Climate Change

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 in line with 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 entire supply chain. This does not only includes our own business sites, but also raw material suppliers as well as the use of our products after being sold. Steps are then taken to publicly disclose the findings.

SEKISUI CHEMICAL Group believes that it is important to earnestly confront all climate change risks and make every effort to keep the temperature rise to less than 1.5°C. Under the SEKISUI Environment Sustainability Vision 2050 that was formulated in 2019, we are trying to contribute to solving environmental issues by reducing the environmental impact of 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 our own business sites in which it was installed, increasing our utilization ratio for renewable energy from externally purchased electricity and have set a new target value of 100% by 2030. We focused on initiatives to achieve a 26% reduction in GHG emissions by 2030, to which we committed ourselves under the SBT initiative. As a result, we expect to reach this target earlier than planned and therefore have begun considering raising the 2030 reduction target.

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 through scenario analysis conducted based on the TCFD Guide.
SEKISUI CHEMICAL Group examines measures to mitigate identified risks and considers the creation of new businesses by developing products and services for identified opportunities. Significant risks along with possible countermeasures and strategies are reported to the Board of Directors through the Sustainability Committee, and important strategies are decided at Board of Directors meetings.
Through this kind of management, we believe it is possible to remain a company that meets the demands of society through sustainable business development.

As an initiative to reduce environmental impact, SEKISUI CHEMICAL Group is working to promote visualization of energy use while reducing the amount by transforming and improving production processes, and continuously upgrading equipment for the purpose of greatly increasing energy efficiency in production processes.
SEKISUI CHEMICAL Group has been switching to purchased power generated from renewable energy sources since fiscal 2020. In Japan, we are promoting the use at our factories of SMARTHEIM DENKI, a power trading service that purchases surplus electricity from solar power generation equipment installed on the roofs of customers’ detached houses sold by the Company.

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 solving issues in the natural and social environment, and disclosing and distributing detailed data on outcomes. At the same time, we believe that it will surely seize the opportunity of “increasing 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 solving issues through co-innovation (fusion) and accelerate solutions through early dissemination. With this in mind, we established the MINASE INNOVATION CENTER (MIC) as an organization to promote open innovation with our stakeholders.
MIC has started to accelerate efforts to solve social issues by actively engaging in technological exchanges with startup companies that possess low-carbon technologies, and materials and technologies that contribute to resource conversion.

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 no longer be able 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 divisional company and Group subsidiary has formulated its own BCP based on its unique situation as a means of avoiding as much as possible the risk of loss in operations and work availability due to natural disasters.

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 businesses 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 sector 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 2021>
SCOPE 1+2: Reduced greenhouse gas emissions by 16.9%, compared to fiscal 2013^*
SCOPE 3: Reduced greenhouse gas emissions by 1.3%, 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 address climate change.

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.In August 2020, we joined the international initiative RE100, which aims to procure the energy consumed in business activities entirely from renewable energy, in order to accelerate efforts that contribute to solving this problem in society as a whole. In the future, we will promote activities in cooperation with member companies and organizations.
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 fiscal 2030, 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.

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 use stages. The reason that emissions are high in the raw materials procurement stage is because of the characteristics of our business as a chemicals manufacturer.
Meanwhile, emissions from the product-use stage arise from the large volumes of greenhouse gases emitted as the result of the energy consumed by 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 use, we will contribute to energy use 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.

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

The following manufacturing sites have installed solar power generation equipment producing electricity for in-house use in fiscal 2021.

SEKISUI CHEMICAL Group has also begun proactively switching over to renewable energy sources for electricity purchased from fiscal 2020, and there are currently a total of 20 facilities in Japan and overseas where 100% of electric power is derived from renewable energy.

Energy consumption from renewable sources in fiscal 2021 was 144.4 GWh, comprising 17.2% of total purchased power (including solar power generation for in-house use) and 19.7% of total power consumption, including self-generated power from co-generation systems.

The MINASE INNOVATION CENTER (MIC), a new research facility, was opened in Shimamoto-cho, Osaka Prefecture in August 2020. 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 have been able to engage in continuous operations at a total volume that meets design values for the past two years. Meanwhile, energy use in air conditioners and lighting exceeded design values. We believe that the increase in human resources and subsequent increase in activity is the main reason behind this compared with when the facility first opened. In fiscal 2022, we will promote activities that will help achieve energy saving performance by further upgrading and expanding rules.

SEKISUI CHEMICAL Group is promoting the creation and expansion of markets through its in-house Products to Enhance Sustainability system. This initiative is designed to help accelerate the Group’s contribution through its businesses and the realization of a decarbonized society in 2050.
Products that not only help mitigate the effects of climate change, but also adapt to changes in the environment are considered important from a roadmap perspective. As such, we are looking to expand our lineup of these products.
Specific examples are listed as follows.

[Examples of Products That Contribute to Climate Change Mitigation]

• <Housing>
  Products and services that support energy-efficient lifestyles through the use of renewable electricity

  • Example)
    ZEH-specification housing (net-zero energy house)
    SEKISUI’s SMARTHEIM DENKI power trading service selliing surplus generated renewable energy purchased from customers of sold housing to factories and other customers

• <Mobility>
  Lightweight and highly functional products that reduce energy consumption during transportation and shipping

  • Example)
    S-LEC^® interlayer film for automotive laminated glass that boasts thermal and acoustic
    insulation functions
    Sheet materials used in aircrafts, trains, etc. (SEKISUI KYDEX product)

• <Electronics>
  Materials indispensable for energy-efficient products, products that contribute to improving the durability and performance of related parts, which are becoming increasingly important with the development of 5G connectivity, etc.

  • Example)
    Heat release materials that help mitigate issues caused by overheating circuit boards (Sekisui Polymatech Co., Ltd. product)
    Materials used in energy-efficient equipment (Micropearl), functional tape

[Examples of Products That Adapt to Changes in the Climate]

[Initiatives Undertaken in Collaboration with Other Companies]
Carbon recycling technology project partnership with ArcelorMittal, S.A.
SEKISUI CHEMICAL and ArcelorMittal concluded a partnership to pursue a project to capture and re-use the CO₂ emitted during the steelmaking process in a bid to reduce the dependence on fossil resources and contribute to the decarbonization of steelmaking. Through this project, energies will be directed toward developing technologies that separate, recover, and reuse the CO₂, which would otherwise have been emitted into the atmosphere during the steelmaking process. Key to this work is SEKISUI CHEMICAL’s innovative technology that converts CO₂ to carbon monoxide at high yields.

[Progress against Commitments]
Expanding the market penetration rate of ZEH- specification housing
In order to reduce the consumption of energy derived from fossil resources by customers living in Sekisui Heim homes sold by the company, we are committed to and are considering various measures aimed at expanding the penetration rate of ZEH-specification housing. In fiscal 2021, the ratio of new detached net-zero energy houses (ZEH) (actual results compiled in accordance with ZEH builders’ reporting methods) was 82%, and 89% after including the Nearly ZEH and ZEH oriented categories. The number of storage cell-equipped homes (energy self-sufficient houses) proposed in conjunction with ZEH houses has also increased on a cumulative basis, and the storage cell installation rate for new detached homes has grown to 72%^*.

The Japan Climate Initiative (JCI)

• Significance/objectives・・・
  The Group is joining the front line of the global push for decarbonization from Japan in order to mitigate climate change.
• Activities・・・・・・・・・・・・・・・・
  In order to drive social change and help realize decarbonization, the JCI promotes information dissemination from and opinion exchanges with companies, local governments, and NGOs that are actively engaged in addressing climate change. Central to efforts aimed at accelerating activities through corporate collaboration, we are promoting the declaration of goals and activities to achieve objectives.
• Our Company’s role・・・・・・
  We share the latest information on our initiatives and using them to consider measures.

RE100

• Significance/objectives・・・
  Aim for companies to cover 100% of the electricity used in their operations from renewable energy sources
• Activities・・・・・・・・・・・・・・・・
  Motivated companies that have made declarations cooperate with each other to communicate and are promoting communication and activities that have an impact on society.
• Our Company’s role・・・・・・
  We are contributing to greater use and diffusion of renewable energy in society by declaring our commitment to shifting toward renewable energy.

JAPAN CLIMATE LEADERS’ PARTNERSHIP (JCLP)

• Significance/objectives・・・
  Aim to realize a rapid transition to a decarbonized society and achieve the 1.5°C target to avert a climate crisis.
• Activities・・・・・・・・・・・・・・・・
  Leading Japan in five pillars to achieve policy changes
  Pursuing policy engagement, promoting decarbonization within companies, providing solutions to decarbonize society, communicating with society, and cooperating with global networks
• Our Company’s role・・・・・・
  Decarbonize the Company and society by making a decarbonization declaration, transitioning to a decarbonized business model, and pursuing corporate collaboration to promote internal decarbonization mainly within supply chains.