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| Scenario | Factors | Value Chain | Impact on Business | Relevant Business | Main Measures | |
|---|---|---|---|---|---|---|
| 1.5℃ Scenario |
Regulations on GHG emissions | Upstream | Risk | ・Increase in raw material procurement costs due to introduction of carbon pricing such as carbon taxes, and compliance with regulations and decarbonization investment, by suppliers | All | ・Price pass-through to products ・Multiple sourcing of several key raw materials |
| Direct Operations | ・Increase in operating costs due to introduction of carbon pricing such as carbon taxes, and compliance with regulations and decarbonization investments | ・Fuel and feedstock conversion at plants ・Update to energy-saving equipment, etc. ・Increased use of renewable energy ・Zero emissions of N2O from nitric acid production capacity (Planned investment amount：830 million yen) ・Optimization of the manufacturing process ・Promotion of decarbonized investment by introducing internal carbon pricing |
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| Opportunity | ・Avoid the impact of carbon pricing by reducing GHG emissions | |||||
| ・Changes in energy policy ・Changes in energy demand and supply |
Upstream | Risk | ・Increase in raw material procurement costs due to renewable energy procurement by suppliers | All | ・Price pass-through to products ・Multiple sourcing of several key raw materials |
|
| ・Increase in logistics costs | ・Optimization of transportation routes, systems, etc. | |||||
| Direct Operations | ・Increase in operating costs due to in-house renewable energy procurement | ・Update to energy-saving equipment, etc. ・Optimization of the manufacturing process |
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| Opportunity | ・Reduce operating costs by improving energy efficiency and saving energy. | |||||
| ・Acquiring opportunities for funding (subsidies, etc.) | ・Advanced GHG emission reduction efforts and appropriate information disclosure | |||||
| Market changes due to increasing demand for environmental consideration | Downstream | Risk | ・Decrease in sales of agricultural chemicals business due to the introduction of regulations on the use of agrochemicals | Agri | ・Development of environmentally friendly agrochemicals ・Development of biological agrochemicals ・Acquiring of biostimulant technology ・Push ahead with registrations of agrochemicals in new countries. |
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| Opportunity | ・Increase in demand for biological agrochemicals, etc. | |||||
| Risk | ・Decrease in sales due to inability to provide low-carbon products ・Decrease in demand from customers due to the retention of products and businesses with large GHG emissions |
All | ・Expand sales of low-carbon products ・Development of environmentally friendly products and services ・Establishment of innovative manufacturing technologies ・Review of the business portfolio ・Promotion of decarbonized investment by introducing internal carbon pricing ・Increased use of renewable energy ・Fuel and feedstock conversion at plants |
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| Opportunity | ・Increase in demand and sales of parts and materials for low-carbon products | |||||
| Increased demand from investors and others for addressing climate change | Direct Operations | Risk | ・Damages of ESG evaluation and reputation, decrease in market capitalization, and financing difficulties due to delay in measures to climate change, such as heavy use of fossil fuels | All | ・Further advanced GHG emission reduction efforts ・Appropriate information disclosure |
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| Opportunity | ・Improve ESG evaluation and reputation, and increase market capitalization through advanced initiatives and information disclosure | |||||
| 4℃ Scenario |
Rising temperatures・Increase in abnormal weather | Direct Operations | Risk | ・Increase in risk of impacts on plant operations, equipment, inventory, and supply chains due to flooding caused by heavy rains, floods, and rising sea levels | All | ・Formulate BCP (business continuity plan) for key products in each plant. ・Rase the foundation of the plant buildings, and place equipment and other key items on the high floor, depending on risk |
| ・Reduced production capacity (such as insufficient cooling capacity, etc.) and increased product and material management costs, due to water shortages caused by droughts and heat waves | ・Formulate BCP (business continuity plan) for key products in each plant. ・Optimization of the existing cooling system ・Introduce equipment for water-saving and water-recycling ・Introduce energy-saving air conditioning and cooling equipment |
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| Market changes caused by rising temperature and abnormal weather | Downstream | Risk | ・Reduction of planted area due to increase in frequency and intensity of storms/floods and difficulties in securing irrigation water. ・Changes in the distribution of planting and reduction in planted area due to temperature rise. |
Agri | ・Push ahead with registrations of agrochemicals in new countries. ・Enhancing our agrochemicals portfolio |
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| Opportunity | ・Increase in sales of existing agrochemicals and in opportunity to develop new agrochemicals due to the increase of pest, weed, and pathogen and the resistance expression | ・Develop new agrochemicals ・Enhancing our agrochemicals portfolio ・Push ahead with registrations of agrochemicals in new countries |
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| ・Increase in disinfectants’ sales due to the reduction of usable (fresh) water resources and the growth of global demand for drinking water | Chem | ・Expand sales of disinfectants for drinking water | ||||
All: All business・Planning and Development Division, Agri: Agricultural Chemicals business, Chem: Chemicals business
