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.

As such, the Asahi Group carries out the following survey to analyze water risk in the production processes of raw materials and assess the economic impact on Group businesses.

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.

Response Going Forward

Items related to water were incorporated into the Supplier Quality Audit in 2017. This allows us to monitor on an ongoing basis the potential impact of restricted availability of water on factory operations as well as procurement of raw production materials.

None of the 24 businesses surveyed in 2017 reported negative impacts due to restricted availability of water. More surveys will be conducted in 2018.
In addition to providing an ongoing picture of water risks, the expanded Supplier Quality Audit helps to raise awareness of water risks among procurement teams in the Asahi Group and encourages the development of collaborative and constructive solutions together with suppliers. If water risks are identified in the future, we plan to implement appropriate measures in accordance with the nature of the risks and social conditions.

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