‘New logic’: Ajinomoto says localisation and innovation key to drive sustainability agenda

13-Feb-2023 - Last updated on 13-Feb-2023 at 03:50 GMT

Ajinomoto has highlighted localisation and innovation as key pillars of its sustainability strategy in the firm’s most recent report. ©Ajinomoto

Japan food heavyweight Ajinomoto has highlighted localisation and innovation as key pillars of its sustainability strategy in the firm’s most recent report, with its leaders pledging to take a ‘fundamentally different’ path from other MNCs.

Establishing new leadership and whole councils to drive sustainability agendas and hit Environment, Social and Governance (ESG) targets is by no means a new thing in the food and beverage sector, particularly since sustainability credentials have emerged as a major purchasing driver for consumers.

Ajinomoto has been no different in this regard, having established its Sustainability Advisory Council (SAC) as a subordinate body of its board of directors back in April 2021, and taking great care to include experts from various fields including academia, nutrition, public health, developing markets and more on this council.

The council recently published its 2022 Sustainability Advisory Council Report, and although this has yet to detail specific achievements, it has highlighted that sustainability initiatives will be focused on areas including innovation and localisation.

“The mandate of the SAC was to identify both positive as well as negative opportunities for Ajinomoto Group to promote sustainability through its business processes and goals over the long term,” Ajinomoto group SAC Chair Scott Davis said.

“This [includes] transformations required for the future that would require new logics, new ways of thinking and new partnerships that can pull the company into a better future, not simply push it along a path leading from its past.”

Within the model presented by the SAC to the board, the need for not only innovation but also localisation in all approaches were highlighted as vital pillars to achieve sustainable success.

“[It is crucial to] promote the advancement and application of the amino/bio sciences [to] promote food system quality, resilience and sustainability as that is Ajinomoto’s expertise,” he added.

“[To do this], there is a need to facilitate the leverage of physical assets and resources on the local scale alongside the sharing and application of wisdom and intangible assets globally to support inclusive, non-exclusionary growth.

“This strategy is also expected to create and promote food products and solutions that understand the multi-domestic nature of food and promote adaptability to local food needs and values, respect the local cultures and communities and promote the relevant value chains.”

Council member Takao Toda added that this is especially important in the context of developing food solutions for developing markets with severe nutritional issues such as South Asia.

“The world’s population distribution is going to change significantly over the next 30 years and by 2050 the global population of 10 billion will see South Asia and Africa have the greatest population growth,” Toda said.

“At the same time, we need to remember that these are regions where the nutritional problems of children are particularly severe with at least one in three children here nutritionally stunted and having to live with the negative legacy od their childhood for the rest of their lives.

“In light of these changes to the world situation, Ajinomoto as a global enterprise needs to consider its path as without further engagement with these regions it would be difficult for it to continue existing.”

This is especially so as in contrast, by 2050 Japan is expected to have the most significant population decline globally.

“As a business it is natural to seek to survive and expand, but [there are various ways to achieve this] - in 2020 Ajinomoto shifted from pursuing ‘relative value’ in terms of surpassing and outperforming others e.g. aiming to be one of the top ten companies in the world, to ‘absolute value’ which people can relate to,” he added.

“This has been a crucial step to gaining support, endorsement and further concrete actions to realise this value will realise even more business growth in the future.”

Achieving fundamental difference

With many big brands having come under fire after announcing or committing to ESG targets in the name of sustainability but then being accused of greenwashing, the Ajinomoto SAC is keen to develop its strategy more carefully to steer away from going down the same path.

“I would like Ajinomoto to fundamentally differ from other companies that have been caught up in the growing craze regarding well-being and ESG, as well as the SDGs, or which are only pretending to be working on these issues,” council member Mana Nakazora added.

“No matter how noble a company’s philosophy, if it is not accepted, no one will buy their products, and if no one buys their products it will not be profitable – Profit supremacy is often disliked, but without this it will be impossible to protect employees or shareholders.”

“So for the Ajinomoto of 2050 will evolve into a form that makes sense, I believe that it is crucial to solve social problems related to food; and also for the firm to generate solid earnings by strengthening its sustainability as a company.