Environment

Environmental Management

Our Environmental Vision for 2050 (net zero)

Our Group relies upon the earth’s natural resources and energy in order to do business. However, doing business will generate garbage and air and water emissions. For this reason, we believe it is important for our Group to adhere to environmental laws and regulations, conduct business in an environmentally friendly manner, and engage in initiatives that reduce the environmental impact on the entire society through our products and services.

In fiscal 2018 our Group established a plan with mediumto long-term targets ending in fiscal 2030, and has been promoting activities based on this. However, in light of the environmental challenges that will only grow more severe from this year on, we felt it was necessary to promote activities from an even longer-term perspective. Therefore, we formulated our Environmental Vision for 2050 (CO2 reduction) ending in 2050.

Taking on the challenge of zero CO2 emissions

Since then, due to the government’s “2050 Carbon Neutral Declaration” and subsequent presentation of its target of reducing GHG by 46% (compared to fiscal 2013) by 2030, we performed a revision based on the new standards and set 2050 as our target for taking on the challenge of carbon neutrality, and 2030 for a 46% reduction in CO2 emissions (compared to fiscal 2013).

Environmental Vision for 2050 (net zero)

Climate Change Project efforts: agreement to TCFD expressed

CDP (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 2020 survey, survey activities were conducted on behalf of 515 institutional investors with net invested assets totaling 106 trillion U.S. dollars. More than 9,600 companies, accounting for over 50% of global market capitalization, disclose environmental data on their initiatives for climate change programs via the CDP.
Responding to a CDP request for responses to its Climate Change and Water Security 2021 questionnaires, our Company received scores of A- and B-, respectively, in December 2020. Having received requests for responses in fiscal 2021 regarding climate change and water security as well, we have responded.
We also expressed our agreement in February 2021 to TCFD. Moving forward, our Group will conduct proactive information disclosure regarding risks and opportunities associated with climate change as we hold ourselves accountable to all of our stakeholders.
We will move forward with environmental information disclosure as we contribute to the response to climate change through environmental impact reduction, resource and energy conservation, chemicals management and development of products that contribute to the environment.

Environmental Management Structure

Our Group aims to contribute to the sustainable development of society through our environmental conservation efforts as a whole group based on our Policy on Responsible Care Activities.
To actively work toward carbon neutrality, conserve biodiversity, and prevent soil and groundwater pollution, our Responsible Care Committee and Carbon Neutrality Promotion Committee take the lead in checking compliance with environmental laws and regulations as well as conducting environmental assessments throughout the entire life cycle, from R&D to raw materials procurement, production, sales and final disposal. They also promote activities that contribute to carbon neutrality and advance studies and deliberation of technologies that make a contribution. Based on the results, each workplace and work site take appropriate actions.

Environmental Management Structure

Activities of the Carbon Neutrality promotion Committee

In order to further strengthen and promote future efforts toward carbon neutrality (CN), the Environmental Impact Reduction Committee was reorganized as the Carbon Neutrality Promotion Committee in July 2021. Together with this change, the Energy Conservation Subcommittee, a subordinate organization, was reorganized as the CN Technology Deliberation Subcommittee.
The Environmental Impact Reduction Committee has recapped each year’s progress toward medium- to longterm environmental targets at the end of the fiscal year and then determined the targets for the following fiscal year. It has carried out its activities with the approval of the Sustainability Promotion Committee, which serves as its parent body. Moving forward, as the Carbon Neutrality Promotion Committee, it will take action toward achieving carbon neutrality together with the subordinate Life Cycle Subcommittee and CN Technology Deliberation Subcommittee.

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, under the Policy on Responsible Care Activities. The subcommittee is moving forward with its activities under its set target of ensuring that 25% of its researchers are capable of performing life cycle assessments (LCA) at all research and development departments and instituting energy conservation on their own by fiscal 2022 by continuing to foster said researchers and developers. Amid the COVID-19 pandemic, all LCA-related education was conducted in online formats during fiscal 2020.

In fiscal 2021, the Life Cycle Subcommittee will work to enhance educational opportunities, horizontally deploy LCA evaluations on baseline products, and expand items on which LCA evaluations have been carried out for SDGcontributing products. Moving forward, they will make preparations to enable the speedy supply of LCA-related information on all products.
The Energy Conservation Subcommittee worked to establish, across all business sites in Japan, a mechanism for continuously soliciting and trying out ideas for saving energy through such means as voluntary implementation initiatives in business sites. In fiscal 2020, the subcommittee successfully reduced energy consumption by as much as 1,535 kL (59,487 GJ) in crude oil equivalent, or 2,962t-CO2, compared with fiscal 2019, primarily by reducing city gas and electricity consumption. Furthermore, the subcommittee established and successfully achieved targets by carrying out unique activities to conserve electricity in the summer and winter months. 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 2021, in line with the objectives of the CN Promotion Committee, the CN Technology Review Subcommittee will formulate and work toward the latest 2030 targets, and will continue efforts aimed at achieving energy consumption reduction plans at the workplace level. In particular, the subcommittee will focus on creating a system across business sites in Japan for sharing practices for reducing energy consumption and technical information related to energy conservation in order to improve the level of energysaving 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.

Material Flows and Investments in Environmental Protection

The figure below shows inputs, including raw materials and energy, and outputs that are products and emissions released into the environment.

The Group is working to minimize its impact on the environment by means of waste reduction and resource savings through promoting more efficient use of raw materials, energy, and water. We have also been advancing CO2 emissions reduction through our carbon neutral efforts.

Quantities of raw materials inputs and product sales declined further across many categories in fiscal 2020 as economic activity continued to stagnate due to the spread of COVID-19 infections ongoing from the previous year. A recovery trend was observed during the second fiscal half, however, resulting in expectations of an increase in economic activity during fiscal 2021. Through the above-mentioned activities at our Group, we are contributing to the response to aspects of climate change such as warming by working to effect reductions in outputs that effect the environment, with respect to increases in input.

Material Flow
  • *1 The ratio of renewable raw materials to total raw materials used is about 2.7% at the current point in time, but we will make efforts from the development stage onward in order to increase the ratio of renewable raw materials use.
  • *2, 3, 4and 6 See the glossary on page 108. SOx, NOx, and soot and dust are calculated using the Company’s own formula based on exhaust gas readings and fuel usage amount, among other variables. Since methods of calculating emissions of soot and dust differ among countries, this figure is compiled solely for business sites in Japan at present. COD is calculated based on the measured concentration and drainage volume. Data on overseas COD covers sites that measure COD within drainage. Data for overseas sites are stated separately because the types of oxidant (potassium dichromate is mainly used overseas) used for measurement differ from those used in Japan.
  • *5 Drainage volume is determined by calculating drainage into sewages based on the breakdown of total usage. Drainage into public water areas is calculated using readings from flow meters installed at business sites; while water usage volume is used for business sites without flow meters.
  • *7 The volume of hazardous waste found in our total waste volume came to 5,714 t (based on the definitions used by each country). The volume of hazardous waste is not subject to assurance.
  • The volume of products shipped and value of products sold are not subject to assurance.

Investments for Environmental Protection

Our Group has compiled data annually on the amounts of investments in environmental protection of all Group companies in Japan since fiscal 2000. In fiscal 2020, a total of 240 million yen of this type of investment were made.
As part of our carbon neutral efforts, we began a full-fledged effort to adopt solar power generation in fiscal 2020, and from fiscal 2021 onward we will be phasing it in at each of our business sites. We will also consider proactive investments in CO2 emissions reduction moving forward.

Amounts of Investments in Environmental Protection in Fiscal 2020

Medium- to Long-term Environmental Targets

In fiscal 2018, we established a medium- to long-term environmental plan ending in fiscal 2030, and are engaging in activities based on it, in which our CO2 emissions met the greenhouse gas emission reduction target in the Japanese government's INDC from COP21.
However, due to the government’s 2050 Carbon Neutral Declaration and presentation of its 2030 target, we performed a new revision according to the 2030 target, and reset our 2030 target policy to include a 46% reduction in CO2 emissions (compared to fiscal 2013). We are currently deliberating the formulation of a new medium- to long-term plan that takes this policy into consideration. (The graph below and the data detailed on page 104 show the existing medium- to long-term plan.)
In addition to the government policy noted above, deliberation of targets will include consideration of:

  • Response to sustainable development needs shared by the international community with 2030 as the target year established in the SDGs.

  • Response to the Act on the Rational Use of Energy and the Act on Promotion of Global Warning Countermeasures.

In addition, we continue to undertake efforts with the Japan Business Federation (Keidanren), and through the Japan Chemical Industry Association.
We will also revise other targets upon reconsidering their appropriateness, and by restricting the volume of material loss that occurs, we will improve the efficiency of resource use, advance the effective use of raw materials, and promote the reduction of chemical substance emissions as we pursue planned efforts to reduce environmental impact.

Environmental Performance

Disclosure of Scope 3 Data

In 2015, our Group began calculating and disclosing Scope 3 emissions in the supply chain of business sites belonging to Group companies in Japan because of the growing importance of understanding CO2 emissions covering the entire supply chain. In fiscal 2018, we enlarged the scope to cover overseas business sites. The scope of said disclosures cover a total of eight categories including Category 1 “Purchased goods and services.” In addition, we confirmed that three categories including Category 8 “Upstream leased assets” are not applicable.
Both in Japan and overseas, Category 1 “Purchased goods and services” accounts for a large portion of CO2 emissions. Since inputs of raw materials decreased both in Japan and overseas in fiscal 2020 due to the impact of the spread of COVID-19 infections, Category 1 emissions were greatly reduced. The amounts of reductions at overseas business sites accounted for a particularly large portion.
Moving forward, we will continue to calculate and disclose data on other categories and work to increase the accuracy of the data for each category, while also promoting ongoing efforts to reduce emissions across the entire supply chain.

CO2 Emissions in Certain Categories of Scope 3 and Other Scopes (In Japan and Oversea Sites)

Conservation of Water Resources

When it comes to the water used at our Group's locations, in Japan a large share of the water used comes from groundwater, while overseas a large share of this comes from waterworks. The water used in our plants in Japan accounts for 84% of the water used by the entire Group.
The Group has always worked continuously to reduce the amount of water it uses. Having begun providing responses to the CDP water program, we have now established a mediumto long-term target for water use reduction from this fiscal year onward, calling for a 25% reduction from the fiscal 2017 level by fiscal 2030.
We are engaging in activities to achieve targets at all business sites. In particular, we are eagerly promoting reductions of water usage at our Shizuoka Plant, which accounts for a large percentage of the Group’s water usage in Japan, and have achieved substantial decreases in its water usage for three years in a row.
These efforts have resulted in a combined overall reduction in Japan and overseas of 50% since fiscal 2005.

Water Usage Volume

Assessment of Water-Related Risk in Fiscal 2020

Since fiscal 2015, we have been continuously surveying the regional watershed risk of all major plants in the Group (11 sites in Japan and 24 sites overseas). In fiscal 2020, our Group revised risk levels based on the results of a study using the WRI Aqueduct tool in addition to independent studies performed on each business site. We compiled the results into a table that contains the risks facing each of the regions in which the Group operates. Although there were no major changes in the assessment for this fiscal year, our ranking worsened after last year’s update due to the increasing prominence of water resource risk in the China region accompanying economic growth there. In light of these results, we will undertake more highly effective water resource conservation moving forward.

Assessment of Water-Related Risk in Fiscal 2020

Initiatives for resource recycling

Marine plastics

When it comes to the problem of marine plastics, we are moving ahead with activities to contribute to reducing plastic marine waste via a number of initiatives based on the Japanese government’s Plastic Resource Recycling Strategy. These initiatives include managing the raw materials used and the plastic products we manufacture, promoting the recycling of said products, and developing new products.

We are currently taking part in the Japan Initiative for Marine Environment (JaIME), which was established by major companies and industry organizations in the chemical industry, as well as the Clean Ocean Material Alliance (CLOMA), which was established by a broad range of business operators related to supply chains for plastic products, including those in the chemical industry and distribution/retail industries, with the goal of forming cross-industry partnerships. Through this, we are working to address a variety of challenges by aiming to curb plastic waste across our supply chain as a whole and promoting recycling via 3R activities for plastic products.

Recycling

Our Group promotes recycling as a means to make effective use of resources. This recycling includes the recovery and recycling of phenol from waste liquid produced by phenolic resin reactions during the product production process, fine grinding of offcuts from phenolic laminated sheets and decorative melamine resin laminate for use as a filler in phenolic resin molding compounds reuse of molded article by-products (sprues and runners) as raw material for molding materials, as well as reuse of excess sludge from activated sludge effluent treatment equipment as compost (organic fertilizer).

Renewable raw materials

Our Company has been using inedible plant-derived raw materials (Cashew nut shell oil, rosin [pine resin], wood flour, etc.) as renewable raw materials, primarily of phenolic resins and molding compounds. They account for about 2.7% of all raw materials used. In order to further increase the rate at which we use renewable raw materials in the future, we will undertake the development of phenolic resins using plant-derived lignin, as well as the use of bioplastics.

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