SSIM_947-5

Asahi
TOC

Japan Overview Asahi & Japan’s Optimum Initiative #1: Gender Equality
Initiative #2: Responsible Consumption &
Asahi’s Roots Value Chain
Production
Initiative #3: Reduce Energy Consumption &
Asahi’s Circle of Use Competition
Carbon Emission
Japan SDGs SDG Action Areas
Japan
Japan is one of the more populous countries in the world with a population of over 126M. It also
has the 3rd largest economy in the world.

Japan is known for its technology, art & culture, and cleanliness and organization, as it’s one of
the cleanest and well-organized cities and public spaces.

Some of Japan’s main industries are auto, technology, and manufacturing.It has one of the
world’s largest soft drink markets. At the end of 2021, it had an estimated value of $47.5 billion
dollars.
Asahi’s Roots
1
In 1892, it began producing one of the
best selling beers in Japan, Asahi draft. In
1982, the Asahi subsidiary Asahi Soft
Drinks was born.
2 Asahi now has the third largest market
share in the Japanese soft drinks market,
after Coca Cola and Suntory.
3
Asahi now owns and distributes a number
of both local and foreign brands such as
Schweppes.
4 The Asahi line of beverages uses a wide
variety of packaging from PET bottles, to
aluminum cans, to paper packaging, in
order to accommodate a diverse line of
beverages ranging from bottled tea to hot
soups in a can.
Asahi’s Circle of Life
Production & Packaging
Asahi produces millions of bottles &
cans of beers, tea, and various other
drinks daily in a variety of aluminum,
PET bottles, or paper packaging. All of
these are recyclable including the PET
bottles are made from 100% recycled
plastic.
Wholesales
The wholesalers then warehouse most
of the goods and prepare them for last
mile delivery. Japan already has some
of the most sustainable last-mile
delivery practices and is pioneering the
use of delivery robots.
Recycling
Businesses take reducing, reusing, and
recycling very seriously. Smaller ones will
use recycling bins scattered throughout
Japanese cities, while large ones will take
their recycling to a centralized point for
collection. Japanese cities are known for
not having trash cans because everyone is
expected to recycle!
Re-use
According to the Japanese Soft Drink
Association, > 85% of PET bottles in
Japan are re-used, compared to 56% in
the EU. This is an important
sustainability move considering 76% of
all soft drinks in Japan use PET bottles.

Distributors Consumers Landfill

Asahi works through an incredibly large
network of distributors to serve the
archipelago nation from Hokkaido in
the north to Okinawa in the South.
Currently most of these are
transported by truck, potentially adding
millions of tons of CO2 and other
emissions into the atmosphere
Consumers include restaurants
supermarkets, bars, , convenience
stores, and vending machines.
Businesses go through thousands of
pounds of packaging material each day.
Due to efficient use of recycling and
waste incineration, Japan only sends
approximately 1% of its municipal
waste to landfills.

Japan & SGDs
Health & Well-being
SDG 3
Strong community around health
and a strong healthcare system,
universal health coverage, and a
focus on preventative care. It also
has one of the highest life
expectancies in the world
Japan has an SGD Index Rank of 19 out of the 163 countries ranked. Overall it is
making progress towards achieving SDGs, it is doing well across the following:
Quality Education Sustainable Cities and
Communities
SDG 4 SDG 11
Highly educated population and a Invested in public transportation
strong education system, with a and renewable energy and fosters
focus on STEM subjects and a culture around preserving the
teacher training. environment.
Yet, there are still many still many areas of improvement in
Japan for SDGs Promoting sustainable
Gender Equality Climate Action consumption & production

SDG 5 SDG 13 SDG 12

Compared to other developed
countries it is far behind for
women’s participation in the
workforce and political
representation
Japan still invests in coal-fired
plants inhibiting it’s abilities to
decrease its carbon footprint,
and while it has targets, many
say they aren’t as aggressive
as they should be.
While Japan introduced a
carbon pricing system in 2021
to reduce emissions, it is still
reliant on imported resources
and has a high level of
resource consumption per
 1.1 1.2 2.3 3.3
3.4 3.8 3.9 4.3 5.5 Japan
6.4 7.2 8.5 9.4
11.3 11.6 12.2 13.1
13.2 14.2 15.1 17.6
Asahi & Japan’s 2.3 3.9
6.4 7.2 8.5 2.3 6.4 7.2
Optimum 9.4 11.6 8.5 9.4
12.2 13.2 2.3 12.2
17.6 6.4 7.2 13.2
8.5 9.4 17.6
12.2 2.3 6.4
2.3 13.2 7.2 8.5
6.4 7.2 17.6 9.4 12.2
8.5 9.4 2.3 6.4 7.2 13.2 17.6
11.6 12.2 8.5 9.4
13.2 12.2
17.6 13.2 Asahi’s SDG
Asahi 17.6 Dependencies
 Prioritization Matrix
Government priority Beverages Industry Government priorities hinder the Beverages Industry priorities hinder
supporting SDG achievement supporting SDG implementation of these SDGs the implementation of these SDGs
achievement

Raw Material Procurement 2.3, 13.2, 15.1, 5.5, 6.4, 6.5, 6.6, 6.a, 2.3 6.3, 2.3, 5.6,7.2 7.2, 13.2, 5.6
6.b

Business Brewing and manufacturing 6.4, 7.2, 9.4, 8.5, 5.5 , 9.1 6.4, 9.4

as Usual Packaging 8.5, 12.2, 5.5

Distribution 11.6, 13.2 , 5. 5, 17.6 13.1

Marketing and sales 17.6 , 5.5 17.6

Consumption 12.2, 2.1 9.3

Raw Material Procurement 13.1, 13.2, 13.3 2.4, 2.5, 15.7 , 17.1 2.3, 6.4, 15.1

High Brewing and Manufacturing 9.4 9.4 6.4, 8.5

Growth Packaging

Scenario Distribution 17.9 11.6

17.9

Marketing and Sales

Consumption 2.3, 14.1 2.1

 Asahi’s Value Chain Description
Value Chain SDGs Aligned Competency Dependency

Raw Material 2, 8, 9, 10, 15, 14 Asahi's capability to align raw materials procurement
with the UN SDGs is shown in sustainable agriculture,
Asahi relies on partners to operate, thus ensuring sustainable practices
throughout its value chain via responsible sourcing programs.
Procurement fair labor, innovative production, diversity, and
environmental impact reduction, supporting its
sustainability mission

Brewing and 6, 7, 9, 12, 13 Asahi is capable of prioritizing sustainable practices in

its brewing and manufacturing operations, including
Asahi is dependent on newer production and cost effective innovations in
machinery to produce at an economy of scale. Asahi is dependent on
Manufacturing responsible water management, renewable energy,
circular economy principles, and greenhouse gas
more sources of renewable electricity and water supply.

emissions reduction

Packaging and 7, 8, 12, 13, 17 Asahi is capable of prioritizing sustainability in its

packaging operations, using recycled content and
Asahi is dependent on wide adoption of biodegradable plastics, cost
effective alternatives which commercially viable to use for the company.
Distribution bioplastics, and designing packaging with end-of-life
considerations. Optimise its distribution routes and
Asahi relies on its logistics partners for cooperation and increase usage of
green energy transportation.
partnering with other partners, and reducing its
container weights.

Sales and Consumption 3,5, 8, 9, 12 Asahi is capable of aligning its sales and consumptions
by creating inclusive campaigns, prioritizing sustainable
Asahi relies on effective government policies for responsible drinking
regulations and also collective effort from partner companies to adopt
practices, investing in R&D, and focusing more non- these measures. Asahi is dependent on government policies to promote
alcoholic drinks and responsible marketing campaign diversity in workplace and effective labour laws.
for alcohol consumption
Asahi & the Competition - How is everyone doing on sustainability initiatives?

Top three soft drinks

producers in Japan

2022 target to achieve a ​Goal of having 24% of bottles Currents status: As of 2021,
Current Sustainability Targets sustainable material utilization s made with recyclable or 11% of its bottles have been
rate of 50% for PET bottles plant based materials converted to sustainable
(not yet met) materials

Aims to switch to renewable

Switch to use of recyclable Goal of having all bottles use energy for the purchased
2025 Sustainability Targets materials in all packaging and at least 50% sustainable electricity at all of its
PET bottles materials. production sites to renewable
energy.

Zero fossil fuels used for a

2030 Sustainability Targets goal of 100% recycled PET Goal of 100% plant-10 or 100% sustainable materials in
recycled materials all of its packaging
bottles
Initiative Specific Areas that need improvement in Japan

SDG Asahi action area Government action area Non-profit or multilateral action
area

SDG 5- Gender Equality 5.6 - Gender wage gap 5.5 - seats held by women in 5.1 End all forms of discrimination
parliament against all women and girls
5.c. everywhere

SDG 7 - Affordable and Clean 7.2 7.2 - Increase the share of renewable 7.2
Energy energy mix in total energy supply

SDG 12 - Responsible 12.4 12.7 12.8 - ensure that people have the
Consumption and Production 12.7 Promote sustainable awareness for sustainable
procurement development

SDG 13 - Climate Action
13.2 13.2 Integrate climate change
measures into national policies,
strategies and planning
13.3
13.3 - Improve education,
awareness-raising and human and
institutional capacity on climate
change mitigation, adaptation,
impact reduction and early warning

Note: This slide only contains that represent SDG areas that represent significant challenges or major challenges and is not meant to be exhaustive
Initiative 1 | Gender Equality

Problem: Japan is not a gender equality focused nation, and Asahi also has much room for
Related SDGs improvement.

Solution: Develop more gender equality goals that lead to direct changes across the
organization that increase the margins of the company.

Background: 8% of women are CEOs in Japan, while the United States has 11%. While they are
not far behind the united states (who is yellow across SDGs), the 3% spread would need drastic
changes to create impact. There is significant progress needed. Asahi is working towards
Gender Equality and has established “shine AS YOU ARE” as one of their Core Messages and
established a DE&I Statement. They are aiming to tackle gender imbalance and are aiming to
increase the target from 22% of women in managerial positions to 40% (+) in 2030 by
enhancing training. Japan also has one of the lowest rates of women in the force participation
across developed countries due to a lack of support for working mothers. Changes need to be
made to promote staying in the workforce. Additionally, many work force harassment and
sexual assault cases fo unreported due to the culture stigma and retaliation.
Initiative 1 | Gender Equality

ACT ASSUMPTIONS $COST SAVINGS

Increase training programs for → increased company retention, leading to 15% saving on 1.2M
women onboarding training and hiring (decrease in hiring externally)

Set management targets at each → women will stay in the workforce long enough to be 2M
tier promoted (women offer a unique perspective at
→ women will be equally assessed for promotion each management tier)

Support for working mothers & → financial ability to subsidize child care 1.8M
flexible work arrangements → working hybrid is the same in productivity (due to retention and not rehiring)

Create Sexual harassment and Employees will not only take the training but participate and Unclear, but likely >.5M due to drop out
assault training programs internalize it. Individuals will feel empowered to report of work
incidences and create safe spaces

OUTCOME
#1 Increased productivity and innovation
#2 Improved employee retention and morale (attractive employer)
#3 Enhanced Reputation and Brand image (responsible and progressive)
#4 Access to a larger talent pool (companies can attract and retain talent from a wider pool of candidates)
 Initiative 2 | Responsible Consumption & Production

Problem: Asahi continues to be a leader in sustainability, however more can still be done in
Related SDGs terms of 1) procurement, 2) plastic reduction, and 3) reduction of imports of products that
produce significant nitrogen emissions during the production prices. While Japan leads in
plastics recycling, and unacceptable amount still gets shipped overseas where it ends up in the
landfills of developing nations.

Solution: Launch a number of initiatives that would aim to procure supplies in an even more
sustainable manner and reduce the number of PET bottles generating unnecessary plastic
waste that Japan ends up exporting to other developing nations. For example, Asahi could
launch the Asahi20 campaign that would give people a 20 yen discount for using reusable
bottles at soda machines around the country.

Country Target: This initiative targets SDG #12, one of the SDGs that Japan has made the least
progress on. One of the primary reasons for this is the country’s reliance on plastic waste
exports to other nations. As the 3rd largest drinks provider in the country, this initiative would
aim to cut that significantly.

Source: https://www.breakfreefromplastic.org/2022/09/23/japans-plastic-waste-exports-and-how-to-slow-them-down/
Initiative 2 | Responsible Consumption & Production

ACT ASSUMPTIONS $COST SAVINGS

Prioritize net zero providers of Assumes that these already exist in Japan and According to UNEP's 2018-2019 Frontiers Report,
bottling solutions and source Asahi can find even more sustainable suppliers nitrogen costs the global economy between US$340 B
local products when possible. than they currently have. Assumes that products and US$3.4 T annually.
are available locally.

Encourage the use of reusable
bottles at soda machines in
convenience stores and fast food
chains. Possibly offer a discount
through the Asahi20 campaign.
Assumes that the convenience store chains in
Japan are willing to adopt the technology that
would allow for these refills. Assumes that the
Japanese public is willing to bring their own
reusable bottles or cups.
Cost of producing one bottle:2 yen
Asahi’s market share: 32%
Assuming every 2nd person in Japan buys a drink daily:
62 million bottles/day
Approx. 40M yen/day saved.

Educate the public about Assumes people care about being educated on this In 2021, the export value of the approx 60,000 tons of
reducing and recycling plastic topic and in helping their country improve on its plastic waste from Japan amounted to over 31.97
waste SDG indicators. billion Japanese yen. Assuming you could halve that
amount of waste, it would save 16 billion yen a year.

OUTCOME
#1 By turning to more sustainable and more local suppliers, the nitrogen emissions embodied in imports will be significantly reduced, in
turn generating tons of positive externalities for the environment.
#2 Reduces use of plastic bottles and has the potential to create huge savings for the company
#3 Helps the public understand how much of Japan’s plastic waste is outsourced to other countries and steps they can take to reduce it
Initiative 3 | Reduce Energy Consumption and Carbon Emission

Problem : Japan's inadequate progress in achieving SDG 7 and 13, particularly reducing CO2
Related SDGs emissions by 2030, presents a significant sustainability challenge for Asahi that requires urgent action.

Solution : Accelerate the reduction in Scope 1 and 2 emissions by faster adoption of renewable
energy and reduce its Scope 3 emissions by optimizing procurement, manufacturing and distribution.

Background : Asahi Group’s total carbon emissions was about 7733 kilo tonnes of CO2 equivalents
which includes Scope 1, 2 and 3 emissions. This is a 22.2% year-on-year increase in the carbon
emissions on an annual basis. Scope 3 emissions accounted for a total of 6933 kilo tonnes of CO2
emissions, about 89.6% of the total emissions.

Asahi Japan’s contribution accounts for more than 50% of the Scope 1 and Scope 2 emissions, for a
total of 402 kilo tonnes of CO2 in 2021.

Solution:
Initiative 3 | Reduce Energy Consumption and Carbon Emission
ACT ASSUMPTIONS *Only Scope 1 and 2 emissions to be carbon taxed and not scope $COST SAVINGS
3. OVERALL
*COGS growth at 4% CAGR (as per 2016-2021) for next 10
OUTCOME
Reduce Scope 1 and 2 emissions by rapidly → Current Carbonyears
tax rate in Japan is ¥ 289/metric tonne Cost savings on carbon
switching over to renewable energy for ($2.95), assume it to grow to ¥2312 ~$10 in 10 years. tax of about ¥169M by
production → CO2 emissions to grow by 5% Y-oY, with growing 2025 and ¥1.4B in 2032. #1 Decrease in total
operations. 489 KTonnes by 2025 and 688 by 2032 equivalent carbon
→ 30% CO2 reduction by 2025, and 90% by 2032
emissions by Asahi
Group - 2595 Kilo
Communicating to its suppliers on using → Current COGS for 2021 at ¥ 1383 B and 40% Cost savings on raw Tonnes in 2025 and
green energy sources for crop yields and attributable to raw materials. materials sourcing by 20%
environment friendly containers. → Raw material cost to be ¥647B in 2025 and ¥819B in in 2025 which is ¥129 B 6000 Kilo tonnes in
2032. and by 40% in 2032 to 2032
→ 20% reduction in costs by 2025 and 40% by 2032 ¥328B.
#2 Scope 1 and 2
Reducing the weight of the containers to → Upstream cost accounting to about 20% of COGS. Cost savings on upstream emissions to
reduce upstream transportation. → ¥324 B in 2025 and ¥409 B in 2032 transportation ¥32B in decrease by 90% in
→ 10% reduction in costs in 2025 and 30% in 2032 2025 and ¥123B in 2032.
2032, reducing .5%
of Japan’s direct CO2
Using energy saving equipments for its → Electricity to account for 15% of COGS. Cost savings ¥167B by equivalent
production like LED lights, energy efficient → ¥243 B in 2025 and ¥307 in 2032 2025 and ¥276B in 2032. emissions.
vending machines, waste water treatment → 70% reduction in overall usage by 2025 and 90% in 2032
and usage of green energy sources for
electricity. #3 Total cost savings
of ¥ 517B (32%) in
Optimizing downstream distribution routes → Downstream cost accounting to about 15% of COGS. Cost savings ¥24B in 2025 and ¥ 1024B
and using joint distribution by partnering → ¥243 B in 2025 and ¥307B in 2032 2025 and ¥92B in 2032 in 2032 (50%)
with similar firms.Using e-trucks and energy → 10% reduction in costs in 2025 and 30% in 2032
efficient shipping.
Economic and Societal Impact of Sustainable Energy Measures
Thank you.