Biodiversity Conservation and Restoration

Material Issue

Environmentally Responsible MONOZUKURI
(Product Development and Manufacturing Practices)/ Sustainable Procurement

PolicyGRI: 101-1

The Fuji Oil Group published the Fuji Oil Group Policy on Biodiversity*1 in March 2023, setting out our basic approach to biodiversity and action guidelines. Based on this policy, we will avoid or reduce negative impacts on biodiversity throughout the value chain, and work to conserve and restore natural ecosystems with nature-based solutions. Through ongoing co-creation with our stakeholders, we aim to put biodiversity on a path to recovery by 2030 in order to help achieve a world living in harmony with nature by 2050.*2

  • *1 Fuji Oil Group Policy on Biodiversity

    https://www.fujioil.co.jp/en/sustainability/policy/biodiversity/

  • *2 The Kunming-Montreal Global Biodiversity Framework (GBF), adopted at the 15th Conference of the Parties to the United Nations Convention on Biological Diversity (COP15), sets out on a mission “to take urgent action to halt and reverse biodiversity loss to put nature on a path to recovery” with targets to be achieved by 2030, and reach the vision of “a world living in harmony with nature” by 2050. This 2030 mission aligns with the G7’s commitment to become “nature positive.”

GovernanceGRI: 101-3

The Fuji Oil Group has established the Sustainability Committee*1 as an advisory body to the Board of Directors that is chaired by the President and CEO. Under the oversight of the Head of Corporate Planning Headquarters, the Executive Officer, the committee promotes Biodiversity Conservation and Restoration, a priority action to address material ESG issues*2 across all divisions. Identifying Sustainable Procurement and Environmentally Responsible MONOZUKURI (Product Development and Manufacturing Practices) as areas of sustainability matters*2 that are related to Biodiversity Conservation and Restoration, the committee deliberates on and monitors relevant matters from a multi-stakeholder perspective, and makes recommendations to the Board.
Furthermore, in order to minimize the impact on stakeholders such as Indigenous Peoples, social minorities, and local communities and to appropriately address any impact that does arise, we adhere to the policies listed below and strive to build a foundation for ongoing dialogue and collaboration with stakeholders toward a sustainable future for food. The Group requires its suppliers to comply with the Supplier Code of Conduct. This ensures that suppliers adhere to the principles of free, prior and informed consent (FPIC) and obtain FPIC from relevant stakeholders, as well as that our suppliers engage in responsible actions and negotiations in our value chain, even at plantations we do not own.
The Group also endorses the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD) and registered as a TNFD Adopter*3 in July 2025. Through disclosures aligned with the TNFD recommendations, we will work to help achieve international goals such as those are supported by the Kunming-Montreal Global Biodiversity Framework, which aims for a nature-positive world.
https://tnfd.global/engage/tnfd-adopters/

Strategy

As the Group manufactures and sells food products using plant-based raw materials and water resources produced by nature, we rely heavily on nature and ecosystem services. The harvest volumes, product quality and other aspects of some raw materials can also be significantly affected by factors such as climate change and soil degradation. We also have impacts on natural ecosystems through our business activities. In FY2022, after identifying our dependencies and impacts on nature, we used assessment tools such as ENCORE (Exploring Natural Capital Opportunities, Risks, and Exposure) to assess nature-related issues that are both material to the Group’s operations and of concern to stakeholders. Based on this analysis, we identified and defined the Group’s critical nature-related risks. “Land use conversion and soil use,” “impacts on ecosystems adjacent to farmland,” “GHG emissions and climate change,” and “water use and wastewater discharge” were found to be particularly significant, and they are highly correlated to our palm oil and cocoa supply chains.
In FY2023, we conducted a nature-related risk analysis in palm oil- and cocoa-producing countries based on the LEAP approach*1 recommended by the Taskforce on Nature-related Financial Disclosures (TNFD). As a result of detailed location-based analysis using geographic information systems (GIS), we found that palm oil- and cocoa-producing countries had high flood risk and high impact on nature by converting ecologically important land such as primary forests, peatlands, mangroves and wetlands into plantations.
Although the degree of correlation with impacts on biodiversity and nature may vary from region to region, we recognize that our principal raw materials such as palm oil and cocoa are produced thanks to nature and ecosystem services, and that their production may be associated with environmental impacts such as forest and ecosystem loss. In particular, we recognize that the destruction of forests and parkland that function as carbon sinks that absorb and store atmospheric CO2 and to recharge groundwater can increase the risks of flooding, soil erosion, and impacts on biodiversity. Thus, we have been working with local stakeholders on deforestation prevention, reforestation, and greening activities in areas where our main raw materials are produced.
As a food company with significant dependencies and impacts on natural capital, understanding and addressing nature-related risks*2 and opportunities*3 across our value chain is essential to the resilience and long-term viability of our business. See the section “Nature-related risks and opportunities across the Fuji Oil Group’s value chain” on the Environmental Management page for the risks and opportunities we identified, and our strategic responses.

In accordance with the seven-point code of conduct set forth in the Fuji Oil Group Policy on Biodiversity, the Fuji Oil Group will not only strive to avoid and reduce negative impacts on nature, but also promote the development of technologies and products that support a nature-positive transition, aiming for a future in harmony with nature.

  • *1 LEAP approach: An integrated approach developed by the TNFD for assessing nature-related issues including interfaces with nature, nature-related dependencies, impacts, risks, opportunities, and other issues
  • *2 Nature-related risks: Potential threats posed to an organization that arise from its and wider society’s dependencies and impacts on nature
  • *3 Nature-related opportunities: Activities that create positive outcomes for organizations and nature through positive impacts or mitigation of negative impacts on nature

Risk managementGRI: 101-2, 4, 5, 304-2, 3

Analysis results of nature-related risks connected with palm oil and cocoa

We assessed our interfaces with nature, as well as our dependencies and impacts on nature and ecosystem services in palm oil- and cocoa-producing countries, and identified our priority locations and sensitive points, in line with the LEAP approach* recommended by TNFD (corresponding to L3, L4, E2, E3, and E4 of the LEAP approach). The “significance” in the table of analysis results indicates the degree of significance of typical dependencies and impacts on nature of palm oil or cocoa in the countries producing them, measured using several analytical indicators. The nature-related risks identified by this analysis are typical risks in the country of production, rather than specific to the Group’s value chain. Note that for corporate strategic reasons, we do not disclose specific regions or the names of locations.

  • * LEAP approach: An integrated approach developed by the TNFD for assessing nature-related issues including interfaces with nature, nature-related dependencies, impacts, risks, opportunities, and other issues

Analysis steps

Step 1 Preparation of farmland spatial data Collect and prepare farmland spatial data on a global scale and in countries where the Group procures
Step 2 Literature review Review reports, papers, and other documents and literature from international organizations, and then identify impact drivers, the state of nature, and ecosystem services that are closely related to the palm oil and cocoa under study. Select corresponding GIS data based on these results
Step 3 Analysis using farmland spatial data Analyze farmlands in palm oil- and cocoa-producing countries using GIS data based on nature-related analysis tools*
Step 4 Creation of spatial data images Generate images of the analysis results from Step 3
Step 5 Summary of results Identify priority regions (in terms of level of dependency on and impact to nature), and clarify key issues (in terms of monitoring and sustainable procurement)
  • * Nature-related analysis tools and indicators: IBAT, KBA (Key Biodiversity Areas), Global Forest Watch, NASA (earth data), The World Agroforestry Centre (ICRAF), EarthStat, Aqueduct, Indigenous & Community Land Map, etc.

Analysis results on nature-related risk in palm oil producing countries

◎ High significance Medium significance Low significance Insufficient data, etc.

  • * The image is linked to a PDF file.

Dependencies

Upon analyzing the materiality of dependencies and impacts in palm oil producing countries for dependencies on nature, the analysis revealed a high significance of flood risk. We also found that some regions in Thailand and Indonesia have high water stress, and that nitrogen-induced water pollution may potentially exceed the capacity of the ecosystem service for water purification in some regions of Indonesia.

Impacts

For impacts on nature, the analysis revealed the highly significant impact of converting land that is important for ecosystems, such as old-growth forests, peatlands, mangroves, and wetlands, into plantations. We also found that developing peatlands and other areas has a large impact on greenhouse gas (GHG) emissions and air pollution. Moreover, we identified sensitive locations in some parts of Indonesia from a broad perspective that includes peatlands, mangroves, wetlands, and forest fires, as well as found a high possibility of overlap with primary forests, peatlands, and wetlands in other parts of Indonesia.
For conservation priority and protected areas, the southern part of Thailand and the northern part of East Malaysia are particularly important. In the event of pollution, the impact on surrounding ecosystems is expected to be significant. The results of the location analysis have shown once again that the northern part of East Malaysia, which our Group has been supporting in collaboration with social enterprise Wild Asia since 2016, is a high conservation priority area, reaffirming the significance of supporting the introduction of regenerative agriculture to local smallholders.
In recent years, deforestation has been conspicuous in some regions of Indonesia and Malaysia. The area in the Indonesian island of Sumatra, where we have been carrying out our landscape initiative since 2018, encompasses various types of land including nature reserves and sensitive regions inhabited by many Indigenous Peoples and is home to species that fall under IUCN Protected Area Management Categories I or II. We ascertained that tree cover loss in this area has been limited even in Sumatra. On the other hand, the area of the Southern Central Forest Spine Landscape program in Malaysia, in which we have been participating since 2022, was found to have a high-percent tree cover loss despite being highly important for biodiversity. We will continue to work on these landscape initiatives so that we can create a positive impact on the sustainability of our production regions as a whole.
In terms of Indigenous Peoples and local communities, we found that some areas in Indonesia require attention.

Connections between main dependencies and impacts for palm oil

Analysis results of nature-related risk in cocoa producing countries

◎ High significance Medium significance Low significance Insufficient data, etc.

  • * The image is linked to a PDF file.

Dependencies

Upon analyzing the materiality of dependencies and impacts in cocoa producer countries, for dependencies on nature, the analysis revealed the high significance of flood risk, soil and sediment retention as well as soil quality regulation. Soil erosion may further increase flood risk, and if floods or soil erosion occurs in areas with a thin soil layer, soil quality may also be seriously affected. Levels of these nature-related indicators are high in some regions of Côte d’Ivoire, and we found that there is a possibility that this could lead to procurement risks in terms of disaster risk and soil fertility.

Impacts

For impacts on nature, the analysis revealed the highly significant impact of converting land that is important for ecosystems, such as old-growth forests, peatlands, and wetlands, into farmlands in West Africa. We also found that developing peatlands and other areas has a significant impact on GHG emissions and air pollution, requiring caution when there is overlap. Moreover, we found that there is a possibility that some farmlands in Côte d’Ivoire overlap with protected areas under IUCN Protected Area Management Category II. The results of the location analysis have reaffirmed the importance of forest monitoring and our initiatives to plant trees in Ghana and Côte d’Ivoire for ecosystem integrity.

Connections between main dependencies and impacts for cocoa

Initiatives to address biodiversity issues

We are working to address the following biodiversity issues throughout the value chain, in terms of both reducing negative impacts and creating positive impacts.

Preventing deforestation and promoting reforestation

  • Palm oil production areas: Satellite monitoring of forests,*1 identification and protection of high conservation value (HCV) forests and high carbon stock (HCS) forests*2
  • Cocoa production areas: Tree planting and forest monitoring*3
  • Shea kernel production areas: Parkland conservation*4

Impact on farmland and surrounding ecosystems; reducing the use of chemicals

  • Palm oil production areas: Good Agricultural Practices (GAP); Unifuji (Malaysia): harnessing ecosystems for pest control, expansion of certified palm oil, and support for smallholders to introduce regenerative agriculture*1
  • Cocoa production areas: Support for introduction of agroforestry and GAP*3
  • Development and promotion of soil conditioners made by upcycling soy whey (a byproduct of the production process)*5

Climate change (CO2 emissions reduction, waste reduction)

  • Shea kernel production areas: Using byproducts after oil extraction (e.g. shea kernel meal) as fuel*4
  • Reducing CO2 emissions by saving energy and introducing renewable energy at Group sites; reducing waste by improving processes and reducing water content of sludge*6
  • Research into soybean cultivation using CO2 captured from a waste incineration facility (carbon capture and utilization: CCU)*7
  • Development of functional food ingredients by making effective use of pea fiber
  • Development of technologies and products to maintain food quality longer*8
  • Development of palm oil alternatives using oleaginous yeast

Use of water resources

  • Analysis of water risk at Group sites using Aqueduct, water use reduction (water conservation, water recycling)*9

Stakeholder engagement & capacity building

  • Raw material production areas/farms: Landscape initiative,*1 empowerment of female farmers,*3,4 parkland management training for female farmers*4
  • Suppliers: Engagement toward NDPE, introduction of Labor Transformation Program (LTP)*1
  • Employees: Raising awareness through internal communication sites (Japanese, English, Chinese, Portuguese) and sustainability training (Group companies in Japan and other countries)

Metrics and targetsGRI: 101-1

Environmental Vision 2030/2050

Medium- and long-term commitment Base year FY2030 target FY2050 target FY2024 results
Reduce GHG emissions FY2020 Scope 1+2*1
42% reduction		 Net zero*4 CO2 Emissions Reduction
Scope 3, category 1*2
25% reduction
FLAG*3-related
30.3% reduction		 －
Reduce water use FY2020 Water use intensity*5
20% reduction		 － Water Use Reduction
Reduce waste volume FY2016 Waste intensity*6
10% reduction		 － Waste Reduction
Recycle resources (Group companies in Japan) － Resource recycling rate
Maintain 99.8% or higher		 －
  • *1 Scope 1: Direct emissions of greenhouse gas (GHG) by business operators themselves. Scope 2: Indirect emissions resulting from the use of electricity, heat and steam supplied by other entities
  • *2 Scope 3: Indirect emissions from other entities in business operator’s value chain (Categories 1 to 15). Category 1: Indirect emissions from purchased products and services
  • *3 FLAG-related: GHG emissions from land conversion, land management, and carbon removals. FLAG: Forest, Land and Agriculture
  • *4 Net zero: A state in which emissions and removals are balanced and GHG emissions into the atmosphere are net zero
  • *5 Water use intensity: Water use per unit of production
  • *6 Waste intensity: Waste volume per unit of production

Nature-related targets in major raw material producer countries

Medium- and long-term commitment FY2025 target FY2030 target FY2024 results
NDPE*1 in palm oil supply chain Deforestation and Conversion Free (DCF): 100%
Traceability to Mill (TTM):100%		 Traceability to Plantation (TTP) 100% Sustainable Procurement of Palm Oil
Deforestation prevention and forest conservation in cocoa supply chain, improvement of farmers’ living environment 500,000 trees planted One million trees planted Sustainable Procurement of Cocoa
Zero deforestation and zero exploitation in soybean supply chain Ensure traceability to primary collection points, or 100% procurement rate of RTRS-certified products or products certified under equivalent standards Ensure traceability to community level, or 100% procurement rate of RTRS*2-certified products or products certified under equivalent standards Sustainable Procurement of Soybeans
Conservation of parkland and zero deforestation in shea kernel supply chain － 6,000 trees per year planted at shea kernel production sites Sustainable Procurement of Shea Kernels
  • *1 NDPE: No Deforestation, No Peat, and No Exploitation
  • *2 RTRS: Round Table on Responsible Soy Association

At least 90% complete At least 60% complete Less than 60% complete

FY2024 Goals FY2024 Results Self-assessment
Consider additional goals and monitoring metrics

  • Developed Environmental Vision 2030/2050
    -　GHG emission reductions: Established FY2050 net zero target, FY2030 1.5°C targets, FLAG target
    -　Water use reduction: Revised FY2030 target upward

  • Developed 2025 zero deforestation goal in the palm oil supply chain

Analysis

Revised planetary boundaries (2023)* indicate that limits on six of nine indicators for planetary systems have already been exceeded. In light of the growing global risks associated with nature degradation, we have reconfirmed the urgent need to address climate change and prevent deforestation, establishing new environmental targets in FY2024. The Group revised its existing CO2 emission reduction targets for FY2030, and established a net zero GHG emissions reduction target for FY2050, as well as Scope 1+2 and Scope 3 GHG emissions reduction targets for FY2030 that are consistent with the 1.5°C standard of the Science Based Targets initiative (SBTi). We have also set a new target to reduce FLAG (Forest, Land and Agriculture)-related GHG emissions for FY2030, taking into account land-based GHG emissions.
Referring to the Forest Positive Guidance developed by the Accountability Framework initiative (AFi) and the Consumer Goods Forum (CGF), we also established a goal of zero deforestation and land conversion by 2025 for the palm oil supply chain.

  • *Planetary boundaries: The safe operating space for humanity. Crossing thresholds in nine key Earth systems may trigger irreversible environmental changes. The nine categories are climate change, stratospheric ozone depletion, ocean acidification, biosphere integrity, biogeochemical flows, freshwater use, land-system change, introduction of novel entities (chemicals, etc.), and atmospheric aerosol loading. According to the recent update, limits have been exceeded in six categories: Climate change, biosphere integrity, biogeochemical flows, freshwater use, land-system change, and introduction of novel entities.

Next steps

Discuss additional measures related to nature-related risks, define targets and monitoring indicators

Specific initiatives

Landscape Initiative (Aceh, Indonesia)

The Group has been participating in landscape initiatives through the Earthworm Foundation since 2018 in Aceh, the northernmost province of Indonesia, an important palm oil supplier. The program covers approximately 3.9 million hectares, covering about 70% of Aceh. Central to the activities lies the Leuser Ecosystem, one of the most important rainforests in the world. The program involves working together with local governments, NGOs, and companies to reduce deforestation and conserve biodiversity in the target areas, as well as to design improvements in labor practices at palm oil plantations, and comprehensively monitor the natural environment and human activities.

  • *1 HCV/HCS: High Conservation Value, High Carbon Stock
  • *2 GAP: Good Agricultural Practices

Landscape Initiative (Southern Central Forest Spine: SCFS) in peninsular Malaysia)

The Group has been participating since 2022 in the Southern Central Forest Spine (SCFS) landscape initiative through the Earthworm Foundation in peninsular Malaysia, a key source of palm oil. We work with multiple stakeholders to promote forest conservation and the coexistence of humans and wildlife.

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