Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• CS & Quality
• Human Resources
• Compliance
• Risk Management
• Disclosure & Communication

Environmental Achievements

• Increased sales of Environment-Contributing Products to 33% of net sales (target: 27%), aiming for 40% by 2013.
• Reduced greenhouse gas emissions by 21% from the 1990 level (domestic production sites), maintaining a reduction above 20% by 2013.
• Reduced external failure costs by ¥4.2 billion from the 2004 level, aiming for ¥5.0 billion reduction by 2013.
• Achieved zero waste emissions at 41 facilities in Japan and 3 overseas.

Social Achievements

• Increased "Global Talents" employees to 224 people.
• 25% of new graduate recruits were women (target: 30%).
• Implemented Intra-group Job Posting System for post-hiring transfers (22 cases).

Governance Achievements

• Earned SAM “Silver Class” CSR rating.
• Earned selection for FTSE4Good Global Indexes.
• Included in the Morningstar Socially Responsible Investment Index (MS-SRI).

Climate Goals & Targets

Environmental Challenges

• Fire in MJS telephone exchange systems due to insufficient sensitivity in compliance and risk management.
• Supply chain disruptions due to the Great East Japan Earthquake.

Mitigation Strategies

• Replacing customers’ products with the same power-supply circuit board free of charge.
• Reviewing related systems and raising consciousness of compliance and risk management.
• Restoring production and other systems at damaged facilities.
• Developing alternative sourcing strategies and securing stable procurement of raw materials.

Supply Chain Management

Responsible Procurement

• Green Procurement System
• Use of certified lumber (FSC).

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI G3.1 (B+ application level), Ministry of the Environment’s Environmental Reporting Guidelines (2007 Edition)

Certifications: ISO 14001 (59 sites in Japan, 21 overseas), ISO 9001 (87 sites)

Third-party Assurance: Independent third-party assurance

Sustainable Products & Innovation

• Zero Energy Cost Houses
• Environment-Contributing Products
• GREEN LABEL recycled plastic products
• Eslo Hyper high-performance polyethylene pipes

Awards & Recognition

• Environmental Advertisement Prize and Minister of the Environment Prize (Nikkei Advertising Awards)
• Merit Award (Toyo Keizai Sustainability Reporting Awards)

Environmental Metrics

ESG Focus Areas

• Global Warming Prevention
• Resource Recycling and Saving
• Biodiversity
• Chemical Substances
• Human Resources
• Safety
• Compliance
• Social Contribution

Environmental Achievements

• Reduced energy consumption per unit of output by -2.3% (Japan: -3.9%, overseas: -6.6%) compared with fiscal 2013.
• Reduced waste generation by production volume by -13.8% (Japan: -16.3%, overseas: -22.7%) compared with fiscal 2013.
• Increased number of business sites with EMS certification to 8.
• 12 business sites achieved zero emissions.

Social Achievements

• Domestic Group hired 804 people.
• Sekisui Chemical hired 34 women, 252 hired at Group companies in Japan.
• Internal job postings: 44/year
• Global talent employees in the Sekisui Chemical Group in Japan: 341

Governance Achievements

• Implemented whistle-blowing system, receiving 59 reports/consultations in FY2016.
• Conducted compliance training courses for various employee ranks.

Climate Goals & Targets

Environmental Challenges

• Decreased number of production business sites with collectible data due to business transfers.
• Increased total environmental conservation costs year on year.
• Decrease in investments compared with the previous fiscal year.

Mitigation Strategies

• Implemented measures to prevent a reoccurrence of environmental complaints.
• Carried out emergency response and reporting drills at business sites.

Supply Chain Management

Responsible Procurement

• Environmental considerations
• Compliance with laws and regulations

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Environment-Contributing Products

Environmental Metrics

ESG Focus Areas

• Governance
• Digital Transformation (DX)
• Environment
• Human Resources
• Fusion

Environmental Achievements

• Reduced greenhouse gas emissions by 6.1% (vs. FY2013)
• Reduced energy consumption per unit of output by 7.6% (vs. FY2016)

Social Achievements

• Secured a ratio of women to total hires of 31.4%
• Increased the number of Group companies certified as an Excellent Enterprise of Health and Productivity Management White 500 by Japan’s Ministry of Economy, Trade and Industry to 28

Governance Achievements

• Achieved effectiveness of 75% or more in risk management
• Reduced the incidence of major violations of laws and ordinances that impact society to zero

Climate Goals & Targets

Environmental Challenges

• Increased total amount of river discharge water chemical oxygen demand (COD) by 5.1% (vs FY2016)
• Increased amount of waste generated per unit of output by 0.3% (vs. FY2016)
• Did not achieve 100% employee participation in SEKISUI Environment Week (89.7% achieved)

Mitigation Strategies

• Implementing initiatives to promote the recycling of waste
• Working to improve the quality of water discharged into watershed areas based on COD indicators
• Promoting environmental protection activities as an educational activity to develop human resources

Supply Chain Management

Responsible Procurement

• CSR procurement surveys
• Green Procurement
• Conflict Minerals Survey Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters
• Climate Change and environmental issues

Reporting Standards

Frameworks Used: GRI Standards, Ministry of the Environment’s “Environmental Reporting Guidelines”, ISO26000, 10 Principles of the United Nations Global Compact

Third-party Assurance: A third-party organization (details on page 401 of the report)

UN Sustainable Development Goals

• Goal 3
• Goal 6
• Goal 7
• Goal 9
• Goal 11
• Goal 12
• Goal 13
• Goal 14
• Goal 15

The Group's business activities contribute to these SDGs through various initiatives related to health, clean water and sanitation, affordable and clean energy, industry, innovation and infrastructure, sustainable cities and communities, responsible consumption and production, climate action, life below water, and life on land.

Sustainable Products & Innovation

• Environment-contributing Products (later renamed products to enhance sustainability)

Environmental Metrics

ESG Focus Areas

• Governance (Internal Control)
• Digital Transformation (DX)
• Environment
• Human Resources
• Fusion

Environmental Achievements

• Reduced greenhouse gas emissions by 19.3% relative to FY2013.
• Increased renewable energy share of purchased electricity to 7.2%.

Social Achievements

• Launched various initiatives for employee participation in planning.
• Implemented programs such as TABLE FOR TWO and BOOK MAGIC.

Governance Achievements

• Achieved zero incidents of major compliance issues.
• Established a Group-wide risk management structure.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the COVID-19 pandemic.
• Climate change risks impacting business continuity.
• Major quality issues.

Mitigation Strategies

• Implemented various measures to prevent the spread of COVID-19.
• Developed and implemented business continuity plans (BCP).
• Strengthened Group-wide quality assurance systems.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Requesting environmental management systems in conformity with ISO 14001 from suppliers.
• Confirming greenhouse gas reduction targets and efforts from key suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Large earthquakes, natural disasters, industrial accidents
• Climate change and environmental issues (resource depletion, water, marine plastics)

Transition Risks

• Major market trends
• Fluctuations in exchange rates, interest rates, and asset value
• Raw material price volatility and procurement

Opportunities

• Development of energy-efficient products
• Expansion of renewable energy use

Reporting Standards

Frameworks Used: GRI Standards, UN Global Compact

Certifications: ISO 14001

Third-party Assurance: A third-party organization (for environmental and social information in the Japanese version).

UN Sustainable Development Goals

• Various SDGs are mentioned throughout the report.

The report describes how initiatives contribute to various SDGs.

Sustainable Products & Innovation

• Products to enhance sustainability

Awards & Recognition

• Silver Partner certification from TABLE FOR TWO International

Environmental Metrics

ESG Focus Areas

• Governance (Internal Control)
• Digital Transformation (DX)
• Environment
• Human Resources
• Fusion

Environmental Achievements

• Reduced greenhouse gas emissions by 21.1% vs. fiscal 2013 baseline
• Increased renewable energy share of purchased power to 19.7%
• Reduced waste generated per unit of production by 6.7% vs. fiscal 2019 baseline
• Registered 28 new products to enhance sustainability, 6 of which contribute to resource recycling

Social Achievements

• Implemented various SDG contribution activities, including 32 new initiatives under the SDG Challenge
• Conducted human rights risk assessments globally
• Provided compliance training to 1365 employees in Japan during Compliance Reinforcement Month

Governance Achievements

• No major compliance issues arose in fiscal 2021
• Implemented mutual on-site inspections to identify and mitigate risks
• Strengthened its risk management structures through PDCA cycles

Climate Goals & Targets

Environmental Challenges

• Climate change and environmental issues (resource depletion, water, marine plastics)
• Raw material price volatility and procurement
• Impact from the spread of COVID-19
• Major quality issues

Mitigation Strategies

• Established a long-term goal of zero greenhouse gas emissions by 2050
• Implemented various measures to reduce water intake and COD discharge
• Strengthened supply chain management through CSR procurement surveys and guidelines
• Implemented a new quality management system and digitized quality data

Supply Chain Management

Supplier Audits: CSR procurement questionnaires conducted for key suppliers (approximately 61% coverage achieved)

Responsible Procurement

• SEKISUI CHEMICAL Group Sustainable Procurement Guidelines (Supplier Code of Conduct)

Climate-Related Risks & Opportunities

Physical Risks

• Large earthquakes, natural disasters, industrial accidents
• Climate Change and environmental issues

Transition Risks

• Major market trends
• Fluctuations in exchange rates, interest rates, and asset value
• Raw material price volatility and procurement

Opportunities

• Expand and create markets for products to enhance sustainability

Reporting Standards

Frameworks Used: GRI Standards, UN Global Compact, ISO 26000

Certifications: ISO 14001, ISO 45001

Third-party Assurance: A third-party organization (for environmental and social information in the Japanese version)

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 13 (Climate action)
• Goal 14 (Life below water)
• Goal 15 (Life on land)
• Goal 4 (Quality education)
• Goal 17 (Partnerships for the goals)

Various initiatives contribute to these goals through environmental conservation, education, community engagement, and sustainable product development.

Sustainable Products & Innovation

• Products that reduce greenhouse gas emissions, conserve water, and promote resource recycling

Awards & Recognition

• Grand prize in the Corporate/Group Leader category at the Nature Conservation Society of Japan Awards (2016)
• Golden Order of Merit from the Japanese Red Cross Society (2021)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Resource Recycling
• Water Risks
• Biodiversity
• Human Rights
• Diversity & Inclusion
• Governance
• Digital Transformation

Environmental Achievements

• Reduced GHG emissions from business activities by 21.1% vs. FY2013
• Renewable energy share of purchased power reached 19.7%
• 20 business sites switched to 100% renewable energy

Social Achievements

• Launched new human resources strategy to improve employee placement and engagement
• Increased ratio of women in management positions to 4.3%
• Established Diversity Promotion Committee

Governance Achievements

• Appointed five Independent Outside Directors, increasing the ratio to 42%
• Established Nomination and Remuneration Advisory Committee
• Linked executive compensation to ESG performance

Climate Goals & Targets

Environmental Challenges

• Raw material price volatility
• Supply chain disruptions
• Climate change impacts (physical and transition risks)
• Geopolitical risks
• COVID-19 pandemic impacts
• Information management risks (data leaks, cyberattacks)
• Quality risks
• Safety risks
• Legal and compliance risks
• Intellectual property risks

Mitigation Strategies

• Cost reduction measures
• Alternative sourcing strategies
• Internal carbon pricing, renewable energy adoption
• Regional headquarters for information gathering and response
• Remote work promotion
• Cybersecurity monitoring systems, data protection framework
• Group-wide quality assurance systems, design reviews
• Total safety activities, equipment safety improvements
• Compliance training, whistleblowing system
• Strategic intellectual property management

Supply Chain Management

Supplier Audits: Sustainable Procurement survey of 499 domestic and overseas companies (336 responses in FY2021)

Responsible Procurement

• SEKISUI CHEMICAL Group Sustainable Procurement Guidelines (Supplier Code of Conduct)

Climate-Related Risks & Opportunities

Physical Risks

• Frequent typhoons
• Heavy rain/droughts
• Rise in sea level
• Rise in average temperatures

Transition Risks

• Policy regulations (carbon tax, energy savings regulations)
• Litigation against fossil fuel companies
• Technologies (replacement to low-carbon products)
• Markets (change in consumer behavior, market uncertainty)
• Reputation (changes in consumer preferences, industry criticism)

Opportunities

• Business opportunities from early response to regulations
• Increased sales from energy conservation/creation businesses
• Development of decarbonization technologies (BR, CCU, perovskite solar cells)
• Acquisition of incentives through resource recycling
• Improved corporate brand and sales with sustainable products

Reporting Standards

Frameworks Used: GRI, TCFD, UN Global Compact

Certifications: SBT

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation, and Infrastructure)
• Goal 11 (Sustainable Cities and Communities)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

Products and services contribute to these goals through energy efficiency, sustainable materials, resilient infrastructure, resource recycling, and GHG emission reductions.

Sustainable Products & Innovation

• ZEH-specification housing
• FFU synthetic wood
• Heat and sound insulation interlayer films
• Biorefinery technology
• Perovskite solar cells

Awards & Recognition

• Semi-Nadeshiko Brand
• Health and Productivity Stock
• White 500 Health and Productivity Management Organization

Environmental Metrics

ESG Focus Areas

• Climate Change
• Resource Recycling
• Water-related risks
• Biodiversity
• Governance (Internal Control)
• DX
• Human Capital
• Innovation
• Products to Enhance Sustainability

Environmental Achievements

• Reduced greenhouse gas emissions by 32.8% compared with FY2019
• Increased renewable energy ratio of purchased electricity to 49.5%
• Material recycling rate for waste plastics (Japan) reached 60.7%
• Reduced water intake volume at production sites by 8.5% compared with FY2016
• Reduced total COD volume of river discharge water by 2.7% compared with FY2016
• Improved JBIB Land Use Score Card® points by 1.5 points compared with FY2022

Social Achievements

• Increased ratio of female to total hires to 31.4%
• Increased ratio of female managers to 4.9%
• Maintained or improved employee retention rate compared with the previous year (97.5%)
• Increased employee engagement score compared with the previous year
• Increased the percentage of male employees taking childcare leave to 69.8%

Governance Achievements

• Zero serious incidents in the 5 fields (Safety, Quality, Accounting, Legal/Ethics, Information Management)
• Achieved 100% deployment rate of important rules at overseas Group companies
• Established internal whistleblower systems in all overseas regions

Climate Goals & Targets

Environmental Challenges

• Increase in energy procurement costs due to carbon tax hikes
• Decrease in sales due to adjustments to product pricing
• Conversion of low-carbon materials and processes to meet market demand
• Increase in damage caused by extreme weather events
• Decrease in sales due to extreme weather events
• Opportunity loss due to changes in consumption behavior

Mitigation Strategies

• Conversion to renewable energy
• Development of low-carbon products
• Strengthening infrastructure
• BCP implementation at each production and business site
• Development of Products to Enhance Sustainability
• Collaboration with supply chain to meet low-carbon product requirements

Supply Chain Management

Responsible Procurement

• Sustainable procurement guidelines
• Timber Procurement Policy
• Environmental Due Diligence

Climate-Related Risks & Opportunities

Physical Risks

• Increase in damage caused by typhoons, torrential rains, droughts, etc.

Transition Risks

• Increase in energy procurement costs due to carbon tax hikes
• Conversion of low-carbon materials and processes to meet market demand

Opportunities

• Stabilization of energy costs through the conversion to renewable energy
• Growth opportunities for Products to Enhance Sustainability
• Increased demand for resilient infrastructure

Reporting Standards

Frameworks Used: GRI Standards, SASB Standards

Certifications: ISO 14001

Third-party Assurance: A third-party organization

Sustainable Products & Innovation

• ZEH housing
• Interlayer films for automotive laminated glass
• Plastic piping
• Cross Wave rainwater storage system