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Sustainability Meeting
Meiji Group’s Approach to Sustainability
December 17, 2019 Agenda
1. Meiji Group 2026 Vison 2. Sustainability 2026 Vision 3. Our Activities during FYE March 2020 4. Sustainability Topics
2 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Business Climate and Social Challenges
1. Change in social structure due to aging population 30% of Japan’s population will be 65 years or older by 2025 2. More health conscious and focused on prevention Rise in diseases and disorders due to changes in lifestyle and dietary habits 3. Larger middle class all over the world Rising income level in emerging countries such as China and India 4. Increasing global food problem Increase in global feminine, malnutrition due to food shortage, and food loss 5. Spreading antibiotic-resistant bacteria Global increase in antimicrobial resistance (AMR)
3 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Meiji Group 2026 Vision Improve our corporate value over the medium‐ and long‐terms
1. Secure an overwhelming To promote; advantage in core businesses Use external resources 2. Establish growth foundation in Increase productivity overseas markets significantly 3. New challenges in the health Business value domain Vision
Sustainability Management Vision Vision
4. Social contributions Establish functional, strategic Set three themes to contribute to management system to grow society sustainably in Japan and globally Healthier Lives Develop work environment, in‐house Caring for the Earth system, organizational climate to A Richer Society maximize individual potential Enhance the Meiji brand
4 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Meiji Group Sustainability Vision
As Food and Health Professionals, We Contribute to Addressing Social Issues through Our Business Activities, and to Realizing a Sustainable Society for People to Live Healthy, Peaceful Lives.
Areas of Activity
Domains
5 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Established the Group Sustainability System
October 2019 Established Sustainable Management Dept. Plan and promote sustainability strategy for the Group to realize Sustainable Society
Chairman: President and representative director, The Group CSR Committee Meiji Holdings Vice chairman: (meets two times per year) President and representative directors of Meiji, Meiji Seika Pharma, KM Biologics
The Group Sustainability Chief of Secretariat: Member of the Board in Secretariat Meeting (Monthly) charge of the Group Sustainability
Meiji Holdings Meiji Seika Pharma KM Biologics Meiji Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd.
Group Human Rights Meeting Sustainable Procurement Meeting The Group Environment Meeting ・ Subcommittee 1 (Raw materials for food) ・ Subcommittee for Raw milk ・ Subcommittee for Recycling of Plastic ・ Subcommittee 2 (Raw materials for ・ Subcommittee for Cocoa Resources pharmaceutical) ・ Subcommittee for Paper ・ Subcommittee for Science Based ・ Subcommittee 3 (Foreign employee) Targets
6 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Climate Change Our Activities for FY 2019 Revised target for CO2 Prepare long-term plan for solar emission power system introduction Install the system in 1-2 plants/year Setup global target taking for the next 10 years into account of SBT* Introduce solar power system in Kyushu Plant, Meiji Co., Ltd. by FY 2030 Start operation in March 2020 * SBT: Science Based Targets Replace to low emission vehicle CO2 Emission Volume Concept drawing for solar power system in Kyushu Plant (10,000 t-CO2) Reduce about 40% 76
FY 2015 FY 2030 (Base year) (Target) Meiji Co., Ltd. to reduce CO2 emission by 6,000 t-CO2 compare to FY 2019 and solar power generation 8.4 MW by FY 2028
7 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Securing Water Resource
Our Activities for FY 2109 Revised target for water Discuss water consumption consumption reduction reduction plan Global target to reduce Discuss water risk management 20% of water consumption • Analyze water risk with volume per unit of sales by Aqueduct FY 2030 compare to FY • Evaluate production site by on- 2017 site survey Water consumption volume unit per sales (1,000 m3/JPY 100 million) Activities for FY 2020 Reduce 20% Hire consultant and discuss concrete measures for water risk 1.94
FY 2017 FY 2030 (Base year) (Target)
8 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Realizing Recycling Society
Reduce food loss Plastic resource recycling
Our activities for FY 2019 Our activities for FY 2019 Work with Food Bank Setup subcommittee for plastic Donate our products resource recycling and discuss Donate stockpile of food concrete measures Join the events sponsored by Food Meiji uses 99% of plastic Group- Bank wide especially yogurt package Switch freshness date to mm/yy from mm/dd/yy Establish policy Discussing concrete measures Establish policy, Specify products Switch newly launching products from next spring Reduce 25% of plastic Extend freshness date consumption volume by 2030 Meiji Oishii Gyunyuu 900 mL Use bioplastic and regenerated Work with distributors plastic Review 1/3 rule Review order lead time
9 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Using Traceable Cocoa
Meiji’s current situation ■ Total volume ■ Traceable cocoa (Imaginary) ■ Non-traceable Revised target
Ghana Procure sustainable cocoa bean* 100% Latin America by 2026
Total
0% 50% 100%
Our activities for FY 2019 Start subcommittee for cocoa Continue Meiji Cocoa Support Work w/World Cocoa Foundation Discuss Action Plan to Protect Forestry in Cocoa Producing Countries Discuss concrete measures to procure * Sustainable cocoa bean: Human rights and environmentally sound cocoa beans such as sustainable cocoa bean* certified beans and traceable beans
10 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Replace 100% to Certified Palm Oil
Our activities for FY 2019 Acquisition of RSPO Certification (mass balance) Acquired and in acquiring in FY 2019 Confectionary Sakado, Tokai, Osaka Plans, and Donan Shokuhin Ice cream Gunma, Kansai Ice cream Plants Infant formula Gunma Nutritionals and Saitama Plants
Accelerate for the Olympic and Paralympic Games Tokyo 2020
Start using RSPO certified palm oil October 2019 Sakado and Gunma Plants April 2020 Six others (plan)
Targets Ratio of certified oil amount in FY 2019 ca.10% Ratio of certified oil amount in FY 2020 ca. 60%
11 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Alignment with External organization
April 2019 Signed The United Nations Global Compact April 2019 Joined Global Compact Network Japan Improve our activities by using information and tools obtained through subcommittee in GCNJ October 2019 Joined The Climate Change Initiative November Agreed on the Recommendations of the 2019 Task Force on Climate-related Financial Disclosures (TCFD) December Joined TCFD Consortium 2019 Develop and share scenario analysis and quantitative analytical method with investors and companies who agreed on TCFD Improve analysis results
12 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Topics-1 TCFD Scenario analysis
Applied to TCFD scenario analysis hosted by Ministry of the Environment Started scenario analysis in August 2019
Target theme Set scenario at 2˚C and 4˚C increase
Year 2056 1. Raw milk Base year for Infectious disease 4˚C scenario Year 2030 Drinking milk, Yogurt, Base year for Raw milk Infant formula, … 2. Anti-infectious drug 2˚C scenario Antibacterial, Vaccine
Important risks Reference: ARS SYR Figure SPM.6 Raw milk Infectious disease Changes in patterns of Increase in average temperature Sea level rise precipitation and temperature Frequent abnormal climate Increase/decrease in Recycling of packages Introduction of carbon tax mainstay products Changes in consumer behavior
13 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Topics-1 TCFD Scenario analysis
4˚C/If leaving to chance… 2˚C/If strictly regulate… Delaying decarbonization, Promoting decarbonization, risk of flood damage etc. will increase, investors and customers become while infectious disease market will interested in environmental issues. expand. Increase in various costs, while ethical consumerism may become popular Milk production decreases due to heat stress Increase in logistic cost due to Cooling cost increases introduction of carbon tax
Increase in production cost and Due to natural disaster procuring cost due to use of Increase in operating - reclaimed materials cost and logistic cost Possible shutdown of - Buying more ethical facilities products Decrease in operating rate of factory in water-stressed areas
Increase in mosquito-borne diseases Increase in mosquito-borne diseases Increase in diarrhea such as infectious enteritis Increase in diarrhea such as infectious enteritis and cholera due to water pollution and cholera due to water pollution
14 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Topics-2 Following Human Rights Due Diligence
FY 2018 The Group Sustainability Assessing actual and potential human Committee rights risks in each value chain The Group Sustainability July 2019 Secretariat Meeting Setup Group Human Rights Meeting Prioritize and select three themes Group Human Rights Meeting FY 2020 Sustainability staff of Meiji Holdings, Meiji, Meiji Seika Pharma, KM Biologics Conduct a questionnaire survey on and related department sustainable procurement
Raw materials for Food Raw materials for • Specify six raw Pharmaceutical Foreign employee materials • Procurement of raw • Reality check for Raw milk, Cocoa, materials Technical intern trainee Paper, Palm oil, • Follow UK Modern Foreign employee Soy beans, and Sugar Slavery Act 2015
15 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Topics-3 Volunteer activity
November 2, 2019 Saturday 9:00 am to 2:00pm In Takeo city, Saga Prefecture Visited Omoyai Volunteer Center 19 volunteers Activities Scoop fresh sand under the floor of houses suffered above floor level inundation
Forthcoming Volunteer activities December 21, Saturday In Nagano prefecture where hit by Typhoon #19 March 2020 Sale of disaster-stricken regional specialty at company store and provide specialty menu at cafeteria
16 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Contribution to Social Issues going forward
Hanji Soma, the founder Topics of the Meiji Group Past Present Future
Sweetness Healthiness Aging Tastiness Malnutrition Prevention Food Pharma- Nutrition ceutical Infectious Disease Contribute to extend healthy life expectancy
17 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. References: Progress of Materiality in FY 2018
18 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Materiality-1 Healthier Lives
Health and Nutrition Our contribution to the SDGs
Contribution to healthy diet, Solving super-aging society Target Results of FY 2018
1. Develop products that Health-conscious contribute to healthy diets Products 47 products and a super-aged society Nutritional products with added value 32 products Products for a super-aged 2. Enroll a total of 500,000 Society 6 products participants into nutrition and healthy diet education within three years from 196,000 enrolled FY2018 to FY2020
19 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Materiality-2 Caring for the Earth
Climate Our contribution Our contribution Water Change to the SDGs to the SDGs
Reduce CO2 emission volume Secure water resources Results of Results of Previous Target Previous Target FY 2018 FY 2018 Reduce total domestic* Reduce total domestic* Reduced CO2 emission volume Reduced water consumption by more than 15% 16.8% volume by More than 12.2% compared with FY2013 * The domestic Meiji Group, 20% compared with * The domestic Meiji Group, excluding KM Biologics excluding KM Biologics baseline by FY2030 FY2015 baseline by CO2 emission volume per unit of sales FY 2030 58.2 (10,000 t-CO2) Water consumption volume per unit of sales 52.3 50.4 3 48.4 49.5 2.13 (1,000 m /JPY 100 million) 2.07 1.92 1.87 1.70
FY 2013 FY 2016 FY 2017 FY 2018 FY 2030 FY 2015 FY 2016 FY 2017 FY 2018 FY 2030 明治 大阪工場 (Baseline) (Target) (Baseline) (Target)
20 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Materiality-3 A Richer Society
Human Resources and Our contribution Society to the SDGs
Promote diversity and inclusion and Development of human resources
Target Results of FY 2018 More than 10% female managers Female managers 3.1% by FY 2026 Female leaders 171leaders 1 Female leaders* in FY 2026 *1 The combined total targets for Meiji HD Co., Ltd., Meiji Co., Ltd., Meiji Seika Pharma Co., Ltd. and KM Biologics Co., Ltd. alone, excluding affiliates Minimum of 420 leaders Leader: Manager and assistant manager The ratio of disabled employees*2 2.29% More than 2.2% *2 The combined total targets for Meiji HD, Meiji and Meiji Seika Pharma alone, excluding affiliates Respect and Promote human rights Employees receive training on human 100% rights 100% 21 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. Materiality-4 Sustainable Procurement
Procure raw materials with consideration toward human Our contribution rights and the environment to the SDGs
Cocoa Beans Palm oil Paper
Previous Target Target Target Use 100% paper Improve traceability Use 100% of raw materials* from of cocoa RSPO*-certified palm oil by FY2023 forests certified for * RSPO: Roundtable on Sustainable sustainability practices Palm Oil (FSC®, PEFC) and/or Results of Results of from recycled paper FY 2018 FY 2018 by FY2020 * Packaging paper for products Approximately 10% Using approximately manufactured domestically reduction in usage 2% Results of from previous year 55.3% FY 2018 The domestic Meiji Group, Reason: Did not meet chocolate usage targets excluding KM Biologics
22 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved. ■ Contact Information Meiji Holdings Co., Ltd. Investor Relations E-mail:[email protected]
Information in this material is not intended to solicit sale or purchase of shares in Meiji Holdings. Business forecasts and other forward-looking statements are based on information available at the time of the release of this presentation and reasonable assumptions made by the Company. Actual results could differ materially from forecasts due to various factors. Although this material includes information concerning pharmaceutical products (including those currently under development), such descriptions are not intended to advertise the products or provide any medical advice.
23 |December 27, 2019 | Copyright © Meiji Holdings Co., Ltd. All rights reserved.