{"id":3316,"date":"2026-04-21T10:00:04","date_gmt":"2026-04-21T01:00:04","guid":{"rendered":"http:\/\/shokubai.mediawars.ne.jp\/ja\/?post_type=sustainability&#038;p=3316"},"modified":"2026-04-21T10:00:04","modified_gmt":"2026-04-21T01:00:04","slug":"tackling-climate-change","status":"publish","type":"sustainability","link":"https:\/\/www.shokubai.co.jp\/en\/sustainability\/environment\/tackling-climate-change\/","title":{"rendered":"Tackling Climate Change"},"content":{"rendered":"\n<div class=\"ark-block-tab\"><ul role=\"tablist\" class=\"arkb-tabList\" data-tab-w-pc=\"auto\" data-tab-w-sp=\"auto\"><li class=\"arkb-tabList__item\" role=\"presentation\"><button class=\"arkb-tabList__button\" role=\"tab\" aria-selected=\"true\" aria-controls=\"tab-9a66b2ad-0\">Tackling Climate Change<\/button><\/li><li class=\"arkb-tabList__item\" role=\"presentation\"><button class=\"arkb-tabList__button\" role=\"tab\" aria-selected=\"false\" aria-controls=\"tab-9a66b2ad-1\">Disclosure Based on TCFD Recommendations<\/button><\/li><\/ul><div class=\"arkb-tabBody\">\n<div class=\"arkb-tabBody__content ark-keep-mt--s\" id=\"tab-9a66b2ad-0\" role=\"tabpanel\" aria-hidden=\"false\">\n<div class=\"wp-block-my-gutenberg-my-block00 m_ancNav\"><ul class=\"anc_content\"><li><a href=\"#anc02\" title=\"\">Promoting Greenhouse Gas (GHG) Emissions Reduction<\/a><\/li><li><a href=\"#anc03\" title=\"\">Promoting Reduction of GHG Emissions Resulting from Our Entire Supply Chain<\/a><\/li><li><a href=\"#anc04\" title=\"\">Internal Carbon Pricing (ICP)<\/a><\/li><\/ul><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"anc02\">Promoting Greenhouse Gas (GHG) Emissions Reduction<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">Formulating a roadmap for reducing GHG emissions<\/h3>\n\n\n\n<p>Nippon Shokubai formulated a roadmap for reducing GHG emissions by 2050 in terms of the \u201cstrategic transformation for environmental initiatives,\u201d one of the \u201cthree transformations\u201d set out in \u201cTechnoAmenity for the future,\u201d the Nippon Shokubai Group long-term vision published in April 2021.<br>In conjunction with the development of the company&#8217;s Medium-term Management Plan announced in April 2025, we have identified materiality and newly established Group-wide goals for reducing GHG emissions (Scope 1+2), including those of the group companies outside Japan.<br>By 2030, we will reduce GHG emissions through measures centering on the promotion of energy conservation with manufacturing process improvements, the use of green energy, the partially replacing raw materials with biomass, and the improvement of catalyst efficiency.<br>From 2030 to 2050, we will promote the above measures and reduce energy-origin GHG emissions by promoting green fuels, such as hydrogen and ammonia. Additionally, we plan to reduce non-energy-origin GHG emissions by expanding the use of biomass and recycled raw materials and by using carbon recycling technology (carbon dioxide capture, utilization, and storage).<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Roadmap for Reducing GHG Emissions by 2050<\/h4>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1138\" height=\"585\" src=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2025\/09\/G-5-3_Roadmap-for-Reducing-GHG-Emissions_250919_en.jpg\" alt=\"\" class=\"wp-image-17887\" srcset=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2025\/09\/G-5-3_Roadmap-for-Reducing-GHG-Emissions_250919_en.jpg 1138w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2025\/09\/G-5-3_Roadmap-for-Reducing-GHG-Emissions_250919_en-300x154.jpg 300w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2025\/09\/G-5-3_Roadmap-for-Reducing-GHG-Emissions_250919_en-1024x526.jpg 1024w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2025\/09\/G-5-3_Roadmap-for-Reducing-GHG-Emissions_250919_en-768x395.jpg 768w\" sizes=\"(max-width: 1138px) 100vw, 1138px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"anc01\">Reducing energy consumption and CO<sub>2<\/sub> emissions<\/h3>\n\n\n\n<p>Our RC Promotion Committee, which is chaired by the Company President, formulated a Medium-Term RC Basic Plan based on the targets set out in the action plan of the Japan Chemical Industry Association (JCIA) for achieving a low carbon society. On the basis of this plan, each of our plants takes action to mitigate climate change under the leadership of the committees responsible for promoting energy conservation activities and a reduction in CO<sub>2<\/sub> emissions.<br>In FY2024, energy-saving activities progressed, and the energy consumption intensity improved due to an increase in the production volume of energy generation products. In addition, CO<sub>2<\/sub> emissions decreased as a result of continued use of carbon offset city gas (formerly carbon-neutral city gas) and improvement in CO<sub>2<\/sub> emission intensity. Our domestic GHG emissions in FY2024 were 701 thousand tons-CO<sub>2<\/sub>e*\u00b9, representing a 16.8%*\u00b9 reduction compared to FY2014.<br>Since FY2021, we have been generating solar power (on-site PPA) at the Himeji Plant. In addition, we promote energy conservation activities through the collection of waste heat and the introduction of a co-generation system. We also collect part of the CO<sub>2<\/sub> generated in the manufacturing process and sell it as liquefied carbon dioxide to reduce CO<sub>2<\/sub> emissions.<br><br>The calculation of GHG emissions and energy consumption has undergone third-party verification (see <a href=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2025\/09\/Third-party-Verification-Report-on-GHG_2025_EN.pdf\" target=\"_blank\" rel=\"noopener\" title=\"\">Third-party Verification Report on GHG<\/a>).<\/p>\n\n\n\n<p class=\"has-text-color\" style=\"color:#6c7872;font-size:12px\">*1&nbsp;Including a carbon credit offset of 58,000 tons of CO<sub>2<\/sub> emissions (6.9% reduction from the FY2014 level) due to the purchase of carbon offset city gas.<\/p>\n\n\n\n<p style=\"font-size:18px;font-style:normal;font-weight:600\">Trend in GHG Emissions (in Japan)<\/p>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"517\" height=\"346\" src=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2025\/09\/G-5-3_Trend-in-GHG-Emissions_2509_en.jpg\" alt=\"\" class=\"wp-image-17449\" style=\"width:506px;height:319px\" srcset=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2025\/09\/G-5-3_Trend-in-GHG-Emissions_2509_en.jpg 517w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2025\/09\/G-5-3_Trend-in-GHG-Emissions_2509_en-300x201.jpg 300w\" sizes=\"(max-width: 517px) 100vw, 517px\" \/><figcaption class=\"wp-element-caption\">Note: We partly changed the aggregation method of GHG emissions.<\/figcaption><\/figure>\n\n\n\n<div class=\"wp-block-cover is-light wp-elements-d3bc8938237cbf4dc659c5de3ca0bdc5\" style=\"min-height:379px;aspect-ratio:unset;\"><span aria-hidden=\"true\" class=\"wp-block-cover__background has-background-dim-20 has-background-dim has-background-gradient\" style=\"background:linear-gradient(135deg,rgb(238,238,238) 0%,rgb(169,184,195) 0%)\"><\/span><div class=\"wp-block-cover__inner-container is-layout-flow wp-block-cover-is-layout-flow\">\n<div class=\"wp-block-cover is-light\" style=\"min-height:181px;aspect-ratio:unset;\"><span aria-hidden=\"true\" class=\"wp-block-cover__background has-white-background-color has-background-dim-100 has-background-dim\"><\/span><div class=\"wp-block-cover__inner-container is-layout-flow wp-block-cover-is-layout-flow\">\n<h4 class=\"wp-block-heading\">Employee\u2019s Voice<br><strong>Energy saving through distillation column modification<\/strong><\/h4>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-1 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:66.66%\">\n<p>The department I belong to manufactures N-Vinylpyrrolidone (NVP). In the NVP manufacturing process, after synthesizing the intermediate N-(2-Hydroxyethyl)-2-pyrrolidone (HEP), the by-product water is recovered in the distillation column and reused in the preceding reaction. However, the distillate contains many high-boiling impurities other than water, and most of the recovered water had to be incinerated as wastewater. This increased fuel consumption for incineration and raised concerns about carbon dioxide emissions from combustion.<\/p>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:33.33%\">\n<figure class=\"wp-block-image size-full is-resized\"><img decoding=\"async\" src=\"https:\/\/www.shokubai.co.jp\/ja\/wpdir\/wp-content\/uploads\/2025\/08\/G-5-3_2507_interview_T.Matsuhashi.jpg\" alt=\"\" class=\"wp-image-21581\" style=\"width:149px;height:auto\"\/><figcaption class=\"wp-element-caption\">Takuma Matsuhashi<br>1st Production Section<br>Kawasaki Plant<\/figcaption><\/figure>\n<\/div>\n<\/div>\n\n\n\n<p>To reduce the amount of wastewater, impurities in the distillate must be reduced. Upon investigation, we found that the upper temperature in the distillation column was higher than the expected temperature, and appropriate operating conditions were not being maintained. Therefore, in cooperation with the Technology Department, we analyzed the relationship between the temperature inside the distillation column and the amount of impurities in the distillate using computer simulations based on accumulated data from previous manufacturing processes. We identified the malfunctioning parts of the distillation column and proceeded with modification work to improve it.<br>The challenging part was that the modification work had to be carried out between NVP production runs. I coordinated with related departments within the company, created modification plans, revised production plans, prepared operation schedules, and supervised the construction.<br>After the modification, the distillate with reduced impurities is now being recycled as raw water. The elimination of wastewater incineration has reduced city gas consumption, achieving energy savings equivalent to 67.9 kiloliters of crude oil annually. Additionally, carbon dioxide emissions from combustion have been reduced by 134 tons annually.<br>Through this improvement activity, I have re-recognized the importance of reviewing equipment design and operating conditions. I will continue to aim to completely avoid accidents and injuries and ensure stable operation of the plant. Additionally, we will strive to identify and eliminate waste, unevenness, and overburden, and pursue optimal plant operation.<\/p>\n<\/div><\/div>\n<\/div><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Fluorocarbon emission control<\/h3>\n\n\n\n<p>The Act on Rational Use and Proper Management of Fluorocarbons, which covers the entire lifecycle of fluorocarbons from production to disposal, went into effect in April 2015, and regulations for disposing of certain equipment were further tightened in April 2020.<br>As a manager of Class I specified products, the Company conducts the legally mandated simple inspections and routine inspections according to plans. Additionally, our calculations of leaked fluorocarbons in FY2024 revealed leakage of 144 t-CO<sub>2<\/sub>e from the Himeji Plant, 2,684 t-CO<sub>2<\/sub>e from the Kawasaki Plant, and 2,931 t-CO<sub>2<\/sub>e Company-wide. We intend to make efforts to reduce leaked fluorocarbons\u2014an activity that facilitates climate change mitigation\u2014by intensifying inspections and maintenance, upgrading to equipment that uses coolants with low global warming and ozone depletion potential, and properly disposing of equipment.<\/p>\n\n\n\n<p style=\"font-size:18px;font-style:normal;font-weight:600\">Calculations of Leaked Fluorocarbons in FY2024<\/p>\n\n\n\n<figure class=\"wp-block-flexible-table-block-table\"><figcaption style=\"text-align:right\">(t-CO<sub>2<\/sub>e)<\/figcaption><table class=\"has-fixed-layout\"><tbody><tr><th>Himeji Plant<\/th><th>Kawasaki Plant<\/th><th>Others<\/th><th>Entire company<\/th><\/tr><tr><td style=\"text-align:right\">144<\/td><td style=\"text-align:right\">2,684<\/td><td style=\"text-align:right\">102<\/td><td style=\"text-align:right\">2,931<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"anc03\">Promoting Reduction of GHG Emissions Resulting from Our Entire Supply Chain<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">Calculating Scope 3 emissions<\/h3>\n\n\n\n<p>The GHG Protocol classifies GHG emissions into three classes: Scope 1, Scope 2, and Scope 3, which are the total GHG emissions attributable to business activities throughout supply chains for all categories.<\/p>\n\n\n\n<ul class=\"m_labelList\">\r\n<li><b class=\"label\">Scope 1<\/b><div>Direct GHG emissions by the reporting company itself (e.g. fuel combustion, industrial process)<\/div><\/li>\r\n<li style=\"margin-top: 20px\"><b class=\"label\">Scope 2<\/b><div>Indirect emissions from the use of electricity, heat, or steam supplied by others<\/div><\/li>\r\n<li style=\"margin-top: 20px\"><b class=\"label\">Scope 3<\/b><div>Indirect emissions other than Scope 1 and Scope 2 (emissions by others related to the company&#8217;s activities)<\/div><\/li>\r\n<!-- \/.m_labelList --><\/ul>\n\n\n\n<p>Nippon Shokubai will continue to calculate Scope 3 emissions and explore the possibility of reducing GHG emissions resulting from all corporate activities.<\/p>\n\n\n\n<p style=\"font-size:18px;font-style:normal;font-weight:600\">Trend in Scope 3 Emissions (Data for Nippon Shokubai alone)<\/p>\n\n\n\n<figure class=\"wp-block-flexible-table-block-table\"><figcaption style=\"text-align:right\">(1,000 t-CO<sub>2<\/sub>e)<\/figcaption><table class=\"has-fixed-layout\"><tbody><tr><th rowspan=\"2\" style=\"width:8%\">No.<\/th><th rowspan=\"2\" style=\"width:250px\">Category<\/th><th colspan=\"3\" style=\"text-align:center;width:50%\"><strong>Emissions<\/strong><\/th><\/tr><tr><th style=\"width:50%\"><strong>FY202<\/strong>2<\/th><th>FY2023<\/th><th>FY2024<\/th><\/tr><tr><td style=\"text-align:center;width:8%\">1<\/td><td style=\"width:250px\">Purchased goods and services <\/td><td style=\"text-align:right;width:50%\">1,370<\/td><td style=\"text-align:right\">1,462<\/td><td style=\"text-align:right\">1,408<\/td><\/tr><tr><td style=\"text-align:center;width:8%\">2<\/td><td style=\"width:250px\">Capital goods <\/td><td style=\"text-align:right;width:50%\">43<\/td><td style=\"text-align:right\">49<\/td><td style=\"text-align:right\">88<\/td><\/tr><tr><td style=\"text-align:center;width:8%\">3<\/td><td style=\"width:250px\">Fuel- and energy-related activities not included in Scope 1 or Scope 2<\/td><td style=\"text-align:right;width:50%\">89<\/td><td style=\"text-align:right\">97<\/td><td style=\"text-align:right\">95<\/td><\/tr><tr><td style=\"text-align:center;width:8%\">4<\/td><td style=\"width:250px\">Upstream transportation and distribution <\/td><td style=\"text-align:right;width:50%\">13<\/td><td style=\"text-align:right\">14<\/td><td style=\"text-align:right\">14<\/td><\/tr><tr><td style=\"text-align:center;width:8%\">5<\/td><td style=\"width:250px\">Waste generated in operations <\/td><td style=\"text-align:right;width:50%\">5<\/td><td style=\"text-align:right\">5<\/td><td style=\"text-align:right\">4<\/td><\/tr><tr><td style=\"text-align:center;width:8%\">6<\/td><td style=\"width:250px\">Business travel <\/td><td style=\"text-align:right;width:50%\">0.3<\/td><td style=\"text-align:right\">0.3<\/td><td style=\"text-align:right\">0.3<\/td><\/tr><tr><td style=\"text-align:center;width:8%\">7<\/td><td style=\"width:250px\">Employee commuting <\/td><td style=\"text-align:right;width:50%\">0.9<\/td><td style=\"text-align:right\">0.9<\/td><td style=\"text-align:right\">0.9<\/td><\/tr><tr><td style=\"text-align:center;width:8%\">12<\/td><td style=\"width:250px\">End-of-life treatment of sold products <\/td><td style=\"text-align:right;width:50%\">1,884<\/td><td style=\"text-align:right\">1,798<\/td><td style=\"text-align:right\">1,811<\/td><\/tr><\/tbody><tfoot><tr><td colspan=\"2\" style=\"width:8%\">Total<\/td><td style=\"text-align:right;width:50%\">3,405<\/td><td style=\"text-align:right\">3,426<\/td><td style=\"text-align:right\">3,421<\/td><\/tr><\/tfoot><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Initiatives for the reduction of Scope 3 emissions<\/h3>\n\n\n\n<p>In order to contribute to the reduction of Scope 3 emissions, the following items will also be strongly promoted.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Development and expansion of Environmental Contribution Products (products that contribute to the reduction of CO<sub>2<\/sub> emissions when used, etc.)<\/li>\n\n\n\n<li>Development and dissemination of CO<sub>2<\/sub> recovery and recycling technology (carbon recycling technology)<\/li>\n\n\n\n<li>Development and social implementation of material recycling and chemical recycling<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"anc04\">Internal Carbon Pricing (ICP)<\/h2>\n\n\n\n<p>We have implemented internal carbon pricing (ICP) to promote low carbonization\/decarbonization in corporate management on February 1, 2023.<br>In utilizing the ICP, we will raise awareness of Group\u2019s commitment to decarbonization, promoting energy saving, and activate discussion about opportunities\/risks concerning CO<sub>2<\/sub> emission reductions.<br>This system is accelerating &#8220;Strategic Transformation for Environmental Initiatives&#8221; of our &#8220;three transformations&#8221; set forth in our long-term vision.<\/p>\n\n\n\n<figure class=\"wp-block-flexible-table-block-table\"><figcaption>Outline of ICP<\/figcaption><table class=\"has-fixed-layout\" style=\"border-color:#ffffff\"><tbody><tr><td style=\"vertical-align:top;width:200px\">ICP<\/td><td>10,000 yen\/t-CO<sub>2<\/sub><br>Shadow price set with reference to domestic and international carbon prices.<\/td><\/tr><tr><td style=\"vertical-align:top;width:200px\">Method of application<\/td><td>The costs will be calculated using ICP based on a change of CO<sub>2<\/sub> emissions and used as a criterion for investment decisions.<\/td><\/tr><tr><td style=\"width:200px\">Range of application<\/td><td>Nippon Shokubai Group<\/td><\/tr><tr><td style=\"width:200px\">GHG Scope<\/td><td>Scope 1 and Scope 2<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><\/p>\n<\/div>\n\n\n\n<div class=\"arkb-tabBody__content ark-keep-mt--s\" id=\"tab-9a66b2ad-1\" role=\"tabpanel\" aria-hidden=\"true\">\n<h2 class=\"wp-block-heading\">Contents<\/h2>\n\n\n\n<p>1.<a href=\"#anc10\" title=\"\">Introduction<\/a><br>2.<a href=\"#anc11\" title=\"\">Governance<\/a><br>\u3000\uff65<a href=\"#anc12\" title=\"\">Management System for promoting sustainability<\/a><br>\u3000\uff65<a href=\"#anc13\" title=\"\">Roles of the Board of Directors<\/a><br>\u3000\uff65<a href=\"#anc14\" title=\"\">Roles of the Sustainability Promotion Committee<\/a><br>\u3000\uff65<a href=\"#anc15\" title=\"\">Role of Subcommittees<\/a><br>3.<a href=\"#anc16\" title=\"\">Risk Management<\/a><br>\u3000\uff65<a href=\"#anc17\" title=\"\">Risk Management System<\/a><br>4.<a href=\"#anc18\" title=\"\">Strategy<\/a><br>\u3000\uff65<a href=\"#anc19\" title=\"\">Definition of Scenarios for Analysis<\/a><br>\u3000\uff65<a href=\"#anc20\" title=\"\">Scenarios for Analysis<\/a><br>\u3000\uff65<a href=\"#anc21\" title=\"\">Risks and Opportunities<\/a><br>5.<a href=\"#anc22\" title=\"\">Metrics and Targets<\/a><br>\u3000\uff65<a href=\"#anc23\" title=\"\">Tackling Climate-related Risks<\/a><br>\u3000\uff65<a href=\"#anc24\" title=\"\">Addressing Climate-related Opportunities<\/a><\/p>\n\n\n\n<ul class=\"wp-block-list m_notesList s_small\">\n<li>The product names in this text are written using the abbreviations below.<br>AA: Acrylic acid, EA: Ethanolamine, EG: Ethylene glycol, EO: Ethylene oxide, SAP: Superabsorbent polymers.<\/li>\n<\/ul>\n\n\n\n<p>For the purposes of climate-related disclosures in accordance with the TCFD recommendations, \u201cthe Company\u201d refers to NIPPON SHOKUBAI CO., LTD., and \u201cthe Group\u201d refers to NIPPON SHOKUBAI CO., LTD. together with its consolidated subsidiaries.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"anc10\">Introduction<\/h2>\n\n\n\n<p>The Group recognizes the transition of social systems and changes in the natural environment driven by climate change as critical management issues. In March 2021, the Group expressed its support for the TCFD recommendations. Since April 2022, the Group has been disclosing information aligned with the TCFD framework while continuously reviewing and enhancing its initiatives.<br>The Group places the highest priority on reducing greenhouse gas (GHG) emissions as part of its response to climate change. The Group supports the Paris Agreement and pursues initiatives aligned with the 1.5\u00b0C global warming limit relative to pre-industrial levels.<\/p>\n\n\n\n<p><strong>Boundary of Disclosure: Overview of Our Businesses and GHG Emissions\/Reductions<\/strong><\/p>\n\n\n\n<p><strong>Materials Business<\/strong><\/p>\n\n\n\n<p>The Materials Business accounts for more than 70% of the Group\u2019s revenue and provides products that support daily life worldwide. Stable procurement of raw materials and energy is essential, and this business accounts for the majority of the Group\u2019s GHG emissions. The Group therefore continues to advance reduction measures at each site.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"789\" height=\"319\" src=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/Core-technology-and-value-chain_260312_en.jpg\" alt=\"\" class=\"wp-image-19880\" srcset=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/Core-technology-and-value-chain_260312_en.jpg 789w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/Core-technology-and-value-chain_260312_en-300x121.jpg 300w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/Core-technology-and-value-chain_260312_en-768x311.jpg 768w\" sizes=\"(max-width: 789px) 100vw, 789px\" \/><\/figure>\n\n\n\n<p><strong>Solutions Business<\/strong><\/p>\n\n\n\n<p>Many products in this business are expected to contribute to solving environmental challenges, including GHG reduction. Under the <a href=\"https:\/\/www.shokubai.co.jp\/en\/ir\/assets\/pdf\/management\/vision\/mid-term_managementplan.pdf\" target=\"_blank\" rel=\"noopener\" title=\"\">Mid-Term Management Plan 2027<\/a> (p.16), the Group is promoting business development in Growth business areas that require technological innovation to address climate change.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"324\" src=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/G-5-3_Solutions_260325_en-1024x324.png\" alt=\"\" class=\"wp-image-20066\" srcset=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/G-5-3_Solutions_260325_en-1024x324.png 1024w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/G-5-3_Solutions_260325_en-300x95.png 300w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/G-5-3_Solutions_260325_en-768x243.png 768w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/G-5-3_Solutions_260325_en.png 1383w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"anc11\">Governance<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"anc12\">Management System for Promoting Sustainability<\/h3>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-2 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<p>Sustainability Promotion Committee chaired by the president has been organized to implement sustainability initiatives, including climate-related initiatives.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.shokubai.co.jp\/en\/sustainability\/concept\/management\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Sustainability Management&nbsp;\/ Materiality<\/a><\/li>\n<\/ul>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"724\" height=\"823\" src=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/G-3-1_Management-System-for-promoting-sustainability_260401_en.jpg\" alt=\"\" class=\"wp-image-19982\" srcset=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/G-3-1_Management-System-for-promoting-sustainability_260401_en.jpg 724w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/G-3-1_Management-System-for-promoting-sustainability_260401_en-264x300.jpg 264w\" sizes=\"(max-width: 724px) 100vw, 724px\" \/><\/figure>\n<\/div>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"anc13\">Roles of the Board of Directors<\/h3>\n\n\n\n<p>The Board of Directors reports, deliberates and resolves important matters related to business operations, and supervises the business operations of each Director of the Board. In addition, the Board of Directors identifies major Group risks, determines countermeasures and responsible leaders, and supervises overall risk management.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"anc14\">Roles of the Sustainability Promotion Committee<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Determine Group\u2019s policies and strategies relating to promote sustainability initiatives<\/li>\n\n\n\n<li>Direct each department to formulate plans and measures and evaluate their performance and progress<\/li>\n\n\n\n<li>Consider other significant matters relating to promote sustainability initiatives<\/li>\n\n\n\n<li>Disseminate information about the initiatives to stakeholders<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"anc15\">Role of Subcommittees<\/h3>\n\n\n\n<p>Subcommittees are established when cross-functional examination or planning is required for important sustainability matters, including climate-related initiatives.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"anc16\">Risk Management<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"anc17\">Risk Management System<\/h3>\n\n\n\n<p>The Group classifies various internal and external risks that threaten the Group into \u201cserious Group-wide risks\u201d and \u201cdepartment risks,\u201d and develops a risk management system appropriate for each risk category, thereby maintaining and improving our corporate value.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.shokubai.co.jp\/en\/sustainability\/governance\/risk\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Risk Management<\/a><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"540\" src=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/G-7-3_Risk-Management-System_260409-1024x540.jpg\" alt=\"\" class=\"wp-image-20239\" srcset=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/G-7-3_Risk-Management-System_260409-1024x540.jpg 1024w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/G-7-3_Risk-Management-System_260409-300x158.jpg 300w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/G-7-3_Risk-Management-System_260409-768x405.jpg 768w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/G-7-3_Risk-Management-System_260409-1536x810.jpg 1536w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/G-7-3_Risk-Management-System_260409.jpg 1573w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>Climate change and human rights risks are recognized as material issues. Accordingly, the Sustainability Promotion Committee increases review frequency to ensure integrated and effective risk management.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"anc18\">Strategy<\/h2>\n\n\n\n<p>In the materiality review conducted in 2025, the Group has identified \u2018Contribution to Solving Social Issues\u2019 and \u2018Promotion of Environmental Initiatives\u2019 as <a href=\"https:\/\/www.shokubai.co.jp\/en\/sustainability\/concept\/management\/#anc03\" target=\"_blank\" rel=\"noopener\" title=\"\">key material issues<\/a> within its materiality framework, and is advancing climate initiatives accordingly.<\/p>\n\n\n\n<p><strong>Contribution to solving social issues<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Group promotes the development and sale of products that contribute to reducing environmental impact, thereby achieving both business growth and resolution of social issues.<\/li>\n<\/ul>\n\n\n\n<p><strong>Promotion of environmental initiatives<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Group aims to achieve net zero for Scope 1 and Scope 2 by FY2050 and is promoting GHG reductions across the entire supply chain, including reducing product carbon footprints and advancing resource circulation.<\/li>\n\n\n\n<li>In response to progressing climate change, the Group is strengthening water risk assessments and promoting the efficient use of water resources to ensure stable business operations.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"anc19\">Definition of Scenarios for Analysis<\/h3>\n\n\n\n<p>Prior to formulating initiatives, the Company developed two distinct scenarios for analysis to assess the impacts of climate change. These scenarios help identify risks and opportunities related to achieving future business strategies and sustaining current operations. Risks and opportunities are extracted through a cross-functional team involving senior management.<br>The analysis scenarios were developed with reference to <a href=\"https:\/\/www.ipcc.ch\/report\/sixth-assessment-report-working-group-ii\/\" target=\"_blank\" rel=\"noopener\" title=\"\">the Sixth Assessment Report<\/a> of the Intergovernmental Panel on Climate Change (IPCC) and the <a href=\"https:\/\/www.iea.org\/reports\/world-energy-outlook-2024\" target=\"_blank\" rel=\"noopener\" title=\"\">IEA World Energy Outlook 2024<\/a>.<br><br><strong>Paris Agreement-Aligned Scenario (1.5\u20132\u00b0C pathway)<\/strong><br>Assumes strong technological innovation and financial mechanisms to limit global temperature increase to below 2\u00b0C and ideally 1.5\u00b0C.<br>Time horizons: short-term to 2027, mid-term to 2030, long-term to 2050.<\/p>\n\n\n\n<p>The time horizons applied in this scenario analysis are defined as follows<br>\u3000Short term: up to 2027, aligned with the Group\u2019s Mid-Term Management Plan period<br>\u3000Medium term: up to 2030, aligned with the Group\u2019s interim GHG emissions reduction target<br>\u3000Long term: up to 2050, aligned with the Group\u2019s net-zero target<\/p>\n\n\n\n<p><strong>Current Policies Scenario (approx. 4\u00b0C\u2013 pathway)<\/strong><br>Based on extensions of 2023 national policies. <a href=\"https:\/\/climateactiontracker.org\/documents\/1277\/CAT_2024-11-14_GlobalUpdate_COP29.pdf\" target=\"_blank\" rel=\"noopener\" title=\"\">Climate Action Tracker (Nov 2024)<\/a> projects an over 4\u00b0C rise by 2100.<\/p>\n\n\n\n<p>\u3000\u3000<a id=\"_msocom_1\"><\/a><\/p>\n\n\n\n<div class=\"ark-block-step is-style-default\">\n<div class=\"ark-block-step__item\"><div class=\"ark-block-step__head\"><div class=\"ark-block-step__number\"><span class=\"__label\">STEP<\/span><\/div><div class=\"ark-block-step__title\">&nbsp;Identification of External Environmental Changes<\/div><\/div><div class=\"ark-block-step__body ark-keep-mt--s\">\n<p>External environmental change factors were identified by reviewing disclosures by suppliers, industry peers, and customers (A), as well as ESG evaluation criteria.<\/p>\n<\/div><\/div>\n\n\n\n<div class=\"ark-block-step__item\"><div class=\"ark-block-step__head\"><div class=\"ark-block-step__number\"><span class=\"__label\">STEP<\/span><\/div><div class=\"ark-block-step__title\">Development of Scenarios for Analysis<\/div><\/div><div class=\"ark-block-step__body ark-keep-mt--s\">\n<p>Based on the recommendations of the TCFD, the Company developed <strong>company\u2011specific analysis scenarios (B)<\/strong> for use in its risk and opportunity analysis, with reference to climate-related scenarios published by the IEA, the IPCC, and other sources, while also taking into account the matters identified in (A).<\/p>\n<\/div><\/div>\n\n\n\n<div class=\"ark-block-step__item\"><div class=\"ark-block-step__head\"><div class=\"ark-block-step__number\"><span class=\"__label\">STEP<\/span><\/div><div class=\"ark-block-step__title\">Assessment of Business Impacts<\/div><\/div><div class=\"ark-block-step__body ark-keep-mt--s\">\n<p>Based on the analysis scenarios (B), business impacts were assessed, reflecting discussions held by the Sustainability Promotion Committee, relevant subcommittees, and deliberations related to the Mid\u2011Term Management Plan.<br>\u2192 The results were reviewed and discussed by senior management.<\/p>\n<\/div><\/div>\n\n\n\n<div class=\"ark-block-step__item\"><div class=\"ark-block-step__head\"><div class=\"ark-block-step__number\"><span class=\"__label\">STEP<\/span><\/div><div class=\"ark-block-step__title\">Identification of Risks and Opportunities and Related Initiatives<\/div><\/div><div class=\"ark-block-step__body ark-keep-mt--s\">\n<p>Based on directions from the Sustainability Promotion Committee, initiatives are being implemented in line with the Company\u2019s management plans and enterprise risk management framework.<\/p>\n<\/div><\/div>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"anc20\">Scenarios for Analysis<\/h3>\n\n\n\n<p><strong>Scenario for Analysis 1: Achievement of the Paris Agreement Goals (1.5\u20132\u00b0C)&nbsp;<\/strong><br>&nbsp;(A scenario developed with reference to the IEA NZE 2050 and the IPCC SSP1\u20111.9)<\/p>\n\n\n\n<figure class=\"wp-block-flexible-table-block-table\"><table class=\"has-fixed-layout\" style=\"border-collapse:separate;border-radius:20px;border-right-color:#ffffff;border-bottom-color:#ffffff;border-left-color:#ffffff\"><tbody><tr><td style=\"border-top-left-radius:20px;width:5%;background-color:#bef4de;border-top-color:#ffffff;border-left-color:#ffffff\"><\/td><th colspan=\"2\" style=\"vertical-align:top\">Political, Environmental, Social, Technological<\/th><\/tr><tr><td rowspan=\"10\" style=\"width:5%;text-align:center;background-color:#bef4de;border-bottom-color:#ffffff;border-left-color:#ffffff\"><img loading=\"lazy\" decoding=\"async\" width=\"103\" height=\"2180\" class=\"wp-image-20072\" style=\"width: 103px;\" src=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/G-5-3_yazirushi_0325.png\" alt=\"\"><\/td><td style=\"vertical-align:top\">\u25a0Natural Environment<br>&#8211; Increase in extreme weather events and natural disasters (medium to long term)<br>&#8211; Higher frequency of wind and flood damage<br>&#8211; Ecosystem changes, with several percent of species facing extinction<br>&#8211; Reduction of habitable areas, particularly in low-lying coastal regions<\/td><td style=\"vertical-align:top\">\u25a0Technology<br>&#8211; Expansion of environmental technologies and accelerated use of digital technologies<br>&#8211; Progress in renewable energy and energy-saving technologies<br>&#8211; Accelerated innovation driven by digital technologies<\/td><\/tr><tr><td style=\"vertical-align:top\">\u25a0Society<br>&#8211; Shift toward reduced consumption and stronger environmental orientation<br>&#8211; Widespread adoption of product collection and reuse businesses<br>&#8211; Aging populations in developed countries and population growth in developing countries<\/td><td style=\"vertical-align:top\">\u25a0Policy<br>&#8211; Progress in climate change mitigation under international cooperation<br>&#8211; Widespread adoption of carbon pricing mechanisms<br>&#8211; Expansion of the circular economy (use of recycled materials)<br>&#8211; Expansion of mandatory non-financial disclosures<br>&#8211; Strengthening of environmental regulations<\/td><\/tr><tr><td style=\"border-color:#ffffff\"><\/td><td style=\"border-color:#ffffff\"><\/td><\/tr><tr><th colspan=\"2\">Value Chain Stakeholder Impacts<\/th><\/tr><tr><td style=\"vertical-align:top\">\u25a0Suppliers<br>&#8211; Higher raw material and energy costs<br>&#8211; Reduced supply stability<br>&#8211; Stronger CSR sourcing and non-financial disclosure requirements<\/td><td rowspan=\"2\" style=\"vertical-align:top\">\u25a0Customers (B2B) \/ Markets<br>&#8211; Demand for improved product carbon footprints<br>&#8211; Requests for renewable energy and sustainable input<br>&#8211; Increased participation in CSR\/ESG procurement assessments<br>&#8211; Expansion of renewable energy\u2013related markets<br>&#8211; Growing investment in low-carbon and environmental technologies<\/td><\/tr><tr><td>\u25a0Shareholders \/ Investors<br>&#8211; Expansion of ESG investment products<br>&#8211; Increased expectations for non-financial disclosure<\/td><\/tr><tr><td style=\"border-color:#ffffff\"><\/td><td style=\"border-color:#ffffff\"><\/td><\/tr><tr><th colspan=\"2\">Risks and Opportunities for the Group<\/th><\/tr><tr><th><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-green-cyan-color\">Risks<\/mark><\/th><th><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-green-cyan-color\">Opportunities<\/mark><\/th><\/tr><tr><td style=\"vertical-align:top\">&#8211; GHG emission costs under established carbon pricing<br>&#8211; Higher procurement costs driven by strengthened climate policies<br>&#8211; Delayed compliance with GHG regulations and non-financial disclosure requirements<br>&#8211; Business impacts from changing market and customer requirements<\/td><td style=\"vertical-align:top;border-bottom-right-radius:20px\">&#8211; Wider adoption of renewable energy\u2013related technologies<br>&#8211; Increased investment in technologies to reduce environmental impact<br>&#8211; Enhanced corporate credibility through appropriate non-financial disclosures<br>&#8211; Operational improvements and solution offerings through digital technologies<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Scenario for Analysis 2: Current Policies \/ Business-as-Usual Scenario (4\u00b0C\u2013)<\/strong><br>(A scenario developed with reference to the IEA STEPS and the IPCC SSP5\u20118.5.)<\/p>\n\n\n\n<figure class=\"wp-block-flexible-table-block-table\"><table class=\"has-fixed-layout\" style=\"border-collapse:separate;border-radius:20px;border-right-color:#ffffff;border-bottom-color:#ffffff;border-left-color:#ffffff\"><tbody><tr><td style=\"background-color:#bef4de;border-top-left-radius:20px;width:5%\"><\/td><th colspan=\"2\" style=\"vertical-align:top\">Political, Environmental, Social, Technological<\/th><\/tr><tr><td rowspan=\"10\" style=\"background-color:#bef4de;width:5%;text-align:center\"><img loading=\"lazy\" decoding=\"async\" width=\"89\" height=\"1884\" class=\"wp-image-20072\" style=\"width: 89px;\" src=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2026\/03\/G-5-3_yazirushi_0325.png\" alt=\"\"><\/td><td style=\"vertical-align:top\">\u25a0Natural Environment<br>&#8211; Intensification of extreme weather events and natural disasters (medium to long term)<br>&#8211; Sharp increase in species extinction, particularly in tropical regions<br>&#8211; Reduction of habitable areas, mainly in coastal regions<br>&#8211; Severe localized water scarcity<\/td><td style=\"vertical-align:top\">\u25a0Technology<br>&#8211; Continued advancement in the use of digital technologies<br>&#8211; Accelerated innovation driven by digital technologies<\/td><\/tr><tr><td style=\"vertical-align:top\">\u25a0Society<br>&#8211; Limited shift toward reduced consumption and environmental awareness<br>&#8211; Continued consumption of petrochemical-dependent products<br>&#8211; Aging populations in developed countries and population growth in developing countries<\/td><td style=\"vertical-align:top\">\u25a0Policy<br>&#8211; Carbon pricing limited to certain regions, creating trade distortions<br>&#8211; Environmental regulations applied unevenly across regions<\/td><\/tr><tr><td style=\"border-color:#ffffff\"><\/td><td style=\"border-color:#ffffff\"><\/td><\/tr><tr><th colspan=\"2\">Value Chain Stakeholder Impacts<\/th><\/tr><tr><td rowspan=\"2\" style=\"vertical-align:top\">\u25a0Suppliers<br>&#8211; Sustained demand and prices for fossil fuels and feedstocks<br>&#8211; Higher water costs due to water scarcity<br>&#8211; Facility damage from intensified natural disasters<\/td><td>\u25a0Customers (B2B) \/ Markets<br>&#8211; Non-financial disclosure requests from selected customers<br>&#8211; Slower growth of decarbonization-related markets<\/td><\/tr><tr><td>\u25a0Shareholders \/ Investors<br>&#8211; Non-financial disclosure expectations concentrated in developed markets<\/td><\/tr><tr><td style=\"border-color:#ffffff\"><\/td><td style=\"border-color:#ffffff\"><\/td><\/tr><tr><th colspan=\"2\">Risks and Opportunities for the Group<\/th><\/tr><tr><th><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-green-cyan-color\">Risks<\/mark><\/th><th><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-green-cyan-color\">Opportunities<\/mark><\/th><\/tr><tr><td style=\"vertical-align:top\">&#8211; Limited delays in GHG regulation and disclosure compliance<br>&#8211; Reduced returns on decarbonization investments<br>&#8211; Facility damage and supply disruptions from extreme events<br>&#8211; Regional constraints on water availability<\/td><td style=\"vertical-align:top;border-bottom-right-radius:20px\">&#8211; Enhanced credibility through non-financial disclosures<br>&#8211; Growing demand for water production and desalination technologies<br>&#8211; Process improvements through digital technologies<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"anc21\">Risks and Opportunities<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\">Impact Assessment and Initiatives for Risks (Transition Risks and Physical Risks)<\/h4>\n\n\n\n<p>For the identified risks, the Group assessed the underlying assumptions, impact magnitude, time horizon, and response measures.<\/p>\n\n\n\n<figure class=\"wp-block-flexible-table-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><th style=\"width:7.5%\">Type<\/th><th style=\"width:8%\">Category<\/th><th style=\"width:15.5%\">Item<\/th><th style=\"width:22%\">Underlying assumptions<\/th><th style=\"width:11%\">Impact magnitude<\/th><th style=\"width:9%\">Time horizon<\/th><th style=\"width:25%\">Initiatives<\/th><\/tr><tr><td rowspan=\"4\" style=\"width:7.5%\">Transition<br>1.5\u20132\u00b0C<\/td><td style=\"width:8%\">Policy<\/td><td style=\"width:15.5%\">GHG emission costs under established carbon pricing<\/td><td style=\"width:22%\">&#8211; Higher product costs from the internalization of Scope 1 and Scope 2 emissions due to expanded carbon taxes and ETS<sup>*1<\/sup><\/td><td style=\"width:11%\">Low (medium term)<br>High (long term)<\/td><td rowspan=\"2\" style=\"width:9%\">Medium term and beyond<\/td><td rowspan=\"2\" style=\"width:25%\">&#8211; Energy efficiency and process improvements aligned with the GHG reduction roadmap<br>&nbsp;<br>&#8211; Evaluation of energy transition and CCUS options (long term)<br>&nbsp;<br>&#8211; ISCC PLUS\u2013certified biomass utilization<br>&nbsp;<br>&#8211; Appropriate calculation and disclosure of product carbon footprints<\/td><\/tr><tr><td style=\"width:8%\">Market<\/td><td style=\"width:15.5%\">Business impacts from changing market and customer requirements<\/td><td style=\"width:22%\">&#8211; Higher production costs driven by increased demand for renewable energy, sustainable feedstocks, and materials<sup>*2<\/sup><\/td><td style=\"width:11%\">Low (medium term)<br>Medium (long term)<\/td><\/tr><tr><td style=\"width:8%\">Policy<\/td><td style=\"width:15.5%\">Higher procurement costs driven by strengthened climate policies<\/td><td style=\"width:22%\">&#8211; Rising raw material and energy costs due to the introduction of carbon taxes and ETS<sup>*3<\/sup><\/td><td style=\"width:11%\">Low (medium term)<br>Medium (long term)<\/td><td style=\"width:9%\">Medium term and beyond<\/td><td style=\"width:25%\">&#8211; Energy efficiency, renewable energy adoption, and use of credits<\/td><\/tr><tr><td style=\"width:8%\">Policy<\/td><td style=\"width:15.5%\">Delayed compliance with GHG regulations and non-financial disclosure requirements<\/td><td style=\"width:22%\">&#8211; Business suspension or loss resulting from delayed compliance with regulations and disclosure requirements<sup>*4<\/sup><\/td><td style=\"width:11%\">Medium<\/td><td style=\"width:9%\">Medium term<\/td><td style=\"width:25%\">&#8211; Strengthened regulatory compliance and non-financial disclosure<\/td><\/tr><tr><td style=\"width:7.5%\">Transition<br>4\u00b0C\u2013<\/td><td style=\"width:8%\">Market<\/td><td style=\"width:15.5%\">Reduced returns on decarbonization investments<\/td><td style=\"width:22%\">&#8211; Difficulty in recovering investments in growth business areas defined in the <a href=\"https:\/\/www.shokubai.co.jp\/en\/ir\/assets\/pdf\/management\/vision\/mid-term_managementplan.pdf\" target=\"_blank\" rel=\"noopener\" title=\"\">Mid-Term Management Plan 2027<\/a>, including decarbonization-related technologies<sup>*5<\/sup><\/td><td style=\"width:11%\">Medium to High<\/td><td style=\"width:9%\">Medium term and beyond<\/td><td style=\"width:25%\">&#8211; Ongoing analysis of market trends and timely investment and exit decisions<\/td><\/tr><tr><td rowspan=\"2\" style=\"width:7.5%\">Physical<br>4\u00b0C\u2013<\/td><td style=\"width:8%\">Natural Environment<\/td><td style=\"width:15.5%\">Facility damage and supply disruptions from extreme events<\/td><td style=\"width:22%\">&#8211; Site shutdowns due to flooding and storm surges<br>Assumption of one-month operational shutdown to loss of site functionality<sup>*6<\/sup><\/td><td style=\"width:11%\">Medium to High<\/td><td style=\"width:9%\">Long term<\/td><td rowspan=\"2\" style=\"width:25%\">&#8211; Continued assessment of flood risk across the supply chain<\/td><\/tr><tr><td style=\"width:8%\">Natural Environment<\/td><td style=\"width:15.5%\">Regional constraints on water availability<\/td><td style=\"width:22%\">&#8211; Temporary constraints on river water use due to drought and other factors<sup>*4<\/sup><\/td><td style=\"width:11%\">Medium<\/td><td style=\"width:9%\">Long term<\/td><\/tr><\/tbody><\/table><figcaption>[Impact Magnitude] <strong>Low<\/strong>: 1 billion yen or more, <strong>Medium<\/strong>: 5 billion yen or more, <strong>High<\/strong>: 10 billion yen or more<br>[Time Horizon] <strong>Short term<\/strong>: Corresponding mid-term management plan period (up to 3 years) , <strong>Medium term<\/strong>: Corresponding long-term vision period (up to 10 years) , <strong>Long term<\/strong>: Up to 2050<\/figcaption><\/figure>\n\n\n\n<ol class=\"wp-block-list m_notesNumList s_small\">\n<li>Long term: Assuming that a carbon price of 10,000 yen per t-CO<sub>2<\/sub> is applied to the entire consolidated Scope 1 and Scope 2 emissions of 1,000 thousand tons in FY2024, resulting in an estimated impact of 10 billion yen.\u3000<\/li>\n\n\n\n<li>Long term: Assuming that 260 thousand tons of consolidated purchased energy emissions (Scope 2) in FY2024 are electricity-related, and applying a carbon price of 10,000 yen per t-CO<sub>2<\/sub>, the estimated impact is approximately 2.5 billion yen.\u3000<\/li>\n\n\n\n<li>Cost information is not disclosed due to its sensitive nature; however, based on FY2024 consolidated revenue of 244 billion yen and ordinary income of 17.7 billion yen, the estimated impact is considered to be at a medium level.<\/li>\n\n\n\n<li>For example, consolidated revenue of NIPPON SHOKUBAI EUROPE N.V. (NSE) in FY2024 was 54 billion yen. (The standalone sales revenue information for NSE is based on data from Japan&#8217;s statutory Securities Report (Yukashoken-Hokokusho) issued on June 17, 2025.) A one-month business suspension would result in an estimated impact of approximately 5 billion yen.\u3000<\/li>\n\n\n\n<li>Assuming that part of the related investments of 90 billion yen made during the period cannot be recovered.<\/li>\n\n\n\n<li>Assumptions range from a one-month business suspension as described in (*4) to irreversible damage resulting in loss of site functionality.<\/li>\n<\/ol>\n\n\n\n<h4 class=\"wp-block-heading\">Impact Assessment and initiatives for Opportunities<\/h4>\n\n\n\n<p>For the identified opportunities, the Group assessed the underlying assumptions, impact magnitude, time horizon, and initiatives.<\/p>\n\n\n\n<figure class=\"wp-block-flexible-table-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><th style=\"width:7.5%\">Type<\/th><th style=\"width:8%\">Category<\/th><th style=\"width:15.5%\">Item<\/th><th style=\"width:16.5%\">Underlying assumptions<\/th><th style=\"width:10%\">Impact magnitude<\/th><th style=\"width:10%\">Time horizon<\/th><th style=\"width:30.5%\">Initiatives<\/th><\/tr><tr><td rowspan=\"5\" style=\"width:7.5%;vertical-align:middle\">Transition<br>1.5\u20132\u00b0C<\/td><td style=\"width:8%\">Policy<\/td><td style=\"width:15.5%\">Wider adoption of renewable energy\u2013related technologies<\/td><td style=\"width:16.5%\">&#8211; Profit indicators for batteries and hydrogen in the Mid-Term Management Plan 2027 (operating profit + equity-method investment gains)<sup>*1<\/sup><\/td><td style=\"width:10%\">Medium to High (profit indicator)<\/td><td style=\"width:10%\">Short to Medium term<\/td><td style=\"width:30.5%\">&#8211; Battery business expansion<br>Short term: Capture strong demand growth in the Chinese market<br>Medium term: Establish localized production aligned with local-for-local strategy<br><em>(New facilities in Japan, capacity expansion in China, continued evaluation in North America)<\/em><br>&#8211; Deployment of technologies supporting the hydrogen supply chain<\/td><\/tr><tr><td style=\"width:8%\">Market<\/td><td style=\"width:15.5%\">Increased investment in technologies to reduce environmental impact (Business)<\/td><td style=\"width:16.5%\">&#8211; Profit indicators for water treatment and CO<sub>2<\/sub> capture in the Mid-Term Management Plan 2027<sup>*2<\/sup><\/td><td style=\"width:10%\">Low to Medium (profit indicator)<\/td><td style=\"width:10%\">Short to Medium term<\/td><td style=\"width:30.5%\">Short term: Strengthen sales expansion in resilient water-related markets<br>Medium term: Market expansion of related products aligned with growing demand for environmental impact reduction<\/td><\/tr><tr><td style=\"width:8%\">Market<\/td><td style=\"width:15.5%\">Increased investment in technologies to reduce environmental impact (R&amp;D investment)<\/td><td style=\"width:16.5%\">&#8211; To be validated through demonstration and deployment<\/td><td style=\"width:10%\">\u2015<\/td><td style=\"width:10%\">Medium term and beyond<\/td><td style=\"width:30.5%\">&#8211; Broader adoption of environmental contribution products<br>&#8211; Development of biomass-based AA, SAP, and SAP recycling<\/td><\/tr><tr><td style=\"width:8%\">Pollicy<\/td><td style=\"width:15.5%\">Enhanced corporate credibility through appropriate non-financial disclosures<\/td><td style=\"width:16.5%\">&#8211; Investment and financing opportunities driven by ESG and environmental ratings<sup>*3<\/sup><\/td><td style=\"width:10%\">Medium<\/td><td style=\"width:10%\">Short to Medium term<\/td><td style=\"width:30.5%\">&#8211; Improvement of major ESG ratings, including CDP<br>&#8211; Establishment of systems to address future non-financial disclosure requirements<\/td><\/tr><tr><td style=\"width:8%\">Technology<\/td><td style=\"width:15.5%\">Operational improvements and solution offerings through digital technologies<\/td><td style=\"width:16.5%\">To be validated through demonstration and deployment<\/td><td style=\"width:10%\">\u2015<\/td><td style=\"width:10%\">Short to Medium term<\/td><td style=\"width:30.5%\">&#8211; Productivity improvements and faster time-to-market through digital technologies in manufacturing sites and R&amp;D<\/td><\/tr><tr><td style=\"width:7.5%\">Transition<br>4\u00b0C\u2013<\/td><td style=\"width:8%\">Natural Environment<\/td><td style=\"width:15.5%\">Growing demand for water production and desalination technologies<\/td><td style=\"width:16.5%\">To be validated through demonstration and deployment<\/td><td style=\"width:10%\">\u2015<\/td><td style=\"width:10%\">Medium term and beyond<\/td><td style=\"width:30.5%\">&#8211; Addressing desalination needs in high water-risk regions (e.g., social implementation of forward osmosis desalination systems using draw solutions)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<ol class=\"wp-block-list m_notesNumList s_small\">\n<li>According to the <a href=\"https:\/\/www.shokubai.co.jp\/en\/ir\/assets\/pdf\/management\/vision\/mid-term_managementplan.pdf\" target=\"_blank\" rel=\"noopener\" title=\"\">Mid-Term Management Plan 2027<\/a> (p.14), operating profit related to energy and hydrogen, together with equity-method investment gains and losses, is included in the \u201cOther\u201d segment. Detailed segment-level numerical information is not disclosed due to its sensitive nature. The figures presented represent the differences between FY2030 and FY2024, and between FY2027 and FY2024 (7.3 billion yen by FY2027 and 16.8 billion yen by FY2030).<\/li>\n\n\n\n<li>The same approach as in (*1) is applied to the \u201cSpecialty\u201d segment, which includes water treatment and CO<sub>2<\/sub> capture, with figures of 1.9 billion yen by FY2027 and 6.9 billion yen by FY2030.<\/li>\n\n\n\n<li>Examples of actual achievements include subsidies from IONEL, financing from the Development Bank of Japan (4 billion yen), and grants aligned with national strategies (12 billion yen).<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"anc22\">Metrics and Targets<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"anc23\">Tackling Climate-related Risks<\/h3>\n\n\n\n<p>The Group formulated a roadmap for reducing GHG emissions by 2050 in terms of the \u201cstrategic trans-formation for environmental initiatives,\u201d one of the \u201cthree transformations\u201d set out in \u201cTechnoAmenity for the future,\u201d the Nippon Shokubai Group long-term vision published in April 2021.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.shokubai.co.jp\/en\/sustainability\/environment\/tackling-climate-change\/\" title=\"\">Tackling Climate Change<\/a><\/li>\n<\/ul>\n\n\n\n<p style=\"font-size:18px;font-style:normal;font-weight:600\"><strong>GHG Emissions Reduction Roadmap toward 2050<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"526\" src=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2025\/09\/G-5-3_Roadmap-for-Reducing-GHG-Emissions_250919_en-1024x526.jpg\" alt=\"\" class=\"wp-image-17887\" style=\"width:792px;height:auto\" srcset=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2025\/09\/G-5-3_Roadmap-for-Reducing-GHG-Emissions_250919_en-1024x526.jpg 1024w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2025\/09\/G-5-3_Roadmap-for-Reducing-GHG-Emissions_250919_en-300x154.jpg 300w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2025\/09\/G-5-3_Roadmap-for-Reducing-GHG-Emissions_250919_en-768x395.jpg 768w, https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2025\/09\/G-5-3_Roadmap-for-Reducing-GHG-Emissions_250919_en.jpg 1138w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h4 class=\"wp-block-heading\">Promotion of GHG Emissions Reduction from Business Activities<\/h4>\n\n\n\n<p>Starting in FY2025, the scope of GHG emissions reduction targets has been revised from covering Group companies in Japan only to covering the entire Group, including Group companies outside Japan. Through this revision, the Company is promoting GHG emissions reduction initiatives across the entire Group.<br>As the Group\u2019s aspired future state in responding to climate change, The Group aims to achieve net-zero Scope 1 and Scope 2 emissions by FY2050, and has set an interim target to reduce total Scope 1 and Scope 2 emissions by 30% by FY2030, compared with the base year and on a consolidated Group basis*.<\/p>\n\n\n\n<p class=\"has-text-color\" style=\"color:#6c7872;font-size:12px\">*(In Japan) 30% reduction from FY2014 levels \u3000(Outside Japan) Reduction by [reduction objectives for each company] from [base year for each company] levels<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.shokubai.co.jp\/en\/sustainability\/environment\/tackling-climate-change\/#anc01\" target=\"_blank\" rel=\"noopener\" title=\"\">Tackling Climate Change<\/a><\/li>\n<\/ul>\n\n\n\n<p>\u3000\u3000<\/p>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary>Efforts to Reduce Scope 1 Emissions<\/summary>\n<p>Scope 1 emissions at Nippon Shokubai and its Group companies outside Japan that conduct manufacturing operations can be &nbsp;broadly divided into the following two categories:<\/p>\n\n\n\n<p>&#8211; Emissions from fuel combustion for on-site energy generation and use, including cogeneration, and steam\/heat production in boilers<br>&#8211; Emissions resulting from chemical reactions in production processe<\/p>\n\n\n\n<dl class=\"ark-block-dl\">\n<dt class=\"ark-block-dl__dt\"><span><strong>Initiative 1: Addressing Emissions from Fuel Combustion<\/strong><\/span><\/dt>\n\n\n\n<dd class=\"ark-block-dl__dd ark-keep-mt--s\">\n<p>The Group has largely transitioned the fuels used in cogeneration, boilers, and other stationary combustion to <strong>natural gas<\/strong>, achieving a significant reduction in GHG emissions compared with conventional fuels such as coal and heavy oil.<br>Looking ahead, through collaboration with a wide range of companies and organizations, the Group will continue to examine the use of <strong>carbon-neutral fuels<\/strong>, including <strong>hydrogen, ammonia, and e-methane<\/strong>, as well as the application of <strong>carbon capture, utilization, and storage (CCUS)<\/strong> technologies.<\/p>\n<\/dd>\n\n\n\n<dt class=\"ark-block-dl__dt\"><span>Initiative 2: Addressing Emissions from Chemical Reactions<\/span><\/dt>\n\n\n\n<dd class=\"ark-block-dl__dd ark-keep-mt--s\">\n<p>A significant portion of emissions from chemical reactions arises from catalytic oxidation reactions. Leveraging its core strength in catalyst technologies, Nippon Shokubai is continuously working to improve reaction efficiency, thereby reducing GHG emissions associated with chemical reactions.<br>Through the application of advanced catalyst technologies and ongoing process optimization, the Group will continue to pursue sustained reductions in Scope 1 emissions derived from chemical reactions.<\/p>\n<\/dd>\n<\/dl>\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary>Efforts to Reduce Scope 2 Emissions<\/summary>\n<p>The Group is promoting energy efficiency measures and increasing the use of renewable energy to reduce Scope 2 emissions.<\/p>\n\n\n\n<p>The Group is continuously implementing energy conservation activities at all manufacturing sites.<br>The adoption of renewable energy varies by region and site.<br>In North America and Indonesia, the renewable electricity share of purchased electricity has reached almost 100% through renewable electricity procurement. The Group will further expand the use of renewable energy at its sites in Japan and Europe. As of the end of FY2024, the renewable electricity share of purchased electricity for the Group was approximately 23%.<br>Going forward, the Group will continue to expand renewable energy adoption in a phased manner across the Group while reviewing its energy portfolio.<\/p>\n<\/details>\n\n\n\n<p>\u3000\u3000<\/p>\n\n\n\n<p>[Assurance of Emissions Data Reliability]<br>To ensure the reliability and accuracy of emissions data, the Company annually publishes emissions information that has been verified by an independent third party.<br><strong><a href=\"https:\/\/www.shokubai.co.jp\/en\/wordpress\/wp-content\/uploads\/2025\/09\/Third-party-Verification-Report-on-GHG_2025_EN.pdf\" target=\"_blank\" rel=\"noopener\" title=\"\">Third-party Verification Report of FY2024 GHG emissions<\/a><\/strong><\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Promoting GHG Emissions Reduction Across the Entire Supply Chain<\/h4>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary>Efforts to Reduce Scope 3 Emissions<\/summary>\n<p>Chemical products can affect the environment by consuming natural resources during production, emitting CO<sub>2<\/sub>, and generating waste.<br>To address the challenges of climate change, it is essential to reduce GHG emissions and environmental impacts not only during the production of the Company\u2019s products, but also <strong>across the entire supply chain<\/strong>, including the <strong>use and disposal<\/strong> stages.<\/p>\n\n\n\n<dl class=\"ark-block-dl\">\n<dt class=\"ark-block-dl__dt\"><span>Initiative 1: Utilization of Biomass-based Raw Materials<\/span><\/dt>\n\n\n\n<dd class=\"ark-block-dl__dd ark-keep-mt--s\">\n<p>The Group is globally establishing a manufacturing and sales framework based on the mass balance approach, which combines biomass-based raw materials with petrochemical feedstocks, in anticipation of the phased expansion of the use of biomass-based raw materials.<br>Currently, Group companies in Japan, Belgium, Indonesia, and the United States have obtained ISCC PLUS certification, thereby further expanding the supply of products with a reduced environmental impact.<br>In parallel, the Group is also advancing the development of a biomass-based production process for acrylic acid, one of the Group\u2019s core products, with the aim of achieving commercialization by 2030.<br>Through these initiatives, the Group seeks to contribute to the reduction of Scope 3 emissions of its customers.<\/p>\n\n\n\n<p><strong>ISCC PLUS Certification Status<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-flexible-table-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><th style=\"width:7%\">Country<\/th><th style=\"width:15%\">Site<\/th><th style=\"width:15%\">Certified Products<\/th><th style=\"width:20%\">Link<\/th><\/tr><tr><td style=\"width:7%\">Japan<\/td><td style=\"width:15%\">Himeji Plant<br>Kawasaki Plant<\/td><td style=\"width:15%\">Acrylic acid, superabsorbent polymers, ethylene oxide and its derivatives.<\/td><td style=\"width:20%\"><a href=\"https:\/\/www.shokubai.co.jp\/en\/news\/2023020911854\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Nippon Shokubai Acquired ISCC PLUS Certification for Various Products, Including Acrylic Acid, Superabsorbent Polymers, and Ethylene Oxide \u2013To promote the use of biomass as raw materials for disposable diapers, detergents, and other products\u2013<\/a><\/td><\/tr><tr><td style=\"width:7%\">Indonesia<\/td><td style=\"width:15%\">PT. NIPPON SHOKUBAI INDONESIA<\/td><td style=\"width:15%\">Acrylic acid, acrylic esters, superabsorbent polymers<\/td><td style=\"width:20%\"><a href=\"https:\/\/www.shokubai.co.jp\/en\/news\/2024052914013\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Nippon Shokubai Begins Manufacturing and Marketing Halal-certified and Biomass-derived Acrylic Acid, Acrylates, and Superabsorbent Polymers in Indonesia\u3000-Contributing to Reducing the Environmental Impact of Paints, Diapers, etc. throughout the Product Supply Chain-<\/a><\/td><\/tr><tr><td style=\"width:7%\">Belgium<\/td><td style=\"width:15%\">NIPPON SHOKUBAI EUROPE N.V.<\/td><td style=\"width:15%\">Acrylic acid, superabsorbent polymers<\/td><td style=\"width:20%\"><a href=\"https:\/\/www.shokubai.co.jp\/en\/news\/202107087200\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Nippon Shokubai Obtains ISCC PLUS for Bio-based Superabsorbent Polymers -To Contribute to the Reduction of the Environmental Impact of Disposable Diapers-<\/a><\/td><\/tr><tr><td style=\"width:7%\">United States<\/td><td style=\"width:15%\">AMERICAN ACRYL L.P.<br>NIPPON SHOKUBAI AMERICA INDUSTRIES, INC.<\/td><td style=\"width:15%\">Acrylic acid, superabsorbent polymers<\/td><td style=\"width:20%\"><a href=\"https:\/\/www.shokubai.co.jp\/en\/news\/2025062616841\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Nippon Shokubai\u2019s U.S. Group Company Acquires ISCC PLUS Certification for Acrylic Acid and Superabsorbent Polymers -Contributing to Reduction of Environmental Impact in Applications Such as Paints and Disposable Diapers through Nippon Shokubai\u2019s Global Supply System- | News | NIPPON SHOKUBAI<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n<\/dd>\n\n\n\n<dt class=\"ark-block-dl__dt\"><span>Initiative 2: Development and Expansion of Environmental Contribution Products<\/span><\/dt>\n\n\n\n<dd class=\"ark-block-dl__dd ark-keep-mt--s\">\n<p>The Group\u2019s products are used throughout supply chains in a wide range of applications, including everyday products and social infrastructure. The Company assesses and reviews how these products contribute to reducing environmental impacts, including GHG emissions, and certifies qualifying products as Environmental Contribution Products.<br>Revenue generated from Environmental Contribution Products is positioned as a materiality-related indicator for the Group, and is used to promote initiatives aimed at reducing environmental impacts.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.shokubai.co.jp\/en\/sustainability\/environment\/our-product\/\" title=\"\">Link to the List of Environmental Contribution Products<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.shokubai.co.jp\/en\/rd\/future\/\" title=\"\">Technical Overview of Environmental Contribution Products<\/a><\/li>\n<\/ul>\n\n\n\n<p class=\"has-text-color\" style=\"color:#6c7872;font-size:12px\">* Certification is conducted by the internal certification committee based on checklists and quantitative data. Prior to certification, a third-party review is performed, and the views and advice obtained are incorporated into the examination materials used by the internal certification committee.<\/p>\n\n\n\n<figure class=\"wp-block-flexible-table-block-table\"><figcaption style=\"text-align:right\">(billion yen)<\/figcaption><table class=\"has-fixed-layout\"><tbody><tr><th><\/th><th style=\"width:12%\">FY2021<br>result<\/th><th style=\"width:12%\">FY2022<br>result<\/th><th style=\"width:12%\">FY2023<br>result<\/th><th style=\"width:12%\">FY2024<br>result<\/th><th style=\"width:12%\">FY2030<br>target<\/th><\/tr><tr><th>Sales revenue from Environmental Contribution Products<br>(including Group companies)<\/th><td style=\"text-align:right;width:12%\">39<\/td><td style=\"width:12%;text-align:right\">44<\/td><td style=\"width:12%;text-align:right\">45<\/td><td style=\"width:12%;text-align:right\">47<\/td><td style=\"width:12%;text-align:right\">135<\/td><\/tr><\/tbody><\/table><\/figure>\n<\/dd>\n\n\n\n<dt class=\"ark-block-dl__dt\"><span>Initiative 3: <strong>&nbsp;Estimation of Avoided Emissions Across the Supply Chain<\/strong><\/span><\/dt>\n\n\n\n<dd class=\"ark-block-dl__dd ark-keep-mt--s\">\n<p>The Company estimates the avoided emissions associated with Environmental Contribution Products that are expected to reduce CO<sub>2 <\/sub>emissions across the supply chain.<br>For FY2024, the estimated avoided emissions amounted to <strong>1,070 thousand t-CO<sub>2<\/sub> per year<\/strong>.<\/p>\n<\/dd>\n\n\n\n<dt class=\"ark-block-dl__dt\"><span><strong>Initiative 4: Calculation and Provision of Product Carbon Footprints (PCF)<\/strong><\/span><\/dt>\n\n\n\n<dd class=\"ark-block-dl__dd ark-keep-mt--s\">\n<p>To reduce GHG emissions across the entire supply chain, it is essential to accurately calculate and share GHG emissions at the product level.<br>The Company has established an appropriate PCF calculation system by referencing domestic and international PCF standards and guidelines and provides PCF data to customers upon request.<br>Going forward, The Company will continue to align with updates to relevant standards and guidelines and will work to reduce PCFs by reflecting its GHG emissions reduction initiatives in PCF calculations, thereby contributing to reductions in customers\u2019 Scope 3 emissions.<\/p>\n\n\n\n<figure class=\"wp-block-flexible-table-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><th style=\"width:20%\"><strong>Vision<\/strong><\/th><td>Contributing to the reduction of GHG emissions throughout the supply chain<\/td><\/tr><tr><th style=\"width:20%\"><strong>Initiatives<\/strong><\/th><td>\uff65 Enhancing product carbon footprint data quality<br>\uff65 Sharing PCF information with stakeholders<\/td><\/tr><tr><th style=\"width:20%\"><strong>KPI \/ Ideal state<\/strong><\/th><td>Continuous improving calculation accuracy and reducing GHG emissions for each product through ongoing activities (achievement year: by FY2027)<\/td><\/tr><\/tbody><\/table><\/figure>\n<\/dd>\n<\/dl>\n\n\n\n<div class=\"ark-block-notice -point\"><div class=\"ark-block-notice__head\"><svg class=\"ark-block-notice__icon\" height=\"20\" width=\"20\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" aria-hidden=\"true\" data-icon=\"LsLightbulb\" viewBox=\"0 0 48 48\"><path d=\"M32 46.5H16c-1.1 0-2-.9-2-2s.9-2 2-2h16c1.1 0 2 .9 2 2s-.9 2-2 2zM41.7 15.9C41.3 13 40 10.3 38.2 8 34.5 3.2 29 .8 23.1 1 14 1.4 6.5 8.9 6 18c-.3 6 2.4 11.7 7.2 15.4.5.4.8.9.8 1.5v1.6c0 2.2 1.8 4 4 4h12c2.2 0 4-1.8 4-4V35c0-.6.3-1.2.9-1.7 5.3-4 8-10.6 6.8-17.4zm-7.1 1.7h-.3c-.7 0-1.3-.5-1.5-1.2-.7-3.2-3.2-5.7-6.4-6.3-.8-.1-1.4-.9-1.2-1.7s.9-1.4 1.7-1.2c4.4.8 8 4.2 8.9 8.6.1.8-.4 1.6-1.2 1.8z\"><\/path><\/svg><span class=\"ark-block-notice__title\">Participation in Demand Response Contributing to the Stabilization of the Electricity Supply-Demand Balance<\/span><\/div><div class=\"ark-block-notice__body ark-keep-mt--s\">\n<p>With the expansion of renewable energy sources, which are unstable in terms of power generation, increases the importance of balancing electricity supply and demand, the Himeji Plant of the Company has been participating in <strong>demand response<\/strong> since FY2021.<br>When the supply-demand balance of electric power becomes tight, the Plant contributes to stabilizing the electricity supply-demand balance by reducing the amount of power received from the power grid, utilizing in-house power generation capacity in response to requests.<\/p>\n<\/div><\/div>\n<\/details>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Contribution to Resource Circulation<\/strong><\/h4>\n\n\n\n<p>Resource circulation is a critically important initiative, not only from the perspective of preventing the depletion of important resources and reducing dependence on specific resources, but also as part of efforts to mitigate climate change.<\/p>\n\n\n\n<p>The Group stipulates the following in its Environmental Protection Policy<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Reduce emissions of waste and chemical substances and promote the recycling and the effective use of resources including water resources to contribute to the realization of a Sound Material-Cycle Society.<\/li>\n\n\n\n<li>Actively seek to develop and provide products and technologies that help reduce environmental impact.<\/li>\n<\/ul>\n\n\n\n<p>Based on this policy, the Company is systematically promoting resource circulation and waste reduction.<\/p>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary>Contribution to Resource Circulation<\/summary>\n<dl class=\"ark-block-dl\">\n<dt class=\"ark-block-dl__dt\"><span>Initiative : Reduction of Waste and Promotion of Recycling<\/span><\/dt>\n\n\n\n<dd class=\"ark-block-dl__dd ark-keep-mt--s\">\n<p>In its production activities, the Company aims to contribute to resource circulation by achieving a state in which the generation of industrial waste is reduced and the waste is effectively utilized as resources and energy sources.<br>Specifically, the Company is advancing initiatives toward the following targets.<\/p>\n\n\n\n<figure class=\"wp-block-flexible-table-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><th style=\"width:20%\"><strong>Vision<\/strong><\/th><td>Minimizing waste generation and effectively utilizing it as resources and energy<\/td><\/tr><tr><th style=\"width:20%\"><strong>Initiatives<\/strong><\/th><td>\uff65 Waste reduction<br>\uff65 Promotion of recycling<\/td><\/tr><tr><th style=\"width:20%\"><strong>KPI \/ Ideal state<\/strong><\/th><td>\uff65 Quantity of final off-site landfills: maintaining zero emissions<sup>(1)<\/sup><br>(achievement year for Nippon Shokubai alone: by FY2027)<br>\uff65 Waste plastic emissions: 50% reduction in emissions from FY2021 level<br>(achievement year for Nippon Shokubai alone: by FY2030)<\/td><\/tr><\/tbody><\/table><figcaption>(1)&nbsp;<kbd>(Quantity of final off-site landfill) \u2264 (total amount of waste generated x 0.1%)<\/kbd><\/figcaption><\/figure>\n<\/dd>\n<\/dl>\n<\/details>\n\n\n\n<h4 class=\"wp-block-heading\">Conservation and Efficient Use of Water Resources<\/h4>\n\n\n\n<p>For the Group, water is an essential resource for the manufacture of chemical products, and ensuring its sustainable availability is a critical management issue directly linked to business continuity and medium- to long-term corporate value.<\/p>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary>Conservation and Efficient Use of Water Resources<\/summary>\n<dl class=\"ark-block-dl\">\n<dt class=\"ark-block-dl__dt\"><span>Initiative :\u3000Assessment of Water-related Risks<\/span><\/dt>\n\n\n\n<dd class=\"ark-block-dl__dd ark-keep-mt--s\">\n<p>From the perspective of climate change adaptation, water-related risks associated with extreme weather events caused by global warming, such as storm surges, flooding, and droughts, are of particular concern.<br>The Company focuses on risks related to water procurement and assesses the potential for its production sites to be located in areas of high water stress, using the Aqueduct Water Risk Atlas provided by the World Resources Institute (WRI).<br>In addition, with the aim of conserving water resources and promoting their efficient use, the Company will continue to conduct water-related risk assessments and promote efficient water use to achieve a state in which harmony between water resource security and water use in business activities is maintained.<\/p>\n\n\n\n<figure class=\"wp-block-flexible-table-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><th style=\"width:20%\"><strong>Vision<\/strong><\/th><td>Maintaining harmony between water resource security and water use in business activities<\/td><\/tr><tr><th style=\"width:20%\"><strong>Initiatives<\/strong><\/th><td>Risk assessment and promotion of efficient use of water resources<\/td><\/tr><tr><th style=\"width:20%\"><strong>KPI \/ Ideal state<\/strong><\/th><td>Continuous monitoring of water risks (stress) and actions based on assessment results (achievement year: by FY2027)<\/td><\/tr><\/tbody><\/table><\/figure>\n<\/dd>\n<\/dl>\n<\/details>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"anc24\"><strong>Addressing Climate-related Opportunities<\/strong><\/h3>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary>Addressing Climate-related Opportunities<\/summary>\n<dl class=\"ark-block-dl\">\n<dt class=\"ark-block-dl__dt\"><span>Initiative 1: Promotion of Renewable Energy-related Technologies<\/span><\/dt>\n\n\n\n<dd class=\"ark-block-dl__dd ark-keep-mt--s\">\n<p>In the <strong>short to medium term<\/strong>, the adoption of <strong>electric vehicles (EVs)<\/strong> is accelerating worldwide. In the <strong>long term<\/strong>, the use of <strong>hydrogen energy is expected to expand across regions<\/strong> as part of the transition away from fossil fuels.<br>The Group will respond swiftly to these market expansions and the energy transition, and make <strong>proactive investments<\/strong> to support the dissemination and development of renewable energy-related technologies.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Related Materials: <a href=\"https:\/\/www.shokubai.co.jp\/en\/ir\/assets\/pdf\/management\/vision\/mid-term_managementplan.pdf\">Mid-term Management Plan 2027<\/a>\n<ul class=\"wp-block-list\">\n<li>Energy (Batteries): p.20<\/li>\n\n\n\n<li>Energy (Hydrogen): p.21<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Related Transcription: <a href=\"https:\/\/www.shokubai.co.jp\/en\/ir\/assets\/pdf\/management\/vision\/Transcription.pdf\" target=\"_blank\" rel=\"noopener\" title=\"\">Nippon Shokubai: Medium-term Management Plan 2027<\/a><\/li>\n<\/ul>\n<\/dd>\n\n\n\n<dt class=\"ark-block-dl__dt\"><span>Initiative 2: Expansion of Investments in Technologies to Reduce Environmental Impacts<br>(e.g., Water Treatment and CO\u2082 Capture)<\/span><\/dt>\n\n\n\n<dd class=\"ark-block-dl__dd ark-keep-mt--s\">\n<p>Water scarcity and water pollution resulting from climate change are critical challenges facing the global community, regardless of country or region. In addition, technologies that capture and remove carbon dioxide (CO<sub>2<\/sub>), a primary driver of climate change, are becoming increasingly important in the transition to a decarbonized society, and are expected to experience rapid market growth in the coming years.<br>By accurately identifying these market growth opportunities and related transitions, the Group will respond swiftly and make proactive investments.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Related Materials: <a href=\"https:\/\/www.shokubai.co.jp\/en\/ir\/assets\/pdf\/management\/vision\/mid-term_managementplan.pdf\">Mid-term Management Plan 2027<\/a>\n<ul class=\"wp-block-list\">\n<li>Specialty Chemicals: p.17<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/dd>\n\n\n\n<dt class=\"ark-block-dl__dt\"><span>Initiative 3: Improvement of Production Technologies and Solution Proposals through the Use of Digital Technologies<\/span><\/dt>\n\n\n\n<dd class=\"ark-block-dl__dd ark-keep-mt--s\">\n<p>At the Kawasaki Plant of the Company, an advanced process control system introduced at the Ukishima Plant was expanded to the Chidori Plant, and operating patterns of production facilities were optimized in accordance with production volumes.<br>As a result, in FY2024, the Kawasaki Plant achieved energy savings of approximately 3,200 kL (crude oil equivalent) and reduced CO<sub>2<\/sub> emissions by approximately 7,500 t-CO<sub>2<\/sub>. In addition, productivity improved, leading to a reduction in variable costs.<br>Going forward, the Group will continue to expand the application of the advanced control system and further promote energy conservation.<\/p>\n<\/dd>\n\n\n\n<dt class=\"ark-block-dl__dt\"><span>Initiative 4: Promotion of Appropriate Regulatory Compliance and Disclosure of Non-financial Information<\/span><\/dt>\n\n\n\n<dd class=\"ark-block-dl__dd ark-keep-mt--s\">\n<p>To clearly communicate the Group\u2019s medium- to long-term initiatives for value creation to all stakeholders, including shareholders and investors, the Company publishes an <strong>Integrated Report (the \u201cTechnoAmenity Report\u201d), <\/strong>which provides a wide range of information, including materiality, the value creation process, business strategy, governance, and financial information.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.shokubai.co.jp\/en\/sustainability\/data\/library\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Sustainability Library<\/a><\/li>\n<\/ul>\n\n\n\n<p>The Company also publishes an ESG Data Book annually, which provides comprehensive ESG-related data covering the Group.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.shokubai.co.jp\/en\/sustainability\/data\/esgdata\/\" target=\"_blank\" rel=\"noopener\" title=\"\">ESG Data <\/a><\/li>\n<\/ul>\n\n\n\n<p>Through appropriate and transparent disclosure, the Company aims to maintain its inclusion in major indices (including ESG indices) and to further broaden such inclusion. The Company also reflects the results of external ESG evaluations in its continuous improvement activities.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.shokubai.co.jp\/en\/sustainability\/concept\/evaluation\/\" target=\"_blank\" rel=\"noopener\" title=\"\">External Evaluation<\/a><\/li>\n<\/ul>\n\n\n\n<p><\/p>\n<\/dd>\n<\/dl>\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary>Internal Carbon Pricing (ICP)<\/summary>\n<p>The Group has introduced an ICP system to raise decarbonization awareness across the Group, accelerate energy-saving initiatives, and facilitate more active evaluation of business opportunities and risks associated with CO<sub>2<\/sub> emissions reductions.<\/p>\n\n\n\n<figure class=\"wp-block-flexible-table-block-table\"><figcaption>Outline of ICP<\/figcaption><table class=\"has-fixed-layout\"><tbody><tr><th style=\"width:25%\">ICP<\/th><td>10,000 yen\/t-CO<sub>2<\/sub><br>Shadow price set with reference to domestic and international carbon prices.<\/td><\/tr><tr><th style=\"width:25%\">Method of application<\/th><td>The costs will be calculated using ICP based on a change of CO<sub>2<\/sub>&nbsp;emissions and used as a criterion for investment decisions.<\/td><\/tr><tr><th style=\"width:25%\">Range of application<\/th><td>Nippon Shokubai Group<\/td><\/tr><tr><th style=\"width:25%\">GHG Scope<\/th><td>Scope 1 and Scope 2<\/td><\/tr><\/tbody><\/table><\/figure>\n<\/details>\n\n\n\n<p>\u3000\u3000<\/p>\n\n\n\n<div class=\"ark-block-notice -ok\"><div class=\"ark-block-notice__head\"><svg class=\"ark-block-notice__icon\" height=\"20\" width=\"20\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" aria-hidden=\"true\" data-icon=\"LsCheck\" viewBox=\"0 0 48 48\"><path d=\"M45.2 10.1 43.1 8c-.4-.4-1-.4-1.4 0L16.2 33.3l-9.9-9.9c-.4-.4-1-.4-1.4 0l-2.1 2.1c-.4.4-.4 1 0 1.4l13.4 13.4 29-29c.4-.2.4-.9 0-1.2z\"><\/path><\/svg><span class=\"ark-block-notice__title\">Updated Contents<\/span><\/div><div class=\"ark-block-notice__body ark-keep-mt--s\">\n<p><strong>April 2026:<\/strong> Comprehensive revision based on the medium-term management plan and materiality formulated in 2025.<\/p>\n<\/div><\/div>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Please <a href=\"https:\/\/www.shokubai.co.jp\/en\/sustainability\/data\/library\/\" target=\"_blank\" rel=\"noopener\" title=\"\">see here<\/a> for past Disclosure Based on TCFD Recommendations.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n<\/div>\n<\/div><\/div>\n","protected":false},"author":1,"featured_media":0,"parent":3118,"menu_order":33,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"cat_sustainability":[347],"class_list":["post-3316","sustainability","type-sustainability","status-publish","format-standard","hentry","cat_sustainability-environment"],"aioseo_notices":[],"acf":{"memo":"\u2460Word\u3001702\u306e\u6587\u7ae0\u304c\u898b\u5f53\u305f\u3089\u306a\u3044\u753b\u50cf\u304c\u65e5\u672c\u8a9e\u3000\u203bWord\u300c5-3\u300dTomotomo55","is_hide_navi":false},"_links":{"self":[{"href":"https:\/\/www.shokubai.co.jp\/en\/wp-json\/wp\/v2\/sustainability\/3316"}],"collection":[{"href":"https:\/\/www.shokubai.co.jp\/en\/wp-json\/wp\/v2\/sustainability"}],"about":[{"href":"https:\/\/www.shokubai.co.jp\/en\/wp-json\/wp\/v2\/types\/sustainability"}],"author":[{"embeddable":true,"href":"https:\/\/www.shokubai.co.jp\/en\/wp-json\/wp\/v2\/users\/1"}],"version-history":[{"count":96,"href":"https:\/\/www.shokubai.co.jp\/en\/wp-json\/wp\/v2\/sustainability\/3316\/revisions"}],"predecessor-version":[{"id":20042,"href":"https:\/\/www.shokubai.co.jp\/en\/wp-json\/wp\/v2\/sustainability\/3316\/revisions\/20042"}],"up":[{"embeddable":true,"href":"https:\/\/www.shokubai.co.jp\/en\/wp-json\/wp\/v2\/sustainability\/3118"}],"wp:attachment":[{"href":"https:\/\/www.shokubai.co.jp\/en\/wp-json\/wp\/v2\/media?parent=3316"}],"wp:term":[{"taxonomy":"cat_sustainability","embeddable":true,"href":"https:\/\/www.shokubai.co.jp\/en\/wp-json\/wp\/v2\/cat_sustainability?post=3316"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}