Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Conservation
• Safety and Disaster Prevention
• Occupational Safety and Health
• Compliance
• Social Contribution
• Corporate Governance

Environmental Achievements

• Reduced PRTR substances released by approximately 30% over fiscal year 2012 due to facility improvements.
• Maintained zero environmental accidents.

Social Achievements

• Conducted company-wide social contribution activities, including painting sports facilities and holding community events.
• Implemented programs to achieve work-life balance for employees, including shorter work hours and leave for child rearing and nursing care.

Governance Achievements

• Established a Nomination and Compensation Committee with an outside director as chair and more than half of the membership composed of outside directors.
• Abolished executive directors’ retirement benefits system and introduced a performance-linked, share-based compensation plan.

Climate Goals & Targets

Environmental Challenges

• Increased energy consumption and CO2 emissions in fiscal year 2017.
• One accident at the Chiba Plant that did not result in lost workdays.

Mitigation Strategies

• Implementing measures to improve specific energy consumption and reduce CO2 emissions.
• Examining root causes of the accident and devising measures to prevent recurrence, including safety education and equipment improvements.

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Lubricant ingredients for environmentally friendly air conditioners
• Cosmetic ingredient 1,3-butylene glycol

Environmental Metrics

ESG Focus Areas

• Environment
• Healthcare
• Electronics
• Sustainable Management

Environmental Achievements

• Reduced GHG emissions by approximately 15% at the Chiba Plant by renewing in-house power generation equipment (March 2021)
• Using CO2 as a raw material in oxo synthesis, consuming approximately 70-80kt of CO2 per year

Social Achievements

• Introduced a job-based personnel system for managers in 2020, expanding to non-managerial employees in 2022
• Improved workplace environment by relocating headquarters and constructing a new office building for the Yokkaichi Plant
• Held compliance workshops at each workplace to improve psychological safety
• Donated and painted benches at a sports field in Ichihara City, Chiba Prefecture and Yokkaichi City, Mie Prefecture

Governance Achievements

• Clearly separated execution and supervision functions in April 2021
• Established a discretionary Nomination and Compensation Advisory Committee
• Formulated a new policy on bribery prevention in 2021
• Established the Compliance Code in 2020

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the COVID-19 pandemic
• Soaring commodity prices and supply chain tightness
• Aging facilities leading to production problems
• Shortages of human resources and the handing down of skills from one generation to another
• Increasingly uncertain business environment due to climate change
• Risk of increasing financial burden from carbon pricing
• Risk to the procurement of raw materials from oil refineries
• Risk of quality problems and increased procurement costs due to switching from oil-based to biomass-based raw materials
• Risk of divestments and falling share prices due to increasing criticism for using large quantities of fossil fuels

Mitigation Strategies

• Ensuring production and inventory levels are appropriate and aligned with demand by reinforcing cooperation with suppliers
• Revising prices in accordance with volatility in crude oil and naphtha prices and the balance of supply and demand for products
• Introducing advanced plant control systems to systematize and reproduce the skills of skilled operators
• Introducing a predictive diagnostic system to detect problems before they occur
• Restructuring business processes in equipment management
• Implementing a PDCA cycle using a risk map
• Promoting energy-saving and the introduction of new technologies to achieve carbon neutrality by 2050
• Promoting purchasing from multiple suppliers
• Maintaining and improving quality assurance
• Expanding the provision of refrigeration lubricant raw materials compatible with refrigerants used in environmentally friendly air conditioners
• Using CO2 as a raw material for products

Supply Chain Management

Responsible Procurement

• CSR Procurement Guidelines
• CSR surveys of suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Abnormal weather events (high tides, heavy rain, floods, typhoons)

Transition Risks

• Introduction of carbon pricing
• Problems procuring raw materials from oil refineries
• Impact of switching to raw materials obtained from biomass
• Delayed response to ESG investment

Opportunities

• Increased need for adaptive products
• Increased need for decarbonizing products

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 9001, ISO 14001

Sustainable Products & Innovation

• Refrigeration lubricant raw materials compatible with low GWP refrigerants
• Marine biodegradable resin (in development)
• Bio-derived products (in development)

Awards & Recognition

• EcoVadis Gold Medal (2021 and 2022)

Environmental Metrics

ESG Focus Areas

• Environment
• Healthcare
• Electronics
• Safety and Stable Operations
• New Business Creation
• Human Resource Development
• Corporate Culture Reform
• Governance
• Compliance
• Stakeholder Engagement
• Supply Chain Management
• Carbon Neutrality

Environmental Achievements

• Reduced GHG emissions by 20% relative to FY2017 levels.
• Renewed in-house power generation equipment at the Chiba Plant in 2021 to reduce CO2 emissions.
• Using CO2 as a raw material for products (consuming 70–80 kt of CO2 per year).

Social Achievements

• Established the Kasumigaura Plant Office at the Yokkaichi Plant in March 2022 to improve the working environment.
• Introduced a job-based personnel system for non-managerial position employees in 2023.
• Increased the ratio of female employees in managerial career track positions to 13.2%.

Governance Achievements

• Established the Compliance Code in 2020.
• Established the Sustainability Committee as an advisory body to the Board of Directors.
• Endorsed the TCFD recommendations.

Climate Goals & Targets

Environmental Challenges

• Serious occupational incident and process unit trouble in 2022.
• Aging equipment at plants.
• Shortages of human resources.
• Increasingly uncertain business environment due to economic trends, geopolitical factors, and trade friction.
• Impact of climate change (abnormal weather, carbon tax).
• Risks to procurement of raw materials from oil refineries.
• Risks of quality problems and increased procurement costs due to switching from oil-based to biomass-based raw materials.
• Risks of divestments and falling share prices due to increasing criticism for using large quantities of fossil fuels.

Mitigation Strategies

• Launched the Comprehensive Safety Check Initiative 2022.
• Reconstructed maintenance work plans to prevent process unit trouble.
• Established turnaround planning and execution guidelines.
• Promoting Smart Industrial Safety.
• Implementing a variety of human resource policies and corporate culture reforms.
• Promoting energy-saving and the introduction of new technologies to achieve carbon neutrality by 2050.
• Achieving the target of reducing greenhouse gas emissions by 30% by 2030 (compared to 2017).
• Promoting purchasing from multiple suppliers.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Formulated Sustainable Procurement Guidelines in March 2023.

Climate-Related Risks & Opportunities

Physical Risks

• Abnormal weather (high tides, heavy rain, floods, typhoons)

Transition Risks

• Introduction of carbon taxes and other carbon pricing
• Problems procuring raw materials from oil refineries
• Risks of quality problems and increased procurement costs due to switching from oil-based to biomass-based raw materials

Opportunities

• Increased need for adaptive products (heat stroke-preventing air conditioners)
• Increased need for decarbonizing products
• Expanding the provision of refrigeration lubricant raw materials compatible with refrigerants used in environmentally friendly air conditioners

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 9001, ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Refrigeration lubricant raw materials compatible with low GWP refrigerants
• Green chemicals from raw bio materials
• Bio products
• Marine biodegradable resin

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Safety
• Human Capital
• Governance
• Supply Chain Management
• Human Rights

Environmental Achievements

• Completed expansion project at Chiba Plant, increasing isononanoic acid production capacity by 1.5 times.
• Decided to install a CO2 capture system at Chiba Plant to reuse CO2 emissions as raw material (completion scheduled for January 2025).
• Achieved 98.4% improvement in energy intensity compared to the previous year.
• Head office effectively switched to 100% renewable energy as of April 2023.

Social Achievements

• Launched Comprehensive Safety Check Initiative 2022 to improve safety and prevent recurrence of accidents.
• Introduced VR training and practical training equipment to improve safety skills and awareness.
• Implemented a new personnel system based on rewarding those who take on challenges and work to achieve them.
• Expanded childcare leave system to male employees.
• Company-wide engagement score of 3.14 in 2023.

Governance Achievements

• Transitioned to a company with an Audit and Supervisory Committee in March 2024.
• Increased the ratio of independent outside directors to 55.6%.
• Established a Sustainability Committee.
• Implemented performance-linked share-based compensation for Corporate Officers.

Climate Goals & Targets

Environmental Challenges

• Sluggishness of housing markets in China and the U.S. impacting demand for refrigeration lubricant raw materials.
• Significant decrease in productivity due to equipment trouble at a raw material supplier.
• Aging equipment in petrochemical plants increasing risk of sudden equipment issues.
• Difficulty procuring CO2 raw material due to equipment problems at suppliers.
• Rising material and personnel costs increasing the cost of maintenance and renewal investment.

Mitigation Strategies

• Implementing preventive maintenance and introducing a predictive diagnostic system.
• Constructing equipment at Chiba Plant to capture and recycle CO2 emissions as raw material.
• Appropriately reflecting increased costs and product value in sales prices.
• Reviewing the priority of individual investment projects and suspending investments with low profitability.
• Strengthening financial foundation by increasing equity ratio and decreasing net interest-bearing debt.

Supply Chain Management

Supplier Audits: 89% coverage of key business partners (by purchasing amount) using CSR Procurement Self-Assessment Questionnaire.

Responsible Procurement

• Sustainable Procurement Guidelines formulated in March 2023.

Climate-Related Risks & Opportunities

Physical Risks

• Abnormal weather events (high tides, heavy rain, floods, typhoons).

Transition Risks

• Introduction of carbon pricing (carbon tax).
• Problems procuring raw materials from oil refineries.
• Impact of switching to biomass-based raw materials.
• Divestments and falling share prices due to criticism for using fossil fuels.

Opportunities

• Increased demand for products mitigating climate change effects.
• Increased demand for products with a smaller carbon footprint.

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 9001, ISO 14001

Sustainable Products & Innovation

• Marine biodegradable resin
• Products using CO2 as raw material
• Higher alcohols from naturally derived raw materials