Sustainability

Mitigation of Climate Change

Policy/Philosophy

Due to consumption of large amounts of fossil fuels such as oil and coal since the Industrial Revolution, greenhouse gas emissions, including carbon dioxide emissions, are increasing and global warming is progressing. With the progression of climate change due to global warming, there is concern that various adverse effects on people's lives and the ecosystem will increase, such as increases in natural disasters including heavy rains and floods, reduction of food and water resources, and occurrences periods with intense heat and outbreaks of infectious diseases due to heat waves.

The Paris Agreement, which went into effect in 2016, aims to reduce the rise in average temperature well below 2°C (2°C target) as a long-term international goal in order to slow the progress of climate change and shift to a low carbon society. In addition, further efforts have been made to suppress the rise in average temperature up to 1.5°C. We support the Paris Agreement and we have set a long-term target of reducing greenhouse gas emissions by 30% from FY2018 level by FY2030. In addition, we announced our support for recommendations of Task Force on Climate-related Financial Disclosures (TCFD).

In accordance with our Responsible Care Basic Policy, our Group will actively work to reduce greenhouse gases in business activities and contribute to the mitigation of climate change through the provision of eco-friendly products and services.

• Responsible Care Basic Policy

System

• RC Management System

Indicators

Greenhouse Gas Emissions (Scope 1+2)

• 1　Due to rounding off figures, there are places where the sums for each item do not match the total.
• 2　Rate of emissions / sales (FY2011 as a base of 100)

Energy Consumption (Crude Oil Equivalent)

Activities

Reduction of GHG Emissions (scope 1 + 2)

In accordance with the "Act on Promotion of Global Warming Countermeasures", we collect data on the emissions of carbon dioxide (CO2) and other GHG from all of our business establishments, including our plants, laboratories, and head office and submit this data to the national government. In FY2020, reduction of CO2 emissions from energy use was achieved by switching fuel for auxiliary boiler of ammonia in Toyama Plant from heavy oil to natural gas. The volume of reduction of emissions was 8,000 tons-CO2e compared to previous fiscal year levels. By reducing emissions by 29% from FY2011 level, the energy consumption rate calculated as a ratio of emissions and sales (emissions / sales) significantly improved by 48% compared to that of FY2011. In addition, in order to examine the appropriateness of the calculation method , we have undergone a third-party verification since FY2018.

Understanding GHG Emissions through the Supply Chain (Scope 3)

We have calculated indirect GHG emissions (Scope 3) through the supply chain from raw material purchase to customer use and disposal. In addition, in order to examine the appropriateness of the calculation method, we have undergone a third-party verification for category 6 and 7 since FY2018.

Scope 3 of FY2020 was calculated and found to be accounted for 61% by purchased products and services. Compared to FY2019, Category 6 (business travel) decreased as a result of countermeasure against Covid-19.

We have participated in the Ministry of the Environment Green Value Chain Platform, and the status of Scope 3 calculation is also disclosed at https://www.env.go.jp/earth/ondanka/supply_chain/gvc/en/accounting_information.html

• 1　SC-DB : Database of Emissions Unit Values for Accounting of Greenhouse Gas Emissions, etc., by Organizations Throughout the Supply Chain (Ver.3.1)
• 2　IDEAv2：Inventory Database for Environmental Analysis ver2.3 (for accounting supply chain GHG emissions)

Initiatives to Reduce Energy Consumption (Production, research and office)

In accordance with the "Act on the Rational Use of Energy", we collect data on the amount of energy consumed at all of our business establishments and submit this data to the national government, along with data on our energy consumption rate. Our energy consumption (crude oil equivalent) in FY2020 decreased by 2.7% compared to that of previous fiscal year through energy saving, etc. We have a product matrix that covers a wide range of products, from commodity chemicals to agrochemicals, pharmaceuticals and functional products for electronic materials. This is why we calculate it not based on simple quantity of production but based on sales. This consumption rate improved from the previous fiscal year by 2.9%.

Initiatives to Reduce Energy Consumption (Logistics)

Use of Renewable Energy

The Toyama Plant mainly produces ammonia-based products and performance materials. It makes the plant consume a large amount of purchased electricity in the manufacturing process. This electricity is supplied by electric power corporations and Toyama Kyodo Jikahatsuden Co., Ltd., which was established through investment by companies in the Toyama Prefecture, including the Company. Toyama Kyodo Jikahatsuden Co., Ltd. uses the abundant water from the Jinzu River System to generate hydroelectric power at the Miza / Kuzuyama Power Station in Takayama City, Gifu Prefecture. At the Toyama Plant, purchased electricity generated at these hydroelectric power station is used at approximately one-third of the entire electricity consumption. We will continue to use environmentally friendly natural energy in the future.