3_Morinaga Milk Sustainability Data Book 2021

[ Contents ]

Approach to Disclosure of Information on Sustainability

Human Rights

Editorial Policy

About Us

Corporate Mission

Measures for and Effects of COVID-19

Sustainability at Morinaga Milk

Seven Priority Issues

Health and Nutrition

Environment

Human Rights

Basic Approach System

Stakeholder Engagement KPIs

Disseminating the Human Rights Policy

Suppliers

Employment Survey for Non- Japanese Employees

Diversity & Inclusion Workstyle Reform

Fair and Equitable Employment Management-Labor Dialogue

Promotion of Occupational Health and Safety in Production

Departments

Supply Chains

Nurturing the Next Generation

Human Resource Development

Corporate Governance

Policies, Philosophy and Principles

Third Party Assurance

The United Nations Global Compact Index

GRI Content Index

Our business activities will be guided by consideration for human rights and respect for diversity. We will create environments in which all people can realize their full potential.

Morinaga Milk respects the United Nations Guiding Principles on Business and Human Rights and works to respect human rights throughout the supply chain. As part of this stance, preparation is underway for human rights due diligence.* To realize the mission of "Ever Brighter Smiles," emphasis will be placed on environmental improvements in all processes, from procurement of raw materials to production and sales.

As a first step, in 2017 Morinaga Milk participated in the Stakeholder Engagement Program which was organized by Caux Round Table Japan and which identifies human rights issues in the supply chain. Morinaga Milk also signed the United Nations Global Compact in April 2018 and participated in another Caux Round Table Japan-sponsored Stakeholder Engagement Program, with overseas experts offering comments on the proposed human rights policy. From these, the Morinaga Milk Group Human Rights Policy was formulated in November 2018 and is disseminated both internally and to external stakeholders such as business partners. In 2019, we conducted CSR procurement questionnaires. We also respect diversity and maintain an environment and systems within the company with that in mind.

Morinaga Milk will continue to carry out business activities with the aim of respecting human rights throughout the supply chain.

• Human rights due diligence
  This is the process by which companies can recognize, prevent, and deal with adverse impacts on human rights. Actions include formulating a human rights policy, assessing the impact of business activities on human rights, and tracking and disclosing performance with regard to human rights.

REPORT ▶Please see the "Human Rights Policy" section (p. 95) for details.

Morinaga Milk Sustainability Committee meetings, which are chaired by the president, are held twice a year for monitoring and reporting on the progress of KPIs. In addition, Morinaga Milk implements PDCA cycles, with the general managers of the relevant divisions responsible for "Priority Issue: Human Rights" and the general managers of the relevant departments responsible for promoting KPIs.

The Morinaga Milk Group also believes that human rights should be addressed in all divisions and departments. A system to address human rights issues on a company-wide basis is currently being developed.

Stakeholder Engagement

As part of human rights due diligence initiatives, Morinaga Milk has participated in the Stakeholder Engagement Program sponsored by Caux Round Table Japan since 2017 and continued this effort in FY 2020. Morinaga Milk will continue to focus on human rights issues in the supply chain.

[ Contents ]

Approach to Disclosure of Information on Sustainability

Editorial Policy About Us Corporate Mission

Measures for and Effects of COVID-19 Sustainability at Morinaga Milk Seven Priority Issues

Health and Nutrition Environment

Human Rights

Basic Approach System

Stakeholder Engagement KPIs

Disseminating the Human Rights Policy

Suppliers

Employment Survey for Non- Japanese Employees

Diversity & Inclusion Workstyle Reform

KPIs

Fair and Equitable Employment

Management-Labor Dialogue

Promotion of Occupational

Health and Safety in Production

Departments

Supply Chains

Nurturing the Next Generation

Human Resource Development

Corporate Governance

Policies, Philosophy and Principles

Third Party Assurance

The United Nations Global Compact Index

GRI Content Index

Disseminating the Human Rights Policy

Human Rights Policy Training

The Morinaga Milk Group began compliance training in 2019 in order to educate employees about the Group's human rights policy, which was created in November 2018. In normal years, compliance officers visit business sites and Group companies for this training.

However, in 2020 this training was held online via e-learning to prevent the spread of COVID-19, with 7,801 Morinaga Milk employees and Group company employees participating.

REPORT ▶Please see the "Compliance Training" section (p. 90) for details.

Compliance Consultation System: Morinaga Milk Helpline (Whistleblower Reporting System)

The Morinaga Milk Group regards harassment as a human rights issue and works toward solutions through Morinaga Milk Helpline, a consultation system for compliance-related matters.

In order for a diversity of people to play an active role in the company, we have also set up an LGBTQ Help Line for employees to consult, etc. about matters such as gender identity, sexual orientation, continuing to work at Morinaga Milk following gender reassignment, or coming out.

REPORT ▶Please see the "Compliance" section (p. 90) for details.

[ Contents ]

Approach to Disclosure of Information on Sustainability

Editorial Policy About Us Corporate Mission

Measures for and Effects of COVID-19 Sustainability at Morinaga Milk Seven Priority Issues

Health and Nutrition Environment

Human Rights

Basic Approach System

Stakeholder Engagement KPIs

Disseminating the Human Rights Policy

Suppliers

Employment Survey for Non- Japanese Employees

Diversity & Inclusion Workstyle Reform

Fair and Equitable Employment Management-Labor Dialogue

Promotion of Occupational Health and Safety in Production

Departments

Supply Chains

Nurturing the Next Generation

Human Resource Development

Corporate Governance

Policies, Philosophy and Principles

Third Party Assurance

The United Nations Global Compact Index

GRI Content Index

Suppliers

Morinaga Milk is dealing with suppliers and other business partners to respect human rights throughout the supply chain.

For raw materials, Morinaga Milk is advancing the purchase of RSPO-certified palm oil and Rainforest Alliance Certified coffee beans and tea leaves.

Morinaga Milk also regularly conducts CSR procurement questionnaires with suppliers to promote sustainable procurement, shares the company Procurement Policy with them, and conducts human rights surveys.

REPORT ▶Please see the "Supply Chains" section (p. 63) for details.

CSR Procurement Questionnaires (2019)

Morinaga Milk Group periodically conducts CSR procurement questionnaires, etc. on the labor environment at raw material manufacturing sites and processing plants. (The next questionnaire is scheduled for 2022.) For the 2019 questionnaire, Morinaga Milk held an advance briefing session for major suppliers about the CSR procurement questionnaires. In this

briefing session, social issues such as society and the environment are discussed along with the purpose and significance of the survey based on Morinaga Milk Group's human rights, procurement, and quality policies.

The questionnaire uses the CSR Sustainable Procurement Self-Assessment Tool Set created by Global Compact Network Japan and asks questions in some 47 categories such as human rights, corporate governance, labor, environment, fair corporate activities, quality/safety, information security, supply chain, and coexistence with the community, with 180 companies (a 100% response rate) submitting. Feedback will be given to business partners to improve and strengthen future efforts in the supply chain.

Topics

Field Visit to an Aloe Plantation and Processing Plant

Morinaga Milk Industry Co., Ltd. uses aloe in products such as Morinaga Aloe Yogurt. We import aloe from Thailand, and we conducted onsite inspections of three aloe farms and aloe processing plants at two companies in 2019.

Aloe manufacturing companies have contracts with many aloe farms, which employ several to dozens of migrant workers from neighboring Cambodia on a live-in basis.

The status of quality control for the produced aloe was checked. The observers also asked about environmental considerations at the plantation and processing plants, the working environment and the status of human rights protection for workers . No particular problematic conditions were identified during this visit.

[ Contents ]

Approach to Disclosure of Information on Sustainability

Editorial Policy About Us Corporate Mission

Measures for and Effects of COVID-19 Sustainability at Morinaga Milk Seven Priority Issues

Health and Nutrition Environment

Human Rights

Basic Approach System

Stakeholder Engagement KPIs

Disseminating the Human Rights Policy

Suppliers

Employment Survey for Non- Japanese Employees

Diversity & Inclusion Workstyle Reform

Fair and Equitable Employment Management-Labor Dialogue

Promotion of Occupational Health and Safety in Production

Departments

Supply Chains

Nurturing the Next Generation

Human Resource Development

Corporate Governance

Policies, Philosophy and Principles

Third Party Assurance

The United Nations Global Compact Index

GRI Content Index

Initiatives with Partner Distribution Companies

Morinaga Milk is working with its distribution partners and other companies to improve the working environment for drivers with the aim of eliminating long work hours and reducing workloads since drivers bear part of the logistics responsibilities.

Specific initiatives

• Promote switching from loading/unloading by hand to pallet deliveries to reduce work load
• Shift means of transportation from trucks to railway/ marine containers, large trailers, etc. (promote a modal shift)
• Promote joint deliveries within the Group and with other companies in the same industry
• Review and improve long working hours for drivers on long-distance transport routes (e.g. reconsider routes, reduce wait times and incidental work)

Employment Survey for Non-Japanese Employees

The Morinaga Milk Group employs foreign nationals as well as Japanese nationals whose first language is not Japanese. An employment survey was carried out for non-Japanese employees at all Morinaga Milk business sites and Group companies in order to confirm employment conditions and enhance the working environment.

Group total: 210 persons (as of September 30, 2020)

Conditions 1. Those who do not have Japanese nationality and are not North Korean, Korean or Taiwanese with Special Permanent Resident status

2. Those who have Japanese nationality but have difficulty communicating in Japanese

Diversity & Inclusion

The Morinaga Milk Group believes it is important to not only recognize diversity, but to also encourage all employees to fully realize their own individuality and abilities while accepting each other's differences, and to promote corporate activities. Morinaga Milk has published its Diversity and Inclusion Declaration and implements a variety of company-wide measures in this regard.

Morinaga Milk Diversity and Inclusion Declaration

Management and employees will:

• Respect the diversity of employees and work to create a workplace in which all employees can maximize their potential.
• Support employee "smiles" and "vibrancy" both at and away from work.
• Continue to express Morinaga Milk's characteristic values to society through our employees' smiles and vibrant work ethic.

Initiatives and Results

Employment Situation

Number of new graduates

hired as regular employees, by 64 127 145 127 83 gender (Morinaga Milk only)

[ Contents ]

Approach to Disclosure of Information on Sustainability

Editorial Policy About Us Corporate Mission

Measures for and Effects of COVID-19 Sustainability at Morinaga Milk Seven Priority Issues

Health and Nutrition Environment

Human Rights

Basic Approach System

Stakeholder Engagement KPIs

Disseminating the Human Rights Policy

Suppliers

Employment Survey for Non- Japanese Employees

Diversity & Inclusion Workstyle Reform

Fair and Equitable Employment Management-Labor Dialogue

Promotion of Occupational Health and Safety in Production

Departments

Supply Chains

Nurturing the Next Generation

Human Resource Development

Corporate Governance

Policies, Philosophy and Principles

Third Party Assurance

The United Nations Global Compact Index

GRI Content Index

Number of re-hires and re-hire rate of persons aged 60 and older (Morinaga Milk only)

• Morinaga Milk Industry Co., Ltd., Morinaga Milk Industry Sales Co., Ltd., Tohoku Morinaga Milk Industry Co., Ltd., Furijiport Co., Ltd., Hiroshima Morinaga Milk Industry Co., Ltd., MK Cheese Co., Ltd., Clinico Co., Ltd., Tokyo Dairy Co., Ltd., Morinaga Milk Business Service Co., Ltd., Morinaga-Hokuriku Milk Industry Co., Ltd., Towa Techno Co., Ltd., Morinyu Sunworld Co., Ltd., Chez Forêt Co., Ltd., Morinaga Dairy Service Co., Ltd., Toyo Fermented Milk Co., Ltd., Morinaga Milk Industry Hokkaido Co., Ltd., Morinaga Milk Industry Kyushu Co., Ltd., Napoli Ice Cream Co., Ltd., Tokachi Urahoro Milk Industry Co., Ltd., Milei GmbH, Milei Plus GmbH, Milei Protein GmbH & Co. KG., Morinaga Nutritional Foods, Inc., Pacific Nutritional Foods, Inc., Nihon Seinyu, Fuji Morinaga Milk Industry Co., Ltd., Okinawa Morinaga Milk Industry Co., Ltd., Kumamoto Morinaga Milk Industry Co., Ltd., Yokohama Morinaga Milk Industry Co., Ltd., Morinaga Engineering Co., Ltd., Hokkaido Hosho Milk Plant Co., Ltd., Elovi Vietnam Joint Stock Company, Sunfco Ltd., MM Property Funding Corp.

Promotion of Diversity and Inclusion

Morinaga Milk has held briefings to ensure that all employees properly understand and implement diversity and inclusion. Since 2017, Morinaga Milk has held an annual diversity forum together with other food product companies with keynote speakers and panel discussions. We also hold lectures and talk sessions featuring experts. In FY 2020, such events were held online under the theme of "psychological safety," which is the foundation for promoting diversity and inclusion.

In 2007, the Nurturing the Next Generation Committee took the opportunity to listen to the voices of female employees with children. This committee is also responsible for creating the short-time work system and establishing leave for school events for both male and female employees. Such efforts are now regarded as part of pursuing diversity. Morinaga Milk is promoting the establishment of a system that supports a diversity and inclusion of workstyles regardless of gender, and is also developing a rewarding workplace for employees to sufficiently realize their individual potential.

Support for Female Workers

Morinaga Milk is supporting female workers as part of its diversity and inclusion promotion efforts. This support includes training programs such as "Female Leader Training" and the "Work × Child-raisingPower-Up Seminar" to support employees seeking to advance in their careers and employees seeking to balance the demands of work and caring for children. Morinaga Milk is also examining mechanisms and tools to promote the engagement of female workers who return to their workplaces after childcare leave and, from 2021, the flextime system and the reduced-hours work system can be used together.

Morinaga Milk is now working on the second phase of an action plan for compliance with the "Act on Promotion of the Women's Participation and Advancement in the Workplace," with a goal of achieving 80 female managers by 2026.

LGBTQ Help Line

Morinaga Milk promotes diversity and inclusion, and recognizes and respects diversity in its efforts to be an organization where everyone can play an active role. In considering that there might be many LGBTQ people in the workplace who are anxious that coming out to coworkers or using company consultation avenues will negatively affect their interpersonal workplace relationships, Morinaga Milk established an email consultation service with an external provider for this purpose. This counselor service is aimed at people who identify as LGBTQ and who wish to consult with someone but are not sure who to turn to, or do not have anyone they can discuss such matters with.

In addition to this internal help line, Morinaga Milk also promotes measures for promoting proper LGBTQ awareness, such as holding study sessions on LGBTQ etiquette and requiring managers to take an LGBTQ e-learning course. In recognition of these measures, Morinaga Milk received the Gold (highest) award under the Pride Index, an LGBTQ initiative (2020) by the voluntary