Progress

To engage in sustainable management, it is key that we view the social challenges for SDGs and other initiatives as business opportunities, promote innovation, minimize future risks, and reinforce management resilience. The Group’s management periodically meet to discuss strategies in order to accurately grasp changes in social demands from the international community and reflect them into management from a long-term perspective. In fiscal 2018 we formulated policies on the SDGs and ESG and integrated ESG elements into our budget-drafting process.

One of KPIs that we set for the Group in our 2025 Long-Term Business Plan is to expand sales of our Blue Value™ and Rose Value™ products that contribute to the environment and society. In aiming to achieve this goal, we are taking steps to specifically incorporate them into business plans and targets. In addition, we are encouraging each and every employee to change their ways of thinking by organizing social challenge workshops to brainstorm the creation of new businesses and new products that are driven by the need to solve social issues. We are also deepening discussions with business and R&D divisions.

Moreover, from fiscal 2019 we started utilizing a system that reflects long-term views of new target investments into our investment plan. The system helps us visualize mainly investments related to Blue Value™ and Rose Value™, contributions to the SDGs, and changes in GHG emissions. These matters are then discussed at investment deliberation meetings. We have predominantly focused our strategy discussions on climate change and plastic waste—two serious issues for chemical companies—because we consider it very important to demonstrate concrete measures as soon as possible. We support the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and took the decision to participate in the Alliance to End Plastic Waste (AEPW). We have also formulated and publicly released policies stating our commitment to these causes.

Breakdown of new large-scale target investments decided in fiscal 2019 (for FY2019-2021)

System and Responsible Officers

The person in charge is the responsible director in charge of Corporate Sustainability Committee.
With ESG concerns as a central feature of the Group’s sustainability management, steps are being taking to discuss the Group’s overall direction at various organizations including the Board of Directors and Corporate Sustainability Committee. In addition, the management of progress of environmental and social targets under the 2025 Long-term Business Plan as well as key issues (materiality) are also undertaken within this system.

Sustainability Management System

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Corporate Sustainability Committee

The CSR Committee was reorganized as the Corporate Sustainability Committee in June 2018. This reorganization reflects the need to address the demands placed on the Company by society and to further bolster sustainability management initiatives from an ESG perspective. The roles of the committee are presented as follows.

• Deliberate on the Group’s policies, strategies, plans, and measures as they relate to the promotion of ESG
• Clarify the important issues and direction of efforts to strengthen and improve initiatives of each committee (Responsible Care Committee, Risk & Compliance Committee)
• Conduct performance evaluations of the Group’s ESG initiatives and oversee internal distribution of results
• Consider other important matters relating to ESG

In principle, this committee meets twice a year.
Should a critical matter arise, including the need to consider an important item relating to ESG or to put forward an initiative, the Chairperson of the Corporate Sustainability Committee establishes a subcommittee to assume responsibility for the item.

Details of the committee’s deliberations and activity results are reported to the Management Committee. In addition, the Management Committee’s authorization is obtained for matters of particular importance.

Composition of the Corporate Sustainability Committee

*Corporate auditors also attend committee meetings and are able to offer their opinions whenever necessary.

*The chairperson is able to call on the attendance of executive officers and general managers who have an interest in the matters being deliberated and ask for their explanation and opinion.