Water Risk Survey

Asahi Group products are made from a diverse range of agricultural products, including both those produced in Japan and those imported from other countries. We therefore believe that it is essential to have an accurate understanding of and control the social, economic and environmental impacts of the supply chain, instead of simply ensuring the safety and peace of mind of consumers.

Water Risk Survey at Production Sites

The Asahi Group's assessments of water risks at its production sites make use of WRI Aqueduct (world maps and data provided by the World Resources Institute (WRI) that show water risks) to geographically identify areas with high-level water risks, such as drought risks, for each production site.

The Group defines areas for which the overall water risk is displayed in WRI Aqueduct as “extremely high risk” as “areas at high overall risk from drought and other water risks.” As a result of assessments conducted based on this definition it was found that, as of 2019, among all of the production sites for which the Asahi Group manages environmental data, one production plant in Indonesia qualifies under the definition.

Since 2019 we have begun collecting data, including water usage data, for that plant, and are considering countermeasures against those risks. We also found that, based on an assessment of water stress risks (the degree of stress between water supply and demand) alone, two of our production plants in Italy also qualify as being at extremely high risk. We have also ascertained survey results for past water risk (vulnerability) surveys in Europe, and begun considering possible countermeasures against such risks.

At production sites in Japan, no sites were found to meet the definition of being at high risk from water risks under the above assessment criteria. However, we have now started conducting our own more detailed water risk (vulnerability) surveys, which include not only water stress risks but also flood risks relating to climate change, at Asahi Group production plants and in their surrounding drainage basins. We plan to conduct these surveys at two plants in Japan during 2020, and to conduct further surveys of plants at production locations in Oceania and other regions in the future.

Going forward, we will continue to regularly survey our production sites and raw material suppliers using tools such as WRI Aqueduct to verify the presence of water risks. If any of our production sites are found to have a high level water risk, we will take appropriate measures in accordance with specific details of the risk and social circumstances in the area.

Water Risk Survey in Procurement of Raw Materials

As shown below, the Asahi Group conducted a survey aimed at analyzing water risk in the process for making raw materials and evaluating its economic effects on the Group's business.

Outline of survey

Raw materials analyzed:

Key raw materials that are used in large amounts in the manufacture of Asahi Group products, and that are difficult to substitute and procured from overseas

Procurement locations:

59 regions worldwide

Analysis conducted:

Water footprint of raw materials*

Natural capital costs (external expenses)

Analysis schedule:

September 2014 - May 2015

Analysis methods:

Water scarcity investigation in supplier regions
Water footprint investigation for raw materials in each region
Assessment of natural capital costs
Comparison with market prices

*The water footprint is the amount of water used both directly and indirectly throughout the full manufacturing lifecycle for foods and other products

This survey used the concept of “natural capital” to quantify water risks in key raw material production processes of the Asahi Group as economic values. The results of this quantification were shown as “natural capital costs,” demonstrating possible future costs in various scenarios such as raw material price rises. This makes it possible to understand the extent of the environmental impact (environmental risks and opportunities), which had previously been impossible to quantify. Furthermore, the use of resources with minimized risks can increase business model sustainability.

While factors such as climate change are expected to reduce the amount of usable environmental resources in the future, the Asahi Group has established a management strategy based on its evaluation of “natural capital” with the aim of continuing to maintain competitiveness in world markets subject to intense resources restriction.

Survey results

The results of this survey clarified which of the raw material suppliers from the 59 regions worldwide need to be prioritized to counter risks. As this survey was completely based on secondary data, we were also able to reconfirm the need for local surveys of supplier agricultural practices and the social conditions surrounding suppliers.

Supplier Water Risk Survey

Outline of survey

As a result of the above water risk survey, it was found to be necessary to conduct onsite confirmations. Since 2017, we have interviewed our suppliers regarding the state of water risks when conducting supplier quality audits.

Topic Questions
Risk of water shortage
  • In terms of percentage, how have your water bills changed in the last five years?
  • Does the water shortage pose an issue for the procurement of raw materials?
    If so, what action have you taken?
  • Does the water shortage pose an issue for the operation of your plant?
    If so, what action have you taken?

Survey results

Quality inspections were conducted at a total of 114 plants from 2017 to 2019, and the following responses were obtained.

  • Changes in water bills: Increased at 25 plants, have not changes at 25 plants, and decreased at 11 plants. Fifty-three plants did not respond.
    (Some of the plants which did not respond left explanatory comments saying, “No water is used in production processes” or “Well water is used”)
  • Issues with the procurement of raw materials, resultant from water shortage: 113 plants experienced no issues, one plant experienced issues.
    (The one plant that experienced issues had suffered crop failure for its agricultural produce as a result of the occurrence of severe drought in the past. Since then, it has prepared for such occurrences by securing multiple water sources on the producer side. At the same time, our procurement division scattered its supplier production locations as a way of responding to this risk.)
  • Issues in plant operation, resultant from water shortage: None of the 114 plants experienced issues.

Response Going Forward

If any water risk is clearly shown to exist, we will take appropriate measures in accordance with specifics of the risk and social circumstances.

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