Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Rights
• Employee Health and Working Environment
• Fair Transactions with Business Partners
• Risk Management
• Sustainable Development Goals (SDGs)
• Corporate Governance
• Diversity and Inclusion
• Supply Chain Management
• Biodiversity
• Water Security

Environmental Achievements

• Decreased Scope 3 emissions in energy categories (transportation, delivery, disposal) despite increased production.
• Achieved expected effects by introducing an electrolysis plant, high-performance lime furnace, and gas turbine power generation at the Omi Plant, and a high-efficiency boiler at the Shibukawa Plant.
• Promoted energy conservation by switching to LED lighting at the Omi Plant and Chiba Plant.
• Reduced CO2 emissions due to reduced production at Omuta and Chiba Plants.
• Received an A- rating in “Climate Change” and a B rating in “Water Security” from CDP 2022.

Social Achievements

• Enacted the Denka Group Human Rights Policy.
• Sent a Self-Assessment Questionnaire (SAQ) to major suppliers regarding human rights risks.
• Signed the United Nations Global Compact.
• Implemented work style reforms to create workplaces employees want to return to.
• Established a Health Promoting Sec. and a Health Support Office to promote health and productivity management.
• Received Health & Productivity Management Outstanding Organization, White 500 certification.

Governance Achievements

• Established a Sustainability Committee and a Portfolio Transformation Committee.
• Established a global compliance system.
• Formulated the Standards of Business Conduct.
• Established a system to review contractual legal matters.
• Implemented measures to prevent insider trading.
• Strengthened Groupwide ICT governance.

Climate Goals & Targets

Environmental Challenges

• Limits to individual company contributions to carbon neutrality.
• Supply chain disruptions due to unforeseen situations (natural disasters, geopolitical events, pandemics).
• Increased risk of lifestyle-related diseases and employee aging.
• High smoking rate among employees.
• High stress levels among employees.
• Fall accidents among employees.

Mitigation Strategies

• Actively seeking collaboration with surrounding companies and local governments.
• Regularly conducting objective risk evaluation of raw material procurement and collaborating with relevant departments to discuss countermeasures.
• Implementing measures to reduce stress, promote healthy lifestyles, and prevent fall accidents.
• Introducing a remote smoking cessation counselling, smoking cessation clinic support, and assistance in purchasing smoking cessation aids.
• Creating a smoke-free environment.
• Deploying a health support app for smartphones.
• Holding health promotion seminars regularly.

Supply Chain Management

Responsible Procurement

• SAQ sent to major suppliers regarding human rights risks.
• Strengthening partnerships with suppliers through site visits and online interviews.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD, UNGC, TNFD

Certifications: ISO 14001, ISO 9001, ISO 45001, ISO 50001, ISO 28000, IATF 16949, ISCC-PLUS, ISO 13485, KES Step 2

Sustainable Products & Innovation

• Heat dissipation materials
• Phosphor materials
• Food packaging materials

Awards & Recognition

• White 500 certification

Environmental Metrics

ESG Focus Areas

• Climate Change
• Circular Economy
• Biodiversity
• Resource Conservation

Environmental Achievements

• Completed demonstration equipment for chemically recycling polystyrene in March 2024.
• Aiming for a 60% reduction in Scope 1 and 2 CO2 emissions from FY2013 levels by 2030 and carbon neutrality by 2050.
• Developing carbon negative concrete.
• Developing and utilizing spherical alumina for heat dissipation in various applications.

Social Achievements

• Not disclosed

Governance Achievements

• Established a Sustainability Committee (meets five times a year) to oversee climate change response and other ESG matters.
• Adopted an internal carbon pricing system (¥10,000/t-CO2) for capital investment.

Climate Goals & Targets

Environmental Challenges

• Scope 3 emissions constituted about 44% of total emissions in FY2023.
• Climate change related risks including increased costs due to rising carbon taxes, increased costs due to carbon reduction in manufacturing processes, increased raw material and fuel costs due to rising naphtha and natural gas prices, and increased damage to production facilities due to natural disasters.

Mitigation Strategies

• Actively collaborating with business partners and local governments to reduce Scope 3 emissions.
• Expanding clean energy, supporting energy conservation, and introducing new technology.
• Reducing CO2 by more than 300,000 tons per year by switching manufacturing processes to a “low-carbon acetylene chain”.
• Pursuing further profit through R&D to utilize by-product hydrogen.
• Augmenting production facilities in line with increased demand for products contributing to decarbonization.
• Promoting recycling resources through chemical recycling of used polystyrene and developing/selling biomass-derived raw material products.
• Reducing usage through process electrification and energy conservation through optimization of production flow.
• Reviewing and strengthening facility maintenance measures.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Increased damage to production facilities and suspension of production activities due to intensification of natural disasters

Transition Risks

• Increased costs due to rising carbon taxes
• Increased costs due to carbon reduction in manufacturing processes
• Increased raw material and fuel costs due to rising naphtha and natural gas prices

Opportunities

• Growth in demand for products that contribute to decarbonization (silicon nitride, acetylene black, spherical alumina)
• Growth in demand for products that contribute to solving the food crisis (biostimulant market)
• Growth in demand for products which make effective use of CO2 (LEAF concrete for CO2 capture and fixation)

Reporting Standards

Frameworks Used: TCFD, TNFD, UN Global Compact

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Carbon negative concrete (CUCO)
• Spherical alumina
• Silicon nitride powder
• Chemically recycled polystyrene products

Awards & Recognition

• Not disclosed