First, please tell us about the basic approach and policy of J-Oil Mills with regard to sustainability.

All of our business activities at J-Oil Mills are based on fat, carbohydrates, and protein, which are all derived from plants and essential to human life. We believe it is important to focus on our initiatives aimed at reducing our impact on the global environment and creating a sustainable, recyclingoriented society, and have established a Sustainability Committee to promote sustainability throughout the company. To bring our vision of “Joy for Life® -Bringing Joy to the Future by Food” to fruition, we will explore what we, as a group of food experts, can do to help create an abundant and sustainable society and lifestyle.

The Sustainability Committee has three subcommittees for discussing social issues across the company: the Sustainable Procurement and Environment Subcommittee, the Human Rights Subcommittee, and the Sustainable Product Development Subcommittee. In addition, matters discussed and examined by the subcommittees are reported in the Management Committee. Furthermore, we ensure that the Board of Directors is involved by having the Sustainability Committee report to the Board of Directors on a quarterly basis.

From FY2022, we revised our executive remuneration system to incorporate ESG indicators into the individual performance targets of our executives. We plan to promote ESG management by introducing incentives that tie executive remuneration to ESG indicators, for example, by setting climate change countermeasures such as reducing CO2 emissions as one of the ESG indicators and raising awareness among executives of the need to address climate change.

As an outside director, how do you evaluate the company’s sustainability initiatives?

Over the past two to three years, as part of our efforts to strengthen corporate governance, we enhanced the structure of the Board of Directors by making five of the eight directors outside directors, of which three are independent outside directors. The Nominating Committee and the Remuneration Committee are also set up as advisory committees, and hold meetings on a monthly basis. I consider the presence of a highly effective advisory committee to be a major step forward. At the same time, companies must continue to evolve, so I think it is necessary to review the system each year, but the fact that a new system has been created and is being steadily operated is praiseworthy.
In addition, the company established a new corporate philosophy in April 2021. At the time, we created and published the Joy for Life® Map, which illustrates our corporate philosophy and vision. The Joy for Life® Map shows how J-Oil Mills plans to address the SDGs through its business activities under the guiding words of “good taste,” “health,” and “low burden,” by fulfilling its corporate philosophy and resolving its Materiality issues of reducing environmental burden, maintaining food resources, and contributing to health through food, as well as its business continuity foundation, which will serve as a foundation for the Materiality.

With regard to our corporate philosophy, we created opportunities for discussion with all employees as part of our dissemination activities in FY2021, and we are continuously monitoring the progress of dissemination through pulse surveys. Despite the challenging business performance, we are beginning to see our corporate philosophy put into practice. For example, when looking at “venture with sincerity,” discussions on packaging material development became more active in production-related departments, and pulse survey scores rose.

Also, when talking about the Joy for Life® Map, for example, we were able to reduce CO2 emissions and the amount of plastic used compared to previous containers for our environmentally friendly and easy to use Smart Green Pack® edible oil, which adds to the existing value of good taste that we have been providing. After customers are done using the product, they can fold it down compactly for disposal, which helps reduce the volume of waste. We believe that we are making progress in our sustainability efforts, as we are seeing positive results in developing products that help solve social issues.

We have been working to reduce CO2 emissions and energy consumption as part of our responsibility as a food company, and I believe that the progress we have made in reducing the environmental impact of our products Tatsuya Sato Representative Director, President and CEO Hiroko Koide Outside Director (Independent Director) Eizo Matsumoto Director, Managing Executive Officer, in charge of Production and Technology is an achievement in itself. In addition to Smart Green Pack®, we also offer our long-lasting Cho Toku® oil and starch products that extend the time that food remains delicious, and I believe we are truly contributing to the achievement of the SDGs by encouraging our customers to choose and use our products, which in turn reduces our environmental impact.

What challenges do you see going forward with regard to the sustainability initiatives at J-Oil Mills?

Among our sustainability initiatives, I believe that we still have much work to do in Diversity, Equity and Inclusion (DE&I).

 I feel that awareness toward DE&I within the company is growing and a system is being established. On the other hand, the scope of our initiatives is very broad and includes everything from attracting and developing human resources to career development, work style reforms, and evaluation systems, and I agree with Mr. Sato that there is still much work to be done in terms of DE&I. For diversity in particular, we need to consider not only gender, but also nationality, age, and experience outside of our company. In recent years, we have seen an increase in the number of mid-career hires with outside experience. Mid-career hiring should be a part of our comprehensive DE&I initiative, but we have not been able to incorporate this into our human resources strategy yet.

 I worked in the US until March 2021, and over 40% of the senior management positions in the corporate group I worked for in the US were held by women. This was a result of equal opportunities being given and the most talented people with the best results being placed in the appropriate positions, rather than women being hired with KPIs in mind. I believe this is really what we should be aiming for. It is very important that opportunities are given equally and evaluated fairly. Equal opportunity and fair evaluation must be ensured without discrimination based on age, nationality, race, or religion, as well as gender. I understand from my own experience that DE&I initiatives, although very sensitive in some aspects, are initiatives that can enhance corporate value and ensure superiority. Accordingly, I would like to work on this as quickly and as efficiently as possible.

We established a KPI target of having 30% of managerial positions held by women by 2030, but this figure is currently only 6%. While it is important to set ambitious targets, I believe we also need to set KPI targets every year, monitor them closely to see how far we have progressed each year, and if progress is lacking, then figure out what the contributing factors are and what actions we can take to rectify the situation.

As a food company, I believe it is essential for us to address product development and marketing, quality control, and safety and security from a woman’s perspective. However, even if we look at just the percentage of female managers, which Ms. Koide pointed out as an issue, we cannot say that our initiatives to date have been enough to achieve our targets. There are many cases where female factory managers are taking a leadership role in production activities, and this is already the norm in other companies, especially in foreign companies. On the other hand, at our company, although we are continuing to work on the Cassiopeia W Project and conducting training for all employees and by job level, a survey of all employees showed that only about 20% of all female employees want to be in management positions, which shows that we have not been able to resolve issues such as by providing work-life balance and addressing the lack of experience needed for leadership roles. In addition, we have had comments saying that “many male employees are still in management positions, and it is difficult to imagine women playing an active role in management.” Going forward, I believe we need to further expand opportunities for women to play an active role and work to develop human resources that enable them to pursue a variety of career paths.

We need to step up our efforts as a company to provide more opportunities for women to play an active role. It would be ideal if the percentage of female managers rises producing results and in turn boosts our corporate value as a result of these initiatives. Looking at our workforce composition, at this point in time, there are many women in the corporate division and very few in the production and sales divisions. For example, we need to quickly figure out how we can create opportunities for more female employees in production, while at the same time exploring what we can do to entice female employees to want to work there. In conversations with employees, I sometimes hear comments such as, “There are more and more female employees active in departments that previously had few women, such as the sales department and the production floor, and this has given us a clearer picture of how women can play an active role.” I want to empower our female employees by creating opportunities.

Human resources are an essential capital that forms the foundation of everything we do. It goes without saying that, from the perspective of business strategy, we need to acquire the talent we need and improve the skills of our employees to achieve our targets. However, I think it is also important for us to take the approach of nurturing employees who share our unique corporate culture and values, to “work together to achieve high targets and exceed expectations,” so that we can move ahead together to achieve our vision. Another point I would like to emphasize is appointing young people. I believe there is still a strong seniority-based culture not only in our company but also in Japanese society, and this needs to change. Of course, I am not talking about appointing young people just because they are young, but because diversity in age is important. I believe we should be bold and appoint young and talented people to appropriate positions, and provide a path for them to become next-generation leaders responsible for the future management of our company by giving them tough assignments.

Regarding human resources, in addition to the low percentage of female managers, I believe another issue is the high average age of our managerial personnel. In addition to expanding the number of female managers, it is important to lower the average age of our supervisory personnel. In the medium-term business plan currently under review, we are in the process of preparing a message to our employees with respect to human resource development to convey that we plan to develop the next generation of leaders, with high hopes not only for women but also for younger employees. In addition, as a concrete measure, we are working on two main initiatives from FY2021 to FY2022 to further accelerate our efforts to promote talented employees with potential. The first initiative is to revise our managerial promotion process. Our current process involves a one- to twoyear pre-management period prior to promoting an employee, but we will change the process so that employees who are deemed to be well-qualified can be promoted without going through that period. In addition, we started working on succession planning to develop the next generation of leaders. Although we do not expect to see the benefits until FY2023 or later, we plan to take things even further to continue enhancing our human resource development efforts.

What sustainability-related initiatives has J-Oil Mills pursued recently?

Human rights are one of the major themes in sustainability. The company’s human rights initiatives include the diversity and inclusion, work style reforms, and awareness reforms that we were talking about earlier with regard to employees. However, human rights go beyond what happens within a company. This is something that ties into the supply chain and should be tracked globally. In the case of oil, we need to ensure that human rights are truly protected all the way down to the overseas farms where the raw materials come from. I think the fact that J-Oil Mills is beginning to address this issue is a very important step forward. The company has announced its basic policy of respecting human rights to suppliers as well. However, I think efforts to go beyond the suppliers and ensure that human rights are respected in overseas farms fall under upcoming initiatives.

That is correct. Procurement serves as a critical juncture in respecting human rights. For example, in palm oil procurement, we are a member of the Roundtable on Sustainable Palm Oil (RSPO) and have established a “Palm Oil Procurement Policy” so that we can track whether there is any forced labor, including child labor, and whether fair wages are being paid. There are still many issues we need to address, but we are sharing them with our business partners and steadily advancing our initiatives to ensure that human rights are respected throughout the entire supply chain.

In palm oil procurement, we have achieved 100% traceability for mills and refineries, and our purchase volume and ratio of RSPO-certified oil is increasing. On the other hand, with regard to soybeans, some source countries and suppliers have not yet taken much action, and there are limits to how far we can go on our own in investigating the human rights practices of our suppliers, and whether we can procure materials that are free of human rights issues. However, to overcome the challenges one by one and fulfill our social responsibility as a company, we formulated our Soybean Procurement Policy in August of this year and joined the Roundtable on Responsible Soy (RTRS). I believe it is important to start where we can and take these initiatives one step at a time even if it is challenging. The more we continue, the closer we will get to our goal, so I hope we can continue our activities appropriately and contribute to building the future of our society.

Rather than simply thinking about returning profits to society, I think it is important to think about how we can create value and boost our competitiveness through sustainability initiatives by solving social issues and contributing to the future of our society. It makes no sense if sustainability itself becomes the objective and we end up talking about whether or not we achieve our KPI targets. As a company involved in food, I believe there is still much that J-Oil Mills can do to help solve social issues such as bringing joy to people, promoting health, and protecting the environment. I would like to continue to further deepen discussions regarding the company’s sustainability activities from the perspective of exploring ways to enhance corporate value and strengthen competitiveness.

Figuring out how to create value and build our competitiveness by taking the appropriate steps and even thinking about ways to solve social issues and help shape the future of our society is a never ending journey. If we let loose, we will come to a stop, and I would like all of us to keep working toward even greater heights.