Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Safety
• Social
• Governance

Environmental Achievements

• Reduced CO2 equivalent emissions by 18% compared to 2006 (p.10)
• Reduced energy consumption by 3% compared to 2009 (p.10)
• Maintained industrial waste at 2006 levels (p.8)
• Reduced PFCs emissions by 50% and SF6 emissions by 75% compared to 1995 (p.9)

Social Achievements

• Zero workplace accidents for employees and contractors (p.8)
• Community engagement through local events and activities (p.13-14)
• Employee wellbeing initiatives (p.13)

Governance Achievements

• Established a comprehensive RC (Responsible Care) system (p.7)
• Implemented internal reporting system (hotline) for compliance violations (p.7)
• Regular audits conducted by Environmental Safety Committee, Quality Management Committee, and Logistics Safety Committee (p.8)

Climate Goals & Targets

Environmental Challenges

• Accidents in 2011 and 2012 (p.2, p.13)
• Technical knowledge transfer issues due to generational change (p.2)
• Increased factory wastewater and COD in 2012 (p.11)

Mitigation Strategies

• Review and revision of procedures and technical documents (p.2)
• Strengthened safety measures and employee training (p.11-12)
• Improved equipment inspection and maintenance (p.13)
• Implemented KYT (risk prediction training) (p.12)
• Improved wastewater treatment (p.11)

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: ISO 9001, ISO 14001, OHSAS 18001

Certifications: ISO 9001 (Shibukawa and Mizushima plants), ISO 14001 (Shibukawa and Mizushima plants), OHSAS 18001 (Shibukawa and Mizushima plants)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Safety
• Profitability
• Employee Development
• Environmental Protection
• Responsible Care (RC)
• Community Relations

Environmental Achievements

• Reduced CO₂ equivalent greenhouse gases emissions by 80% compared with FY1990
• Achieved 90% reduction in PFCs unit emission and 90% reduction in SF₆ unit emissions compared with FY1995 levels
• Reduced energy consumption per unit of production volume
• Reduced the quantity of principal raw materials against plant production volume
• Reduced the amount of plant wastewater and COD emissions
• Reduced emissions of SOx, NOx, and soot and dust

Social Achievements

• Zero workplace injuries among employees and contractors
• Implemented K-SF³ system for business improvement, receiving approximately 600 proposals annually
• Offered mental health training sessions and sexual harassment sessions
• Provided various welfare programs such as maternity leave, childcare leave, and reduced working hours scheme
• Held a 50th-anniversary event for the Mizushima Plant, inviting employees' families
• Cooperated with the Shibukawa Fire Department on a study group concerning chemical substance handling

Governance Achievements

• Established a Compliance and Risk Management Committee
• Implemented an Internal Notification System (hotline) for compliance breaches
• Formulated a basic policy regarding the protection of personal information

Climate Goals & Targets

Environmental Challenges

• Two minor workplace injuries and one minor accident at a company facility occurred in FY2015
• Increase in carbon dioxide emissions due to increased production volume (partially mitigated by fuel substitution)
• Increase in industrial waste volume due to significant production increase in some products
• Increase in dichloromethane emissions in FY2015

Mitigation Strategies

• New initiatives towards zero accidents and injuries
• Fuel substitution in part of the manufacturing process
• New measures to reduce waste
• Measures to deal with the four substances with a large emission amount

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ISO 14001, OHSAS 18001

Certifications: ISO 9001, ISO 14001, OHSAS 18001

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced greenhouse gas emissions by 23.9% compared to FY2018 (86.2% reduction compared to FY2013)
• Reduced final disposal of industrial waste by 65.4% compared to FY2018
• Reduced unit emissions of PRTR-designated chemical substances by 22.5% compared to FY2018

Social Achievements

• Achieved zero occupational accidents resulting in lost work time (employees and subcontractors) and zero equipment accidents in FY2020
• Shibukawa Plant received the Award as Excellent Hazardous Materials-Related Site from the Commissioner of the Fire and Disaster Management Agency for FY2021
• Promoting diversity in hiring, training, and promotion

Governance Achievements

• Established the Sustainability Promotion Committee, chaired by the President
• Established the Compliance and Risk Management Committee to oversee compliance
• Implemented a robust internal reporting system for compliance violations

Climate Goals & Targets

Environmental Challenges

• Increased production exceeding operational load for high-efficiency energy conservation at Shibukawa Plant
• Increased industrial waste from Mizushima Plant due to higher production
• Increasing emissions of organic solvents

Mitigation Strategies

• Implementing measures to conserve energy for high energy-consuming facilities
• Developing new recycling sites to reduce final disposal of industrial waste
• Installing a new combustion treatment system to reduce organic solvent emissions

Supply Chain Management

Responsible Procurement

• Prioritizing suppliers complying with RBA Code of Conduct, OECD Due Diligence, and mineral resource disclosure rules

Climate-Related Risks & Opportunities

Opportunities

• Development of climate-change-responsive products

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 9001, ISO 14001, ISO 45001

Sustainable Products & Innovation

• Process gas products for semiconductors with low global warming potential
• Electrolytes and additives for lithium-ion rechargeable batteries

Awards & Recognition

• Award as Excellent Hazardous Materials-Related Site

Environmental Metrics

ESG Focus Areas

• Climate Change
• Safety
• Resource Efficiency
• Waste Reduction
• Human Rights
• Diversity & Inclusion
• Governance

Environmental Achievements

• Reduced CO2 equivalent emissions by 18.9% compared to 2018 (85.3% reduction compared to 2013)
• Reduced industrial waste final disposal by 59.2% compared to 2018
• Improved energy efficiency in production processes
• Developed technology to recycle lithium from used LIBs

Social Achievements

• Zero major work-related accidents and equipment accidents in 2021
• Implemented various initiatives to improve employee well-being, including mental health support and work-life balance measures
• Promoted diversity and inclusion in hiring and promotion
• Engaged in community activities

Governance Achievements

• Established a Compliance and Risk Management Committee
• Implemented a robust internal reporting system
• Developed and implemented a Business Continuity Plan (BCP)

Climate Goals & Targets

Environmental Challenges

• Increased industrial waste due to increased production
• Maintaining energy efficiency despite increased production
• Managing risks associated with climate change and supply chain disruptions

Mitigation Strategies

• Exploring new recycling methods and equipment to reduce waste
• Implementing energy-saving measures in production processes
• Developing and implementing a BCP, promoting diversification of production sites

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 9001, ISO 14001, ISO 45001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Low GWP value products
• Products for electric vehicles

Awards & Recognition

• Fire and Disaster Prevention Agency Minister's Award (Shibukawa Factory)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance
• Resource Recycling
• Supply Chain Sustainability
• Safety

Environmental Achievements

• Reduced greenhouse gas emissions from non-energy sources by 99.3% (CO2 equivalent) compared to FY2013.
• Reduced greenhouse gas emissions from energy sources by 11.1% compared to FY2013.
• Reduced final disposal of industrial waste by 14.3% compared to FY2021.
• Reduced emissions of PRTR target substances by 13.7% compared to FY2021.
• Installed solar power generation equipment at Shibukawa and Mizushima Plants.

Social Achievements

• Established a Mental and Physical Health Contact Point and assigned a mental health representative at each business site.
• Conduct annual stress checks for all employees.
• Extended retirement age to 65.
• Re-employment system until age 70.
• Mizushima Plant received the FY2022 Minister's Award for High-Pressure Gas Safety (Excellent Production Facility).

Governance Achievements

• Established the Compliance and Risk Management Committee.
• Formulated the Kanto Denka Kogyo Group Compliance Manual.
• Established a consultation and reporting system for compliance.
• Regular meetings of the Board of Directors and Management Committee.
• Revised officer compensation system to further enhance corporate value.

Climate Goals & Targets

Environmental Challenges

• Slowdown in the second half of FY2022 due to the impact of production adjustments by semiconductor manufacturers.
• Significant production adjustments beyond expectations at semiconductor manufacturers in FY2023.
• Deterioration of the supply-demand environment for battery materials due to a temporary slowdown in growth in the electric vehicle industry.
• Shrinking market for ferrochemicals due to the shift to paperless copiers.
• Shrinking market for chlorine-based solvents in the fundamental chemicals business.

Mitigation Strategies

• Price revisions to offset increased raw material and fixed costs.
• Strengthening sales capabilities for advanced products in the fine chemicals business.
• Cost reductions and quality improvements in the battery materials business.
• Consolidating the manufacturing of ferrochemical products to Kanto Denka Finetech Co., Ltd.
• Reorganizing product portfolio in the fundamental chemicals business, including halting production of caustic soda flakes.

Supply Chain Management

Responsible Procurement

• Kanto Denka Kogyo Purchasing Guidelines.

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Drought
• Water shortage

Transition Risks

• Carbon pricing
• Changes in energy costs
• Changes in demand for environmentally friendly products
• Changes in raw materials costs

Opportunities

• Growth of lithium-ion battery market
• Increased demand for environmentally friendly products

Reporting Standards

Frameworks Used: IIRC, TCFD

Certifications: ISO 9001, ISO 14001, ISO 45001

Sustainable Products & Innovation

• KSG-14 (low GWP etching gas)
• Recycled lithium compounds in battery materials

Awards & Recognition

• Minister of Economy, Trade and Industry Award for High-Pressure Gas Safety (Excellent Production Facility)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance

Environmental Achievements

• Reduced non-energy derived GHG emissions by 99.5% from 2013.
• Installed solar power generation equipment at Shibukawa and Mizushima plants in 2023.
• Reduced energy-derived GHG emissions by 26.9% from 2013 in 2023.

Social Achievements

• Established a support office for the promotion of employment of persons with disabilities in June 2021.
• Launched a farm operation in October 2023 as part of efforts to create employment opportunities for persons with disabilities.
• Shibukawa plant received the Commissioner of the Fire and Disaster Management Agency Award for Excellent Hazardous Materials-Related Businesses in 2021.
• Mizushima plant received the Minister of Economy, Trade and Industry Award for High-Pressure Gas Safety (Excellent Manufacturing Plant) in 2022.
• Kanden Shibukawa Sangyo Co., Ltd. received the Gunma Labor Bureau Director's Award (Excellent Award) in 2023.

Governance Achievements

• Reduced the upper limit of the number of directors from 12 to 10.
• Increased the proportion of outside directors to a majority (5 out of 9 directors).
• Increased the proportion of female directors to 33%.

Climate Goals & Targets

Environmental Challenges

• Decreased demand for special gases due to a slowdown in the consumer electronics market.
• Slowdown in EV market growth due to the end of subsidies in various countries.
• Sharp decline in raw material prices for battery materials.
• PBR below 1.

Mitigation Strategies

• Portfolio reform, focusing on high-performance, low-GWP products.
• Expansion of license business.
• Strengthening supply chain resilience.
• Adoption of ROIC as a new management indicator.
• Reduction of policy-held shares.
• Revision of executive compensation system.
• Strengthening of corporate governance.

Supply Chain Management

Responsible Procurement

• Compliance with RBA Code of Conduct and OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Droughts

Transition Risks

• Carbon pricing
• Changes in demand for high-GWP products

Opportunities

• Expansion of the lithium-ion battery market
• Increased demand for low-GWP gas products

Reporting Standards

Frameworks Used: TCFD, IIRC

Certifications: ISO 9001, ISO 14001, ISO 45001

Third-party Assurance: Societe Generale de Surveillance (SGS)

Sustainable Products & Innovation

• KSG-14
• KSG-5

Awards & Recognition

• Commissioner of the Fire and Disaster Management Agency Award for Excellent Hazardous Materials-Related Businesses (Shibukawa plant, 2021)
• Minister of Economy, Trade and Industry Award for High-Pressure Gas Safety (Excellent Manufacturing Plant) (Mizushima plant, 2022)
• Gunma Labor Bureau Director's Award (Excellent Award) (Kanden Shibukawa Sangyo Co., Ltd., 2023)