Sustainable use of biological resources

Sustainable biological resources

The Kirin Group has taken concrete measures toward biological resources from an early stage, including announcing the Kirin Group Declaration of Support for Biodiversity Conservation in 2010, conducting risk surveys and assessments of biological resources in 2011, and announcing the Kirin Group Action Plan for the Sustainable Use of Biological Resources in 2013. Agricultural raw materials often reflect the unique characteristics of the areas that produce them. We must maintain both a local perspective centered on our "dependence" on agricultural products produced in specific "places," as well as a global perspective centered on the fact that climate change has a significant impact on the yield and quality of agricultural raw materials.
With our understanding of this background, in ddition to scenario analysis based on the TCFD recommendations, we will develop a holistic approach by referring to the LEAP (Locate, Evaluate, Assess,Prepare) approach presented in the beta version of the TNFD Disclosure Framework.

Targets

1. Black Tea
   Kirin Holdings aims to enhance sustainability of tea farms in Sri Lanka, the main raw material production area from which Kirin Beverage Company, Limited sources tea leaves.
2. Paper and Printed Materials
   Kirin Holdings will maintain 100% usage of FSC-certified paper or recycled paper, which it achieved at Kirin Holdings Company, Limited, Kirin Brewery Company, Limited, Kirin Beverage Company, Limited, and Mercian Corporation in 2020, and Kirin Holdings will also expand this initiative to cover all Group companies, including those outside of Japan.
3. Palm Oil
   In Kirin Holdings’ domestic businesses, Kirin Holdings will ensure that 100% of transactions for palm oil used as a primary or secondary raw materials have RSPO^*6 certification.
4. Coffee
   Kirin Holdings aims to enhance sustainability of coffee farms in Vietnam, the main production area from which Kirin Beverage Company, Limited sources coffee beans.
5. Soybeans
   Kirin Holdings will use soybeans and processed goods*9 from highly sustainable farms at Kirin Brewery Company, Limited.

Risk research

Progress

*All information above is as of the end of June 2022.
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Tea farms

Support for acquisition of Rainforest Alliance Certification

Since 2013, the Kirin Group has supported the acquisition of Rainforest Alliance certification by tea farms in Sri Lanka. As of end of 2021, we had supported the acquisition of certification at a total of 94 tea farms in Sri Lanka, equivalent to approximately 30% of all certified large estates, and in August 2021, we also began sales of year-round products that use tea leaves from certified tea farms.
Since its launch, we have used tea leaves from Sri Lanka as the main ingredient for Kirin Gogo-no-Kocha, Japan's leading brand of black tea brand with a share of approximately 50%*1 of the domestic packaged black tea market. When we conducted a biodiversity risk assessment in 2011, we learned that approximately 25%*2 of the Sri Lankan tea leaves imported by Japan were used for Kirin Gogo-no-Kocha. We also considered purchasing tea leaves from certified farms to reduce risk from our high level of dependency. But at the time, Sri Lanka was in the immediate aftermath of a civil war and we found the number of farms that were able to access training themselves was limited. Therefore, rather than leaving behind such farms, we decided to create a positive impact on the sustainability of the production area as a whole by supporting the acquisition of certification by tea farms in Sri Lanka in order to build better partnerships with production areas and the people who work there and to continue producing tasty and reliable tea drinks.

Training content

Droughts and heavy rains are frequent in Sri Lanka due to the impact of climate change. Urbanization, industrialization, soil erosion and outflow as a result of inappropriate agriculture are also major problems. Tea farms are often located on steep, sunny slopes, so heavy rainfall not only causes the loss of fertile soil, but there have also been examples of it causing landslides that kill people living on the farms. In training, we teach people how to identify grasses that have a negative effect on tea cultivation and show them how to ensure the ground in tea farms is covered with harmless grasses with deep roots.
This prevents landslides by stopping rain from directly hitting the ground during heavy rain, while also serving to retain water during droughts, making it an effective measure for adapting to climate change.
We not only protect forests, but also reduce spending, improve farm profits, and enhance tea leaf safety by teaching scientific methods of increasing yields while reducing agricultural chemical and fertilizer use in our training.

1. Actual data for 2021 based on research conducted by Food Marketing Research
   Institute Co., Ltd.
2. Source: 2011 Tea Statistics, Japan Tea Association
3. Certification is awarded to farms that meet comprehensive standards for
   sustainable agriculture to create a better future for people and nature.
   https://www.rainforest-alliance.org/lang/ja

Social and economic impact of certification

This data is from a specific farm, and from it, we may say that our support for certification has a positive impact, both financially and socially, on farms and farm workers, and makes areas where raw materials are produced more sustainable.

Support for the acquisition of certification by small farms

In 2018, we began supporting the acquisition of certification by small farms, and by 2025, we plan to support the acquisition of certification by 10,000 small farms.
In Sri Lanka there are many small family-operated farms, with the total number said to be in the hundreds of thousands.
Nationally qualified collectors collect the tea leaves that small farms produce, and sell them to large nearby farms for processing before shipping. Tea leaves from small farms can sometimes account for as much as half or more of the tea leaves processed in the large farms’ plants. We thus determined the acquisition of certification at small tea farms is also necessary for the sustainability of black tea leaves.
In order to obtain certification for small farms, multiple small farms are organized to form a team and appoint a leader. Local trainers first train the leaders, who then train the team’s small farms, thus ensuring that they learn about the requirements of the certification standard.
In many cases, we are able to obtain the full cooperation of large farms, including the dispatch of instructors and the opening of training rooms. Since it is necessary, however, to begin by organizing the small farms into a team, it often takes time to start actual training, and the process to obtain certification is perhaps more difficult than the process for large farms.

1. The target for small farms was a cumulative total of 5,350 farms between 2022 and 2024, but in 2021, it was difficult for trainers to visit farms owing to strict curfews, etc., as a result of the spread of COVID-19, and we were not able to provide training at small farms.

Book donations to elementary schools in Sri Lanka

In 2007, the year following the 20-year anniversary of Kirin Gogo-no-Kocha, we launched the Kirin Sri Lanka Friendship Project to further strengthen ties with Sri Lankan tea farms and continue to ensure stable production of tea leaves.
In Sri Lanka, unlike in urban areas, schools in rural areas such as those well known as tea-producing areas usually do not have class libraries or substantial libraries, which are taken for granted in Japan. The Kirin Group donates quality books to elementary schools for the children of tea farm workers, and continues to help children improve their academic abilities and envision their dreams for the future. We have already made donations to over 200 schools and plan to continue to increase the number of schools to which donations are made.

Vineyard

Nature Positive at Japan Wine vineyards

We have invited researchers from the National Agriculture and Food Research Organization (NARO), and have been conducting ecological surveys at Château Mercian Mariko Vineyard, on the Jinba Plateau in the Maruko district of Ueda City, Nagano Prefecture, since 2014. In these surveys, we confirmed the existence of 168 species of insects and 288 species of plants, including endangered species listed in the Red Data Book of the Ministry of the Environment, Japan.
Many rare species, including endangered species, have also been found in Jyonohira Vineyard in Katsunuma-cho, Koshu City, Yamanashi Prefecture.In addition to contributing to the expansion of our business, the conversion of derelict farm land into hedgerow-style vineyards for Japan Wine also creates valuable grasslands and contributes to the expansion and protection of Japan’s traditional rural Satochi-Satoyama landscapes.
Within nature, there is a kind of nature called "secondary nature" that is protected only by human intervention.
Attention has been focused on trends such as the proposal of “Other effective area-based conservation measures” (OECMs) at the Fourteenth Conference of the Parties to the Convention on Biological Diversity in 2018. A typical example is grasslands.Grasslands are said to have covered 30% of Japan’s national land area 130 years ago, but they have dwindled to just 1% today. However, the ratio of endangered plants per unit area is extremely high (see figure on the top right), and grasslands play an important role in conserving biodiversity.In Japan Wine vineyards, we regularly cut the undergrowth for vertical shoot cultivation, and this has created an environment that functions as high-quality, vast, grasslands, enabling the development of native and rare species, without being dominated by highly fertile plants. Mercian envisions to "make Japan recognized as one of the world’s foremost wine regions."As such, in order to produce wine of world-class quality in a stable manner, the expansion of vineyards that Mercian manages itself to secure high-quality grapes on an ongoing basis contributes to creating grasslands and enriching ecosystems.

Mariko Vineyard has been selected as an approved socio-ecological production landscapes and seascapes site for the Japanese Ministry of the Environment ’s 30by30 Alliance For Biodiversity.
https://www.kirinholdings.com/en/newsroom/release/2023/0113_06.html

Studies into the process of converting derelict farm land into vineyards

Revegetation activities

Activities to increase shrubby sophora

Along with an NGO and local elementary school students, we have begun activities to increase shrubby sophora (Sophora flavescens) in Mariko Vineyard. Shrubby sophora is not a rare species at the national level, but it is the sole grass used for feeding Shijimiaeoides divinus, a critically endangered IA (CR) butterfly. In 2019, international NGO Earthwatch Japan and its volunteers collected, with the permission of the rice field owners, cuttings of shrubby sophora from the sides of rice fields near vineyards, and took them home to grow them. Two years later, at the end of May 2021, we planted the seedlings at Mariko Vineyard.
Since 2021, Ueda City Shiogawa Elementary School at the foot of the Jinba Plateau where Mariko Vineyard is located has also participated in activities to increase shrubby sophora. The school grew cuttings taken in 2021 in a flower bed in the schoolyard, and planted them in Mariko Vineyard at the end of May 2022. We also invite a lecturer from NARO and hold environmental classes for students at the school.

Coffee farms

Since 2020, the Kirin Group has supported the acquisition of Rainforest Alliance Certification by coffee farms in Vietnam. By the end of 2021, we had provided training for transition to new certification to 309 farmers of arabica coffee. We are utilizing the knowledge we have accumulated by supporting the acquisition of certification by tea farms in Sri Lanka since 2013 to expand our activities to coffee farms in Vietnam.

Hop fields

We have been conducting an ongoing living species survey in the hop fields of contracted farmers in Tono City since 2014.
In the fall of 2020, we conducted a survey of the vegetation in the new hop fields of BEER EXPERIENCE, an agricultural corporation funded by Kirin Brewery, in Tono City. As a result, we found there were Corydalis raddeana, which are designated as “Near threatened” in the Ministry of the Environment’s Red Data Book, as well as Cynoglossum asperrimum,
which is designated as “Near threatened” by Iwate Prefecture. In a survey we conducted in spring 2021, we found Adonis ramosa, designated as a “Vulnerable” species by Iwate Prefecture, as well as Anemone debilis and moschatel (Adoxa moschatellina), which are both designated as “Near threatened” by Iwate Prefecture.
We farm the hop fields every year, so the fields themselves do not have the function of enriching vegetation. However, it is fair to say that the creation and maintenance of windbreak forests to aid in the cultivation of hops and the continued functioning of hop fields as rich ecosystems in Japan’s traditional rural Satochi-Satoyama landscapes both contribute to the richness of vegetation.

Mass plant propagation technology

Mitigation Measures Against Global Warming

Kirin’s scenario analyses based on the TCFD recommendations that we have conducted since 2018 show that climate change has a significant impact on yields of many agricultural products used as raw materials. Mass plant propagation technology is also useful for the mass propagation aimed at promoting the spread of new varieties that have been developed in response to environmental changes as well as for mass propagation of new varieties, endangered species, and useful plants, and we thus expect it to positively impact the sustainability of agriculture.

Regeneration of coastal forests in the Tohoku Region

For two years from 2014, the Kirin Central Research Institute participated in the Ministry of Agriculture, Forestry and Fisheries project, “Dramatic Improvement of Production of Seeds and Seedlings of Bursaphelenchus Xylophilus - Resistant Black Pine for Regeneration of Coastal Forests in the Tohoku Region.”

• Agriculture, Forestry and Fisheries Industry/Food Industry Science and Technology Research Promotion Project (lead institution: Forest Tree Breeding Center, Forestry and Forest Products Research Institute, Forest Research and Management Organization)

Contribution to the lunar farm

The Kirin Central Research Institute took part in the lunar surface base project led by the Ministry of Education, Culture, Sports, Science and Technology launched in 2017, which included industryacademia collaboration research on a pest free farm system and emergency backup system using bag-type culture vessel technology to reproduce growth patterns similar to those under the same atmospheric pressure as on the earth.

World’s first cultivation experiment performed onboard the ISS’s Japanese Experiment Module “Kibo”

The Japan Aerospace Exploration Agency (JAXA), Takenaka Corporation, Kirin, Chiba University, and Tokyo University of Science, aiming at food production during long-term stays in space for future lunar and other exploration missions, carried out a demonstration experiment of bag-type culture vessel technology onboard the Japanese Experiment Module “Kibo” on the International Space Station (ISS). This was a first of its kind in the world.
JAXA is promoting research aimed at setting up farms on the moon and producing food to enable long-term stays without relying on supplies from Earth. Under a framework calling for joint research proposals, in 2017, JAXA began joint research related to bag-type culture vessel technology with a view to its application in space activities.

Palm oil

Paper and Printed Materials

• The Forest Stewardship Council® (FSC) Forest Certification System is a system for the appropriate management of forests and the sustainable use and conservation of forest resources. The FSC label is a mark that protects forests.
• The above information is reprinted from the Kirin Group Environmental Report 2022 and is current as of June 30, 2022.The photographs of sealed envelopes, paper cups, etc. may not be the latest version.

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Food Waste Reduction and Recycling

Reducing losses from disposing of products

Continuous donation of surplus inventory^* to local　governments and food banks

In order to reduce losses from disposing dated and damaged products on an ongoing basis, we optimize production by improving demand forecasts through means such as the close sharing of information on actors affecting demand, such as retail sales, with plants and logistics centers. In addition, we re moving forward with efforts to prevent valuable biological resources and containers and ackaging from going to waste by strictly managing sales volume targets.

• Products that have no quality problems and are within their expiration date, but that we cannot ship because they will take a long time to reach customers

Reducing of food waste

Recycling spent grains from beer mashing as livestock feed
Production processes for beer, low-malt beer, and other products generate spent grains after the mashing process. Because such spent grains contain residues of nutritious substances, we utilize them efficiently as livestock feed for cattle, for growing mushrooms, and other applications.
Lion continues to supply brewer’s yeast for use as an ingredient in the Australian fermented food, Vegemite.

Reuse of grape press lees
The grape lees from wine-making are turned over in a compost heap on the company vineyard for a year to make compost, which is used as organic fertilizer.

Effective use of shochu lees
Since 2015, we have been supplying some of the distillation residue (shochu lees) generated in the shochu production process at Mercian’s Yatsushiro Plant to hog farmers in Kumamoto Prefecture In 2019, Kirin Holdings, Mercian and the University of Tokyo jointly confirmed for the first time in the world that shochu lees can reduce stress among hogs and improve pork palatability, demonstrating the potential for the effective use and creation of value from shochu lees.

Support for the restoration of nature

Educational program for wildlife conservation in Sri Lanka

Kirin Beverage is funding an educational program for wildlife conservation for young people in tea farms in Sri Lanka.Leopards are at the top of the food chain in Sri Lanka's ecosystem, but local residents often trap and kill them in traps, raising the need for farmers and local residents to understand the importance of ecosystem conservation.
In 2020, a black panther, said to be a mutation of a leopard that was thought to have gone extinct decades ago, was found in a trap. The black panther was sheltered at the Elephant Transit Home in Udawalawe National Park, but unfortunately died later.
In the wake of this incident, Sri Lankan NGOs, the Department of Wildlife Conservation, academic experts, and farm managers passionate about environmental conservation came together to plan a pilot project to educate young tea farmers about the local ecosystem, which Kirin Beverage helped implement through funding support. The spread of COVID-19 delayed the implementation of this project, but in 2021, two seminars for farm employees and students (69 participants in total) were held in March, and a residential workshop for a total of 43 young people was held in Horton Plains National Park in April and October

Protection of endemic species in biotopes　at manufacturing plants

At the Kirin Brewery’s Yokohama Plant, in an endorsement of the “Yokohama b Plan,” the city’s biodiversity action plan, we built a biotope in the grounds of the plant in the summer of 2012. The Yokohama Brewery, which is part of a widespread network of ecosystems, is pursuing initiatives to enrich the local ecosystem as a whole. Since 2012, the brewery has conducted “Tours to Experience the Blessings of Nature” every week from spring through fall, in collaboration with the Tsurumi River Catchment Network, an NPO with a deep base of knowledge related to the region’s natural environment. (We are currently suspending these tours due to the spread of the COVID-19).
The Kirin Brewery’s Kobe Plant has been cultivating local endangered species, including the fish species, Hemigrammocypris rasborella (golden venus chub), and Pogonia japonica, a species of orchid, in the biotope that we set up in 1997. This biotope functions as a “refuge biotope” for the protection and cultivation of local endangered species.

Key data related to biological resources