Sustainability Material Issues and Implementation Structure

Sustainability Material Issues

The Sapporo Group had identified materiality as a CSR priority issue in 2017, we have thoroughly reviewed its Sustainability Material Issues in response to changes in the social situation and business environment surrounding our group in 2022.
We have identified 9 sustainability material issues by evaluating "the degree of impact of our business on society and the environment" and "the degree of impact of society and the environment on our finances" in terms of risks and opportunities. In particular, we have positioned "Realization of a decarbonized society," "Mutual prosperity with local communities" and "Active participation of diverse human resources" as the most important issues for management.

Through the Time and Space where all our businesses is playing, we contribute to Well-being of People and Local Communities

Risks and Opportunities by Material Issues

Classification	Most Important Issues	Material Issues	Specific Initiatives	Relevance to Each Business			Impact of Our Business on Society and the Environment		Social/Environmental Impact on Corporate Finances		Connection to Economic Value
Classification	Most Important Issues	Material Issues	Specific Initiatives	Alcoholic Beverages	Food Beverages	Real Estate	Risk	Opportunity	Risk	Opportunity	Connection to Economic Value
Harmony with the Environment	●	Realization of a decarbonized society	Reducing CO₂ emissions at company sites and supply chains	◎	◎	◯	Large	Large	Large	Medium	Reduction in energy consumption through energy conservation, etc. Reduction of cost increase when carbon tax is introduced in the future
		Realization of a recycling-based society	Realization of containers and packaging compatible with a recycling-oriented society Reduction and recycling of plastic resources	◎	◎	◯	Large	Medium	Large	Medium	Stable procurement of materials Creation of new business models based on resource recycling
			Reduction of waste and food loss								Profit generation by providing lean services Elimination of disposal costs
			Conservation of Water Resources								Reduce risks such as securing high-quality water resources, etc.
		Realization of a society in harmony with nature	Crop cultivation that responds to climate change Facility/community development that coexists with nature	◯	◯	◯	Medium	Small	Medium	Medium	Long-term stable procurement of raw materials through implementation of climate change adaptation measures Creation of added value through collaboration with raw material producers
Co-prosperity with Society	●	Mutual prosperity with local communities	Improvement of regional value Resolution of local issues using company resources	◎	◎	◎	Medium	Large	Medium	Large	Generate profit by increasing real estate value Creation of new sales opportunities based on regional development Stable procurement of high value-added domestic raw materials
		Providing health value	Provision of health value through business	◯	◎	◯	Small	Large	Small	Large	Profit generation by providing health value
		Building a sustainable supply chain	Respect for Human Rights in the Supply Chain Reduction of environmental impact in the supply chain Stable procurement	◎	◎	◯	Large	Small	Large	Small	Reduce risk from supply chain instability
Activation of Human Resources and Potentials	●	Active participation of diverse human resources	Promotion of Diversity & Inclusion (D&I)	◎	◎	◎	Small	Medium	Large	Large	Increase productivity by enhancing work engagement Creating new value by improving individual skills and integrating diverse values
Activation of Human Resources and Potentials	●	Active participation of diverse human resources	Investing in human capital for growth and productivity	◎	◎	◎	Small	Medium	Large	Large
Promotion of Responsible Drinking			Awareness-raising of responsible drinking	◎	△	△	Medium	Medium	Medium	Medium	Building a foundation to support stable business continuity
Provision of Safe Products and Facilities			Food safety	◎	◎	◯	Large	Medium	Large	Medium
Provision of Safe Products and Facilities			Building safe facilities	◎	◎	◯	Large	Medium	Large	Medium

Sustainability Material Issues Targets and Indicators

* Target setting company notation　SH: Sapporo Holdings, SB: Sapporo Breweries, PS: Pokka Sapporo, SRE: Sapporo Real Estate, SLN: Sapporo Lion, SGF: Sapporo Group Foods, SBL: Sleeman, SUSA: Sapporo USA, SVL: Sapporo Vietnam, YSM: Yasuma, FBS: Foremost Blue Seal, PK: Pokka, SSI: Shinsyu-ichi Miso

Classification	Most Important Issues	Material Issues	Specific Initiatives	Indicators	Targets Setting Companies	Target Year	Targets
Harmony with the Environment	●	Realization of a decarbonized society	Reducing CO₂ emissions at company sites and supply chains	CO₂ emissions reduction	Common to all operating companies	2050	Scope 1, 2 Zero CO₂ emissions	7.2 13.1 17.17
					Common to all operating companies	2030	Reduction of CO₂ emissions at the Scope 1 and 2 SBT certification level (= 4.2%/year from the base year) * Commitment letter submitted to SBT initiative, accepted
					SB, PS, SBL	2030	Reduction of CO₂ emissions at the Scope 3 SBT certification level (= 2.5%/year from the base year) * Commitment letter submitted to SBT initiative, accepted
		Realization of a recycling-based society	Realization of containers and packaging compatible with a recycling-oriented society Reduction and recycling of plastic resources	Usage rate of recycled materials in PET bottle products	SB	2030	Domestic production of wine PET bottles: Recycled material usage rate 50%	12.3 12.4 12.5 14.1
				Usage rate of recycled materials in PET bottle products	PS	2030	Domestic sales of PET products: Recycled material usage rate 50%
				Reduction of plastic used in advertisement products	SB	2030	Single-use plastic advertising products derived from fossil fuels: abolished in principal domestically
			Reduction of waste and food loss	Implementation rate of food recycling, etc.	SLN	2024	Implementation rate of food recycling, etc.: 50%
			Reduction of waste and food loss	Waste recycling rates at production sites	SB, PS		Waste recycling rate of 100% at domestic production bases
			Conservation of Water Resources	Water usage reduction rate	SB, PS	2030	Reduce water usage at domestic production bases by 10% (compared to 2013)	6.4
		Realization of a society in harmony with nature	Crop cultivation that responds to climate change Facility/community development that coexists with nature	Progress in developing ingredients to respond to climate change	SB	2030	Application for registration of domestic varieties of barley and hops with characteristics that can respond to climate change	13.1 15.4
Co-prosperity with Society	●	Mutual prosperity with local communities	Improvement of regional value Resolution of local issues using company resources	Progress in sustainable urban development that contributes to improving area brand value	SRE		Improving the value of properties and creating excitement Community formation, strengthening, and expansion with stakeholders in the vicinity of properties Creating facilities that are friendly to everyone	4.7 8.9 11.3 11.7 17.17
				Progress of our “regional revitalization business”	SB		In order to create sustainable regions in cooperation with local governments, we will conduct matching between local food suppliers and companies at food business meetings
				Progress in building an environment for lemon production in Japan	PS		Expansion of cultivated land not only in-house but also with partners Taking over farmland without a successor Implementation of initiatives to regenerate abandoned farmland
				Number of regional learning programs (food education, on-site classes, factory tours, etc.) related to the food and beverage business	PS, SGF	2030	Four times as many as FY2021 (140 cases)
		Providing health value	Provision of health value through business	Results of the value penetration survey of lemon foods and beverages in the market (Purchasing experience and frequency of use in the last 6 months)	PS	2030	Doubling of the total demand for lemons by disseminating information on the health benefits of lemons and proposing applications and usage scenarios	2.1 3.4 11.3
				Development status of products that contribute to customer health	PK		Continuous development of products that contribute to customer health
				Status of acquisition of certifications for properties that contribute to the provision of health value	SRE		Acquisition of certification for owned properties that contribute to the provision of health value
		Building a sustainable supply chain	Respect for Human Rights in the Supply Chain Reduction of environmental impact in the supply chain Stable procurement	Compliance rate with the Sustainable Procurement Guidelines	SB, SBL, SUSA, SVL, PS, YSM, SGF (FBS, PK, SSI), SLN		Implementation of measures to promote and disseminate the Basic Procurement Policy and Sustainable Procurement Guidelines	10.2 15.3 17.17
				Compliance rate with the Sustainable Procurement Guidelines	SB, PS		100% compliance rate with the Sustainable Procurement Guidelines of major suppliers
				Progress of human rights DD process	SB, SBL, SUSA, SVL, PS, YSM, SGF (FBS, PK, SSI), SLN		Establishment and implementation of a scheme () that can confirm respect for human rights in the supply chain (Priority implementation from major raw materials and high-risk raw materials) ① Compilation of a list of the supply chain for each raw material ② Confirmation of daily activities through questionnaires, etc. ③ Investigation of the situation, etc. as necessary ④ Confirmation of corrective actions as necessary
					SB, PS	2025	Confirmation that human rights are respected when procuring major raw materials and high-risk raw materials
					SRE		Understanding the actual situation regarding respect for human rights in the value chain in the real estate business
Activation of Human Resources and Potentials	●	Active participation of diverse human resources	Promotion of Diversity & Inclusion (D&I)	Development status of systems and environments that match diverse values and new work styles	SH, SB, PS, SRE, SLN	2026	Work engagement ^() 54 or higher Index <deviation value> based on stress checks and employee awareness surveys	5.5 8.5
					SBL, SVL, PK		Promotion of engagement survey/analysis and associated D&I activities
				Progress status of promotion of women's empowerment	SH, SB, PS, SRE, SLN	2026	At least 12% female executives and at least 12% female managers
				Progress status of promotion of women's empowerment	SH, SB, PS, SRE, SLN	2030	At least 20% female executives and at least 20% female managers
			Investing in human capital for growth and productivity	Progress in fostering a challenging culture for future value creation	SH, SB, PS, SRE, SLN	2026	Integrated survey “Challenges for future value creation” ^() 3.0 or higher Sapporo Group's own survey index based on stress checks and employee awareness surveys <1.0 to 4.0 digitized>.
				Progress status of human resource development through active investment (management human resources/global core human resources/DX/IT core human resources)	SH, SB, PS, SRE, SLN	2026	Sufficient personnel to provide successor candidates for management positions 100 persons of global core human resources 200 persons of DX/IT core human resources
				Degree of improvement in productivity due to improved mental and physical health	SH, SB, PS, SRE, SLN	2026	Presenteeism loss rate ^() 33.4% or less An index based on stress checks and employee awareness surveys SH and the average of the four operating companies
Promotion of Responsible Drinking			Awareness-raising of responsible drinking	Progress in the labeling of pure alcohol content	SB	2025	100% display of pure alcohol content (g) per bottle on canned alcoholic beverages and lightly alcoholic beverage containers produced and sold domestically	3.5
				Percentage of employees participating in awareness-raising activities related to responsible drinking through e-learning, etc.	SB, SLN	2023	Education through e-learning, etc. for all domestic employees (more than once a year) 100% participation
				Number of incidents of accidental ingestion of alcohol at restaurants	SLN	2023	0 cases
				Display rate of messages to prevent drinking under the age of 20 on restaurant menus and at the POP	SLN	2023	100%
Provision of Safe Products and Facilities			Food safety	Operation and continuous improvement of the food safety assurance system Number of serious food accidents	SB, SBL, SUSA, SVL, PS, SGF (FBS, PK, SSI), SLN		Reflect the voices of customers and other stakeholders (including inside the company) in the food safety assurance system Reduction of the occurrence of serious food accidents	2.1
Provision of Safe Products and Facilities			Building safe facilities	Status of initiatives for promoting facility safety	SRE		Securing appropriate emergency power sources for properties Reliably secure seismic performance of properties Periodical review of contingency plans and execution of drills	11.3

Process for Identifying Material Issues

Step 1: List the issues

Comprehensive list of sustainability issues based on international frameworks such as GRI standards, SASB, and ESG rating assessment items
Extract items from the list of issues that are particularly relevant to the Sapporo Group's business type and format

Step 2: Prioritize issues

Based on the issues identified, score the "degree of impact of the business on society and the environment" and the "degree of impact of society and the environment on our finances" from the aspect of "risk and opportunity" for each business
Prioritization at Sapporo Holdings and major business companies based on relevance to vision and management strategy

Step 3: Advice from external experts

Dialogues with external experts from both the investor and multi-stakeholder perspectives were held to obtain objective advice on priority issues

External experts who participated in the dialogue

Mr. Minoru Matsubara, Executive Officer and General Manager of Responsible Investment Division, Resona Asset Management Co., Ltd.
Ms. Makiko Akabane, CSR Asia Japan Representative

In addition to the assessment that we have captured important issues in the Group's business, we have received the following perspectives.

Linkage between business strategy and sustainability material issues
- Implications of each issue for business development using natural capital
- Financial implications in terms of both risks and opportunities
The importance of clearly stating the Group's specific efforts to address each issue
- Value of raw materials, regional initiatives, etc.
- Disclosure of specific strategies for human capital

Step 4: Approval of priority issues

Approval of the final identified material issues by the Executive Committee and the Board of Directors

Sustainability Implementation Structure

Sapporo Holdings formulates an overall policy for implementing the Sapporo Group’s sustainability activities and has established a Group Sustainability Promotion Committee. This committee is chaired by the President and representative director of the Company, who is responsible for coordination and adjustment within the Group.
The Corporate Planning Department of Sapporo Holdings develops and implements various measures to promote sustainability activities in each Group company, holds monthly meetings for Sustainability personnel, and shares information and progress.

Group Sustainability Committee

Meetings are basically held twice a year
Main topics of discussion
- Monitoring of the performance against the sustainability material issues
- Review of strategies and policies for each issue
Discussions, resolutions, reports, etc. at the Management Committee and Board of Directors meetings according to the agenda

Management Philosophy and Fundamental Sustainability Policies
Sustainability Initiatives and Implementation Structure
Stakeholder Engagement
Basics of SAPPORO GROUP Sustainability