As a company that enjoys the gifts of nature in its business operations, the Asahi Group has launched initiatives to visualize impacts with the aim of quantitatively understanding the business impacts of sustainability measures and the social impacts of our business activities. Through these efforts, the Group aims to identify important indicators for management and utilize them to prioritize initiatives, make investment decisions, and manage the progress of initiatives. The Group believes that this will contribute to the realization of sustainable business growth and the creation of positive social impact.
|Initiative||Theme||Analytical Methods Used for Verification|
|Initiatives verified in 2022||Create and verify a Value Relevance Map||
||Value relevance analysis||A method for developing a hypothetical map of value chain paths from various initiatives to enhancement of corporate value and verifying correlations between all adjacent instances of value by using simple regression analysis|
|Overview analysis: “The Yanagi Model”||A method using the Yanagi Model* to verify direct relationships between multiple metrics and corporate value (PBR) through multiple regression analysis|
|Initiatives for the future
|Visualize business impacts of initiatives from a financial perspective||-||Development stage||-|
|Visualize social impacts||Responsible drinking||Impactweighted accounts||A method of financially quantifying a company's impacts on society, including its employees, customers, and the environment|
Yanagi Model: Ryohei Yanagi, CFO Policy (Dai 3 han): Zaimu hizaimu senryaku ni yoru kachi sozo (CFO Policy (3rd Edition): Financial and Non-financial Strategies for Value Creation), Chuokeizai-Sha, 2023
Initiatives verified in 2022
We created and verified a value relevance map to assess our overall value chain paths to identify the business and social impact of our sustainability initiatives as well as to ascertain how they lead to the enhancement of corporate value. We carried out these analysis for four key initiatives of our sustainability strategy are: “Environment” (Respond to Climate Change and sustainable packaging); “Communities” (realizing sustainable communities through the creation of people-to-people connections); “Responsible drinking” (reduction of inappropriate drinking and solving alcohol-related issues by creating new drinking opportunities); and “Enhancement of human capital,” which is the strategic foundation of our Medium-to-Long-term Management Policy.
Create and verify a Value Relevance Map
When creating the Value Relevance Map, we established financial and nonfinancial metrics to measure the value created and set about collecting the data needed for analysis. We adopted the value relevance analysis method to verify the correlation between all adjacent instances of value using simple regression analysis. We also carried out a multiple regression analysis (overview analysis) of the direct relationship between multiple indicators that measure various initiatives and corporate value (PBR). Lastly, we confirmed whether or not the results of both these analyses were reliable from a qualitative perspective.
Through these verification efforts, we were able to demonstrate that the direct effects of our various measures lead to improved engagement—which is a type of indirect non-financial value—and enhancement of corporate brand value, via dialogue with multi-stakeholders. This, in turn, leads to enhancement of financial value and corporate value. In addition, we were able to confirm that communication with multi-stakeholders, customer satisfaction, and employee engagement are important connections in value chain paths which lead to enhancement of corporate value. On the other hand, there were cases where connections between instances of value could not be demonstrated due to a lack of data for analysis, selection of metrics with low suitability, and other reasons. From these cases, we derived many hints that led us to reconsider and improve our hypothesis in the future. Through the creation and verification of this Value Relevance Map, we were able to build a foundation for the visualization of impacts and to see the paths toward its actualization. We will further develop this Value Relevance Map as the foundation of our initiatives and link it to the visualization of our business and social impacts.
Initiatives for the Future (Trial Phase)
With regard to creation and verification of value relevance map that are still in the trial phase, we examined areas of these initiatives that need to be reinforced and considered their future aims based on the results of the analyses carried out in 2022.
Visualize business impacts of initiatives from a financial perspective
In 2022, we attempted to calculate how much corporate value enhancement would be impacted in total if we made a 1% improvement in the performance of certain initiatives within the value chain paths, which was verified in the value relevance map. For example, we performed a trial calculation on how much a 1% reduction in CO2 emissions through a certain measure would contribute to sales revenue through value chain paths. Although we obtained results from this trial calculation, they were not convincing enough due to the fact that they failed to incorporate the impact of certain factors not represented in the value relevance map. In the future, we intend to resolve the issues raised by this research and visualize business impacts in financial terms in order to help determine measure priorities and make investment decisions.
Visualize social impacts
As a company that uses the gifts of nature in its business operations, the Asahi Group believes that it needs to manage the potential impacts of our business on the environment and society as a whole. We believe that we can only seriously address issues and formulate appropriate strategies and effective measures after quantitatively grasping the extent to which our business activities and sustainability initiatives have a positive or negative impact on corporate value or on society. In 2022, we began working on quantitative visualization of social impacts, which we believe will enable us to reduce negative impacts and increase positive impacts.
Overview of the initiatives
We are using impact-weighted accounting methods to visualize social impacts. Under this method, we assess our social impact based on the three aspects of the environment, products, and our employees and convert the positive and negative impact we have on these three aspects into a monetary value. In the first year, we began this initiative based on the theme of “Responsible drinking,” which is one of our material issues, with Japan as target region. In 2022, the World Health Organization (WHO) General Assembly adopted the Global Alcohol Action Plan with the goal of reducing harmful alcohol use by 20% by 2030. In order to strengthen our efforts toward this goal, we believe it is necessary to grasp the social costs of inappropriate drinking, such as heavy episodic drinking, and the effectiveness of measures to eliminate inappropriate drinking.
Overview of the initiatives
Our efforts to visualize social impacts are still in their initial stages, but progress is being made. We hope to use these efforts to motivate Asahi Group employees to work on sustainability measures, and to inform people outside the company that we are moving forward in trial-and-error fashion with these efforts in order to get more stakeholders involved and resolve social issues through co-creation. In the future, we aim to improve the accuracy of the data and logic, expand the scope of coverage, and use these initiatives as metrics for evaluating measures and making investment decisions. The Asahi Group is embracing the challenge of being a pioneer in these initiatives.