Foundation -Management Capital That Serves as a Source of Value Creation-Last Update : Sep 21, 2018

Foundation -Management Capital That Serves as a Source of Value Creation-

Human Capital

While continuing to protect the rights of all its staff and giving consideration to providing comfortable and rewarding workplace environments, the Sekisui Chemical Group works to develop its human resources and is intending that the effective utilization of those human resources will lead to the enhancement of its corporate value.

Stance toward Human Resources

Based on the belief that “employees are precious assets bestowed on us by society,” the Sekisui Chemical Group works to create environments in which employees are able to work with enthusiasm and provides a range of opportunities for each and every one of them to hone his or her unique skill and assist in their personal growth.
Recognizing that protecting the human rights of individuals is our social responsibility, we respect each person’s diversity, personality and individuality, while promoting various work styles compatible with each country and region and the creation of safe and secure working environments. Sharing the same basic stance with regard to human resources throughout the Group, we are promoting the creation of fulfilling workplaces in which diverse human resources are able to excel.

Respect for Human Rights

To fulfill its responsibilities to all stakeholders, the Group conducts business activities that show consideration for human rights in conjunction with its business partners. Providing all Group employees with a copy of the Compliance Manual, we strictly demand respect for human rights, the prohibition of discrimination, prevention of harassment, and the protection of personal information. With regard to the prevention of harassment, we also conduct educational programs in association with e-learning sessions. We are working to facilitate and encourage the understanding of our employees.

Human Rights Educational Programs and Training

To maintain awareness of human rights, the Sekisui Chemical Group implements educational programs and training on human rights themes for its employees. Particularly in the case of educational programs conducted on key occasions, such as when they join the Company or receive promotion, the curriculum is designed to increase awareness of issues related to human rights, such as forced labor, child labor, and harassment.

Caring about Human Rights in Procurement Activities

Through CSR procurement with our suppliers, we make sure our business partners respect human rights. With regard to a supplier that does not meet the procurement standards, we make a request for improvements and implement those improvements in collaboration with the business partner. Particularly in the case of our overseas business partners, we are developing a mechanism to encourage improvement through our regional management companies.

Labor Relations

In the Sekisui Chemical Group, the companies and labor unions collaborate while respecting each other’s position and way of thinking. Through close communications, we undertake constructive discussions on issues labor and management have in common under the shared objective of advancing our companies. In the Group in Japan, there were 16 independent labor unions with 4,886 employees in the All-Sekisui Chemical Labor Union Federation in fiscal 2017.

Safe Workplaces and Health Management

At the core of safety, it is important that each and every employee has the ability to identify dangerous situations and take appropriate steps to protect themselves and fellow employees. At the same time, constructing a work environment in which employees can work with safety and security is our responsibility as a company and one of the most important priorities for management. The Sekisui Chemical Group is implementing total safety activities (i.e. zero occupational injuries, zero equipment-related accidents, zero commuting-related accidents, and zero extended sick leave) based on five themes*1.

Recognized for its efforts in solving employee health-related issues from a Companywide perspective, Sekisui Chemical was certified as a 2017 Health and Productivity Management Organization by the Ministry of Economy, Trade and Industry and the Nippon Kenko Kaigi for the second consecutive year. In addition, on this occasion the certification included five Sekisui Chemical Group companies*2 that are actively engaged in health management.

Health and Productivity Management Organization

*1 Five themes: The intrinsic safety of equipment; safety management using OHSMS; safety education of employees; risk prevention through risk detection activities and other initiatives; and the auditing of health, safety, and accident prevention
*2 Names of certified companies: Sekisui Chemical Co., Ltd. Names of companies certified together with the company at left: Tokyo Sekisui Heim Co., Ltd., Tokyo Sekisui Famis Co., Ltd., Sekisui Medical Co., Ltd., Ritto Sekisui Industry Co., Ltd., and Kyushu Sekisui Industry Co., Ltd.

Diversity Management

Not only perceiving diversity by differences understood from outward appearance—such as gender, age, and nationality—the Sekisui Chemical Group will also focus on differences that include career, values, and personality while understanding, recognizing, and utilizing the differences between each and every employee as strengths.

Diversity Management Policy

Based on the realization that diversity is essential to continue to be a corporate group with a sense of presence strong enough to last a century, we understand and recognize that each and every employee’s orientation to work and life and their distinctive characteristics are different and thus actively take advantage of that. To create an organizational culture, we will continue, through employee dialogue, to provide employment and participation opportunities and a variety of environmental improvements that support growth.

Diversity Management Training

In working toward the realization of diversity management, since it is important for departmental heads, who play a key role, to understand, recognize, and utilize the fact that attitudes to work and life and distinctive characteristics differ from one employee to another, we are implementing educational programs on diversity management that are geared toward the organizational departmental heads of all the domestic Group companies. At these educational programs, participants are learning the way that business leaders ought to act as well as communications and management styles that uncover new possibilities and which they are putting into practice in day-to-day management.

Diversity Management Training

Women’s Empowerment

As a first step, we began working on the most familiar, promoting the success of women. For women to be empowered, they are divided into two stages: consolidation and success, and the nurturing of management candidates. In aiming to be company where women can continue to work with enthusiasm, under the CSR Medium-term Plan launched in fiscal 2017 we established specific numerical targets for the ratio of women to total hiring and the number of women in management positions in order to become an organization where women can truly thrive. These targets are one of the goals of directors, officers, and managers.

Women’s Empowerment

Fostering Women as Candidates for Management Positions

Targeting women employees who hope to be appointed to management positions and their direct supervisors, the Company is conducting a career development program for women. This educational program has been put in place with the aim of fostering awareness and gaining the achievements appropriate for management positions. We have been deploying this program as essential training across the entire Group since fiscal 2016.

Recognition as a Nadeshiko Brand

Nadeshiko Brand

Having evaluated the Company's efforts to implement diversity management initiatives (including women's empowerment) since fiscal 2015, the Ministry of Economy, Trade and Industry (METI) as well as Tokyo Stock Exchange, Inc. (TSE) recognized the Company as a Nadeshiko brand* in fiscal 2017. Following on from fiscal 2016, this was the second consecutive fiscal year the Company has achieved recognition in this way.

* The Nadeshiko Brand is a project that has been undertaken jointly by METI and the TSE since fiscal 2012. Aimed at introducing certain TSE-listed enterprises that are outstanding in terms of encouraging the empowerment of women in the workplace as attractive stocks to investors who put emphasis on improving corporate value in the medium to long term, the project is thus promoting investment in such enterprises and accelerating efforts encouraging women's success in the workplace.

Efforts to Employ People with Disabilities

We believe it important not only to hire people with disabilities, but to create an environment where those with disabilities can easily work. Recognizing that the creation of such an environment leads to a comfortable workplace, we conducted brainstorming sessions for people with disabilities on a joint Group basis, focusing not only on just employment targets, but on the importance of improving the working environment. In fiscal 2017, we sponsored workplace improvement and operational review workshops, with a focus on creating an organization conducive to the active participation of those with disabilities.

New Diversity Management Selection 100

In fiscal 2016, Group company Kofu Sekisui Sangyo Co., Ltd., which employs 16 people with disabilities, including eight who are classed as having severe disabilities, was evaluated on the content of those efforts and received a “New Diversity Management Selection 100” award certificate from Japan’s Minister of Economy, Trade and Industry.

Improving the Abilities of the Group’s Human Resources

We have developed a consistent training system, covering all stages from new hires to management positions, to systematically train business leaders to power the Sekisui Chemical Group into the future. Based on the concept that the foundations of growth are the experience gained through everyday business activities and learning from such experience, we have developed a training system that links these two elements together. Through this system we will enhance each individual's mastery of the skills required of business leaders, by running through the cycle of growth through experience, starting from when a new hire joins the Company through to the management level.
We are also encouraging the training of the human resources who will support the workplace. It is important that the human resources who will support the foundations of management in practical terms undergo self-growth as highly capable practitioners, accumulating experience over the long term and acquiring highly specialized knowledge and skills. Based on this concept, the Sekisui Chemical Group hires human resources who will support the workplace as full-time, permanent employees, creates an environment in which they can demonstrate their abilities with peace of mind over the long term, and deploys the Meister System to strengthen their abilities in the workplace.

Human Resources Who Can Excel on World Stage

Due to the broadening of the Group’s business domains, the ratios of overseas sales and non-Japanese personnel are continuing to increase every year. We believe that each and every one of our employees working around the world grows through work and through providing good products and services that meet the needs of each country and that this will lead to the development of the entire Group. Under the Medium-term Management Plan (SHIFT 2019-Fusion), human resources (HR) has been adopted as one of the basic strategies to achieve a “new phase of growth.” As the pace of global business development increases, it is essential that we make active use of diverse human resources, who can excel while supporting each business, and revitalize organizations to ensure the continued and self-sustained growth of each Group company. The Sekisui Chemical Group is focusing on the development of human resources who can make the most of their talent and skills in each country and region so that we can address and adapt to different business characteristics, history, management, lifestyles and customs as well as laws and ordinances.

Global Talent Employee System

The Group has established a Global Talent Employee System dedicated to nurturing the global human resources that can succeed on the global stage, and about 1,700 Group employees working in Japan have registered. In addition to being provided with cultural training programs and professional education necessary for working overseas, we are currently promoting measures to create opportunities for registered employees to actually go to other countries and gain work experience there.

Global Trainee Program

The Group offers a Global Trainee Program supporting employees wishing to gain work experience overseas. Employees working in sales, accounting, product development, and some other areas with a certain achievement level are eligible to participate in the program allowing them to apply for posts at the overseas companies affiliated with the Group. In fiscal 2017, after having made use of this system, 10 employees were reassigned overseas. The Group shall continue expanding the programs allowing more and more employees working in various countries to gain experience in business overseas.

Intellectual Capital (Research & Development/Manufacturing/
Intellectual Property)

The Sekisui Chemical Group recognizes that maintaining a prominence in technology is the bedrock for creating value. This is particularly the case in the housing infrastructure and chemical solutions fields, where the Group’s technology platform provides the underlying strength of its competitive advantage. In order to maintain this prominence in technology, the Group is committed to consistently strengthening its human resources and organizational structure in the research & development, manufacturing and intellectual property (IP) fields.

Research & Development (R&D)/Manufacturing

Sekisui Chemical’s Approach to R&D and Its R&D System

With the putting of efforts into practice for its Group Vision forming the framework of its medium-term management strategy, the Sekisui Chemical Group is aiming to continue to be a corporate group with a sense of presence strong enough to last a century. The Medium-term Management Plan “SHIFT 2019 -Fusion-” is positioned as one step forward toward a “new phase of growth” for the realization of the aim, and establishes the acceleration of new business creation through “technology fusion” as one of the top priorities. Actively promoting the fusion of in-house technologies with those from outside, the Company is working to increase the pace of commercialization in the new markets and fields that will play a part in the Group’s future while creating attractive themes that look beyond at what will follow.

25 Technological Platforms

Forming the basis of these efforts are the 25 technological platforms with direct links to the Group’s two business domains, “Creation of Housing and Social Infrastructure” and “Chemical Solutions”. These are the fundamental technological platforms that support the Group’s product lineup and should even be said to be the source of its competitiveness that has been cultivated over many years. An example of this would be our processing, which imparts smart value to components and our molding that enhances the functionality of materials. In this area, we listen to the needs of our customers as a way to best determine the path to adding value. Moreover, by effectively combining multiple platforms, we will continue to develop new products and services that are capable of maintaining a clear lead in the market even in a harsh competitive environment. As an example of our concrete efforts in promoting integration, we have established the New Innovation Committee (NIC), which is composed of officers in charge of R&D, manufacturing, business strategy, and human resources. The Committee meets to discuss development themes where fusion appears viable. Those themes considered worth pursuing are then supported either through corporate expenses or through the dispatching of personnel. Several themes have already been approved and are in the process to realization. Serving as the R&D system in the Group responsible for these platforms are the four primary R&D centers within the Housing Company, the UIEP Company, the HPP Company, and the Corporate headquarters. In addition, Sekisui Medical Co., Ltd. and other key affiliated companies maintain independent R&D divisions and facilities.

25 Technological Platforms

Directly linked to the enhancement of existing businesses and the pioneering of new frontiers, the R&D conducted at the divisional companies focuses on product development and manufacturing technology themes that will lead to profit in the near future. In fiscal 2017, we launched Smart Power Station GR, which is steel-based housing featuring large capacity photovoltaic panels, GRAND TO YOU V, which is wood based housing targeting the volume zone, and Infrastructure GUARDTM, a line of products for aging infrastructure expected to show growth moving forward. We intend on the aggressive introduction of new products driving next-generation growth in fiscal 2018.

In contrast, as an independent research unit the center within Corporate headquarters is conducting research into themes that present extremely high technical hurdles to be addressed over medium- and long-term timeframes, largescale themes spanning the entire company, and new business domain themes which we have never challenged before for the Group. As an example of this, we are actively pursuing joint development with electronic paper and sensor manufacturers for the commercialization of film dye-sensitized solar cells. We have also established a world-leading revolutionary production technology for converting waste to ethanol, further contributing to a recycling-based society no longer dependent on fossil fuels. We are also actively advancing the development of other themes with the aim of creating new businesses.

Pilot plant using world-leading technologies that convert waste to ethanol

Strengthening Manufacturing Capabilities

The Group is working to promote R&D that helps to create new products. At the same time, the Group is placing equal emphasis on strengthening its manufacturing capabilities in a bid to reinforce the competitive advantage of its existing products.

In the Medium-term Management Plan “SHIFT 2019 -Fusion-,” we stated “minimizing manufacturing risk and fortifying our ability to respond to the new era of manufacturing”* as a policy relating to manufacturing capabilities. Regarding the building of a culture to reduce manufacturing risk as one of its priority measures, the Company will promote the strengthening of CS quality infrastructure by, for example, promoting the intrinsic safety of equipment and the thorough promotion of safety-aware human resource development as well as the building of a CS quality information knowledge system. As part of our efforts to bolster our manufacturing capabilities, we will use quantitative assessments of our production technology capabilities to strengthen our technical capabilities in automation and information technologies, while accelerating the introduction of new technologies relevant to ICT/IoT technologies. At the same time, we will further enhance our manufacturing core strengths through the nurturing of manufacturing human resources, as we have been doing up to now.

Such organizational approach will enable the Group to engage its prominent technologies and quality in the continuous development of new frontiers in the domains of “Creation of Housing and Social Infrastructure” and “Chemical Solutions” for the betterment of the environment and the people’s lives in the world.

* The Third Industrial Revolution: IT/Information Society; The Fourth Industrial Revolution: AI

Human Resources and Benefits for R&D and Manufacturing

The Group presents Great Invention Awards to acknowledge researchers and engineers that have created highly unique and innovative inventions with the potential to become profitable technologies and products. These awards and the accompanying monetary endowment are one way the Group demonstrates its recognition of and appreciation for its talented researchers and engineers. Certification in fiscal 2018 was awarded to advancements in sound absorbing panel with reflector and diagnostic reagents for interstitial pneumonia.

The Group has also established a specialist position system for researchers and engineers with highly specialized skills. The system selects exceptional individuals who have been recognized as possessing highly advanced skills and appoints them to uniquely defined specialist positions. The system promotes ongoing development and aims to cultivate outstanding researchers and engineers recognized both inside and outside the Company. As of April 2018, 23 people held specialist positions.

The Group introduced the Meister position in fiscal 2009 to recognize individuals that exemplify the range of manufacturing skills and technical objectives of the Group. The position is intended to promote the Group tradition of superior skill and craftsmanship and increase the motivation of each and every technician. As of April 2018, 6 people held Meister positions. Cultivating and encouraging the Group’s talented manufacturing technicians by acknowledging their highly refined skills inspires motivation and will further elevate the Group’s high level of manufacturing expertise in the years to come.

Intellectual Property

Fundamental Policy on Intellectual Property

The IP cultivated from our R&D activities is an important management resource that underpins the Group’s growth and revenue and contributes to optimizing corporate value. An IP strategy is vital to maximizing the Group’s technological prominence.

In its Principles on Intellectual Property, the Group clearly states that the objectives of its IP management are to contribute to business growth and to increase corporate value by encouraging the creation, protection, and utilization of IP, which is to be achieved by respecting the Group’s proprietary IP and that of others and by clearly laying out an approach toward IP management. This management mandate is further reinforced by our fundamental policy of ensuring business competitiveness by acquiring highly beneficial patents.

Intellectual Property Management System and Major Activities

To speed up judgments and decision-making, the Group has set up intellectual property divisions at Corporate headquarters and at each divisional company.

The role of the Intellectual Property Division at Corporate headquarters ranges from the planning and drafting of a basic IP strategy common to the entire Company to IP training, and the operation and management of the patent management system. The company from fiscal 2018 is implementing in cooperation with each group company IP systemic training programs for personnel in each of the R&D and sales departments. We updated the patent management system in May 2018 and plan on introducing a platform for the building of strategic patent groups with the goal of improving patent group management.

The company’s basic policy on intellectual property includes securing competitive strength through the acquisition of strong patents. With this in mind, IP strategies and activities at the corporate and divisional company levels are based on the operating conditions unique to each divisional company. At the corporate level, the company analyzes market and competitive conditions, as well as the latest IP information, and implements strategic IP activities aimed at the creation of new businesses. On the other hand, the intellectual property divisions, the business divisions, and the R&D divisions at each of the companies are tasked with maintaining cooperation and periodically holding Intellectual Property Strategy Committee meetings to implement activities aimed at the construction of strategic patent groups.
In this way, the intellectual property divisions at Corporate headquarters and at each divisional company are endeavoring to improve the Group’s IP level by collaborating in an organic manner.

R&D, Manufacturing, and Intellectual Property Management System

Social Capital

The Sekisui Chemical Group recognizes the importance of providing products and services that consistently satisfy and appeal to customers. Only in this way can the Group truly strengthen its ties with society and stakeholders. Accordingly, every effort is made to enhance the quality of our human resources, products, and systems while targeting the quality that will always be specified by customers. At the same time, we adhere strictly to a policy of CSR procurement and promote green procurement when seeking to purchase raw materials. We also refrain from the use of conflict minerals associated with inhumane acts.
Cognizant that the Company is a member of society, we support the social contribution activities of employees in each of three fields: the environment, the next generation, and local communities.

CS & Quality Management — Pursuing a level of quality that is always specified by customers

The Sekisui Chemical Group has been engaged in CS management, which focuses on customer satisfaction (CS), since 1999. In 2004, we coined the phrase CS & Quality in the belief that customer satisfaction and quality are inseparable and began to engage in CS & Quality Management that consistently delivers the value that allows our customers to continue choosing Sekisui Chemical. Mindful of the fact that customer feedback is the wellspring of our manufacturing activities, we are actively honing the Quality of Our People, the Quality of Our Systems, and the Quality of Products and Services. In this manner, the Group is working in unison to consistently deliver the quality that is always specified by customers.

The Group has identified two themes for CS & Quality Management. One of these is the number of major quality issues*1 and the other is the external failure costs*2. In fiscal 2017, the first year of the Medium-term Plan, we had two major quality issues. External failure costs slightly increased compared with the final year of the previous medium-term plan. To achieve zero major quality issues in the future, we aim to improve Basic Qualities by ensuring thorough adherence to the Development Guidelines and Everyday Management Guidelines throughout the entire Group.

*1 Major quality issues: Problems related to product and service quality that could cause significant damage to customers, society, or the Sekisui Chemical Group if not thoroughly resolved on an urgent basis.
*2 External failure costs: Costs arising from responding to product-related complaints.

Three Zeros Initiatives

Based on the idea that costs arise from poor quality in the form of losses and wastefulness, such as responding to customer complaints and increasing waste, we aim to achieve the “Three Zeros” of zero accidents, zero waste, and zero complaints.

Major Quality Issues Initiatives

To prevent the occurrence of major quality issues, we have been holding development risk prevention seminars, which are aimed at acquiring effective prevention methods, and DR reviewer training seminars, designed to improve the skills of people who conduct design reviews (DRs), on an ongoing basis since fiscal 2013. Both seminars are based on the topic of preventing quality problems before they arise.
In fiscal 2017, we held risk prevention case study meetings at four domestic locations and reconfirmed the importance of predicting and identifying risks to quality by focusing on points of change with existing products. We plan to hold these seminars again in fiscal 2018.

Publishing a Booklet Summarizing Customer Feedback

Publishing a Booklet Summarizing Customer Feedback

The Sekisui Chemical Group’s Customer Information & Consulting Services receive over 10,000 inquiries and comments every year. The Group directly answers each inquiry and analyzes the factors that motivated the customer to make the inquiry in the first place, in order to discover the hidden needs of customers.
Having published VOICE, a summary of the inquiries received by Customer Information & Consulting Services, since fiscal 2015, the Group is working to reflect customer feedback in management activities, cultivate and instill a culture of CS & Quality in all employees, and promote understanding of these issues in Group-wide businesses in a manner that transcends particular operational areas.

Materials Procurement

The Sekisui Chemical Group regards openness, fairness and equity, legal compliance mutual trust, and consideration for the environment as the basis of its CSR procurement.
We will strengthen the harmonious and mutually beneficial partnerships with our business partners through fair transactions. We actively request that all our suppliers ensure superior quality, take into consideration the environment, comply with the relevant laws and social norms in each of the countries and regions in which they operate, and conduct health and safety activities in their own companies.

Green Procurement

Evaluating procurement, including for raw materials, not only on a QCD basis, but also on an environmental basis, the Sekisui Chemical Group is promoting the “Greening of Procurement” by procuring products with low environmental impacts from producers who also have a low environmental impact. The Group conducted a regular review of green procurement standards in April 2017 and revised relevant documents to comply with amendments to the Ordinance on Prevention of Hazards Due to Specified Chemical Substances.

Addressing the Issue of Conflict Minerals

Concerned about the issue of conflict minerals, which provide a source of funds for armed forces involved in human rights violations and environmental destruction in the Democratic Republic of the Congo (DRC) and its neighboring countries, the Sekisui Chemical Group conducts conflict mineral specification surveys and inspections throughout its supply chains from the viewpoint of CSR management. We put our Conflict Mineral Survey Guidelines into operation in April 2017. These guidelines were newly formulated for each the relevant Sekisui Chemical groups*1 that receive conflict mineral surveys and inspection requests from suppliers and conducts them. Sekisui Chemical’s Infrastructure & Environmental Products Company, High Performance Plastics Company, and its Group companies conducted 308 conflict mineral surveys in fiscal 2017. Of these, no 3TG*2 minerals had been used in 238 cases, 51 cases originated from non-DRC*3 countries, and 19 cases were from the DRC, but we have confirmed that these were from a CFS-certified production facility*4. Thus there were no unknown smelters.

Social Contribution Activities

As a company that lives together with the local community, the Group promotes social contribution activities in the areas of the environment, the next generation, and local communities. For example, on an environmental theme, we encourage forest preservation activities, the preservation of biodiversity, and greening activities. Positioning these activities as a hallmark of our initiatives as a corporate citizen in tune with the needs of society, we also support the activities of Group employees to give back to society.

Social Contribution Activities

Social Contribution Activities

Natural Capital

The air, water, and land that constitute our plant provide a healthy living environment for its inhabitants and foster robust biodiversity. Our daily lives and economic activities are sustained by the natural capital* provided by our planet. The Sekisui Chemical Group is aiming for the planet and society to remain like this. In addition to halting the deterioration of natural capital, such as by reducing greenhouse gas (GHG) emissions, promoting the recycling of resources, and reducing the burden on ecosystems, the Group contributes to making returns to natural capital through such means as expanding sales of its Environment-Contributing Products that contribute to the environment, while engaging in daily business activities toward achieving a world in which biodiversity is preserved.
* Natural capital: A term that refers to physical capital, such as soil, air, water, minerals, flora and fauna, as well as biological capital, human capital and social capital.

Long-Term Environmental Management Vision Sekisui Environment Sustainability Vision 2030

The Group is aware that its business activities depend on resources (natural capital). All our management-level staff and employees are working to develop into talented personnel with excellent environmental activity promotional skills and will engage in environmental management based on contributions in three areas—“expand and create markets for Environment-Contributing Products,” “reduce environmental impact,” and “conserve the natural environment”— to “give back more to the Earth than is taken” by 2030.
With a view toward the return of natural capital, energies will continue to be directed toward creating prominent value as a part of efforts to realize a planet where biodiversity is preserved. By continuing to create such value, we are convinced that we can contribute to resolving the various issues being addressed under the Sustainable Development Goals (SDGs) advocated by the United Nations.

Environmental Management System

The Group holds meetings of its CSR Committee, headed by the president, and the Environmental Subcommittee twice a year to decide on the major policies that guide the activities of the entire Group. Each business site also has in place an environmental management system based on ISO 14001 and manages environmental activities. As of March 31, 2018, including the 46 business sites in Japan and 36 overseas that had been ISO 14001 certified, the number of business sites represented 47% of the overall total for the Sekisui Chemical Group. We are aiming to acquire ISO 14001 certification and achieve zero emissions at all our major business sites.

SEKISUI Environment Sustainability Index

Taking into account the effects of a number of factors, such as reducing the various forms of environmental impact, the expansion of Environment-Contributing Products and services as well as the conservation of the natural environment, which are major items for implementation in the medium-term management plan, we integrated 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) in a single indicator by means of the SEKISUI Environmental Sustainability Index and began trial calculations in fiscal 2014. In fiscal 2017, we started to manage the “rate of return to natural capital,” as reflected in this index, as a KPI to show the overall progress of a company’s environmental management. We set targets of 85% in fiscal 2017, 90% in the three years of the Medium-term Plan, and a return of 100% or more in 2030.

SEKISUI Environment Sustainability Index

Establishment of Environmental Contribution Investment Framework

Based on the adoption of COP 21 (Paris Agreement), while Japan aims to have reduced its GHG emissions by 26%, compared with fiscal 2013, by fiscal 2030, the Sekisui Chemical Group would ambitiously like to set reduction targets equal to or greater than the national target. Under its environmental medium-term plan, the Group has set the goal for reducing the overall amount of its CO2 emissions at 6%, planned active capital investments, and formulated internal investment promotion measures of around ¥12.0 billion, which corresponds to 0.3% or more of sales. The reduction in GHG emissions from projects already ordered by fiscal 2017 reached 20,000 metric tons, and we will make further investments by means of this support system and aim to reduce the total volume by 40,000 metric tons.

Usage of Natural Capital

Climate Change

Under the environmental medium-term plan launched in fiscal 2017, we set targets by expanding those covered to encompass not only GHG emissions related to production but also GHG emissions from our overall business activities, With regard to GHG emissions from business activities, the Group is targeting a 6% emission reduction against fiscal year 2013 levels by fiscal year 2019. Sekisui Chemical is also investing aggressively in environmental projects that contribute to reducing GHG emissions from its production divisions. Looking ahead, we will continue reducing GHG emissions at every stage of our business activities, with the COP21 objectives at the forefront of our decision-making.

Efficient Use of Resources

With regard to waste, we strive to thoroughly implement the “3Rs” (reduce, reuse, and recycle) throughout entire lifecycles. We also engage in Zero Waste Emissions Activities that reuse as resources all the waste generated due to our business activities. Under the environmental medium-term plan, we are targeting a reduction in the amount of waste generated per unit of output by 1% every year compared with the fiscal 2016 level.

Chemical Substance Management

With regard to chemical substances, in addition to operating a product assessment system for environmental impact*1 and a green procurement system*2, the Group has set and worked toward its own targets for reducing emissions and the transfer of chemical substances since fiscal 1999. In the case of VOC emissions, against the medium-term target of a reduction by more than 3% compared with the fiscal 2016 level, in fiscal 2017, VOC emissions in Japan increased by 12.1% compared with fiscal 2016 as production volume increased in the adhesive tape manufacturing division, which uses solvents. Alternative fluorocarbons were fully phased out in fiscal 2008.

*1 Product Assessment System for Environmental Impact: A system to evaluate environmental impacts throughout all phases of resource development, manufacturing, use, disposal, transport
*2 Green Procurement System: When procuring product raw materials and parts, a system that preferentially selects from those with less burden on the environment.

Conservation of Water Resources

The Group formulates environmental medium-term plans, in which the following initiatives are considered key issues: reducing water use; identifying water-related risks, including impacts on supply chains and the natural environment; conducting environmental education targeting management and employees; and providing information to stakeholders. Involved in the business of supplying infrastructure-related products for water supply, storage and drainage, the Sekisui Chemical Group therefore believes that conveying the importance of safe water supply and the maintenance of water infrastructure to customers is important in making business sustainable. We recognize that contributing to preserving water resources through our businesses will lead to “access to safe drinking water and sanitation,” one of the 17 Sustainable Development Goals (SDGs).

Environmental Impact Assessment

The Group assesses environmental impact at every stage of a product's lifecycle when product processes are developed or changed.

Return of Natural Capital

Environment-Contributing Products

Defined as products that possess high levels of environmental contribution effects and that have been certified as having demonstrated those effects when used by customers, Environment-Contributing Products are contributing to the Earth by creating and expanding markets.

Conserving the Natural Environment

Having incorporated items relating to biodiversity into its Environmental Management Policy in April 2008, the Sekisui Chemical Group formulated guidelines in 2011. The Group has striven to conserve the natural environment, including in terms of biodiversity, through both environmentally conscious business activities and actions to preserve the environment undertaken around the world. Its Environmental Subcommittee meets twice a year to deliberate on biodiversity with regard to the Group’s business activities and to assess their impact by means of methods that utilize the JBIB Land Use Score Card™*1, a tool for evaluating the level of effort to preserve biodiversity with respect to land use, and WET*2, which evaluates the impact on living organisms exerted by waste water.

*1 JBIB Land Use Score Card™: A tool used to assess the level of effort to preserve biodiversity, developed by the NPO Japan Business Initiative for Biodiversity.
*2 WET (Whole Effluent Toxicity): A test method to assess the toxicity of wastewater in bio-response of fish, water fleas, and algae.