Products to Enhance Sustainability
SEKISUI CHEMICAL Group will accelerate efforts to create and expand markets for Products to Enhance Sustainability that contribute significantly to solving social issues. In order to realize a sustainable society, we support the basis of LIFE and will continue to create peace of mind for the future through these means.
Positioning of Products to Enhance Sustainability
SEKISUI CHEMICAL Group has positioned Products to Enhance Sustainability as the most appropriate conduit through which to realize both a sustainable society and the sustainable growth of the Group itself. Through the creation and expansion of Products to Enhance Sustainability, the Group aims to help achieve the SDGs while improving its contributions and ability to solve social issues as well as grow as a company. Under the current Medium-term Management Plan, SEKISUI CHEMICAL Group is evolving the Products to Enhance Sustainability system and redefining issues as they relate to the natural and social environments. At the same time, we are strengthening technology platforms in a bid to generate innovation, developing human resources, and creating opportunities that transcend organizational boundaries.
SEKISUI CHEMICAL Group will contribute to solving various social issues, including the SDGs, through its core business products. More than just contribute to the realization of a sustainable society, we will grow as a company essential to society. To this end, we will accelerate efforts to create and expand markets for Products to Enhance Sustainability that increasingly contribute to solving social issues while working to enhance global and social sustainability. At the same time, we will utilize the Products to Enhance Sustainability system to improve the sustainability of companies and products.
Products to Enhance Sustainability are products that make a significant contribution to solving issues in the natural and social environments. SEKISUI CHEMICAL Group evaluates and certifies these products’ degree of contribution based on certain internal criteria.
Vision 2030 positions Products to Enhance Sustainability as the outcomes of efforts to resolve materialities with important impact on management and society. By creating and expanding such product lines, SEKISUI CHEMICAL Group aims to solve social issues while growing its business.
We position our target* for the creation and expansion of Products to Enhance Sustainability as a key performance indicator (KPI), devising strategies and carrying out measures to achieve it.
- This target is a milestone back-cast from SEKISUI Environment Sustainability Vision 2050, an environmental vision that sets goals for solving natural and social environmental issues that require a long-term approach.
As such, it is positioned as a management target in the Group’s Environmental Medium-term Plan, Sekisui Environment Sustainability Plan: Accelerate II. Progress on this target is managed based on the environmental management promotion system.
Please refer to Environmental Management Promotion System.
Enhancing the Ability to Contribute to Solving Social Issues through Education
SEKISUI CHEMICAL Group has continued to focus on training to enhance its ability to contribute to solving social issues, which is key to realizing Vision 2030, from fiscal 2020.
As a company, we provide education and training in an effort to encourage employees to take the initiative in understanding and solving social issues, while putting into practice their own thoughts, depending on their responsibilities and working environment.
Social and SDG Contribution Activities to Improve the Ability to Contribute to Solving Social Issues
Beginning in fiscal 2020, SEKISUI CHEMICAL Group is recommending activities that contribute to the SDGs and strengthening efforts to cultivate its people and spiritual climate. Our aim is to improve employees’ ability to contribute to solving social issues.
Advanced Product Evaluation System That Promotes the Resolution of Social Issues
SEKISUI CHEMICAL Group has continued to promote a product evaluation system in order to accelerate the solving of issues related to the natural and social environments since fiscal 2006. Certification registration is based on the determination criteria established through discussions among internal committee members. We have received opinions and advice from outside advisors on the criteria and approach, as well as the validity of results, to ensure high standards and transparency.
- Fiscal 2006: Launched the Environment-Contributing Products system
Based on internal criteria, SEKISUI CHEMICAL Group launched a product system to certify and register products that contribute significantly to the solving of issues in a bid to promote the creation and expansion of products that contribute to the solving of issues in the natural environment.
- Fiscal 2017: Expanded the scope of the system to include not only products that contribute to solving natural environment issues, but also those that focus on the social environment
SEKISUI CHEMICAL Group is working diligently to further create and supply problem-solving products. We have also reaffirmed that the SDGs and our goals are one in the same.
- Fiscal 2020: Evolution as Products to Enhance Sustainability
Introduced a strategic framework referred to as Premium Framing and sustainability assessment as confirmation assessments
Evolution of the Product System at SEKISUI CHEMICAL Group
In Vision 2030, ESG management is described as a strategy for achieving a sustainable society and sustainable corporate growth. To drive its achievement of the target state of Vision 2030, SEKISUI CHEMICAL Group is continuing its existing systems for improving its ability to contribute to solving social issues while launching two key changes starting in fiscal 2020. First, to bolster profitability, the Group is establishing a strategic framework called Premium Framing to match its business portfolio with the above systems and strategically expand them. Second, to boost its capabilities in sustainable management, the Group is implementing Sustainability Assessment, a program to confirm and evaluate items necessary to improve the sustainability of its products and businesses.
Ensuring the sustainability of the Group and Group products themselves is vital to continue making products that contribute significantly to solving social issues and expanding that contribution. For this reason, we adopted a new perspective on evaluating corporate and product sustainability in addition to the conventional process of certifying products that contribute significantly to the solving of issues based on internal criteria from fiscal 2020. Using confirmation assessments based on such factors as profitability, process evaluations, and Governance (Internal Control) across the supply chain, we are building and operating an evaluation system that confirms sustainability and promotes the implementation of activities to enhance sustainability.
In addition, SEKISUI CHEMICAL Group has established Premium Framing as a strategic framework for strategically expanding products that contribute to solving social issues and is committed to expanding this framework with medium-term targets. Our goal is to accelerate contributions to solving social issues by implementing strategies that balance the solving of social issues and profitability.
Strengthen the Group’s management ability to sustain business to continue contributing to the natural environment and society
Discussion with External Advisors
In fiscal 2012, SEKISUI CHEMICAL Group established an External Advisory Board. This board assembles experts from outside the Group who offer advice on standards and registration of Products to Enhance Sustainability, as well as future perspectives.
The External Advisory Board meetings are organized by the supervising director of the organization in charge of environmental issues and sustainability. Members of the internal certification screening committee for Environment-Contributing Products, including staff such as executive officer representatives from each divisional company who oversee the technical side, organization heads carrying out management project work with a grasp for business conditions as a whole, participate in External Advisory Board meetings. We also ask others from outside the Company coming from various backgrounds in industry, government, and academia who are currently engaged in environmental and other sustainability-related work to take part as external experts.
In addition to the existing five external members who will continue to serve, one other individual from outside the Company with knowledge and experience in ESG issues in both the financial and corporate sectors was added to the committee in fiscal 2021. By further expanding the committee, we hope to obtain opinions and advice from a variety of perspectives to address increasingly complex social issues while responding to diverse corporate requirements (Table A). The External Advisory Board held two online meetings in March. Through these meetings, SEKISUI CHEMICAL Group received opinions on the significance of contributions made to the natural and social environments by newly registered products and how best to convey that significance. Advice was also received on the evolution and direction of the product system based on various inputs including confirmation of the need to consider multiple issues, which is also required by the EU Taxonomy.
|Specialist Areas||Anticipated Role(s)|
|Representative of the Resource and Environment Strategic Planning Office||
||The giving of opinions/advice on management including natural capital and the product portfolio|
|President of the specified non-profit corporation Network for Coexistence with Nature||
||The giving of opinions/advice on business related to the solving of social issues based on the spirit of three-way benefits (the buyer, seller, and society as a whole)
The giving of opinions from a nature-positive perspective
|Sustainable Management Promotion Organization (SuMPO), Senior Managing Director||
||The giving of opinions from a life cycle perspective, the giving of opinions/advice based on regulations regarding environmental value and global trends|
|Minako Oishi||Nippon Association of Consumer Specialists (public corporation), Representative Director, Deputy Chairperson||
||From the standpoint of using products, the giving of opinions/advice based on requests, expectations, and matters of concern|
|Nikkei Business Publications, Inc., Executive Director, ESG Management Forum||
||From a comprehensive perspective, the giving of opinions on future trends with regard to risks and opportunities in ESG management|
|Mitsubishi UFJ Research and Consulting Co., Ltd., Principal Sustainability Strategist, Management Planning Department Virtue Design Representative Director||
||Seen from a financial standpoint, the giving of opinions/advice on risks and opportunities in terms of corporate value and ESG management/green business|
Note:Internal certification screening committee
The committee is chaired by the supervisor of the ESG Management Department and comprised of supervisors in charge of technology and business at the Company’s headquarters and divisional companies. The committee meets to deliberate on issues related to the certification of Products to Enhance Sustainability. Meetings are held regularly twice per year.
Strengthening the registration of products that contribute to resource recycling
While Products to Enhance Sustainability fall under the Company’s registration system owing to their high degree of contribution to solving social issues based on internal criteria, steps are being taken to strengthen and review the system’s operations and criteria to ensure that the product portfolio continues to evolve in line with business strategies that account for social needs and business conditions.
Against this backdrop, we announced details of our fiscal 2021 resource recycling strategy and roadmap in response to the issue of resource recycling, which is one key aspect of the natural environment. Recognizing the need to accelerate the creation and market expansion of products that contribute to resource recycling and resource conservation based on this strategy and roadmap, we revised and clarified the following three resource recycling criteria for the registration of Products to Enhance Sustainability.
- Greenhouse gas reduction and non-fossil resource-derived plastics use
- Raw materials use reduction and horizontal recycling of materials collected internally
- Biodiversity preservation and biodegradable materials use
Of the 28 products newly registered in fiscal 2021, including the aforementioned criteria, six products contribute to resource recycling.
Products that employ biomass plastics and other candidates including resins that are derived from the horizontal recycling of materials collected internally in collaboration with raw material manufacturers were registered after newly confirming their high degree of contribution to solving issues.
Visualization of the Degree of Contribution to Solving Social Issues
To clarify the amount of return to natural capital up to fiscal 2019, SEKISUI CHEMICAL Group worked to visualize the degree to which each Environment-Contributing Product contributed to solving social issues. We calculated and quantified into a single indicator (damage costs) the various contribution vectors in the life cycle of Environment-Contributing Products. We multiplied the market impact, based on sales, by the environment contribution of each product to arrive at a quantifiable contribution by product, reflected in the Sekisui Environment Sustainability Index.
In calculating the impact on the environment for each Environment-Contributing Product until fiscal 2016, we broadly classified environmental issues into three areas that should be resolved in our aim to help realize an earth with maintained biodiversity. However, since broadening the scope of Environment-Contributing Products from fiscal 2017, we have since taken steps to integrate contributions across four areas adding the area of human health/social assets.
We began conducting environmental impact assessments based on the contribution to solving issues in the natural and social environments of Products to Enhance Sustainability throughout their respective life cycles from fiscal 2020. These contributions to natural and social capital are reflected in the Sekisui Environment Sustainability Index. In particular, we have started to explore the possibility of evaluating the social value of our products based on impact-weighted accounting.
How to Visualize the Degree of Contribution to Solving Social Issues
Computation of the degree of contribution to environmental issues is based on the following calculations
(1)Determine technologies and products to be compared.
(2)Gather quantifiable data related to environmental impact of each stage of a product's life cycle (from raw materials to production, transport, use and disposal).
(3)Apply a coefficient* to calculate environmental impact for each factor affecting the environmental impact data obtained and consolidate the results.
(4)Environmental contribution is the difference between the coefficient-derived value in (3) above and the original value.
* Coefficient:Calculated using a customized version of MiLCA, a system developed by Japan Environmental Management Association for Industry using LIME2, an environmental impact assessment method created by Professor Norihiro Itsubo at Tokyo City University.
Creating Products to Enhance Sustainability through Internal Fusion by the ESG Task Force
Today’s companies are hearing growing demands to offer solutions in a timely manner to address issues such as the COVID-19 pandemic. In such times, innovations must be considered quickly and turned rapidly into action. However, we believe it is also important to accelerate the proposal and consideration of innovations aimed at solving social issues with a long-term view and to implement those innovations in a timely manner. By taking such quick and prompt action, SEKISUI CHEMICAL Group was able to fuse its 28 technological platforms for promoting the creation of Products to Enhance Sustainability. The result was the launch of the ESG Task Force, a forum for considering social issues in ways that transcend organizational boundaries.
In the future, we will take steps to normalize internal cross-sectional systems that enable development and business proposals aimed at addressing social issues, while at the same time putting in place a system that can accelerate innovation in case of emergencies such as the COVID-19 pandemic.
R&D Promotion System
Encouraging Development through the Use of ESG Investment and Measures to Support Expansion of Products to Enhance Sustainability
SEKISUI CHEMICAL Group has identified a subset, measures to support the expansion of Products to Enhance Sustainability, within its established limit for ESG investment. This investment subset is designed to encourage planning and proposal of measures to create products and services and expand markets. To propose solutions to social issues through fusion, this investment subset serves as a financial incentive in support of themes at the planning and testing stages to achieve internal fusion and contribute to the solving of social issues whose solutions are urgently needed or that require long-term measures to solve.
After submitting a theme or plan for assessment, a decision on whether or not to invest is made. In addition to evaluating the importance attached to solving a particular issue and the degree of contribution to enhancing sustainable corporate value, deliberations encompass how the promotion of a theme can be accelerated, the effects of each proposal, and whether investment will help increase corporate value.
In fiscal 2021, support measures were approved and implemented for eight new creation or market expansion themes.
Steps have been initiated to verify new recycling technologies that accelerate the recycling of waste into materials, an area which we are committed to strengthening as a part of our resource recycling strategy. Among a host of measures, we have also commenced efforts to identify new technologies that will trigger innovation and help promote improvements in the durability of products that support social infrastructure. Work to check progress on an interim and fiscal year-end basis are underway.
Environment-Contributing Products PR
As a company that supports the basis of LIFE and solves social issues by delivering value to society including peace of mind for the future through its products and businesses, we introduced products at the following venues, provided education on the means to solve issues, and promoted the importance of finding solutions.
[Promoting efforts to mitigate climate change through products]
・ SeptemberSponsored by the Sustainable Management Promotion Organization: SEKISUI CHEMICAL Group’s Carbon Neutral Strategy presented at a carbon neutral seminar
・ SeptemberSponsored by the Japan Association of New Economy: Case Studies on ICP Use for Decarbonization Strategies at a Japan Association of New Economy seminar
・ DecemberSponsored by the Kansai Chemical Industry Association: ESG Management for the Realization of a Decarbonized Society in 2050 at a fiscal 2021 safety management seminar
・ FebruarySponsored by SB Forum Japan: Strengthen the Foundation of ESG Management in light of Climate Change and ESG Themes/Mega-trends at SB Yokohama
[Promoting effort to adapt to climate change through products]
・ MarchSponsored by Japan’s Ministry of the Environment: Turning Adaptation Initiatives into Opportunities at a climate change adaptation guide utilization seminar for the corporate sector
・ MarchSponsored by the Asia-Pacific Water Forum: Panel discussion at the finance pre-session of the 4th APWS Water and Disaster/Climate Change seminar
Enhancing Product Environmental Value
Taking into consideration the needs of society and customers, the environmental value of Products to Enhance Sustainability reflects a variety of factors. This includes efforts to stay one step of the curve by promoting the value of low-carbon, decarbonized products that help mitigate climate change.
In order for low-carbon, decarbonized products to deliver value to customers, steps are taken to calculate each product’s carbon footprint carbon life cycle assessment (C-LCA).
While boundaries are set and calculations made according to the purpose and product, at this stage, calculations for raw materials are based on a database (IDEA) that applies publicly available average GHG emission coefficients. We believe that through the activities and collaboration of raw material manufacturers, positive steps can be taken to harness the low-carbon value and efforts of each company.
The volume of raw materials used and energy consumed at the time of production are calculated using actual measurement data at production plants.
In order to understand and better appreciate the significance of methods to undertake life cycle assessments (LCAs), which will become increasingly important in the future as an indicator of low carbon value, SEKISUI CHEMICAL Group is actively participating in a variety of endeavors including the LCA Utilization Promotion Forum, the LCA Forum, and the Institute of Life Cycle Assessment. In addition to brushing up on information on the handling of each method and solution, we are encouraging employees to take external training courses and conducting in-house LCA training.
Over and above online LCA training conducted in February, which attracted more than 100 participants, SEKISUI CHEMICAL Group provide archived courses. We are developing human resources that are capable of calculating and promoting the appeal of low-carbon values.
At the UIEP Company, which handles a large number of infrastructure products made from resin, we provide training for sales staff. Complementing this training, we prepare and distribute materials that help explain calculated value to customers, focusing on resin pipes and other products. As of March, the Company has trained more than 500 employees and launched sales activities to promote low-carbon value.
Recognizing that the growth of low-carbon values varies from industry to industry, we are first approaching business fields where value growth is slow. We believe this is helping to distinguish the Company’s efforts in each business and transforming risks into opportunities. In order to proactively meet the low-carbon, decarbonization requirements of products while also working with the supply chain, we will accelerate reforms in raw material selection and production processes, energy conversion, and studies that contribute to resource recycling, with the aim of achieving carbon-neutral products.
Note 1:From fiscal 2019, Medical Business results are collated and presented with Headquarters results following its separation from the High Performance Plastics Company as an independent entity.
Note 2:From fiscal 2020, the product system has evolved and renamed “Products to Enhance Sustainability”.
Net Sales / Proportion of Products to Enhance Sustainability
Trends in Net Sales of Products to Enhance Sustainability
|Urban Infrastructure & Environmental
|High Performance Plastics Company||99.4||142.2||178.9||110.0||121.9||186.9|
|Net Sales of Products to Enhance Sustainability||Net sales of Products to Enhance Sustainability = Consolidated SEKISUI CHEMICAL Group sales of products internally certified as Products to Enhance Sustainability
All businesses of the Group in and outside Japan are subject to assessment
approach toward Products to Enhance Sustainability
|Proportion of Products to Enhance Sustainability to net sales||Proportion of Products to Enhance Sustainability to net sales = Net sales of Products to Enhance Sustainability / Consolidated sales
All businesses of the Group in and outside Japan are subject to assessment
approach toward Products to Enhance Sustainability
Number of Products to Products to Enhance Sustainability Newly Registered
|FY2017||FY2018||FY2019||FY2020||FY2021||Number of registrations as
of the end of March