Sustainability Framework and Materiality
CCBJH Group's materiality
As part of Coca-Cola System in Japan's Sustainability Framework, we are committed to pursuing activities that address social issues through creating shared value (CSV). To further advance our efforts and fulfill our mission, we have identified our material issues for 2023.
Process for Identifying Material Issues
Recognizing the current status
Further adaptation is required to changes in the social environment while promoting the Sustainability Framework
In 2019, the Coca-Cola System in Japan established its Sustainability Framework, which outlines three platforms - Inclusion, Communities, and Resources - and nine key issues to be addressed. Despite our ongoing efforts to promote activities based on this framework, it has been four years since its formulation and the macro environment continues to evolve. These include changes to the global economy, geopolitical risks, a declining birthrate and aging population, and climate change. Additionally, the recent COVID-19 pandemic, rising raw material and energy prices, and the weak yen have had a major impact on consumer behavior and business. This has led to sustained uncertainty and challenges in the business environment, making forecasting increasingly difficult.
To fulfill our mission of delivering happy moments to everyone while creating value, we have established a group-wide, cross-divisional project team to identify our material issues in response to these changes.
Identifying material issues
Gaining New Perspectives: Identifying material issues through analysis, surveys, and evaluation
In identifying material issues, we first revisited the agreed Coca-Cola System Sustainability Framework for Japan. We then conducted a social axis evaluation based on ESG reports, NGO reports, industry reports, media analyses, etc. This evaluation was used to identify topics of social attention and importance, from which a list was made of items to be added as material issues.
The listed items were surveyed for their degree of importance. Based on the results of this survey, they were grouped and organized, social axis evaluation was conducted, and we drafted a proposal of what our material issues should be. The project team conducted an internal evaluation by analyzing documents such as the Annual Review and the CSV Report. This evaluation checked the materiality proposal for comprehensiveness and appropriateness, and the team then discussed the proposed definition of material issues. Based on these discussions, we have identified and defined 13 material issues unique to our Group, covering three categories of “environmental,” “social,” and “governance.”
The importance of the 13 material issues was scored by interviewing ESG-related investors, NGOs, local governments, and our management team, including the CEO, as well as by conducting employee surveys. This information was used to plot a materiality map of importance levels.
- ● Confirming and organizing existing issues being addressed by the Coca-Cola System in Japan
- ● Identifying topics of social and industry attention and importance
- ● Listing of items to be added as material issues
- ● Conducting importance surveys on existing and additional issues
- ● Grouping issues and reorganizing the issue list based on issue granularity
- ● Conducting social axis evaluation in accordance with issue granularity, drafting a proposal for material issues
- ● Organizing and preparing a proposal for material issues and their proposed definitions through internal evaluations, including analysis of our data
- ● Discussing issue granularity and definition within the project team
- ● Selecting 13 key material issues across three categories: Environmental, Social and Governance
- ● Conducting interviews with stakeholders
- ● Conducting interviews with management including the CEO and employee surveys
- ● Scoring importance for the preparation of the proposed map of material issues
Organizing material issues
Mapping material issues based on importance to stakeholders and the CCBJH Group
In mapping our material issues, for the social axis we scored importance for stakeholders based on factors such as interviews with outside experts and analysis of various reports. For the business axis, we scored importance for the CCBJH Group based on interviews with management and employee surveys. The resulting scores were plotted along the axis of importance for stakeholders and for the CCBJH Group to create a map of material issues. We then classified the material issues in the upper right of the map as Key Themes in Sustainable Value Provision, those in the upper left as Key Themes in Sustainable Society, and those in the lower right as Key Themes in Sustainable Organizational Management.
Relationship between the Sustainability Framework and our own material issues
Our own material issues are based on the key issues identified in the Sustainability Framework and the 19 key issues selected during the framework’s formulation process, to which topics to be added as material issues were also incorporated. These were evaluated and material issues were identified, then classified in connection to three platforms: Inclusion, Communities, and Resources. This enables us to ensure consistency between our sustainability activities and the key issues of the Coca-Cola System in Japan, as well as our own material issue areas—Key Themes in Sustainable Value Provision and Key Themes in Sustainable Society.
Furthermore, the Key Themes in Sustainable Organizational Management, common to all three platforms, have been established as the foundation for our organization’s management.
| Key Themes in Sustainable Value Provision | |
|---|---|
| Packaging and Recycling (Circular Economy) |
To achieve the Coca-Cola Company’s 2030 Global Vision World Without Waste, we will work on activities such as light-weighting, horizontal recycling, and waste reduction through the three pillars of design, collection, and partnerships. By doing so, we contribute to the promotion of recycling of plastic and other materials in Japan. |
| Mitigation of and Adaptation to Climate Change | To mitigate and adapt to climate change, we aim to reduce our environmental impact through initiatives throughout the value chain, including the reduction of our greenhouse gas emissions. |
| Employee Development & Wellbeing | We believe that employees are important assets in conducting sustainable business. Therefore, in our human resource development system, we work to create a workplace environment that maximizes and develops the potential of each employee. We focus on our employee’s safety and their physical and mental well-being by measures such as enhancing their work-life balance. |
| Key Themes in Sustainable Society | |
|---|---|
| Water Stewardship | As a company whose main product ingredient is water, we strive to reduce, reuse, and properly treat water used in manufacturing. We also work with local communities to conserve water resources in a sustainable manner to pass on abundant water resources to future generations. |
| Sustainable Conservation of Biological Resources | We conserve biodiversity and achieve sustainable business by recognizing and reducing the impact on the natural environment and ecosystems whilst making business decisions. |
| Healthy Products/Services | We contribute to consumer wellness by providing high value-added products and services that contribute to the maintenance and promotion of health and nutrition. |
| Diversity, Equity and Inclusion | We foster a culture that respects human rights, diversity, and fairness, and create an environment where each individual can maximize their abilities regardless of gender, age, disability, race, nationality, sexual orientation, gender identity or expression, or other attributes throughout the value chain. |
| Contribution to Local Community Development | Based on collaboration and communication with local communities and other stakeholders, we engage in activities aimed at developing sustainable local communities and solving social issues. Through our business, we contribute to the revitalization of local economies. |
| Key Themes in Sustainable Organizational Management | |
|---|---|
| Product Quality and Safety | In order to provide safe, high-quality, fresh, and refreshing products and services to our consumers, we implement strict quality systems and processes in all business processes, from raw material procurement, manufacturing, distribution and transportation, to sales and service. In this way, we guarantee and improve the safety and quality of our products. |
| Resilience to Natural Disasters | We strive to build a system and structure that is safe and robust enough to minimize the impact on our business in the event of any injury to employees and damage to facilities for manufacturing, logistics, sales operations, and business sites caused by large-scale natural disasters such as earthquakes and typhoons. |
| Corporate Governance | We strive to build and maintain a strong corporate governance structure to improve management soundness and maximize corporate and shareholder value. In accordance with the intent of the Corporate Governance Code, we strive to improve the skill sets of our directors and all employees, pursue an optimal organizational design for our company, and further strengthen our governance. |
| Sustainable Supply Chain | We build a sustainable supply chain through the stable procurement of materials and raw materials, addressing human rights and environmental issues in the supply chain, conducting appropriate transactions and responsible procurement. |
| Responsible Commercial Practices | We build our relationships with our consumers by ensuring responsible marketing of our full beverage portfolio, including alcohol, ensuring compliance with all commercial activities in line with laws and regulations. We provide our stakeholders with access to useful and sufficient information on the health and nutrition of our products through easy-to-understand communications. |
Coca-Cola System Sustainability Framework
In 2019, The Coca-Cola system in Japan jointly conducted a large-scale study to identify sustainability issues and set priorities based on materiality for The Coca-Cola system in Japan.
The intent was to formulate a strategy reflecting issues unique to Japan, in addition to global sustainability targets being pursued worldwide, and to include these in a common action plan for the combined Coca-Cola system in Japan.
We have examined the impact of the three platforms against the Sustainable Development Goals (SDGs) and are progressing towards them. Going forward, The Coca-Cola system in Japan will develop and implement concrete action plans based on the identified priority issues. We will continue to report regularly on the progress and results of activities by the Coca-Cola system in Japan and seek to engage in activities aligned with the times, referring to the advice of NPOS, outside specialized organizations, experts and other third parties.
Coca-Cola System Sustainability Activities—Purpose and Strategy
- Purpose of Coca-Cola System Sustainability Activities
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- We are committed to creating a shared future and a sustainable business that can make a difference when addressing important challenges facing Japan, including the environment, people's lives, and our communities.
Process of Establishing the Sustainability Framework
Issue identification (1)Identified social issues in Japan based on third-party studies
We selected 189 issues by identifying and categorizing social issues from SDG-related reports and guidelines, outside consultant reports (including outside stakeholder interviews), ISO 26000, government agency reports, and benchmark surveys by outside consultants.
Issue identification (2)Narrowed down the list from 189 to 33 issues
We then narrowed down the list of issues from 189 to 33 based on common shared categories, such as renewable energy and an aging society.
Issue identification (3)Plotted a materiality matrix of 33 issues and specified 15 priority issues
Conducted interviews within The Coca-Cola system in Japan and adjusted priority issues
We then added 4 priority issues identified within the Coca-Cola system through interviews and workshops with management and junior employees of Coca-Cola Japan and Coca-Cola Bottlers Japan, which increased the number of priority issues to 19.
Workshop held in 2019
Specified 3 platforms and 9 priority issues
Through workshop-style discussions on the 19 priority issues with the management of Coca-Cola Japan and Coca-Cola Bottlers Japan, agreement was reached on specification of 3 platforms not expected to change over the next 10 years—Inclusion , Communities and Resources —and 9 priority issues (material issues) requiring immediate attention.