Climate Change Data

Environmental Metrics

ESG Focus Areas

• Safety
• Environment
• Society

Environmental Achievements

• 20% reduction in CO2 emissions compared to 1990 levels
• 53% reduction in VOC emissions compared to 2000 levels (achieved one year early)
• 340-ton decline in total PRTR discharge versus fiscal 2007
• 64% recycling rate

Social Achievements

• Launched mental health seminar for line managers
• Announced Basic Thinking on Personnel Policies to improve employee satisfaction
• Exceeded legally mandated employment ratio for people with disabilities
• Various initiatives to promote the success of female employees

Governance Achievements

• Established the “Compliance Code of Conduct for the Purchasing Department”
• Formulated internal rules to ensure thorough compliance with the Act Against Delay in Payment of Subcontract Proceeds
• Developed internal controls concerning financial reporting

Climate Goals & Targets

Environmental Challenges

• High lost time injury frequency (0.43 for MCC, 0.28 for the Group)
• Kashima Plant fire in 2007
• Economic recession impacting production and energy consumption
• Stricter international chemical substance controls
• Aging of facilities

Mitigation Strategies

• Strengthened safety precautions and safety management systems
• Established five committees at the Kashima Plant to cultivate a safety culture
• Implemented measures to prevent recurrence of accidents
• Enhanced near-miss and simulation-based training
• Implemented RC audits
• Developed and implemented Super-Stability Technologies (SSOT and SSMT)
• Energy conservation activities
• Introduction of non-solvent technologies
• Review of styrene recovery facility operating conditions
• Enhancement of seals on exhaust gas lines

Supply Chain Management

Responsible Procurement

• CSR-related items included in purchasing guidelines

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, Ministry of the Environment’s Environmental Reporting Guidelines

Certifications: ISO 9001

Sustainable Products & Innovation

• Green Sustainable Plastic (GS Pla®)
• Li-ion battery materials
• LED materials

Awards & Recognition

• Outstanding Award in the Family Category and the Award Commemorating 60 Years Since the Universal Declaration of Human Rights

Environmental Metrics

ESG Focus Areas

• Environmental Conservation
• Occupational Safety & Health
• Process Safety and Disaster Prevention
• Quality Assurance
• Chemical/Product Safety
• Corporate Governance
• Human Rights/Employment
• Responsible Care (RC)
• Stakeholder Engagement
• Supply Chain Management
• Biodiversity
• Community Investment
• Work-Life Balance

Environmental Achievements

• Reduced CO2 emissions by more than 30% compared with 1990 levels in fiscal 2009.
• Reduced total PRTR discharge in fiscal 2009 to 1,080 metric tons, down 150 metric tons (12%) compared with fiscal 2008 levels.
• Early achievement of the goal to reduce VOC emissions by fiscal 2010 (53% reduction compared to fiscal 2000).

Social Achievements

• Developed the SEARCHGAIT sensor system for early detection and treatment of diseases and maintaining health.
• Implemented initiatives to curtail the increase in the amount of work performed outside business hours to realize a balance between work and lifestyle.
• Supported employee efforts to define their own career paths by developing systems (in-house application, in-house intern and FA systems).

Governance Achievements

• Strengthened corporate governance and enhanced corporate value by ensuring that management decision-making and operations are carried out appropriately and promptly; by clarifying management responsibilities; and by prioritizing compliance and stronger risk management.
• Implemented the Mitsubishi Chemical Corporation Risk Management Policy in May 2006.

Climate Goals & Targets

Environmental Challenges

• Improper data processing at the Yokkaichi Plant.
• High lost time injury frequency (0.46 for Mitsubishi Chemical and 0.26 for the Group as a whole in fiscal 2009).
• Need for radical purification of paddy fields to improve food safety due to cadmium contamination.

Mitigation Strategies

• Implemented heightened measures at the Yokkaichi Plant to prevent recurrence of improper data processing, including creating manuals and systems to prevent data distortion, cultivating compliance awareness, reviewing organizational structure, and making the checking function more robust.
• Enhanced near-miss and simulation-based training to improve risk prediction and communication.
• Developed phytoextraction technology for purifying soil contaminated with heavy metals.

Supply Chain Management

Supplier Audits: Audits of plant purchasing departments to confirm their understanding of the Subcontractor Act.

Responsible Procurement

• Purchasing guidelines to ensure fair and equitable transactions and incorporate CSR considerations.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, Ministry of the Environment Environmental Reporting Guidelines, Ministry of the Environment Environmental Accounting Guidelines 2005

Certifications: ISO 9001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Biodegradable plastics (GS Pla)
• Biomass-derived plastics
• Organic photovoltaic (OPV) modules
• Lithium-ion battery (LIB) materials
• White LEDs

Awards & Recognition

• 2006 Minister of Health, Labour and Welfare Award (disabled employment promotion month poster)
• Bronze medal in the 7th International Abilympics in 2007

Environmental Metrics

ESG Focus Areas

• Sustainability
• Health
• Comfort
• Safety
• Environmental Conservation
• Quality Assurance
• Chemical Products Management
• Human Rights
• Work-Life Balance
• Community Investment
• Responsible Care
• Compliance
• Risk Management
• Corporate Governance
• Biodiversity

Environmental Achievements

• Reduced PRTR substance emissions by 100 metric tons from fiscal 2010 levels.
• Reduced groupwide VOC emissions by 56% from the fiscal 2000 level and by 1,020 metric tons from the preceding fiscal year.
• Reduced final landfill disposal rate for the whole group to 2.5%, down 0.2 percentage points from the preceding fiscal year.
• Reduced greenhouse gas emissions by 27% from 2005 on a nonconsolidated basis and by 28% on a groupwide basis.
• Reduced carbon dioxide emissions by 14% from the preceding fiscal year.
• Reduced chemical oxygen demand (COD) of drains by 230 tons compared to the fiscal 2010 level.
• Achieved zero serious environmental accidents.

Social Achievements

• Launched KAITEKI Management and MOS Indexes promotion campaign, reaching various plants, offices, and business partners.
• Achieved zero serious occupational accidents.
• Maintained a high percentage of paid vacation holidays taken among regular daytime workers (70%) and shift workers (90%).
• Conducted surveys of 24,545 personnel, accounting for 90% of those working in Japan and stationed overseas.
• Improved the proceedings of biannual management and labor committee meetings to facilitate communications between management and workers.
• Organized scientific experiment events at different locations to support the cultivation of future human resources in science and technology.
• Won an award for excellence in the 5th Work-Life Balance Awards held by the Japan Productivity Center.
• Cultivated a channel for recruiting personnel from overseas universities in China and Singapore.
• Continued to attain the statutory rate for disability employment.

Governance Achievements

• Appointed a Chief SUSTAINABILITY Officer (CSO) and set up a KAITEKI promotion committee.
• Provided compliance training for various levels of employees, including overseas employees.
• Conducted compliance awareness surveys in Japan and overseas.
• Revised internal rules to strengthen the internal verification system for quality inspection and to strengthen auditing.
• Continued to reform the green data management system to unfailingly control and communicate data on substances subject to special control that are contained in individual products.
• Strengthened risk management systems at Group companies, including building a risk management network in Asia.

Climate Goals & Targets

Environmental Challenges

• Disseminating KAITEKI management and MOS Indexes.
• Addressing serious risks faced by the MCC Group (compliance violations, country risks in overseas business expansion, transport of hazardous and dangerous materials).
• Establishing and steadily operating risk management systems at Group companies.
• Creating a business continuity plan (BCP) based on lessons from the Great East Japan Earthquake.
• Increasing compliance awareness and auditing and monitoring.
• Preventing facility-related accidents.
• Preventing occupational accidents.
• Managing occupational health.
• Preventing environmental accidents and problems.
• Reducing chemical emissions.
• Reducing landfill disposal.
• Implementing global warming countermeasures.
• Complying with international regulations on chemicals.
• Strengthening risk assessment and information distribution.
• Improving the reliability of quality data and continuing to modify the green data management system.
• Promoting Mitsubishi Chemical's groupwide implementation of RC activities.
• Complying with the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors.
• Monitoring the CSR status of business partners.
• Cultivating the next generation of management.
• Cultivating global human resources.
• Offering opportunities to take up challenges and increase awareness.
• Increasing the percentage of female employment.
• Working toward a women's career support program.
• Working toward recruiting foreign nationals as employees.
• Working to help people with disabilities exhibit their skills.
• Promoting reduction of total working hours.
• Educating and raising awareness of human rights.
• Preventing sexual harassment, abuse of authority, and other forms of harassment at workplaces.
• Conducting employee opinion surveys.
• Building good labor-management relations.
• Cultivating future generations, communications with local communities, and support for disaster control.

Mitigation Strategies

• Appointed a CSO and set up a KAITEKI promotion committee; held briefing sessions on KAITEKI management and MOS Indexes.
• Addressed risks in different departments (abolished long-distance transport of dangerous or hazardous substances, settled overseas legal cases); addressed companywide and cross-divisional risks; addressed expected risks in social circumstances (reviewed the BCP).
• Built a risk management network in Asia.
• Closely examined priority products; assessed moving head office functions and business continuation in case a disaster strikes the head office district.
• Conducted compliance training sessions for various employee groups; conducted compliance awareness surveys in Japan and overseas.
• Achieved the target of no serious facility-related accidents; reviewed past measures to develop more convincing and effective measures; toughened facility management; continued to offer plant safety education.
• Conducted groupwide safety activities, decreasing the number of serious occupational accidents; raised awareness of responsible behaviors and conducted basic behavioral training; shared examples of near-misses and minor occupational accidents within the group; provided experience-based training.
• Provided level-specific mental health education.
• Had no serious environmental accidents; reduced PRTR substance emissions; reduced VOC emissions; worked toward zero emissions.
• Implemented energy conservation measures during the production process; reduced unit energy consumption in transit.
• Prepared to officially register substances with EU export quantities of less than 1,000 metric tons a year; conducted a study on the contents of substances of very high concern (SVHC) in products exported to the EU.
• Provided product safety data sheets (SDS) compliant with the GHS; helped promote the global product strategy (GPS) for the ICCA and the JIPS; disclosed risk assessments and safety summary sheets in succession in the GPS initiative.
• Revised internal rules to strengthen the internal verification system for quality inspection and to strengthen auditing; continued to reform the green data management system.
• Held information exchange meetings to share PC information in the Group; held Safety Day activities.
• Held an internal workshop; carried out an audit of the purchasing departments of different plants.
• Conducted a CSR survey of 117 business partners; conducted interviews with six business partners regarding their CSR actions.
• Continued to run an entry-level global personnel development program.
• Continued to run an entry-level global personnel development program; revised overseas practical work training and reorganized it into the Overseas Business Challenge Program.
• Consolidated application forms to facilitate the use of different programs, and improved the methods of advertising them to employees.
• Increased percentage of women in new graduates recruited; won an award for excellence in the 5th Work-Life Balance Awards.
• Cultivated a channel for recruiting personnel from overseas universities; hired two new graduates of foreign nationality.
• Continued to attain the statutory rate for disability employment.
• Maintained a high percentage of paid vacation holidays taken; implemented programs for open recruitment, in-house free agents, in-house internships, and career counseling.
• Held group training sessions at different locations, including overseas plants; offered in-house Intranet training on human rights.
• Conducted surveys of 24,545 personnel.
• Improved the proceedings of biannual management and labor committee meetings.
• Organized scientific experiment events; sponsored the Mitsubishi Chemical Junior Designer Award; supported employees' volunteer activities.

Supply Chain Management

Supplier Audits: CSR survey of 117 business partners; audits of plant purchasing departments to confirm compliance with the Subcontractor Act.

Responsible Procurement

• Purchasing guidelines to ensure fair and equitable transaction practices; CSR briefing for business partners; CSR questionnaire for business partners.

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters (earthquakes, tsunamis)

Transition Risks

• Market trends
• Legal and regulatory environment

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, Ministry of the Environment: Environmental Reporting Guidelines 2007, Ministry of the Environment: Environmental Accounting Guidelines 2005

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• GS Pla (biodegradable plastic)
• DURABIO (high-performance engineering plastic made of plant materials)
• VxRGB (high-color rendition LED lighting fixture)
• VELVE (organic EL lighting)

Awards & Recognition

• Award for excellence in the 5th Work-Life Balance Awards
• Award for excellent at the Work-Life Balance Awards

Environmental Metrics

ESG Focus Areas

• KAITEKI (sustainable well-being of people, society, and the planet)
• Climate Change
• Resource Conservation
• Water Management
• Food Security
• Health and Safety
• Sustainable Production and Consumption
• Sustainable Infrastructure
• Community Development
• Human Rights
• Diversity and Inclusion
• Corporate Governance
• Compliance

Environmental Achievements

• Achieved the fiscal 2015 target of reducing greenhouse gas emissions by at least 17% compared with fiscal 2005 levels.
• Reduced NOx emissions by 900 tons due to structural reorganization and other factors.
• Continued efforts in waste reduction and recycling, aiming to improve the recycling rate of industrial waste.

Social Achievements

• Implemented KAITEKI Health and Productivity Management initiatives, focusing on health support and workstyle reforms.
• Advanced initiatives related to respect for human rights and promoting diversity, including support for employees with disabilities and women.
• Implemented a remote work system, enabling employees to work from home or elsewhere.

Governance Achievements

• Established a Group-wide risk management system.
• Implemented a Compliance Promotion Program, including education and training, auditing, and a reporting hotline.
• Maintained a robust internal control system.

Climate Goals & Targets

Environmental Challenges

• Increased number of chlorofluorocarbon gas leak incidents (main causes: corrosion and degradation of facilities, insufficient inspection and checking).
• Occupational accidents due to lack of competency in basic practices and operations and inadequacies in work procedures.
• Growing demands to exercise proper management of chemical substances in products and disclose information on such chemical substances.

Mitigation Strategies

• Implementing key measures to improve process safety, including thorough facility management, human resources training, and accident and natural disaster response.
• Focusing on human factors (physical strength and dexterity) to prevent falls.
• Introducing i2 Healthcare system to support employee health and promote healthy lifestyle habits.
• Establishing management standards for chemical substances in products and contributing to chemSHERPA.

Supply Chain Management

Responsible Procurement

• Promoting purchasing and procurement that take into account CSR-related considerations.
• Requesting business partners to exercise caution regarding their suppliers’ business practices in areas of legal compliance, human rights, labor, environment, safety, conflict minerals, and information management.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Ministry of the Environment Environmental Reporting Guidelines 2012, Ministry of the Environment Environmental Accounting Guidelines 2005, GHG Protocol

Certifications: ISO 14001

UN Sustainable Development Goals

• SDG 6: Clean Water and Sanitation
• SDG 11: Sustainable Cities and Communities
• SDG 12: Responsible Consumption and Production

Many products and services contribute to the realization of the SDGs.

Sustainable Products & Innovation

• BioPBS™ (plant-derived, biodegradable plastic)
• Replark™ (structural repair and strengthening carbon fiber fabric)

Awards & Recognition

• 12th annual JCIA Responsible Care Outstanding Award (May 2018)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Resource Depletion
• Water Resource Distribution
• Plastic Waste
• Health and Productivity
• Human Rights
• Diversity & Inclusion
• Sustainable Production and Consumption
• Sustainable Infrastructure
• Safe Water Access
• Compliance
• Corporate Governance
• Stakeholder Engagement
• Biodiversity

Environmental Achievements

• Achieved fiscal 2015 target of reducing greenhouse gas emissions by at least 17% compared with fiscal 2005 levels.
• Reduced NOx emissions by 600 tons due to structural reorganization and other factors.
• Reduced PRTR-regulated substances and VOC emissions.
• Increased industrial waste recycling rate, decreasing landfill waste.

Social Achievements

• Implemented KAITEKI Health and Productivity Management, including 30 declarations under “Mitsubishi Chemical Has Decided” to improve workplace health, safety, and work-life balance.
• Launched initiatives to support employees in balancing work and personal lives, including childcare and nursing care.
• Advanced initiatives to promote the hiring of people with disabilities and enable them to exercise their abilities.
• Worked towards doubling the percentage of management positions held by women by 2021 from the 2017 level.

Governance Achievements

• Established a Group-wide risk management system.
• Implemented a Compliance Promotion Program with a hotline for reporting violations.
• Strengthened internal control systems across Group companies.
• Established a security export control system to prevent legal violations.

Climate Goals & Targets

Environmental Challenges

• Process safety incidents (corrosion and degradation of facilities, insufficient inspection).
• Occupational accidents (lack of competency, inadequate work procedures, insufficient safety activities).
• Increasing variety of accidents, aging plant facilities, decreasing number of highly experienced employees.
• Growing demands for proper management of chemical substances in products and information disclosure.
• Securing funding and manpower needed to renovate infrastructure.

Mitigation Strategies

• Thorough safety management activities, facility management, human resource training, accident and natural disaster response.
• Implementing legal education and environmental audits to ensure compliance with environmental laws and regulations.
• Systematically reducing environmental risk by implementing risk assessments.
• Reducing environmental impact through cutting greenhouse gas emissions, saving resources and energy, and reducing emissions of pollutants.
• Working with business partners to provide relevant information to ensure safe and secure use and to support the recycling and proper disposal of products.
• Innovation and global business development to find solutions for infrastructure renovation.

Supply Chain Management

Responsible Procurement

• Guidebook and survey to ensure suppliers share understanding of CSR issues.
• Feedback to business partners and dialogue about improvements.
• Compliance with the Subcontract Act.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather, flooding

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: Ministry of the Environment Environmental Reporting Guidelines 2018, Ministry of the Environment Environmental Accounting Guidelines 2005, GHG Protocol

Certifications: ISO 14001

UN Sustainable Development Goals

• SDG 6
• SDG 8
• SDG 11
• SDG 12

Initiatives related to safe water access, economic growth, sustainable cities, and sustainable production and consumption.

Sustainable Products & Innovation

• BioPBS™ (plant-derived, biodegradable plastic)
• Replark™ (structural repair and reinforcement carbon fiber fabric)

Awards & Recognition

• JCIA Responsible Care Outstanding Award (Ibaraki Plant)
• Chairman’s Award in the Energy Conservation Grand Prize (Shiga Plant)
• Outstanding Plant Award from the Kashima Coastal Industrial Zone Environmental Conservation Promotion Council (Ibaraki Plant)

Environmental Metrics

ESG Focus Areas

• Sustainability
• Health
• Comfort
• Climate Change
• Circular Economy
• Human Rights
• Diversity & Inclusion
• Governance

Environmental Achievements

• Reduced GHG emissions by 16.8% (domestic) compared to 2013.
• Developed and launched green KTF film, reducing CO2 emissions by 30% in the manufacturing process.
• Developed bio-PTMG, significantly reducing CO2 emissions compared to petroleum-based PTMG.
• Launched chemical recycling pilot plant for PMMA in 2021.

Social Achievements

• Launched employee well-being program, improving employee engagement and wellness.
• Increased female employee ratio and female management ratio.
• Improved safety culture, receiving the Responsible Care Award from the Japan Chemical Industry Association.

Governance Achievements

• Transitioned to a company with a nomination committee, etc.
• Increased the number of outside directors to a majority.
• Implemented ERM (Enterprise Risk Management).

Climate Goals & Targets

Environmental Challenges

• Low profitability in some business areas.
• Supply chain disruptions due to energy price hikes and raw material shortages.
• Climate change risks (carbon tax, regulations on plastic use).
• Digital transformation challenges.
• Maintaining compliance across numerous group companies.

Mitigation Strategies

• Portfolio restructuring and cost reduction (targeting ¥1,000 billion cost reduction by 2025).
• Shifting to specialty chemicals and focusing on high-growth markets (electronics, healthcare, life sciences).
• Implementing digital transformation initiatives to improve efficiency and customer experience.
• Strengthening global compliance programs and training.
• Developing alternative sourcing strategies and chemical recycling technologies.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier sustainability requirements, code of conduct

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather, flooding

Transition Risks

• Carbon tax, regulations on plastic use, changes in customer demand

Opportunities

• Development of energy-efficient products, bioplastics, carbon fiber composites

Reporting Standards

Frameworks Used: International Integrated Reporting Framework

Certifications: Null

Third-party Assurance: KPMG Azsa Sustainability

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Green KTF film, bio-PTMG, bioplastics, chemical recycling technologies

Awards & Recognition

• Responsible Care Award (Japan Chemical Industry Association)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Circular Economy
• Human Rights
• Diversity & Inclusion
• Supply Chain Sustainability
• Governance

Environmental Achievements

• Reduced GHG emissions by approximately 14% in fiscal 2022 (compared to FY2019)
• 44% reduction in Scope 1 and Scope 2 GHG emissions in Europe in fiscal 2022 (compared to fiscal 2019) in Performance Polymers division
• 50% CO2 reduction compared to fiscal 2019 in Engineering Shapes and Solutions (ES&S) division in Europe and Americas through renewable energy transition
• 20% reduction in GHG emissions per m2 of ALPOLIC composite panels at Wiesbaden site since 2017
• Launched recycled and bio-based product grades for slush, PVC and TPE compounds (mass-balance approach) and obtained ISCC+ certification for French production sites in Performance Polymers division
• ALPOLIC introduced a special grade (R75) that contains 75% recycled aluminum content

Social Achievements

• Launched RADICAVA ORS, an oral suspension formulation of edaravone for the treatment of amyotrophic lateral sclerosis (ALS)
• Increased production capacity at China base for LiB anode material from 2,000 to 12,000 tons a year
• Increased production capacity at U.K. plant for SoarnoL from 18,000 to 39,000 tons/year
• Implemented a new internal job posting system at MCC to improve employee career development and matching
• Introduced overseas training program for young employees to enhance global staff exchanges and foster diversity

Governance Achievements

• Implemented enterprise risk management (ERM) system
• Launched Global Compliance Promotion Program
• Improved Board effectiveness through better monitoring and information disclosure
• Redefined diversity among management indices to promote a more global perspective on DE&I

Climate Goals & Targets

Environmental Challenges

• Sharply rising raw material and fuel prices
• Supply chain disruptions
• Monetary tightening policy to control inflation
• Declining demand for some products (MMA, petrochemicals, carbon products)
• Risk of economic slowdown
• Labor shortages (truck drivers, sailors)
• Need to achieve carbon neutrality and a circular economy

Mitigation Strategies

• Actively passing on price rises
• Cost reductions (¥50 billion delivered in FY2022, expecting additional ¥80 billion in FY2023)
• Business restructuring
• Supply chain optimization
• Group company integration
• Exiting non-profitable businesses (petrochemicals, carbon products)
• Strategic capital allocation
• Implementing DX to improve efficiency and decision-making
• Developing sustainable products and processes
• Collaborating with partners on sustainability initiatives
• Investing in renewable energy and cleaner technologies
• Implementing a collaborative approach to logistics

Supply Chain Management

Supplier Audits: CSR survey sent to main raw material suppliers (90% coverage)

Responsible Procurement

• Mitsubishi Chemical Corporation and Its Group Companies CSR Procurement Guideline
• Mitsubishi Chemical Corporation and Its Group Companies Responsible Mineral Procurement Policy
• Declaration of Partnership Building

Climate-Related Risks & Opportunities

Physical Risks

• Increased flood risk in Asia
• Operational losses due to extreme weather

Transition Risks

• Increase in carbon tax burden
• Rise in response to climate change in the stock market
• Decrease in virgin demand for petrochemicals

Opportunities

• Growth in businesses contributing to carbon neutrality (lighter mobility materials, battery materials, bioplastics, carbon fiber composites)

Reporting Standards

Frameworks Used: TCFD

Certifications: ISCC+

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 8 (Decent Work and Economic Growth)
• Goal 3 (Good Health and Well-being)

Initiatives contribute to these goals through GHG emission reduction, renewable energy use, sustainable product development, circular economy practices, employee well-being programs, and responsible supply chain management.

Sustainable Products & Innovation

• SoarnoL EVOH resins
• Recycled and bio-based product grades
• Bio-MMA monomer
• ALPOLIC with recycled aluminum content

Awards & Recognition

• Prestigious Italian Oscar dell’Imballaggio award
• NRG Energy’s Excellence in Energy award
• Texas Chemistry Council’s Sustained Excellence in Caring award
• Finalist in the Plastics Recycling Awards Europe 2023
• Finalist in the Crystal Cabin Awards

Environmental Metrics

ESG Focus Areas

• Carbon Neutrality
• Circular Economy
• Human Rights
• Sustainable Supply Chains
• GHG emissions reduction

Environmental Achievements

• Reduced GHG emissions by approximately 16% in fiscal 2023 compared with fiscal 2019.
• Approximately 29% reduction in GHG emissions in Japan compared with fiscal 2013.

Social Achievements

• Launched Mounjaro®, the world’s first sustained release GIP/GLP-1 receptor agonist.
• Improved employee engagement scores in fiscal 2023.
• Increased percentage of managers and regular employees who took consecutive days off in fiscal 2023.

Governance Achievements

• Revised certain operations to further enhance the accessibility of information for outside directors.
• Introduced restricted transfer stock remuneration that is not linked to performance for internal directors who do not serve concurrently as corporate executive officers, effective from fiscal 2024.
• Enhanced the diversity of the skills matrix of the Board of Directors.

Climate Goals & Targets

Environmental Challenges

• Weak demand in the semiconductor-related market and for a wide range of industrial materials.
• Deteriorating profit margins in the petrochemical industry due to a widening supply–demand gap.
• Soaring coking coal prices and sluggish demand overseas in the carbon products subsegment.
• Need to address challenges such as carbon neutrality and circular economy.
• Restructuring is likely inevitable in the petrochemicals industry.

Mitigation Strategies

• Implementing major changes to the leadership team.
• Promoting business reforms.
• Actively investing through a process of selection and concentration.
• Accelerating restructuring towards green in the petrochemicals subsegment.
• Collaboration and alignment with other companies.
• Decisively implementing structural reforms to improve profitability in the carbon products subsegment.
• Promoting thorough cash flow management, cost reduction initiatives, working capital management, and a pricing policy that avoids discounting.
• Designated ROIC (return on invested capital) as a key management indicator.

Supply Chain Management

Supplier Audits: 559 major suppliers assessed based on CSR questionnaire (2023)

Responsible Procurement

• CSR Procurement Guideline
• CSR questionnaire
• Responsible Mineral Procurement Policy

Climate-Related Risks & Opportunities

Physical Risks

• Operational losses due to extreme weather

Transition Risks

• Rising carbon prices
• Rise in climate action in stock markets
• Decrease in demand for petrochemical products

Opportunities

• Lighter mobility materials
• Vehicle-mounted battery materials
• Bioplastics
• Carbon fiber and composite materials
• Conversion to environment-friendly raw materials

Reporting Standards

Frameworks Used: TCFD

Certifications: ISCC PLUS

Third-party Assurance: Independent assurance provided for GHG emissions and energy consumption data.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Recycled PMMA for automotive bodies
• Products that contribute to GHG emissions reductions

Awards & Recognition

• Best Workplace award (D&I AWARD 2023)