Materiality

The Nippon Shokubai Group has identified materiality (material issues) to be addressed in order to achieve its vision for 2030 as set forth in its long-term vision “TechnoAmenity for the future,” which is to “Provide the materials and solutions required by people and society,” “Become a chemical company that keeps evolving by identifying social trends,” and “Develop with various stakeholders inside and outside the company.”
The content of material issues will continue to be reviewed and revised on a regular basis.

Materiality Identification Process

Materiality and Initiatives

Promote climate change response

Initiatives	KPI and their ideal state	Year of achievement	Actual performance in FY2022
Contribute to carbon neutrality	･ Scope 1, Scope 2: reduce CO2 emissions by 30% from the 2014 level (Nippon Shokubai and Group Companies in Japan)	End of FY2030	Reduced by 14% (including an offset equivalent to 7.3% through the purchase of carbon-neutral city gas)
Contribute to the circular economy	･ Develop and socially implement technologies for resource use reduction and recycling	ー	ー
Promote the development and sales of Environmentally Contribution Products	(1) 55 billion yen (2) 135 billion yen	(1) End of FY2024 (2) End of FY2030	44 billion yen

* CO₂ emissions : Our Group’s emissions reduction targets are for greenhouse gases, but since they are mostly carbon dioxide (CO₂), they are referred to as CO₂.

Contribute to solving customer issues

Initiatives	KPI and their ideal state	Year of achievement	Actual performance in FY2022
･ Strengthen the company’s ability to understand issues and propose solutions ･ Strengthen the supply chain management	(1) Develop a platform to strengthen solution proposals (2) Expand the Solutions business to achieve the dual focus of the Materials and Solutions businesses (Sales ratio of 50% each, revenue of the 500 billion yen level)	(1) End of FY2024 (2) End of FY2030	Completed the introduction of the foundation system for information sharing

Promote safe and stable production activities

Initiatives	KPI and their ideal state	Year of achievement	Actual performance in FY2022
･ Strengthen the safety foundations ･ Foster a culture of safety	･ Third-party evaluation: maintain above industry standards for the petroleum and petrochemical industries	ー	･ Conducted a third-party evaluation at the Kawasaki Plant ･ Confirmed the maintenance of levels above industry standards (evaluations to be conducted every few years for individual business locations）

Developing/Promoting the Active Participation of Talent

Initiatives	KPI and their ideal state	Year of achievement	Actual performance in FY2022
Develop autonomous talent	･ Improve the employee engagement score (transformation and growth of people and workplaces through early establishment of a new personnel system, linkage with multi-layered measures, and organizational improvement) ･ Increase in the number of applicants for solicit publicly proposed autonomous learning programs (e-learning, skill development training, online English conversation classes, etc.) and make these programs better known within the company	End of FY2024	･ Began to conduct engagement surveys ･ Began to conduct Company-recommended training named “autonomous learning programs” (with an attendance rate of about 20%)
Promote the active participation of diverse talent	･ Improve the employee engagement score (promotion of suitable assignments, individual motivation, and diverse and autonomous work styles through various systems such as self-assessment and the continuity of work location) ･ Increase the ratio of female employees hired in the clerical and chemical fields to at least 30% ･ Increase the ratio of female in managerial position to 6% or more	End of FY2024	･ Began to conduct engagement surveys ･ Rate of female employees hired in the clerical and chemical fields: 24.1% ･ Rate of females in managerial positions: 4.4%

Strengthen corporate governance

Initiatives	KPI and their ideal state	Year of achievement	Actual performance in FY2022
Enhance the effectiveness of the Board meeting	･ Improve the effectiveness of the Board meeting by enhancing its decision-making of management policy and strategy, and supervisory functions	End of FY2024	Confirmed with a third-party evaluation that the effectiveness of the Board was ensured
Ensure the knowledge, experience, skills, and diversity of the Board meeting	･ Disclose a skills matrix of the Board meeting ･ Satisfy the skills matrix of the Board meeting	End of FY2022 End of FY2024	･ Started the disclosure at the end of FY2022 ･ Expanded the positions subject to the skills matrix disclosure （Statutory Corporate Auditors）
Enhance medium- to long-term incentives for corporate officers	･ Introduce stock-based compensation for internal Members of the Board, etc.	End of FY2022	Introduced the plan at the end of FY2022 (Effectiveness being monitored on an ongoing basis)