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Sustainability

Sustainability

Social changes Factors Value Chain Risk/
Opportunity
Relevant Business Impact on Business Impact
FY2030 FY2050

Enhancement of our company initiatives and regulations for environmental conservation (transition)

Enhancement of nature-related regulations Upstream Risk All Increase in raw materials procurement costs due to tightening environmental laws and regulations for materials sourcing, processing, and production of intermediate products. High High
Direct Operations Increase in operation costs in our plants due to the enforcement of regulations on pollution. Mid High
Increase in operation costs due to the introduction of tax on plastics;
Generation of additional costs for replacing production equipment and switching packaging materials by introducing biomass plastics and other recyclable materials.
Mid High
Growth of demand from investors and others seeking initiatives for nature-related issues Direct Operations Risk All Declines in the ESG rating, the Group’s reputation, the market capitalization and difficulty in financing due to the delay in countermeasures against climate change, such as the massive use of fossil-derived raw materials. High High
Opportunity Rises in the ESG rating, the Group’s reputation, and the market capitalization through progressive approaches and information disclosure. High High
Downstream Risk Agri Reputational risk related to product safety Mid Mid
Market changes due to increasing demand for environmental consideration Downstream Risk Agri Decline in agrochemicals’ sales by introducing regulations on the use volume of agrochemicals. High High
Reduction of the use volume and decline in sales of agrochemicals due to the expansion of organic beverage and food markets. High High
Reduction of the use volume and decline in sales of agrochemicals by using various technologies, such as big data, drones, and farm management software. High High
Opportunity Growth of demand for biological agrochemicals; increase in opportunities to develop new agrochemical products. Mid High
Increase in sales of new agrochemicals that adapt to Smart Agriculture (such as drone agrochemicals spraying*)
* It contributes to the reduction of the use volume of agrochemicals.
High High
Increase in sales of agrochemicals* for agricultural products in countries and territories where farming lands are being expanded for food production due to population growth. (*Those products that contribute to the prevention of farmland expansion by improving yields and environmentally friendly.) High High
Increase in sales of agricultural business other than agrochemicals, such as investments into agriculture-related technologies development for Smart Agriculture and breed improvement. Mid Mid

Transition・Physical

Market changes due to degradation of ecosystem services and increasing demand for environmental consideration Upstream Opportunity All Increase in sales of low-carbon products by switching to biomass-derived raw materials Mid High

Environmental degradation・Rising temperatures (physical)

Degradation of ecosystem services Upstream Risk All Increase in raw materials procurement costs due to water scarcity, floods, or similar risks in materials sourcing and processing and production of intermediate products;
Supply shortage of those materials due to the suspension of or limitation to production.
High High
Direct Operations Agri Decline in production capacity (such as shortage of cooling capacity) and increase in products/materials management costs due to water scarcity caused by drought and heat waves Low Low
Market changes due to degradation of ecosystem services Downstream Risk Agri 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.
Low Low
Opportunity Increase in existing products’ sales and opportunities for the development of new agrochemicals due to the spread of pest insects, weeds, and pathogens and the development of their resistance. High High

All: All business・Planning and Development Division, Agri: Agricultural Chemicals business

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