Climate Change

Efforts to Reduce Greenhouse Gas Emissions throughout the Supply Chain

Management Approach

Basic ConceptReducing Emissions throughout the Supply Chain

SEKISUI CHEMICAL Group has formulated a medium-term greenhouse gas emission reduction plan in line with targets established at COP21 (the 21st Conference of the United Nations Framework Convention on Climate Change). We are identifying and disclosing the effects in terms of “risks and opportunities” that climate change will have on business continuity based on science-based scenarios aimed at the achievement of the ambitious goals of the Paris Agreement, which are based on Science Based Targets (SBT). Moreover, we reflect these factors into our business plans and emission reduction targets. Concerning emissions, SEKISUI CHEMICAL is engaged in reducing greenhouse gas emissions at every stage, from the procurement of raw materials to development, manufacturing, transport, and use. We monitor these emissions throughout the supply chain, including not just our own business sites but also raw material suppliers and the use of our products after being sold, and publish our findings.

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Combating Climate Change

SEKISUI CHEMICAL Group believes that it is important to earnestly confront all the risks of climate change and make every effort to keep the temperature rise to less than 1.5°C. Under the Sekisui Environment Sustainability Vision2050 that was formulated in 2019 we are trying to contribute to solving environmental issues by reducing the environmental impact through our business activities. We have set a target of zero GHG emissions due to our business activities by 2050. Moreover, we are advancing the introduction of solar power equipment to generate electricity for use at the plant or facility in which it was installed, increasing our utilization ratio for renewable energy from electricity purchased from outside and have set a new target value of 100% by 2030. At the same time, we started specific actions to achieve a 26% reduction in GHG emissions by 2030, to which we committed ourselves under the SBT initiative.

Risks and Opportunities Posed by Climate Change to Our Businesses

SEKISUI CHEMICAL Group recognizes that global warming and other forms of climate change are a global problem. The Sekisui Environment Sustainability Vision 2050 created in fiscal 2019 aims to realize “a planet where biodiversity is preserved.” Our concept of “a planet where biodiversity is preserved” is a vision where global-scale issues, such as climate change, resource depletion and ecosystem degradation, have been resolved.

We also strive to understand the risks and opportunities that climate change presents to the operations of SEKISUI CHEMICAL Group, in terms of their magnitude, scope of impact and other matters. For identified risks, SEKISUI CHEMICAL Group examines measures to mitigate the risks, and for identified opportunities, it considers the creation of new businesses by developing products and services. Through this kind of management, we believe it is possible to remain a company that meets the demands of society through sustainable business development.

Addressing the Rising Costs Associated with Climate Change Strategies

As an initiative to reduce environmental impact, SEKISUI CHEMICAL Group introduced the ECO-JIT Program* for the purpose of greatly increasing energy efficiency in production processes, improve factory processes where necessary, and promote visualization of energy usage while reducing the volume used. We also created a system where employees can select an eco-car from the list of company-owned vehicles and conduct environmental impact assessments and energy conservation assessments when installing new equipment in our plants. Through these and other efforts, SEKISUI CHEMICAL Group has put in place a structure that allows it to meet new environmental regulations around the world at minimal cost.

  • * ECO-JIT Program:
    A program to reduce energy costs by thorough detection of energy losses in production processes and thorough innovation

Product Development and Strategies Aimed at Resolving Environmental Issues and Meeting the Changing Needs of the Market

SEKISUI CHEMICAL Group manages risks that arise from changing market needs due to climate change and other global social issues by continuing to develop products that make a significant contribution to resolving issues in the natural and social environment, and disclosing and distributing detailed data on outcomes. At the same time, we believe that this will help to precisely identify opportunities arising from strengthening demand.

In particular, we believe it is possible to magnify the impact we create by quantifying as much as possible the size of the contribution Group products make to solving social issues, which leads to opportunities to create markets in ways that help solve global issues and heighten the awareness of consumers.

From fiscal 2020, we intend to strengthen our partnerships with stakeholders and engage in activities to increase our contribution to resolving issues through co-innovation (fusion) and accelerate solutions through early dissemination. With this in mind, we established the MINASE INNOVATION CENTER (commonly known as MIC) as an organization to promote open innovation with our stakeholders.

Addressing the Deterioration in Operating and Working Conditions

If climate change becomes a grave problem and the highest and lowest temperatures become increasingly extreme, it is possible that people in manufacturing and construction will become unable to work. SEKISUI CHEMICAL Group believes that it is possible to minimize the effects of climate change by proposing construction and engineering plans that take into account the seasonality of each region.

Each company division and Group company has formulated its own BCP based on their unique situation as a means of avoiding as much as possible the risk of loss in operations and work availability due to natural disasters.

Major Initiatives

Acquisition of Certification under the SBT* Initiative for Greenhouse Gas Reduction Targets

SEKISUI CHEMICAL Group discloses its targets on its website and elsewhere in order to demonstrate to society its commitment as a company to proactively addressing climate change issues. Additionally, in fiscal 2017, the Group applied for certification under the SBT Initiative to demonstrate that the medium- to long-term targets announced for its overall business and for its supply chains reach a scientifically grounded, ambitious level aimed at achieving the COP21 (Paris Agreement) targets. The Group then became the first in the chemical industry worldwide to receive this certification.

<Certified targets>

SCOPE 1+2: Reduce greenhouse gas emissions by 26%, relative to fiscal 2013, by 2030
SCOPE 3: Reduce greenhouse gas emissions by 27%, relative to fiscal 2016, by 2030

<Progress in Fiscal 2020>

SCOPE 1+2: Reduce greenhouse gas emissions by 18.6%, relative to fiscal 2013
SCOPE 3: Reduce greenhouse gas emissions by 11.4%, relative to fiscal 2016

The Group will continue to affirm its growing responsibility to play its role as an industry leader and will strive to engage in activities leading and imploring society as a whole to work on measures to combat climate change.

  • * SBT:
    SBT (short for Science-Based Targets). Called for by joint initiatives, including the UN Global Compact, in response to the adoption of the Paris Agreement. Through the SBT Initiative, greenhouse gas reduction targets established by companies are certified as science-based targets (SBT) that contribute to long-term measures combating climate change.

Promoting the Use of Renewable Energy in Electricity by Joining RE100

We recognize that the issue of climate change is not only a major social challenge, but also a major risk factor for SEKISUI CHEMICAL Group. As part of our goal to accelerate our efforts to contribute to the resolution of this issue in a way that encompasses society as a whole, in August 2020 we joined RE100, an international initiative that aims to source 100% of the energy consumed in business activities from renewable sources.

To achieve zero GHG emissions from our business activities by 2050, and to attain the greenhouse gas reduction target certified by the SBT Initiative by FY2030, SEKISUI CHEMICAL Group will enact strategies such as entrenching energy conservation measures and promoting a shift to renewable energy.

We intend to shift to renewable energy sources for 100% of the electric power we purchase from external sources by 2030, and aim for all our electric power, including that produced by cogeneration systems, to come from renewable energy sources by 2050.

Reducing Greenhouse Gases at Supply Chain Stage

In the case of SEKISUI CHEMICAL Group, we were able to determine that greenhouse gas emissions falling under SCOPE 3 are highest at the raw materials procurement and product usage stages. The reason that emissions are high in the raw materials procurement stage is understood to be due to the characteristics of our business as a chemicals manufacturer. Meanwhile, the emissions from the product-usage stage arise from the large volumes of greenhouse gases emitted as the result of energy consumed in the houses that we sell.

Moving forward, we will review our selection criteria for new materials, with the goal of reducing greenhouse gas emissions by 20% compared to fiscal 2016 for raw materials. We have also begun working with suppliers to reduce the use of four resins known to be raw materials that result in high levels of emissions.

In terms of emissions at the stage of product usage, we will contribute to energy usage reductions from occupied housing by increasing the proportion of net-zero energy houses (ZEH) among the housing units that we sell, achieving 50% reductions, relative to fiscal 2016, by fiscal 2030.

Promoting the Use of Renewable Energy

SEKISUI CHEMICAL has been promoting the use of renewable energy by installing solar power generators at our domestic and overseas production sites.

The following facilities installed solar power generation equipment producing electricity for on-site use in fiscal 2020

  • Sekisui Heim Industry Co., Ltd. Kanto Site
  • SEKISUI SEIKEI, LTD. Kanto Plant
  • Sekisui Medical Co., Ltd. Tsukuba Plant
  • SEKISUI S-LEC(THAILAND) CO., LTD.
  • SEKISUI S-LEC B.V. Film Plant
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  • Sekisui Heim Industry Co., Ltd. Kanto Site

  • SEKISUI SEIKEI, LTD. Kanto Plant

  • Sekisui Medical Co., Ltd. Tsukuba Plant

  • SEKISUI S-LEC( THAILAND) CO., LTD.

  • SEKISUI S-LEC B.V. Film Plant

Solar Power Generation Facilities Producing Electricity for On-site Use
Japan Tohoku Sekisui Heim Industry Co., Ltd.
Chushikoku Sekisui Heim Industry Co., Ltd.
Kyushu Sekisui Heim Industry Co., Ltd.
Sekisui Heim Industry Co., Ltd. Kanto Site
Yamanashi Sekisui Co., Ltd.
Sekisui Seikei, Ltd. Kanto Plant
Sekisui Medical Co., Ltd. Tsukuba Plant
America Sekisui S-Lec America, LLC.
Netherlands Sekisui S-Lec B.V. Film Plant
Thailand Sekisui S-Lec (Thailand) Co., Ltd.

SEKISUI CHEMICAL Group has also begun proactively switching over to renewable energy sources for electricity purchases from fiscal 2020, and there are currently a total of 8 facilities in Japan and overseas where 100% of this electric power is derived from renewable energy.

Facilities for which 100% of electricity is derived from renewable energy sources
Japan
Sekisui Chemical Co., Ltd., Tsukuba Plant
Hokkaido Sekisui Heim Industry Co., Ltd
Tohoku Sekisui Heim Industry Co., Ltd
Sekisui Heim Co., Ltd, Kinki Site
Sekisui Medical Co., Ltd., Tsukuba Plant
Sekisui Medical Co., Ltd., Ami Site
Netherlands Sekisui S-Lec B.V. Film Planta
Spain Sekisui Specialty Chemicals Europe S.L.

Energy consumption from renewable sources in fiscal 2020 was 48.7 GWh, comprising 7.2% of total purchased power (including solar power generation for on-site use) and 6.3% of total power consumption, including self-generated power using the co-generation system.

Energy Savings in Newly Constructed BuildingsZEB Ready* Certified New Research Facility, “MINASE INNOVATION CENTER”

In April 2020, we constructed a new research facility, the MINASE INNOVATION CENTER (commonly known as MIC), in Shimamoto-cho, Osaka Prefecture. The facility was designed with a skip-floor configuration and a central atrium so as to make the entire building a “space for people to interact.” While this gives the building a complex shape, it has also been certified as “ZEB Ready” thanks to the adoption of fixtures and equipment that contribute to energy conservation, as well as a design that makes the best use of solar energy.
We were able to limit energy consumption in fiscal 2020 in lighting to a level far below the design value thanks in part to the use of motion sensors. However, energy use in air conditioners exceeded the design value due 24-hour use as ventilation in line with measures designed to prevent the spread of COVID-19. Our goal in fiscal 2021 is to operate the facility based on the balance between hygiene and energy conservation that we learned to achieve in fiscal 2020, with the overall aim of using less energy than the design value.

  • ZEB (Net Zero Energy Building): Buildings that are aimed to reduce annual primary energy consumption balance to zero.
    ZEB Ready: As advanced buildings in anticipation of ZEB certification, buildings with high thermal insulation and highly efficient energy-saving equipment
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    • Primary energy consumption (MJ/m2 per year)
    • MINASE INNOVATION CENTER (exterior view)
    • MINASE INNOVATION CENTER (interior view)
Performance Data
  • Note 1:
    Since the calculation method for energy usage was changed from fiscal 2020, figures from past years have been revised.
  • Note 2:
    From fiscal 2019, Medical Business results are collated and presented with Headquarters results following its separation from the High Performance Plastics Company as an independent entity.
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  • Greenhouse Gas (GHG) Emissions That Arise from Business Activities

    • Note:
      Past figures have been revised due to improvements in precision.
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  • Greenhouse Gas (GHG) Emissions during Manufacturing / Japan

  • Energy Usage and per Unit of Output* (Index) during Manufacturing / Japan

  • Greenhouse Gas (GHG) Emissions during Manufacturing / Overseas

  • Energy Usage and per Unit of Output* (Index) during Manufacturing / Overseas

  • Breakdown of Greenhouse Gas (GHG) Emissions during Manufacturing / Japan

  • Breakdown of Energy Usage during Manufacturing / Japan

  • Breakdown of Greenhouse Gas (GHG) Emissions during Manufacturing / Overseas

  • Breakdown of Energy Usage during Manufacturing / Overseas

  • Electricity Consumption in Japan and Overseas/
    Domestic Production Laboratories, Overseas Production Facilities, Domestic and Overseas Offices

  • Amount of electricity generated for in-house consumption, amount of purchased electricity derived from renewable energy sources and the ratio of electricity derived from renewable energy sources/Domestic and Overseas
    Note: Co-generation excluded

  • Ratio of renewable energy to total energy consumption/
    electricity, biomass boilers

  • GHG Emissions at Research Facilities

  • Energy Usage and per Unit of Output* (Index) at Research Facilities

    * Energy consumption per employee

  • GHG Emissions at Offices

  • Energy Usage and per Unit of Output* (Index) at Offices

Indicator Calculataion Method
Greenhouse Gas Emissions GHG emissions = Σ[fuel usage, purchased electricity, purchased steam × CO2 emissions coefficient] + greenhouse gas emissions not arising from energy consumption
Greenhouse gas emissions not arising from energy consumption = CO2 emissions not arising from energy consumption* + Σ[emissions of non-CO2 greenhouse gases × global warming coefficient]
*Includes CO2 emissions from the burning of non-fuel matter based on the Act on Promotion of Global Warming Countermeasures, both inside Japan and overseas
[CO2 Emissions Coefficient]
  • Purchased Electricity:
    In Japan, the coefficient provided in notices pursuant to the Act on Promotion of Global Warming Countermeasures is applied to the latest data at the start of each fiscal year. In cases where the Company purchases power with the emission coefficient set by menu, the adjusted emission coefficient applies.
    For overseas data, the latest coefficient data as of the start of each fiscal year acquired from suppliers is applied.
    When no data is available, the data is complied with the GHG Protocol and EPA eGRID 2016 for determinations.
  • City Gas and Purchased Steam:
    Coefficients obtained from suppliers are applied to the latest data at the start of each fiscal year
    If a coefficient cannot be obtained in this manner, it is based on the Act on Promotion of Global Warming Countermeasures
  • Fuel Other than the Above:
    Based on the Act on Promotion of Global Warming Countermeasures
Global warming coefficient: An emissions coefficient determined based on a system of greenhouse gas emission calculations, reports, and official disclosures
Energy Usage Energy usage = Σ[amount of fuel used, amount of electricity purchased, amount of self-consumption-type solar power generation, and amount of steam purchased x amount of heat generated per unit]
[Amount of Heat Generated per Unit]
  • Purchased Electricity:
    3.60 MJ/kWh
(Amount of self-consumption-type solar power generation and amount of purchased electric power from renewable energy sources are included in the energy usage)
  • Fuel, Purchased Steam:
    Based on the Act on the Rational Use of Energy
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  • Transportation Volumes and Energy per Unit of Output (Index) during Transportation / Japan

  • CO2 Emissions during the Transport Stage / Japan

Indicator Calculation Method
CO2 Emissions during the Transport The calculation is the CO2 emissions yielded by combining the fuel method (transport of housing units, etc.) and the metric ton-kilo method (other than transport of housing units, etc.)
CO2 emissions = Σ[fuel usage × CO2 emissions coefficient] + Σ[amount transported (metric tons) × distance transported (km) × fuel usage per unit of output × CO2 emissions coefficient]
Fuel usage per unit of output is the value used in the reporting system for specified freight carriers under the Act on the Rational Use of Energy
Domestic distribution (shipment of products) is covered
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Emissions of non-CO2 greenhouse gases (global production, laboratories)

Greenhouse Gas Emissions throughout Supply Chain (SCOPE 3)

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(1000 tons‒CO2)
Category Estimated emissions (1,000 tons-CO2)
FY2016 FY2017 FY2018 FY2019 FY2020
Upstream Purchased goods and services 2,180 2,336 2,457 2,352 2,282
Capital goods 37 171 123 96 80
Fuel-and energy related activities not included in Scope 1 and Scope 2 127 131 129 127 198
Transportation and distribution (upstream) 37 46 48 48 43
Waste generated in operations 46 42 44 44 37
Business travel 26 30 27 24 7
Employee commuting 5 6 6 6 5
Downstream Transportation and distribution (downstream) 45 45 50 47 43
Processing of sold products 43 46 48 45 39
Use of sold products 1,542 1,554 940 772 708
End-of-life treatment of sold products 310 529 560 558 481
Leased assets(downstream) 1 1 1 2 1
Total(upstream/downstream) 4,400 4,937 4,433 4,119 3,923
  • Note:
    After including the effects of reducing energy consumption, emission volumes related to the “use of sold products” declined, and SCOPE3 decreased compared to the previous fiscal year for ZEH specification housing from fiscal 2018.
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  • Greenhouse Gas Emissions Throughout Supply Chain as a Whole (Classified by SCOPE)

  • Note:
    Since fiscal 2016, transport energy accuracy has improved and the scope of tabulation of purchased products and services has been expanded in relation to SCOPE3; this resulted in the emissions known increasing substantially from the previous fiscal year.
    After including the effects of reducing energy consumption, emission volumes related to the “use of sold products” declined, and SCOPE3 decreased compared to the previous fiscal year for ZEH specification housing from fiscal 2018.
Indicator Calculation Method
Greenhouse Gas Emissions throughout Supply Chain Purchased goods and services CO2 emissions = Σ[(amount of major raw materials used as listed in Material Balance section of this report + estimated values for other raw materials) × emission coefficient (IDEA v 2.3 (a GHG emissions database by the National Institute of Advanced Industrial Science and Technology and the Japan Environmental Management Association for Industry))]
Up to and including fiscal 2017, the Group gained an understanding of environmental impact, including the volume of greenhouse gases 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 emissions of its raw material suppliers with regard to four principal resins (PP, PE, PVC and PVA).
Capital goods CO2 emissions = Σ[(amount of spending on capital expenditures authorized for the given fiscal year for buildings, structures, mechanical equipment, and transport vehicles) × emissions coefficient (per unit emissions database for calculating organizational greenhouse gas emissions, etc., arising from supply chains (Ver. 3.0) (Ministry of the Environment and Ministry of the Economy, Trade and Industry))]
Fuel-and energy related activities not included in Scope 1 and Scope 2 CO2 emissions = Σ[(fuel usage, amount of purchased electricity, and amount of purchased steam) × emissions coefficient]
The emissions coefficients used are as follows. For fuel, IDEA v 2.3 (a GHG emissions database by the National Institute of Advanced Industrial Science and Technology and the Japan Environmental Management Association for Industry); for purchased electricity and steam, per unit emission database for calculating greenhouse gas emissions by organizations, etc., arising from supply chains (Ver. 3.0) (Ministry of the Environment and Ministry of the Economy, Trade and Industry).
Applicable to production sites, laboratories, and offices both inside Japan and overseas
Transportation and distribution (upstream)) CO2 emissions = Σ[amount of major raw materials used as listed in the Material Balance section of this report × transport distance × emission coefficient (IDEA v 2.3 (a GHG emissions database by the National Institute of Advanced Industrial Science and Technology and the Japan Environmental Management Association for Industry))]
(Calculated assuming that the uniform transport distance was 200 km)
Waste generated in operations CO2 emissions = Σ[amount of waste materials generated (by type) × emission coefficient (IDEA v 2.3 (a GHG emissions database by the National Institute of Advanced Industrial Science and Technology and the Japan Environmental Management Association for Industry))] Covers major production sites and research facilities in Japan and overseas
Business travel CO2 emissions = Σ[transportation costs by method of transport × emissions coefficient (per unit emissions database for calculating organizational greenhouse gas emissions, etc., arising from supply chains (Ver. 3.0) (Ministry of the Environment and Ministry of the Economy, Trade and Industry))]
(Includes estimates of transportation costs for group companies)
Covers group companies in Japan and overseas
Employee commuting CO2 emissions = Σ[amount spent on commuting assistance × emissions coefficient (per unit emissions database for calculating organizational greenhouse gas emissions, etc., arising from supply chains (Ver. 3.0) (Ministry of the Environment and Ministry of the Economy, Trade and Industry)]
(Calculated based on the assumption that all commuting is done by passenger train) (Group company commuting costs include estimates)
Group companies in Japan and overseas all covered
Transportation and distribution (downastream) The calculation is the total amount of CO2 emissions yielded by combining the fuel method (transport of housing units, etc.) and the metric ton-kilo method (other than transport of housing unit, etc.)
CO2 emissions = Σ[fuel usage × CO2 emissions coefficient] + Σ[amount transported (metric tons) × distance transported (km) × fuel usage per unit of output × CO2 emissions coefficient (value used in the reporting system for specified freight carriers under the Act on the Rational Use of Energy)] (Estimates used for overseas)
Covers shipments of products by group companies in Japan and overseas
Processing of sold products CO2 emissions = Σ[production volume of relevant products × emission coefficient at the time of processing the relevant products (IDEA v 2.3 (a GHG emissions database by the National Institute of Advanced Industrial Science and Technology and the Japan Environmental Management Association for Industry))]
Covers products for the automotive industry by group companies in Japan and overseas
Use of sold products CO2 emissions = Σ[number of structures sold as housing during the relevant fiscal year × amount of electricity purchased from power companies throughout a year × 60 years × electricity-based emissions coefficient]
The amount of electricity purchased from power companies throughout a year is based on the Electricity Income and Expenditure Home Survey of Houses with Built-In Solar Power Generation Systems (2018). The electricity-based emissions coefficient employed is the emissions coefficient from the fiscal 2020 report produced by the Act on Promotion of Global Warming Countermeasures reporting system (alternate value), equal to 0.488 metric tons-CO2 /MWh. The calculation is performed under the assumption that housing will be used for 60 years. Housing sold within Japan for the fiscal year relevant to the calculation is covered. Up to and including 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.
End-of-life treatment of sold products CO2 emissions = Σ[amount of major raw materials used in the products sold during the relevant fiscal year × emission coefficient (IDEA v 2.3 (a GHG emissions database by the National Institute of Advanced Industrial Science and Technology and the Japan Environmental Management Association for Industry))]
The calculation assumes that products sold during a given fiscal year are disposed of during the same fiscal year
Leased assets (downstream) Calculated to cover construction related to the installation of machinery leased by Sekisui
CO2 emissions = Σ[relevant installation units × emission coefficient (IDEA v 2.3 (a GHG emissions database by the National Institute of Advanced Industrial Science and Technology and the Japan Environmental Management Association for Industry))]