Climate Change Data

Nippon Chemi-Con

Climate Impact & Sustainability Data (2020, 2022)

Reporting Period: 2020

Environmental Metrics

Total Carbon Emissions:469,062 tCO2e/year (2019)
Total Energy Consumption:428,225 MWh/year (2019)

ESG Focus Areas

  • Environment
  • Social
  • Governance

Environmental Achievements

  • Reduced carbon dioxide emissions by 11% from 2018 to 2019
  • Reduced resource consumption by 18% from 2018 to 2019
  • Reduced waste material volume maintaining a long-term reduction trend

Social Achievements

  • Increased designated health guidance implementation ratio to 85.2% (FY2017), ranking tenth in all health insurance unions in Japan
  • Implemented smoking bans during work hours at all factories
  • Maintained 5-year turnover rate of 11% or less for young employees
  • Proactive hiring of foreign students studying in Japan
  • Increased rate of hiring for disabled workers
  • Increased rate of female hiring
  • Increased number of female managers

Governance Achievements

  • Established a Nomination Advisory Committee and a Compensation Advisory Committee, both chaired by independent outside directors
  • Reduced the number of executive officers from 14 to 12 to increase the speed of decision-making
  • Streamlined the organization by reducing the number of back office departments from seven to three
  • Conducted effectiveness evaluations for the Board of Directors
  • Established a whistleblowing system

Climate Goals & Targets

Long-term Goals:
  • Shift to a corporate structure capable of responding flexibly to changes in the business environment
Medium-term Goals:
  • Net Sales: 140 billion yen
  • Operating Income Margin: 7%
  • ROE: 10% and higher
  • Total Asset Turnover Ratio: 1.0
Short-term Goals:
  • Increase the number of women in management positions by 50% by FY2020
  • Increase the percentage of female hires to 30% and higher for technical and manufacturing positions, and 40% and higher for sales and clerical positions

Environmental Challenges

  • US-China trade friction
  • COVID-19 pandemic
  • Stagnant corporate capital investments
  • Declining vehicle sales
  • Increased price competition from emerging manufacturers in China and Taiwan
  • Risks concerning raw material price fluctuations and procurement
  • Risks concerning product defects
  • Risks concerning laws and public regulations
  • Risks concerning natural disasters and unpredictable events
  • Risks concerning serious phenomena related to assumptions regarding business continuity
Mitigation Strategies
  • Consolidated three domestic aluminum electrolytic capacitor manufacturing subsidiaries and created Chemi-Con East Japan Corp. to improve productivity and reduce costs
  • Established Chemi-Con East Japan Materials Corp. to accelerate operation within the aluminum electrode foil business
  • Implemented structural reforms aimed at shifting away from a high-cost structure by reducing fixed costs and improving productivity
  • Revised Green Procurement Guidelines for more thorough management
  • Conduct periodical and continuous audit and evaluation on suppliers
  • Share regulatory information with suppliers through “Green supplier approval system”
  • Implemented telecommuting and flexible time schedules to reduce the number of commuting employees and avoid crowded public transportation
  • Strengthening product planning capabilities and accelerating the introduction of new products into markets that are expected to grow
  • Enhancement of the earning power of aluminum electrolytic capacitor business
  • Reduction of fixed costs through productivity reform and improvement of financial position
  • Realization of speedy management
  • Workforce optimization under the early retirement program
  • Improve productivity by integrating and reorganizing production sites and consolidating production site staff functions at the head office
  • Reduce manufacturing processes by promoting the use of smart factories
  • Establishment of a system for high-capacity operation of electrode foil facilities
  • Improve capital efficiency through selection and concentration of capital investment
  • Drastic reform of supply chain management system to reduce inventories
  • Streamlined executive officer system and reorganization of the head office

Supply Chain Management

Supplier Audits: Periodical and continuous audit and evaluation on suppliers

Responsible Procurement
  • Nippon Chemi-Con Group Green Procurement Guideline
  • Green supplier approval system

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Global Compact

Certifications: ISO14001, IATF 16949, ISO9001

UN Sustainable Development Goals

  • Goal 7 (Affordable and clean energy)
  • Goal 9 (Industry, innovation and infrastructure)
  • Goal 13 (Climate action)

Creating long-lasting products to support industrial infrastructure and developing technology to support the social welfare sector.

Sustainable Products & Innovation

  • Surface mount type aluminum electrolytic capacitor that increases the product lifespan of conventional products by 250%
  • Diaper sensor using materials with a low environmental load

Awards & Recognition

  • Life Nanotechnology Award (for diaper sensor)

Reporting Period: 2022

Environmental Metrics

Total Carbon Emissions:356,558 t-CO2 (FY2013)
Total Energy Consumption:428,126 (FY2022)

ESG Focus Areas

  • Environment
  • Social
  • Governance
  • SDGs

Environmental Achievements

  • Energy intensity improvement of 9.5% compared to the base year (FY2020)
  • CO2 emission reduction rate of 22.0% compared to the base year (FY2013)
  • Zero environmental-related product accidents
  • Final disposal rate of 0.9%

Social Achievements

  • Continued work-from-home system
  • Achieved average overtime of less than 29 hours per month per employee
  • Increased female managers/section chiefs/section managers/deputy section managers by 67% compared to the end of FY2020
  • Conducted tiered training as scheduled
  • Proactive employment of foreign students studying in Japan

Governance Achievements

  • Compliance with basic policy on corporate governance
  • Prompt disclosure of financial results explanatory materials
  • Continued participation in UN Global Compact
  • Regular BCP validation and reviews
  • Reinforced information leak prevention

Climate Goals & Targets

Long-term Goals:
  • Achieve carbon neutrality by 2050
Medium-term Goals:
  • Reduce CO2 emissions from manufacturing by roughly 46% compared to FY2013 levels by FY2030
  • Improve energy consumption per unit by an annual average of 1% or higher towards FY2030
  • Increase female section chiefs, section managers and deputy section managers by 50% by the end of FY2025 (compared to the end of FY2020)
Short-term Goals:
  • Reduce average overtime to 29 hours or less per month per employee
  • Increase paid leave and childcare leave usage rates to 70% or higher

Environmental Challenges

  • Intensified price competition
  • Fluctuations in raw material prices and procurement difficulties
  • Potential product defects
  • Changes in laws and public regulations
  • Natural disasters and unpredictable events
  • Climate change related risks
  • Competition law violations
Mitigation Strategies
  • Cost reductions by optimizing production systems, developing high added value products, expanding sales in core markets
  • Local procurement at overseas manufacturing companies, productivity improvements, purchasing raw materials from multiple suppliers, regular credit management of suppliers
  • Product liability insurance, ISO9001 and IATF16949 certifications, structure for quick response to defects
  • Legal means to respond to decisions by competition law authorities
  • Multiple production locations, alternative material sourcing, BCP review and measures to reduce risk at sites likely to suffer disasters
  • CO2 reduction initiatives, renewable energy introduction, meeting customer requirements related to climate change
  • Identifying the cause of competition law violations, reinforcing measures to prevent reoccurrence, strengthening legal affairs structure

Supply Chain Management

Responsible Procurement
  • Green Supplier Certification System
  • Nippon Chemi-Con Group Green Procurement Standards
  • Climate Change Risk Assessment Report (issued since July 2021)

Climate-Related Risks & Opportunities

Physical Risks
  • Increase in severity of disasters due to extreme weather
Transition Risks
  • Adoption of carbon pricing and increase in electricity and fuel costs
  • Market risks related to unmet customer demands for climate change-related technologies
Opportunities
  • Providing products/services that meet customer demand for energy-efficient and sustainable technologies
  • Improvement of competitive advantage due to development of new technology
  • Promotion of renewable energy programs and energy-saving measures

Reporting Standards

Frameworks Used: UN Global Compact, TCFD

Certifications: ISO14001, ISO9001, IATF16949

Sustainable Products & Innovation

  • Products for automotive electronics and industrial equipment/energy conversion markets contributing to climate change mitigation

Awards & Recognition

  • Seiro town Environment Beautification Contest Encouragement Award