Biodiversity Conservation and Restoration

Sustainability
Management

Material ESG Issues

Environmentally Responsible MONOZUKURI / Sustainable Procurement

Sustainability Areas

Priority Actions

Related issue area (policy, governance, strategy, and risk management)

This priority action relates to the sustainability areas of Environmentally Responsible MONOZUKURI (Product Development and Manufacturing Practices) and Sustainable Procurement.
For information on policy, governance, strategy, and risk management, please refer to the pages on Environmentally Responsible MONOZUKURI (Product Development and Manufacturing Practices) and Sustainable Procurement pages.

Issue recognition

Given the nature of our business, which primarily uses agricultural products as raw materials, the Fuji Oil Group depends heavily on natural capital, including forests, soil, water, and ecosystem services. At the same time, we recognize that activities throughout our value chain, including raw material production and procurement, may have impacts on biodiversity through land-use conversion and the degradation of forests and ecosystems.
In recent years, as climate change, the degradation of natural capital, and biodiversity loss have accelerated, the deterioration of ecosystem services and the emergence of nature-related risks have become global challenges. These changes could affect the continuity of the Group’s business and corporate value over the medium to long term by causing fluctuations in raw material quality and instability in procurement.
Market participants, customers, investors, regulators, and other stakeholders are also calling for more effective risk management and disclosure that take into account companies’ dependencies and impacts on natural capital. Taking into account regional characteristics in natural environments and biodiversity, the Group considers it an important management issue to appropriately identify nature-related risks*1 and opportunities*2 across the value chain, particularly those associated with its principal raw materials, including palm oil and cocoa, while avoiding and mitigating negative impacts and linking our initiatives to conservation and restoration.
Through these initiatives, we will strengthen our response to nature-related risks and opportunities, support the conservation and restoration of biodiversity, and work toward a nature-positive future while enhancing the resilience of our business.

  • *1 Nature-related risks: Potential threats posed to an organization that arise from its and wider society’s dependencies and impacts on nature
  • *2 Nature-related opportunities: Activities that create positive outcomes for organizations and nature through positive impacts or mitigation of negative impacts on nature

Risk management initiativesGRI: 101-2,101-4,101-5

For details on the Group-wide approach to risk management in environmental management and the Group’s response to nature-related risks and opportunities across the value chain, visit the following links.

For details on risk management of the sustainability area: Environmentally Responsible MONOZUKURI (Product Development and Manufacturing Practices), visit the following link.

For details on risk management of the sustainability area: Sustainable Procurement, visit the following link.

Identification of nature-related risksGRI: 101-4

The Fuji Oil Group identifies and assesses risks and opportunities related to biodiversity conservation and restoration in a phased and systematic manner, based on the LEAP approach* recommended by the Taskforce on Nature-related Financial Disclosures (TNFD). Taking into account our dependencies on natural capital and the impacts of our business activities, we identify nature-related risks and opportunities across the entire value chain and manage them according to their materiality to the Group’s management.

In FY2022, we examined the relation between our business activities and nature and biodiversity across the entire value chain, from raw material production to manufacturing and sales. Following the Locate (L) and Evaluate (E) phases of the LEAP approach, we developed an overall picture of our dependencies and impacts on nature. We then used ENCORE and other natural capital risk assessment tools to conduct an assessment along two axes: nature-related issues that stakeholders expect us to address, and nature-related issues that could have a significant impact on the Group’s business. Through this process, we identified material nature-related risks and the associated raw materials.
As a result, “land-use conversion and soil use,” “impacts on ecosystems adjacent to farmland,” “GHG emissions and climate change,” and “water use and wastewater discharge” were identified as particularly material nature-related issues. The assessment also found that these issues are closely associated with the supply chains for palm oil and cocoa, our principal raw materials.

Based on the results of this analysis, the Group assesses the identified nature-related risks and opportunities, corresponding to the Assess phase (A) under the LEAP approach, and uses the findings to develop strategies and implement measures, corresponding to the Prepare phase (P). For details, see “Nature-related risks and opportunities across the Fuji Oil Group’s value chain” on the Environmental Management page and “Initiatives to address biodiversity issues” below.

Analysis results of nature-related risks connected with palm oil and cocoaGRI: 101-4

In FY2023, to gain a more specific understanding of nature-related risks, we conducted a detailed risk analysis based on the TNFD’s LEAP approach, corresponding to L3, L4, E2, E3, and E4.*1
Building on the results of the materiality assessment covering all Group businesses conducted in FY2022, we focused the analysis on palm oil- and cocoa-producing countries and regions, where the Group’s dependencies and impacts on natural ecosystems are particularly significant, and where understanding the regional characteristics is critical for risk management. Using multiple nature-related analytical indicators*2 and geographic information systems (GIS), we conducted location-based assessments.

As a result, we identified relatively high risks of natural disasters, including flooding, in palm oil- and cocoa-producing countries, as well as relatively significant impacts on nature caused by the conversion of primary forests, peatlands, mangroves, wetlands, and other areas of ecological importance into plantations.

In this analysis, “significance” indicates the magnitude of the dependencies and impacts on nature associated with palm oil or cocoa in producing countries, as assessed using multiple indicators. The nature-related risks identified through the analysis are general risks in the producing countries, and are not specific to the Group’s value chain. For business strategy reasons, we do not disclose specific regions or place names.

  • *1 The LEAP Approach consists of four phases: Locate (identifying company’s interface with nature), Evaluate (assessing its dependencies and impacts on nature), Assess (assessing its nature-related risks and opportunities), and Prepare (responding to, and reporting on, material nature-related issues). L3, L4, E2, E3, and E4 indicate the respective assessment steps of the LEAP Approach implemented in this analysis. For details, please refer to the TNFD Guidance on the identification and assessment of nature-related issues: The LEAP approach.
  • https://tnfd.global/publication/additional-guidance-on-assessment-of-nature-related-issues-the-leap-approach/
  • *2 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.

Table: 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 various GIS datasets that serve as indicators for 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 dependencies and impacts on nature), and clarify key issues (in terms of monitoring and sustainable procurement)

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

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

Image links to a PDF file（983KB）

Dependencies on nature (palm oil)

For dependencies on nature, we found flood risk to be particularly significant.
We also found that some regions in Thailand and Indonesia have high water stress, and that nitrogen pollution may be progressing beyond the capacity of ecosystem services to purify water in some regions of Indonesia.
We recognize that these water-related risks could affect the stability of raw material production and the reliability of procurement over the medium to long term.

Impacts on nature (palm oil)GRI: 101-5

For impacts on nature, the analysis revealed the highly significant impact of converting land that is important for ecosystems, such as primary forests, peatlands, mangroves, and wetlands, into plantations. We found that developing peatlands especially has a large impact on greenhouse gas (GHG) emissions and air pollution.
Moreover, the analysis revealed that some areas in Indonesia warrant attention from a broad perspective, given the complex risks posed by peatlands, mangroves, wetlands, and forest fires. Additionally, there is 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, where our Group has been supporting smallholder farmers 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 in the region.
In recent years, deforestation has been getting worse in some regions of Indonesia and Malaysia. The area on the Indonesian island of Sumatra, where we have been carrying out our landscape initiative since 2018, is a sensitive region that includes nature reserves and is home to species that fall under IUCN Protected Area Management Categories I or II. Many Indigenous peoples also live in the area. We confirmed 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 to create a positive impact on the sustainability of our production regions as a whole.
In terms of Indigenous Peoples and Local Communities (IPLCs), we found that some areas in Indonesia require attention, and recognize the importance of a comprehensive approach that addresses both environmental impacts and local community considerations.
For our specific landscape approaches in Malaysia and Indonesia, see:

Figure: Connections between main dependencies and impacts for palm oil

Image links to a PDF file（184KB）

Identification and monitoring of nature-related risks (palm oil)

The location analysis described above reaffirmed the significance of impacts on nature arising from the conversion of ecologically important land to plantation use. The findings support the validity of the Group’s No Deforestation, No Peat, and No Exploitation (NDPE) policy adopted in 2016, and the initiatives undertaken in accordance with that policy.
Specifically, we identify and continuously monitor nature-related risks through the following initiatives:

  • Ensuring traceability to plantation
  • Monitoring forest conditions using satellite imagery
  • Identifying and managing high conservation value (HCV) and high carbon stock (HCS) areas

For our specific initiatives, see:

Table: Analysis results of nature-related risk in cocoa-producing countries

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

Image links to a PDF file（961KB）

Dependencies on nature (cocoa)

For dependencies on nature, the analysis revealed the high significance of flood risk, as well as soil and sediment retention and soil quality regulation. Soil erosion may further increase flood risk, and if flooding or soil erosion occurs in areas with a thin soil layer, soil quality may also be seriously affected.
Levels of these nature-related indicators tend to be high in some regions of Côte d’Ivoire, and we found that there is a possibility that this could be a risk that could affect the stability of raw material production and medium- to long-term procurement in terms of disaster risk and soil fertility.

Impacts on nature (cocoa)GRI: 101-5

For impacts on nature, the analysis revealed the highly significant impact of conversion of land that is important for ecosystems, such as primary forests, peatlands, and wetlands, into farmlands in West Africa. We found that developing peatlands especially has a significant impact on GHG emissions and air pollution, requiring caution when there is overlap of these factors.
Moreover, we found that there is a possibility that farmlands in some regions of 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.
For our specific initiatives in Ghana and Côte d’Ivoire, see:

Figure: Connections between main dependencies and impacts for cocoa

Image links to a PDF file（187KB）

Identification and monitoring of nature-related risks (cocoa)

The location analysis described above confirmed the risk that land of high importance for forests and ecosystems may be converted to agricultural use. To address these risks, the Group identifies and continuously monitors nature-related risks through the following initiatives:

  • Improving traceability: Working with suppliers to develop polygon maps of farms from which we procure directly
  • Monitoring forest conditions in Côte d’Ivoire, Ghana, and Ecuador: Continuously monitoring changes in forest cover and the occurrence of deforestation using satellite imagery based on farm polygon maps
  • Understanding carbon dynamics: Monitoring increases and decreases in carbon stocks and carbon sequestration on farms and in surrounding areas

For our specific initiatives, see:

Initiatives to address biodiversity issues

Across a value chain that relies primarily on agricultural raw materials, our Group promotes initiatives that take into account both dependencies on nature and biodiversity and the impacts of our business activities. These initiatives help to avoid and reduce negative impacts, as well as contribute to the conservation and restoration of nature and the creation of value.
Together with the appropriate management of nature-related risks, these initiatives are intended to help to realize a nature-positive future.
The figure below organizes the Group’s main initiatives according to the mitigation hierarchy*1 and the various stages of the value chain.

Table: Biodiversity initiatives based on the mitigation hierarchy across the supply chain

Main purpose Specific initiatives Value chain
Avoid Prevent deforestation and ecosystem conversion Monitoring forest conditions using satellite imagery
Identifying and protecting High Conservation Value (HCV)*2 forests and High Carbon Stock (HCS)*2 areas		 Palm oil and cocoa
Conserve water resources Analyzing water risks at Group business sites using Aqueduct Fuji Oil Group business sites
Reduce and minimize Reduce environmental impacts on farmland and surrounding ecosystems Implementing Good Agricultural Practices (GAP),*3 ecosystem-based pest management, and increased use of RSPO-certified palm oil
Supporting smallholder farmers in adopting regenerative agriculture		 Palm oil
Supporting the adoption of agroforestry
Supporting the adoption of Good Agricultural Practices (GAP)		 Cocoa
Reduce environmental impacts at business sites and in surrounding areas, including impacts related to GHG emissions, waste, and water resources Reducing CO2 emissions through energy conservation and the introduction of renewable energy
Using by-products from oil extraction as fuel
Reducing waste through process improvements and reductions in the moisture content of sludge
Conserving and recycling water		 Fuji Oil Group business sites
Restore Regenerate and restore forests and ecosystems Tree planting and green-space conservation Palm oil, cocoa, and shea kernels
Participating in landscape initiatives Palm oil
Positive outcomes Promote resource circularity and soil improvement Conducting research on soybean cultivation using CO2 captured at a waste incineration plant through carbon capture and utilization (CCU)
Developing and promoting soil conditioners made by upcycling soy whey generated as by-products of processing		 Fuji Oil Group R&D
Create positive value for nature and biodiversity Developing alternatives to palm oil using oleaginous yeast
Developing functional food ingredients through the advanced utilization of pea fiber		 Fuji Oil Group R&D
Stakeholder engagement Raise stakeholder awareness and advance capacity building Communicating Group policies to suppliers and local communities and engaging with them to improve nature-related issues Palm oil, cocoa, soybeans, shea kernels, and other raw materials
Introducing the Labor Transformation Program (LTP) to suppliers Palm oil
Empowering women farmers and providing green-space management training for women farmers Cocoa and shea kernels
Raising awareness through the Group’s internal communication site in Japanese, English, Chinese, and Portuguese
Providing sustainability training		 Group-wide
  • *1 Mitigation hierarchy: A prioritized sequence for considering environmental conservation measures. It comprises four broad action steps that are designed to be implemented sequentially: (1) avoid, (2) minimize, (3) remediate, and (4) offset.
  • *2 HCV, HCS: High Conservation Value, High Carbon Stock
  • *3 GAP: Good Agricultural Practices

Metrics and targetsGRI: 101-1

Environmental Vision 2030/2050

Medium- to long-term commitment Base year FY2030 target FY2050 target FY2025 results
Reduce GHG emissions FY2020 Scope 1+2*1: 42% reduction Net zero*5 CO2 Emissions Reduction
Scope 3*2 (category 1*3): 25% reduction
FLAG*4-related: 30.3% reduction －
Reduce water use FY2020 Water use intensity*6 20% reduction － Water Use Reduction
Reduce waste volume FY2016 Waste intensity*7 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).
  • *3 Scope 3 (category 1): Covers only non-FLAG GHG emissions associated with purchased raw materials, supplies, and other goods and services
  • *4 FLAG-related: GHG emissions and removals related to land conversion, agriculture and land management, and carbon removals. FLAG: Forest, Land and Agriculture
  • *5 Net zero: A state in which emissions and removals are balanced and GHG emissions into the atmosphere are net zero
  • *6 Water use intensity: Water use per unit of production
  • *7 Waste intensity: Waste volume per unit of production

Nature-related targets in key raw material producing countries

Medium- to long-term commitment FY2025 target FY2030 target FY2025 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*2-certified products or products certified under equivalent standards Ensure traceability to community level, or 100% procurement rate of RTRS-certified products or products certified under equivalent standards Sustainable Procurement of Soybeans
Conservation of shea parklands and zero deforestation in shea kernel supply chain 6,000 trees per year planted 6,000 trees per year planted Sustainable Procurement of Shea Kernels
  • *1 NDPE: No Deforestation, No Peat, and No Exploitation
  • *2 RTRS: Round Table on Responsible Soy Association

Soil carbon sequestration using biochar (Sabah, Malaysia)

In Sabah, Malaysia, the Fuji Oil Group is working with Wild Asia to support smallholder farmers in adopting regenerative agriculture. In FY2025, we compiled results based on the indicators below to quantitatively assess the contribution of regenerative agriculture initiatives, including the use of biochar, to biodiversity conservation and restoration and climate change mitigation.

Indicator FY2025 results (Jan–Dec)
Area of oil palm plantations under regenerative agriculture 66 ha
Biochar applied to oil palm plantations 17 t
CO2 sequestered through biochar application 35 t-CO2e

Targets and results for this priority action

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

FY2025 Goals FY2025 results Self-assessment
Consider additional biodiversity-related disclosures with reference to the TNFD core disclosure metrics Quantified the amount of CO2 sequestered through the use of biochar as part of regenerative agriculture initiatives involving smallholder oil palm farmers in Sabah, Malaysia, and disclosed the results in the Sustainability Report 2026

Analysis

In FY2025, with the TNFD disclosure metrics in mind, we reviewed the Group’s initiatives for which the benefits to nature could be quantified. As part of this process, we focused on regenerative agriculture practices implemented by smallholder oil palm farmers we support in Sabah, Malaysia.
On these farms, biochar is applied to improve soil conditions. In addition, by calculating the amount of carbon sequestered in the soil in accordance with the Global Artisan C-Sink Standard,* an internationally recognized calculation and certification standard, we were able to quantify the amount of CO2 sequestered.
Although the initiative is limited in scale, it enables the disclosure of quantitative information aligned with the TNFD core disclosure metrics.

Next steps

We will explore opportunities to quantify and disclose nature-related impacts across other regions and raw material supply chains.

Specific initiatives

Landscape Initiative (Aceh, Indonesia)

The Group has been participating in landscape initiatives in the Aceh region of Indonesia, in collaboration with the Earthworm Foundation since 2018.
Covering an area that includes the Leuser Ecosystem, which is of high importance for biodiversity, the initiative aims to curb deforestation while advancing sustainable palm oil production, nature conservation, and appropriate social and labor practices.
The target area extends across approximately 2.3 million hectares and encompasses natural forests, farmland, and smallholder production areas. The initiative operates as a collaborative platform through which diverse stakeholders work together across the broader landscape. A key feature is its integrated approach to environmental and social issues throughout the region, rather than addressing individual plantations in isolation.

In FY2025, we made progress in identifying and managing high-priority conservation areas through such measures as establishing a multistakeholder forum in collaboration with local governments, protecting the land- and forest-governance rights of Indigenous Peoples and Local Communities, and advancing land-use planning. As a result, the area of forests and ecosystems protected under local regulations and international standards such as HCV and HCS has expanded, contributing to biodiversity conservation and the maintenance and restoration of ecosystem functions. We also advanced locally led forest restoration and conservation activities, Good Agricultural Practices (GAP) training for smallholder farmers, and support for livelihood diversification. By seeking to reconcile forest and ecosystem conservation with the sustainable development of local communities, these efforts contribute to enhancing resilience across the landscape.
For details, see Sustainable Procurement of Palm Oil.

Table: APT Landscape Initiative (Aceh, Indonesia)

Image links to a PDF file（147KB）

Southern Central Forest Spine (SCFS) Landscape Initiative 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. The region contains an important forest corridor from a biodiversity perspective. The initiative aims to balance efforts to curb deforestation, and advance sustainable palm oil production and the development of local communities.
Working in collaboration with a diverse range of stakeholders, including companies, government agencies, and local communities, the initiative takes an integrated approach that includes satellite monitoring, improved traceability, human-wildlife coexistence, and support for improving smallholder livelihoods.
In FY2025, progress was made in curbing deforestation through stakeholder engagement supported by satellite-based monitoring. The human-wildlife coexistence program was also expanded, and the formal application process for recognizing the rights of Indigenous Peoples and Local Communities over customary lands was advanced.
These initiatives contribute to biodiversity conservation and the maintenance of ecological connectivity, thereby helping to enhance the sustainability of the region as a whole.
For details, see Sustainable Procurement of Palm Oil.

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

Image links to a PDF file（147KB）