“Sustainability is a business issue.” The next phase of CSV management envisioned by Kirin

What it means to place both corporate strategy planning and CSV under a single executive officer

In March 2026, you became the first executive officer to be placed in charge of both corporate strategy planning and CSV (Creating Shared Value) strategy. What stage of CSV management does this appointment signify?

Until now, separate executive officers were responsible for corporate strategy planning and CSV strategy. Because different people were in charge, each area would move forward on its own to a certain point before the two were brought together. Going forward, we will carry out the management process using both financial and the non-financial factors from the initial stage.

This is only natural as a company that focuses on CSV management. I view my appointment to be a message from the company to that effect, and I believe it reflects the Kirin Group’s determination to take CSV management up to a new stage.

We will link higher social value to sales and profits, and thereby increase economic value. As economic value rises, this will enable us to invest in social value. Solving social issues and increasing economic value are no longer separate matters. I believe my role is to integrate these two into a single management decision.

You have said that “nature-related risk is no longer a sustainability issue; it is clearly a business issue.”

Our business is grounded in the brewing philosophy “Reverence for life” and use of nature’s bounty. That is true not only of our original beer business but also of our non-alcoholic beverages, the lactic acid bacteria in Health Science, and biopharmaceuticals. Our businesses depend on biological resources and natural raw materials.

I have always looked at sustainability and CSV from a business perspective. For example, we used to think about our business based on the assumption that the nature which has supported it would last forever. But this is no longer the case.

Protecting nature is nothing less than protecting the very foundation for increasing our business’s sustainability. CSV initiatives are, in essence, initiatives that address business issues.

Poor orange harvests and a flooded brewery. Nature-related risks are already affecting business

Have there been cases where nature-related risks affected Kirin’s business?

Recently, the impact of climate change has been pronounced. For example, unseasonable weather in the United States and Brazil caused orange harvests to plummet, leading to soaring procurement costs. We considered sourcing from other regions, but this creates challenges not only in terms of cost but also flavor changes. Although the soaring procurement costs were not the only factor, we ultimately had no choice but to raise product prices.

Damage from typhoons and hurricanes is also becoming more severe. In 2024, a brewery belonging to New Belgium Brewing, a Kirin Group company that operates a craft beer business in the United States, was hit by a disaster. The production facility was flooded, and the entire inventory was ruined.

Once a brewery is flooded, it takes a long time to restore. In this case, it took about six months to resume production. During this time, we were unable to deliver any products, which led to lost sales opportunities. Nature-related risks like these are not a thing of the future; they are already affecting our business.

With corporate strategy planning and CSV strategy now integrated under one executive officer, how will Kirin’s decision-making and investment decisions change?

When making investment decisions, we take into account the future financial impact of greenhouse gas emissions on our business. This is what is known as “carbon pricing,” which puts a price on carbon dioxide emissions. We had already been using carbon pricing for environmental investment decisions, but because the price was lower than actual market levels, we raised it this April.

If systems such as emissions trading are fully implemented, any emissions above the allocated allowance will require the purchase of additional allowances, which becomes a cost. Conversely, if emissions fall below the allocated allowance, that difference can be sold to other companies and earn revenue. We make investment decisions based on this kind of medium- to long-term outlook.

Our business portfolio is discussed at Board meetings about once every three months. Going forward, we will further incorporate non-financial perspectives into those discussions rather than just focusing on financial perspectives. As head of corporate strategy planning, I have overseen the business portfolio. Now, I will incorporate CSV into it as a management perspective. I believe that is my current role.

Positioning “health” at the center. What has changed in the CSV Purpose

In February 2026, Kirin announced the Long-Term Management Vision “Innovate2035!” and also revised the CSV Purpose. What has changed in Kirin’s CSV management, and what has not?

The fundamental concept of CSV management has not changed. We will deliver business results, increase social value, and achieve both at the same time. This has been our core principle ever since the Kirin Group designated CSV a central pillar of management in 2013.

On the other hand, some things have changed. We recently revised the CSV Purpose, which serves as a guideline for Kirin’s CSV management. Based on “Responsibility of Kirin Group which runs Alcoholic Beverage Businesses,” the CSV Purpose sets out “Health and Well-Being,” “Community Engagement,” and “The Environment” as priority issues. In the current revision, as the illustration shows, we positioned “Health and Well-Being” at the center.

For “Health and Well-Being,” we revised the message to “Contributing to People’s physical and mental health.” We added the phrase “mental health,” and we will contribute not only to physical well-being but also to mental well-being. This includes the revitalization of communities by connecting people through beverages. We also believe it is important to contribute to heart-enriching moments in consumers’ lives, based on the premise of addressing alcohol-related problems and raising awareness of responsible drinking.

How does the CSV Purpose relate to the Long-Term Management Vision “Innovate2035!”?

The CSV Purpose is the guideline for the Kirin Group to grow sustainably while co-creating value with society. It is our promise about what kind of presence the Kirin Group will continue to be for society. I feel the Long-Term Management Vision “Innovate2035!” shows how we will fulfill that promise. I believe our envisioned form of CSV management is pursuing solutions to social issues and business growth together, in tandem.

Sustainability is not “non-financial.” It is “pre-financial” and leads to future financial value

With non-financial initiatives such as health and the environment, it can be hard to see how they lead to corporate value.

The term “non-financial” is commonly used, including by us, but it tends to be understood as “not financial.” I see spending on sustainability not as a cost but as an investment that will generate financial returns in the future. Rather than being “not financial,” I think of such spending as “pre-financial” in the sense that it will lead to financial results in the future.

I don’t think this applies only to sustainability. Take investment in people, for example. It does not immediately appear as value in the financial statements, and stopping it would not cause profit to fall next year. However, unless this investment is maintained, the company’s growth will not be sustained. The same is true for investment in research and development. Without continued investment, the business will gradually shrink. I consider investment in people and in R&D to be “pre-financial” as well.

How do CSV initiatives lead to corporate value in this “pre-financial” sense?

For example, the carbon pricing initiative I mentioned earlier serves as a hedge against the risk of rising emissions costs in the future and, as a result, may lead to future financial returns. From a health perspective, delivering Health Science products to consumers directly drives business growth and generates free cash flow. And if investors can see that we are seriously addressing a wide range of potential future critical issues, that has the effect of lowering our cost of capital, which also contributes to corporate value.

With the global situation so hard to foresee, isn’t it difficult to put the future into numbers and show specifically “this is how much we will earn”?

Because the future involves many factors, it is difficult to show it precisely in numbers. Even so, we must make the effort to communicate the potential value to stakeholders inside and outside the company. That is exactly why it is important to create a story. Such stories may be qualitative, but I think they are important way to express, “This is what we believe will happen” and “By making this kind of investment, the future will look like this.”

Protecting the tea leaves for Kirin Gogo-no-Kocha, now in the 14th year. Three examples of pre-financial value

Please give some examples of products or initiatives through which “pre-financial” value has led to corporate value.

In 2013, we began supporting Sri Lankan tea plantations in obtaining Rainforest Alliance certification. Building on that, we now support their transition to regenerative agriculture, and this year marks the 14th year of our collaboration tea farmers. Kirin Beverage sources much of the tea leaves for its flagship brand, Kirin Gogo-no-Kocha（in Japanese）Open in a new window or tab, from Sri Lanka.

The sustainability of the tea plantations and the quality of the tea leaves are directly linked to our business. This is not a sustainability issue but rather a business issue in itself. Today, about 30% of the large tea plantations in Sri Lanka that have obtained certification did so with Kirin’s support.

In 2025, we held the “Kirin Forum,” bringing together stakeholders including farmers and government officials to share what we are doing to make Sri Lankan tea plantations more sustainable. Initiatives such as this protect the foundation for procuring sufficient tea leaves of consistent quality and for continuing to sustainably produce and sell the Kirin Gogo-no-Kocha brand. Thus, they are “pre-financial” activities that will lead to future financial value.

Kirin Brewery’s Kirin Good Ale（in Japanese）Open in a new window or tab links product purchases to support for local communities across Japan. How do you view the results and response so far?

Kirin Good Ale is designed so that purchases enable consumers to take part in supporting local communities across Japan. As of the end of July 2026, cumulative donations exceeded 50 million yen, surpassing the two-year target of 40 million yen. Kirin Brewery is also expanding similar initiatives as brand actions for other brands such as Kirin Beer Harekaze and KIRIN ICHIBAN.

The Health Science business posted revenue of 251.4 billion yen and normalized operating profit of 11.1 billion yen in the fiscal year ended December 2025, returning to profitability from a loss of 10.9 billion yen in the previous fiscal year. Please give an example of how solving the social issue of health is leading to economic value.

Health Science is an area where it is easy to explain the value created through CSV management. For our proprietary Lactococcus lactis strain Plasma (LC-Plasma, a postbiotic), we are leveraging the assets of our Group company Blackmores to accelerate its rollout in the Asia-Pacific region (APAC). For example, in July 2026, we launched the small-size beverage KIRIN IMMUSE Yoghurt FlavourOpen in a new window or tab in Singapore. We also expect to launch a supplement containing LC-Plasma in Australia in 2027. In addition, we offer Cognizin®, a citicoline ingredient designed to support brain function, which is sold exclusively outside Japan by Kirin Group company Kyowa Hakko Bio. Solving the social issue of health expands markets and creates new demand. These accumulated efforts also build trust in the Kirin brand and lead to future cash flow.

From a beer company to a health science company. What will Kirin be in 2035?

When advancing CSV management, what challenges are faced in terms of Kirin Group employees?

Our employee engagement survey shows that empathy with CSV is extremely high. On the other hand, the score drops when it comes to putting CSV into practice, and that is a challenge.

I believe the work of every business, every functional department, and every employee is naturally connected to CSV. Thinking that practicing CSV involves doing something special makes it feel difficult, but I feel practicing CSV really means to work with the understanding that the daily work is directly linked to CSV.

It is important not to stop the explanation at “because it is good for society” or “because consumers will appreciate it.” When we can explain how practicing CSV will lead to the growth of the Kirin Group’s business and enhancement of corporate value, then social value and corporate value finally become one. It also boosts day-to-day job satisfaction and morale.

What kind of company do you think Kirin will be in 2035?

I think Kirin’s strength lies in our technological capabilities. As a leader in R&D and innovation, I believe we will be a company that creates new things and brings new lifestyle habits to consumers through products and services.

Our area of focus is, after all, health. Positioning Health and Well-Being at the center of the CSV Purpose also sends a strong message. I am aware that Kirin is still seen as a beer company, but by 2035 I want us to be seen as a company that supports both mental and physical health. For now, the key will be how much we can grow our Health Science business.

Finally, what message would you like to share with Group employees and Kirin’s stakeholders?

For us, CSV management is a strategy. From the outside, people may think, “Kirin is doing it, so let’s copy it.” But in reality, it is the accumulation of many years of building CSV into the core of our management and our organizational knowledge, so simply importing the framework will not produce the same results. That, I believe, is our competitive advantage, and in turn, it also enables us to attract talented people.

The Kirin Group began to champion CSV management in 2013, but we have always been attentive to how we can contribute to society since the early days of the company. We will carry on this way of thinking and pass it on to the next generation. We cannot stop now. I want to carry forward and evolve the will and efforts of those who came before us. This is my message to Group employees.

Precisely because uncertainty is so high today, I think many people are concerned about whether businesses can keep growing sustainably. We will continue to invest in health, community, and the environment, as well as in people and R&D, with a view to 10, 20, and 30 years ahead, and I want to communicate how these investments will lead to corporate value through both stories and quantitative data.