Demands on the corporate sector to help realize a sustainable global society are increasing more than ever before. Against this backdrop, Sekisui Chemical Group is merging its existing environmental and business activities to engage in a new style of management.
Like most corporate organizations worldwide, the Sekisui Chemical Group’s environmental activities focused mainly on the prevention of pollution up to around 2000. In 1999, however, under then president Naotake Okubo, the Company adopted the slogan “balancing ecology and economy” as its overarching environmental theme. Rallying under the banner of this slogan, the Group transitioned from this defensive posture, and the prevention of pollution, to a more aggressive management concept that focused on products that were distinguished by their exceptional environmentally friendly attributes. This concept then evolved into a CSR management approach through the Environmental Midterm Plan that is based on the core themes of Three Prominences (Environment, Customer Service & Quality, and Human Resources) and Three Attitudes of Sincerity (Compliance, Risk Management, and Disclosure & Communication). Today, the Group has inherited a management style that places the utmost importance on integrating environmental, social, and governance (ESG) concerns into its business activities in order to secure sustainable growth that is in tune with fulfilling its corporate social responsibility (CSR).
In addition to balancing the needs for quantitative and qualitative growth over the three-year period to fiscal 2019, the Sekisui Chemical Group is promoting sustainable growth in tune with efforts to fulfill its CSR under its Medium-term Management Plan SHIFT 2019 -Fusion-. This Plan encapsulates the Group’s integration approach based on the five “Sustainable,” “Human Resources,” “Innovation,” “Frontier,” and “Transformation” themes with an especially strong focus on building a sustainable management foundation that incorporates ESG concerns.
Under its Environment Midterm Plan, the Group has identified the three key initiatives of “expanding and creating markets for Environment-Contributing Products,” “reducing environmental impact,” and “conserving the natural environment.” In addressing each of these issues, the Group will help to not only realize “an Earth with maintained biodiversity,” but also to resolve SDG-based challenges and in turn bring a sustainable society to fruition.
As a first step in 2014, we took steps to visualize the balance between the impact on natural capital and the amount of contribution. This integrated index has been used as a KPI since fiscal 2017. Moreover, we have positioned the expansion and creation of markets for Environment-Contributing Products as the key for pushing forward the Company’s growth while at the same time realizing a return to the natural environment.
Based on its long-standing environmental protection approach, the Sekisui Chemical Group registers products that are effective in significantly reducing any impact on the environment as Environment-Contributing Products. To date, the Group has worked diligently to lift the ratio of Environment-Contributing Product sales to total sales.
Recognizing that conserving the natural environment on its own is not enough to realize a sustainable society, we have expanded the scope of Environment-Contributing Products to include products that assist in addressing both social and environmental issues by improving the lives of people around the world.
In revisiting the definition of Environment-Contributing Products, we also broadened our outlook to include contributions in such categories as “extend healthy life” ”build and promote more resilient infrastructure” “make lifestyles safer and more disaster resilient.” Taking into account each of the aforementioned factors, our policy is to realize an Earth with maintained biodiversity.
The Sekisui Chemical Group has been contributing to resolving social issues through various products and businesses for a very long time. We have also been promoting active involvement in international organizations and international rules, including the declaring of our support for the UN Global Compact in 2009. At this point, we would like to showcase the products and services that the Group contributes through its business operations under the Sustainable Development Goals (SDGs) agenda compiled by the United Nations.
In addition to expanding the scope of its Environment-Contributing Products to cover society and the environment, the Sekisui Chemical Group is ramping up efforts to more effectively conserve the natural environment. As one of these efforts, we have put in place the long-term vision of systematically reducing greenhouse gas (GHG) emissions over the next 30 years.
Under this vision, we have positioned the 942,000 tons of GHGs emitted in fiscal 2013 as a base, and have worked to control the level of emissions by establishing an environment contributing (energy-saving) investment*1 that has included the renewal of existing equipment over recent years. Moving forward, we are reviewing production methods with a view to increased innovation, reducing the amount of energy consumption, and pursuing such other avenues as the generation of new energy in a bid to reduce GHG emissions. We have a reduction goal of 26% compared with the fiscal 2013 base.
After applying for SBT*2 Initiatives certification in March 2018, the Group was the first company in the chemical sector to receive approval in June 2018. Under this approval, our long-term GH reduction targets are recognized as scientifically based ambitious targets to achieve the 2°C target set under the Paris Agreement. As far as the scope of the Company’s targets are concerned, the Group has also declared its intention address both upstream and downstream operations along the supply chain. In the case of SCOPE 3*3 approved targets, we are promoting reductions at each of the procured raw materials and product use stages, which emit substantial quantities of GHG (our target is to reduce GHG emissions by 27% by fiscal 2030 compared with fiscal 2016).
Through these initiatives, the Group secured a rate of return on natural capital of 84.1% in fiscal 2017. The goal is to increase this rat to 90% or higher over the next three years and to achieve a 100% rate or higher in 2030. Within the framework of international cooperation, we are looking to become a frontrunner in the environmental field even on a stand-alone basis.
*1 Environment contributing (energy-saving) investment set at approximately 0.3% compared with net sales under the current Environmental Midterm Plan.
*2 SBT (Science Based Targets): Taking the opportunity of the adoption of the Paris Agreement, other joint initiatives were proposed in addition to the United Nations Global Compact. With SBT initiatives, company-set GHG reduction targets are certified as scientific based targets which contribute to long-term climate change measures.
*3 Scope 3: Other indirect emissions, supply chain production, transport, customer use of products, disposal, etc.
As indicated, the Sekisui Chemical Group is working to preserve the environment by actively expanding Environment-Contributing Products. At the same time, we are endeavoring to help realize a sustainable global society by conserving the natural environment.
However, we recognize the need to renew ourselves at the organizational level and to ensure that this renewal is fully functional and entrenched if we are to continue our endeavors on both a Group-wide as well as medium- and long-term basis. With this in mind, we have integrated the business planning as well as CSR and IR functions into the Business Strategy Department, which is responsible for medium- and long-term corporate management. We have also put in place a structure that allows us to promote business planning and CSR in an integrated manner within the overall corporate planning of the Group. These initiatives are designed to help us stay one step ahead of the competition.
On another note, we acknowledge the importance of maintaining an external oversight function. To this end, we have introduced a framework for the certification of Environment-Contributing Products by outside advisors.
Plans are in place to lift the ratio of Environment-Contributing Products to total net sales from 50.2% in fiscal 2017 to 60% in 2019. Our goal is to help realize sustainable growth commensurate with efforts to fulfill our corporate social responsibility by contributing to society through our products and services. In this manner, we are working to become an increasingly indispensable member of society.