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Response to Global WarmingResponse to Global Warming

Mitigation of Global Warming

The Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) found that "It's unequivocal: Humans are warming the planet" and indicates there is a high probability that the increase in average temperature worldwide will reach 1.5 degrees Celsius compared to before the Industrial Revolution within the next 20 years. The cause of global warming is greenhouse gases emitted by humankind. For this reason, humankind must urgently mitigate the progress of global warming by controlling these emissions. The Kagome Group is working to reduce greenhouse gases (CO2) from its business activities to mitigate humankind's pressing issue of global warming.

Policy on Reducing CO2 Emissions

The Kagome Group has engaged in manufacturing using nature's bounty by procuring safe raw materials. For this reason, we recognize that an interruption in the procurement of raw ingredients is the greatest risk facing the continuity of its business operations.
Climate change has resulted in extreme weather patterns, including massive typhoons and strong wind and rain, which causes extensive damages in areas where raw ingredients are grown.
To avoid this risk and ensure continuity of its operations in the future, the Kagome Group has been proactively reducing its greenhouse gas emissions after taking the initiative in implementing the Paris Agreement*.
*Paris Agreement: an international agreement on curbing climate change adopted at COP21 on December 12, 2015.
(Keeping temperature rises compared to before the Industrial Revolution at less than 2 degrees Celsius).

Medium- to Long-term Targets for Reducing CO2 Emissions

In 2021, Kagome reviewed its medium- to long-term targets for reducing CO2 emissions established by Board resolution in 2018 in order to speed up its efforts to mitigate risks associated with climate change and prevent global warming. We established reduction targets for the Group's greenhouse gas emissions in 2030, with the aim to eventually achieve net-zero greenhouse gas emissions by 2050. The new target has received certification under the Science Based Targets initiative.

Item Targets(compared to 2020) FY2020 results(t)
Scope 1 and Scope 2 Reduce greenhouse gas emissions by 42% by FY2030 (1.5℃ scenario) 143,524
Scope 3 Reduce greenhouse gas emissions by 13% by FY2030 1,315,239

(FY2021 results will be announced on our CSR website following third-party verification)

Scope 1: Direct emissions of greenhouse gases from businesses (burning of fuels, industrial processes)
Scope 2: Indirect emissions from the use of electricity, heat, steam supplied by another company
Scope 3: Indirect emissions outside of Scope 1 and Scope 2 (emissions of other companies related to the usiness' activities)

Kagome Group's CO2 Emissions

Scope 1 and Scope 2 CO2 Emissions
Business locations 2019 2020 2021
Scope 1 Scope 2 Total Scope 1 Scope 2 Total Scope 1 Scope 2 Total
Japan 44,976 26,326 71,302 45,295 25,234 70,529 43,773 22,713 66,486
Portugal 26,249 5,183 31,433 24,647 4,505 29,152 27,080 540 27,620
Australia 16,967 8,969 25,936 18,923 11,167 30,090 19,046 9,491 28,537
United States 5,592 5,587 11,179 4,701 4,927 9,627 5,390 5,518 10,908
Italy 815 1,219 2,034 607 1,069 1,676 794 1,187 1,981
Taiwan 555 1,322 1,877 777 1,672 2,450 969 1,845 2,815
Total 95,154 48,607 143,761 94,949 48,574 143,524 97,052 41,294 138,346
Composition of Energy Usage
Composition of Energy Usage

The Kagome Group is promoting the use of renewable energy both inside and outside of Japan in order to reduce CO2 emissions. In 2021, we used 20,035 MWh of renewable energy, which cut our CO2 emissions by 4,238 tons.
As of 2021, renewable energy (solar power) accounted for 18.7% of the Kagome Group's total power consumption.

Scope 3 CO2 Emissions
Category CO2 emissions (tons) Ratio (%) Remarks
(1) Purchased goods and services 1,141,154 80.8
(2) Capital goods 43,735 3.1
(3) Fuel- and energy-related activities (not included in Scope 1 and Scope 2) 26,151 1.9
(4) Upstream transportation & distribution 51,038 3.6
(5) Waste generated in operations 12,848 0.9
(6) Business travel 367 0.0
(7) Employee commuting 1,257 0.1
(8) Upstream leased assets 563 0.0
(9) Downstream transportation & distribution 74,946 5.3
(10) Processing of sold products 42,670 3.0
(11) Use of sold products - - Excluded from scope of calculation
(12) End-of-life treatment of sold products 17,640 1.2
(13) Downstream leased assets 262 0.0
(14) Franchises - - No applicable franchise businesses
(15) Investments - - No applicable investment businesses
Total 1,412,630 100.0

Third-Party Verification of Greenhouse Gas Emissions

Kagome obtains third-party verification reports on its greenhouse gas emissions (Scope 1, 2 and 3), recognizing the need for disclosure of highly reliable data on greenhouse gas emissions. Regarding our greenhouse gas emissions in 2021 (January 1 to December 31), we obtained a verification report from the Japan Management Association (JMA), which examined our data and calculation method for the Kagome Group's greenhouse gases from its plants in Japan and abroad (Scope 1, 2) and from the Kagome Group in Japan (Scope 3) was in compliance with ISO 14064-3:2006.
Furthermore, the Scope 1 and 2 CO2 emissions for which verification was obtained account for approx. 80% of the Kagome Group's entire CO2 emissions.

Results of the CDP Climate Change Score

CDP, an international non-profit organization, evaluates the initiatives of companies in terms of climate change and water globally. CDP assigns one of eight different scores: A, A-, B, B-, C, C-, D and D-. Kagome received a score of A- in CDP Climate Change 2021.


CO2 Reduction Initiatives

Domestic Plants

Reducing Energy Used

Trends in Energy Used
Trends in Energy Used

Reducing CO2 Emissions

CO2Trends in CO2 Emissions
Trends in CO2 Emissions

Introduction of Solar Power Generation Systems

We installed solar panels at the Kozakai and Ibaraki plants, which began generating electricity in April 2021. This electricity is used to power these plants. Going forward, we will continue to utilize renewable energy as a way of lowering our CO2 emissions.

Kozakai Plant
Kozakai Plant
Solar panels installed on the plant's rooftop
Overseas Plants

Energy Conservation at Overseas Plants

Most of the CO2 emitted by the Kagome Group originates from its plants and farms in Japan as well as overseas plants which juice tomatoes and produce concentrate. Our overseas plants are working on a number of energy conservation activities, including improving the energy efficiency of their facilities and increasing production efficiency.

(Main energy conservation activities)
•Increase energy efficiency by upgrading to high efficiency boilers
•Reduce energy loss by insulating steam pipes, etc.

Introduction of Solar Power Generation Systems

Kagome Inc. in the United States installed solar panels covering the plant's entire rooftop in December 2017 in order to generate its own electricity. The plant decided to install solar panels to address rising electricity prices which are expected to continue increasing in the future and to reduce CO2 emissions. In FY2021, solar power generation helped the plant to reduce its annual CO2 emissions from power consumption by approx. 42%.

Kagome Inc. in the United States

Kagome Australia Pty Ltd. began generating solar power in June 2019. As a result, in FY2021 the plant was able to reduce its annual CO2 emissions from power consumption by approx. 4%.

Kagome Australia Pty Ltd.

Use of Electricity from Renewable Energy

Holding da Industria Transformadora doTomate, SGPS S.A. of Portugal began purchasing electricity generated from 100% renewable energy in July 2021. As a result, in 2021 it reduced CO2 emissions from electricity consumption by around 3,300 tons.

Commercial Greenhouses

Kagome cultivates tomatoes in commercial greenhouses in order to deliver safe and delicious fresh tomatoes to markets throughout the year.
The large-scale commercial greenhouses that Kagome uses are heated in order to maintain the right temperature for cultivation. Environmentally friendly LP gas is used as the heat source, while the CO2 emitted from the incineration process is effectively utilized for the photosynthesis required to grow tomatoes.
Starting in 2020, we have been using the warm wastewater and CO2 contained in boiler exhaust gas of the Fujimi Plant in Nagano Prefecture for the cultivation of tomatoes at the nearby Yatsugatake Mirai Farm.
In addition, some of the electricity used at Hibikinada Farm in Fukuoka Prefecture is sourced from the large-scale solar power plant constructed nearby, ensuring the effective use of natural energy.

Yatsugatake Mirai Farm
Yatsugatake Mirai Farm
Effective use of exhaust heat and CO2 from the plant
Use of solar power at Hibikinada Farm
Use of solar power at Hibikinada Farm
Sales and Administrative Departments

The Kagome Group's Head Office, branches, and research institutes are implementing energy conservation and resource conservation activities.

Reduction of Power Consumption in Offices

Kagome participates in the annual Cool Biz and Warm Biz campaigns, under which we encourage air conditioner thermostats to be set at just the right temperature for the season. We also encourage energy conservation by reducing the number of lighting appliances, switching lights off when not in use, and reducing administrative equipment through the introduction of multifunction devices.
Furthermore, we are curbing unnecessary power consumption in offices by promoting streamlined operations through switching to flex time working hours, utilizing remote meetings, and sharing individuals' schedules online as part of our work style reforms.

Trends in Power Consumption in Offices (per floor area)
Trends in Power Consumption in Offices (per floor area)
Efficient Use of Company Vehicles

Kagome owns a fleet of vehicles used by its division offices, branches, and business offices nationwide in Japan. We are shifting to more efficient sales activities and working to curb CO2 emissions from gasoline consumption by innovating the way we use company vehicles.

(Main measures at business sites)
•Utilization of public transportation and rental cars
•Sharing of company-owned vehicles among more than one employee (reduction of fleet size)

Reducing CO2 Emissions

Kagome was designated as a Specified Consigner*1 pursuant to the Act on the Rational Use of Energy.
We will continue to reduce CO2 emissions from transportation and delivery through measures such as increasing the rate of use of large-sized delivery vehicles, decreasing the number of vehicles in operation by facilitating the use of vehicles returning from their destinations, shortening the distance of transportation and delivery, promoting joint transport services, and optimizing the loading ratio by reviewing the frequency of transportation on each route.

*1: A consigner whose volume of freight transportation consigned to freight carriers (including in-house distribution) involved in its business activities is 30 million ton-kilometers or more annually.

Trends in CO2 Emissions in Logistics
Modal Shift

The Kagome Group continues to make a modal shift to reduce the environmental impacts of its product transportation and delivery. A modal shift refers to a shift of transportation methods to those with a reduced environmental impact, such as rail.
As a result of these efforts, Kagome has obtained the Eco Rail Mark certification from the Ministry of Land, Infrastructure, Transport and Tourism of Japan, recognized as a company that uses railway transport proactively.
In addition, Kagome Tomato Ketchup, Kagome Sauce Worcester Jojuku, Kagome Sauce Chuno Jojuku, and Kagome Sauce Tonkatsu Jojuku obtained the Eco Rail Mark Product certification in February 2014 under a program organized by the Ministry of Land, Infrastructure, Transport and Tourism of Japan and the Railway Freight Association.

Eco Rail Mark
Joint Transport Services

In 2015, six domestic food companies* began exploring the establishment of a joint logistics platform intended to realize an efficient and stable logistics system. F-LINE Corp. was jointly established in April 2019 by five food companies* as a culmination of these efforts.
F-LINE's mission is threefold: (1) nationwide rollout of joint transport service structure; (2) redevelopment of medium range trunk line transport services; and (3) standardization of logistics systems. F-LINE is expected to play a role in resolving various logistics issues, including the recent shortage of truck drivers, rising logistics costs, and response to environment conservation including CO2 reduction.
To date, F-LINE has launched joint transport services in the Hokkaido and Kyushu areas, which has reduced the CO2 emissions of the six companies by approx. 15% (results for 2019).

*The six domestic food companies: Ajinomoto Co., Inc., Nisshin OilliO Group, Nisshin Foods Inc., House Foods Group Inc., Mizkan Holdings Co., Ltd. and Kagome
*The five food companies: Ajinomoto Co., Inc., Nisshin OilliO Group, Nisshin Foods Inc., House Foods Group Inc. and Kagome

Areas for Joint Transport Services and Month/Year of Launch
Areas for Joint Transport Services and Month/Year of Launch

Adaptation to Global Warming

At the same time as working to mitigate global warming by controlling greenhouse gas emissions, there is also a need to adapt to a warming environment. The Kagome Group is working to adapt to global warming by utilizing its proprietary technologies to ensure that it can sustain business activities including ingredient procurement even in a future natural environment that is more severe.

Examples of Adaptation to Global Warming

Adaptation by Developing Disease-tolerant Plant Varieties

United Genetics Holdings LLC., with operations in eight countries including the state of California in the United States, develops its own varieties of vegetables including tomatoes, and it supplies the seeds and seedlings of these vegetables to customers in over 80 countries around the world. Developers known as breeders modify varieties over long periods of time using conventional cross-breeding technologies without genetic modification and repeat this trial and error process until they arrive at varieties suited to the cultivation environment and market needs of each country.
In recent years, the habitat of the tobacco whitefly is expanding in countries around the world including Japan due to climate change. This pest, which carries a disease virus called TYLCV can decimate tomato production by causing tomato yellow leaf curl disease. In response, United Genetics Holdings LLC is actively developing TYLCV-resistant tomato varieties and introducing them in regions with growing damages. This avoids disease risk and also reduces the amount of pesticides used.

Adapting to Drought-prone Regions by Minimizing Water Usage

Recent droughts occurring around the world are having a major impact on the cultivation of agricultural crops. Countermeasures against these water shortages are becoming an urgent measure standing in the way of sustainable agriculture.
Amid this, our joint venture company with NEC Corporation called DXAS Agricultural Technology plans to launch a service in April 2023 offering AI-based farm management advise and automatic irrigation control function compatible with high frequency, low volume irrigation (*1).
Conventionally, high frequency, low volume irrigation is known as a cultivation method that reduces water usage while maintaining the optimal moisture content of soil. However, it is difficult to determine the right moisture content amid constantly changing conditions using this cultivation method and there is a larger workload from the complexity of management for producers with large and multiple fields. For these reasons, this cultivation method is not widespread.
Looking to develop sustainable agriculture, Kagome and NEC conducted a real-life test of high frequency, low volume irrigation using AI at a farm in Portugal from April 2022. As a result, compared to farms without AI, there was an about 20% increase in yield with about 15% lower irrigation.
By spreading services combining AI-driven farming management advise compatible with high frequency, low volume irrigation with automatic irrigation control functions that mitigate workload to the market for tomatoes for processing, both Kagome and NEC will contribute to sustainable farming.
(*1) A cultivation method in which water and fertilizer are provided slowly across multiple applications to maintain the optimal moisture content of the soil for growing crops.
(*2) A function that remotely and automatically controls water and fertilizer application by connecting to irrigation facilities.

Adapting to Extreme Weather Using a Worldwide Tomato Procurement Network

Selling processed tomato products year-round requires a system for the stable procurement of raw ingredients from around the world. Regions suited to high quality tomato cultivation are found predominantly between 35 degrees north latitude and 40 degrees south latitude. This region is known as the tomato belt. The harvest arrives around July in the Northern Hemisphere countries of Spain, Portugal, Italy and the United States (California) as well as Japan, while the harvest in the Southern Hemisphere countries of Australia and Chile is around January.
In recent years, tomato cultivation areas have been impacted by extreme weather, such as heavy rainfall and drought caused by climate change. Kagome has an extensive worldwide procurement network for tomatoes, which enables it to adapt to climate change and to access stable procurement channels.

Avoiding Risk of Operational Stoppage Due to Natural Disaster

Kagome is preparing for risks posed by natural disasters in terms of both prior preparation and response post-disaster.
First, as prior preparations, Kagome has selected 11 priority risk issues facing the entire company. One of these is "natural calamity/force majeure," which involves the stoppage of business activities due to earthquake or other disaster or infectious disease as well as disruptions in raw materials procurement caused by extreme weather. In response to these priority risk issues, we have defined organizations in charge and methods to confirm progress of addressing these issues with certainty.
As a response post-disaster, Kagome has formulated "First Action Guidelines after Occurrence of Large-scale Disasters" outlining the roles and initial response for each management resource (people, goods, facilities, information) based on consistent and prompt decision making by related departments led by management. This covers the initial response to BCP*, from disaster occurrence to establishment of a Disaster Countermeasures Center headed by the President. Following these standards, during a disaster the SCM Division takes the lead in securing a logistics network for resuming product shipments as quickly as possible.
These mechanisms will help us to safeguard employee lives and ensure the continuity of our business operations.

*BCP: business continuity plan

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