Disclosure of Information on Climate Change

Disclosure Based on TCFD Recommendations

For a detailed scenario analysis, including responses to the new TCFD guidance for 2021, please see “Disclosure Based on TCFD Recommendations” in the 2022 Environmental Report.

  • New TCFD guidance
    Guidance on Metrics, Targets,and Transition Plans(October 2021)  Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures(October 2021) https://www.fsb-tcfd.org/publications/

Business Impacts of Climate Change and Holistic Approach

The Kirin Group’s business, which generates value by utilizing ecosystem services, relies heavily on natural capital. As climate change becomes more severe due to greenhouse gases generated by business activities, the agricultural products and water that are the raw materials in Kirin’s business will be most affected. The containers and packaging required to deliver products also damage natural capital if we do not use appropriate container materials and reuse used containers. Based on these recognitions, we have been conducting a variety of risk surveys related to natural capital since around 2010, before the publication of the final TCFD recommendations. We are also taking a holistic approach with the understanding that material issues set out in our Environmental Vision—biological resources, water resources, containers and packaging, and climate change—are interrelated rather than independent issues.

Disclosure Framework

We started scenario analyses immediately after the publication of TCFD’s final recommendations in 2017 based on our many years of accumulated knowledge on the risk assessment of natural capital in the value chain and the impact of climate change, and were able to promptly disclose information in line with TCFD recommendations in the Kirin Group’s Environmental Report published at the end of June 2018.
Disclosure based on TCFD recommendations advanced scientific proof that climate change issues are closely linked to other environmental challenges, and reaffirmed the effectiveness of a holistic approach.
In this part, we explain how the Kirin Group assesses and analyzes the impacts of climate change and promotes transition strategies such as mitigation and adaptation in order to increase resilience to climate change and lead a decarbonized society, in accordance with the new guidance issued by the Task Force on Climate-related Financial Disclosures (TCFD) in October 2021.
Details are available in our Environmental Report and on our website.


Supervisory structure

At the Kirin Group, the Board supervises the execution of operations addressing environmental issues, such as climate change, natural capital, and a recycling-oriented society. The Board also deliberates and makes resolutions on basic policies and material matters related to these and other environmental issues.
Specifically, the Board at least once a year receives reports on and reviews strategies, action plans, and the status of progress of environmental management. These involve business risks and growth opportunities associated with environmental issues, including material risks identified in the course of risk management, and the results of scenario analyses.
Meanwhile, the Group Executive Committee deliberates and makes resolutions on material non-financial targets.

Excerpts from the 2022 Board reports (conducted twice)

February 21

  • The Corporate Governance Code has been revised, and it is expected that the Board will “deepen discussions to actively and proactively address sustainability issues.” and strengthening governance is necessary
  • To strengthen our internal structure, multiple Group CSV Committee meetings will be held, and each meeting will require reporting to the Board. A new Group Environmental Meeting will be established, and it will be added to the governance structure along with the existing Group Business and Human Rights Meeting
  • To strengthen sustainability disclosure, we will disclose information in accordance with the new TCFD guidance and prepare for ISSB compliance

December 19

  • ESG integration is becoming mainstream in corporate valuations, and companies won’t be valued by investors if they do not meet expectations for ESG compliance
  • At a time when simultaneous disclosure of financial and non-financial information is required, accelerating the aggregation of non-financial information is a major challenge
  • The Kirin Group is highly regarded for its progressive approach to TCFD and its trial disclosure under the TNFD, and will continue to take the lead in global disclosure initiatives

Executive structure

The Senior Executive Officer in charge of CSV Strategy is responsible for environmental issues, including climate change, and also chairs the Group Environmental Meeting. Since FY2021, we have continued to participate in the Ministry of Economy, Trade and Industry’s Study Group on Disclosure Policies for Non-financial Information, and have assisted in the making of rules for climate related financial disclosure.
The Group CSV Committee, which meets three times a year to discuss CSV issues, including environmental issues across the Kirin Group, is an advisory body to the President & CEO, which is chaired by President & CEO of Kirin Holdings and whose members consist of Presidents and CEOs of key Group companies and Senior Executive Officers of Kirin Holdings, submits any decisions it makes to the Board.
In 2022, we increased the number of meetings of the Group CSV Committee (from once a year to 3 times a year) and established a new Group Environmental Meeting (twice a year) under the Group CSV Committee.

Committee Chairperson Committee Members Main Agenda Meeting Frequency
Group CSV
  • KH Internal Officers
  • Kirin Group
  • Presidents of key domestic and overseas operations
  • Exchanging views on Group CSV policies, strategies, and action plans
  • Monitoring Group companies' implementation of CSV initiatives
  • Reports from affiliated meeting bodies
3 times/year
Of those, one held
as a Group ESG
Group Environmental Meeting Chief Officer in
charge of CSV
  • Chief Officer in charge of Supply Chain Management
  • KH Head of CSV Strategy
  • KH Head of Corporate Planning
  • KH Head of Accounting
  • Monitoring progress on various road maps to realize the Kirin Group's Environmental Vision 2050 and exchanging views on policies, strategies,and plans

Performance linkage

In view of the importance of environmental issues, including climate change, executive compensation is set to be linked to the performance evaluation of non-financial metrics (the Group’s Scope 1 + Scope 2 reduction targets, water consumption per unit at Lion production sites with high water stress, and recycling of PET bottles), one of the key management indicators in the Medium-Term Business Plan.
Environmental issues, including climate change, are included in the CSV commitment, one of the non-financial target for Group companies, and are reflected in their business plans and the performance evaluations of their top management.

Business Impact Assessment of Risks and Opportunities of Climate Change

Since 2017, continued scenario analyses have helped us improve our level of understanding and strategies for the risks and opportunities posed by climate change. In addition to our own manufacturing sites, we also analyze the yield of agricultural products, procurement costs, carbon pricing, etc. Businesses analyzed include Kirin Brewery, Kirin Beverage, Mercian, Lion, Kyowa Kirin, Kyowa Hakko Bio, and Koiwai Dairy Products, which account for approximately 90% of the Kirin Group’s sales.
Scenario analyses use group scenarios that combine temperature scenarios (RCP) and socioeconomic scenarios (SSP), such as those of the IPCC. It is necessary to take into account the fact that the impact estimates analyzed and calculated are subject to uncertainties in the research results, information, and data used. We will continue to reflect new research findings, information, and data to improve accuracy.

Financial impact

Business Risks/Social Issues Financial Impact
Physical risks Decline in yields of agricultural products 2°C scenario: Approx. 0.9 billion yen to 2.5 billion yen (2050)
4°C scenario: Approx. 2.5 billion yen to 9.7 billion yen (2050)
Shutdowns due to floods Approx. 1 billion yen (once-in-200-year disaster, a total of 20 locations in Japan)
Shutdowns due to droughts Approx. 30 million to 0.6 billion yen
Transition risks Financial impact of carbon pricing on energy 1.5°C scenario: Approx. 9.5 billion yen to 427 billion yen (2030)
2°C scenario: Approx. 69 billion yen (2030)
4°C scenario: Approx. 1 billion yen (2030)
Financial impact of carbon pricing on agricultural products*1 RCP2.6/SSP1: Approx. 0.7 billion yen to 3.0 billion yen (2050)
RCP8.5/SSP3: Approx. 1.6 billion yen to 5.7 billion yen (2050)
Business opportunities Spread of infectious diseases Immunity & health supplements market: Approx. 28,961.4 million USD (2030)
Increased heatstroke Drinks for heatstroke market: Approx. 94 billion to 188 billion yen (2100, 4°C scenario)
  1. If GHG emissions are not reduced.
  • The financial impact of a decline in yields of agricultural products due to climate change and carbon pricing on agricultural products are assessed using the 25–75 percentile range of the distribution of forecast data for price fluctuations. Due to high uncertainty, estimates of carbon pricing under the 1.5°C scenario are included in the Environmental Report as reference values.

Analysis of impacts on assets

We estimated the impact of the sale of the Lion non-alcoholic beverages business in 2021 and the Myanmar business in 2023. There were no significant changes in the physical and transition risks, and although GHG emissions from the divested businesses were confirmed retroactively to the base year, we determined that there is no need to change targets.
The estimated exposure of assets in a typical once-in-200-year disaster (a total of 20 locations in Japan) is as follows. While we believe it is unlikely that boilers, delivery trucks, etc., will be forced out of service before they reach their end of life due to laws and regulations, we have disclosed the book values below for reference although they are not material.

  • Impact of divestments

  • Impact of divestments

Assets exposed to risk

Items Subject to Analysis Impact
Impact of divestment Before business divestment 515 thousand tons CO2e
After divestment 463 thousand tons CO2e
Assets exposed to risk Exposure Approx. 1 billion yen
Residual value of related facilities Approx. 1.1 billion yen


Considering the business characteristics of the Kirin Group, in order to sustainably create value, it is necessary to simultaneously respond to both the sustainable use of natural capital and increased resilience, as well as to minimize the challenges posed by climate change, containers, and packaging that impede this.

  • Kirin Group Environmental Issues

  • Kirin Group Environmental Issues

While the scenario analyses draw on multiple research findings and include different views, they generally indicate that climate change impacts on agricultural products and water are inevitable.
Although we have judged that there will be no major impact that will change the industrial structure, the impact will be considerable as a company that creates value through ecosystem services generated by natural capital. We believe that it is essential to continue to focus on reducing GHG emissions, making agricultural production areas sustainable, and addressing water risks and stresses.
We were also able to grasp social issues related to heat stroke and infectious diseases caused by climate change. We expect this can contribute to our business in the Health & Well-being domain, which the Kirin Group defines as a growth area.

Significant Issues Response Strategy Progress
(Sustainable use of natural capital)
Biological resources
  • Brewing technology that does not rely on barley
  • Mass plant propagation technologies
  • Support for farms to acquire certification for sustainable agriculture
  • Established mass propagation technology for hop seedlings
  • Joined a corporate engagement program of the Science Based Targets Network (SBTN) for Nature and a pilot test of the Taskforce on Nature-related Financial Disclosures (TNFD)
  • Commenced a survey on highly risky business sites, based on the results of natural disaster and flood simulations, to determine whether we need to take out insurance on these sites
  • Implemented flood prevention and facilities measures at pharmaceutical plants that require a stable supply
Water resources
  • Sharing of knowledge against floods
  • Facilities to protect against floods
  • Sharing of knowledge against droughts
  • Development and deployment of water conservation techniques
(Minimizing impact on natural capital)
Containers and packaging
  • Promotion of PET-to-PET
  • Lightweight containers
  • Joined Alliance To End Plastic Waste
  • Increase use of 100% recycled plastic R100 PET bottles
  • Practical application of chemical recycling
Climate change
  • Achieving science-based GHG emission reduction targets
  • Profit and loss neutral energy conversion (through 2030)
  • Formulated a roadmap to reducing GHG emissions up to 2030 (in 2022). Finalized the reduction targets and paths for Group companies, and started to work toward these targets
  • We have installed PPA-based (except for Yokohama Plant) large-scale solar power generation systems in all plants of Kirin Brewery (in 2021), Kyowa Kirin’s Ube Plant, and Mercian’s Fujisawa Plant (in 2023). We have also raised the percentage of renewable energy in the overall amount of energy procured to 100% at Kirin Brewery’s Nagoya Plant (2020), Sendai Plant (2022), Okayama Plant, and Fukuoka Plant, Kyowa Kirin’s Takasaki Plant, all production sites of Lion in Australia and New Zealand (2023), and all wineries of Chateau Mercian (2022). Kirin Holdings received SBT’s net zero certification for the first time as a food company in the world (2022)
Business opportunities Infectious diseases
  • Providing corresponding products
  • Expanded product lineup
  • Supply and provision of ingredients to partner companies
  • Providing drinks to address heatstroke
  • Raising awareness of heatstroke

Transition Plan

The Kirin Group has formulated a roadmap for achieving science-based GHG emission reduction targets and net zero targets in order to limit the global average temperature increase to 1.5°C compared to pre-industrial levels. The roadmap was discussed and resolved by the Executive Committee, and has been in operation since January 2022. We have also developed and implemented investment plans and funding measures in response to our roadmap. Exploration and trials will continue for Scope 3, starting with reduction measures in the packaging and agricultural domains. As for climate change adaptation measures, we will expand the promotion of sustainable agriculture and forestry. We also plan to participate in a pilot program for international initiatives to develop natural capital target setting methodologies and disclosure frameworks to lead rule making. The roadmap will be reviewed regularly and updated appropriately in light of scientific advances, regulations, and other factors.

  • Roadmap to Net Zero

  • Roadmap to Net Zero

Reducing Scope 1 and Scope 2 emissions

(Unit: thousand tons CO2e)

2021 2024 2030 2050
Kirin Brewery 185 140 90 0
Kirin Beverage 40 37 20 0
Mercian 59 45 27 0
Lion 84 74 51 0
Kyowa Kirin 41 27 25 0
Kyowa Hakko Bio 201 165 109 0

Investment amounts

(Unit: hundred million yen)

2019-2021 MTBP 2022-2024 MTBP 2025-2027 MTBP 2028-2030 MTBP
Investment in/measures for energy conservation 15 74 104 48
Expansion of renewable energy 15 150 237 362
Energy transition 0 0 9 12
Total 30 224 350 422
  • Figures for MTBP from 2019 to 2021 are actual. The 2022-2023 plan was estimated at the time of planning the transition-linked loan and the figures may be revised.
  • The investment value includes all cost related to install and procure the renewable energy.

Scope 1 + 2 emissions reductions

For Scope 1 and Scope 2 reductions, we will combine three approaches: promoting energy conservation, expanding renewable energy, and transitioning energy. Up to 2030, we will increase energy efficiency and reduce its use, transitioning the energy mix from fossil fuels to electricity and utilizing electricity made from renewable energy sources.
After 2030, in order to achieve net zero in 2050, it will be necessary to switch the combustion fuel used in the steam production process from fossil fuels to hydrogen and other fuels that do not emit GHG. Infrastructure development and technological innovations are necessary, so there is uncertainty about achieving these goals. We will take the initiative in taking on the challenges of practical application and engage in appropriate policy proposals and rule making.

Scope 3 emissions reduction

Of the categories defined in the GHG Protocol, we have identified the following categories as the areas of focus: Category 1 (manufacture of ingredients and materials) making up the largest proportion of the total emissions at approximately 60%, Category 4 (transport) making up the second largest proportion, and Category 9 (distribution). We will promote reductions through “encouragement of reduction at business partners” and “reducing our own independent emissions.”
Lion has also shown in pilot tests that it can raise Scope 3 reduction targets by pooling actual GHG emissions with suppliers and customers with a third party, without mutual disclosure. This approach has been published by Australia’s Climate Leaders Coalition as the Scope 3 Roadmap, which was presented by Lion’s CEO at COP27.

Encouragement of reduction at business partners We plan to reduce emissions with an emphasis on engagement based on the emissions reduction plan and the status of progress in both quantitative and qualitative terms at each company, obtained through questionnaires to major suppliers
Reduction of our own independent emissions We will make containers and packaging lighter and raise the percentage of recycled resin in PET bottles by leveraging the competence of our own research institute to develop containers and packaging in-house

Investment plan

Until 2030, our basic principle for environmental investment is profit and loss neutral. Specifically, we will offset increases in depreciation from investments and the cost of procuring renewable energy with cost benefits derived from energy saving. We use Net Present Value (NPV) as an indicator for environmental investments aimed mainly at reducing GHG emissions and have incorporated Internal Carbon Pricing (ICP: $63/tCO2e) into our framework for making investment decisions. We intend to accelerate the reduction of GHG emissions by reflecting ICP in the roadmap. In 2020, we issued green bonds (totaling 10 billion yen) to finance the procurement of recycled PET resin and the introduction of heat pump systems at plants. Then, in January 2023, we financed the projects related to energy saving and renewable energy, which we are promoting as part of initiatives to reduce Scope 1 and 2 GHG emissions, with a transition-linked loan (totaling 50 billion yen) for the first time as a food company in Japan. The loan is subject to the FY2022 subsidy for global warming countermeasures promotion project and the performance-linked interest subsidies program offered by the Ministry of Economy, Trade and Industry based on the Industrial Competitiveness Enhancement Act (financial support for promoting the transition towards achieving a carbon-neutral economy).

Risk Management

Climate change risks consist of two categories: physical risks and transition risks. Of these, areas producing raw materials and manufacturing sites are exposed to physical risks. Since 2013, the company has made various efforts to make its areas producing raw materials sustainable while accumulating knowledge on recovery from flood damage suffered by manufacturing facilities. To reduce GHG emissions, which is a significant transition risk, we are prioritizing the “additionality” of substantially increasing renewable energy and the “ethicality” of energy generation from the perspective of the environmental impact and human rights. We have promoted the installation of large-scale solar power generation at our plants and participation in the wind power generation business.
In addition, natural disasters of unprecedented scale and legal regulations that change the structure of industry are becoming a reality, and we believe that the approach of setting scenarios and analyzing and evaluating them is quite effective for risks that would have an extremely material impact on business if they occurred, regardless of the possibility of such events. We will apply this approach not only to climate change but also to other challenges to minimize risks and expand business opportunities.
Material risks, including those related to climate change, are managed by the Group Risk and Compliance Committee, which meets every quarter and is chaired by the Senior Executive Officer in charge of Risk Management. For the BCP, we have reviewed our traditional event-by-event approach and transitioned to an all-hazard approach to business continuity planning whereby we work out countermeasures with a focus on the loss of management resources, regardless of the event.

Metrics and Targets

Response Items Targets Results
Mitigation measures GHG emissions reduction targets (relative values) Net zero (2050) 4,411 thousand tons CO2e
Scope1+2 50% reduction (in 2030 from 2019) 13% reduction
Scope 3 30% reduction (in 2030 from 2019) 722 thousand tons CO2e
Percentage of renewable energy in total energy consumption 100% (2040) 17%
Adaptation measures Number of small farms that received training for the acquisition of certification in Sri Lanka 10,000 farms (2025) 2,120 farms
Ratio of certified palm oil in Japan Maintain 100% 100%
Lion water efficiency* Less than 2.4 kl/kl (2025) 3.8kl/kl
Kyowa Hakko Bio water consumption 32% reduction (in 2030 from 2015) 52% reduction from 2015
Ratio of FSC-certified paper container used in the Japan Non-Alcoholic Beverages Businesses Maintain 100% 100%
Proportion of recycled materials used in PET bottles in Japan 50% (2027) 4.9%
  • Tooheys Brewery, Castlemaine Perkins Brewery, James Boag Brewery, Pride