Sustainable Procurement
Policies
There are various underlying problems regarding raw materials production processes, including child labor, forced labor, poor working conditions, and the negative environmental impact on the areas around the production site.
The NISSIN FOODS Group instituted the Basic Policy on Green Procurement in May 2007 and is promoting procurement of environmentally friendly raw materials. In addition, we build a traceability system from raw materials to finished products and product shipment for the purpose of ensuring product quality.
To strengthen these initiatives, in September 2017 we instituted the NISSIN FOODS Group Policy on Sustainable Procurement. This policy addresses food safety, respects the global environment and human rights, and proclaims our commitment to procuring legally produced raw materials. For realizing this policy, the cooperation of our primary suppliers is important. We therefore inform them of the policy and obtain signed documents on the confirmation.
Targets
In the NISSIN FOODS Group’s environmental strategy, EARTH FOOD CHALLENGE 2030, we set a goal to raise the procurement ratio of palm oil that is assessed to be sustainable to 100% for the entire Group by fiscal 2031. We are undertaking measures to achieve this goal as quickly as possible. In addition, we aim to raise the procurement ratio of palm oil that is assessed to be sustainable to 100% for our instant noodle business in Japan by fiscal 2026.
- Sustainable Procurement Ratio of Palm Oil (Targets)*1
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Instant noodle business in Japan: 100% by fiscal 2026
Group-wide: 100% by fiscal 2031
- Usage Ratio of Palm Oil Certified by the Roundtable on Sustainable Palm Oil (RSPO) (Results)*1, 2
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2019: 20%
2020: 26%
2021: 36%
2022: 37.7%
- Procurement Ratio from Suppliers That Can Trace Products up to Oil Mills (Results)*1, 3
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2019: 100%
2020: 100%
2021: 100%
2022: 100%
- *1Certification of mass balance for NISSIN FOOD PRODUCTS and NISSIN FOODS (U.S.A.), and segregation for Nissin Foods Kft. Mass balance is a certification model where certified palm oil is mixed with other uncertified palm oil during the distribution process. While it physically contains uncertified palm oil, the ratio is strictly recorded up until the final use stage, guaranteeing the certified sources from which it was purchased and the amount of certified palm oil. Segregation is a certification model where certified palm oil from several certified sources is delivered to the final manufacturer without being mixed with other uncertified palm oil. While it is not possible to identify a specific plantation, it guarantees that the raw material comes from a certified source.
- *2Usage ratio of RSPO-certified palm oil by NISSIN FOOD PRODUCTS, NISSIN FOODS (U.S.A.), and Nissin Foods Kft. to the entire Group
- *3For Group companies in Japan
Palm Oil Procurement
The NISSIN FOODS Group uses palm oil extracted from oil palms for purposes such as frying instant noodles. Oil palms are grown mainly in tropical areas such as Indonesia and Malaysia. Some plantation farms have been cited for destroying rainforests and ecosystems, emitting greenhouse gases (GHGs) from peatland fires, and violating the human rights of plantation workers, and other issues.
Direction of Initiatives Related to Palm Oil
The NISSIN FOODS Group observes a commitment to the procurement of sustainable palm oil that includes a policy of NDPE* and works to expand the procurement of sustainable palm oil.
Toward observing our commitment to the procurement of sustainable palm oil, besides building up engagement with oil and fat manufacturers, we also recognize the necessity of comprehensive support for oil mills and oil palm plantations that are upstream in the supply chain.
- *Abbreviation of No Deforestation, No Peat, and No Exploitation
Specifically, we strive to improve traceability by creating and managing a list of palm oil mills*1 that consolidates the names and locations of suppliers. In addition, using the satellite monitoring tools provided by the international environmental NGO World Resources Institute (WRI), we verify the risk of deforestation and peatland destruction in areas where mills and surrounding oil palm plantations are located. For mills assessed to have high risks, we confirm the facts with the oil and fat manufacturers that are our suppliers and study measures for improving the situation. Regarding oil palm plantations around mills with high risks, we gradually conduct field surveys with outside experts using questionnaires and dialogues and monitor in detail the impact on the environment of the location of production and the human rights of the workers.
In addition, by 2030, we will ensure traceability back to oil palm plantations, which are furthest upstream in the supply chain, and provide comprehensive support so that plantations can manufacture palm oil that takes into consideration the environment and human rights. We are also working on the establishment of a grievance response mechanism*2 for small-scale farmers to confirm and investigate together with third parties the issues of these farmers and complaints from them, and seek solutions to these issues and complaints. We also plan to progressively introduce forest footprints*3, starting from areas that are particularly high in risks of deforestation and peatland destruction or infringements on the rights of local communities.
The NISSIN FOODS Group will cooperate with all stakeholders to build a sustainable palm oil supply chain.
- *1Refer to the link below for the list of mills
List of mills - *2A remedy mechanism for receiving reports about cases of human rights infringements and rectifying or improving the situation
- *3Total area of forests and peatlands affected by a company’s supply chain or financial institution’s investments and financing
Commitment to the Procurement of Sustainable Palm Oil
The NISSIN FOODS Group supports the No Deforestation, No Peat, No Exploitation (NDPE) requirement. We have committed to cooperating with our suppliers and other stakeholders to procure sustainably sourced palm oil which has been produced in consideration of the environment of the palm's habitat and workers' rights.
- ・Protect high Conservation Value (HCV) areas and High Carbon Stock (HCS) forests, zero deforestation
- ・Prohibit the new development of peatland regardless of depth
- ・Prohibit burning for planting, land development, and other types of development
- ・Respect the rights of indigenous people and local residents, and prohibit infringement of land rights
- ・Principles and Criteria for the Production of Sustainable Palm Oil set forth by the RSPO
- ・We comply with human rights policies to respect for human and labor rights
NISSIN FOODS Group Policy on Human Rights
Procure RSPO-certified palm oil
To procure palm oil that has received third-party certification that production takes into consideration factors including the prevention of deforestation and protection of biodiversity, the NISSIN FOODS HOLDINGS became a member of the Roundtable on Sustainable Palm Oil (RSPO)*1 in October 2017. From March 2019, all domestic plants that manufacture CUP NOODLES began procuring RSPO-certified palm oil. At present, the CUP NOODLES*2 packages bear the RSPO certification mark.
The NISSIN FOODS Group endorses the Principles and Criteria of the RSPO, which are determined after discussions with many stakeholders. And in April 2019, NISSIN FOODS HOLDINGS joined, as a board member, the Japan Sustainable Palm Oil Network (JaSPON) - which promotes the use of RSPO-certified palm oil.
- *1RSPO stands for Roundtable on Sustainable Palm Oil. The goal of the RSPO is to promote and operate a sustainable palm oil industry. It is an international non-profit organization established in 2004 by the World Wildlife Fund (WWF) and companies that are closely connected with palm oil. The organization is headquartered in Kuala Lumpur Malaysia. The RSPO certification mark is given to palm oil produced at RSPO-certified palm oil plantation farms and products distributed and processed by certified business operators. As of June 2020, the RSPO has more than 4,000 members worldwide, including palm oil producers, processors, manufacturers, retailers, and environmental NGOs from various walks of life. These members pledge to produce, supply and use RSPO-certified sustainable palm oil. Numerous stakeholders participate in the RSPO to repeatedly conduct talks while aiming to product and use sustainable palm oil. The members also review RSPO Principles and Criteria to address changes in conditions.
- *2Applies to three regular size items: CUP NOODLES, CUP NOODLES SEAFOOD, and CUP NOODLES CHILI TOMATO.
Implementation of Assessments
The NISSIN FOODS Group, together with Japanese domestic oil and fat manufacturers that supply the Group, is confirming that there are no violations of local laws at the primary refineries and oil mills from which domestic oil and fat manufacturers are sourcing their products.
In case if we find some local suppliers potentially have negative impact on the environment or human rights, we cooperate with oil and fat manufacturers to investigate the issues and implement some measures. Specifically, we monitor local oil mills and plantation farms by looking at the grievance response list managed by oil and fat manufacturers. For mills and plantations that have issues, we also take actions, including providing corrective guidance or suspending business transactions.
- Actions Taken Since 2019
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Corrective guidance, including strengthening of traceability back to plantations: 7 cases
Suspension of business transactions with oil mills and plantations: 3 cases
Strengthening of the Supply Chain Management System in Regions in Asia
From January to March 2022, we conducted a survey for questionnaires and dialogues online with small-scale palm oil farmers assessed to be on our Group’s supply chain. This initiative was conducted with the support of Caux Round Table Japan*1 and Serikat Petani Kelapa Sawit (SPKS)*2.
- *1A global network of business leaders working to realize a fair, free, and transparent society through sustainable and socially responsible business
- *2A local union of small-scale oil palm farmers in Indonesia that was established in 2006. The union supports production of oil palm with consideration for the sustainability of farmers. It maintains a network with more than 8,000 small-scale farmers in seven regions across Indonesia. Some of its activities include data collection and mapping of small-scale farmers, organization of farmers, training to improve productivity, and supporting the acquisition of certification—such as Indonesian Sustainable Palm Oil (ISPO) and RSPO—by farmers.
| Background | The NISSIN FOODS Group has recognized that "strengthening supply chain management systems in the Asian region" as a priority theme to be addressed. In particular, human rights risks for small-scale palm oil farmers and environmental risks such as deforestation during the production process have been pointed out, and therefore, monitoring needs to be strengthened. |
|---|---|
| Purpose | Through dialogues with farmers, gain a detailed understanding of human rights and environmental risks in small-scale palm oil farmers and their surrounding areas. |
| Scope | Dialogue participants: 20 small-scale farmers |
Process
- *Nine external standards used as references for this survey
•Roundtable on Sustainable Palm Oil (RSPO) Independent Smallholder Standard, 2019
•Roundtable on Sustainable Biomaterials (RSB) Principles and Criteria for Smallholder Groups, 2016
•International Sustainability and Carbon Certification (ISCC) Independent Smallholder Group Certification Criteria, 2016 (ISCC 201-5, 202, 206)
•Malaysian Sustainable Palm Oil (MSPO) Certification Part 2: General Principles for Independent Smallholders, 2013
•Indonesian Sustainable Palm Oil (ISPO) Standard, Independent Smallholders (4 out of 7 principles), 2011
•Rainforest Alliance & UTZ/RA Sustainable Agricultural Standard for Smallholders, 2019 (Draft to be published June 2020)
•Fairtrade/Fairtrade Standard for Small-Scale Producer Organizations, 2019
•Tokyo 2020 Olympic and Paralympic Games Sustainable Sourcing Code (3rd edition) issued by the Tokyo Organising Committee of the Olympic and Paralympic Games
•Sourcing Code for the Promotion of Sustainable Palm Oil issued by the Tokyo Organising Committee of the Olympic and Paralympic Games
Fiscal 2022 Survey scope and results
From the results of the preceding survey and dialogues, we did not identify any issue which needs to be handled immediately among the small-scale farmers who participated in the survey this time. However, among the 10 core sections, regarding economic sustainability, concerns were raised such as that some farmers have a poor understanding of obtaining certifications such as RSPO (Roundtable for Sustainable Palm Oil), there are only a few years left for harvesting, not being prepared for the replanting of oil palm trees, and not having enough funds for farm management due to rising fertilizer prices. We also found that although farmers have conveyed these concerns to local farmers’ associations and the government, there has been no effective responses.
Furthermore, from the perspective of legal compliance, it was discovered that the farmers surveyed were unable to obtain Cultivation Registration Certificate (STDB) and Statement of Commitment to Environmental Management and Monitoring (SPPL) issued by local governments. The lack of these certifications is also considered a risk from an economic sustainability perspective, as farmers may not be able to obtain the necessary government subsidies to replant oil palms. Some of the reasons behind the difficulties in obtaining certification are that it is difficult for farmers themselves to prove the exact extent of their plantations, the government does not provide farmers with sufficient information necessary to obtain certification, and the process of issuing certification by local governments takes time. According to the Caux Round Table Japan Committee and SPKS, not only the farmers surveyed in the survey this time, but small-scale farmers throughout Indonesia are facing similar issues.
- Future actions
- The NISSIN FOODS Group will continue to conduct such surveys, dialogues, and other similar measures to seek compliance from the entire supply chain—including major suppliers and palm oil farmers—with the Group’s sustainable procurement and other policies. At the same time, we will confirm the state of implementation. In addition, we will strive to understand the environmental and social situations surrounding small-scale farmers and other parties as well as the problems obstructing compliance with and implementation of policies, and study and implement measures toward improvement together with suppliers. Specifically for small-scale farmers and similar parties, various measures will be considered based on the aforementioned "Direction of Initiatives Related to Palm Oil" to promote sustainable farming practices that reduce human rights and environmental risks while promoting economic growth. Among others, promoting traceability to plantations will help farmers understand the boundaries of their properties (plantation), which is necessary to obtain certification. Furthermore, we will work toward developing an effective grievance response mechanism to absorb potential risks and concerns that should be raised.
Procurement State of Other Raw Materials
Paper
NISSIN FOODS Group places priority on using FSC®*1 certified paper, produced from appropriate forestry management, mainly for product containers and packaging, various types of printed matter, cardboard, and copy paper.
Since September 2020, NISSIN FOOD PRODUCTS has started using FSC®-certified paper for the cardboard cases of some products such as those under the CUP NOODLES brand.
MYOJO FOODS CO., LTD. is promoting the use of FSC®-certified paper and biomass ink made from biological resources. The outer packaging of MYOJO CHUKAZANMAI (bag-type noodles) indicates that FSC®-certified paper is used, and the hot water drainage lid of MYOJO IPPEI-CHAN YOMISE NO YAKISOBA indicates that FSC®-certified paper and biomass ink are being used.
We have also started using FSC®-certified paper for the cardboard cases of instant noodle and soup products being manufactured and sold by MYOJO FOODS for distribution in Japan, and aim to achieve 100% switch within fiscal 2022.
- *Abbreviation of the Forest Stewardship Council®, a program that strives for proper management of forest as well as the use and conservation of sustainable forest resources
Marine Products
The NISSIN FOODS Group aims to procure marine products that are caught in accordance with fishery methods that protect the ecosystem based on systematic marine resources management and give consideration to the human rights of employees. In light of this, the Group is promoting the procurement of MSC*1 and ASC*2 certified marine products. If these certified products cannot be available, products are procured from suppliers that can confirm conditions up to the fishing ground. For example, the Alaskan Pollack, which is used in making fish paste, is all MSC-certified. Meanwhile, squid and shrimp are procured from suppliers that can trace conditions up to the fishing ground.
- *1Marine Stewardship Council
- *2Aquaculture Stewardship Council
Soybeans
The soybeans NISSIN FOOD PRODUCTS procures as a raw material for deep fried tofu are all produced using sustainable methods certified by the U.S. Soybean Export Council (USSEC).
Agricultural products
The green onions and cabbage used as raw materials by NISSIN FOOD PRODUCTS are grown under contract, and a representative of the Resourcing Division of NISSIN FOODS HOLDINGS visits the fields to check cultivation and agricultural chemicals use records.
Animal welfare (livestock)
The NISSIN FOODS Group regularly requests meat suppliers to share the state of animal welfare being implemented. We also comply with proper usage methods of veterinary pharmaceutical drugs, including antibiotics and growth hormones, in line with national standards. Suppliers that deliver chicken extract confirm that the chickens are not neglected in an unsuitable environment (in other words, neglected at night). We do not use genetically-modified or cloned animals as raw materials.
- Approach to Animal Welfare
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The NISSIN FOODS Group takes into consideration the Five Freedoms, the basic principles of animal welfare* which are internationally recognized.
- ・Freedom from hunger and thirst
- ・Freedom from fear and distress
- ・Freedom from discomfort
- ・Freedom from pain, injury or disease
- ・Freedom to express normal behavior
Development of Low Environmental Impact Plant-Derived Meat Alternatives and Cultured Meat Products
While demand for meat is growing rapidly along with global population growth and economic growth in emerging countries, livestock production requires feed, large amounts of water and land, and emits large amounts of methane and other greenhouse gases, having an enormous environmental impact.
In 2016, the NISSIN FOODS Group developed “soy beef,” made using an original production process with soy protein as the main raw material, and began using it as a product ingredient.
Subsequently, we are promoting the use of “soy meat,” including the development of soy pork and a soy char siu chip.
In March 2019, we were the first in the world to successfully produce bovine muscle tissue in the form of a diced steak (1.0 cm × 0.8 cm × 0.7 cm) using beef-derived muscle cells, created in collaboration with the research group of Professor Shoji Takeuchi of the Institute of Industrial Science, the University of Tokyo.
Furthermore, in March 2022, we succeeded for the first time in Japan in producing edible cultured meat. In recent years, cultured meat has been researched around the world, and the NISSIN FOODS Group is working on cultured steak meat, which requires advanced technology. Currently, our goal is to establish the basic technology to produce cultured steak meat measuring 7 cm (width) x 7 cm (depth) x 2 cm (thickness) and weighing approximately 100 g within fiscal 2025.