Climate Change Data

Daiseki Co., Ltd.

Climate Impact & Sustainability Data (2021-03 to 2022-02, 2022-03 to 2023-02, 2023-03-01 to 2024-02-29, 2024)

Reporting Period: 2021-03 to 2022-02

Environmental Metrics

Total Carbon Emissions:42,000 tCO2e/year (Scope 1 and 2)
Scope 1 Emissions:27,738 tCO2e/year
Scope 2 Emissions:14,153 tCO2e/year
Scope 3 Emissions:147,369 tCO2e/year
Water Consumption:969,000 tons/year
Waste Generated:197,000 tons/year (non-recyclable)
Carbon Intensity:0.021 tCO2e/t (Scope 1 and 2, FY2022)

ESG Focus Areas

  • Environment
  • Society
  • Governance

Environmental Achievements

  • Achieved a 90.0% recycling rate (Daiseki Group) in FY2022.
  • Reduced CO2 emissions by over 564,000 tons (equivalent to the annual CO2 emissions of 190,000 households) through low-greenhouse gas emission waste treatment methods.
  • Improved CDP Climate Change 2021 rating from D to B.
  • Switched to carbon-neutral LNG at Daiseki MCR.
  • Started trials to supply biodiesel for marine vessels.

Social Achievements

  • Certified as a 2022 Health and Productivity Management Organization (Daiseki and Daiseki MCR).
  • 100% employee participation in regular health checkups.
  • Introduced a 24-hour health consulting service.
  • Extended short-time work period for childcare.
  • Launched a five-year “Action Plan for Promotion of Women’s Active Participation”.

Governance Achievements

  • Established an Audit and Supervisory Committee with three outside directors (one woman).
  • Introduced an executive officer system.
  • Established a Compliance Committee.
  • Formulated an Ethics Charter.
  • Established Risk Management Regulations.

Climate Goals & Targets

Long-term Goals:
  • Reduce SCOPE 1 + SCOPE 2 emissions by 100% by FY2051.
Medium-term Goals:
  • Achieve zero greenhouse gas emissions from renewable energy at all facilities by FY2028.
  • Increase the number of female managers to 10% or more by FY2027.
Short-term Goals:
  • Reduce SCOPE 1 + SCOPE 2 emissions by 30% by FY2028 and SCOPE 3 emissions by 18%.

Environmental Challenges

  • Climate change impacts (extreme weather, rising sea levels).
  • Increased energy costs due to carbon pricing.
  • Reduced demand for recycled fuels due to decreased fossil fuel usage.
  • Potential for operational disruptions due to natural disasters.
  • Maintaining high compliance standards.
Mitigation Strategies
  • TCFD scenario analysis and response plans.
  • Switching to renewable energy sources.
  • Developing low-emission industrial waste treatment services.
  • Shifting operations from recycled fuels to material recycling.
  • Ongoing employee compliance training and a robust whistleblowing system.

Supply Chain Management

Responsible Procurement
  • Requesting partner companies to work on preventing overworking and conducting proper medical exams.

Climate-Related Risks & Opportunities

Physical Risks
  • Natural disasters (typhoons, torrential rain, flooding)
Transition Risks
  • Increased energy costs due to carbon pricing
Opportunities
  • Increased demand for low-emission industrial waste treatment services
  • Increased demand for raw materials and industrial waste treatment services with low emissions

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 14001

Third-party Assurance: KPMG AZSA LLC

Sustainable Products & Innovation

  • Recycled fuels

Awards & Recognition

  • Japan Environmental Management Association for Industry Chairman Award
  • ESG Finance Award Japan Special Award (Daiseki Eco. Solution)

Reporting Period: 2022-03 to 2023-02

Environmental Metrics

Total Carbon Emissions:194,750 tCO2e/year
Scope 1 Emissions:27,951 tCO2e/year
Scope 2 Emissions:9,990 tCO2e/year
Scope 3 Emissions:156,809 tCO2e/year
Renewable Energy Share:25.3%
Water Consumption:93.3 million tons/year
Carbon Intensity:0.019 tons of CO₂/tons (FY2023)

ESG Focus Areas

  • Circular economy
  • Carbon neutrality
  • Environmental protection
  • Creating workplace that individuals shine
  • Promoting thorough understanding of compliance and observation of laws and regulations

Environmental Achievements

  • Recycling rate of 87.7%
  • Avoided emissions of 559,000 tons of CO2 (waste oil) and 116,000 tons of CO2 (waste solvent)
  • 25.3% of electricity used by the Daiseki Group switched to renewable energy
  • Reduced electricity use by approximately 20% by introducing turbo blowers

Social Achievements

  • Daiseki and Daiseki MCR were certified as a “2023 Health and Productivity Management Organization”
  • Hired a public health nurse for employee health consultations and seminars
  • Implemented company-wide RPA at Daiseki Eco. Solution, reducing analysis work time by 40 hours per month
  • Installed digital tachographs on all industrial waste transport vehicles at Chiba Works, reducing overtime hours

Governance Achievements

  • Appointed one external director with corporate management experience, creating a management structure consisting of three internal directors and four external directors
  • Held 21 Board of Directors meetings and 14 Audit and Supervisory Committee meetings
  • Ratio of external directors within all directors increased to 57.1%

Climate Goals & Targets

Long-term Goals:
  • Triple net sales and operating profit by FY2031 (compared to FY2018)
Medium-term Goals:
  • Scope 1 + Scope 2: 34% reduction by FY2028 (compared to FY2022)
  • Scope 3: 20% reduction by FY2028 (compared to FY2022)
  • Switching to 100% power from renewable energy sources by FY2031
Short-term Goals:
  • Avoided emissions of at least 680,000 tons of CO2 by FY2025
  • Increase the ratio of female managers to at least 10% by the end of FY2027

Environmental Challenges

  • Sluggish growth of the industrial production index for the manufacturing sector due to the impact of the COVID-19 pandemic, semiconductor shortages, and a supply outage at an industrial waterworks
  • Reducing Scope 1 emissions generated by the company’s own fuel use and industrial processes
  • The circular economy is not yet a core business
  • Scope of business is Japan only, and has not yet expanded overseas
  • Cost of disposing of contaminated soil and industrial wastes
Mitigation Strategies
  • Strengthening its stable management foundation through self-support efforts such as acquiring new customers and reducing costs
  • Planning to reduce Scope 2 emissions to zero by switching to renewable electricity at all company sites by FY2028
  • Planning to coordinate with partner companies to whom we outsource transportation of waste and recycled products to reduce Scope 3 emissions
  • Developing business models that contribute to the circular economy
  • Collaborating with other companies to transition to material recycling

Supply Chain Management

Responsible Procurement
  • Gathering fuel efficiency data from transportation companies

Climate-Related Risks & Opportunities

Physical Risks
  • Natural disasters (typhoons, torrential rain)
Transition Risks
  • Increased energy costs due to carbon pricing systems
  • Reduced sales of recycled fuels due to reduced fossil fuel usage
Opportunities
  • Increased demand for Daiseki’s low-emissions industrial waste treatment services
  • Increased demand for recycled resources with low emissions

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 14001

Third-party Assurance: SGS Japan Inc

Sustainable Products & Innovation

  • Recycled fuels
  • Raw materials for cement
  • Usable metals
  • Recycled lead
  • Raw materials for plasterboard

Awards & Recognition

  • Medal with Dark Blue Ribbon

Reporting Period: 2023-03-01 to 2024-02-29

Environmental Metrics

Total Carbon Emissions:Not disclosed
Scope 1 Emissions:Not disclosed
Scope 2 Emissions:Not disclosed
Scope 3 Emissions:Not disclosed
Renewable Energy Share:Not disclosed
Total Energy Consumption:Not disclosed
Water Consumption:Not disclosed
Waste Generated:Not disclosed
Carbon Intensity:Not disclosed

ESG Focus Areas

  • Environmental
  • Social
  • Governance

Environmental Achievements

  • Contribution to reduction of greenhouse gas emissions through recycling
  • Substitution of fossil fuels with recycled fuels
  • Contribution to circular economy through recycling

Social Achievements

  • Disaster recovery support
  • Not disclosed

Governance Achievements

  • Not disclosed

Climate Goals & Targets

Long-term Goals:
  • Not disclosed
Medium-term Goals:
  • Not disclosed
Short-term Goals:
  • Not disclosed

Environmental Challenges

  • Not disclosed
Mitigation Strategies
  • Not disclosed

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: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

  • Not disclosed

Not disclosed

Sustainable Products & Innovation

  • Not disclosed

Awards & Recognition

  • Not disclosed

Reporting Period: 2024

Environmental Metrics

Total Carbon Emissions:600,000 tons CO2 reduction annually for customers

ESG Focus Areas

  • Environment
  • Social
  • Governance

Environmental Achievements

  • Contributing to the reduction of approximately 600,000 tons of CO2 emissions annually for our customers

Social Achievements

  • Low employee turnover rate (1.9% non-consolidated, 3.9% consolidated)
  • Emergency support activities in disaster-stricken areas
  • Launched a restricted stock incentive plan

Governance Achievements

  • Upgraded ESG Report to an Integrated Report combining financial and non-financial information
  • Clearly stated management approach with awareness of share price and cost of shareholders’ capital

Climate Goals & Targets

Long-term Goals:
  • Increase ROE to at least 15% by FY2031
Short-term Goals:
  • Increase ROE to 12% and equity spread to at least 3.5% to 4% within three years

Environmental Challenges

  • Relatively large earnings volatility within the Group (specifically Daiseki Eco. Solution’s soil contamination remediation business)
Mitigation Strategies
  • Developing sales activities to acquire customers ahead of other companies by utilizing Daiseki’s customer network and working with Daiseki Eco. Solution to identify potential customers in advance
  • Steadily accumulating projects each year to even out performance
  • Raising the dividend payout ratio to at least 40% and buying back 12 billion yen of company shares over the next three years

Supply Chain Management

Climate-Related Risks & Opportunities