Sustainability

ShoEi Foods Group Basic Policy on Sustainability

1．Basic Policy

Based on our management philosophy of "contributing to society by creating a new food culture through the provision of safe and secure foods carefully selected from Japan and overseas," the ShoEi Foods Group will help to realize a sound and bright society by proposing and providing foods, creating health through the provision of nourishment, and creating smiles and happiness through the provision of nice tastes.

In the course of doing business, we must consider not only our own profits but also our environmental impact, and reduce this as much as possible. We believe that we must make our society a better place through our business operations, by contributing to the achievement of the SDGs' goals and the resolution of social issues that our stakeholders require.

In pursuit of our management philosophy and the realization of a sustainable society, our group is aiming to be a company that is trusted and needed by society, where individual employees think for themselves, have a sense of ethics, and act in compliance with laws and social norms.

2．Environmental measures

Compliance with environmental laws and regulations : We comply with laws, regulations and self-regulations relevant to the countries and regions in which we operate, and aim to comply with international standards and norms.
Provision of safe and secure products : We strive to provide safe and secure products that are friendly to the global environment.
Reduction of environmental pollutants :We strive to prevent pollution by properly managing environmentally hazardous chemicals and other environmental pollutants.
Reduction of environmental impact : We strive to improve the efficiency of our use of energy, raw materials, and water throughout our business operations and to reduce greenhouse gases (CO₂, CFCs, etc.), thereby reducing our environmental impact and curbing global warming.
Resource conservation and waste reduction : We will strive to implement carbon management, including the promotion of energy conservation and the visualization of energy use, and to reduce waste.
Protection of biodiversity :We strive to deepen our understanding of biodiversity, maintain and conserve biodiversity, and protect ecosystems.
Raising environmental awareness : We will raise the environmental awareness of all group employees through awareness programs and environmental education, including on nature and living things.
Contribution to local environmental improvement : We contribute to the creation of better local environments through communication with neighbors and local communities.

3．Social measures

For customers:
- We will work to prevent accidents by proposing and providing safe and secure foods and establishing an advisory service.
- Along with the pursuit of tastiness, we will work to contribute to achieving a healthy and long-lived society.
- By supplying products that meet customer needs at our plants in Japan and overseas, we aim to contribute to resolving such issues as reforming the way our customers work and reducing labor shortages and food waste.
- We will consider diversification of raw material supply areas at any time and strive for stable supply.

For suppliers:
- We will conduct fair and proper trading and build and maintain relationships that enable us to prosper together.
- We will work together on key CSR issues (human rights, labor practices, and environmental impact).

For shareholders:
- We strive to increase management transparency and to disclose company information in a fair, timely, and appropriate manner.
- Based on our mid- to long-term vision, we will strive for sustainable growth and increased corporate value.
- We will work to strengthen our governance and establish constructive dialogue.

For employees:
- We will strive to respect human rights, eradicate harassment and discrimination, and increase education and awareness of occupational health and safety.
- Based on the idea that employee health is the key to a sustainable company, we will promote work-life balance and mental and physical health management, striving to create a happy and comfortable working environment where every employee can fulfill their potential.
- We will try to nurture our employees’ abilities, creating a workplace that offers career development and job satisfaction through skills development training and other programs.
- We will strive to improve working conditions such as salaries and benefits as fair compensation for work.
- We respect our employees' freedom of association and the right to collective bargaining, and will communicate appropriately to resolve issues related to workplace and employment conditions.

For local communities:
- We consider our impact on the environment and are committed to reducing our environmental footprint.
- We will strive to coexist in mutual prosperity as a member of our local and international communities, and to contribute to the safe and sustainable development of local communities through our individual thoughts and actions.
- We will also promote dialogue with local communities and participation and collaboration in local events.

For NGOs and NPOs:
- We appreciate the significance of social activities that are not intended for profit, and will actively discuss and participate in such activities.

ShoEi Group Code of Conduct

This Code of Conduct is aimed at all officers and employees of ShoEi Foods Corporation and Group companies, and sets forth standards and guidelines for behavior that will ensure awareness of compliance and fulfilment of social responsibility, enabling everyone in the Group to devote themselves to their duties with pride. We hope that all officers and employees remain fully aware that a business cannot exist without the trust of society, and that they work diligently in accordance with this Code, based on a full understanding of its aims.

1. Respect for the founding spirit and founding principles

As the characters in our company name imply, the founding spirit of our group is "to prosper correctly," which can be said to be the starting point of compliance. Furthermore, we have a good corporate culture, which has been nurtured over many years since the company was founded. This includes ideas such as "stick to your core business", "take good care of things", and "do what you can do yourself". We will again reflect on the founding aspirations and principles of our predecessors and, while taking pride in the corporate culture we have inherited from them, pave a new way forward that we can also be proud of.

2. Legal compliance and social responsibility awareness

(1)We always uphold law and order with high ethical standards and act in a civil and responsible manner.
(2) We deal strictly with any illegal or antisocial behavior.
(3) We have a proper understanding of the content of applicable laws and regulations in our business operations and act responsibly in compliance with licensing procedures etc. and in line with social norms.

3. Provision of safe products

(1)We always give top priority to the safety of our customers and conduct quality control with great care and sensitivity from a company-wide perspective.
(2) We completely eliminate illegal and defective products and provide only trusted products to the market.
(3) We provide customers with correct information about products and other items to ensure satisfaction and peace of mind.

4. Social contribution and environmental protection

(1)Every officer and employee thinks and acts on their own initiative in order to make a positive contribution to society by always trying to coexist in mutual prosperity with local and international communities.
(2) We aim as a company to contribute to the harmony and coexistence of sound global environmental protection and social prosperity, by considering and reducing the environmental impact of our business operations and working to protect biodiversity.

5. Prohibition of unfair trading

(1)We do not engage in unfair or illegal trading that violates the principles of public policy or market competition.
(2) We do not engage in price-fixing, collusion, or other unfair relationships with counterparts with regard to conditions such as transaction prices and services.

6. Maintaining healthy relationships with stakeholders, trade partners, and trade partner executives, and preventing corruption

(1)We maintain healthy relationships in our business development with stakeholders, trade partners, and executives of trade partners, free from criticism by society.
(2) We strive to prevent corruption by, for example, not offering or accepting money, gifts, hospitality, or any other benefits that exceed socially accepted norms.

7. Organized crime measures

(1)We do not associate in any way, and for any reason, with organized criminals or other groups that affect the order and safety of society.
(2) We do not engage in, overlook, or have any vested interest in behavior that could encourage the activities of such groups.

8. Respect for human rights, prohibition of harassment, discrimination, and forced labor

(1)We are conscious of being a member of the international community and local communities, and act with a proper understanding of and respect for the laws, cultures and customs of the countries and regions concerned.
(2) We are committed to securing a positive, safe and comfortable working environment by respecting human rights, without any discrimination based on race, gender, age, nationality, religion, mental or physical disability or status, and by eliminating sexual harassment, power harassment, acts of violence, forced labor, child labor or any other infringements of human rights.
(3) We play our role in creating a prosperous and comfortable society while respecting the personality and values of individuals, respecting their privacy and not infringing upon it unjustly, and always keeping in mind harmony with all parties concerned.

9. Company’s interests, and distinction between business and personal matters

(1)We always act in the interests of the company and never act contrary to the interests of the company.
(2) We distinguish clearly between the company's position and the individual's position, and do not bring personal interests into the company or use the company's position or assets for personal use. In addition, we do not engage in profit-making activities for personal use.

10. Appropriate accounting reporting and processing

(1)The company’s assets are not used for any illegal purposes.
(2) Accounting processing and reporting must be in accordance with the actual situation, in line with internal rules, and based on proper standards generally accepted as fair and reasonable.
(3) There is no false processing that differs from the actual situation, or inappropriate processing that could be misleading, such as deliberately changing the time when processing was carried out.

11. Appropriate management and prevention of infringement of intellectual property rights

We respect the intellectual property of other companies and strive to create such a corporate culture, both in Japan and overseas.

12. Appropriate management and disclosure of information

(1)We continue to maintain a corporate structure that is reliable and trustworthy by appropriately managing and protecting the information obtained in the course of our business.
(2) We strive to prevent insider trading by disclosing corporate management information in a timely and appropriate manner.
(3) We do not spread rumors, etc.

13. Implementation of supply chain CSR procurement management

We do not base our purchases solely on product quality, price and supply capability but, wherever possible, take into account CSR aspects in the supply chain (e.g. human rights abuses, forced labor, child labor, legal wage payments, working hours, work environment, and the environmental impact of production sites and processing plants).

ShoEi Foods Group Materiality

We have established the following materiality issues that our stakeholders expect of us and that we must address in order to achieve sustainable growth.

Disclosure under the TCFD Framework

The ShoEi Foods Corporation group (The ShoEi Group) recognizes that climate change is an important issue that affects the sustainable growth of our business. We assess risks and opportunities that climate change poses to our business, and disclose governance, strategy, risk management, indicators and targets.

Governance

The ShoEi Group, which mainly handles processed agricultural products and processed dairy products, is exposed to droughts, floods, storms, and other abnormal weather and global warming caused by climate change, which will damage raw material production areas and create major risks in raw material procurement. In order to avoid this risk, the ShoEi Group has established a Sustainability Committee chaired by the President and CEO as a subordinate body of the Board of Directors to discuss risks and opportunities in climate change and consider countermeasures. In addition, an independent outside director participates in this committee as a member in order to receive an objective and rational evaluation from the outside. The results of the discussion in committees are reported to the Board of Directors at least twice a year. The Board of Directors makes decisions based on a comprehensive perspective, taking into account the impacts of climate change and the results of environmental assessments.

Strategy

The ShoEi Group imports and procures processed raw materials and commodities of agricultural and dairy products from around the world. Therefore, climate change is expected to have a wide range of effects, including drought and sunshine, massive outbreaks of pests, inactivity of insect vectors using honeybees and other insects essential for pollination work, supply instability due to bad harvests, poor quality, price hikes, changes in consumer preferences, and changes in suitable agricultural production areas. The entire group closely monitors these changes and considers diversification of suppliers, diversification of risk, market analysis of transition risk, and investigation of trends in emerging production areas, in order to ensure a stable supply of products to customers and to propose alternative products.
In addition, the Company will procure and develop products for emerging regions in response to the growing ethical consumption choices of consumers due to climate change and increasing health consciousness.

Risk management

The ShoEi Group promotes risk management by establishing a Risk Management Committee, a Sustainability Committee, etc., in order to appropriately respond to risks that have a serious impact on the company. Among them, "climate change" is also positioned as an important management risk, and the Sustainability Committee comprehensively evaluates the risk level and impact of physical risks, legal regulations, market transition risks, etc., and measures to respond to them. The results will be reported to the Board of Directors, which will supervise and appropriately reflect them in management to promote risk management.

Indicators and Targets

1．Reduction of CO₂ emissions

　　The ShoEi Group measures CO₂ emissions at all business sites in Japan and overseas (including branches and production plants), and set the 2030 target as follows.

　　30% reduction in CO₂ emissions (Scope 1.2 target from FY2022)

FY2022 ShoEi Group CO₂ emissions results （Apr. 2022～Mar. 2023）

	Scope 1（t）	Scope 2（t）	Total amount (t)
Domestic group companies including ShoEi Foods Corporation	22,038	16,859	38,897
Overseas group companies	1,111	5,751	6,862
Total amount	23,149	22,610	45,759

CO₂ emission reductions from renewable energy (solar power generation systems, etc)

1,489ｔ

■Scope 1 is the direct greenhouse gas emissions from in-house fuel use and industrial processes.　

■Scope 2 is the indirect greenhouse gas emissions resulting from the use of electricity, heat, and steam in the company supplied by other companies.

■For Scope 3, we are currently working to collect and maintain data on CO₂ emissions, and we will encourage our major suppliers to reduce CO₂ emissions and work together with them to reduce CO₂ emissions.

The ShoEi Group is working to reduce CO₂ emissions from a long-term perspective at its domestic and overseas bases of operation.

Grasping CO₂ emissions at domestic and overseas activity sites.
Switching to high-efficiency (energy-saving) equipment when renewing machinery and equipment.
Review production methods and increase efficiency of energy consumption by improving production efficiency. (improvement of emission intensity).
Switching energy use from heavy oil to gas with lower CO₂ emissions while taking efficiency into consideration [energy conversion].
Reduction of CO₂ emissions through the introduction of solar power generation (renewable energy) systems (already installed at ShoEi U.S.A.).
Reduction of CO₂ emissions through procurement (purchase) of green electricity.
Maintain functionality of air conditioning and mechanical equipment through periodic maintenance and cleaning.
Promote the use of LED lighting at all business locations.
Promoting energy conservation with motion sensors and illumination sensors.
Promote air conditioning control in offices (28°C in summer and 20°C in winter).
Forest protection through the promotion of paperless.
Reduction of CO₂ emissions by modal shift from truck transportation to rail container transportation for domestic delivery.
Reduction of CO₂ emissions by omitting domestic transportation by unloading ocean freight at consumption points.
Labor savings in electricity use through management of inventory items (temperature-controlled, refrigerated, and frozen) by optimizing inventory and improving turnover ratio, etc.

Overview of Scenario Analysis Based on TCFD Recommendations

In identifying medium- and long-term business risks and opportunities due to climate change, we analyzed and summarized the impact of greenhouse gas emission control and procurement and production of main commodities (agricultural and dairy products) under two scenarios: the 4°C scenario, in which the global average temperature rises 4°C, as announced by the IPCC (Intergovernmental Panel on Climate Change), IEA (International Energy Agency), and the 2°C scenario, in which the global average temperature is kept below 2°C as agreed in the Paris Agreement.

①Scenario Analysis: Risk （Common scenario 2°c and 4°c assumed）　

＊Worldview Of The 4°C Scenario

Regulations to limit temperature rise will be less stringent than in the 2°C scenario (Transition Risk)

Negative impacts on the environment and human activities become more pronounced with rising temperatures. (Physical Risk)

Transition Risks

Major Category	Small Category	Impact On Business	Importance	Response Measures
Policy / Regulation	Carbon tax, carbon credit, etc. Introduction of carbon pricing	Increase in production costs due to higher fuel costs and electricity charges Increase in logistics costs	Significient	Efforts to reduce CO2 emissions throughout the supply chain, including energy conversion and switching to energy-saving equipment Improving logistics efficiency and modal shift（Switching from trucking to rail container transportation）
Policy / Regulation	Strengthening GHG emission regulations	Operational costs increased in relation to the formulation and execution of reduction targets Increase in investment costs for energy-saving equipment	Medium	Initiatives to improve energy efficiency Promotion of the use of private power generation and conversion to renewable energy
Evaluation	Changes in consumer behavior	Decreased sales due to deterioration of reputation to companies when it is judged that efforts to sustainability management are insufficient Adverse effects on talent acquisition and employee retention due to deterioration of corporate reputation	Significient	Initiatives for environmentally friendly use of raw materials and materials (organic, recycled materials, etc) Promoting initiatives for food loss and 3R Actively promote human capital management
Evaluation	Change in reputation among investors, financial institutions, shareholders, and business partners	Increased funding costs and the risk of being excluded from the transaction	Significient	Promoting transparency in management such as information disclosure Steady Initiatives for Sustainability Management

Physical Risks

Major Category	Small Category	Impact On Business	Importance	Response Measures
Chronic	Transition of major agricultural production areas due to rising temperatures	The existing purchasing network may be insufficient for raw material procurement	Significient	Diversify and decentralize raw material suppliers Building a healthy and sustainable supply chain
	Increased damage caused by pests and diseases due to rising temperatures, and a decrease in biodiversity caused by pollinating difficulties due to the decrease in insects	Increased costs and procurement difficulties due to lower raw material quality and lower yields	Significient	Diversify and decentralize raw material suppliers Research and development of alternative products to existing products
	Increased water resource stress	Produce difficulties or increase of procurement costs due to lack of agricultural products due to drought or drought in the cultivation area, production plant, and supply chain	Significient	Strive to diversify and decentralize raw material suppliers Deepen your understanding of water resource finiteness and water cycle mechanisms Make the most effective use of water resources
Acute	Intensification and increase in frequency of weather disasters (typhoon and storm surge)	Shutdown of operations due to damage to factory facilities, equipment and infrastructure	Significient	Reduce the damage by formulating BCPs (Business Continuity Plans) at each production plant and distribution point and confirming their effectiveness

Opportunity

Category	Impact On Business	Importance	Response Measures
Opportunities for Changing Consumer Behavior	Expanded purchasing behavior for products that take environmental impact into account (ethical consumption)	Significient	Promotion of development of differentiated products with high sustainability value (such as building environmentally friendly manufacturing processes)
	Increasing frequency of infectious diseases and epidemics due to global warming and increasing interest in health due to epidemics	Significient	Expansion of the line-up of health-conscious products Development of healthy materials/proposals
	Shrinking the conventional market and appearance of new market due to changes in food preferences caused by global warming	Medium	Promote new product design and development efforts through appropriate market research

PDF Data：　The ShoEi Foods Corporation Disclosure under the TCFD Framework

Various Data

Society

※The data below don't include group companies.

Item（Society）		Unit	Oct 31,2023
Number of regular employees	Men	people	253	61.9%
	Women	people	156	38.1%
	Total	people	409	100.0%
Number of part-time and fixed-term employees	Men	people	7	36.8%
	Women	people	12	63.2%
	Total	people	19	100.0%
Number of foreign employees		people	9
Ratio of female employees in management positions(percentage of women in deputy manager positions or higher)		％	11.8
Ratio of female chief clerks(Percentage of women in chief clerk position)		％	41.1
Average number of consecutive years served　※Regular employees only	Men	year/month	13.2
	Women	year/month	13.0
	Total	year/month	13.1
Average age of employees ※Regular employees only	Men	age(YY.MM)	40.1
	Women	age(YY.MM)	38.3
	Total	age(YY.MM)	39.4
Compostion of age ※Regular employees only	under 30	％	22.5
	30 to under 39 years old	％	30.8
	40 to under 49 years old	％	24.5
	50 to under 59 years old	％	18.8
	Over 60 years old	％	3.4
Number of new employees in 2023	Men	people	6	60.0%
	Women	people	4	40.0%
	Total	people	10	100.0%
Ratio of mid-career recruits		％	56.5
※Ratio of mid-career recruits during the current fiscal year(November to October)
Employee voluntary turnover rate ※Regular employees only	Men	％	1.96
	Women	％	0.49
	Total	％	2.44
	Voluntary turnover rate of New Graduate Recruits within 3 years	％	0.00

Number of people who wish to be re-employed after retirement (at the age of 60)		people	6
Ratio of employees re-employed after retirement		％	100.0
Ratio of employees with disabilities		％	1.87
Annual education and training expenditure		Yen	6,842,067
※It's the amount spent on external training institutions. In addition, we strive to develop the next generation by conducting factory training within the group,product study sessions inside the company, compliance training, OJT within departments, etc.
Annual total working hours (per person)		hours	1,724.3
Average overtime hours (per person)		hours/monthly	7.3
Average days of paid		days	18.1
Average paid Leave days		days	12.1
Average rate of available annual paid leave taken		％	66.6
Mental health care	Stress check paraticipation rate	％	87.6
	Ratio of high-stress persons	％	7.3
Number of employees taking long-term leave due to mental health issues		people	0
Percentage of employees receiving health checkups		％	80.1
Number of employees who took family care leave		people	0
Acquisition rate of childcare leave	Men	％	30.7
	Women	％	100.0
Average days of childcare leave taken by male employees		days	28.8
Number of employees who taking childcare leave	Men	people	4
	Women	people	9
Ratio of employees who return to work after taking childcare leave	Men	％	100.0
	Women	％	100.0
Number of employees using systems reducing working hours for childcare	Men	people	0
	Women	people	4
Average annual salary of employees　※Regular employees only		Yen	6,400,289
Wage gap between male and female employees (ratio of women's wages to men's wages)	Regular employee	％	68.2
	Non-regular employee	％	49.7
	Part-time employees only	％	115.3
	All employees	％	66.6
※Non-regular employees(part/fixed-term contact employees) are part-time employees, field sales employees, and contract employees who are re-employed.
Number of work-related fatalities (Nov.2022 to Oct.2023)		number	8
Systems related to work formats
Flextime work system			None
Staggered working hours system			None
Telecommuting system			None

Governance

※The data below don't include group companies.

Item（Governance）			Unit	Oct 31,2023
Number of directors	Number of Internal Directors	Men	people	8	100.0%
		Women	people	0	0.0%
		Total	people	8	100.0%
	Number of Independent Outside Directors	Men	people	2	66.7%
		Women	people	1	33.3%
		Total	people	3	100.0%
		Ratio of Independent Outside Directors on the Board	%	27.3%
	Total	Men	people	10	90.9%
		Women	people	1	9.1%
		Total	people	11	100.0%
Auditor	Number of Internal Directors	Men	people	1	100.0%
		Women	people	0	0.0%
		Total	people	1	100.0%
	Number of Independent Outside Directors	Men	people	3	100.0%
		Women	people	0	0.0%
		Total	people	3	100.0%
	Total	Men	people	4	100.0%
		Women	people	0	0.0%
		Total	people	4	100.0%
Ratio of female board member			％	6.67%
Number of board meetings ※			回	13
Number of audit committee meetings			回	14
Existence of whistle blowing system				有
System regarding confidentiality and protection for whistleblower and those who cooperated in investigations				有

※In principle, the Board Meetings are held at least once a month, but in August it is held in writing.

Data related to safety and security

※Until the end of Nov.2023

Third-party certification acquisition
	Production Affiliated company	Location	Certification
Domestic	Shoei Delicy Corporation Chikusei Plant	Chikusei-shi, Ibaraki，Japan	ISO22000
			FSSC22000
	Kyo Marron Co., Ltd. Mitsukaido Plant	Joso-shi, Ibaraki，Japan	ISO22000
			FSSC22000
	Kyo Marron Co., Ltd. Amakusa Plant	Amakusa-shi, Kumamoto，Japan	ISO22000
			FSSC22000
	Kyo Marron Co., Ltd. Bando Plant	Bando-shi, Ibaraki，Japan	ISO22000
			FSSC22000
	Robinia Corporation	Sakaki-machi, Hanishina-gun, Nagano，Japan	ISO22000
			FSSC22000
	Tsukuba Dairy Products Co., Ltd. Ishioka Plant	Ishioka-shi, Ibaraki，Japan	ISO9001
	Tsukuba Dairy Products Co., Ltd. Tamari Plant (dairy plant)	Omitama-shi, Ibaraki，Japan	ISO9001
			ISO22000
			FSSC22000　　※1
			RSPO
	Tsukuba Dairy Products Co., Ltd. Tamari Plant (nuts plant)	Omitama-shi, Ibaraki，Japan	ISO9001
			ISO22000
			FSSC22000
Oversea	ShoEi Foods Qingdao Co., Ltd.	Qingdao, Shandong, China	BRC
			KOSHER
			HALAL
	Yanji ShoEi Foods Co., Ltd.	Yanji, Jilin, China	ISO22000
			BRC
			KOSHER　　　※2
	SHOEI FOODS(U.S.A),INC.	California, USA	BRC　　　　　※3
			KOSHER　　　※4
			HALAL　　　　※5
※1 Certified for all lines except feed
※2 Pine nuts (including sterilized products), pumpkin seeds (including sterilized products), sunflower seeds, walnuts, macadamia, almonds, and processed products made from almonds.
※3 Applicable lines: fumigation, cleaning, sorting, packaging, and outsourced process: pasteurization.
※4 Target product: Walnut
※5 Applicable products：California walnuts with and without shells
Quality assurance department under direct control of the president			Yes
Customer consultation room			Yes

PDF Data：　Society　　Governance　　Data related to safety and security