With population growth, urbanization, and economic development, environmental problems such as inappropriate waste disposal, water pollution, and air pollution are becoming more serious.
Furthermore, global warming is progressing due to greenhouse gas emissions, and Climate Change is having a major impact on our lives and is also threatening the natural ecosystems of animals and plants.
Our company uses algae such as the microalgae Euglena to address environmental and nutritional issues, and our purpose is to "make people and the earth healthy."
Our company is developing a healthcare business that sells health foods and cosmetics using Ishigaki Island Euglena and Yaeyama Chlorella, a biofuel business that uses biomass oil and waste cooking oil, and other new businesses that aim to solve social issues. We believe that we have a responsibility to leave the earth rich in nature to the next generation.
Based on this idea, our company complies with international declarations, conventions, and treaties regarding environmental conservation, as well as the laws and regulations of the countries and regions in which it operates, and strives to resolve environmental issues.

Policy

Of all the greenhouse gases emitted from our business activities, we are working to reduce _CO2 emissions, which have the greatest impact on Climate Change. In promoting our efforts, we respect the greenhouse gas emission reduction targets for 2050 set out in the long-term goals (Paris Agreement) established based on the United Nations Framework Convention on Climate Change, set specific targets for the entire Group, and promote activities to achieve these targets.

Goals and Initiatives

We aim to be carbon neutral ^* in Scope 1 and 2 emissions by the end of 2030. Specifically, we will work on saving electricity in offices, adopting energy-saving technologies for lighting fixtures, switching to electricity from renewable energy sources, reducing energy consumption by improving production efficiency in factories and switching to energy-saving equipment, etc. In addition, as a Euglena that upholds "Sustainability First" as its philosophy, we will steadily advance our own efforts to achieve our goal while also raising awareness of _CO2 reduction and building teams among our colleagues at each group company and base.
We will also consider purchasing carbon credits using profits generated from our biofuel and sustainable agritech businesses, which can contribute to reducing _CO2 emissions in society, and creating the credits themselves.

*100% owned company as of January 2024

Furthermore, our group's response to Climate Change, including our efforts to reduce _{CO2 emissions}, is under the supervision of the President and CEO, who also chairs the Sustainability Committee, and is discussed within the Sustainability Committee as needed.

Scope 1: Direct emissions from a company's own energy use (fuel combustion, industrial processes, etc.)
Scope 2: Indirect emissions associated with the use of energy (electricity, heat, steam, etc.) supplied by other companies.

​_CO2 Emissions Results (Scope 1, 2)

The main Scope 1 and Scope 2 _CO2 emissions and energy consumption by our Group are shown in Tables 1 and 2.

Case Study:​ ​_CO2 Reduction Initiatives

As a specific example of our efforts, we implemented the "Sustainable Delivery Project" with Sagawa Express Co., Ltd., a member of the SG Holdings Group, and in order to work toward reducing greenhouse gas emissions in order to realize a sustainable society, the three parties of our customers (individuals), shippers (our company), and transport companies (Sagawa Express) cooperated to use trucks fueled with the next-generation biodiesel fuel "SUSTEO" for some of our mail-order deliveries. Customers who supported this project were asked to donate to cover the cost of introducing "SUSTEO" from June 26, 2023 until the end of the same year, and both our company and Sagawa Express contributed an amount equal to the amount of support collected. Approximately 8,000 liters of "SUSTEO" were used in approximately 100 vehicles at the Sagawa Express Hamamatsu Office, reducing _CO2 emissions by the equivalent of 4.11 tons. In addition, the Q'SAI Group changed its regular delivery of its main products to bimonthly deliveries, thereby reducing the number of deliveries and also reducing _CO2 emissions. We will continue to promote efforts to reduce environmental impact.

Case Study: Supporting and responding to TCFD and industry initiatives

Support and response to TCFD

In May 2019, our company endorsed the recommendations by the Task Force on Climate-related Financial Disclosures (TCFD ^*1 Task Force on Climate-related Financial Disclosures) calling for the disclosure of climate-related financial information, and our aim is to promote the recommendations. We have joined the TCFD Consortium ^*2, which was established in Based on the recommendations of the TCFD, we are disclosing information about climate-related risks, business opportunities, and governance systems.

• *1 TCFD: A task force established by the Financial Stability Board, an international organization that aims to stabilize the financial system. The aim is to support companies that disclose information on Climate Change and to stabilize financial markets through a smooth transition to a low-carbon society.
• *2 TCFD Consortium: Established in May 2019 in Japan to discuss effective information disclosure by companies and efforts to link disclosed information to appropriate investment decisions by financial institutions. Any company or institution that supports TCFD can become a member.

Endorsement of the GX League by the Ministry of Economy, Trade and Industry

Our company has expressed support for the "GX League Basic Concept"* announced by the Ministry of Economy, Trade and Industry on February 1, 2022. The GX League will begin full-scale operation in fiscal 2023 as a framework for companies that have set ambitious carbon reduction targets to invest in emissions reductions while voluntarily trading emissions to achieve their targets. doing.

*GX League: The GX League is initiated by the Ministry of Economy, Trade and Industry as a place where Japanese companies that take on the challenge of carbon neutrality aim to create an environment in which they can lead the transformation of the entire economic and social system and the creation of new markets, and demonstrate their competitiveness in international business. 

In addition, we are a member of the Chugoku Region Carbon Neutral Promotion Council and participate in subcommittees and policy advocacy activities related to the promotion of biofuels.
Chugoku Region Carbon Neutral Promotion Council | Chugoku Economic Federation (chugokukeiren.jp)

Related links

​Japanese version / English version for TCFD

Policy

Our group uses a large amount of plastic in packaging containers for food and cosmetics in our healthcare business, as well as packaging materials used to deliver products to customers. As a company that operates using natural capital, we recognize that reducing ocean pollution and the impact on ecosystems caused by discarded plastics is one of Materiality.
Therefore, from 2020 onwards, our group has set a policy of ``aiming to build a system that allows customers to act in an environmentally friendly manner, regardless of their level of environmental awareness.'' We are working to reduce usage.

Initiatives

In June 2020, we set a goal of reducing the amount of petroleum-derived plastics used in our products by 50% by 2021, and we have been working towards this goal. We have switched to tube-type containers containing sugarcane-derived resin for six all-in-one cream products from the cosmetics brand "ONE," which accounts for more than 90% of the plastic used in cosmetics (as of 2019). As a result, as of the end of December 2021, we succeeded in reducing the amount of petroleum-derived plastics used by an average of 86% (up to 90%). Additionally, we completely abolished existing PET beverage bottle products, achieving a reduction in plastic usage of 8,433 tons (2019). Additionally, we continue to implement measures such as allowing customers to choose whether or not plastic straws are included for some products.

Related links

Business reforms by our CFO - Acting with responsibility to the future -

Example of initiativesDe-plasticization of cushioning materials

Example of Initiatives Complete abolition of PET bottle products

Examples of initiatives Switching to tube type skin care product containers

Policy

Euglena and chlorella, which are raw materials for products manufactured by the Group, require water for cultivation. We have a water managemenet plan to manage water use and work with our stakeholders to reduce water usage.

Water usage results

Table 3 shows the amount of main well water and tap water used by our group. From the fiscal year ending December 2023, the scope of calculation will be expanded to include Euglena Group domestically.

Example of Initiatives Water risk assessment

In 2024, we will conduct water risk assessments using WRI Aqueduct for all Euglena Group sites, and no sites have been rated as having "extremely high" water risk. We will continue to work to reduce water usage at all sites and continue to conduct water risk assessments while working to conserve and use water resources sustainably.
In addition, in 2024, we also conducted an environmental risk assessment of our suppliers and confirmed that there are no significant environmental risks for our major suppliers. Specifically, we conducted a questionnaire survey of major suppliers in our healthcare business and a desktop survey using the WWF biodiversity Risk Filter (BRF). We will continue to work to understand the environmental risks in the supply chains of our major businesses.
*The last time it was held was in 2021.

Case Study: Water conservation activities around production sites through ASC-MSC certification

In obtaining this certification, we have been conducting water usage and water quality monitoring with consideration for the surrounding area.
Find out more Find a farm - ASC International (asc-aqua.org)

Policy

Our company generates waste mainly during the manufacturing process of our products. We believe that if waste is not properly disposed of, it not only has the potential to pollute the environment, but also increases the risk of resource depletion due to wasted resources, impacting long-term business continuity. Therefore, we will promote appropriate waste disposal, reduction of waste amount, and reuse.
The main industrial wastes discharged from our manufacturing bases, research bases, and quality control facilities are metal scraps, waste plastics, and waste oil, and we are working to monitor and reduce them at each base. The outsourced processing of industrial waste complies with the electronic manifest system ^*.

*Electronic manifest system: For the purpose of preventing illegal dumping, industrial waste generators entrust collection and transportation companies and disposal companies to collect and dispose of industrial waste in an electronic manner, in order to understand whether the waste has been properly disposed of in accordance with the contract. A system that enables verification on the network.

Industrial waste emissions results

The main amounts of industrial waste generated by our Group are shown in Table 4. From the 2023 results, the scope of calculations has been expanded to include the entire Group.
We are also taking on the challenge of reducing waste by reusing waste generated within the Group as unused resources.

Obtaining environmental certification

Our group produces Euglena and Chlorella, and as algae are increasingly being used in various fields, we recognize that reducing the environmental impact of production is an important issue for our group. I am. By building an environmentally friendly and sustainable production system, we will conduct production activities that are kind to people and the earth.

Sample initiative Acquisition of ASC-MSC certification

In March 2018, the ASC ^*1 (Aquaculture Stewardship Council), an international certification system for seafood produced using responsible aquaculture methods that are considerate of the environment and society, and the MSC ^*2 (Marine Stewardship Council), an international certification system for seafood caught in sustainable and environmentally friendly fisheries, launched the "ASC-MSC Seaweed Certification," their first jointly developed standard. Then, in January 2019, Euglena and Chlorella raw materials produced by Euglena Co. and Yaeyama Shokusan became the first in the world to obtain the "ASC-MSC Seaweed Certification." Until then, ASC certification was limited to some farmed fish, shellfish, and shrimp, while MSC certification was limited to wild seafood, and neither covered seaweed (algae).

For more information on ASC-MSC certification, please see Find a farm - ASC International (asc-aqua.org)

ASC and MSC certifications are also attracting attention for their contribution to achieving the SDGs, and the number of countries around the world obtaining certification is increasing year by year. In obtaining certification, we conduct water quality monitoring around our production sites twice a year to confirm that there is no risk of water pollution, and also hold dialogues with local governments and communities.

*1 ASC certification: 1,338 farms in 44 countries around the world have obtained this certification (as of August 2020)
*2 MSC certification: 405 fisheries worldwide have obtained this certification (as of February 2020)

Environmental fines ^{⋆1, 2}

2022/12 term (2022/1-2022/12)	0 Yen
2023/12 term (2023/1-2023/12)	0 Yen
2024/12 period (2024/1-2024/12)	0 Yen
2025/12 term (2025/1-2025/12)	0 Yen

*1 Environmental regulations include the Energy Conservation Act and wastewater regulations.
*2 No environmental-related fines have been incurred since the company's founding. (As of December 2023)

Related links

Acquired the world’s first ASC-MSC Seaweed (Algae) Certification for Chlorella and Euglena microalgae - The first algae ever to be certified as a food ingredient that contributes to the globally shared SDGs set out by the United Nations -

ASC-MSC Seaweed (Algae) audit report form “Public Certification Report”

In February 2023, we issued Climate Change-solving convertible bonds (CCB ^*1, hereinafter, the CCB) to two partners. Through this green finance, we aim to achieve further business growth and realize a sustainable society.

Overview of Climate Change Solving Convertible Bonds (CCB)

In December 2022, we announced that, in order to commercialize our biofuel business, we were considering a project with PETRONAS of Malaysia and Eni of Italy to construct and operate a biofuel manufacturing plant, and were conducting a technical and economic feasibility assessment. This project is expected to result in a final investment decision among the three companies in July 2025, with the goal of commencing commercial plant operations by the second half of 2028.
In order to advance this project, raise funds for future expansion of biofuel supply, and strengthen collaboration with partner companies, we issued this CCB to two partner companies, Mazda Motor Corporation and Dai-ichi Life Insurance Company, Limited, in February 2023 ^*2, raising 4.8 billion yen.
Furthermore, this CCB has received a green bond rating from Rating and Investment Information, Inc. (R&I) ^*3.

• *1 “Climate” Convertible Bond = A unique name of our company that expresses our intention to “convert” the climate to the ideal state as a financing that embodies our commitment to solving Climate Change
• *2 On the same day, a third-party allotment of new shares to Marui Group Co., Ltd. and Rohto Pharmaceutical Co., Ltd. was carried out, and together with this CCB, a total of approximately 7.8 billion yen was raised. Approximately 6.8 billion yen of this will be appropriated for the biofuel production plant construction related funds for this project.
• *3 Obtained a second party opinion from Rating and Investment Information, Inc. that the financing is in accordance with the International Capital Market Association (ICMA) Green Bond Principles 2021 and the Ministry of the Environment's Green Bond Guidelines 2022.

Terms of issuance of this CCB

Green bond framework

When issuing a green bond, we will follow the four elements ((1) Use of Proceeds, (2) We have formulated a green bond framework that describes the project evaluation and selection process, (3) management of proceeds, and (4) reporting).
Please check here for details.

second party opinion

Please check here for details.

reporting

The allocation status of funds raised through the first series of unsecured convertible bonds with stock acquisition rights issued on February 6, 2023 and the first series of unsecured straight bonds issued on May 8, 2024 is as follows: