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 Paris Agreement). We are identifying and disclosing the effects in terms of “risks and opportunities” that climate 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 ChangeSteadily Reducing Greenhouse Gases in All Business Activities

Under the Environmental Medium-term Plan that we have been implementing since fiscal 2017, we have widened the scope to encompass not only production-related greenhouse gas emissions but also those from n all aspects of our business activities. In the case of the latter, we have set a reduction target of 6% against the fiscal 2013 level by fiscal 2019. Sekisui Chemical is also actively engaged in environment-contributing investments that contribute to reducing greenhouse gas emissions from its production divisions. In regard to the electricity that accounts for about half of these greenhouse gas emissions, we are reviewing our selection criteria for electric power suppliers with an eye toward cutting costs and CO2 emission coefficients. Moreover, we are increasing our utilization ratio for renewable energy by advancing the introduction of solar power equipment to generate electricity for use at the plant or facility in which it was installed.
Looking ahead, we will continue to work toward reducing greenhouse gases at every stage of our business activities, with the COP21 (Paris Agreement) objectives at the forefront of our decision-making.

Climate Change and Our BusinessRisks and Opportunities Presented by Climate Change for Our Businesses

Sekisui Chemical Group recognizes that global warming and other forms of climate change are a global problem for society. The Sekisui Environment Sustainability Vision 2030 created in fiscal 2013 aims to realize “a planet where biodiversity is preserved.” Our concept of “a planet where biodiversity is preserved” is a vision where the earth has achieved a state of having solved global-scale social issues, such as climate change, resource depletion and ecosystem degradation.
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.

Higher Costs to Address Climate Change Can Be Met with Reductions in Environmental Impact

As an initiative to reduce environmental impact, the Sekisui Chemical Group introduced the ECO-JIT Program* for the purpose of greatly increasing energy efficiency in production processes while working on the visualization of its energy usage and 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, the 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

Changes in Market Needs and Stronger Demand for Environmental Products Can Be Addressed by Improving Environment-contributing Products

We manage risks that arise from climate change and other global social issues by continuing to develop Environment-contributing Products and disclosing and distributing detailed data on outcomes, and this also allows us to precisely identify opportunities arising from strengthening demand.
In particular, we believe it is possible to magnify the impact of the products and services 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 and transform markets in ways that help solve global issues and change the awareness of consumers.

Deterioration in Operating and Working Conditions Can Be Addressed on a Case-by-Case Basis

If climate change becomes a grave problem and significantly increases the highest and lowest temperatures, it is possible that people in manufacturing and construction would be unable to work as much. Since climates vary by region, it may be possible to minimize the effects of climate change by proposing to do construction work and projects during the more favorable seasons in the 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 SBT CertificationAcquisition of Certification under the SBT* Initiative (a World-First in the Chemistry Industry) Relating to Greenhouse Gas Reduction Targets

To commit before society its stance of actively engaging in corporate efforts to resolve issues of climate change, Sekisui Chemical Group publicly releases CSR reports and other materials relating to its targets. 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


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.

Environment-contributing InvestmentsEnvironment-contributing Investment Framework Newly Created to Advance Measures for Combating Global Warming

It will first be necessary to steadily achieve the targets, set by backcasting, in the Environmental Medium-term Plan that the Group has been implementing since fiscal 2017 to achieve the Group’s 2030 targets for reducing greenhouse gas emissions.
The Group is already implementing extremely high-level initiatives for reducing emissions at its production sites. To achieve its targets of wide-ranging reductions, the Group believes that bold capital expenditures, in addition to mere changes to its operations in production sites, will be essential. To promote capital expenditures that contribute to energy savings, the Group has set a new Environment-contributing Investment Framework, and has established internal systems that support production sites upgrade or replace equipment to reduce greenhouse gas emissions.
The effects of initiatives, such as the undertaking of capital investment that had previously been considered not economically viable and had thus been postponed, have become increasingly apparent. By investing to upgrade older types of manufacturing equipment, introduce solar power equipment to generate electricity for in-house use, utilize energy conversion boilers, and switch to LED lighting, the Group is on track to reduce the greenhouse gas emissions from projects already ordered through fiscal 2018 by 30,000 metric tons, and, with the further spending based on this support system, we aim to achieve total reductions of 40,000 metric tons.

Greenhouse Gas Emissions in the Supply Chain (SCOPE 3)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.
Concerning raw materials, going forward, we will revise our selection criteria for new materials at the time of their adoption and reduce the use of four resins known to be raw materials that result in high levels of emissions to reduce the amount of greenhouse gases that are emitted. Thus, we will act to include the entire supply chain, achieving reductions of 20%, relative to fiscal 2016.
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.

Renewable Energy UseThe Installation of Solar Power Equipment Generating Electricity for In-house Use

Sekisui Chemical has been promoting the use of renewable energy by installing solar power generators at our domestic and overseas production sites. In fiscal 2018, solar-derived energy usage amounted to 1,268 MWh, which is equivalent to 0.15% of our total energy usage, including purchased electricity. This equates to a 0.1 of a percentage point improvement compared with fiscal 2017, thanks largely to the installation of solar power generation equipment with 814kW of power output capacity at Sekisui S-Lec America in July 2018. The equipment is expected to produce 1,044MWh of power on an annual basis. In Japan, we installed solar power generation equipment with 644kW of power output capacity at Yamanashi Sekisui Co.,Ltd. in March 2019, with this equipment expected to produce 700MWh of power on an annual basis. Sekisui Chemical Group is actively focused on introducing similar equipment at several of its facilities.
Sekisui Chemical will continue to monitor the proportion of renewable energy out of its total amount of electricity consumed, including purchased electricity, and to strive to increase that proportion to help achieve its Environmental Sustainability Vision 2030 targets.

Performance Data

Starting with the current Environmental Medium-term Plan (2017-2019) we have revised the CO2 emissions coefficient and amount of heat generated per unit of output, resulting in revisions to figures for previous fiscal years.

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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 Volume for Research Facilities and Manufacturing / Japan and Overseas

  • In-House Use Solar Power Generation Volume for Research Facilities and Manufacturing / Japan and Overseas

    Note: Past figures have been revised due to improvements in precision.

  • GHG Emissions at Research Facilities

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

  • GHG Emissions at Offices

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

    • Note
      : For Japan, electricity and fuel for company cars are tabulated,while only electricity is tabulated for overseas.
Indicator Calculation 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 2014 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 steam purchased × amount of heat generated per unit]
[Amount of Heat Generated per Unit]
  • Purchased Electricity
    : 3.60 MJ/kWh
  • 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

Greenhouse Gas Emissions throughout Supply Chain (SCOPE 3)

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Category Estimated emissions (1,000 tons-CO2)
2014 2015 2016 2017 2018
Upstream Purchased goods and services 1,521 1,455 2,180 2,336 2,457
Capital goods 31 17 37 171 123
Fuel-and energy related activities not included in Scope 1 and Scope 2 121 119 127 131 129
Transportation and distribution (upstream) 24 24 37 46 48
Waste generated in operations 45 45 46 42 44
Business travel 30 29 26 30 27
Employee commuting 5 5 5 6 6
Downstream Transportation and distribution (downstream) 59 53 45 45 50
Processing of sold products 42 41 43 46 48
Use of sold products 1,353 1,528 1,542 1,554 940
End-of-life treatment of sold products 227 216 310 529 560
Leased assets(downstream) 1 1 1 1 1
Total(upstream/downstream) 3,461 3,531 4,400 4,937 4,433
  • Note
    : Since fiscal 2016, the scope of tabulation of purchased products and services has been expanded; this resulted in the emissions increasing substantially from the previous fiscal year following review of the values for fiscal 2016.
    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 = ∑[(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 2.2 (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 = ∑[(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. 2.0) (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 = ∑[(fuel usage, amount of purchased electricity, and amount of purchased steam) × emissions coefficient]
The emissions coefficients used are as follows. For fuel, IDEA v 2.1 (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. 2.0) (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 = ∑[amount of major raw materials used as listed in the Material Balance section of this report × transport distance × emission coefficient (IDEA v 2.1 (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 = ∑[amount of waste materials generated (by type) × emission coefficient (IDEA v 2.1 (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. 2.0) (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. 2.0) (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 (downstream) he 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 product CO2 emissions = Σ[production volume of relevant products × emission coefficient at the time of processing the relevant products (IDEA v 2.1 (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 2018 report produced by the Act on Promotion of Global Warming Countermeasures reporting system (alternate value), equal to 0.512 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 2.1 (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 2.1 (a GHG emissions database by the National Institute of Advanced Industrial Science and Technology and the Japan Environmental Management Association for Industry))]