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 evaluation of water risk at Asahi Group production sites involves the use of WRI Aqueduct, the world map and data provided by the World Resources Institute (WRI) that shows water risk and geographically identifies areas with greater water stress for each site.

The Asahi Group defines the areas with the indication of "extremely high risk" in the WRI Aqueduct as having greater water stress. This definition led to the conclusion that as of 2018 none of the Asahi Group production sites are located in an area with greater water stress.

The domestic production sites of the Asahi Group do not meet the definition of extremely high risk area in the water risk definition, above. However, considering various water risks in the future, the Asahi Group is promoting the activities to protect sustainable water resources by implementing forest preservation activities in the water source areas.

We will annually survey the water risk using materials such as the WRI Aqueduct for our production sites and raw material providers. If any of our production sites are found to have high water risk, we will take appropriate measures in accordance with specifics of the risk and social circumstances.

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.

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.

Supplier Water Risk Survey

Outline of survey

Our suppliers were interviewed about water risk as we visited and conducted a quality inspection.

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

Seventy-eight plants underwent quality inspections from 2017 to 2018 and responded as follows.

  • Water bills: increased at 16 plants, have not changed at 17 plants and decreased at 9 plants. Thirty-six plants did not respond.
  • Issues for the procurement of raw materials, resultant from water shortage: None of the 78 plants have experienced any issues.
  • Issues in the operation of a plant, resultant from water shortage: None of the 78 plants have experienced any issues.

Response Going Forward

Adding topics related to water risk leads to understanding about changes in the situation and increases the Asahi Group's awareness about water risk. Through this effort, we will continue trying to solve issues related to water resources.
If any water risk is clearly shown to exist, we will take appropriate measures in accordance with specifics of the risk and social circumstances.

Related Information