Kirin Group Long-Term Environmental Vision

Hajime Nakajima Managing Director Responsible for Group Quality and Environment Strategy Kirin Holdings Company, Limited

TOP MESSAGE

The Kirin Group is a corporate group that

of fers a redef ined joy of “food and well-

being,” with craftsmanship that is focused on

people and nature. Our Group has expanded

its worldwide offerings to alcohol, soft drinks,

food, pharmaceutical and biochemical, and our

operations now cover regions including Asia,

Oceania, and Brazil.

Kirin has also announced the Kirin Group

Vision 2021 (KV2021) long-term business plan,

specifying brand-centered management and

striving for sustainable growth for the Group,

while focused on being a corporate group that

protects the environment.

It is said that humanity is already using more

resources than the Earth has the capacity to

supply. Many believe that with the population

growth by 2050 and improvements in lifestyles,

an even greater burden will be placed on the

global environment. As the Earth can only bear

a limited load, handing down the bounty of

nature to future generations is a pressing issue,

for both the businesses of the Kirin Group and

for society as a whole.

With this in mind, the Kirin Group wishes to

Message from Top Management 02

The Long-Term Environmental Visionof the Kirin Group 03

Key Target Areas of Priority

・Biological Resources 04・Water Resources 05・Containers and Packaging 06・Global Warming 07

Ensuring Long-term Sustainability of

the Environment and our Society and Improvement

in Corporate Value

2050 Long-term Environmental Vision

The Kirin Group shares with all the people associated with its value chain its aspiration to continue to enjoy the bounty of nature and pass it down to the generations to come.

2010 Medium-term Business Plan

2007 Mid-term Plan 2010 Mid-term Plan 2013 Mid-term Plan 2016 Mid-term Plan

KV2021KV2015

2050

Exchanging Views with Outside Stakeholders

100th Anniversary of our Founding

Action Plans for Becoming a Low-Carbon Corporate Group

Declaration of Support for Biodiversity Conservation

2013 Medium-term Business Plan

Recycling of Containers and PackagingSustainable Use of Biological ResourcesPrevention of Global WarmingConservation of Water Resources

Four Key Target Areas

Kirin Group E�orts Toward Sustainability

I N D E X

Striving for a Sustainable Global Environment

2

expand its awareness of global environmental

issues in KV2021, and has unveiled its Kirin

Group Long-Term Environmental Vision with its

sights on 2050. The target is the realization of

a society that is based on 100% recycling as to

balance the environmental load produced by

the Kirin Group's value chain with the Earth's

ability to supply resources. That is why we

have made it our goal by 2050 to ensure the

sustainable use of biological resources, water

resources, and containers and packaging, and

to keep the CO2 emissions of the value chain

within the Earth’s natural CO2 absorption

ability.

　 In suppor t of K ir in’s “brand- centered

management ” approach, through which

Kirin aims to further its engagement with

stakeholders through its business activities

along the value chain, Kirin is adopting a

CSV (Creating Shared Value) approach to

business. For example, its program to aid Sri

Lanka tea farmers in becoming certified for

sustainable farming methods (see p. 4) will not

only contribute to protecting the ecosystems

and improving the livelihoods of people in

Passing Down the Bounty of Natureto the Future Generations

agricultural communities,but also will lead to

more sustainable sourcing of high-quality raw

materials for the Kirin Group. As we continue

to conduct these efforts and share our vision

for the future with our stakeholders based on

our Long-Term Environmental Vision, we can

pursue a more sustainable way of business that

creates shared value.

We intend to embark on this journey one step

at a time along with all around us, so that we

may continue to ensure that our children and

grandchildren enjoy the “joy of food and well-

being.“

Creating Shared Value with our Stakeholders

Containers and PackagingWe use sustainable containers and

packaging in consideration of their users.

Water ResourcesWe make sustainable use of

water together with communities.

E�orts throughout our value chain

Biological ResourcesWe support agricultural communities and

make sustainable use of biological resources.

Global WarmingWe keep the CO2 emissions of the value chain within

the Earth's natural CO2 absorption ability in cooperation with all the people associated with our value chain.

Raw materials Products

Today, it is said that our society is consuming natural resources at a rate of 1.5 times the Earth’s supply*1. Predictions indicate that by 2050 the Earth’s population will top 9 billion people and the world economy will nearly quadruple*2, and that we will need to raise our current food production by 70%*3. At this rate, expansion of land used for agriculture and other factors will cause the area of mature forests to decrease by 13%, and over 40% of

Make a cyclical use of resources so as to keep their use at or below the level that the Earth can replenish them, while reducing the environmental loads that the Kirin Group generates through its value chain

We will work with non-governmental organizations and industry groups, and develop our initiatives maintaining close communication with a wide range of stakeholders while sharing roles to achieve our targets.

*1 WWF Living Planet Report 2012*2 OECD (2012) Environmental Outlook to 2050*3 FAO (2009) Issues briefs : How to feed the world in 2050*4 UNEP（2011）Decoupling natural resource use and environmental impacts from economic growth

Our Efforts

Realization of society that is based on 100% recyclingGreater cropland

Increased water demand

Greater demand for energy and resources

Increased greenhouse gas emissions

Kirin Group Long-Term Environmental Vision

The Long-Term Environmental Vision of the Kirin Group

The Kirin Group shares with all the people associated with its value chain its aspiration to continue to enjoy the bounty of nature and pass it down to the generations to come.

3

Annual extraction of resources

Greenhouse gas emissions

Mature forest area

Rate of population living in areas of severe water stress

Downby

Up to

Over

Over

13%

50%

40%

3x

Use of land for agriculture and other purposes will expand to feed the larger population, leading to a decline in the area of biodiversity-rich mature forests*2.

With the greater global demand for water, the population suffering from water shortages will increase rapidly *2.

Emerging and developing countries will consume resources at the level Europe does today, worsening the global depletion of resources*4.

With CO2 emissions for energy use as a major factor, the world's greenhouse gas emissions will increase by 1.5 times overall.

Working towards

sustainable growth

with the society of

2050.

Population 7 billion Population 9 billion4x economic growth

In 2050The World Today

2050: An Unsustainable Future

This will be the Earth in 2050 if we do not take action.

Our direction

the world’s population will face serious shortages of freshwater*2. What is more, with the increased consumption of energy throughout the world, greenhouse gas emissions are projected to rise to 1.5 times their current amounts.To cope with these challenges and ensure that the bounty of nature can be enjoyed by generations to come, the Kirin Group has set its Long-Term Environmental Vision for 2050. Our target is the

realization of society that is based on 100% recycling so as to balance the environmental load produced by the Group's value chain with the Earth's capability to supply resources. And in close cooperation with our stakeholders, we will pursue a sustainable way of doing business that creates shared value.

Benefits for Sri Lanka Tea Farmers

4

Biological Resources

Work toward the sustainable use of biological resources by 2050

The Kirin Vision

Supporting Agricultural Communities

Population growth is leading to greater industrialization and conversion of land to agricultural use. This is causing excessive consumption of biological resources, fragmentation and loss of habitats, and destruction of ecosystems. As species disappear and biodiversity is lost, economic growth in emerging nations and other areas is bringing about changes in the dietary habits of people, resulting in expanded use of cropland for greater production of feed for livestock, along with deforestation. Furthermore, the greater demand for biofuel crops is also spurring these events.

The loss of abundant nature in the areas that produce raw materials for our products and of the communities of their producers represents a major loss for the Kirin Group. Even as we attempt to secure stability in supplies of materials, we are faced with significant risks.

With the continuing expansion of Rain Forest Alliance Certification, a certification of sustainable farming, as we work to protect the abundant nature and ecosystems and improve the socioeconomic conditions of production areas, we are seeing a greater possibility that high- quality raw materials can be secured.

We will build lasting partnerships with agricultural communities and the people who work there, promoting use of biological resources and protection of ecosystems along with better socio-economic sustainability for the communities.

From the standpoint of conserving the rich ecosystems in which people and nature coexist, and of our business’ needs to use biological resources sustainably, we will assess the risk caused by our use of such resources and address issues in order of priority.

Risks

Our challenges

Opportunities

Target

(Note: Shows rate of change with 1970 set to 1)Source: WWF Living Planet Report 2008 and 2012

Our stance

Our approach

Major Efforts

■Conservation of wetlands and 　tropical rainforests

■Mariko Vineyard

Lion helps protect the rich ecosystems of Oceania through efforts including support for NPOs and farmers who improve soil on dairy farms and conservation of wetlands. Brazil Kirin is also working to regenerate rainforests in the Amazon.

The Mariko Vineyard in Ueda, Nagano Prefecture, from which Mercian harvests grapes for wine, sits on largely idle farmland that was reclaimed with careful attention paid to the original landscape and scenery. Efforts here include use of eco-friendly fertilizers and limited use of agrochemicals.

Guidelines drafted in cooperation with the Japan Off ice of the World Wide Fund for Nature (WWF). We will apply these guidelines to verify that farms or forests that serve as production areas for the raw materials we use have not been created through illegal deforestation. Furthermore, we will make use of reliable third-party certification systems to source products that are produced legally and properly and do our best to avoid purchasing from businesses that cause environmental destruction.

Palm oilPurchase sustainable RSPO* certified palm oil for all primary and secondary materials by 2015

Continuous surveying of supplier tea farmers and improvements of sustainability for farmers

Verify through questionnaires and other means that all raw pulp is sustainable by 2015

We support tea farmers that are seeking to be certified by the Rain Forest Alliance Certification, a certification of sustainable farming. Doing this will give added value to the foods they produce, improve the living conditions for producers and provide their children with a better educational environment.

Training for farmers in protecting ecosystems and improving sustainability is provided by Rainforest Alliance. The Kirin Group, makers of Gogo-no-Kocha, Japan’s no. 1 brand of PET-bottled black tea drinks, provides some of the funding for this training.

Farmers whose farms have higher rates of sustainability will enjoy greater added value. Plus, lives for workers and education for children will improve.

Future sustainability of the entire tea-producing region will improve, and a stable supply of high-quality black tea leaves can be obtained.

Support for Sri Lanka tea farmers in becoming Rainforest Alliance-certified

The Kirin Group assists with funding for training toward obtaining certifications

Benefits for the Kirin Group

Guideline for the Sustainable Sourcing of Biological Resources

TOPICS

Black tealeaves

Paper

1970 1975 1980 1985 1990 1995 2000 2005

2

1.5

1

0.5

0

Living Planet Index (LPI) indicating the state of global biodiversity

28% dropin number of

species globally

*Using the Book and Claim method in which credits for RSPO (Roundtable on Sustainable Palm Oil) certified palm oil are purchased, and then an equivalent volume of certified palm oil is assumed to have been purchased.

RSPO (Roundtable on Sustainable Palm Oil): An international non-profit organization established in 2004, primarily consisting of seven related groups including the WWF, with the goal of promoting production and use of sustainable palm oil.

Action Plans

Water Resources

The Kirin Vision

Along with Communities

We will work together with stakeholders in each area to tackle the water-related issues that vary greatly from region to region.

The Kirin Group, upon assessing the risks related to regional water resources in its produc tion areas, wil l take the appropriate initiatives to address the water challenges of each region. We will promote high efficiency in water use while we partner and cooperate with stakeholders to engage in activities to protect local water resources.

Major Efforts

■Efficient Use of Water ■Recycling of water using reverse 　　osmosis membrane technology

■Water-source Protection Project

Large amounts of water are used in the cleaning and sterilization processes for equipment and pipes in beer manufacturing. Each brewery has set its own targets for saving water, and as we review our processes for better efficiency in water use, we will proactively promote recycling of water tailored to each particular purpose.

Australia has been beset by droughts in recent years, forcing its government to focus on rationing of water use. Our Castlemaine Perkins brewery in Brisbane, which was particularly impacted by droughts, now uses advanced water recycling methods using reverse osmosis membrane technology.

As part of our efforts to protect the forests that provide us with a bounty of high-quality water and nurture diverse forms of life, we are working alongside local NPOs and forest cooperatives on forest-building projec ts that respec t the ecosystems and vegetation.

Kirin Holdings has been active participant in CDP Water Disclosure, a program that encourages companies to disclose their water usage. In 2011 it was among the 14 global companies that scored the highest in the Water Management Disclosure Rating by Norwegian Government Pension Fund Global, a socially responsible investment fund affiliated with the Norwegian government. This gave a global stamp of approval to Kirin's efforts.

Ranked among the world’s top 14 companies for disclosing water-related risks

5

TOPICS

40

30

20

10

0

12

9

6

3

01990

34.917.4 12.6 11.6

5.2

10.4

2009 2011 2012

Water Use Amount (millions m3 per year)

Consumed water by Kirin Brewery

Water Use-Intensity (cubic meters/kl)

Reduction of Water Use-Intensity by 50%

Our stance

Our approach

Strive to see that the water resources in each region can be ensured on a permanent basis by 2050

TargetAs the global population increases and economies advance, demand for water will continue to grow, and severe water shortages are predicted. Such shortages will not only affect water used for daily life, but also will impact ecosystems and lead to serious food shortages. Water is a resource that is not distributed evenly, and involves a variety of issues including deforestation and global warming. A greater population could make these problems even more serious.

In addition to the challenge of securing a stable supply of quality water, one of our most basic resources, we can also foresee the threats of increased costs due to water scarcity and impacts on production due to droughts, floods and other regional disasters.

Given that water is a regional resource that presents unique challenges depending on the area, we continue to discuss and share ideas on how to address water resource issues at river basins and along the value chain. If water supplies do become scarce, the water-saving technologies of the Kirin Group could offer advantages.

Risks

Our challenges

Opportunities

世界の人口と世界の取水量の推移

世界の水取水量

20世紀

(K㎥) (億人)世界の人口

19001940

19501960

19701980

19901995

20002010

2025

9000

8000

7000

6000

5000

4000

3000

2000

1000

0

80.1

61.2

90.0

80.0

70.0

60.0

50.0

40.0

30.0

20.0

10.0

0.0

人口３・７倍

取水量６・７倍

16.5

579 1382

3973

5235

25.4

Global water demand

(K㎥)6000

5000

4000

3000

2000

1000

02000 2050

OECD BRIICS

2000 2050 2000 2050 2000 2050Rest of

the World World

Irrigation

Domestic

Livestock

Manufacturing

Electricity

2050 global water demand

Up 55%

Source: The Environmental Outlook Baseline; output from IMAGE model suite.

Containers and PackagingWith our customers in mind

Total global resource use and population growth (1990 = 1)

Source: UNEP, UNDP

1990

1.5

1.4

1.3

1.2

1.1

1

0.9

1995 2000 2005

Population Resources

Major Efforts

■Smaller Can Ends and Lighter Bottles■Corner-cut Wrap-around Cardboard CaseKirin Brewery was the first Japanese beverage company to use a corner-cut carton, a wrap-around canned beverage cardboard shipping case with beveled-off corners that requires less paper to make, with a shape that makes it easier to carry and handle. Kirin Beverage has also adopted this design, the first to do so in the soft drink industry.

(From typical 350-ml beer cans)

(From typical 350-ml beer cartons)

Kirin Brewery adopted 204-diameter can ends in 2011, resulting in 4% thinner aluminum and making the cans lighter thanks to the redesigned shape. In addition, our use of thinner glass for large bottles has resulted in a 21% lighter returnable bottle.

197320.5g

198518.6g

201114.6g

Can weight

6

Reduction of raw materials by

10.9%

TOPICS

Use of resources is outpacing population

growth

Recycling PET bottles into new PET bottles

Kirin Beverage has launched a “bottle-to-bottle” program that reuses old PET bottles and makes them into new ones. When implemented in 2012, it reduced environmental load over typical containers by using 10% of mechanically recycled PET materials and up to 27% plant-derived PET materials. We will make further endeavors to reduce environmental impact by increasing the proportion of mechanically recycled materials along with assessing strength and adaptability for products.

sugarcane

Plant-derivedmaterialnatural

gas

PETPolyethylen

terephthalate (PET)

DrinkingBeveragesCollection

Decontaminationthrough heat, vacuum, etc. Sales Production

By reusing old PET bottles as new ones, we are contributing to domestic resource recycling

Mechanically recycled PET

Materials derived from mechanicalrecycling

70%

30%

Reduction of petroleum-derived

materials by 37%

Reduction of CO2

emissions up to 27%

Reduction of can weight by 29% (5.9 g)

The Kirin Vision

We will work to make packaging lighter and easier to use for our customers and for the people who transport our products, and to minimize the impact of our containers and packaging on the natural environment.

As we strive to improve ease of use for the people who use and consume our beverages, along with making packaging lighter for those who transport our products, we are proactively involved in development and adoption of containers and packaging materials that are sustainable and have minimal impact on the natural environment. We will also work to improve the sustainability of container materials themselves, making greater use of plant-derived materials and recycling used containers into new ones.

Our stance

Our approach

Work toward sustainableuse of packaging and containers by 2050

Target With the rapid development of economies, the explosion in consumption of the world’s resources has outpaced even population growth. This surge in consumption has led to numerous problems including rampant development, global warming, environmental pollution, and biodiversity loss. We will need to reuse and recycle resources in order to control our overall consumption if we are to pursue further economic growth.

In producing containers and packaging for our products, we cannot deny that we must use finite natural resources from the Earth as well as energy. The sustainable use of resources for this purpose is a serious issue for the Kirin Group.

We are becoming better able to reduce our environmental load and reuse resources thanks to the greater possibilities for bioplastics and enhanced technologies for reusing old containers as new ones.

Risks

Our challenges

Opportunities

Global WarmingAlong with all associated with our value chain

Targets (excerpt)

Major Efforts■Selected for Carbon Disclosure　Leadership Index (CDLI)

In 2012, Kirin Holdings was selected as one of 22 CDLI companies by the CDP (Carbon Disclosure Project) for advancement in disclosure of climate change information.

In August 20 09, we formulated a strategy for mitigating climate change. With a med to long-term target of reducing CO2 emissions directly associated with our business as well as mid to long-term targets for re ducing th em throughout our value chain ranging from R&D to disposal and recycling, we are working to achieve these goals.

●We will reduce CO2 emissions generated from our global value chain by half by 2050.●By 2015, we will bring CO2 emissions from our manufacturing, distribution and office operations in Japan down to 35%

Mercian ships some of its imported wines over sea using special large bags, and bottles the wines at its plants in Japan. This has helped greatly reduce CO2

emissions during the shipping process.

Ocean Transportationin Large Bags and Bottling in Japan

Action Plans for Becoming a Low-Carbon Corporate Group

7.2billion tons of carbon

Emissions due to human activities, originating from fossil fuel use

Greenhouse gas emissions due to humanactivities and natural absorption amount

Whole Earth

3.1billion tons

of carbon

Naturallyabsorbed amount

7

Figures are for annual CO2 emissions (or absorption)Source: IPCC Fourth Assessment Report (2007)

TOPICS

984778824881953

The target has been achieved, so a new target is to be set in 2013.

1990

1,500

1,000

500

02008 2009 2010 2011 2012 2015

1,514

1,000 tons

target reductionby 35%

Reduction by 53%

715

Raw materials Logistics Production (bottling)Production (fermentation)

Reduction of CO2 emissionsduring ocean transportationby approximately 60%

Reduction of the containerweight by 5%

Kirin Group's CO2 Emissions from its Manufacturing, Distribution, and Office Operations in Japan 2012 Achieved

53%reduction

The Kirin Vision

With the cooperation of all stakeholders involved in the businesses and products of the Kirin Group, we will reduce CO2

emissions from our value chain.

Along with reducing our direct CO2 emissions, our total value-chain CO2 reduction efforts will be closely tied to our initiatives in biological resources, water resources, and containers and packaging.

Our stance

Our approach

Keep the CO2 emissions acrosschain within the Earth’scapacity to absorb them by 2050

As greenhouse gas emissions have already grown to twice the Earth’s natural rate of absorption, even further increases are being forecast due to the expansion of the global economy. It is said that this will bring about major changes in the Earth’s climate, the impact of which could extend not only to resources and energy, but also a host of other environmental issues involving natural ecosystems, water supplies, water-related disasters, agriculture, forestry and fisheries.

The impact of climate change also has some influence on the other issues we face (biological resources, containers and packaging, water resources), making it an issue that the Kirin Group must take seriously if it is to continue operating its businesses while making use of the bounty of nature. We will have to cooperate with all involved in our value chain in our actions to reduce CO2 emissions.

With the greater importance of energy efficiency and renewable energy use, we will see more opportunities to apply the technologies of the Kirin Group. Promotion of energy saving will also lead to cost reductions.

Risks

Our challenges

Opportunities

Target

H e a d O f f i c e

Kirin Holdings Company, LimitedNAKANO CENTRAL PARK SOUTH 10-2, Nakano 4-chome, Nakano-ku, Tokyo 164-0001, Japan TEL +81-3-6837-7000 [ Information Desk ]