DAIICHI KIGENSO KAGAKU KOGYO CO., LTD. (DKK)
Climate Impact & Sustainability Data (2024)
Reporting Period: 2024
Environmental Metrics
Total Carbon Emissions:38,139 tonnes CO2e/year (Scope 1+2)
Scope 1 Emissions:30,020 tonnes CO2e/year
Scope 2 Emissions:8,119 tonnes CO2e/year
ESG Focus Areas
- Climate change mitigation and adaptation
- Use of renewable resources
- Human rights due diligence
- Respect and utilization of diversity
- Strengthening of safety and health and promotion of health
- Human capital development in line with business strategy
- Promotion of sustainability management
Environmental Achievements
- Reduced CO₂ emissions (Scope 1+2) by 106% compared to FY3/2018 (Note: This seems to be an error in the report, likely a percentage increase rather than decrease. Further clarification needed.)
- Introduced biomass-derived heat sources at Vietnam production site
- Recycling of used packaging and pallets
- Reuse of used chemicals
- Installed solid oxide fuel cells at Fukui Site
Social Achievements
- Established a new R&D Center
- Implemented a role- and performance-based remuneration system
- Conducted annual employee engagement survey
- Promotes initiatives to increase the value of human capital
- Carries out a wide variety of social contribution activities
Governance Achievements
- Established Nomination and Compensation Committee
- Established Governance Committee
- Established Risk Management Committee
- Regularly evaluates the effectiveness of its Board of Directors
- Introduced an executive officer system
Climate Goals & Targets
Long-term Goals:
- Achieve carbon neutrality by 2050
Medium-term Goals:
- Increase net sales in Strategic Areas to ¥9 billion (FY3/2026)
- ROIC of 10% (FY3/2032)
Short-term Goals:
- Net Sales from Strategic Areas ¥7.3 billion (FY3/2025)
- ROIC of 6% or more (FY3/2026)
- Reduce Scope 1 and 2 CO₂ emissions by 20% (FY3/2030)
- Achieve a ratio of female managers of 10% (FY3/2029)
- Undertake human rights due diligence (FY3/2024)
- Productivity improvement: 20% improvement compared to FY3/2017 (FY3/2025)
- Achieve zero occupational accidents (FY3/2025)
- Achieve zero work absences due to mental health issues (FY3/2025)
Environmental Challenges
- Fluctuations in materials prices and foreign exchange rates
- Lower than expected sales volume
- Slowdown in electrification momentum in European and US markets
- Equipment problems at new Vietnam plant
- High interest-bearing debt due to investments
- High inventory levels
- Dependence on Automotive Catalyst Area for revenue (60%)
- Relatively high occupational accident rates
Mitigation Strategies
- Stable operation of Vietnam business to limit materials price fluctuation
- Foreign exchange hedging efforts
- Focus on Strategic Areas (Semiconductor/Electronics, Energy, and Healthcare)
- Addressing equipment problems at Vietnam plant
- Disciplined financial approach to reduce interest-bearing debt ratio
- Reducing product inventories and work-in-progress inventories
- Expanding sales into Strategic Areas
- Improving productivity and operational efficiency
- Implementing various measures to reduce inventories
- Reviewing and improving safety culture
Supply Chain Management
Supplier Audits: 10 companies cooperated in self-assessment in FY3/2024
Responsible Procurement
- Responsible mineral sourcing
- Compliance with OECD Due Diligence Guidance
- Cooperation with customers on responsible minerals sourcing investigations
- Conducting self-assessment risk analyses for key suppliers
Climate-Related Risks & Opportunities
Physical Risks
- Flooding or destruction of production sites
- Supply chain disruptions
Transition Risks
- Reduced demand for automotive catalysts
- Introduction of carbon pricing systems
- Higher costs for raw materials
Opportunities
- Increased demand for electric vehicle materials
- Development of decarbonization technologies
Reporting Standards
Frameworks Used: GRI Standard, ISO 26000, MSCI ESG Research, TCFD
Certifications: ISO 9001, ISO 14001
Sustainable Products & Innovation
- DURAZR®-S Series zirconia ceramics
- Auxiliary catalysts for automotive catalysts
Awards & Recognition
- The Ceramic Society of Japan’s award for achievement in industrial ceramic technology (FY2023)
- Selected as one of the ‘Global Niche Top 100’ companies (2020)