Sustainability Management / Materiality

Our Group Mission at Nippon Shokubai Group, “TechnoAmenity: Providing prosperity and comfort to people and society, with our unique technology,” expresses our desire to contribute to creating a society where people can not only enjoy economic and material affluence but also lead a comfortable life with social and emotional well-being along with hope for the future.
Our business activities are supported by society and the rich global environment that sustains it, and achieving sustainability is a crucial challenge for Nippon Shokubai Group.
We believe that it is our mission not only to reduce the environmental impact of our business activities but also to provide solutions to various social issues through our technology, thereby contributing to the realization of a sustainable society.
Such initiatives create new economic value and increase corporate value. We aim to achieve sustainability and growth through our business and technology.

Sustainability Policy

This Policy has been approved by the Sustainability Promotion Committee (formerly the TechnoAmenity Promotion Committee, which is chaired by the President and composed of Inside Directors of the Board, Executive Officers and others appointed by the President).

Management System for promoting sustainability

Sustainability Promotion Committee chaired by the president has been organized to implement sustainability initiatives.

Roles of Sustainability Promotion Committee

• Determine Group’s policies and strategies relating to promote sustainability initiatives
• Direct each department to formulate plans and measures and evaluate their performance and progress
• Consider other significant matters relating to promote sustainability initiatives
• Disseminate information about the initiatives to stakeholders

Operation for Sustainability Promotion Committee

• In principle, the Committee meets at least twice a year.
• When it is necessary to consider and adopt measures for important sustainability issues across departments, the Committee will establish a subcommittee to assume responsibility for them.

Materiality

The Nippon Shokubai Group has formulated a long-term vision called “TechnoAmenity for the Future” and is promoting three transformations—”Business Transformation,” “Strategic Transformation for Environmental Initiatives,” and “Organizational Transformation”—towards the goal for FY2030. In conjunction with the formulation of our Mid-term Management Plan, we have identified materiality and revised its content to align with the three transformations. Moving forward, we will manage the progress of materiality and implement the PDCA cycle to achieve the realization of a sustainable society and increase corporate value as outlined in our Sustainability Policy.

Contribution to people and society

Contribute to the future of people and society by solving social issues through our business activities

Materiality 1. Contribution to solving social issues

Continuous creation of new products

Vision	A company with the technology and talent to continuously create products that contribute to people and society
Initiatives	･ Strengthening the R&D capabilities ･ Strengthening the constitution of R&D organization ･ Investment in R&D human capital
KPI / Ideal state	･ Swiftly develop customer-oriented materials and solutions and contribute to the realization of a sustainable society ･ Possess, acquire, and continuously advance world-class core technologies to ensure competitiveness in target markets ･ Actively exchange information with people inside and outside the company to engage in collaboration that sparks innovation (achievement year: each by FY2030)

Promotion of the development and sales of Environmental Contribution Products

Vision	A company that creates products contributing to the reduction of environmental impact
Initiatives	Promotion of the Solutions Business
KPI / Ideal state	Revenue from Environmental Contribution Products: ･ 55 billion yen (FY2027) ･ 135 billion yen (FY2030)

Promotion of environmental initiatives

Protect the global environment and build a society where future generations can live with peace of mind

Materiality 2. Promotion of environmental initiatives

Contribution to achieving carbon neutrality

Vision	Achieving net zero for Scopes 1 and 2 by FY2050
Initiatives	･ Promoting the use of bio-based materials ･ Promoting energy conservation ･ Promoting the use of green energy ･ Process improvement ･ Improving catalyst efficiency
KPI / Ideal state	Greenhouse gas (GHG) emissions: 30%* reduction in emissions by FY2030 from the base year as Nippon Shokubai Group total (achievement year: each by FY2030) * (In Japan) 30% reduction from FY2014 levels 　(Outside Japan) Reduction by [reduction objectives for each company] from 　[base year for each company] levels

Reduction of Product Carbon Footprint (PCF)

Vision	Contributing to the reduction of GHG emissions throughout the supply chain
Initiatives	･ Enhancing product carbon footprint data quality ･ Sharing PCF information with stakeholders
KPI / Ideal state	Continuous improving calculation accuracy and reducing GHG emissions for each product through ongoing activities (achievement year: by FY2027)

Conservation and efficient use of water resources

Vision	Maintaining harmony between water resource security and water use in business activities
Initiatives	Risk assessment and promotion of efficient use of water resources
KPI / Ideal state	Continuous monitoring of water risks (stress) and actions based on assessment results (achievement year: by FY2027)

Contribution to resource recycling

Vision	Minimizing waste generation and effectively utilizing it as resources and energy
Initiatives	･ Waste reduction ･ Promotion of recycling
KPI / Ideal state	･ Quantity of final off-site landfills: maintaining zero emissions(1) (achievement year for Nippon Shokubai alone: by FY2027) ･ Waste plastic emissions: 50% reduction in emissions from FY2021 level (achievement year for Nippon Shokubai alone: by FY2030)

Strengthening the company’s foundation and achieving sustainable growth

Aim to be a continually growing organization where diverse talents can be active

Materiality 3. Developing / Promoting the active participation of talent

Development of autonomous talent

Vision	Employees resonating with the company’s vision, finding their work fulfilling, growing together with the company, and trusting each other
Initiatives	･ Provision of learning opportunities ･ Implementation of the preferred career declaration system
KPI / Ideal state	･ Participant ratio of self-selected training programs (e-learning, skill development training, online English conversation classes, etc.): Maintain 70% or above ･ Continue to implement career training (second career training, promoting women’s participation and advancement in workplaces, training for young employees and others) according to hierarchical levels ･ Continue to implement interviews between supervisors and subordinates through the career declaration system (achievement year for Nippon Shokubai alone: each by FY2027)

Promote the active participation of diverse talent

Vision	Employees resonating with the company’s vision, finding their work fulfilling, growing together with the company, and trusting each other
Initiatives	Establishment and maintenance of the working environment
KPI / Ideal state	･ Increase the positive response rate for D&I-related items in the employee survey: 80% or above ･ Ratio of female employees hired in the clerical and chemical position: 30% or above ･ Improve ratio of female managers (managerial positions): 8% or above ･ Ratio of male employees taking childcare leave (15 days or more): 100% (achievement year for Nippon Shokubai alone: each by FY2027)

Materiality 4. Promotion of CSR in the value chain

Strengthening supply chain management

Vision	Building a sustainable supply chain that not only complies with laws and regulations, but also takes human rights and the global environment into consideration
Initiatives	Enhancing supplier survey content and maintaining coverage rate
KPI / Ideal state	CSR supplier survey coverage rate (based on raw material purchase amount): Maintain 95% or above (achievement year for Nippon Shokubai alone: by FY2027)

Strengthening efforts to respect human rights

Vision	Widely adopting and firmly establishing efforts to respect human rights, which is required internationally
Initiatives	Establishment of human rights due diligence process
KPI / Ideal state	Human rights due diligence: Starting implementation across the entire Group (achievement year: by FY2027)

Materiality 5. Strengthening governance

Enhancing compliance awareness

Vision	Contributing to enhancing corporate value, while fulfilling our corporate social responsibilities, such as compliance, as a result of Group Mission Framework being well understood and practiced by the executives and employees
Initiatives	･ Dissemination of Group Mission Framework ･ Promotion of the practice of Code of Conduct
KPI / Ideal state	･ Participant ratio of compliance training (by hierarchical level): Maintain 95% or above (achievement year for Nippon Shokubai and Group Companies in Japan: by FY2027) ･ Number of significant violations of laws or regulations in the social and economic area: Maintain 0 (achievement year for Nippon Shokubai alone: by FY2027)

Enhancing the effectiveness of the Board of Directors through the exercise of its roles and demonstration of its functions

Vision	Effectively fulfilling responsibilities as a strategic formation function of our Group, in addition to the decision-making and supervisory functions of business execution
Initiatives	Continuous implementation of the evaluation of the effectiveness of the Board of Directors
KPI / Ideal state	･ Review and fulfill the necessary skills and attributes of the Board of Directors ･ Continue to implement the evaluation of the effectiveness of the Board of Directors and address key issues based on the survey results (achievement year for Nippon Shokubai alone: each by FY2027)

Strengthening medium- to long-term incentives for executives

Vision	Making swift and decisive decisions for sustainable growth
Initiatives	･ Promotion of initiatives in accordance with the Corporate Governance Code ･ Review of the executive compensation system
KPI / Ideal state	Consider and complete expanding the proportion of performance-linked and stock-based remuneration for executives (achievement year for Nippon Shokubai alone: each by FY2027)

Materiality 6. Promotion of safe and stable production activities

Safety culture development / Strengthening safety infrastructure

Vision	Continuing safe and stable production regardless of changes in the business environment, ensuring customer satisfaction and trust
Initiatives	Promotion of the Medium-term RC Basic Plan
KPI / Ideal state	･ Class 1 and Class 2 process safety accidents(2): 0 ･ Serious injuries(3): 0, injuries with lost workdays: 0 (achievement year: each by FY2027)

Improvement of product quality and trust

Vision	Continuing safe and stable production regardless of changes in the business environment, ensuring customer satisfaction and trust
Initiatives	Promotion of the Medium-term RC Basic Plan
KPI / Ideal state	Serious quality complaints: 0 (achievement year: by FY2027)

Materiality Identification Process

In formulating the Mid-term Management Plan 2027, the Nippon Shokubai Group conducted a review through the following process in FY2024.

Click here for Materiality and Identification Process for FY2022-2024