System

The environmental aspects of SEKISUI CHEMICAL Group have been managed and promoted under the Sustainability Committee since fiscal 2020. The Sustainability Committee serves as a forum for discussing polices and strategies intended to improve the sustainability of society and SEKISUI CHEMICAL Group.
As a series of committees under the Sustainability Committee, we established subcommittees for each issue defined under materiality by the Group, and established the Environmental Subcommittee to address environmental issues.
The main sustainability-related initiatives, including the environment, as well as activity policies and related issues, that have been deliberated by the Sustainability Committee are reported to and approved by the Board of Directors, and advanced under a framework that is reflected within management. In addition, the determination and implementation of a detailed activity plan related to the environment is carried out through meetings of environmental managers for each issue from Corporate Headquarters and each divisional company.
In fiscal 2022, the Environmental Subcommittee met twice, in November and March. At these meetings, the subcommittee confirmed progress for the final fiscal year of the current Environmental Medium-term Plan, and deliberated on the direction for the three-year Environmental Medium-term Plan (fiscal 2023-2025) that will begin during the next fiscal year, and discussed initiatives and promotion measures for reducing greenhouse gas emissions, handling water-related risk problems, reducing the amount of waste products generated, and other issues. In addition, cases requiring urgent expansion of measures are deliberated as needed at management meetings (which meet monthly and are chaired by the head of the Business Strategy Department who is also the person in charge of the ESG Management Department) and reported to the Board of Directors.
Looking for example at the climate change issue, in response to the milestone achieved for fiscal 2021, namely the reduction of greenhouse gas emissions ahead of schedule, we deliberated and made a decision at the management meeting on revising the target from the original 2°C to 1.5°C in July, and on reviewing the roadmap for greenhouse gas emissions reduction. As a result, we were able to revise the target early on, and began investigating measures toward accelerating initiatives.

When starting or continuing business transactions, we ask our suppliers to establish an environmental management system in conformity with ISO 14001 and to reduce their environmental impact. With regard to the issue of climate change, in particular, we are confirming progress in setting and tackling reduction targets.
In terms of the raw materials used by SEKISUI CHEMICAL Group, we assess the volume consumed along with the environmental impact as an approach to material balance. When it comes to the issue of climate change, we recognize that raw materials account for the largest portion of Scope 3 emissions, and, in particular, are therefore strengthening our approach to raw material suppliers with regard to reducing greenhouse gas emissions.
From a raw material perspective, we are requesting the presentation of greenhouse gas emissions data during raw material manufacture from more than 10 manufacturing companies, while promoting efforts to reduce greenhouse gases under Scope 3 for the future for the four major resins that are purchased in large volumes and have high levels of greenhouse gas emissions. These emissions represent 2.2% of the emission calculated using the IDEA database of GHG emissions derived from the raw materials used.
While the amount of data obtained directly from suppliers is not large, the use of databases makes it possible to grasp the amount of GHG emissions over the entire lifecycle of products, even if only in terms of averages, and to consider countermeasures after determining the emissions to be reduced. Through these efforts, we are also promoting reduction activities across the supply chain.
In addition, we are checking with suppliers and initiating investigations into substitutes in regard to lower carbon materials made from biomass and the potential of supplying recycled materials.
Given that timber is considered to have a significant impact on the issue of biodiversity, we will formulate specific procurement guidelines* for timber, and will work to assess risk through supplier surveys, as well as implement DD in order to reduce risk, in an effort to procure 100% of timber from sustainable forests.

SEKISUI CHEMICAL Group encourages environmental activities in its offices that are in line with its Environmental Management System (EMS). At our offices located throughout Japan, we refer to the EMS for guidance on environmental activities, such as turning off lights during lunch breaks and other steps to conserve energy and reducing the use of paper.

SEKISUI CHEMICAL Group has set its own environmental management targets. This includes reducing emissions into the atmosphere and water environments, which are stricter than legal regulations. Each business site closely follows these internal targets. We aim to prevent environmental accidents before they occur by conducting internal environmental audits to uncover latent environmental risks.
In addition, we are developing comprehensive activities by sharing information on new legal and regulatory trends as well as incidents of other companies within the Group.
In fiscal 2022, there were no reports of violations of environmental laws or regulations including transgressions relating to the disposal of waste, wastewater discharge, and contamination. There were also no reports on incidences of administrative guidance.

At our overseas business sites, we are also expanding EMS implementation with similar policies to Japan. We are putting in place systems for obtaining environmental impact data and taking initiatives to reduce environmental impact based on this data.
As of March 2023, 48 business sites in Japan and 36 business sites overseas had acquired ISO 14001 or other similar certifications. The proportion of SEKISUI CHEMICAL Group production sites and research institutes that have acquired these certifications is 88%.
The Group aims to obtain ISO certification at all production sites.