Integrated Index"Sekisui Environmental Sustainability Index"

What is the Sekisui Environmental Sustainability Index?

The Sekisui Environmental Sustainability Index represents the impact on the environment of the activities of Sekisui Chemical Group companies (the use of natural capital) and their degree of contribution to the environment (returns to natural capital) as a single indicator. The major items for implementation in the Environmental Medium-term Plan—reducing various impacts on the environment, conserving the natural environment, and so forth—were integrated into this indicator; the Group began trial calculations in fiscal 2014. Starting in fiscal 2017, we began using the “rate of return to natural capital” as an index to monitor the overall progress of Group companies’ environmental management. The Group has been aiming to achieve 90% over the three-year period of the Environmental Medium-term Plan (2017-19) and achieved a result of 104.5% in fiscal 2019, the final year of the Plan.
A new three-year Environmental Medium-term Plan starts from fiscal 2020. Under the new Plan, for its SEKISUI Environmental Sustainable Index, the Group will evaluate its impact on and contribution to not only the natural environment but also the social environment. We are declaring our intention to contribute to the return of natural and social capital. In 2050, even as we expand our business, we will promote ESG management while maintaining a return of 100% or higher for both natural capital as well as social capital.

Results of Calculation

The results of calculating the Sekisui Environmental Sustainability Index, utilizing results from fiscal 2019, are provided in the chart below. Setting the use of natural capital (the impact on the environment) at 100, the return of natural capital (contributions to the environment) was 104.5%.

One of the factors in this achievement was to increase the "contribution to reducing environmental impact" from products by, for example, expanding the sales of Environment-contributing Products, including the remodeling menus for smarter homes, which promote conversion to renewable energy and boost energy savings, and the materials used for electronic products as well as associated reduction in SCOPE 3 greenhouse gas emissions during product use.

Going forward, we will sustain the rate of return to natural capital and social capital at 100% or higher while growing as a company and expanding our business. By 2050, we aim to realize the sustainable use of the earth’s natural capital and the social capital generated by human society.
In this index, boosting problem solving by means of products will contribute to improving the sustainability of the earth and society. At the same time, we believe that bringing about improvements in the returns to natural and social capital are also linked to improvements in the sustainability of the Sekisui Chemical Group and its products.

  • 3-004

After compiling the raw data in (1), above, the damage calculation-based impact assessment method “LIME2,” developed for use in Japan by Professor Norihiro Itsubo of Tokyo City University, was employed for the calculations in stages (2) and (3).

Indicator Calculation Method
Sekisui Environmental Sustainability Index
  • Sekisui Environmental Sustainability Index:
    Overall volume of returns of natural capital by the Group / Overall volume of usage of natural capital by the Group

Calculating the usage and return volumes of natural capital
Employing LIME2 (a damage calculation-based impact assessment method developed for use in Japan by Professor Norihiro Itsubo of Tokyo City University) and covering all the criteria for conservation defined by LIME2, the impacts on each of “human health (including the effects of global warming),” “societal assets (including the effects of global warming),” “the effects on plants (reducing interference on growth),” and “the effects on life (restricting the extinction of living species)” were evaluated and then made into a single indicator

The amount of return to natural capital was calculated as the reduction in the risk of harm to natural capital because of the whole Group’s various initiatives that contribute to the environment, relative to if these initiatives had not been implemented.
  • Items included in the calculation of the amount of natural capital used
    Direct usage: Use of land, greenhouse gases, amounts of emissions into the air of PRTR substances and air pollutants, the COD volume of discharges into bodies of water
    Indirect usage: Purchased raw materials*1, energy use, water intake volume, amount of waste material emitted, amount of GHGs emitted indirectly in supply chains (Scope 3)
  • Items included in the calculation of returns to natural capital
    Amount of contributions to reducing usage of natural capital through Environment-contributing Products, the amount of contribution from environmental conservation activities, environment-related donations, mega-solar power generation output
    • *1
      Until fiscal 2017, the Group gained an understanding of environmental impact, including the volume of greenhouse gasses emitted, by making calculations using “MiLCA,” the database furnished by the Japan Environmental Management Association For Industry. However, from fiscal 2018, the Group is reflecting the actual GHG emissions of its raw material suppliers with regard to four principal resins (PP, PE, PVC and PVA).

Scope of Calculation / Listing by category of calculation: Trial calculations were conducted using the following assumed conditions:

    • Raw materials:
      Purchased raw materials covered; estimates incorporated into calculations
      Concerning housing, the calculation includes the constituent raw materials for one structure multiplied by the number of structures manufactured
    • Manufacturing / Emissions of harmful chemical substances:
      <Japan>emissions of 1 t per year or
      more of substances covered under PRTR are included in the calculation. <Overseas>Not included
    • Manufacturing / Land maintenance:
      Domestic plants and research facilities were incorporated into the calculation using the area of the premises, generally considered in terms of the land used for buildings*2. The areas of the premises of overseas plants were estimated. The effects of land usage are included in the calculation based on the 30-year period after the purchase of the land
    • *2
      Concerning land usage, starting with the current Medium-term Plan (2017-19), improvements to soil quality in the “JBIB Land Use Score Card®” were deemed as reductions of the impact of land usage, weighted accordingly, and included in the calculation.
    • Others:
      Capital goods in supply chains, other fuel- and energy-related activities, transport and shipping, waste, business trips, commuting by employees, leased assets (downstream), processing/use/disposal of sold products
      Business trips and commuting by employees: Covers consolidated numbers of employees and includes some estimation
      Use of sold products: Covers housing sold during the fiscal year, and included in the calculation with assumed energy usage for 60 years into the future
      Until fiscal 2017, the Group calculated the amount of greenhouse gas reduction achieved through solar power generation as the amount of reduced environmental impact. From fiscal 2018, however, we are also calculating the effect of reduction in energy used in residences built to zero energy house (ZEH) specifications.
      Processing of sold products: Energy usage by customers while processing products anticipated to consume large amounts of energy was estimated and included in the calculation
      Disposal of sold products: Major raw materials for each fiscal year were covered and included in the calculation based on the assumption that they would be made into products and disposed of during that fiscal year
    • Product contributions:
      (1) The differences in contribution to the environment between the relevant products and previous technologies were evaluated qualitatively for each criterion, based on the contribution to the natural and social environments for each life-cycle (the five stages of procurement of raw materials, manufacturing, distribution, usage/maintenance, disposal, and recycling) in terms of CO2 reductions and energy savings, reductions in waste materials, resource savings, water-savings and the water cycle, preventing pollution, direct preservation of biodiversity, QOL improvements, and other factors. For factors for which a significant difference was estimated, data per product unit was investigated.
      (2) Based on the results of these investigations, a coefficient for calculating the impact on the environment for each series of data was multiplied by the data, yielding a calculation of the degree of contribution to the environment of each product unit.
      (3) The sales results for products in each fiscal year were multiplied by the results found in (2) to calculate the degree of contribution to the environment for each product, and the results were included in the calculation. Trial calculation performed on the effects of products equivalent to around 72% of Environment-contributing Products.
    • Direct contribution / Contribution from activities reducing environmental impacts:
      The effects on the environment relating to production for each fiscal year were compared to “the effects on the environment relating to manufacturing in fiscal 2016 × (revenue in that fiscal year / revenue in fiscal 2016),” and the difference was included in the calculation. There was a proportional relationship between revenue and the effects on the environment relating to manufacturing, based on the idea that the difference was the result of efforts undertaken in the group's activities.
    • Direct contribution / Conservation of the natural environment:
      The Group keeps track of the number of participants and the amount of time spent on each activity. In the case of planting cedar trees, a fixed amount of CO2 (1.1 t-CO2/person-hour) was multiplied by the number of people and the amount of time spent and incorporated into the calculation. Because, starting with the current medium-term plan (2017-19), improving the sustainability of activities through local cooperation and by making them stand on their own (autonomous) were made a target, the Group’s ability to work toward this target was weighted against the growth axis and included in the calculation
    • Direct contributions / donations:
      The amount intended to be paid for conservation was deemed equal to the amount of money calculated for damage caused and included in the calculation.
    • Direct contribution / Mega-solar:
      Amount of electricity generated included in the calculation as generated energy converted to a CO2 basis