving visitors a Conducting R&D in the food Procuring raw materials that meet the Keeping product inventory at the right hands-on opportunity to and health elds to enhance Group's safety standards, and regularly level and at the right temperature so Japan. We have changed the design of the to make it easier to remove. However, the Kirin Group's technical assessing the quality performances of as to be able to deliver fresh products learn with their own five prowess essential to oering suppliers to ensure that they continually in good condition to retailers. identification mark printed on steel cans to as customers continued to tell us it was senses about how beer new value to customers. improve the quality of the materials we use. make it more distinctive without detracting still hard to break, the following year we and whisky are made. Group companies' logistics We value comments and Strategic R&D Department Procurement Department departments from the overall presentation. added a tab at the top of the seal so that feedback made by visitors Kirin Holdings Kirin Group O‡ce during factory tours. With unwavering dedication to ensuring Using scientic approaches and the ve senses Providing through advertising and sales promotion (A redesigned mark applied to Kirin Ichiban, customers can pull it down to remove the safety, developing products that meet to ensure the safety and reliability of our information that helps customers make informed, Kirin Tanrei Nama, and Kirin Nodogoshi Nama) seal more easily. customers' needs and that oer them products in every step of the manufacturing condent decisions to buy our products. Having all compelling, tangible value propositions. process ranging from the receipt of raw our salespeople in the eld hone their skills in materials to the shipping of products. serving customers professionally. Group companies' laboratories

for new product development Food Safety Assurance Center Group companies' sales Accountable Management Kirin Group O‡ce and marketing departments

22 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 23 Delivering on the Brand Promise

Keeping up with the Growing Health Needs Customers

Kirin Group companies, whether in the beverage or food business, listen to customers and align their processes of developing, manufacturing, and marketing products to add new value to them. We have been translating customers' Examples of Kirin Group Products Developed to Meet Health Needs growing health needs into a variety of products, and will continue to leverage our technical expertise to offer health- conscious customers a wider variety of alternatives to choose from. Mets Cola, Designated as Food for Specified Health Use Kirin Beverage, taking a cue from a market research in the blood after meals. After a series of finding that males in their 30s and older were becoming tasting tests, the company achieved the increasingly health right balance between sweetness and Percentage of Men Who Regularly We incorporate VOC into the product development cycle ranging Have Drinks for Specified Health Use conscious, started zestfulness to give this new beverage the Product Development Cycle from R&D to manufacturing to marketing. （%） to develop a sugar- thirst-quenching characteristics unique 30 free cola containing to cola drinks. Mets Cola's packaging Global Environment 20 indigestible dextrin design was chosen to give it an easily

10 that reduces the recognizable look of a cola drink with absorption of fat a specified health benefit; the design's Product development 0 R&D Sales and marketing during meals and acceptance was verified by quantitative and manufacturing Men in their 20s Men in their 30s Men in their 40s Green tea drinks for specied health use that diminishes the consumer surveys conducted prior to Oolong tea drinks for specied health use increase of neutral fat product launch.

Energizing Yogurt for Hard-Working Adults Communities Koiwai Dairy Products has, as part of the Kirin Health today's active adults. Analyze VOC Help customers make informed Project, developed an energizing yogurt for hard-working The company has come up with a consumption adults in their 40s and older. This yogurt contains 400 technology (patent pending) to make milligrams of ornithine*—a self-renewal amino acid an ornithine-derived flavor less bitter ● Market trend analyses found in abundance in freshwater clams—and KW lactic and prominent in the yogurt so that ● Publishing information on raw ● Consumer research acid bacteria that remain active in the intestine when customers can have it every day. materials and nutrition facts ・Focus groups on company web sites consumed, combined to work as an energy booster for ・Tasting tests ● Nutrition labeling on products *Ornithine is a self-renewal amino acid that is reproduced during the ornithine cycle after being consumed in a human body. A faint trace of ornithine is found in some food items as ・Packaging tests well as in the human body, and is contained in an abundance in freshwater clams. However, ornithine is not easily absorbed from food. Kyowa Hakko Kirin has been researching and Employees mass-producing it since 2003.

Customers' health needs Drink and Food Products that Offer Health Benefits

Kirin Group companies around the world offer food and drink products that meet the growing needs of health-conscious customers.

Alcohol beverages Non-alcohol beverages

Kirin Brewery markets low-calorie, low-carb low- Kirin Beverage has been marketing fat- Business Partners Ascertaining Customers' Health Needs malt beer. In 2011, the company introduced a free, carb-free, low-calorie Gogo-no-Kocha carb-free low-malt beer, Kirin Koi-Aji Zero Carb, (afternoon tea) black tea drink since 2011. which offers a rich, full-bodied flavor. Mercian The company has introduced two RTD teas As a growing number of Japanese are suffering with of research achievements and technologies, we have markets Bon Rouge wines, which contain a with health benefits under the Kirin Plus-i lifestyle-induced diseases, the medical community is developed under the Kirin Plus-i brand products that higher level of polyphenol than other wines in brand: one with a body-warming flavor and shifting its focus from therapeutic care to preventive care, enable customers to have hard-to-take food items and the company's lineup. the other with a cooling, soothing flavor. which includes encouraging a well-balanced diet to stay those with health benefits as part of their daily diet. healthy. People will likely become more health-conscious Kirin Group companies and the Kirin Health Projects will and have more diverse values and needs for healthy continue to launch new products born out of customers' living. The Kirin Group—believing that people need to need to eat healthy and live healthy. be physically, mentally, and socially healthy to be truly Food products Overseas

wholesome—offers products and services that extend Shareholders and Investors beyond the health and functional food business to help Koiwai Dairy Products markets yogurt made 100% from raw To contribute to consumers’ healthy lifestyles, Lion has customers have a happy life. (Kirin Health Project) milk, which is designated as a food for specified health use and launched Frusion, a non-alcohol beverage for adults, In 2008, the Kirin Group launched the cross- company stabilizes the stomach condition, and also offers low-fat yogurt and Farmers Union Iced Coffee “One,” with 1% fat and Kirin Health Project. Participating Group companies enriched with calcium. Kirin Kyowa Foods no added sugar. brought their technical prowess to the project and markets a new improved freeze-dried Lion also offers Vitasoy "VitaGo," a soy created intercompany synergy to jump-start the health rice porridge under the Kirin Plus-i milk drink with high protein and fiber, 10 food and beverage business intended to help customers brand, developed by leveraging the essential vitamins and minerals, and low eat healthy and live healthy. Leveraging our wealth research achievements of the Kirin GI; and Berri Juice 250 ml kids poptop, Health Projects. which has no added sugar or preservative. Accountable Management

24 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 25 Delivering on the Brand Promise Universal Design Pharmaceutical and Biochemical Business Customers

User-Friendly Packaging for Every Customer

Universal Design Fighting Intractable Diseases with Therapeutic Antibodies Containers and packages protect products and under diverse real-world conditions. The center Therapeutic antibodies engage the innate and Kyowa Medex for its POTELIGEO® Test for ensure they are delivered to customers in pristine takes a customer-focused approach to developing immune system to cure diseases, and identify vitro diagnostic reagent. condition. The packaging we use for our products user-friendly packaging, whether it is glass bottles, and attack only malignant cells such as The Kyowa Hakko Kirin Group will continue meets high standards for quality and safety cans, PET bottles, or cartons. cancer cells. In March 2012, Kyowa Hakko Kirin to leverage its technical prowess to develop and is eco-friendly. In addition, we incorporate For instance, engineers in the center created a received approval for its premarket approval innovative new drugs as quickly as possible

*Universal design: user-friendly universal design* features into new advanced pecology bottle for Kirin Alkali Ion application from the Ministry of Health, Labour and market them to people struggling against Global Environment Design features and our packages so that customers of all ages and Water. In addition to being light, the new bottle and Welfare for its POTELIGEO® therapeutic diseases around the globe. elements incorporated into a product to make genders enjoy our products with ease and sports many universal design features: Its shape antibody for adult T-cell leukemia-lymphoma, it accessible to people comfort. makes it easy for a person with small hands to of all ages, genders, cultures, languages, and Kirin Brewery's Packaging Development Center hold; it is easy to squash after use; and its cap Providing Information Online about Diseases and Therapeutic Antibodies nationalities, and with or develops containers and packages that meet strict is easy to grasp, twist, and open. Engineers also without disabilities. Kyowa Hakko Kirin, with the assistance of on the microsites Microsite on therapeutic quality, safety, and environmental requirements worked on a shipping carton for experts, provides a general audience and within its web site. antibodies for a general canned beers; they beveled the audience patients with information about therapeutic (Only a microsite on http://www.kyowa-kirin. System to Evaluate Universal Design 包材開発 carton's four vertical edges to give antibodies, chronic kidney disease, allergies, therapeutic antibodies co.jp/english/rd/antibody/ Features of a Package it an octagon-shaped structure, Microsite on therapeutic pipeline/index.html Communities and other diseases in an easy-to-digest fashion is available in English.) antibodies Development of which resulted in greater ease packaging of handling and a reduction in お客様の要望 開発完成品 Medical Information Office 容器開発 cardboard usage. These are two of Development of Kyowa Hakko Kirin has the Medical Information Kyowa Hakko Kirin ensures that information 市場調査 container examples of user-friendly and eco- Finished Customer Office that answers inquiries about its medicines collected by the information office is shared Market research package friendly packaging design. 基本設計 input Basic designing design from medical professionals as well as patients and throughout the company so that it is used to keep 試作品 Prototyping their families. medical institutions and patients informed and to The provision of accurate information is essential enhance product-safety management and quality for medicines to work effectively and safely. Kyowa management. Kirin Alkali Ion Water in a Employees Applying universal new pecology bottle Feedback Hakko Kirin keeps patients informed so that they UD性向上 design criteria フィードバック use drugs as intended. Operators at the Medical チェック Information Office keep themselves up to date Evaluation of on the company's products and train themselves universal design features in call handling, so as to be able to give accurate Sensory evaluation answers to medical experts and patients. UD 性評価 Technical evaluation The information office received more than 官能評価 38,000 inquiries in fiscal 2011, many of which 科学的評価 Evaluation result provided valuable information that led to product improvements and additional indications Evaluation of

universal for existing drugs—part of efforts for drug Business Partners UD性評価結果 design features Kirin Brewery Packaging Development Center refinement* and greater customer satisfaction. Operator at Medical Information Office *Drug refinement: Medical experts, ＵＤ性評価 patients, pharmaceutical companies, researchers How Medical Information Office Works working together to improve the effectiveness Pharmaceutical and Biochemical Business Kyowa Hakko Kirin and safety of a drug Head Oce Marketing Department Kyowa Hakko Kirin develops groundbreaking new biotechnology-based drugs. Medical representatives (MRs) Circulate product information drugs, such as therapeutic antibodies, with a sense Kyowa Medex, a company in the Kyowa Hakko Medical Pharmacovigilance Department of mission to deliver them as fast as possible to as Kirin Group, develops, manufactures, and institutions PV Oparations Department many people in the world suffering with diseases markets biochemical and immunological test Monitor adverse e ects Hospitals Quality-Assurance Department Shareholders and Investors as possible. The company focuses its forward- reagents and medical instruments to contribute Manage quality information looking R&D on oncology as well as nephrology to people's health and prosperity. Kyowa Hakko Clinics Medical Production Planning Department and immunological diseases to take advantage of Bio, a biochemical arm of the group, develops, Dispensing pharmacies Information Oce Handle requests for its expertise in antibody technology, and works manufactures, and markets value-added amino improving packaging to establish acids and other innovative medical and health Sales Department Manage sales via MRs proprietary food products in pharmaceutical, medical, and Wholeseler of drugs Sales Administration drug-discovery healthcare fields to contribute to the health and Department Notify changes to packaging technologies and prosperity of people throughout the world. Medical consumers industry-leading The Kyowa Hakko Kirin Group will continue Other departments manufacturing to leverage core competencies of these three Accountable Management technologies for companies to achieve better results.

26 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 27 Delivering on the Brand Promise Food Safety Customers

In May 2011, the Food Kirin Group's Quality Policy Ensuring the Safety and Reliability of Our Products Safety Assurance Center's frontline unit— responsible for product- Consumers around the world are increasingly on Quality—a commitment to ensuring product Food Safety Assurance Center based probe—relocated to a new facility in Kirin concerned about what they eat. The Kirin Group safety and customer satisfaction. This commitment The Food Safety Assurance Center of Kirin Group customer inquiries. Brewery's Yokohama Plant ensures the quality of products by performing some reflects the Group's core value that stands for being in Yokohama's Namamugi Office assists other Group companies with quality To fulfill these responsibilities, the center district. The center's of the most stringent quality-assurance practices in customer focused and quality focused—a value assurance. The center accumulates and manages regularly upgrades its analyzing and testing backyard unit, responsible the food and beverage industry. All Group companies that Kirin Brewery has been embracing throughout for basic research, remains the Group's wealth of knowledge and assets equipment and systematically trains the technical in the center's home base follow a standardized quality-assurance manual, its history. The manual also includes the Action related to quality assurance and works closely staffers who operate the equipment. in the Fukuura district. Both units work closely which begins with the Kirin Group Basic Policy Principles and the Quality Standards. Global Environment with Group companies so as to raise the overall together to achieve better level of quality assurance across the Group. results. Kirin Group Basic Policy on Quality We make it our highest priority to ensure product safety and customer satisfaction. The center's wide-ranging responsibilities 1.Increase Customer We make it our highest priority to listen to our customers, value their feedback and respond include: (1) testing Kirin Group products Satisfaction (A customer- to it from their viewpoint. We realize that a dialogue with our customers give us a good to ascertain that they meet the regulatory focused approach) opportunity to make incremental improvements to quality and customer satisfaction, which results in better products and services down to fine details. requirements and internal specifications; (2) keeping abreast of the latest information and 2. Provide Safe and We offer safe and reliable products and services to our customers in all aspects of our Reliable Products (A steady business activities ranging from the sourcing of raw materials through product development, developments related to food safety in Japan focus on quality) manufacturing and inspection to distribution and marketing so as to retain their trust in us. and abroad; (3) developing and implementing analysis and evaluation methods necessary Communities Quality-Assurance System Each Group company performs intensive end-to-end quality assurances that extend from product to ensure product safety; and (4) conducting development up until the time customers consume our products. investigations and analyses in response to Food Safety Assurance Center (Namamugi Facility)

Product Check raw materials, development packaging materials, Sourcing of and labels raw materials Check the safety of sales Safeguards Against Radioactive Contamination Sales promotion items Check the safety of health and functional food products Conduct after-sale follow-ups The Kirin Group has been testing raw materials class radiation-protection supervisors are assigned Provide quality-related information Share customer feedback and imported from Europe for residual radioactivity to the Food Safety Assurance Center—collecting

act on it quickly Establish quality requirements for Employees suppliers and share quality since the Chernobyl incident in 1986, so as to up-to-date information, performing high- information with them ensure that only safe ingredients go into our precision radioactive measurements, and sharing Inspect incoming materials Keep products fresh by storing them Manufacturing products. Immediately after the incident at the results with all Kirin Group companies. This Distribution and shipping at the appropriate temperature Establish a quality-assurance the Fukushima Daiichi Nuclear Power Plant in arrangement enables Group companies to deepen Work with logistics service system based on ISO 9001, providers to resolve issues HACCP, and other standards March 2011, we upgraded our already stringent their understanding of radioactive risks and to Inspect incoming imported goods Perform stringent inspections of outgoing products safeguards against radioactive contamination of communicate accurate and reliable information to raw materials and products. their customers. Quality-Management System In addition to the radioactive-testing equipment The Food Safety Assurance Center is playing a we already had, we have acquired germanium central role in checking everything from contract To maintain continuous compliance with the Kirin and implementing the PDCA cycle. In addition, semiconductor detectors capable of performing farms to raw materials and water to final products Group's quality policy, Group companies have we have established within Kirin Group Office highly sensitive measurement of radioactivity. to verify that none of them is radioactively established a quality-management system based the Quality Assurance and Environmental Business Partners Since the incident at the Fukushima Nuclear contaminated, so that Group companies are on ISO 9001 and other international standards, Management Department, which centrally Power Plant, we have been working with 100% confident that what they manufacture and and continually improve quality as measured manages and coordinates quality-assurance Group companies' plants and quality-assurance sell is safe. against the Kirin Group Quality Standards by efforts and environmental initiatives carried out departments to voluntarily test raw materials By cooperating with the regulatory authorities performing as-is analyses, identifying issues, within the entire Group. and water they use as well as their products on food safety and by keeping a close watch on for radioactivity, and have upgraded our new developments, we will continue to enhance Unified Approach to Quality Assurance across the Group testing procedures to meet the new regulatory our quality assurance and to maintain a quick- With the Kirin Group's business expanding scope and scale of our business and to more guidelines for safety. response posture so that customers feel confident globally, all Group companies must follow unified effectively address growing concerns about food Several Kirin Group employees certified as first- about the safety of our products they buy. operational policies wherever they conduct safety around the globe. We are preparing to business. We are reviewing and updating our implement a unified quality-management system quality-assurance system to reflect the expanding across the Group. Shareholders and Investors

Offering Customers Greater Peace of Mind Offering customers peace of mind is as important first step, we will be starting to discuss in greater to us as giving unwavering dedication to ensuring detail on our web site our quality-assurance product safety. We will step up our efforts to efforts in our domestic alcohol and non-alcohol keep customers informed of how we have been beverages business. At the same time, we will performing some of the most stringent quality- solicit advice from academic experts, journalists, assurance practices in the food and beverage and consumer groups on how we can effectively

industry, so that customers feel more confident present quality information to consumers. Accountable Management Germanium semiconductor detectors Sodium-iodide scintillation gamma counter about the quality and safety of our products. As a

28 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 29 Promoting Environmental Sustainability Customers

Stakeholder Dialogue on Environmental Stewardship

The Kirin Group exchanges insights and ideas on addressing environmental issues with a broad range of Global Environment stakeholders who have touchpoints with its value chain. Promoting Environmental Sustainability Dialogue with Experts While tackling individual environmental issues understand and assess the trends in environmental such as reducing CO2 emissions and conserving issues around the world. In addition, in December biodiversity, we have been constantly reminded 2011, we sat down with experts in diverse fields Global Environment that maintaining environmental sustainability to incorporate stakeholder perspectives into along the Kirin Group's value chain has much to do planning our next step. In these sessions, experts Our Goal with the continuity of society and of our business. told us what role the Kirin Group should play in We have also realized that we need to address environmental stewardship. We will use their The Kirin Group uses the bounty and heritage of materials to consumption by customers through environmental issues as a whole rather than advice and our own assessments to reposition and nature to create products that enrich people's lives. to recycling, and we share our concerns with our individually in order for our efforts to be effective. realign our environmental initiatives to help make Ensuring a balanced coexistence with nature and business partners and customers and work with These factors have led us to review what we a sustainable society a reality and to increase the the sustainable use of its blessings is one of the top them to address these issues. have done in environmental stewardship and to Group's corporate value. priorities on our corporate agenda. This is all the The more our business grows geographically and Communities more pressing as people around the world today in complexity, the more deeply we recognize the face a multitude of environmental issues—natural importance of working closely with our stakeholders resources running dry, growing risks to biodiversity, toward ensuring environmental sustainability. global warming, and water scarcity. To help achieve a prosperous society that lives All these issues adversely affect the Kirin Group's in harmony with nature, we offer products and entire value chain, ranging from the sourcing of raw services with environmental value to our customers.

Our Approaches Employees

The Kirin Group unveiled an action plan in 2009 objectives and have been working to deliver on it. A group that discussed value-added approaches to products A group that discussed the Kirin Group's environmental strategy that set aggressive targets for reducing CO2 To continually improve the Group's environmental (from left) (from left) emissions across its value chain, and has since management and enhance its environmental ● Miyoko Takagi, Marketing Director, CARE International Japan ● Noriko Takemoto, Professor, Auditor, Natural Step Japan ● Motoshi Muraoka, Partner and Senior Executive Manager, Socio & made progress in addressing issues surrounding governance, Kirin Group Office—a shared-service ● Manabu Akaike, President, Universal Design Intelligence, Inc. Eco Strategic Consulting Sector, NTT Data Institute of Management global warming. We have also been working entity within the Kirin Group—has a responsibility for ● Megumi Ushikubo, President of Infinity Inc. Consulting, Inc. ● Mariko Kawaguchi, Managing Director, Head of ESG Research to conserve biodiversity as outlined in the Kirin quality assurance and environmental management Department, Daiwa Institute of Research Ltd. Group's Declaration of Support for Biodiversity for the entire Group. In addition, Group companies ● Yoshinao Kouzuma, Professor, Faculty of Economics, Sophia University Conservation, announced in 2010. have been establishing an environmental

Following up on these group-wide initiatives, each management system that meets the requirements Dialogue with Investors Business Partners of the larger companies in the Group has declared of the ISO 14001 international standards on The Kirin Group works with investors, accountants, Framework—developed by the Climate Disclosure its commitment with society to meet environmental environmental management, and an increasing and auditing firms to establish an effective Standards Board (CDSB)*—and participated in a *Climate Disclosure challenges in a manner relevant to the nature of number of them have obtained company-wide and Standards Board: carbon-disclosure system in society. We became panel discussion at the CDSB Symposium held in A global initiative its business. These companies have integrated by-site certifications under ISO 14001. a member of a workshop to review a reporting Tokyo on February 23, 2012. established at the 2007 environmental commitment into their management World Economic Forum standard based on the Climate Change Reporting to develop globally Kirin Group's Environmental Policy standardized guidelines for reporting on climate The Kirin Group, which delivers food and health, is committed to creating a prosperous society that lives in harmony with nature. To Dialogue with Customers change in corporate Basic Policy achieve this objective, we are helping to preserve the environment by adopting low-carbon operations in all our businesses and financial statements. oering tangible environmental benets to customers. From July 20 through August 31, 2011, Kirin Beverage and Tokyo Kirin Beverage Service held a 1 Implementing the Basic Policy in every aspect of business along the entire value chain 2 Conducting ongoing assessments and audits to ensure follow-through on the policy’s implementation consumer event at the Science Museum in Tokyo are the two guiding principles underlying our environmental practices. We align the leadership of the Group’s senior management focused on vending machines. In the event space Shareholders and Investors This Sustainability Report and the involvement of all employees toward making environmental stewardship an integral and vitally important part of business covers key subjects management, for which we set challenging goals. were a cut-away model of a vending machine and related to the Kirin a heat-pump unit to demonstrate how the latest Group’s environment ■ Legal compliance ■ Technology development stewardship. Detailed data We hold the high moral ground to be compliant with We develop technologies that respect nature and benet energy-saving design helped a vending machine are available in the Kirin environmental laws, agreements and voluntary standards. both the natural environment and customers. run more efficiently. Group Environmental Data ■ Environmental management system ■ Environmental training Book, which discusses the Action We establish an environmental management system that is We continuously develop human resources who can On nine weekend days during the event period, Guidelines Group's environmental in line with the management strategy so as to make make a dierence in promoting environmental visitors had a chance to replenish a vending continual improvements to our environmental stewardship. stewardship. management system, machine to understand how it worked. They filled ISO 14001 certification, ■ Environmental performance ■ Communication environmental We save resource use and energy consumption, curb We conduct community-oriented green activities and out questionnaires about what they thought accounting, history greenhouse gas emissions, prevent environmental pollution, strive to retain the trust of our stakeholders by keeping and implement the three Rs—reduce, recycle and reuse— them constantly informed of our practices for about Kirin's efforts to reduce power use by

of its environmental Accountable Management initiatives for waste materials. environmental stewardship. stewardship, and site data. vending machines. Kirin event at the Science Museum

30 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 31 Promoting Environmental Sustainability

Promoting Environmental Stewardship across the Entire Value Chain Customers Making Sustainable The Kirin Group—with its corporate philosophy focused on people, Mitigating Global Conserving Water Greener Packaging Use of Biological Warming Resources nature, and craftsmanship—shares with all the people associated with Resources Sourcing of Number of trees planted Number of participants its value chain its aspiration to continue to enjoy the bounty of nature We convert used containers We partner with food- We work with our We take a global (Kirin Brewery): in forestation: and pass it down to the generations to come. into useful materials to producing communities stakeholders to reduce our perspective on water Raw Materials help make a zero-waste and people who work value-chain CO2 emissions. resources and conserve ■Supporting sustainable society a reality. in them to make the them in a manner most agriculture 30,000 30,000 procurement and use of appropriate to each ■Forestation at water sources food resources sustainable. country or region. ■Sri Lanka Friendship Project Number of schools in Sri Lanka to receive books Disposal and Recycling under the Friendship Project (Kirin Beverage):

■Bottle-to-bottle recycling (Kirin Beverage) over the next Global Environment ■PET bottles for wine (Mercian) 100 five years ■Corner-cut cardboard cases (Kirin Brewery and Kirin Beverage) ■Lighter cans (Kirin Brewery) R&D Immunostimulating effect of Use of petroleum-derives ■ materials in PET bottles barley residues on dairy cows made by bottle-to-bottle Molecular breeding of yeast recycling: Down % ■ 37 capable of efficiently producing L-lactic acid from which biomass- Communities CO2 emissions: derived plastics can be made Down 27% Use of cardboard (Kirin Beverage):

Down Manufacturing 750tons a year ■Photovoltaic power generation Conventional Corner-cut carton Wines in specially Ocean Bottling Delivered carton designed bags transportation to customers■Reducing water use Employees ■Protecting endangered species in a biotope Consumption ■Using biogas to generate electricity Porte Preferment ripened at low temperature Sales ■ Wines in specially Ocean Bottling Delivered Manufacturing lines designed bags transportation to customers Percentage of vending Distribution (Kirin Kyowa Foods) Reducing power use Electricity ■ machines running on heat InternalCO2 emissions in manufacturing Modal shift to rail Evaporator Evaporator on vending machines pumps among all newly ■ heat exchanger (Kirin Brewery): installed units: Reducing and simplifying Sharing delivery trucks with Biogas ■ ■ engine Steam supplied Cooling cycle Recovering Heat-pump cycle to manufacturing shipping cartons other beverage companies exhaust heat lines Manufacturing lines Exhaust-heat ■Importing wine in bulk Integrated Down % recovery boiler %Electricity heat exchanger 70 Internal in specially designed bags Evaporator Evaporator 100 below the 1990 level heat exchanger Cooling Compressor Biogas Heating efficiency of a compressor for heat pump vending machine running onBiogas Steam supplied Steam boiler

engine Business Partners Cooling cycle Recovering Heat-pump cycle a heat pump as compared to manufacturing exhaust heat with a conventional type: lines Exhaust-heat Wines in specially Ocean Bottling Delivered Maximum power generated Integrated recovery boiler designed bags transportation to customers by photovoltaic system (Shinshu Beverage): heat exchanger Treated water Cooling Compressor Biogas compressor for heat pump % CO2 emissions in ocean 130 Steam boiler transportation (Mercian): How a Heat Pump Works greater Down % kilowatts Biogas Power Generation 60 1,478 Manufacturing lines Electricity Internal Quantifying Value-Chain Environmental Loads Treated water Evaporator Evaporator heat exchanger Biogas engine Steam supplied Cooling cycle Recovering Heat-pump cycle to manufacturing exhaust heat lines Participating in Carbon Disclosure Project Exhaust-heat Integrated recovery boiler The Kirin Group calculates and estimates its total value-chain CO2 emissions using the Scope The Carbon Disclosure Project (CDP) encouragesheat exchanger dialogues among investors, business leaders, and government 3 Standards in the GHG Protocol international standards for corporate GHG accounting officials to seek solutionsCooling to climate change, and requestsCompressor large companies around the world to discloseBiogas Kirin Group's Value-Chain CO2 Emissions in 2009 compressor for heat pump Shareholders and Investors and reporting defined by the World Resources Institute and the World Business Council for information about their initiatives to address climate change and about their CO2 emissions. In 2011, the CDP Steam boiler CO2 emissions across value chain: 6.8 million tons Sustainable Development. We estimate that our value-chain CO2 emissions were 8.6 million ranked Kirin Holdings top among Japan's 500 largest companies, as defined by market value, for the quality and tons in 1990 and 6.8 million tons in 2009—a reduction of 21% in 20 years. Of the 6.8 million Estimated CO2 emissions: 0.4 million tons completeness of the information the company disclosed with regard to climate change initiatives. tons of CO2 emissions in 2009, only 20% was found to have come from our direct business CO2 emissions calculated using the standards: 6.4 million tons Kirin Holdings Managing Director Hajime Nakajima accepted the honor of being ranked top in the Carbon Treated water activities—manufacturing, distribution, and office operations. This means that we need to do Distribution 3% Sales and marketing Disclosure Score at the CDP 2011 Japan Conference held in Tokyo on November 7, 2011. In his acceptance something about CO2 emissions associated with the rest of the value-chain activities to reduce speech, he attributed the company's placement at the top to its proactive efforts to make public the Contract our overall CO2 emissions. Manufacturing manufacturing performance of its environmental management and stewardship. He also reiterated the Kirin Group's Materials 41% 16% 6％ In 2011, Lion completed an inaugural water footprint for the entire Lion Group including its 16% 17% commitment to working closely with its stakeholders to achieve business growth while contributing to the supply chain and agricultural usage in its wine business. The results will allow the company to sustainable development of society. analyze outcomes and examine priorities to reduce its water usage. ) Disposal and recycling 1% Estimates The Kirin Group has also been participating in the CDP Water Disclosure, a program to disclose the usage of water resources, since 2010. CDP 2011 Japan Conference Accountable Management

32 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 33 Promoting Environmental Sustainability Helping Make a Zero-Waste Society a Reality Customers

Greener Packaging Reduce: Reduce the Mass and Volume of Packaging

Containers and packages preserve the quality of bottles into new PET bottles. We will continue to The Kirin Group sheds weight from its glass and cartons for its products with the consent of Guidelines for Designing Green Packaging their contents and make it easy for customers wisely use finite resources and will work closely PET bottles and cans, and also simplifies shipping distributors and retailers. Kirin Brewery established to handle products. As they are made from with our customers and communities in a stepped- the guidelines in 1998 finite resources, the Kirin Group takes packaging up effort to make a zero-waste society a reality. and has been shedding Lion’s Beer, Spirit & Wine weight from its containers seriously and seeks to reduce its environmental and packages as well as business in New Zealand 3Rs of Packaging Specially coated lighter Lighter six-pack cartons continued to progress load. In the global arena, there is growing promoting recycling of (Kirin Brewery) their product stewardship PET bottles resources. concern about the depletion of finite natural ■Reduce the mass and (Kirin Beverage) Global Environment schemes and accreditation Reduce volume of packaging 22% lighter The redesigned carton for six 6% lighter of these within the central resources spurred by an ever-increasing demand 350-ml cans of beer is made The newly developed 500- Packaging Development government’s waste of a smaller square of thinner for them. ml PET bottle for carbonated Center minimization policy. Reuse ■Use returnable containers paperboard and has a lower 回収 飲用 販売 生産 drinks, weighting 24 grams, Kirin Brewery's Packaging Lion is also continuing While continuing to promote 3Rs (reduce, reuse, environmental load. This carton is one the industry's lightest Development Center is to improve recycling is lighter than its predecessor. recycle) efforts for packaging, we will use more ■Reprocess packaging materials PET bottles, and has improved working on technologies opportunities and rates in Recycle into new containers performance in keeping to improve the quality and the New Zealand market. plant-derived materials for the manufacture of carbonated gas trapped in it. Use recyclable materials reliability of packages and, Lion’s efforts with the ■ plastic bottles and will start to recycle used PET at the same time, reduce country's glass packaging their environmental forum have been PET load. The center shares recognized by the Ministry ポリエチレン its technological of the Environment, テレフタレート achievements with other Communities resulting in the Recycle: Reprocess Packaging Materials into New Containers; Use Recyclable Materials Group companies. government’s recycling サトウキビ CO2 emissions in program “LoveNZ.” Corner-cut cartons CO2 emissions: PET bottles for wine manufacturing a PET bottle In summer of 2012, Kirin Beverage will start using made from recycled PET bottles. compared with (Kirin Brewery and Kirin Beverage) tons (Mercian) a glass bottle : for Kirin Namacha green tea drinks PET bottles Down400 a year Achieving greater Kirin Brewery was the first Japanese Mercian started using specially Down 50% recycling rates 天然ガス beverage company to use a corner- coated PET bottles with cut carton, which is a wrap-around excellent oxygen-barrier Japanese beverage 環境効果 石 油 cardboard shipping case for canned characteristics first for some of companies and packaging Bottle-to-Bottle Recycling: Recycling Used PET Bottles into New PET Bottles beverages, the four corners of which its wine products in 2010 and companies have been are beveled off, and which requires for its Franzia wine in 2011. working to improve less paper to make. Moreover, a PET bottles for wine are much collection and recycling Used PET bottles are recycled mainly into filled corner-cut carton is easier to lighter than glass bottles. rates for containers carry and handle. Kirin Beverage

under the Containers polyester fibers that can be used to make has also adopted this design for its Employees shipping cases, the first to do so in and Packaging Recycling non-bottle products such as clothes and Collection Consumption Sales Manufacture Corner-cut carton for 2-litter Act of Japan, and have the soft drink industry. bottles of Kirin Alkali Ion Water achieved one of the carpets—most of which are exported. highest recycling rates in In bottle-to-bottle recycling, used PET the world. In 2011, Lion’s Beer, bottles are recycled back into new PET Spirit & Wine business in Lighter beer cans Lighter beer bottles Australia assessed and bottles, and the recycling process is (Kirin Brewery) % lighter (Kirin Brewery) % lighter reengineered packaging Industry Collection PET 29 21 completed in Japan. materials under the and Recycling Rates for (polyethylene Kirin Brewery was the first Kirin Brewery uses the industry's auspices of project Aluminum and Steel Cans Kirin Beverage makes new PET bottles terephthalate) Japanese beer company lightest large beer bottles, and, evergreen. As a result in Japan to switch to the smaller by the end of 2011, has saved a from mechanically recycled PET they significantly reduced Sugarcane 204-diameter can end for total of 55,000 tons of materials Aluminum Cans materials—impurities in which are its beer cans. In 2011, the to make bottles and reduced the materials they use, (kt) (%) particularly glass and (kt) (%) company, working with three 57,000 tons of CO2 emissions. 300 100 removed by heat, vacuum, and gas- cardboard. Overall, their 300 100 can manufacturers, shed 1 gram The company also has switched cleansing processes—combined with, for of weight from every 350-ml to lighter small bottles. materials usage index Business Partners and 500-ml can it uses. 200 95 Use of petroleum- measured as grams of 1 CO2 emissions 200 95 the first time in Japan , plant-derived PET Natural gas derived materials: packaging per liter of materials. Initially, these PET bottles are Environmental product was reduced by 100 90 Petroleum bene ts 2.3%. 100 90 made from 10% of mechanically recycled DOWN DOWN

0 85 PET materials and up to 27%2 of plant- 0 85 (Year) 2008 2009 2010 (Year) 2008 2009 2010 derived PET materials. The company will gradually increase the percentage of *1 As of January 5, 2012 *2 The percentage of plant-derived PET materials in recycled PET bottles Steel Cans mechanically recycled materials. varies from 4.5% to 27% within a production lot. Reducing and Recycling Waste Materials (kt) (%) (800kt) 100(%) 800 100 600 95 The Kirin Group works to minimize waste from recycling rate for the waste it does generate while Mercian places grape 600 95 its business operations and to maintain a high developing ways to make better use of industrial pomace on a compost 400 90 heap in its vineyard for a Shareholders and Investors 400 90 Reuse: Use Returnable Containers by-products instead of throwing them away. year to transform it into 200 85 Amount of By-Products and Waste Generated and their All plants of Kirin Brewery, Kirin Beverage, and Kirin organic fertilizer, which is 200 85 Recycling Rate in Kirin Group Companies in Japan then used in its vineyard. 0 80 Kirin Brewery reuses glass bottles as well as large Kirin Brewery's Performance in Collecting Returnable Distillery maintain a 100% recycling rate for the 0 80 Recycling rate Waste treated on site Recycled waste Disposed waste (Year) 2008 2009 2010 Beer Bottles Recycling rate % Recycling Amount (kt) waste materials they generate. (Year) 2008 2009 2010 kegs for draft beer for commercial use. While Number of bottled beers sold 500 98 99 99 99 100 Number of beer bottles collected

Weight of used cans bottles Million Kirin Holdings' Central Laboratories for Frontier Weight of used cans the company has been using fewer glass bottles 500 418 414 Weight of recycled cans 400 6 2 369 80 3 Technology has discovered that barley residue, a RecyclingWeight of raterecycled cans as canned beers have gained popularity, the 400 300 289 60 Recycling rate collection rate for glass bottles has reached more 300 1 by-product of making low-malt beer, stimulates 327 312 263 224 Sources of data: Japan than 99%. Kirin Beverage uses returnable glass 200 200 40 immune activity in cows when consumed as feed. Aluminum Can Recycling 100 Association and Japan bottles for its Kirin Lemon and other soft drinks 100 20 This discovery raises expectations for a novel way 0

Steel Can Recycling 85 100 103 Accountable Management with their collection rate at nearly 100%. 0 64 0 of using barley residue in a manner that benefits Association (Year) 2007 2008 2009 2010 2011 (Year) 2008 2009 2010 2011 dairy farmers.

34 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 35 Promoting Environmental Sustainability Conserving Biodiversity Customers

Making Sustainable Use of Biological Resources Leveraging Kirin Group's Technologies to Conserve Biodiversity

Developing more and more land for farming, abundant, high-quality biological resources. In the The Kirin Group has developed a technology to breeding—from xylose abundant in inedible plant *Biomass-derived plastics: partly to feed growing populations and to grow spirit of the Kirin Group's Declaration of Support propagate plantlets from the tissue of a plant, biomass—of yeast capable of efficiently producing eco-friendly plastics made from organic biological crops to produce biofuels, might affect the for Biodiversity Conservation, announced in 2010, which has the potential to restore a commercially L-lactic acid from which biomass-derived plastics* materials (biomass), such balance of nature and might have an impact on we will continue to work with food-producing logged forest to its natural state faster, thus to can be made. This may lead the way to producing as plants and microbes, that can be reproduced communities of farmers and their families. communities and supplier partners to achieve the maintain the sustainability of forest resources. biomass materials without harming ecosystems. fast; polylactate is the The Kirin Group, which relies on what nature has sustainable sourcing of biological resources so In 2011, we succeeded with the molecular most widely available form of biomass plastics, made

to offer to conduct its business, recognizes the that nature continues to bless us with its plentiful from polymerized lactic Global Environment importance of sustainable sourcing and use of bounty to keep our business going. acid produced when sugar is fermented using lactic Working with Stakeholders acid bacterial.

Kirin Group's The Kirin Group, which relies on the bounty and goodness of nature to conduct its business, recognizes Biotope Declaration of Support the importance of conserving the Earth's biodiversity. We take it upon ourselves to help conserve for Biodiversity biodiversity so as to be able to continue to bring a greater joy of food and health to our customers. Kirin Brewery's Kobe Plant protects and breeds gradually grew to nearly Kirin Holdings—a promotion partner for the Conservation indigenous fish species in a biotope it built on 1,000 and has stayed Declaration of Biodiversity 1. Make sustainable use of natural resources its premises in 1997. The plant worked with the at that level. Children by Nippon Keidanren and In our business operations, we use natural resources with biodiversity consideration in mind so that Hyogo Museum of Nature and Human Activities in the community visit a member of the Japan people around the world can continue to enjoy and appreciate the rich bounty of nature. Business and Biodiversity Communities on scientific research into golden venus chub— the biotope to check on Partnership—spearheads 2. Apply technologies to conservation of biodiversity an endangered the fish—enjoying the the Kirin Group's efforts to integrate biodiversity We apply the portfolio of technologies we have acquired through business operations to the sustainable use fish species—and hands-on opportunity to considerations into its and conservation of biodiversity while delivering a new joy of food and health to our customers. transferred 200 of learn about nature. The Kobe Plant is working to business operations. 3. Work with stakeholders to conserve biodiversity them from a reservoir establish guidelines for bringing the fish back to We incorporate biodiversity considerations into our ongoing environmental stewardship efforts and nearby to the biotope the natural environment in the local community Part of the proceeds from work with customers and communities to conserve biodiversity. beverage sales from this in 2002. The number without compromising its genetic diversity. vending machine go to 4. Meet legal and regulatory obligations a conservation project in Borneo We meet our obligations under laws and international treaties that govern the conservation of biodiversity to Saving a Wetland

ensure that the rich bounty of nature is shared among people around the globe. Employees (Announced on October 6, 2010) On King Island, Lion supports the King Island ecological value to the region. This project has been Natural Resource Management Group, which largely led by Wither Hill’s staff and a local ecologist aims to ensure that the island is a world leader in conjunction with the region’s council and the Sustainable Sourcing of Biological Resources in integrated sustainable production and quality Biodiversity Fund of New Zealand. This conservation living. The project will support the island’s dairy project includes major weed eradication and control, farmers in using sustainable farming practices the replanting of natives as well as protecting the Assessing the Sustainable Use of Resources Kirin Beverage supports to protect waterways from nutrient run-off. This rare flora which has been listed as ‘vulnerable” by the Borneo Conservation The Kirin Group has been assessing its practices influence on it. In 2011, we ascertained how much scheme will improve farmers’ knowledge of nutrient the International Union for Conservation of Nature. Trust Japan, an NPO of sustainable use of biological resources since we sourced other types of biological raw materials working to protect forests management while at the same time protecting the This project was shortlisted for a prestigious and establish a rescue 2010. As a first step, we assessed the influence and from where to evaluate their sustainability. We Ramsar-listed Lavinia Wetland and other estuaries international environmental award at the Drinks center for wild animals in Borneo. The company that our suppliers of black tea leaves—one of our will use these findings and those from assessments on King Island which are threatened by too many Business Green Awards 2012. The awards recognize Business Partners installed vending primary procurement items—might have on local of our suppliers' sustainability performances to nutrients entering the systems via sediment loads those in the machines that support the biodiversity and found that they had no adverse realize the biodiversity-friendly use of resources. from neighboring properties. These wetlands are a industry who are cause first in Asahiyama Zoo in Hokkaido in 2009, vital asset and provide food plants for endangered changing their and has since been Supporting the Development of Agricultural Communities species such as the orange-bellied parrot. business practices installing them in other parts of Japan. Kirin Beverage donates books to Sri Lankan communities. Wither Hills, Lion’s winery in New Zealand, has to minimize their

communities that produce tea leaves for its Gogo- The company has been carrying out this project since undertaken a conservation of the Rarangi wetlands, impact on the *Drinks Business Green no-Kocha (afternoon tea) brand of bottled black tea 2007 and will expand it to include 100 elementary whose indigenous biological diversity is of significant environment. Awards: drinks, to assist in the education of children in the schools over the next five years from 2012. Environmental management award program run by the Drinks Students of an elementary Business, a London-based school that received Supporting Sustainable Agriculture in Communities Meeting Legal and Regulatory Obligations books leading trade publication As part of efforts to promote regional agriculture, communities—Lion provides grants for projects in on alcohol drinks. Shareholders and Investors Mercian harvests grapes for wine in its vineyard the dairy industry and in the broader community. To ensure that the rich bounty of nature is Kirin Group's Principles on Access Management of Genetic Resources developed from largely idle farmland with One of these initiatives is aimed at improving the shared among people around the globe, careful attention paid to the original landscape quality of soils on genetic resources must be managed in 1. Respect international agreements on biodiversity. and scenery. The company uses fertilizer and dairy farms in the accordance with applicable laws and agrochemicals with a low environmental load Hunter Valley, 2. Gain access to genetic resources with prior informed consent of regulations that comply with international a country providing such resources. Do not introduce or use and uses mist spraying to reduce the amount of which have been agreements to that effect. The Kirin Group genetic resources of unknown origin. agrochemicals used on the vineyard. damaged due has established guidelines on access to In its ongoing partnership with Landcare to a long history genetic resources that incorporate the 3. Properly manage the use of genetic resources, including the fair and equitable sharing of benefits arising from their use, in Australia—a not-for-profit movement dedicated of intensive basic principles of the Nagoya Protocol, accordance with international treaties. to managing environmental issues in local production. adopted at COP 10 in 2010. Accountable Management

36 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 37 Promoting Environmental Sustainability Mitigating Global Warming Customers

Renewable Energy 2 Reducing CO Emissions Shinshu Beverage is working with C Energy, an Tokyo Research Park. The company added another energy solutions company in the Chubu Electric one in its Ube Plant in 2011. Researchers say that global warming might trigger an action plan for mitigating global warming with Power Group, to build a mega-solar power climate change that affects the entire Earth— a medium-term target of reducing CO2 emissions Kirin Group Plants and Offices in Japan Using Energy- generation plant on its premises in Nagano Efficient Equipment and Renewable Energy Sources its ecosystems, water resources, farm crops, and directly associated with our business as well as Prefecture. When the plant becomes operational by Equipment Installation Wind power generation natural disasters. Climate change could also affect longer-term targets for reducing them throughout the end of 2012, it will generate 1,478 kilowatts of facility in Yokohama Gas boilers Installed in 21 plants and oces since 1980 (sponsored by Kirin the Kirin Group's business, whose sustainability our value chain ranging from R&D to disposal and electricity per hour, the largest capacity among all Brewery) Photovoltaic Installed in 12 plants and oces since 1996. relies on the bounty of nature. recycling. We have been making progress toward photovoltaic facilities in Nagano (as of February 2012). system Rated power output: 260 kilowatts

In August 2009, we formulated and announced achieving these reduction targets. The power plant is expected to help the company Global Environment Wind-power Kirin Brewery has been sponsoring the Wind Power system Generation Project initiated by the City of Yokohama reduce its CO2 emissions by 600 tons a year. since 2007. Rated power output: 1,980 kilowatts Kyowa Hakko Kirin operates photovoltaic power Cogeneration CO2 Reduction Targets Installed in 7 plants and oces since 2002 generation facilities year-round in its Fuji Plant and in system Weighing the balance between the Earth’s finite natural CO2 absorption ability and the CO2 emissions created by mankind,

We will reduce CO2 emissions generated from our entire global value chain by half 1 ▶ See Page 32 and 38 from the 1990 level by 2050. ● Distribution

We will reduce CO2 emissions resulting from our global manufacturing, distribution 2 ▶ See Page 41 and office operations by 1% or more annually through 2050. ● Modal Shift to Rail Importing Wine in Bulk Communities By 2015, we will bring CO2 emissions from our manufacturing, distribution Kirin Beverage and Kirin Brewery became certified Mercian imports wine in bulk in specially designed 3 ▶ See Page 38 and 39 and office operations in Japan down to 35% below the 1990 level. ● with the Eco Rail Mark for their extensive use of rail large bags, and bottles it in Japan to reduce CO2 freight in 2006 and in 2010, respectively. emissions during ocean transportation. Reduction targets apply to the value chains of all Group companies throughout the world. (Formulated on August 3, 2009) Although neither of them achieved their targets for Shared Delivery rail freight use for 2011 Kirin Brewery and Kirin Beverage share trucks to Shipping carton for Kirin Progress Report on Action Plan because rail transportation deliver products to distributors and retailers with Namacha green tea drinks, with an Eco Rail Mark was disrupted in some the Suntory Group and Sapporo Breweries Ltd. In printed on it *Scope of reporting: We have found that the Kirin Group 's value- the 1990 level by 2050. We will keep monitoring parts of the country in the August 2011, Kirin Brewery and the Asahi Group Kirin Brewery Co., Ltd.; wake of the Great East started collaborative small-lot deliveries to retailers Employees Kirin Distillery Co., Ltd.; chain CO2 emissions for 2009 were 21% below our performance in reducing value-chain CO2 Eco Rail Mark Ei Sho Gen Co., Ltd.; Kirin their 1990 level, and that we are on track toward emissions to stay on track. Japan Earthquake, both and collection of empty bottles and kegs; both Logistics Co., Ltd.; Kirin companies will continue A certification granted to a companies are expected to reduce CO2 emissions Engineering Co., Ltd.; Kirin achieving the goal of reducing them by half from business whose extensive use to make a modal shift to of rail for freight transportation from their distribution operations by 196 tons Techno-System Corp.; Kirin is judged to be beneficial to Merchandising Co., Ltd.; Kirin Group's Value-Chain CO2 Emissions Kirin Group's CO2 Emissions from its Manufacturing, rail. the environment. combined, or 22%, a year. Eco-Series Kirin City Co., Ltd.; Mercian Distribution, and Office Operations in Japan* Kirin Eco-Series kt Corp.; Kirin Beverage Co., kt kt kt beverages are eco- 1,500 Ltd.; Kirin Chilled Beverage 7500 21% 50% 1,500 7500 21% 50% friendly. reduction reduction reduction reduction 48%Co., Ltd.;35% Shinshu Beverage 48% 35% Sales and Office Operations reductionCo. Ltd.;reduction Kyowa Hakko reduction reduction Kirin Co., Ltd.; Kyowa 1,000 Medex Co., Ltd.; Kyowa 5000 1,000 5000 Eco-Series Beverages Eco-Friendly Cars Hakko Bio Co., Ltd.; Daiichi They come in lighter PET Fine Chemical Co., Ltd.; Kirin Beverage has started marketing Eco-Series As of the end of 2011, Kyowa Hakko Kirin had 585 bottles. Kirin Kyowa Foods Co., Business Partners 1,514 1,042 953881 824 781 984 8,6008,600 6,8006,800 4,3004,300 1,514 1,042 953881 824 781 984 8,6008,600 6,8006,800 4,3004,300 500 Ltd.; Koiwai Dairy Products 2500 500 2500 beverage products, which come in the industry's hybrid vehicles in its fleet of cars for its salespeople Co., Ltd.; Kirin Holdings lightest PET bottles and are sold in stores in in the field, with the goal of having 1,000 of them Co., Ltd.; Kirin Business Expert Co., Ltd.; and Kirin selected markets to which products are drop- by 2014. 0 0 0 0 They are produced in and Real Estate Co., Ltd. shipped from Kirin Beverage plants to reduce CO2 Kirin Brewery is phasing electric vehicles and fuel- shipped from selected (Year) 1990 2007 2008 2009 2010 2011Amounts2015 of CO2 emissions (Year) 1990 2009 2050 (Year) 1990 2007 2008 2009 2010 2011 2015 (Year) 1990 2009 2050 (Target) (Target) (Target) emissions (Target)during transportation. efficient, low-emission cars into its fleet. Kirin Beverage plants to shown left include those selected markets to reduce reported as a specified CO2 emissions during consigner pursuant to Porte Preferment Ripened at Low transportation. the Japanese Act on the Vending Machines Rational Use of Energy. Manufacturing Temperature Kirin Beverage cut power consumption by its vending Kirin Kyowa Foods has developed Porte Preferment ripened CFC-free vending machines in 2011 by installing machines running on energy- at low temperature. Preferment and bread dough ripened machines Conserving Energy efficient heat pumps and conserving power during summer at low temperature overnight give distinctive flavors and Kirin Beverage will have and winter. The company started in March 2012 to install a textures when baked. Making consistently good bread from CFC-free refrigerant in

Kirin Brewery, having already achieved its target for oil in its Yatsushiro Plant in 2011. new generation of heat- such preferment requires the right ripening equipment and a more than 90% of new Shareholders and Investors CO2 reduction set for 2012, has been working toward Lion has continued its strong focus on reducing pump vending machines tight process control over an extended period, both of which vending machines it plans to install in 2012. Biogas power generation new goals for 2015. The new goals are reducing CO2 energy consumption across its manufacturing sites, that run on 50% less consume energy. High-quality bread can be made quickly Kirin Brewery generates emissions from its manufacturing, distribution, and mainly through the involvement in the federal electricity than their from Porte Preferment without having to store it in special electricity with a predecessors, and all its equipment before baking, which saves energy in the process. cogeneration system office operations by 64%; reducing 2CO emission government’s Energy Efficiency Opportunities new vending machines, using biogas produced intensity in manufacturing by 55%; and reducing program. Under the program, Lion is required to except a small number of by wastewater-treatment shallow-profile units, will 2 facilities in its plants. CO emission intensity in transportation by 46%—all identify, evaluate, and report publicly on cost- have energy-efficient LED compared with the 1990 level. effective energy savings opportunities, and over lights. Furthermore, most of Shinshu Beverage switched fuel to natural gas in the past three years it has identified more than new vending machines to be installed in 2012 will use January 2012. Kirin Beverage switched the fuel used 90 opportunities, many of which have been refrigerant free of ozone-

for boilers to natural gas in its Maizuru Plant in 2011. implemented. harming CFC gas. Accountable Management Mercian switched fuel for boilers from coal to heavy

38 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 39 その他事業 医薬・バイオケミカル事業 海外酒類・飲料事業 国内飲料事業 国内酒類事業 エネルギー ケミカル事業 バイオ 16 医薬・ その他事業 33 廃棄物 T U P T U O ケミカル事業 バイオ 15 医薬・ CO 12 飲料事業 海外酒類・ ケミカル事業 バイオ その他事業 19 医薬・ 31 T U P N I % % 2 % % % 排出量 Environmental Stewardship % Environmental Stewardship キ リ ン ビ ジ ネ ス シ ス テ ム 、キリン協和フーズ、小岩井乳業、横浜アリーナ、横浜赤レンガ、キリンエコー、協和発酵ケミカル、キリンホールディングス、キリンビジネスエキスパート、 キ リ ン リ ア ル エ ス テ ー ト キリンビバレッジ、信州ビバレッジキリンテクノシステム、キリンオーストラリア、メルシャン、メルコム、日本リカー、メルシャン軽井沢美術館キ リ ン ビ ー ル、 キ リ ン デ ィ ス テ ィ ラ リ ー、 永昌源、 キ リ ン シ テ ィ 、 キ リ ン マ ーチ ャ ン ダ イ ジ ン グ 、 キ リ ン ア ン ド コ ミ ュ ニ ケー シ ョ ン ズ、 キ リ ン 物流、 キ リ ン エ ン ジ ニ ア リ ン グ 、 協和発酵キリン、協和メデックス、協和発酵バイオ、第一ファインケミカル麒麟（中国）投資有限公司、麒麟 酒（珠海）有限公司、ライオンネイサン ナショナルフーズ

Conserving Water Resources 国内飲料事業 Environmental Risk Management and Material Balance 飲料事業 海外酒類・ 21 4 国内飲料事業 26 国内酒類事業 その他事業 10 28,156TJ % 53 国内酒類事業 27 飲料事業 海外酒類・ 4 国内飲料事業 23 国内酒類事業 % % 1,677 % % Customers 422 % % % 6 ※協和発酵キリングループの環境データは2009年4月～2010年3月（エネルギーデータのみ2010年1月～12月）を報告対象期間とし、信州 ビバレッジの環境データは2010年1月～9月はナガノトマトの実績、2010年10月～12月は信州ビバレッジの実績を報告対象としています。 % 千t 千t 水（淡水のみ） ケミカル事業 その他事業 バイオ 47 医薬・ Efforts to Conserve Water 13 Resources Preventing Environmental Pollution 大気への排出 SOx 大気への排出 排水 大気への排出 NOx 大気への排出 ケミカル事業 バイオ 51 医薬・ その他事業 11 % % % The impacts of water resources issues significantly% properly and work with communities to preserve Kyowa Hakko Kirin, because of the nature of its monitoring, discharged wastewater that exceeded * Biochemical oxygen demand: vary geographically and from year to year. Globally forests at water sources to continue to obtain business, handles a large amount of chemical the standards on biochemical oxygen demand*. The amount of oxygen operating companies must address the water clean and safe water, an essential resource for our substances. Under its Basic Policy on Environment, We immediately notified the regulatory authorities consumed when organic substances in water are resources issue in each region in a manner that is business. Safety and Product Safety, the company undertakes of the incident and, to prevent similar incidents, decomposed by microbes; 10 飲料事業 海外酒類・ 3 国内飲料事業 27 国内酒類事業 89,326 79,732 % 7 飲料事業 海外酒類・ most appropriate for it. 3 国内飲料事業 28 国内酒類事業 Kirin Group's Efforts to Conserve Water Resources Responsible Care activities that include stringent have since been exercising tighter control over a metric to measure the % % % % level of organic pollution

The Kirin Group employs highly sophisticated% water- assessment of the safe handling of chemical wastewater-treatment operations and more ■使う量を減らします545 ■We reduce our water use of a river. 千m 66 千m Using water eciently saving systems when it operates in high water- substances from the research phase through to vigorously monitoring the discharge of wastewater. Global Environment

・水の使用量を抑える工場設計t 3 ■We recycle water where feasible t 3 stress areas and, （in ユーティリティ設備の分散配置などother areas, chooses the right） their use and disposal. We regularly train our employees on environmental

水使用の合理化 Treating wastewater物質（原料と容器包装材） ■We treat wastewater before ケミカル事業 6 医薬・バイオ ■可能な限り循環利用します 27 飲料事業 海外酒類・ water-saving technology according to the level properly% discharging it into rivers and oceans The Kirin Group assesses and cleans up any soil management, as we believe that having a good % ・洗浄工程の見直しと使用済回収水の ［内訳］ 原料：1,507千t 容器包装材：688千t of energy use at each plant. In addition, to keep Protecting water ■We protect sources from which contamination before selling a property. understanding of environmental risks is essential to 生産量 （酒類） 再生利用(カスケード利用)の拡大 （食品など） （その他） 生産量 （酒類） （その他） 生産量 （医薬） sources to draw water 医薬・バイオケミカル事業 生産量 （飲料） the water cycle working well, we （その他） treat wastewater In 2011, one of our plants, due to inadequate mitigate such risks. （その他） 生産量 （飲料） ■使ったらきれいに返します海外酒類・飲料事業 国内飲料事業 国内酒類事業 その他事業 Water Use and ・法令の遵守はもとより、法令で求めら

適正な排水処理 1,047 2,819 1.1 Water-Use Intensity れる以上の自主基準を設定して排水590 163 119 70 Using Water Efficiently Material Balance 9 2,016

in Kirin Brewery 1,081 千t 千t その他事業 負荷を最小化 26 5 国内飲料事業 36 国内酒類事業 千t 2,195 千kℓ 千kℓ 千t 千 kℓ 千kℓ % %

Water use amount % Communities 千t The Kirin Group ascertains the effects that its business operations may have on the environment and uses the findings to take (million m3 per year) The floods in千t Brisbane,■水源を維持します Australia, in 2011 caused water consumption for the year. 水の恵みを守る 千t ・水の恵みを守り再生する森林保全活 action to reduce environmental load. Shown below are the results for material balance broken down by business segment for 2011. Water-use intensity 活動major issues to Lion’s best performing brewery, In 2011, Kirin Brewery—through a company-wide (m3/kl) 動の推進 40 12 Castlemaine Perkins, with the water recycling water conservation project—reduced its water 10.4 plant inundated and out of action for six months. use for manufacturing by 64% and its water-use INPUT

30 9 This was, however, offset by the outstanding intensity by 47% from their 1990 levels. Kirin Group Substances Energy 19,750 TJ Freshwater 85,433 km3 (Raw Materials and Packaging Materials) 1,623 kt

■使う水の量を減らします ［内訳］ 原料：1,507千t 容器包装材：688千t 物質（原料と容器包装材） ケミカル事業 6 医薬・バイオ 27 飲料事業 海外酒類・ 34.9 エネルギー その他事業 ケミカル事業 バイオ 13 47 医薬・ 水（淡水のみ） その他事業 ケミカル事業 バイオ 6.7 results in some of its other breweries, in particular, engineers in Japan and overseas exchange ideas 16 医薬・ 33

・水の使用料を抑える工場設計 % Domestic Domestic Other T U P N I Other Pharmaceuticals

% Other % 20 % 5.5 6 the new Pride Brewery in Auckland which showed and information about efficient use of water, and % % alcohol businesses alcohol businesses1% 水使用の合理化 （ユーティティ設備の分散配置など） businesses beverages 31% beverages22% and biochemicals a decrease of 15% from the previous year— Group companies around the world share know- 2% 12% Domestic 17.4 ・洗浄工程の見直しと使用済回収水の 5% Domestic Domestic alcohol 10 3 enabling Lion to achieve再生利用(カスケード利用)の拡大 an overall reduction in how and best practices for conserving water. non-alcohol non-alcohol beverages47% 12.6 Pharmaceuticals beverages 7% Pharmaceuticals beverages % Overseas

3 Domestic Employees and biochemicals and biochemicals beverages 0 0 Overseas Overseas non-alcohol 89,326 10 飲料事業 海外酒類・ 3 国内飲料事業 27 国内酒類事業 %

28,156 % 21 飲料事業 海外酒類・ 4 国内飲料事業 26 国内酒類事業 29 beverages % beverages 34 beverages その他事業 5 国内飲料事業 36 国内酒類事業 ■使った水はきれいに返します 26 28 64% 9% 6% %

(Year) 1990 2009 2011 % 2,195 % % % % Treating Wastewater Properly % Packaging Materials: 643kt Raw Materials: 980kt % ・法令の遵守はもとより、法令で求めら % 適正な排水処理 千m TJ

れる以上の自主基準を設定して排水 千t The Kirin Group has負荷を最小化 established more stringent anaerobic and activated-sludge methods before 3 voluntary standards for wastewater treatment being discharged. OUTPUT than required by■ law,水自体を守る活動をします so as to minimize the load of Kyowa Hakko Kirin recovers high-purity 水の恵みを守るwastewater on the・水の恵み守り再生する森林保全活動 environment. phosphoric acids from wastewater and offers Domestic alcohol beverages 活動 3 の推進 CO2 Emissions 1,097 kt Wastewater 82,215 km Production volume (alcohol beverages): Kirin Brewery's beer plants generate high- them as agricultural materials. As phosphoric 2,789 thousand kl ［内訳］ 原料：1,507千t 容器包装材：688千t Other Domestic Other Domestic 物質（原料と容器包装材） ケミカル事業 6 医薬・バイオ 27 飲料事業 海外酒類・ エネルギー その他事業 ケミカル事業 バイオ 13 47 医薬・ 水（淡水のみ） その他事業 ケミカル事業 バイオ 16 医薬・ 33 (Others): kt concentration wastewater originating from raw acid resources are in short supply globally, the% businesses alcohol businesses alcohol 111 % % % % % beverages % beverages % T U P N I 31 1% 22 Kyowa Hakko Kirin materials as well as low-concentration wastewater company seeks to market recovered phosphoric 5% Domestic non-alcohol beverages Domestic

エネルギー Domestic CO Business Partners その他事業 ケミカル事業 その他事業 ケミカル事業 ケミカル事業 バイオ バイオ バイオ 16 医薬・ 33 Takasaki Water-Source 12 飲料事業 海外酒類・ 19 医薬・ 廃棄物 15 医薬・ 31 non-alcohol Production volume (beverages): such as used cleaning water. All wastewater is acids T U P T for U O a variety of applications. non-alcohol T U P N I

Forestation Project 2

排出量 beverages thousand kl % % % % beverages 639 % % Pharmaceuticals 3% Ninety-three employees first piped into balancing tanks and treated using and biochemicals 5% Pharmaceuticals Overseas and biochemicals Overseas 89,326 10 飲料事業 海外酒類・ 3 国内飲料事業 27 国内酒類事業 28,156 21 飲料事業 海外酒類・ 4 国内飲料事業 26 国内酒類事業 その他事業 5 国内飲料事業 36 国内酒類事業 of the Kyowa Hakko Kirin 26 30% beverages % % beverages % % 29 8 Overseas beverages 2,195 % 66%

Group and their family % % % % % % Production volume (alcohol beverages): 千m members participated in 国内飲料事業 TJ 千t 981 thousand kl a forestation project held Protecting Water Sources 3 Waste Materials 514 kt (foods and others): 1,627 kt 28,156 27 飲料事業 海外酒類・ 4 国内飲料事業 23 国内酒類事業 21 飲料事業 海外酒類・ in a 1.55-hectare forest in 4 国内飲料事業 26 国内酒類事業 その他事業 53 国内酒類事業 10 1,677 % the Warabi Daira Forest % Discharge of NOx into the Atmosphere Pharmaceuticals and biochemicals 422 % % % % Other % % Pharmaceuticals T U P T U O Park located at the foot of 6 117 projects participated Kirin Group's projects to protect water sources Kirin Group employees and their families cleaned and biochemicals businesses1% 404t Production volume (pharmaceuticals): %

Description CO TJ 千t 千t ケミカル事業 ケミカル事業 その他事業 バイオ バイオ 19 医薬・ 廃棄物 15 医薬・ 31 Mount Asama-kakushi, a in by 8,428 people 12 飲料事業 海外酒類・ kt comprise three components: forestation at water up the vicinities of their plants and shores nearby 18% Domestic 2.1 water source of Takasaki 2 (others): 71.4 kt 排出量 % % % % alcohol その他事業 その他事業 ケミカル事業 ケミカル事業 バイオ バイオ 51 医薬・ 11 13 47 医薬・ 水（淡水のみ） City. sources; voluntary environmentalSOx 大気への排出 conservationNOx 大気への排出 together排水 with other members of the communities. beverages36% Overseas Discharge of SOx into the Atmosphere Other businesses % % % Helping preserve % around its factories and offices;16 projects and community Domestic Water-Source forests owned Projects to Protect Water Sources Conducted beverages 41t Production volume (beverages): participated non-alcohol thousand kl Forestationenvironmentalby national conservation. and by Kirin Brewery in 2011 41% beverages 49 in by 2,227 people 国内飲料事業 % (others): kt local governments 117 projects participated 4 30 Shareholders and Investors The projects to protect water sources—initiated by Description in by 8,428 people 27 飲料事業 海外酒類・ 4 国内飲料事業 23 国内酒類事業 その他事業 Kirin Brewery in 1999, the first such attempt in the 53 国内酒類事業 10 1,677 Helping preserve % 79,732 422 89,326 7 飲料事業 海外酒類・ 3 国内飲料事業 28 国内酒類事業 10 飲料事業 海外酒類・ 3 国内飲料事業 27 国内酒類事業 % % Domestic alcohol Kirin, Brewery Co., Ltd.; Kirin Distillery Co., Ltd.; Ei Sho Gen Co., Ltd.; Kirin City Co., Ltd.; Kirin Merchandising Co., Ltd.; Kirin & Communications Co., Ltd.; Japanese brewing industry—have been extended forests owned 16 projects % %

% % Water-Source % Voluntary 77 projects participated 6 beverages business Kirin Logistics Co., Ltd.; Kirin Engineering Co., Ltd.; Kirin Techno-System CorAp.; Kirin Diageo Co., Ltd.; Heineken Kirin Co., Ltd.; Mercian Corp.; Mercian % % % Voluntary Forestation by national and % 千t to other Group companies. in by 2,227 people 千t Feed Corp.; Mercom Corp.; Nippon Liquor Ltd.; Daiichi Alcohol Co., Ltd. Environmental beautication participated 545 local governments 千m 千m in by66 4,718 people ConservationAs part of a water-sourceproject forestation project carried Domestic non-alcohol ケミカル事業 その他事業 バイオ 51 医薬・ 11 大気への排出 SOx 大気への排出 大気への排出 NOx 大気への排出 排水 t t 3 Prime Minister's Award Voluntary Voluntary 3 77 projects beverages business Kirin Beverage Co., Ltd.; Kirin Chilled Beverage Co., Ltd.; Shinshu Beverage Co. Ltd.

out in 2011, Kirin Beverage signed an agreement ［内訳］ 原料：1,507千t 容器包装材：688千t 物質（原料と容器包装材） ケミカル事業 6 医薬・バイオ Environmental 27 飲料事業 海外酒類・ beautication participated Kirin Distillery’s Fuji- % % with Kanagawa Prefecture to sponsor its forest Conservation project% in by 4,718 people Overseas beverages Gotemba Distillery, which Participating in % business Kirin (China) Investment Co., Ltd.; Kirin Brewery (Zhuhai) Co., Ltd.; Lion Pty Ltd 生産量 （酒類） （食品など） （その他） 生産量 （酒類） （その他） had been engaged in 生産量 （医薬） 医薬・バイオケミカル事業 生産量 （飲料） Communityrestoration project, and started24 working projects on a （その他） forest Participating in （その他） a beautication 生産量 （飲料） projects to protect water Environmentalnewly namedproject the initiatedKirin Beverageparticipated Kanagawa Forest.海外酒類・飲料事業 In Community a beautication 24 projects Pharmaceuticals and Kyowa Hakko Kirin Co., Ltd.; Kyowa Medex Co., Ltd.; Kyowa Hakko Bio Co., Ltd.; Daiichi Fine Chemical Co., Ltd.; Kirin Kunpeng (China) Bio-Pharmaceutical sources, received the 国内飲料事業 国内酒類事業 Co., Ltd.; Biokyowa Inc.; Shanghai Kyowa Amino Acid Co., Ltd. Conservation by a local その他事業 in by 1,483 people Environmental project initiated participated biochemicals Prime Minister's Award for voluntary environmentalcommunity conservation projects and Conservation by a local in by 1,483 people Accountable Management 79,732 Kirin Kyowa Foods Co., Ltd.; Koiwai Dairy Products Co., Ltd.; Yokohama Arena Co., Ltd.; Yokohama Akarenga Inc.; Kirin Echo Co., Ltd.; Kirin Holdings Co.,

1,047 Other businesses 7 飲料事業 海外酒類・ 3 国内飲料事業 28 国内酒類事業 2,819

1.1 community

Afforestation Promotion 590 163 119 70 community environmental conservation projects, % % Ltd.; Kirin Group Office Co., Ltd.; Kirin Business Expert Co., Ltd.; Kirin Business System Co., Ltd.; Kirin Real Estate Co., Ltd. 9 2,016

for 2011. 1,081 その他事業 5 国内飲料事業 36 国内酒類事業 千t 26 % 千t 千t 千kℓ 2,195 % 千kℓ 千t 545 千 kℓ 千kℓ 千m 66 % % 千t 千t t t 3

40 KIRIN GROUP SUSTAINABILITY REPORT 2012 千t KIRIN GROUP SUSTAINABILITY REPORT 2012 41 （食品など） 生産量 （酒類） 生産量 （酒類） （その他） 生産量 （医薬） （その他） 医薬・バイオケミカル事業 （その他） 生産量 （飲料） 生産量 （飲料） （その他） 海外酒類・飲料事業 国内飲料事業 国内酒類事業 その他事業 1,047 2,819 1.1 590 163 119 70 9 2,016 1,081 千t 千t 千t 千kℓ 千kℓ 千t 千 kℓ 千kℓ 千t 千t Coevolving with Communities Customers

Dialogue with Communities

Dialogue with Consumer Groups We sit down with consumer groups to solicit their minors away from it. Communities insights and suggestions about new category We value staying in touch with consumer products we bring out to the market and their advocates and will continue to incorporate their Coevolving with Communities advertising messages and campaigns. perspectives into how we develop and market our Kirin Free, which we introduced in 2009, is a products and services.

case in point. Kirin Free is a non-alcohol, beer- Global Environment tasting drink made through a non-fermentation See Pages 8 to 11 for process. At the suggestions of the Japan an update on the Kirin KIZUNA Relief-Support Our Goal Housewives Association—a pioneering consumer Project organization in Japan—and the Japan Specified The Kirin Group Identify Statement calls for us alcohol-related problems (ARPs) and food- Non-profit Corporation to Prevent Alcohol and to focus on people, nature, and craftsmanship related issues in society, both of which have Drug Problems, we to redefine the joy of food and health. We an immediate relevance to our business; we chose to tout Kirin consider it our corporate responsibility to research trends and changes in what people eat Free as a beverage establish a lasting bond with communities that and how they eat it, so as to gain insights into the product for people Communities support our business while actively engaging future of food lifestyles; and we also invest in the aged 20 years and ourselves in supporting their sound, sustainable development of children to build a foundation older and to sell it in alcohol aisles in Some national convenience-store chains have taken a step further; development. for the future, and help people foster enduring they ask customers buying non-alcohol, beer-tasting drinks to verify To sustain coevolving relationships with bonds with each other. supermarkets and they are of legal drinking age at cash registers to prevent minors from Kirin Free stocked in an alcohol aisle buying them. (Pictured is an age-verification system installed in a communities, we play our part in addressing of a supermarket liquor stores to keep Seven-Eleven store in Japan.)

ARP Workshops for Employees Our Approaches Kirin Brewery, as a socially responsible beer director of the hospital, who talked about drinking company, holds ARP workshops regularly for its and its toll in Japan, initiatives undertaken by the Employees The Kirin Group's efforts to sustain coevolving among people. Each Group company puts these management and employees so that they have a World Health relationships with communities take four approaches into action in a manner that reflects good understanding of alcohol-induced diseases Organization approaches: (1) addressing ARPs; (2) helping its business nature and that benefits communities and alcohol addiction, and they exercise self- (WHO) to resolve food-related issues; (3) investing in the in which it operates. discipline when drinking. address ARPs, development of children; and (4) fostering bonds In February 2012, the company held a workshop underage for the president and other top executives at the drinking, and National Hospital Kurihama Alcoholism Center, women's Kirin Group Identity Statement one of the leading alcoholic treatment centers in drinking The Kirin Group—Focused on people, Japan. In this workshop, they received updates on problems. Workshop at the National Hospital Kurihama nature and craftsmanship to redene the joy of food and health ARPs and alcohol addiction from Susumu Higuchi, Alcoholism Center Business Partners

Working with DrinkWise Lion is a foundation sponsor and board member child and adolescent psychology. of DrinkWise, a non-profit organization that DrinkWise’s campaigns mainly focus on the Initiatives that support Initiatives integrated with Initiatives that respond was established in 2005 by the alcohol industry parents of children, because studies reveal a cultural development the Group's business to community needs and that aims to encourage a healthier, safer strong link between drinking culture across Australia. the way parents Lion and DrinkWise know that cultural change drink and how their will not happen overnight and that complex, children grow up to interdependent factors drive the use and drink. misuse of alcohol. DrinkWise's activities are Lion cooperates Shareholders and Investors a key part of a broad, multi-faceted strategic with DrinkWise approach to creating a safer drinking culture to seek the best Supporting Addressing ARPs Investing in that involves government, industry, and the sports and the arts and food-related local communities way of promoting issues community. As an evidence-based organization, responsible DrinkWise relies on key independent research consumption and clinical advice. The information supporting of alcohol and DrinkWise’s campaigns has been gathered from proactively supports Fostering bonds among people, authoritative studies and knowledge gained DrinkWise’s investing in the development of children from consultations with experts in the fields of campaign activities.

public health, neuroscience, epidemiology, and DrinkWise's campaign poster Accountable Management

42 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 43 Coevolving with Communities Socially Responsible Alcohol Beverages Company Customers

Our Goal Raising Awareness of ARPs

While alcohol beverages give joy and pleasure high-risk drinking. Our far-reaching efforts to tackle Enlightening Our People on Responsible Drinking to people, consuming them in an irresponsible ARPs start with establishing the basic policy and The Kirin Group expects all its employees to new managers. manner takes its toll. As a socially responsible action guidelines for addressing them, and range be role models for responsible drinking for the Lion has a Responsible Drinking Policy that covers corporate group that manufactures and markets from raising public awareness about responsible public. Group companies and plants in Japan the way they expect their employees to behave in alcohol beverages, the Kirin Group addresses drinking to defining and enforcing stringent have designated staffers in charge of promoting the workplace and at work-related social functions alcohol-related problems (ARPs) head-on and voluntary standards on alcohol advertising. We responsible drinking, who provide awareness- where alcohol is being consumed. Lion also Training session on provides practical solutions to them. also train our employees on responsible drinking, raising training to all employees during the continues to promote the ‘3Ps’ (plan, pace, and responsible drinking Global Environment We consider ARPs are at odds with the Kirin and participate in industry-wide programs and responsible-drinking campaign month in April protect) tool for living sociability responsibly. Group's identity statement of "redefining the campaigns against the harmful use of alcohol in every year. The ARP Office directly contacts and Kirin Brewery (Zhuhai) trains employees and other joy of food and health." We work with local and Japan and abroad. supervises these staffers to exercise governance stakeholders on responsible drinking, especially on international communities in a crusade against over them. In addition, Group companies in Japan strict compliance with laws against drunk driving. conduct by-rank training sessions on responsible The company has been enforcing sanctions The Kirin Group, true to its identity statement of being “focused on people, nature and drinking for their employees-to-be, new hires, and against drunk driving by employees since 2009. Basic Policy craftsmanship to redene the joy of food and health,” strives to prevent high-risk for Addressing drinking that may result in a variety of problems and to promote responsible drinking Enlightening Suppliers on Responsible Drinking ARPs Communities in a society. To ensure that the call for responsible drinking efforts to address ARPs. In fiscal 2012, we will start アルコール 「キリングループは、自然と人を見つめるものづくりで、「食と健康」の新たなよろこびを runs through all aspects of our business, we ask— providing suppliers with copies of a DVD that 関連問題に 広げていきます。」というグループ経営理念のもと、不適切な飲酒による様々な問題をThe Vision behind the in the Kirin Group Supplier CSR Guidelines—our promotes responsible drinking. ●▶ See Page 59 対する WHO Global Strategy to 1 In the belief that responsible drinking has its merits and facilitates communication 防止し、適正飲酒を啓発する活動を推進していきます。 supplier partners to understand and support our 基本方針 Reduce the Harmful Use among people, we educate the public on sensible drinking. of Alcohol Basic Policy ・Improve health and Educating the Public social outcomes for 2 Acknowledging that alcohol beverages have an intoxicating eect on people and 行動指針 1 適量で節度ある飲酒（適正飲酒）は、効用もあり、人と人とのコミュニケーションを individuals, families that excessive drinking may lead to alcohol dependency, we conduct We educate the public on alcohol and health by and 60,000 copies of a video titled Minors and 広げるとの認識に立ち、アルコール飲料との正しい付き合い方についての知識のand communities with making information available to all age groups Alcohol. We also provide quizzes on alcohol and a considerably reduced public-awareness campaigns on the potential problems that irresponsible morbidity and mortality through a variety of communication media. For self-test on drinking habits on our web site as part 普及に努めます。 drinking may cause to prevent such problems. Employees due to the harmful use of instance, we have distributed 6.8 million copies of our public education programs. alcohol and the ensuing ● Preventing underage drinking ● Preventing drunk driving 2 アルコール飲料のもつ致酔性、過度な飲酒による依存性などを認識し、不適切な飲social consequences. ● Preventing reckless drinking of a brochure titled The ABCs of Alcohol and Health The ABCs of Alcohol and ・Promote and support 酒による様々な問題の防止に向け、正しい知識の継続的な啓発活動を行います。 ● Discouraging pregnant women from drinking Health local, regional and global Communication Tools to Raise Public Awareness on Responsible Drinking and the Harmful Use of Alcohol A brochure that discusses ● 未成年者飲酒の防止 ● 飲酒運転の防止 ● イッキ飲みの防止 actions● to prevent妊産婦 and 3 We strictly adhere to laws and regulations, voluntary standards set up by the Number of Copies alcohol and health in reduce the harmful use of Media Type Released in Target Audience の飲酒防止など alcohol. industry, and our own voluntary standards in conducting our business while Distributed to Date an easy-to-understand manner promoting responsible drinking and preventing high-risk drinking. The ABCs of Alcohol and Health Brochure 1996 General public 6,832,300 3 事業活動にあたっては、法令、業界自主基準、キリングループの自主基準を厳守し、 Drinking and Health: 4 We support public campaigns and grassroots activities to prevent irresponsible CD-ROM 2000 Junior high school students/Adults 182,700／14,200 New brochure on 適正な飲酒の啓発、不適切な飲酒の防止に努めます。 Students Edition/Adults Edition responsible drinking Drink drinking. Happily Throughout Your Minors and Alcohol (no longer available) VHS video 1993 High-school and college students 33,000 4 不適切な飲酒の防止に向けた社会の活動を積極的に支援します。 Lifetime

5 We establish a responsible-drinking drive month in which all employees are Business Partners Minors and Alcohol: Revised Edition VHS/DVD 2005 Junior high school students encouraged to participate in a training session or a self-development program. 27,300 5 適正飲酒強化月間を設け、全社員を挙げて、社員研修や自己啓発に取り組みます。 International audience and Minors and Alcohol: Revised Edition DVD 2006 people with hearing disabilities

Learn about and Enjoy Alcohol and Health Web site 2002 General public Our Approaches Responsible Drinking Web site 2001 General public (As of December 31, 2011) ARP Office Training Programs Developed to Prevent the Harmful Use of Alcohol In May 2010, WHO resolved to adopt the Global address social issues and health risks associated Strategy to Reduce the Harmful Use of Alcohol. with drinking, as part of our ongoing crusade As part of efforts to raise public awareness of rest of their lives. Based on this program, we have The Kirin Group established the ARP Office in Kirin against the harmful use of alcohol. ARPs, the Kirin Group develops training programs created an education brochure and a DVD on Shareholders and Investors Brewery in February 2011 to step up our efforts to to prevent harmful use of alcohol. responsible drinking for adults titled Drink Happily People drink alcohol to have a good time; Throughout Your Lifetime and have distributed Joining Forces with Trade Associations however, irresponsible drinking poses health risks 20,000 copies since March 2012 to help reduce and may lead to drunk driving. health problems and alcohol addiction caused by The Kirin Group has joined the Global Alcohol misuse Following the May 2010 WHO resolution, Using a training program we have developed excessive drinking in society. This is the second GAP Group Producers Group (GAP Group)—an international trade associations in the Japanese alcohol industry under the supervision of the National Hospital educational DVD we have created, following the An international coalition trade organization that provides alcohol beverage have been working with the government to established to address Organization Hizen Psychiatric Center, we one produced for minors. ARPs, representing alcohol companies with a channel of dialogue with develop initiatives to address ARPs including those encourage our employees in Japan to assess their We are considering offering this training program beverages companies and the WHO—and has been globally carrying out specific to the Japanese market. industry associations. drinking habits and practice responsible drinking outside the Kirin Group to reduce the risks of projects to reduce adverse effects of alcohol so that they can continue to enjoy alcohol for the ARPs in society. Accountable Management

44 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 45 Coevolving with Communities Socially Responsible Alcohol Beverages Company Customers

Crusading against Drunk Driving Responsible Marketing of Alcohol Beverages

Leveraging Kirin Free to Promote the Designated Driver Campaign Voluntary Standards on Alcohol Advertising Example of the Kirin Group's voluntary Kirin Brewery uses Kirin Free—a non-alcohol, beer- when a national traffic safety campaign was The Kirin Group has adopted the Self-Regulatory on advertising, we have established the Ethics standards on alcohol Steering-Wheel Keeper tasting beverage—as a vehicle to get across its underway, the company—to further spread Code of Marketing & Advertising Practices and Committee comprising 17 members from eight advertising Do not use a scene of a Campaign message against drunk driving and to generate the message against drunk driving—ran TV Container Labeling for Alcoholic Beverages, departments. The committee reviews extensively One way to avoid woman drinking alone in drunk driving is, when increased public support and awareness of a advertisements to promote the campaign; established by the Japan Liquor Industry and approves advertisements on Kirin Group's broad daylight. a group of people drive designated driver and safe ride campaign called hung campaign posters in bars, restaurants, Council, which comprises eight alcohol trade alcohol beverage products before they are run. to a restaurant or a bar for a drink, to choose the Steering-Wheel Keeper Campaign. In 2011, the convenience stores, and supermarkets; and groups in Japan. As a leading alcohol beverage The committee also gives the green light to sales Global Environment designated drivers from company, with the blessing of local governments, handed out campaign materials on the street. In manufacturer, we have even established more promotion campaigns for alcohol beverages among them who agree to have no alcohol during distributed campaign brochures and free samples 2011, Kirin Brewery started printing the campaign stringent voluntary standards on advertising. before they are carried out. the meal and to drive of Kirin Free to people on the street at 30 locations symbol on its beer cans, in addition to bottles, to To enforce these more stringent internal standards the others home. This campaign is intended around Japan. In the spring and autumn of 2011 boost public awareness of the campaign. to encourage Japanese Cautionary Notes Printed on Products drivers to follow this practice, and is run by Mandatory Alcohol Testing of Employee Drivers and Commercial Truck Drivers The Kirin Group prints warnings regarding warnings near the "Alcohol Beverage" logo on the Japan Traffic Safety We mandate that employees who drive to work test shows that an employee has a breath alcohol problem drinking on its alcohol beverage products so that customers do not mistake Association, the Japan Foodservice Association, or at work have their breath alcohol level tested level of 0.01% or more, he or she must not get products. For instance, on containers of our low- them for soft drinks. Communities and the Japan Automobile before driving a vehicle. behind the wheel. We ask trucking companies alcohol beverage products, such as chu-hi and Federation. We supply breath analyzers to employees in the working for Kirin Logistics to implement the cocktails, we print a warning "You must be 20 ■ Warning label: sales and logistics departments who drive at work mandatory alcohol testing of their truck drivers. or older to drink alcohol" to prevent underage You must be 20 or and those who drive to and from work; when a drinking, and one saying "Women who drink older to drink alcohol. alcohol while pregnant or breastfeeding may Women who drink while pregnant or Kirin Fund against Drunk Driving risk affecting the health of their babies" to breastfeeding may risk reduce the risk of fetal alcohol syndrome. affecting the health of In 2010, we added the Kirin Fund against Drunk and donated to the Japan National Organization Moreover, in April 2007, we became the first their babies. Driving as an option in our special benefit Welfare of Victims of Automotive Accidents. We alcohol beverage company to print these

program for shareholders. In 2011, 1.3 million yen hope this gives our stakeholders an opportunity to Employees was raised through the 3,000-yen-per-person fund think about responsible drinking. Overseas Following the initial release of Labelling Logic on Lion’s biggest brand XXXX GOLD and at the Crusading against Underage Drinking in January 2011 by the Australia and New end of 2011 were adopted across 60%. "Stop Underage Drinking" Zealand Food Regulation Ministerial Council, San Miguel Brewery adds a message "Drink symbol Lion announced they would voluntarily adopt Responsibly"—either visually or verbally—to its "Stop Underage Drinking" Campaign consumer health messages that support TV, radio, and magazine advertisements of its beer Percentage of Teenagers Kirin Brewery has been participating in the "Stop and high schools around the country. products to promote responsible drinking among Who Drink Alcohol responsible drinking choices, including during Underage Drinking" campaign organized by the The association runs "Stop Underage Drinking" pregnancy, on the labels of their alcohol the general public. （%） Boys 100 Brewers Association of Japan since its inception advertising in public transportation systems in beverages. The messages have already launched 89.3 in 2005. Participating beer companies show the nine large cities, in magazines, and in newspapers, Business Partners 80 79.8 76.4 "Stop Underage Drinking" symbol in their TV and broadcasts campaign messages through 60 57.3 55.7 and print advertisements, and the association radio, and posts campaign posters in convenience

40 37.2 communicates the campaign message to other stores and supermarkets around the country. As a Lion San Miguel Brewery manufacturers of alcohol beverages, convenience result, the public awareness of the campaign has 20 ■ Warning label: ■ Warning label: stores, supermarkets, liquor stores, and junior high exceeded 95%. 0 It advises against underage drinking and during It advises against underage drinking and reminds （Year）1996 2004 2010 pregnancy. customers to drink at their own risk. Poster and Slogan Contest （%） Girls 100 The Brewers Association of Japan has been and high school students of underage drinking and 89.5 80 82.1 sponsoring an annual poster and slogan contest encourage them to consider its dangerous nature. 75.1 against underage drinking since 2002. The contest is In 2011, the competition garnered 4,384 entries of 60 61.2 58.6 intended to raise the awareness among junior high posters and 2,863 entries of slogans from students. Shareholders and Investors 42.5 40

20 Overseas 0 Lion supports programs and organizations that people with （Year）1996 2004 2010 promote the prevention of underage drinking. alcohol-related High School Seniors For instance, the company supports Youth problems;

Junior High School Seniors Off the Streets, an Australian NPO engaged in and helping a youth-care program to prevent underage young mothers Source: Final Report of Healthy Japan 21, drinking. The program's goals include: helping acquire sponsored by the Ministry young people develop self-confidence and a parenting skills. of Health, Labour and Accountable Management Welfare, 2011 sense of responsibility; rehabilitating young Supporting the NPO Youth Off the Streets

46 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 47 Coevolving with Communities Coevolving with Communities Addressing Food-Related Issues Exploring the Future Lifestyle of Food Customers

Helping Solve Food Problems in Developing Countries Kirin Institute of Food and Lifestyle

United Nations United Nations・ University-Kirin1993年の設立以来 2009Fellowship年までにアジア Program9カ国83名の将来を担う食品科学研究員（フェロー）を支援 Food and Lifestyle Research University-Kirin 実 績 Fellowship Program While many Asian・国連大学の能力育成事業の中で最も成功している支援プログラムのひとつ countries have been growing the fellowship program to undertake one-year The Kirin Institute of Food and Lifestyle analyzes end parties. The institute also presents quarterly http://www.kirinholdings. co.jp/english/csr/ economically, they have a long history of serious research projects at the National Food Research emerging trends in people's dietary behavior research findings on how people over 20 enjoy プログラムの ・アジア開発途上国での食糧問題の自主解決に向けた、食品の科学技術分野に関する研究開発を支援 fellowship/index.html food problems, such as food shortages and Institute in Japan. from various angles and works with customers seasonal foods and traditional events. In addition,

malnutrition.概 要 The・フェローたちが研究を通じて習得した知識と技術を自国で普及させ、社会に貢献することを目指す Kirin Group, which promotes the and Group employees to develop a vision of the institute publishes reports on global beer joy of food and health in Asia and Oceania, has future food lifestyles and to define what role the production and consumption by country and on ・アジアの各大学や研究機関から、国際連合大学とその提携機関のひとつである独立行政法人農業・食 been sponsoring the United Nations University- Kirin Group should play in turning that vision into per-capita beer consumption by country, based Global Environment 品産業技術総合研究機構 食品総合研究所（茨城県つくば市）が推薦する毎年5名の食品分野の研究員 支 援 対 象 Kirin Fellowship・食品総合研究所で１年間の研究支援の後、母国の研究機関でも Program since 1993. This program 2年間、研究継続に必要なフォロー reality. The institute conducts food and lifestyle on findings derived from questionnaires sent is intended to assistアップ費用を支給 developing countries in Asia research and regularly reports its findings. to brewers associations overseas and the latest in their efforts to solve food problems and achieve In 2011, the institute published research reports statistics available overseas. healthy socioeconomic growth. on what young people who had started their Furthermore, it analyzed perceptions of food Lion donates food United Nations University selects from research careers immediately after graduating from college and health and the dietary behavior of 10,000 products to Foodbank institutions in Asian countries annually five food thought of drinking and their job; what people Japanese men and women aged from 16 to 69, Lion continues to be a regular and substantial researchers, who receive financial assistance from Fellows on the 2011 Program over 20 thought about going out for a drink and identified 10 distinctive patterns of food donor to Foodbank, with their coworkers; how they liked drinking lifestyles among them, including an "upscale food

Australia’s largest hunger Communities relief organization. Lion in beer gardens, and how they enjoyed year- lifestyle" and a "streamlined food lifestyle." From its inception in 1993 through 2011, the program has sponsored 93 up-and-coming researchers from nine Asian donates products that ・ countries in their food science research. Foodbank makes available Achievements to welfare agencies across ・It is one of United Nations University’s most successful sponsorship programs for capacity development. Employees Participating in the Forum on Future of Food and Health Australia for distribution to people without The Kirin Institute of Food and Lifestyle launched people lead better dietary lifestyles. The institute enough to eat. In 2011 ・It provides nancial assistance to research projects in food science in the hope that it will help developing countries the Forum on Future of Food and Health in 2009. will take up in future forums two of the most Lion provided more than Program in Asia solve their food problems on their own. 818,500 kilograms of dairy Employees and executives of Group companies popular themes from the past—food cultures and outline It also helps fellows take the knowledge and technical skills they gain through research in Japan back to their home products to Foodbank. ・ countries to promote scientic, technological and social progress in their communities. meet twice a year to analyze diverse lifestyles and beverages in Asia, and nutrition and health. Lion also helped develop, and became a major discuss what the Group can do to help people In the seventh forum held in March 2012, following Presentation on food and partner in, an industry- enjoy fulfilling dietary lifestyles. Themes from a keynote speech on food and communication in an communication in an wide program that enables ・Five food researchers and scientists selected annually from universities and research institutions in Asian countries aging society at the forum Employees Foodbank to provide fresh by United Nations University and the National Food Research Institute (NFRI) in Tsukuba, Ibaraki Prefecture, of the past forums include the future of food and health aging society, participants split into group sessions milk to Australia’s needy Whom National Agriculture and Food Research Organization. lifestyles, the human perception of good taste, centered around this theme. to sponsor people. ・The program provides nancial assistance to fellows for one-year research projects at NFRI and for follow-up changing diets and dining styles in Asia, and happy The Kirin Institute of research for up to two years after they return to their home countries. dietary lifestyles in the future. Food and Lifestyle The forum begins with a keynote speech by a will continue to guest speaker, which is followed by presentations work with Kirin Comment by a Fellow on the 2011 Program on improving dietary lifestyles by food researchers employees to Adawiyah Dede from Indonesia from Asian countries studying in Japan on the develop insights into United Nations University-Kirin Fellowship Program. how to help people I am researching starch extracted from arenga palm and sago palm, both The forum then breaks into group sessions to enjoy fulfilling widely found in Indonesia. Indonesian sago starch is imported to Japan and is Group sessions at the forum

discuss what the Kirin Group can do to help dietary lifestyles. Business Partners used as flour to be sprinkled over udon noodle dough. Arenga starch has long been used to make noodles and cookies in Indonesia, but little research had been done on it. I am working to compare the physical characteristics of these Envisioning the Future Lifestyle of Food with College Students two types of starch to find a way to use them for food processing. I am also The Kirin Institute of Food and Lifestyle sets lifestyle we have developed has any chance of working on a technology to reform starch without using chemical agents. Adawiyah Dede the stage for Kirin Group employees to explore becoming a reality. ideas of what new opportunities for sociability The Kirin Institute of Food and Lifestyle has found beverages can bring to consumers in the future. that young people do not care much about what Addressing Food and Health Issues with Global Implications In 2011, we invited 15 junior and senior students they eat. We hope to reverse this trend and will of the Faculty of Economics, Keio University, to explore the future lifestyle of food with young Percentage of people a Kirin Brewery project to envision the future people. The Kirin Group seeks to address food- and how it works. When you buy a low-calorie, healthy who have little or no lifestyle of food and drink. In this project, Kirin interest in food health-related social issues and works with society item at a participating restaurant, the restaurant Group employees and the students developed a （%） Men Shareholders and Investors to achieve its sustainable growth. Table For Two donates 20 yen to a school lunch program in a Women vision of what value packaged beverages would 60 is one such social program we are carrying out. developing country; a school lunch costs about 55.5 deliver, what role alcohol beverages would be 44.144.1 Today's world faces two contradicting food 20 yen per person in developing countries. 50.2 41.6 40 playing, and how consumers would be enjoying 44.7 42.6 Company cafeteria in our problems. On one hand, 1 billion people suffer The Kirin Group introduced the Table For Two Tokyo head office them in a variety of lifestyle scenes in 2025, from malnutrition and hunger in developing program in two company cafeterias in its Tokyo 26.9 22.2 32.4 based on predictions of how information and 20 19.1 countries; on the other hand, another 1 billion head office in January 2011. The Kirin Group communication technology would evolve, how 18.3 in developed countries are obese as a result of will continue to play a role in addressing food- 13.413.4 consumers would spend their time, and how 0（

overnutrition. The Table For Two program is and health-related social issues with global Age group their lifestyles would change over the years. 16〜 20 30 40 50 60 intended to address these two contradicting implications. In 2012, we are planning to perform a reality 19years

social issues with a single set of solutions. This is Accountable Management Low-calorie items ） check to ascertain if the vision of the future Group discussions with college students old

48 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 49 Coevolving with Communities Coevolving with Communities Investing in the Development of Children Supporting Sports, and the Arts and Culture

Investing in Local Communities Customers

The Secrets of Good Dietary Habits Nurturing Children through Food Education Supporting Sports, and the Arts and Culture

Kirin Kids School of Great Taste Supporting Sports Food is the backbone of the Kirin Group's business. the fermentation process and about the mystery The Kirin Group focuses its support for sports on supporting The Kirin Institute of Food and Lifestyle offers of the sense of taste in classes held in four cities in soccer and has been an official sponsor of the Japan National

We have been offering children a food education program called "Kirin Japan. Team for more than 30 years, intended to help them succeed food education to Kids School of Great Taste" to develop their ability We plan to in the global arena and to make soccer more popular in elementary students to choose the right food, to prepare the right expand a Japan. We support Japan National Teams in all categories: attending the Kirin Soccer Field, a soccer class for meals, and to eat the right food. program to Men’s Senior National Team, Women’s National Team, U-23 Global Environment children, since 2009. Using This hands-on class has been conducted in Group include a class National Team (Olympic team), U-20 National Team, U-17 information boards and a brochure titled The Secrets companies' factories in Japan since 2008, teaching on food and National Team, Futsal national team, and Beach soccer Ⓒ J.LEAGUE PHOTOS Ⓒ J.LEAGUE PHOTOS of Good Dietary Habits, we children to use their five senses to learn about sports for national team. Our commitment to supporting soccer is Starting lineup of the Japan National Team at Starting lineup of the Japan Women's National stimulate their interest in what they eat. sports-loving reflected in our slogan "Kirin Loves Soccer." a game against Vietnam on October 7, 2011 Team at a game against selected members of what they eat to build a Kirin Kids School of Great Taste held in the women's league on August 19, 2011 strong, healthy body. In 2011, children learned about the intricacy of children in 2012. the Yokohama Plant Supporting the Arts and Culture The Kirin Group sponsors arts and culture events in the hope of providing Nurturing Children Through Science Education more people with an opportunity to have cultural experiences in their daily lives. Since 2008, we have been engaged in social action programs, and Communities The Kyowa Hakko Kirin Group invites children to its nicknamed Bio Adventure, giving 80 science one of them is to sponsor the piano duo Les Freres in their concert tour in factories and laboratories to let them experience classes to more than 3,000 students. One of Kyowa Japan. In their concerts, we reserve a section of the auditoriums for children. Les Freres in a concert the fun and joy of science experiments. Hakko Kirin's researchers says he got motivated to In the summer of 2011, researchers from become a researcher when he attended one of Kirin Group companies' community support Kyowa Hakko Kirin's Bio Process Research and these science classes as an elementary student. Investing in Local Communities projects Development Laboratories held in its Takasaki Since 2009, Kirin Brewery and Kirin Beverage have Plant a class named "A Science Project is been working together to offer, in Kirin Brewery's ■ Japan ■ Japan Surprisingly Fun" for elementary students. Yokohama Plant, extracurricular science classes Mercian Kirin Beverage Mercian http://www.mercian.co.jp/ Since 2000, researchers at its Tokyo Research to high school students on the flavoring of low- e/index.html Employees Kirin Beverage conducts social outreach projects Mercian provides wine classes, viticulture Park facility have been visiting schools in a van calorie sports drinks. built around its products, including donating part of assistance, and job-training support to people in Kyowa Hakko Kirin http://www.kyowa-kirin. the proceeds from its soft drink sales from vending grape-growing communities in Akita, Fukushima, co.jp/english/index.html machines to a social cause to raise awareness of Nagano, and Yamanashi Nurturing Children Through Soccer breast cancer; donating part of the proceeds to Prefectures, so as to maintain a ■ Overseas upgrade school facilities; and strong tie with them and keep Lion http://www.lionco.com/ The Kirin Group has been an official sponsor We also invite children to the National Team’s donating books to elementary the Mercian brand as a brand sustainability/ of the Japan National Team of Soccer for more games held in Japan to give them an opportunity schools near tea estates in Sri they love and are proud of. San Miguel Brewery than 30 years. It supports soccer to, among other to see professional players in action in packed Lanka that grow tea leaves for http://www. things, nurture children through the sport. In the stadiums of cheering supporters. Some of the Kirin black tea drinks. Kirin Brewery sanmiguelbrewery.com.ph/ csr.html

process, it helps soccer gain a broader fan base in children are designated as “Players Escort Kids" Kirin Brewery keeps community environment Business Partners Japan and encourages small children to aspire to and "Kirin Kids Supporters." Kyowa Hakko Kirin in good condition and maintains harmonious make it to the National Team. The Group has been sponsoring the JFA Family Kyowa Hakko Kirin carries out social relationships with the communities in which it 1. Responsive Care: An initiative that the We have been sponsoring the Kirin Soccer Field, Futsal Festival with Kirin events since 2004 to development programs, including undertaking operates. The company conducts water-source Japan Chemical Industry soccer classes for elementary students, in Japan offer people an opportunity to enjoy kicking a community dialogue forestation projects to protect sources of clean Association has been initiative called Responsible undertaking since 1995 since 2008. This program is intended to introduce soccer balls around indoors and outdoors. and safe water—an essential to encourage companies children to the joy of sports and to encourage Annually, more than 150 Family Futsal games Care1 and supporting ingredient in making great- that deal with chemical are held all over Japan, and both experienced science education for substances to adopt a them to take on the challenge of becoming tasting beer, and in cooperation voluntary management better players. Nearly 4,800 children participated and novice futsal players enjoy the sport with children. with local residents cleans the system to protect in the classes held in 31 prefectures around the their families and in a close-knit community the environment and vicinities of its plants. promote safety and health country in the first four years of its introduction. environment. throughout the life cycle of chemical substances ■ Overseas from development and Shareholders and Investors manufacturing to use and Lion San Miguel Brewery disposal; companies then Lion invests in the communities in which they San Miguel Brewery has made a long-term publicize their activities and achievements and operate and in programs that drive real change. commitment to developing local communities. maintain dialogue with Initiatives that contribute to social sustainability The company has been providing, through the San the public. include the preservation of historical buildings and Miguel Foundation2, basic social services, such as surrounding environment, ongoing partnership with providing medical services and installing portable 2. San Miguel Foundation: a predominantly indigenous community to support water tanks for the communities near its factories. A foundation established by the San Miguel Group their sustainable tourism venture, and continued It also assists local residents in starting their own in 2008 to provide financial support to community J.LEAGUE PHOTOS Kirin Soccer Field partnerships with various community organizations. businesses. Ⓒ Accountable Management Kirin Kids Supporters at a Kirin Challenge Cup game development programs.

50 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 51 Valuing Employees Customers

Fostering a Sense of Togetherness and Belonging throughout the Group

The Kirin Group produces and markets around the 16). We provide Kirin Group employees in Japan world a broad range of products including alcohol with KIRIN WAY training annually to help them Employees beverages, soft drinks, and pharmaceuticals, and understand and embrace the values for which the has a growing number of employees with diverse KIRIN WAY stands. Valuing Employees backgrounds. The Group benefits from synergy We also offer employees opportunities to get to when each Group company musters its strength know their counterparts in other Group companies

while each of its employees comes to have a sense and to refresh their understanding of the Group's Global Environment of togetherness and belonging as a member of shared values. For instance, new employees of the Kirin Group. Group companies in Japan attend a joint initiation Our Goal The KIRIN WAY defines the values we hold most ceremony in April, and employees from various dear and the guiding principles to which all Kirin business lines across the Group participate in Derived from its Corporate Philosophy, the the job and enjoying a sense of meaning and employees are expected to adhere (See Page cross-functional training sessions. Kirin Group pledges respect for humanity in its purpose.” In the belief that employees and the Action Declaration; the declaration states that company are equal partners brought together by the Group is committed to “creating a workplace common business goals, this is what the company Open Dialogue with Employees in which each employee can exhibit her or his expects from employees and what the company Communities independence and creativity, taking pride in will do for them. Dialogue-Driven Corporate Culture President's blog The Kirin Group believes in open dialogue top management better. The president of Kirin Holdings posts his insights between management and employees and Top executives of other Group companies also and observations on his among employees. talk openly with their staffers in meetings, training blog, which accepts and Kirin's Principles of Human Resources Management: posts comments from Valuing Employees The president of Kirin Holdings visits company sessions, and projects. In addition, employees employees. Out of respect for each employee’s initiative and individuality (humanity) to keep improving and departments and offices to hold Town Meetings answer questionnaires on such areas as workplace expanding her or his professional skills, we create a workplace environment that ensures each employee has in which he shares management strategies and environments, job satisfaction, and the promotion the opportunity to bring out her or his unlimited potential. objectives with staffers. The president regularly of diversity and inclusion, and the results are

posts messages on his blog via the company reported upward so that management can take Employees Employees The Company intranet so that employees can get to know the action to address employee concerns. Employees’ commitment The company’s commitment Kirin Brewery Be a self-motivated and Employees and the company Respect and support self- driven individual are equal partners motivated and driven employees Kirin Brewery has been carrying out the company- thoughts on the company's vision and culture; wide V10 Project since 2005 to foster a corporate this cross-functional forum also gives employees Pursue self-motivated career development Motivate employees to strive for and culture that encourages every employee to be a chance to network with their counterparts achieve professionalism Be responsible for their own career and self-motivated and self-driven, and in which from other departments. The president of Kirin Dialogue session at Kirin continue to improve their skills and expertise Help employees with their career management values feedback from employees. Brewery visits plants and regional offices around Brewery to gain professional excellence and high Being put development by creating an environment in employability. which they can acquire and exercise expertise The company holds a forum several times a year, the country and has direct dialogues with 2,500 to on the same and by giving them an opportunity to learn. in which employees volunteer to share their 3,000 employees a year. footing by Play an active, self-sucient role at work business Communicate well-de€ned individual mission Business Partners Being aligned to the company’s vision, Keep employees informed of the company’s Kirin Beverage understand their role and contribution at goals and objectives and communicate what Kirin Beverage is carrying out the Spread the Smile each department is encouraged to take action on work, and act with self-discipline and a sense is expected of them so that they can of ownership. continually increase the value they bring to Project to encourage employee initiatives and its own initiative. These workshops also provide their jobs. facilitate cross-functional communication among a vehicle for the company's top executives and Be a responsible citizen Treat employees equitably employees in collective efforts to bring smiles to staffers to get to know each other better; the Be a self-disciplined individual who adheres Assess equitably how employees perform to customers. In this year-round project, employees president occasionally participates in a workshop to the company’s and other applicable rules, contribute to the success of the company and from the same or different departments hold to engage employees in a discussion. upholds public morals, and is sensitive to the reward their performance fairly. needs of others. workshops to discuss pre-selected themes, and

Mercian Mercian has been encouraging its employees to 2012, which is intended to foster a corporate culture take part in diverse cross-functional workshops to that promotes openness and initiative. In this project, Shareholders and Investors Our Approaches unite them across company sites and departments. all Mercian employees will participate in small- Recognizing the need to provide employees with group workshops of 30 to 40 people including the more opportunities to open up with each other, the company's top executives to enhance the relationship Human resources managers from seven group toward employees including respect for humanity. company is launching the Future-Ready Project in of trust between management and employees. *Kirin Holdings, Kirin companies* convene the Group Human Resources Each Group company implements human Brewery, Kirin Beverage, Mercian, Kyowa Hakko Management Committee every month. In this resources management practices that reflect its Kirin City Kirin, Kirin Kyowa Foods, committee, they discuss the long-term strategic own business strategy and needs. However, we Kirin City held a "World Cafe" session to share its what it takes to achieve Kirin City's vision of and Kirin Group Office agenda and proposed new policies concerning ensure that these practices are in line with the business plan for fiscal 2012 with its employees becoming a beer restaurant that brings smiles to human resources management, and share a group-wide, unified principles of human resources in an informal and open setting. The company's customers and employees. This session also helped

common understanding of the Group’s philosophy management that value all employees. Accountable Management executives and staffers were engaged in a relaxed encourage employee initiative. World Cafe session yet creative and insightful conversation about

52 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 53 Valuing Employees Embracing Diversity and Inclusion Customers

Corporate Culture that Embraces Diversity and Inclusion in the Workplace Ensuring a Healthy Work-Life Balance

The Kirin Group believes in a corporate culture acknowledges the importance of embracing Maintaining a healthy work-life balance is working hours and employees can reduce that encourages employees with diverse talents diversity among employees. critically important for employees to feel overtime to have more time for themselves. We to interact freely with each other and meet their When we say "embracing diversity among motivated to exercise initiative and creativity and also take a systematic approach to ensuring all potential; such a culture will sustain the Group employees," this has two aspects: making to feel proud and enthusiastic of their jobs. employees—men and women—can balance in delivering a new joy of food and health to as diversity happen in the workplace, and making it In April 2010, we drew up the Kirin Group Charter their careers and personal life. many people as possible. stick in the workplace (inclusion). of Work-Life Balance. We will encourage other Group companies to 1: In 2007, the Ministry Leveraging the talents and skills of diverse We implement programs to empower female The Kirin Group creates better workplace adopt these programs to develop a diverse of Health, Labour and Global Environment employees will meet the social needs arising employees, to ensure a healthy work-life balance, environments where employees' working hours workplace environment that supports employees' Welfare of Japan certified Kirin Brewery and Kirin from the changing demography, diversifying and to promote the hiring of people with are tracked and managed to avoid excessive efforts to maintain a healthy work-life balance. Beverage under the Act values in society at large, and globalization. disabilities, so as to build a workplace in which on Promoting Measures to The past few years have seen an increasing diverse employees respect the individuality of Conceptual Diagram of the Charter of Work-Life Balance Support the Development of the Next Generation. number of employees with diverse backgrounds each other and comfortably demonstrate their join the Kirin Group, and the management abilities. Kirin Brewery introduced in January 2009 programs that include: (1) the Work- Feel motivated to stay with the company longer Feel driven to perform better and more e ectively Life Balance Support

Program, which allows Communities Greater Career Opportunities for Female Workers employees to take an Employees’ role extended leave of absence when they choose to The Kirin Group, as a first step to promoting accompany spouses who diversity and inclusion in the workplace, has are relocating out of town for career reasons been offering greater career opportunities to Achieve the right work-life balance or when they choose to female workers. pursue a self-development opportunity outside work; In October 2006, we put together "Kirin and (2) Family Support 1. Kirin Holdings, Kirin Affirmative Action Initiatives1" for systematically Leave, which allows Brewery, and Kirin Company’s stance and role employees to take a leave Group Office began hiring and developing female employees, and of absence to take care implementing the set quotas for female hires and female managers. Foster a workplace Create a workplace in which of their children, to care Employees initiatives in 2006. In 2010, Furthermore, we established the Kirin Women's environment that embraces Ensure appropriate work hours employees feel comfortable for sick family members, Kirin Beverage adopted diversity and inclusion both physically and mentally to attend school events the initiatives, and Kyowa Network (KWN) in February 2007 to encourage with children, or to receive Hakko Kirin launched female workers to network with their female fertility treatment. its own. Other group Kirin Women's College “Respect for Humanity” in the Group Action Declaration companies started to coworkers across business units. KWN's project adopt them in 2011. members make recommendations to management As part of our efforts to transform our corporate to provide fulfilling career opportunities culture, we provide employees in managerial all employees, regardless of gender, career positions with training programs in management background, or type of employment. KWN offers skills to promote the empowerment of female female employees leadership training through employees as well as diversity and inclusion in the Promoting the Hiring of People with Disabilities the Kirin Women's College and individual mental workplace. These initiatives and programs have support on career development through the proved effective in empowering more female The Kirin Group promotes the hiring of people facilities barrier-free and accessible, and are Business Partners Mentoring Program. It also helps prepare female employees to realize their full potential in diverse with disabilities to foster a workplace in which helping employees overcome mental barriers employees who take childcare leave to return fields. An increasing number of female employees all employees—with or without disabilities— they may have to disabilities, so that people to work smoothly. KWN regional meetings, held have been promoted to presidents of Group find dignity and meaning in work. This approach with disabilities can find working for Kirin Group regularly around the country, offer participants companies, department managers of the head not only helps make diversity happen in the companies pleasant and fulfilling. awareness-raising programs and career-support office, presidents of regional sales companies, and workplace but also helps every employee learn to programs. These regional meetings attract an managers in Group companies abroad. Furthermore, accept and appreciate diversity in the workplace. increasing number of male employees interested female employees have proved themselves in field In January 2011, we drew up the Kirin Group in issues that affect all employees regardless of sales and manufacturing positions that used to be Charter for Hiring of People with Disabilities to gender. filled largely by male employees. broaden employment opportunities for people with disabilities.

As of June 1, 2011, people with disabilities Shareholders and Investors Promoting Diversity and Inclusion in the Workplace accounted for 1.73% of all employees of Kirin Kyowa Hakko Kirin has been undertaking the cross-divisional Diversity & Inclusion Project (D&I PJ) since October 2010, Holdings' consolidated subsidiaries in Japan, with the goal of promoting diversity and inclusion in the workplace to help employees exert their individuality and realize their full potential. slightly short of the minimum of 1.8% required In fiscal 2011, the project—as a first step—focused on developing a corporate culture that inspires employees, by law . Each Group company, either by itself or regardless of gender, to achieve their full potential. Project activities along this line included: 1) increasing employees' with others, will step up its effort to hire more understanding of the meaning and importance of diversity and inclusion; 2) sharing information internally about role Preparing students with intellectual disabilities for employment models through the intranet site; 3) providing a vehicle for employees in different departments to interact with each people with disabilities in a manner that reflects Kyowa Hakko Kirin works with public special needs schools in Tokyo other; and 4) conducting a preliminary study on diverse work styles. the nature of its business. to offer their students an apprentice program to prepare them to The D&I PJ will continue to help foster a workplace environment in which all employees—regardless of gender, We are expanding the types of jobs that can pursue employment opportunities. Students on this program are nationality, career history, and experienced life events and with or without disabilities—find dignity and meaning in given assignments in the company's facilities, such as entering data what they do at work. be performed by people with physical or into computers, filing documents, collecting and delivering mail, and Accountable Management intellectual disabilities. We are also making our replenishing paper in copiers.

54 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 55 Valuing Employees Valuing Employees Learning and Development Respecting Human Rights Customers

Employees’ Professional Growth Results in the Group’s Success Respecting Human Rights

The Kirin Group respects humanity and believes The Kirin Group's policy of adhering to laws and As the scale and scope of the Kirin Group's in human resources development. In order to regulations as well as to social ethics is expressly business extends beyond national boundaries, strengthen the Kirin Group and develop global outlined in the Kirin Group Compliance Guidelines. the scope of human rights that the Group must managers, we will expand training programs, more The guidelines state in their "Relations with address is expanding. We have the challenge actively support self-motivated skill development Society" and "Respect of Human Rights and of establishing a system for ensuring that and learning. This will benefit employees’ Prohibition of Discrimination" sections that the human rights are upheld not just for Kirin Group

professional growth as an individual and at the same Group respects employees' human rights, bans employees but at all stages across the value chain Global Environment time enhance the Group’s organizational strengths. Sessions of Global Management Program discrimination and harassment in workplaces, and outside the operational boundaries of the Group. strongly opposes child labor and forced labor.

Expanded Group-Wide Training Opportunities Group-Wide Efforts to Respect Human Rights We train employees on human rights and human rights compliance, taking into account Each Group company conducts human resources exchange program between Group companies in compliance every year, and gauge the level of social environments prevalent in the countries in development programs tailored to its business Japan and overseas to facilitate greater sharing of human rights awareness among them every two which they operate. needs; it provides training programs for its knowledge, years. employees and assists them in self-motivated skills, and We also offer executive training sessions on human Communities skill development and learning. To foster greater technological rights* to presidents and general managers of *In an executive training human resources managers of Group companies session on human rights organizational excellence across the Group, we expertise for 2011, a Japanese movie provide opportunities for younger managers with in order to every year. We plan to appoint and train a human about people with hearing rights point person in each Group company to impairment was used as a leadership potential from Group Companies to establish a basis for discussion about join Kirin School of Management and develop platform to raise awareness of human rights in workplaces. how to relate to people with disabilities. them to become new generation business leaders. create synergy. We use the risk management system to identify In 2011, we began a short-term employee Kirin School of Management human rights risks in our overseas subsidiaries and to monitor how they treat those risks. We conduct

on-site assessments of their facilities to ensure Human rights training session Employees Provide Employees with Opportunities for Growth The Kirin Group supports highly motivated employees—regardless of gender, age, or nationality—in expressing their individuality and maximizing their capabilities. Depending on the stages of their careers, we offer them opportunities to further their learning and professional careers. Relationships with Labor Unions

The Kirin Group management considers labor culture. Labor-management councils held in Every Minute is a Learning Experience Leveraging Career Experience to Step Up to the Next Level unions an important partner in maintaining Group companies provide a forum through which a healthy employer-employee relationship. management and employees maintain a stable I am in a class of 102 students My job in the Overseas Business Management and labor unions interact with each relationship. from 26 countries at MIT Promotion team is to promote the other to build and sustain a winning corporate Sloan School of Management. Kirin Brand outside of Japan. I am

Motivating each other, we are very excited about the opportunity Business Partners studying the latest theories but at the same time I am a little of management as well as nervous, since this is my first Ensuring Occupational Safety and Health leadership essential for today's experience working outside Taiwan. global business environment. When I was told that I was going The students and their spouses Tomohiko Okada (second from left) to be transferred to Kirin Brewery, I The Kirin Group defines in its Compliance To address issues relating to workplace mental Guidelines occupational safety and health as one health, we have been implementing an Employee and children form a closely-knit Tomohiko Okada did not have any second thoughts Qiumei Zheng community, in which I cherish Sloan School of Management about working in Japan. But Kirin Overseas Business Promotion of the Group's key operational considerations, Assistance Program (EPA) in Group companies the opportunity to learn about Massachusetts Institute of Brewery operates on a much larger Planning Department Kirin Brewery and gives it the highest priority to ensure the since 2009, taking preventive and early detection history and cultures of my fellow Technology scale than Taiwan Kirin so there students' countries, their values, are many different challenges. It Career History safety and health of employees. We comply approaches to managing employees' mental Career History and traditions they uphold as is a great experience working at 1991: Joined Taiwan Kirin, assigned with relevant laws and regulations and keep health risks. The EPA will be offered to Japanese 1995: Joined Kirin Brewery Kyoto well as to learn how to relate to the Planning Department as it to the Accounting Department Plant engaged in labor management. 1992: Transferred to the Planning workplaces safe and clean so that employees feel employees on overseas assignments starting in people with diverse backgrounds. 1999: Upon the closure of the gives me an opportunity to learn Department, maintaining contact comfortable working in them. 2012. I find all of these experiences as Kyoto Plant, transferred to the many new things through daily with the sole distributor of Kirin Shareholders and Investors valuable to me as what I have Personnel Department of Kirin interaction with other departments. Beer in Taiwan and engaged in sales Employee Assistance Program learned in class. I would like to Brewery in Tokyo, engaged in labor- It also makes me realize what planning for beer bring back home the experience management negotiations over skills I need to improve on and 1995: Engaged in marketing in the wages, bonuses, and fringe benefits. Sake Department Diagnosis Feedback Counseling and knowledge I have acquired 2007: Transferred to the Personnel what knowledge I need to gain. 1998: Assumed the position of project on and off campus and share and Administration Department Other members of the Overseas manager for accounting system in them with my coworkers in our of Kirin Pharma, engaged in the Business Promotion team and the the Accounting Department 1 Online counseling collective efforts to help the Kirin development of a new human Planning Department have been 2004: Transferred to the General Perform a diagnosis Refer an employee Group succeed with their global resources management system of a tremendous help to me. I am Affairs Department Provide feedback Kyowa Hakko Kirin of an employee 2 Face-to-face counseling to a mental health specialist business. looking forward to gaining more 2007: General Administration to an employee 2011: Started a course of study at MIT Department online as needed on the company's scholarship program, experience in order to contribute 2011: Started working in the Planning expecting to earn an MBA in 2012 to the success of the company. Department of Kirin Brewery 3 Telephone counseling Accountable Management

56 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 57 Developing Collaborative Relationships Customers

Dialogue with Business Partners

The Kirin Group maintains interactive to improve in professional knowledge and communication with suppliers to develop and accountability. To meet their expectations, we Business Partners sustain long-term relationships. will train our procurement staffers—through We regularly assess the performance of our knowledge sharing, factory visits, and on-the- Developing Collaborative Relationships suppliersキリングループ調達基本方針 and, in return, ask them their opinion job training—soキリングループ調達基本方針 they acquire the technical

of our procurement5つの方針 policies and practices. In expertise and5つの方針 professional knowledge necessary

anonymous surveys conducted since 2009 by to engage in more robust give-and-take Global Environment 1 品質本位 1 品質本位 a research firm2 オープンでフェアなお取り引き we retain, suppliers provide dealings with2 オープンでフェアなお取り引きsuppliers. We will also make our straightforward3 コンプライアンスの遵守 feedback on the way our procurement3 departmentコンプライアンスの遵守 more accountable Our Goal procurement4 coordinators環境への配慮 interact with them by having their4 環境への配慮 staffers work more closely with and on the specifics5 サプライヤーとの相互の信頼とつながり of our procurement other departments5 サプライヤーとの相互の信頼とつながり to keep suppliers in the loop practices. regarding supply-and-demand trends, results of From the time R&D begins until the moment making a sustainable society a reality. サプライヤーCSRガイドライン サプライヤーCSRガイドライン customers make purchases, every stage of The Kirin Group builds relationships with its In 2011, 181 suppliers participated in a survey, their performance evaluations, and responses in which they gave us high marks for having to their proposals and complaints. the Kirin Group's value chain is supported by business partners based on the following three 遵守大項目 遵守大項目 a strong sense of responsibility and ethics in We will continue1 to体制・コンプライアンス・ use feedback from suppliers business partners. Their active involvement in guiding principles. 1 体制・コンプライアンス・

リスクマネジメント Communities conducting fair andリスクマネジメント open business transactions to improve our procurement practices and to promoting CSR is essential for us to work toward 2 人間性の尊重 and in ensuring regulatory2 人間性の尊重 compliance. On develop stronger collaborative relationships 3 環境への配慮 the other hand, they3 環境への配慮 told us that we needed with them. 4 安全・安心 4 安全・安心 We treat all our business partners reasonably and with an open heart as a basis for 5 アルコール関連問題への取り組み ● 5 アルコール関連問題への取り組み 6 社会貢献 developing a fair and equitable relationship with each one of them. 6 社会貢献 Policy and System for Socially Responsible Procurement ● We solicit from all our business partners their understanding and support for our efforts in promoting CSR. Updated Policy on Procurement ● We work closely with our business partners to offer customers safe, reliable, and high-quality In 2011, the Kirin Group updated Policy and Guidelines on Procurement Management

products and services with clear value propositions. Employees its policy and guidelines on procurement management so as Kirin Group Procurement Basic Policy to be more adaptable to emerging Our Approaches social needs and to more effectively Five Areas of Policy Agenda enforce socially responsible 1 Quality focused procurement practices. With this Working toward achieving a sustainable society, partners and sets the stage for both parties to 2 Fair and open business transactions update, the Kirin Group Green the Kirin Group maintains frequent, interactive work together to promote CSR. 3 Ensuring regulatory compliance Procurement Basic Policy, CSR communication with business partners at each In these collaborative relationships, the Kirin Procurement Basic Policy, and CSR 4 Environmental stewardship stage of the value chain ranging from R&D and Group and its business partners work together Procurement Guidelines—all under 5 Relationships of mutual trust with suppliers sourcing of raw materials through to distribution to offer customers products and services with

the Kirin Group Procurement Basic Business Partners and sales. This interaction enables us to develop compelling, tangible value propositions. Policy—are streamlined into the Kirin Group Supplier CSR Guidelines fair and equitable relationships with our business Kirin Group Supplier CSR Guidelines. The new Kirin Group Supplier CSR Six High-Level Categories Guidelines covers six categories 1 Governance, compliance, risk management as shown to the right and are 2 Respect for humanity Customers Health Happiness Comfort Uncompromised quality intended to be informative and 3 Environmental stewardship useful for suppliers to understand 4 Food safety what is expected of them. The Kirin Group uses these guidelines 5 Addressing alcohol-related problems to encourage suppliers to step up 6 Social contribution

Product Sourcing of Manufacturing Sales and Shareholders and Investors R&D Distribution their CSR efforts. development raw materials and shipping marketing

CSR Procurement System Contract Logistics service Research institutions and universities manufacturers providers The Procurement Department of Kirin Group affiliated companies) for which more than 50% Office develops, implements, and manages of voting shares are owned by Kirin Holdings. Producers and suppliers Distributors procurement strategies for the entire Group. We will establish a unified governance structure Retailers, bars, Since its establishment in 2010, the department to step up CSR procurement efforts by Group and restaurants has taken over the procurement responsibilities companies around the world. Medical institutions Medical institutions of domestic Group companies (including Accountable Management

58 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 59 Developing Collaborative Relationships Case Studies of Collaborative Projects Customers

Partnering with Suppliers Lion Promotes Sustainable Dairy Farming

Mercian Works with Grape Farmers Lion's dairy and drinks business works with the Where and how grapes are cultivated and to bring great-tasting wines to wine lovers. farming community to create a supply chain that harvested, and by whom, determine, in no small ●▶ See Page 36 delivers a four-way win: for farmers, for customers, part, the taste of wine made from them. for distributors, and for Lion. To this end, Lion Mercian's Château Mercian Winery in Japan works closely with dairy farmers to provide buys grapes directly from its contract farmers support and help involve them in programs run by

on a continual basis. This practice is intended to Dairy Australia, a dairy industry association. Global Environment ensure long-term sustainability of the agriculture ●▶ See Page 36 in the region, and the company shares this objective with the farmers. Mercian employees regularly visit contract grape Working with dairy farmers farmers in Yamanashi, Nagano, Fukushima, and Akita Prefectures to inspect the grapes ● Research into efficient use of resources growing in their vineyards and to provide and implication of policy and trading. quality-improvement advice on bud nipping, propagating of new vines, and pruning of ● Lower Murray Darling basin review. Communities vines—depending on the season. Hands-on seminar on bud nipping to improve the quality of grapes ● Life cycle analysis in response to policy Mercian will continue to work with grape farmers and to determine yield and market imperatives.

Kirin Brewery's Collaborative Research on Plum Wine $1 A LITRE MILK Since 2006, Kirin Brewery and Mercian have (conventionally made been working with the Plum Research Center plum wine) and the Lion Dairy & Drinks remains deeply concerned about industry to continue delivering fresh white milk to in Wakayama Prefecture on research into the other from fully ripened the impacts of the current retail price of house- retail outlets on Australian consumers’ doorsteps. aroma of plum wine made from fully ripened plums—and found brand milk - sold by supermarket chains at $1 a liter – The long-term impact of the $1-per-liter policy is nankoume, a plum variety cultivated primarily that the latter had a on the sustainability of the Australian dairy industry. serious and Lion would like consumers to appreciate Employees in the prefecture. The latest joint research much higher level of Although it may seem attractive to consumers in the value and ready availability of fresh white milk, analyzed the aroma constituents of two plum constituents that give Nankoume plums the short term, the continuation of the $1-per-liter and to understand the need to pay more than $1 wines—one made from under-ripe green plums plum wine a fruity aroma. policy will make it less and less viable for the dairy a liter for it. The research also identified the conditions optimum for cultivating and handling nankoume plums to extract a fruitier aroma. Armed Collaborative R&D Projects with the research findings and its proprietary manufacturing process, Kirin Brewery developed a Beer is made through a fermentation process, called CalMorph. new plum wine product named Ume Makkoi (rich in which yeast plays the most critical role in These newly developed methods enable and thick plum wine) and has been marketing it determining the quality and flavor of beer. In fact, the researchers—for the first time—to explain Business Partners since 2011. physiological condition of yeast during fermentation the physiological condition of brewing yeast at Kirin Brewery will continue to partner with plum determines how good the beer turns out. the metabolite level and from a morphological producers to find ways to develop new plum The condition of brewing yeast was conventionally perspective, which is a major leap in brewing Wakayama Plum Research Center wines that appeal to a broad range of customers. speculated only by the intracellular pH or cell size, technology. but it could not be elucidated at the metabolite Kirin Holdings and Kirin Brewery received an Award and morphological levels. In collaboration with for Achievement in Technological Research from Cross-Industry Carton Project Professor Tomoyoshi Soga and his team at Keio the Japan Society for Bioscience, Biotechnology, Kirin Holdings and Kirin Beverage are founding members Conceptual Drawing of a Carton Box University, Kirin Brewery developed a method of and Agrochemistry in 2012, for developing these of the Carton Project, launched in October 2010 by 15 with Shorter Side Flaps advanced metabolite analysis of brewing yeast methods of data acquisition and analysis of brewing Japanese manufacturers, distributors, and retailers of cells using the capillary electrophoresis time-of- yeast that can be applied to producing beer of consumer goods to standardize cardboard shipping Previous design New design flight mass spectrometry technology, which is consistently high quality. boxes for beverage products. After a year of deliberation, Shareholders and Investors the project in October 2011 published standardized capable of measuring ionic low molecules—such specifications for a box that would result in a 7- to 18- as amino acids and glycolytic intermediates—with a gram reduction in weight per box and a reduction in CO2 emissions. molecular weight of 1,000 or less. Kirin Holdings is a founding member of the Japan TCGF*, Kirin Brewery also partnered with Professor established in August 2011 by Japanese manufacturers, Yoshikazu Ohya and his team at the University distributors, and retailers of consumer goods to discuss, among several subjects, how to mitigate operational risks (Applied to carton boxes for RTD tea) of Tokyo to develop a method for an accurate to manufacturing and distribution of consumer products, *TCGF: The Consumer Goods Forum, a global network of more understanding of the physiological condition of as evidenced in the aftermath of the Great East Japan than 650 retailers, manufacturers, and service providers in the brewing yeast through a quantitative analysis of its Earthquake. Kirin Holdings chairs the Sustainability Project, consumer goods sector from 70 countries, was established in which is working toward achieving a sustainable society. June 2009. cell morphology, using state-of-the-art microscopic

observation with cytological staining and a high- Accountable Management resolution image-processing technique, which is

60 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 61 Developing Collaborative Relationships Partnership in Manufacturing, Distribution, Sales, and Medical Research Customers

Partnership in Manufacturing

Kirin Brewery's Approach Kirin Brewery's Approach Kirin Brewery and its manufacturing partners followed by a discussion of subjects—such Restaurants and retailers play an important role In addition, the Kirin Draft Masters School trains work as a team to produce safe, high-quality as safety and environmental management, in enhancing the fun and enjoyable experiences people who serve beer from dispensers at bars products. Each Kirin Brewery plant shares its byproduct management procedures, and the customers have when they come into and restaurants on how to keep beer in good business objectives and production plans with its observance of compliance requirements—that direct contact with our products. We closely condition in a dispenser, how to pour beer into manufacturing partners so that both parties are on provide manufacturing partners with helpful tips communicate and work with restaurants and a jug, and how to maintain a dispenser.

the same page, working toward common goals. for factory management. In turn, presidents of retailers, and provide them with a wide range of The Kirin Group will continue to work closely Global Environment A Kirin Brewery plant invites presidents and partner companies give presentations of their support to make their businesses a success. with restaurants and retailers to keep bringing senior managers of subcontractors to partners business objectives and proposed improvements. For instance, Kirin Brewery's sales great-tasting products and smiles to customers. meetings to exchange and share a wide range These meetings are an important vehicle for representatives call on restaurants and of information. These meetings start with fostering greater understanding and forging retailers to assist them in better serving their Kirin's people talking about the plant's business closer cooperation between Kirin Brewery and its customers—helping them improve the quality objectives and annual production plans. It is manufacturing partners. of the alcohol beverages they offer, advising them to broaden the assortments of alcohol Kyowa Hakko Kirin's Approach offered, and recommending a training class Medicines that Kyowa Hakko Kirin markets under and extent of its impact on product quality, and to on customer-service skills. The company also Communities its brand are manufactured by its own plants and, implement corrective and preventive measures. invites owners and managers of restaurants and to some extent, by contract manufacturers. Information about a quality problem that arises in retailers to workshops in which they exchange The company regularly audits contract a subcontractor's plant and preventive measures ideas for new menu items, and to beer-making manufacturers to improve their levels of quality taken against it is shared with other contract classes in which they learn about beer, beer management. An on-site audit ascertains manufacturers and Kyowa Hakko Kirin's plants so brewing, and beer culture—something to talk if a contract manufacturer is managing its that they learn from other's experience. about to their customers. Beer-making class manufacturing and quality in strict accordance All these practices are part of the risk management with pharmaceutical manufacturing standards. An that enables Kyowa Hakko Kirin and its contract

audit also determines if a subcontractor is following manufacturers to enhance their respective quality Partnership in Medical Research Employees the provisions of an agreement with Kyowa Hakko management. This is one of the keys of providing Kirin and of the Pharmaceutical Affairs Act of Japan. reliable medicines to patients. DOPPS When an audit identifies a substandard quality- Kyowa Hakko Kirin partners with physicians and that Japanese hemodialysis patients show management performance by a subcontractor, other medical professionals to bring smiles to significantly better vital prognoses than those in the company requests that it take remedial action. people struggling against illness. The company the 11 other countries, which raises expectations When the company finds instances of outstanding joins forces with them to develop new drugs and that hemodialysis studies conducted in Japan will performance, it encourages a contractor to keep to search for effective treatments expected to contribute to advancing dialysis practices not only up the good work. bring better prognoses to patients. for Japanese patients but also for those in the rest When a contract manufacturer has a quality- For instance, Kyowa Hakko Kirin has been of the world. related problem, Kyowa Hakko Kirin immediately

supporting the Dialysis Outcomes and Practice Another DOPSS research showed that the longer Business Partners asks it to look into the problem, and to take Patterns Study (DOPPS) since 1999. The dialysis session patients receive the better corrective action if the initial probe warrants it. In DOPPS is the first internationally collaborative prognoses they have. This finding led to a revision the event of a serious quality defect, Kyowa Hakko epidemiological study ever conducted, in which to the health insurance coverage for dialysis Kirin's audit team rushes to a subcontractor's investigators and institutions in 12 countries*, practices in Japan. *Australia, Belgium, plant; both parties work side by side to get to the Canada, France, Germany, including Japan, participate. The company Kyowa Hakko Kirin is committed to supporting Italy, Japan, New Zealand, Quality control of medicines bottom of the problem, to ascertain the degree serves as the DOPPS coordinating center in the DOPPS and working with professional medical Spain, Sweden, United Japan, collecting data from participating medical partners with the goal of helping patients around Kingdom, United States institutions in an effort to help advance dialysis the globe have better prognoses by leveraging the Partnership in Distribution and Sales treatments. company's expertise to facilitate the advancement This study focuses on determining which in disease treatments. Kirin Beverage's Approach hemodialysis practices and patient care are Shareholders and Investors Kirin Beverage has been increasing the use of container and accept a longer order-to-delivery associated with the best patient outcomes, with rail for intermodal shipping of its products— lead time. Through the use of rail and shorter the primary goal of improving patient longevity, becoming less dependent on trucks. Transporting routes, this alternative shipping arrangement quality of life, and admission rate. DOPPS container loads of products by rail reduces both helps the company reduce CO2 emissions and investigators publish results of their studies at the environmental load and shipping costs, environmental loads in its distribution operations. medical conferences and in medical journals, compared with shipment by truck. In 2010, the Kirin Brewery will continue to work closely with which illustrate differences in dialysis practices company took a step further by starting to deliver its retail partners to make wider use of this performed in each country. Analyses of these products directly from its plants to distribution environmentally friendly shipping method. differences are expected to lead to improved centers of national retailers, with part of the routes dialysis treatments that can be tailored to the

traveled by rail, when retailers agree to order by ●▶ See Page 39 needs of individual patients. The DOPPS reports DOPPS Symposium held in Yokohama Accountable Management

62 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 63 Customers

Quiet Period Kirin Holdings has a period of silence that extends on or answer any questions about soon-to-be- from the day following the end of a fiscal period released earnings results. However, we make an to the day of an earnings announcement for that announcement during this period if we expect fiscal period to keep the earnings information results to differ materially from our earlier forecasts. Shareholders and Investors confidential and ensure fairness to all shareholders. We will also answer questions about information During this quite period, we do not comment already made public. Timely and Fair Disclosure of Information

Keeping in Touch with Shareholders and Investors Global Environment

Kirin Holdings keeps in touch with shareholders shareholders' meetings, investors briefings, the Our Goal and investors through a variety of communication company web site, investor newsletters, and efforts, including earnings briefings, general annual reports. Investor Relations Interactive Communication between Conceptual Diagram of Interactive Communication Kirin Holdings discloses Management and the Capital market Top Management's Commitment to IR financial and business between the Capital Market and Management information on its web Kirin Holdings, a publicly traded company, Kirin Holdings' top management demonstrates site to reach a broader values interactive communication between its Shareholders and investors their commitment to IR by making themselves range of shareholders and Communities *Videos of recent earnings investors. management and its shareholders and investors available at earnings briefings* and other briefings are available for http://www.kirinholdings. when conducting investor relation (IR) activities. Financial analysts management briefing sessions to give viewing in English on our co.jp/english/ir/index. web site. html Kirin Holdings' IR Section updates shareholders presentations on the company's financial results and investors on the Group's growth strategy Kirin Holdings’ IR Section and growth strategies. and its progress in an easy-to-digest manner. Our top executives also value the opportunity for Earnings brieng The section regularly forwards to the company's direct contact with investors and shareholders; management comments and opinions that General meeting of shareholders they make speeches at major conferences for shareholders and investors provide as well as the Brieng for private investors institutional investors and meet with investors in

section's own insights. This interactive process Posting IR information to the company web site small-group sessions. Financial Results in the Investor Relations section helps establish long-term relationships of trust These forms of direct communication provide a of Kirin Holdings' web site Employees Publishing investor newsletters and annual reports between the Kirin Group and the capital market common ground for the Kirin Group management

and increase the Group's corporate value. Input from the capital market and shareholders and investors to better We ensure transparency, fairness, and continuity understand each other. in disclosing financial and business information to Kirin Holdings’ management shareholders and investors timely and appropriately. Presentation Given in a Conference for Institutional Investors In a forum that attracted institutional investors from around the Our Disclosure Policy world, Kirin Holdings President and CEO Senji Miyake discussed the progress that the Kirin Group was making in accomplishing its Medium-Term Business Plan for 2010-2012 as a step toward Award-Winning Disclosure Policy achieving Kirin Group Vision 2015. He also talked about the Business Partners IR Activities Kirin Holdings endeavors to ensure transparency, Act of Japan and the Securities Listing Regulations Group's strategy for becoming an integrated beverage group In 2009, Kirin Holdings in Japan and abroad, as well as about an outlook for its newly won the IR Grand Prix for fairness and continuity in keeping shareholders enforced by the Tokyo Stock Exchange. In acquired beverage business in Brazil. maintaining excellent and investors informed on a timely basis. We addition, on a regular and consistent basis, we communication with investors from among disclose information in a manner and scope that make available other information that we believe 335 companies that complies with applicable laws and regulations, to be of interest to shareholders and investors to participated in the IR Prime Business Awards including the Financial Instruments and Exchange have a better understanding of us. Socially Responsible Investment Indexes competition organized by the Japan Investor Method of Information Disclosure Relations Association. There has been a growing interest in socially around the world evaluate corporations' CSR The company was also Kirin Holdings discloses significant corporate an advance briefing to it. Immediately following recognized for its senior information as specified in the rules for timely the disclosure via TDnet, we provide the same responsible investment (SRI) that determines performances and publish SRI indexes among management's proactive disclosure of corporate information by the Tokyo information for the news media and post it to our in which company to invest on the basis of its good performers. As of December 2011, Kirin

attitude toward IR and Shareholders and Investors its voluntary disclosure Stock Exchange via the Timely Disclosure Network web site. practices with regard to social, environmental, Holdings was included in the following SRI practices in the Awards ethical and governance issues. Various institutions indexes. for Excellence in (TDnet) operated by the exchange after delivering Corporate Disclosure by the Securities Analysts Cautionary Statement with Respect to Forward-Looking Statements Association of Japan. Statements made on Kirin Holdings’ web site are based on management’s assumptions and with respect to its current plans, estimates, beliefs in light of the information available at the strategies and beliefs and those of its affiliated time of the statements. Actual results may differ companies that are not historical facts are materially from those discussed in the forward- forward-looking statements about the future looking statements due to a variety of risks and Ethibel Sustainability Index Morningster Socially Responsible Investment Index FTSE4GoodIndex

performance of the Group. These statements uncertainties as well as economic conditions. Accountable Management

64 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 65 Customers

execution functions. addition, the Internal Audit Department in Kirin The Board of Directors makes decisions on Holdings—independent of the auditors—audits significant business and legal matters. Internal the company and its subsidiaries to ensure that directors, corporate auditors, and division heads internal controls are maintained within the Group. meet in the Group Executive Committee as External directors use the practical, objective, needed to review and to decide in a timely fashion and professional perspectives accumulated from Accountable Management on proposed strategic and investment plans that years of experience in corporate management to affect two or more business units or that have ensure that the Board of Directors makes the right group-wide implications. decisions and exercises prudent management The Compensation Advisory Committee and oversight. Kirin Holdings does not provide full- Global Environment the Appointment Advisory Committee advise time assistants to external directors; the Secretary the Board of Directors on compensation and Section in the Personnel and Administration Our Goal appointment of directors and auditors. The Department provides administrative support to Compensation Advisory Committee—consisting internal and external directors. Maintaining robust corporate governance is one and efficiency to corporate management as of four directors, including the president and one To facilitate the Kirin Group's CSR efforts, the of the prime management objectives of the Kirin well as to retain the trust of internal and external external director—recommends to the Board of Group CSR Committee manages and coordinates Group. We continually enhance group-wide stakeholders. Directors a proposed compensation system for them, and the Group Risk Management corporate governance to bring greater equity directors and auditors and levels of remuneration Committee oversees risk management and for them that are reasonable, fair, and in line with compliance as a basis for CSR. In addition, the Communities the business environment and performance. The Information Disclosure Committee plays an Our Approaches Appointment Advisory Committee also comprises advisory role in determining what information to four directors, including the President and one disclose to shareholders and investors and ensures The Kirin Group has been operating under a pure to drive group-wide growth while allowing the external director, and proposes to the Board of management transparency through the timely, holding company system since July 2007 so as to latter to exercise autonomy and flexibility and still Directors candidates for directors and auditors. truthful, and fair disclosure of information. optimize its corporate structure for sustainable allowing all of them to work together to add value Two advisory staffers assist the auditors. In growth. Kirin Holdings—the Group's holding to the entire Group. This structure also streamlines Convening of and Attendance at Board of Directors Meetings, Board of Auditors Meetings, and Committees company—oversees its operating subsidiaries each entity's decision-making process and helps engaged in alcohol beverages, non-alcohol make its business management more transparent The Board of Directors meets once a month and on an ad hoc basis as needed. In fiscal 2011, 19 Employees Board of scheduled sessions of the Board of Directors were held, with an average attendance rate of 79% by beverages and foods, and pharmaceutical 後and sound, combining to maximize the Group's Directors external directors. businesses, and manages functional entities that corporate value. provide back-office support and services for the Kirin Holdings operates in a transparent and The Board of Auditors meets once a month and on an ad hoc basis as needed. In fiscal 2011, 13 Board of scheduled sessions of the Board of Directors were held, with an average attendance rate of 94% by Auditors entire Group. efficient manner. The Board of Directors and the external auditors. The Kirin Group's corporate governance is Board of Auditors underpin the Group's corporate structured to facilitate the quantum-leap growth governance structure. The Compensation Advisory In fiscal 2011, four sessions of the Compensation Advisory Committee were held, with an average Committees attendance rate of 100% by committee members. The Appointment Advisory Committee convened outlined in the Kirin Group Vision 2015 long- Committee and the Appointment Advisory seven times during the year, with an average attendance rate of 100% by committee members. term business plan. A division of roles and Committee, both of which include external responsibilities is established between Kirin directors, are in place as well as other committees Holding company structure (Kirin Holdings) Holdings and its subsidiaries to enable the former that perform specific decision-making and Maintaining Internal Control System Business Partners Holding company structure (Kirin Holdings) The Kirin Group has defined the outline of a designated for each area of control, monitor the Shareholders Meeting system for ensuring the appropriateness of ongoing operational status and issues against business operations, based upon which it targets set for each year, and use the results as Compensation Advisory maintains an internal control system and makes a basis for setting targets for the following year. Committee Board of Auditors Auditing Board of Directors continual improvements. To make incremental Monitoring results are regularly reported to the Appointment Advisory enhancements to the system, lead units, Board of Directors. Committee

Accounting Auditing President and CEO Auditor Group Executive Committee ■ System to ensure that the duties performed by the Directors and employees comply with laws and the company’s articles of incorporation Shareholders and Investors ■ System to ensure the proper preservation and maintenance of information regarding the performance of duties by the Directors Group CSR Committee ■ Regulations and other systems related to the control of risks of loss Group Risk Management Group Head System to ensure the efficient performance of duties by the Directors Internal Audit Auditing Committee ■ Department Oce Divisions Information Disclosure ■ System to ensure the appropriate operations of the corporate group that comprises the company, its parent company and its subsidiaries Committee Internal auditing ■ System to assign employees to assist the Corporate Auditors when the Corporate Auditors so request ■ System to ensure that the employees as described in the preceding provision remain independent of the Directors ■ System to ensure reporting by the Directors and employees to the Corporate Auditors, and other systems to ensure reporting to the Corporate Auditors Group companies Operating companies Functional companies ■ Other systems to ensure effective auditing by the Corporate Auditors Accountable Management

66 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 67 Accountable Management system Accountable Management system Risk Management Compliance Customers

Risk Management Compliance

The Kirin Group focuses its risk management to ensure the effectiveness of risk management The Kirin Group realizes that maintaining loss or of destroying its credibility and can retain efforts on preventing risks from materializing and throughout the entire Group using the PDCA compliance underlies all CSR activities. We define and strengthen the trust of stakeholders. affecting its business. When we implemented the cycle. Under this system, we identify and manage compliance as: fulfilling both legal and ethical The Group Risk Management Committee manages pure holding company structure, we established significant risks that could affect the entire Group, responsibilities that society expects from us by and promotes compliance across the Group. Each a risk management system based on the Group and each Group company makes it part of its adhering to laws, internal and external regulations Group company integrates compliance efforts into Risk Management Rules. This system is employed business plan to manage its own significant risks. and rules, and social norms, so that the Kirin Group risk management processes to ensure effective

in consolidated subsidiaries around the globe can avoid the risk of suffering unexpected financial implementation. Global Environment

Group Risk Management Committee Compliance Guidelines President of Kirin Holdings The Kirin Group's Compliance Guidelines companies in Japan and of selected consolidated Group Risk discuss legal compliance and spell out the dos subsidiaries abroad, so that they can understand Management Chairman of Group Risk Management Committee Committee and don'ts of ethical behavior. The guidelines' and internalize the Group's ethical principles key elements are incorporated into a handy and values. We regularly update the Compliance Administrative O ce Communities (CSR Management Department) employee manual titled The RULE., copies of Guidelines to keep them relevant to changing which are distributed to employees of Group social requirements in Japan and abroad. Handy code of conduct: Internal Internal the Kirin Group Audit Group Head O ce Divisions auditing Compliance Guidelines Department The RULE. Compliance Training

Hotline system Training employeesNormal routeon compliance is a critical them but something they have to do; that they are Major group companies Leader, general administration manager step to instilling greater awareness and ownership expectedConducting to give fact-nding their investigation superiors information with of compliance in each of them. Kirin GroupReporting, asking for advicenot only positive but also negative implications Risk Employees companies in Japan and abroad provide (anonymity their guaranteedtimely) Internal and accurately; hotline Hotline and sta that they managementneed to act Asking for advice department

employees with compliance trainingCaller annually;Proving feedback in an open and fair manner. Employees grasp employees learn through group discussions (preventing that retaliatory these basics of compliance to become sensitive to action against caller) In case of serious misbehavior compliance Resolvingis not something an issue other people do for changes in society. inside the Providing feedback Personnel department Crisis Management and Business Continuity Planning workplace (sanctions committee) (anonymity Reporting, asking for advice External hotline guaranteed) (anonymity guaranteed) Compliance Hotline Determining disciplinary The Kirin Group maintains organizational group-wide crisis readiness. action against violator preparedness for crises to minimize their impact In the wake of the Great East Japan Earthquake The Kirin Group has in place two compliance by a third party. The external hotline is operated on its business and customers. Pursuant to the that struck in March 2011, the Group Risk hotlines; one is an internal hotline manned by by a contracted consultant and offers greater Group Crisis Management Manual, the Group Risk Management Committee has enhanced business Kirin staffers and the other an external one staffed confidentiality to callers. Business Partners Management Committee shares and exchanges continuity planning by upgrading initial-response information with the risk management committee plans against disasters and expanding the scope How Hotlines Work established in each Group company to maintain of disaster preparedness.

Normal route Hotline system

Enhancing Information Security Conducting fact-nding investigation Leader, general administration manager Reporting, asking for advice Risk Kirin Business System provides IT support and Japanese equivalent. The Kirin Group Information (anonymity guaranteed) Internal hotline Hotline sta management services to the entire Group. It also manages Security Rules provide Group companies outside Asking for advice department and maintains group-wide information Japan with a basis for them to create their own Providng feedback Caller (preventing retaliatory Shareholders and Investors security, providing each Group company with information security rules. Group companies in action against caller) In case of serious administrative and operational guidance on Japan train all their employees through e-learning misbehavior Resolving an issue upgrading information security. In January 2010, inside the to make them more knowledgeable and skillful in Providing feedback Personnel department we updated the Kirin Group Information Security information management. Moreover, we supply workplace (sanctions committee) (anonymity Reporting, asking for advice External hotline Rules, which define the Group's basic stance smart ID cards to employees to ensure a higher guaranteed) (anonymity guaranteed) on information security as well as systems and level of security in personal authentication and Determining disciplinary methods for managing it. This update has made in allowing them to access high-security areas action against violator the rules compliant with the ISO/IEC 27001:2005— on the company premises. All these measures international standards for information security are intended to enhance information security management system—and JISQ 27001:2006—their throughout the Group. Accountable Management

68 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 69 Third-Party Opinion How We Act Upon Expert Advice

The Great East Japan Earthquake and the subsequent First of all, we appreciate Mr. Adachi's review of our sustainability report for 2012. incident at the Fukushima Daiichi Nuclear Power Plant made The Great East Japan Earthquake, which struck in March 2011, prompted us to reflect upon what many Japanese business leaders learn the hard way that a corporate social responsibility truly meant to us. While we were struggling to bring Kirin Brewery's healthy business needs a healthy society to prosper. heavily damaged Sendai Plant back to normal operation, we extended many forms of assistance to This report explains how Kirin Brewery's Sendai Plant and speedy reconstruction in affected communities in the Tohoku region. Mr. Adachi's kind words make Kirin Group's other facilities sustained damage from the it all worthwhile. Our relief-support project is not over yet. The entire Kirin Group is committed to earthquake. My hat is off to the people who worked hard continuing to assist people in the region in their reconstruction efforts. to bring those facilities back to what they used to be. I read Following Mr. Adachi's advice from last year, we have made this year's report more informative to with particular interest the special section of this report readers by covering a broader range of our CSR activities and discussing how we incorporated the that discusses the Kirin Group's efforts to "review and outcomes of stakeholder dialogues into our CSR activities. upgrade its preparedness for natural disasters to enhance Seiichi Hashimoto We take seriously Mr. Adachi's comment that the Kirin Group could use a more insightful its ability to handle disaster recovery and maintain business Managing Director, perspective to understanding critical social issues. His advice will be incorporated into our CSR continuity" and to "upgrade safeguards against radioactive Kirin Holdings Co., Ltd. planning. The Kirin Group serves customers and society in the food and health fields. We value contamination." Of equally keen interest to me was the comments and suggestions our stakeholders give us so that we can serve them better. feature story about the Kirin KIZUNA Relief-Support Project, We appreciate your feedback. to which the Group is contributing 6 billion yen over three years. It is especially heartening to know that every Head of ESG Research Center The Japan Research Institute, Limited employee was retained and back in the Sendai Plant after the earthquake to make the special edition of Kirin Ichiban using Eiichiro Adachi hops harvested in Tono in the Tohoku region. I respect Kirin Group's candor when it announced that it would step up disaster preparedness and would continue Public Recognition to proactively help bring normalcy to the affected areas more aggressive strategy for conserving biodiversity and for through day-to-day business and community investment. accommodating employees' work-life balances. Furthermore, Kirin Group companies have received public recognition and awards for their achievement in diverse areas. When an earthquake disrupts the normal functioning the Kirin Group's value chain is vulnerable to concerns that The following are five of the awards we have received from authoritative organizations. of society, there is nothing for which businesses can the global food supply and water resources can hardly keep be blamed. But in other cases, business activities could up with the growing population and that overly aggressive Month/Year Award directly or indirectly compromise the soundness of society. food production may aggravate human rights issues in Prime Minister's Award for Afforestation Promotion for 2011 April 2011 The important thing is whether a business is willing to food-producing communities. I would like to know how the (Kirin Distillery’s Fuji-Gotemba Distillery) publicly admit its responsibility. I applaud the Kirin Group's Kirin Group will secure multiple sources of raw materials to commitment to addressing global environmental threats and reduce risks and how it will realize local production for local October 2011 Award of the Society of Soft Drink Technologists for new advanced pecology plastic bottles alcohol-related problems by organizing and directing group- consumption. Rated as top Japanese company in the Carbon Disclosure Project's carbon disclosure score wide efforts to reduce environmental loads throughout A company's CSR efforts used to be judged by their November 2011 scope and scale. Today, what counts more is a company's its value chain and by leading a moral crusade against March 2012 Outstanding Performance Award of the 15th Environmental Communication Awards irresponsible drinking. The Kirin Group is at the forefront in commitment and determination to keep abreast of social the Japanese beverage industry for taking novel approaches issues, to prevent its operations from making them worse, Award for Achievement in Technological Research granted by the Japan Society for to these challenges, such as quantifying its value-chain and to provide solutions to them. Internationally accepted March 2012 Bioscience, Biotechnology, and Agrochemistry for developing a comprehensive technology CO2 emissions using Scope 3 Standards; recycling used PET codes of conduct, standards, and guidelines for social to analyze beer yeast for quality improvement bottles into new PET bottles; and aggressively marketing responsibility should be used only as a basis to formulate non-alcohol, beer- and wine-tasting beverages. a company's blueprint for CSR initiatives. Meeting those On the other hand, the Kirin Group might want to take a standards and guidelines is only half the story. more insightful perspective to understanding other critical A corporation can be indifferent to social issues and still make social issues. For instance, the Kirin Health Project should a profit with savings in social and community investments be driven not merely by consumers' growing health needs going directly to the bottom line—but only for a short but more by the acknowledgement that many people are term. Such a socially aloof company is unlikely to remain experiencing deteriorating health. An insight into reality in the market's favorite for long. This realization motivates Information on Kirin Group Companies' Sustainability Efforts a company to pursue excellence in social responsibility. I which people are suffering from obesity, lifestyle-induced Several Kirin Group companies report their CSR activities in English. diseases, food allergies, atopic dermatitis, and mental disorder assume that the Kirin Group management thought along this would reveal that the Kirin Group's business is vulnerable to line when developing a theme for its medium-term business Kyowa Hakko Kirin Group CSR Report http://www.kirin.co.jp/csr/env/report/index.html these health issues, that the Kirin Group may be unwittingly plan for 2010-2012: "three years to implement key initiatives causing them, and that the Kirin Group can do a lot to and achieve a qualitative expansion." I hope the Kirin Group Lion Sustainability Reporting http://www.beverage.co.jp/csr/environment/index.html proactively address them in the normal course of business. will become a corporate group that passionately cares about Likewise, I would suggest that the Kirin Group pursue a the soundness of society. CSR Section in Kirin Holdings' web site http://www.kirinholdings.co.jp/csr/

I have provided a third-party opinion on the Kirin Group's CSR activities described in this report and on the way the Group disclosed relevant information, from the perspective of a provider of corporate information to financial institutions to serve their decision-making regarding socially responsible investment. This opinion does not express a view on whether this report presents, in all material respects, matters measured, calculated, and prepared in accordance with environmental reporting guidelines generally accepted.

70 KIRIN GROUP SUSTAINABILITY REPORT 2012 KIRIN GROUP SUSTAINABILITY REPORT 2012 71