Our Group has established the Environmental Policy as a policy related to environmental issues pertaining to our Group (including greenhouse gas (GHG) emissions). Our Group's Environmental Policy is described on the following page.

The structure for supervision and management of environmental issues pertaining to our Group (including greenhouse gas (GHG) emissions) is described on the following page.

The identification, assessment, and management of risks and opportunities related to environmental issues pertaining to our Group (including greenhouse gas (GHG) emissions) are carried out in accordance with the risk management system and risk management process described on the following page.

In line with the government’s 2050 Carbon Neutral Declaration and presentation of its 2030 target, we have been working to reduce CO₂ emissions by 2030 with the goal of “reducing emissions by 46% or more (compared to fiscal 2013),” and we were able to achieve the goal ahead of schedule with a 48% reduction in CO₂ emissions in fiscal 2023.

To acquire SBTi certification (standards equivalent to 1.5°C scenario targets), in February 2023, we made a commitment to develop targets.

For our medium-term GHG (Scope 1 + Scope 2) reduction target that we aim to achieve by 2030, we have set a new target of 48% or more reduction compared to fiscal 2021.

We will also set a Scope 3 reduction target by the end of fiscal 2024 and work to reduce emissions in the supply chain.

After the announcement by the government of its 2050 Carbon Neutral Declaration and 2030 targets, our Group revised its plans as mid- to long-term targets, and has now set the following new targets to acquire SBTi certification.
• 2050 target: Taking on the carbon neutrality challenge
• 2030 target: Reducing GHG emissions by 48% or more (compared to fiscal 2021)

The Carbon Neutrality Promotion Committee recaps each year’s progress toward medium- to long-term environmental targets at the end of the fiscal year and determines the targets for the following fiscal year. It carries out its activities with the approval of the Sustainability Promotion Committee, which serves as its parent body. Two subcommittees were established within the committee in order to achieve its objectives, and these subcommittees work to reduce our environmental impact.

The Life Cycle Subcommittee aims to establish production systems with minimal environmental impacts through scientific, quantitative, and objective assessments of environmental impacts, from the R&D phase onward.

With the global trend toward achieving carbon neutrality, the approach to LCA (Life Cycle Assessment)—which assesses products over an extended period of time from their raw materials through to use and disposal—has become indispensable, and “LCA” has become a common term when engaging in dialogue with customers and suppliers.

In light of these circumstances, to provide an opportunity to learn about basic knowledge of the social background of LCA, the basics of LCA methods and our initiatives, the “LCA Basics” e-learning course was arranged for the first time in FY2023 for employees under the jurisdiction of the head office, with 1,725 employees taking the course.

Each R&D department decides a theme and works on it with an awareness of Life Cycle Assessment (LCA), from raw material extraction to final disposal (cradle to grave). In fiscal 2023, we worked toward the target of “retaining at least at 25% of all researchers” as qualified R&D personnel capable of understanding LCA and calculating the carbon footprint (CFP) of products. To this end, we organized LCA introductory courses, LCA training courses and LCA practice courses (comprehensive education and tutorials related to LCA) online, and maintained a target of 32% in fiscal 2023. Starting from fiscal 2023, guidance officers were also selected from qualified personnel for each location, to boost the level of LCA initiatives at each location. Starting from fiscal 2023, guidance officers were also selected from qualified personnel for each location, to boost the level of LCA initiatives at each location.

In addition, we also plan on establishing a system enabling us to speedily provide LCA information, from raw material extraction to factory gate (Cradle to Gate), on all of our Group’s products by the end of fiscal 2024, in response to the rapid increase in inquiries from customers regarding LCA since the Japanese government’s October 2020 net zero greenhouse gas emissions declaration. Initiatives in Japan achieved 93% of the target at the end of fiscal 2023 (92% of the plan). These initiatives will also be rolled out at overseas plans during fiscal 2024.

The CN Technology Review Subcommittee has established a system for continuously soliciting and implementing energy conservation ideas, and is promoting voluntary energy conservation activities at domestic sites.

In fiscal 2023, the subcommittee successfully reduced energy consumption by as much as 2,951 kL (114,369 GJ) in crude oil equivalent, or 5,696t-CO₂, compared with fiscal 2021, primarily by reducing city gas and electricity consumption. Outside of Japan, the subcommittee worked to ensure a similar level of activities as in Japan and continued to promote the roll out of activity methods and best practices. Outside of Japan, the subcommittee worked to ensure a similar level of activities as in Japan and continued to promote the roll out of activity methods and best practices. Outside of Japan, the subcommittee worked to ensure a similar level of activities as in Japan and continued to promote the roll out of activity methods and best practices.

In fiscal 2023, in line with the objectives of the CN Promotion Committee, the CN Technology Deliberation Subcommittee will formulate a plan and work toward the most recent 2030 target. In terms of energy conservation, we will build upon past efforts to set energy conservation targets and also to complete our reduction plans for each business site. In particular, the subcommittee will focus on creating a system across business sites in Japan for sharing energy conservation practices and technical information related to energy conservation in order to improve the level of energy-saving technology throughout our Company; and having the mother plants in Japan provide technical support to their affiliated sites through a tie-up with the Company-wide Energy Conservation Secretariat.

CDP*¹ (headquartered in London) is an international NGO established in 2000 in partnership with institutional investors from around the world. It carries out projects in which it sends out questionnaires to major companies and municipal governments around the world on issues such as climate change, water security, and forests, and that seek climate change strategies and specific declarations related to emissions of greenhouse gases.

With the CDP’s 2023 survey, survey activities were conducted on behalf of 740 institutional investors with net invested assets totaling 136 trillion U.S. dollars. More than 23,000 companies disclose environmental data on their initiatives for climate change programs via the CDP.

From 2022, the number of companies in Japan requested to disclose their information on climate change was expanded to all companies (1,841) listed on the Prime Market of the Tokyo Stock Exchange.

Upon responding to the CDP questionnaire for fiscal 2023, we received an A- rating for climate change and B rating for water security in February 2024. Having received requests for responses in fiscal 2024 regarding climate change and water security as well, we have responded.

The TCFD initiative, for which we expressed our agreement in February 2021, is introduced in [Information Disclosure Based on the TCFD recommendations (Response to Climate Change)].

As a new initiative, following our announcement of our support for the “GX League*² Basic Concept” published by the Ministry of Economy, Trade and Industry in fiscal 2022, we became a participating company in the “GX League” in May 2023, and have set targets for the our domestic group and are working on the initiative.
(https://dashboard.gx-league.go.jp/en/company/9010701005073/)

Going forward, our group will continue to proactively disclose information on the risks and opportunities associated with climate change and fulfill its responsibility to account to all stakeholders.

We will move forward with environmental information disclosure as we contribute to the response to climate change through reduction of environmental impact, resource and energy conservation, management of chemical substances, and development of products that contribute to the environment.

All of our domestic business sites have switched their purchased electricity to electricity derived from renewable energy sources at all manufacturing and research sites, which is significantly reducing CO₂ emissions from fiscal 2022 onward.

We are also encouraging our overseas business sites to switch to electricity derived from renewable energy sources, and in fiscal 2023 some sites in parts of the China and Southeast Asia region made the switch.

With efforts to actively install solar power generation also playing a role, both energy usage per production amount value and CO₂ emissions per production amount value were on a reduction trend during fiscal 2023.

We will continue with our plans to utilize renewable energy sources during fiscal 2024 and beyond, with the view to further reducing CO₂ emissions.

At our domestic business sites, we have switched from purchased electricity to electricity derived from renewable energy sources at all major business sites. We are also encouraging our overseas business sites to make the switch, and are actively installing solar power generation. As a result, our global CO₂ emissions reduced by the use of renewable energy sources came to 32% of the total in fiscal 2023.

We have focused on fuel conversion from petroleum-based fuels to natural gas from an early stage.

Natural gas reduces SOx and NOx emissions as well as CO₂ emissions by about 30%, compared to petroleum-based fuels.

In domestic business sites, we began switching over from around 2005. And in 2009, most of our plants directly operating under the group management had been converted to natural gas (city gas). Even subsidiaries that were slow converting due to certain infrastructure issues are now moving ahead with initiatives for gas conversion.

Overseas, business sites in North America and Europe were early in converting to natural gas, but sites in China and other Asian regions have also been gradually converting to natural gas, and by 2023, most business sites had completed the fuel conversion.

Currently, natural gas and other energy sources account for around 87% of the fuel used by the entire the Group of Sumitomo Bakelite Co., Ltd., but we are aiming to achieve 90% or more by 2027 by moving ahead with conversion at our domestic subsidiaries.