Ezaki Glico Co., Ltd.

The risk that earthquakes, tsunamis, storm and flood damage, pandemics, and similar events could disrupt the supply chain, halt business operations, and cause damage to employees, officers, and business assets. New threats such as a Mt. Fuji eruption and intensifying heavy rainfall are also becoming apparent. The Group is building a system for early recovery through regular updates to its BCP (Business Continuity Plan), multiplication and diversification of production and procurement sources, and distributed storage of critical parts and product inventory.

The risk that ransomware, DDoS attacks, exploitation of vulnerabilities, and cyberattacks originating from outsourcing partners could result in leakage, tampering, or loss of critical data, system failures, and business disruption. The Group is minimizing damage by establishing information security policies, building an early detection system through access control, vulnerability management, and log monitoring, and developing incident response procedures and recovery plans including backups.

The risk that the corporate brand and product brands could be damaged by the emergence of adverse rumors or a crisis. A decline in brand value would have a direct adverse impact on sales and earnings. The Group addresses this by establishing and disseminating a crisis communication plan, providing appropriate information disclosure, and conducting regular education and training for officers and employees.

The risk of development failures in new product development, improvement of existing products, cost reduction, and basic research, or the risk that products may not be accepted by the market due to a failure to capture changes in market needs. The Group is improving the quality and efficiency of development by concentrating management resources on priority areas, utilizing digital technologies in product development, and pursuing open innovation with external research institutions and startups.

The risk that delays in talent development and external recruitment could impede improvement of the organizational capabilities needed to realize management strategy, leading to lower productivity and deteriorating business performance. The Group addresses this by strengthening its talent portfolio (successor development, research strategy talent, etc.), supporting career autonomy through individual development plans, career self-reporting, and internal job posting systems, and promoting inclusion initiatives and health management.

The risk of brand damage from rising costs associated with addressing global warming, tightening global health and nutrition regulations such as sales restrictions on high-fat, high-sugar, and high-salt products, response to human rights due diligence, and insufficient consideration for food accessibility and diversity. The Group addresses this through implementation of the "Glico Group Environmental Vision 2050," response to climate change risk based on the TCFD framework, promotion of the Glico Group Human Rights Policy, and development and provision of products with appropriate sugar content and reduced salt.

The risk that changes in the external political, economic, social, and technological environment could affect the achievement of medium- to long-term management goals. This includes geopolitical risks and rapid changes in market structure. The Group continuously gathers, analyzes, and evaluates information on medium- to long-term trends in the external environment to identify material risks, and has established a system to promptly consider and implement countermeasures should a significant event suddenly occur.

The risk that product recalls could result in substantial costs, loss of customers leading to sluggish sales, and damage to the Glico brand. The Group thoroughly manages quality by promoting acquisition of the FSSC22000 food safety certification, building and operating a quality assurance system across the entire supply chain including supplier audits, and providing appropriate disclosure of information including allergen information.

The risk that profitability could be squeezed by rising crude oil prices, raw material costs, processing costs, and logistics costs driven by supply-demand fluctuations. The Group addresses this by strengthening supply chain management using digital technologies, diversifying procurement sources, strengthening procurement capability through global sourcing, and improving production and logistics efficiency through labor-saving measures and other means.

The risk that violations of laws and regulations or actions contrary to social norms could lead to administrative sanctions, litigation risk, and brand damage. The Group works to prevent such occurrences through compliance education for officers and employees across various fields, development and review of internal regulations, and establishment of an internal reporting hotline.