Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Corporate Governance
• Human Rights
• Resource Recycling

Environmental Achievements

• Reduced water resources input by 226 thousand m³ year on year and water resources discharge by 263 thousand m³ year on year.
• CO₂ reduction attributable to electricity derived from renewable energy at Fujioka Factory: 163 tons
• Establishment of new warehouse with Net Zero Energy Building (Net ZEB) design at Yanai Headquarters Plant, CO₂ reduction: 20 tons (5 months from November 2022 to March 2023)
• Reduction of PRTR substances treated by 249 tons year on year.
• Reduction of waste discharge by 0.2 tons year on year.

Social Achievements

• Recognition under 2023 Certified Health and Productivity Management Outstanding Organizations Recognition Program (large enterprise category)
• Average annual paid leave utilization rate increased by 2.9 percentage points year on year to 50.6%
• Promotion of Robotic Process Automation (RPA) deployment
• Expansion of language training
• Provision of career development training for junior and middle-level employees

Governance Achievements

• Increased Board diversity with 2 female outside directors, of whom 1 is a foreign national.
• Enhanced cybersecurity by establishing CSIRT framework to handle unforeseen incidents
• Strengthened internal control functions to ensure reliability of sustainability information.

Climate Goals & Targets

Environmental Challenges

• Persisting inflation with resource and energy prices remaining at high levels.
• Increasing severity of climate change issues.
• Mandatory disclosure of non-financial information related to sustainability.

Mitigation Strategies

• Improving profitability through a shift to high-profit businesses.
• Strengthening and increasing earning power.
• Strengthening sustainability management practices.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Sustainability Procurement Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: TCFD, CDP

Certifications: ISO 9001, ISO 14001, WRAP

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

FUKU-NO-WA Project, renewable energy initiatives, reduction of greenhouse gas emissions, water conservation, waste reduction.

Sustainable Products & Innovation

• B.V.D. products using Green Nano packaging

Awards & Recognition

• 2023 Certified Health and Productivity Management Outstanding Organizations Recognition Program

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced greenhouse gas emissions (Scope 1 + Scope 2) by 3.1 thousand t-CO2 year on year to 59.9 thousand t-CO2
• Reduced Scope 3 emissions by 15.9 thousand t-CO2 year on year to 94.0 thousand t-CO2
• Reduced water resources discharge by 135 thousand m3 year on year to 1,237 thousand m3
• Reduced waste discharge by 2.3 thousand tons year on year to 45.6 thousand tons
• Reduced amount of PRTR substances treated by 2,150 tons year on year to 5,662 tons
• Reduction of approx. 242 t-CO2 through use of renewable energy

Social Achievements

• Recognition under 2024 Certified Health and Productivity Management Outstanding Organizations Recognition Program (large enterprise category)
• Introduction of “Welcome Back System,” a reinstatement system
• Promotion of Robotic Process Automation (RPA) deployment
• Expansion of language training
• Provision of career development training for junior and middle-level employees
• Implementation of smoking cessation program

Governance Achievements

• Increased the number of outside directors from three to four
• Enhanced discussions on management challenges and management strategies at meetings of the Board of Directors
• Enhanced information disclosure for shareholders and other stakeholders

Climate Goals & Targets

Environmental Challenges

• Downward adjustment of the silicon cycle impacting the Polishing Pad Business
• Deteriorating market conditions in electronic materials impacting the Industrial Chemicals Business
• Weak global demand in the chemical industry and worsening market conditions for electronic materials
• Higher product costs due to soaring costs of raw materials and energy
• Reduced sales of seasonal products due to climate change and a decline in consumer spending due to inflation
• Higher procurement costs due to the weak yen
• Shortening of the product life cycle of functional materials due to technological innovation and a profit structure that is susceptible to market fluctuations in electronic materials
• Shifting from a business that focused on receiving orders to a solution-proposing business and improving profitability

Mitigation Strategies

• Portfolio reforms set forth in “Zokyo 21-25” to make growth trajectory more certain and sustainable
• Growth investments in the Polishing Pad Business and Industrial Chemicals Business
• Investments to increase production capacity for functional materials
• Transition to an e-commerce business model in the Lifestyle Apparel Business
• Sales price revisions and reducing costs by automating production lines in the Lifestyle Apparel Business
• Broadening the range of standard products and implementing thorough management of inventory in the Lifestyle Apparel Business
• Expanding the range of products handled, including the cultivation of new customers, in the Industrial Chemicals Business
• Strengthening the diversification of products handled and the cultivation of new customers in the Industrial Chemicals Business
• Considering expanding into peripheral business areas in the Industrial Chemicals Business
• Concentrating on the medical field and making systematic capital expenditures in the Chemical Products and Mold Business
• Working to create Group synergies, expand business areas through M&As, and expand sales of large molds in the Chemical Products and Mold Business
• Strengthening R&D in collaboration with the Near-Future Product Development Supervisory Department

Supply Chain Management

Responsible Procurement

• Sustainability Procurement Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Rising temperatures
• Water shortages

Transition Risks

• Introduction of a carbon tax
• Demands from business partner companies to reduce carbon
• Expansion of supply chain transition risk (rising raw materials prices due to reduced volume of cotton cultivation)

Opportunities

• Increased demand for energy-saving semiconductors
• Spread of the virtual society
• Increasing needs for products responding to the low-carbon society
• Resource efficiency
• Transition to a low-carbon energy society

Reporting Standards

Frameworks Used: GRI, IIRC, TCFD

Certifications: ISO 9001, ISO 14001, WRAP

Sustainable Products & Innovation

• Environmentally friendly packaging materials
• Environmentally certified products (luminous fiber [Lumifilo])
• Waste-free chemical products (hot runner system)