Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Achieved zero emissions for ten consecutive years (final landfill volume < 0.5% of total waste)
• Reduced energy intensity index by 2.9% from fiscal 2014
• Achieved CO2 emissions intensity index target of 77.8

Social Achievements

• Supported WFP school meal program in Sierra Leone, providing meals to ~700,000 children (2013-2015)
• Launched Women's Network Program to promote female employee participation
• Held Kaneka Manufacturing Classes for elementary school students

Governance Achievements

• Increased the number of independent external directors from one to two
• Prepared a basic policy on corporate governance
• Conducted CSR audits at Kaneka and Group companies in Japan, the U.S., and Europe

Climate Goals & Targets

Environmental Challenges

• Process accidents (14 in fiscal 2015)
• Need to further reduce CO2 emissions
• Need to improve chemical substance management

Mitigation Strategies

• Enhancing safety techniques and preventive actions
• Implementing environmental capital investment program
• Continuing VOC emissions reduction measures

Supply Chain Management

Responsible Procurement

• Green Procurement Standards
• Basic Procurement Policy

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Global Compact, GRI G4

Certifications: ISO 14001, ISO 9001, ISO 13485, ISO 22000, FSSC 22000, ISO 22716

Third-party Assurance: Japan Chemical Industry Association (for Responsible Care data)

Sustainable Products & Innovation

• KANEKA PEPTIDE (fertilizer)
• Anti-freeze ingredients
• Organic EL lighting
• Soil Blocks

Awards & Recognition

• JSBBA Award for Achievement in Technological Research
• Porter Prize
• Corporate Technology Award from the Vitamin Society of Japan
• 47th Ichimura Prize in Industry
• Science and Technology Prize (Development Category)

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Occupational Safety and Health
• Product Safety and Quality Assurance
• Compliance
• Corporate Governance
• Biodiversity Conservation
• Youth Development
• Community Engagement
• Work-Life Balance
• Diversity & Inclusion

Environmental Achievements

• Reduced energy intensity index by 2.3% from the previous fiscal year, achieving a 1.9% reduction target on a five-year average basis.
• Achieved CO2 emissions intensity index target of 97.0 for the year, based on a target of 93.2 for fiscal 2020.
• Achieved a final landfill rate of 0.005% for Kaneka (zero emissions).
• Reduced VOC emissions by 8.6% compared to the previous year to 1,556 tons.
• Reduced total emissions of six hazardous atmospheric pollutants by 10% year-on-year to 21.5 tons.

Social Achievements

• Launched a Women's Network System to address workplace-related issues and promote women's active participation.
• Increased the ratio of new female employees who graduated from colleges of technology and universities exceeding 30% for the first time.
• Offered Kaneka Manufacturing Classes to 281 elementary school students, teaching them how to make small self-powered rolling robots.
• Participated in the Children's Chemistry Show, with approximately 330 children visiting Kaneka's booth for eraser making.
• Provided a visiting science class program for local elementary schools at the Kashima Plant.

Governance Achievements

• Conducted Anti-Monopoly Act seminars with 158 participants.
• Conducted CSR evaluation audits, including visiting consultations at 4 parent plants and 20 Group companies in Japan.
• Conducted compliance e-learning at Group companies in Japan, with 4,656 participants from 42 companies.
• Held an appointment and remuneration advisory committee and obtained approval for selection of executive officer candidates and compensation paid to executive officers.
• Held independent external directors’ meetings.

Climate Goals & Targets

Environmental Challenges

• Increased transport-related energy intensity index by 3.3% from fiscal 2015.
• Group companies in Japan failed to achieve zero emissions (1.8%) due to increased final landfill disposal volume.
• Many incidents, including chemical substance leakages and other events, at Group companies outside Japan.
• Fires broke out at parent and Group companies.
• 18 industrial accidents occurred.

Mitigation Strategies

• Promoting and planning effective efforts to reduce the transport-related energy intensity index.
• Controlling the waste generation intensity to reduce the final disposal volume and keep the final landfill rate at 0.2% or below for parent plants.
• Introduce and conduct risk assessments according to the type and size of the business, including Group companies.
• Develop a prediction technology and a system to minimize damage from disasters by utilizing external resources.
• Enhance education and support for line managers, including those in Group companies, to improve their safety-first awareness.

Supply Chain Management

Responsible Procurement

• Green Procurement Standards
• Basic Procurement Policy

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Global Compact, GRI G4

Certifications: ISO 14001, ISO 9001, ISO 13485, ISO 22000, FSSC 22000, ISO 22716, OSHMS

Third-party Assurance: Japan Chemical Industry Association (for Responsible Care data)

Sustainable Products & Innovation

• Eco-friendly products (defined and enhanced from fiscal 2017)
• Kanekalon
• Kanelite Foam
• Solar Circuit House
• Kaneka MS Polymer
• Kane Ace MX

Awards & Recognition

• Grand Prix Wallonie à l'Exportation (Kaneka Eurogentec)
• Excellent Safety and Health Best Workplace (Kaneka Takasago Service Center Co., Ltd.)
• Saitama Safety and Health Commendation (Tokyo Kaneka Foods Manufacturing Corporation)
• Kanagawa Safety and Health Commendation (Kaneka Medix Corporation)
• Human Resources Development Gala Dinner 2016 awards (Kaneka (Malaysia) Sdn. Bhd.)

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced carbon intensity by 0.2% year-on-year; achieved a 2.1% decrease in a five-year average rate of change.
• Obtained “OK Biodegradable MARINE” certification for PHBH.
• Achieved the world’s highest cell conversion efficiency of 26.63% in a practical size (180 m²) crystalline silicon solar cell.

Social Achievements

• Established a company-wide project consisting solely of female members to expand Kaneka’s business and increase its corporate value and brand power.
• Established a technical tie-up with Pur Natur in Belgium to promote sustainable dairy farming and offer high-quality dairy products.
• Acquired AB-Biotics, S.A., a Spanish company specializing in lactic acid bacteria, to expand the functional food business.

Governance Achievements

• Established the ESG Charter to evolve its ESG management.
• Established the ESG Committee and the ESG Steering Committee to promote Group-wide ESG activities.
• Implemented an analysis and evaluation of the effectiveness of the Board of Directors.

Climate Goals & Targets

Environmental Challenges

• Risks related to maintaining operational advantages and trends in Japanese and overseas economic environments.
• Risks associated with globalization of business (fluctuations in foreign exchange rates and overseas business development).
• Risks of price fluctuations of raw materials and fuels.
• Risks associated with product liability, industrial accidents, and large-scale disasters.
• Risks associated with the protection of intellectual property rights.
• Impact of environment-related regulations.
• Risks associated with legal action.

Mitigation Strategies

• Each division identifies operational risks and other types of risks, takes appropriate preventive measures, and responds appropriately in cooperation with other relevant divisions if a risk manifests itself.
• The Compliance Subcommittee of the ESG Committee oversees the development and implementation of company-wide plans for preventive measures against potential risks, including those related to ethics and legal compliance.
• The Risk Management Committee handles risks in cooperation with the relevant divisions.

Supply Chain Management

Responsible Procurement

• Conduct fair transactions with raw material suppliers and contractors with a focus on compliance; build mutually beneficial and sound relationships of trust.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Global Compact

Certifications: OK Biodegradable MARINE

Sustainable Products & Innovation

• PHBH biodegradable polymers
• Solar power generation systems (VISOLA)
• Residential electricity storage systems
• Kanepearl Eperan
• KANEKA Surfactin

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced NOx emissions by 4.1% and final landfill waste by 7.8% in FY2018.
• Achieved energy-origin CO2 emission intensity index of 91.4, exceeding the FY2020 target of 93.2.

Social Achievements

• Established the Health Care Promotion Standards to improve the health care system company-wide.
• Increased employment rate of women who graduated from technical colleges and universities to 33%.

Governance Achievements

• Established the ESG Charter in 2018 to evolve ESG management.
• Established the ESG Conference in April 2019 to set policy directions to promote ESG management.

Climate Goals & Targets

Environmental Challenges

• Risks related to maintaining operational advantages and trends in Japanese and overseas economic environments.
• Risks associated with globalization of business (fluctuations in foreign exchange rates and overseas business development).
• Risks of price fluctuations of raw materials and fuels.
• Impact of environment-related regulations.
• Risks associated with legal action.

Mitigation Strategies

• Each division identifies operational risks and other types of risks, takes appropriate preventive measures, and responds appropriately.
• The Compliance Subcommittee of the ESG Committee oversees the development and implementation of company-wide plans for preventive measures against potential risks.
• The ESG Committee handles risks in cooperation with relevant divisions.
• Regular checks ensure the risk management system’s effectiveness.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Global Compact

Sustainable Products & Innovation

• Biodegradable Polymer PHBH
• T-Green Multi Solar

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced GHG emissions by 6.3% from the previous year to 1,027 thousand tons-CO2e due to a reduction in production volume, a decrease in the CO2 emission factor for electricity, and the results of energy conservation activities.
• Developed exterior system “T-Green® Multi Solar,” which generates electricity through photovoltaic laminates integrated into outer walls and windows.
• Developed a next-generation see-through photovoltaic module integrated into windows.
• Achieved the world’s highest cell conversion efficiency of 26.7% and module conversion efficiency of 24.5% in heterojunction back-contact crystalline Si solar cells.
• Social implementation of KANEKA Biodegradable Polymer Green Planet

Social Achievements

• Launched an Infection Initiative Team to provide various solutions, including the contract production of DNA vaccines, the supply of active pharmaceutical ingredients for Avigan® Tablet, the development of antiviral drugs, and the provision of PCR test kits.
• Developed cosmetic containers made from Green Planet for the first time in the world.
• Expanded product lineup of high-value-added dairy products focused on delicious flavor and health.
• Established Betsukai Wellness Farm Co., Ltd., which is engaged in the production and sales of organic raw milk.

Governance Achievements

• Established the ESG Charter in 2018 to evolve its ESG management.
• Conducted ESG inspections, comprising ESG safety and quality inspections and ESG evaluation audits, targeting all Group companies within and outside Japan.
• Formulated a basic risk management policy to respond to potential risks in business operations.

Climate Goals & Targets

Environmental Challenges

• Risks related to the spread of COVID-19
• Risks related to the Group’s ability to maintain operational advantages and trends in the Japanese and overseas economic environments
• Risks associated with the globalization of our business (overseas business development and fluctuations in foreign exchange rates)
• Risks of price fluctuations of raw materials and fuels
• Risks associated with product liability, industrial accidents and large-scale disasters
• Risks associated with the protection of intellectual property rights
• Impact of environment-related regulations
• Risks associated with legal action

Mitigation Strategies

• Established the Infection Initiative Team.
• Implemented various initiatives to ensure all directors and employees comply with all applicable laws and regulations.
• Formulated a basic risk management policy.
• Strengthened information security.

Supply Chain Management

Responsible Procurement

• Green Procurement Standards

Climate-Related Risks & Opportunities

Opportunities

• Increase in demand for renewable energy
• Expansion of carbon neutral-related businesses, such as energy saving, energy creation, and energy storage
• Social implementation of KANEKA Biodegradable Polymer Green Planet™
• Rise in demand for products and technologies
• Expansion of market for safe and reliable food
• Development of food production support technology

Reporting Standards

Frameworks Used: UN Global Compact, TCFD

Certifications: OK Biodegradable MARINE

Sustainable Products & Innovation

• KANEKA Biodegradable Polymer Green Planet
• Next-generation photovoltaic modules
• New electronics materials
• Biologics, regenerative medicine and cell therapy, and probiotics businesses

Awards & Recognition

• Runners Award

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Achieved a 2.1% year-on-year reduction in energy intensity index at all parent manufacturing sites.
• Achieved fiscal 2021 target of 92.3 for CO emission intensity index (toward a fiscal 2030 target of 84.3).
• Effectively achieved zero emissions (final landfill rate of 0.43% for Kaneka and Group companies in Japan).

Social Achievements

• Established the KANEKA UNITED Kizuna Foundation to support disaster-affected areas.
• Continued Kaneka Manufacturing Classes to foster youth development.
• Held Female Challenge Dialogue to advise management on supporting female employees.

Governance Achievements

• Reorganized ESG-related organization with the establishment of the Engine of Sustainability Management.
• No serious violations of laws, regulations, or rules in fiscal 2021.
• Implemented analysis and evaluation of the effectiveness of the Board of Directors.

Climate Goals & Targets

Environmental Challenges

• Increased VOC emissions due to higher production volume and product mix changes.
• Increased estimated leakage of fluorocarbons due to equipment problems.
• Increased total environmental impact (EIPs) primarily in terms of greenhouse gases, ozone-depleting substances, and discharges of COD and nitrogen in coastal waters.

Mitigation Strategies

• Continued efforts to manage and reduce VOC emissions.
• Upgraded equipment to a fluorocarbon-free model.
• Implementing own environmental capital investment program (annual budget of 300 million yen) for energy conservation and CO2 emission reduction.

Supply Chain Management

Responsible Procurement

• Green Procurement Standards
• RSPO supply chain certification

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters

Transition Risks

• Shift to low-carbon energy

Opportunities

• Development of energy-efficient products
• KANEKA Biodegradable Polymer Green Planet™

Reporting Standards

Frameworks Used: GRI Standards, UN Global Compact, TCFD

Certifications: ISO 14001, Eco-Action 21, RSPO

Third-party Assurance: KPMG AZSA Sustainability Co., Ltd.

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 13 (Climate action)

Initiatives related to energy conservation, CO2 emission reduction, and development of eco-friendly products.

Sustainable Products & Innovation

• KANEKA Biodegradable Polymer Green Planet™

Awards & Recognition

• Safety Excellence Award (Shiga Manufacturing Site)
• Gold Medal at AIGA 2020 award ceremony (Kaneka (Malaysia) Sdn. Bhd.)
• Director’s Excellence Award (Kaneka Medix Corporation)
• 2022 Health & Productivity Management Outstanding Organization (Kaneka (Malaysia) Sdn. Bhd. and Kaneka Medix Corporation)