Kirin Holdings Selected As An "Excellent TCFD Disclosure" By The Government Pension Investment Fund External Asset Managers In Japan
April 14, 2023
Kirin Holdings Company, Limited
TOKYO, April 14, 2023 - Kirin Holdings Company, Limited (Kirin Holdings) was nominated by Japan’s Government Pension Investment Fund (GPIF) as an "Excellent TCFD*1 (Climate-related Financial Information Disclosure Task Force) Disclosure," which asked 13 external asset managers that manage domestic equities for the GPIF. Kirin Holdings received high commendations from 10 of the 13 external asset managers. This is the second consecutive year that Kirin Holdings has been selected.
1. The Task Force on Climate-related Financial Disclosures
In addition, Kirin Holdings was also nominated as for an excellent disclosure of each four TCFD disclosure categories ("Governance," "Strategy," "Risk Management," and "metrics and targets"). This year, 28 companies were selected as "Excellent TCFD Disclosure" in Japan and four companies, including Kirin Holdings, received high commendations from four or more external asset managers.
Key Remarks for Selection by Asset Managers
The contents of each item are in line with the TCFD Recommendations and Implementation Guide, and are well written. It (the disclosure) is also very easy to understand.
We are impressed by the fact that the company has incorporated into its strategy a solid understanding of the short-, medium-, and long-term timeframes during which risks may emerge. In particular, the thorough and in-depth investigation of each issue related to climate change, makes us think about how the company went that far into detail, is at a level that is a model for other companies, and is highly commended.
The disclosure is highly complete in all four elements required by the TCFD and is an interesting read. The company's unique global presence is conveyed in the analysis of agricultural products by region, policy risks in each country, and overseas M&A policy. The scenario analysis covers a wide range of risk factors, and the company's concrete countermeasures and mitigation measures are presented in a realistic manner.
For all elements, the report describes the progress made in the past year in addition to the details of initiatives, making it easy to grasp changes. Financial impact is also described in detail, making it easy to evaluate the impact on future corporate value. In addition, the relationship with biodiversity and natural capital is also considered in the disclosure content, and consideration of the interrelationship between climate change and natural capital is not often seen in other companies.
The disclosure is of high quality throughout. Starting with an overview, four items are disclosed in a well-balanced manner. In addition, the details of the TCFD, its reflection on the strategy, and its financial impact are highly commended.
Kirin Holdings forecasts the harvest volume of agricultural raw materials by commodity and region, and discloses specific adaptation measures, such as the development of brewing technology that does not depend on barley. For water risk, the company evaluated its own sites and barley export ports, and explained risk reduction measures such as diversification of procurement sources.
The report is particularly commendable in that it has greatly expanded its content to include not only climate-related information but also TNFD disclosures based on an integrated approach to interrelated environmental issues, given the nature of its business, which is highly dependent on natural capital. The report is also commendable for its enhanced and easy-to-understand descriptions in each section of the TCFD disclosures.
The disclosure is excellent in each of the four areas of the TCFD recommendations. The risks and opportunities are divided into short-, medium-, and long-term categories, and the explanation of financial impact includes specific adaptation and mitigation measures.
Kirin Holdings has a detailed understanding of risks, including the disclosure of the impact of each site and product after examining each risk scenario. The response strategies are also highly visible, with simulations incorporating specific measures. Kirin Holdings' investment plan for acquiring SBT certification (1.5°C target) and its corresponding investment plan is also good. Kirin Holdings has also adopted non-financial indicators such as climate change as part of its performance indicators, and its commitment is clear.
Based on our own risk analysis of natural capital, the content is deep and broad, setting Kirin Holdings apart from other companies. Risk management approach, results of scenario analysis and reflection in strategies, GHG reduction targets and results for each business, and priority areas for Scope 3 emission reductions are explained.
Following the release of the TCFD final report in June 2017, Kirin Holdings was one of the first companies to endorse the recommendations of the TCFD in June 2018, and became the first Japanese food and beverage company to endorse the TCFD in December 2018. Together with this, Kirin Holdings was the first in the world to disclose natural capital on a trial basis based on the TNFD’s*2 "LEAP Approach"*3. Kirin Holdings also became the first company in the food and beverage sector to be certified as SBT*4 Net Zero by the SBTi *5 in July 2022.
2．Taskforce on Nature-related Financial Disclosures
3．TNFD's proposed process for assessing nature-related risks and opportunities.
4．Science Based Targets: Greenhouse gas reduction targets based on scientific evidence.
5．An international initiative jointly established in 2015 by CDP, the UN Global Compact, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF).
The Kirin Group will continue to address complex and interrelated environmental issues (biological resources, water resources, containers and packaging, and climate change) in an integrated manner, and to work with all those involved in the value chain to connect the Group’s desire to enjoy and pass on the bounty of the earth to future generations. The Kirin Group will proactively promote various initiatives that will have a positive impact on nature and people.
Kirin Group Environmental Report 2022 (Management Summary: Natural Capital (Biological and Water Resources), p. 18-19)
Link:Kirin Group Environmental Report 2022 p 18-19PDF：203KB
About Kirin Holdings
Kirin Holdings Company, Limited is an international company that operates in the Food & Beverages domain (Food & Beverages businesses), Pharmaceuticals domain (Pharmaceuticals businesses), and Health Science domain (Health Science business), both in Japan and across the globe.
Kirin Holdings can trace its roots to Japan Brewery which was established in 1885. Japan Brewery became Kirin Brewery in 1907. Since then, the company expanded its business with fermentation and biotechnology as its core technologies, and entered the pharmaceutical business in the 1980s, all of which continue to be global growth centers. In 2007, Kirin Holdings was established as a pure holding company and is currently focusing on boosting its Health Science domain.
Under the Kirin Group Vision 2027 (KV 2027), a long-term management plan launched in 2019, the Kirin Group aims to become “A global leader in CSV*, creating value across our world of Food & Beverages to Pharmaceuticals.” Going forward, the Kirin Group will continue to leverage its strengths to create both social and economic value through its businesses, with the aim of achieving sustainable growth in corporate value.
* Creating Shared Value: combined added value for consumers as well as for society at large