Sustainability Management

System and Responsible Officers

The person in charge is the responsible officer for the 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 progress of VISION 2030 non-financial metrics and reviewing material topics are also undertaken within this system.

Sustainability Management System

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Corporate Sustainability Committee

In June 2018, Mitsui Chemicals restructured the CRS Committee into the Corporate Sustainability Committee in order to further enhance its ESG-related initiatives. 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
• Define the priorities and direction for strengthening and improving individual committees, including the Responsible Care Committee, Risk & Compliance Committee, and Circular Economy CoE
• Conduct performance evaluations of the Group’s ESG initiatives and oversee internal distribution of results
• Consider other important matters relating to ESG

Although in principle, the company rule requires the Corporate Sustainability Committee to meet twice a year, it has been meeting three times a year since its launch. In FY2022, the committee will begin meeting four times annually, in response to the recent increase in the number of topics to be discussed.
If circumstances require us to plan new important matters related to promoting sustainability strategies and propose measures accordingly, the committee chair will establish a subcommittee to address such matters. Until FY2021, the committee has been working on climate change and plastics strategies by establishing a dedicated subcommittee. However, the recent trend, including the increasing call for carbon neutrality, has led to a wider range of initiatives for the subcommittee, increasing the need to further deepen and accelerate them. In response, in FY2022, the committee has restructured and upgraded the subcommittee into the Circular Economy Center of Excellence (CoE) to further strengthen the initiatives.

Details of the committee’s deliberations and activity results are reported to the Management Committee. In addition, the committee submit particularly important agenda items to the Management Committee and Board of Directors for approval.

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.

Incorporating ESG elements into the management system

The Mitsui Chemicals Group aims to build a management system that integrates financial and non-financial aspects by incorporating ESG elements into its management practice and strategies.

Incorporating ESG elements in investment and financing decisions

The Mitsui Chemicals Group has established a system to incorporate ESG elements and perspectives on social challenges, including the SDGs, when making decisions on major investment and financing cases. Starting in FY2019, we decided to include estimates calculated based on ICP^*1 in the investment planning form. Furthermore, in FY2022, in addition to IRRs, which were usually evaluated, we added ICP-based IRRs (c-IRR)^*2 as a reference for investment/financing evaluation. We also updated the ICP price, based on a discussion by the Corporate Sustainability Committee.

*1ICP:
Internal carbon pricing.

*2c-IRR:
IRR calculated by the following formula: Incremental profit ± GHG increase or decrease × ICP price

Investment planning form (Example)

FY2022 major investments^*

Incorporating ESG elements in annual budgets

Mitsui Chemicals incorporates ESG elements into its basic company-wide budgeting policy.
In FY2020, in our efforts to accelerate the production of Blue Value™ and Rose Value™ products and services, we adopted the sales revenue ratios of Blue Value™ and Rose Value™ products and services as performance indicators in line with the goal under VISION 2030 (40% of sales revenue by product and service). Each business division plans its annual budget based on the challenges and measures for the targets and tracks their progress.
As for climate change measures, each division includes its short-, medium-, and long-term challenges, goals, and measures in its annual budget, and also adds measures for circular economy starting in 2022.
In addition, we have set KPIs and targets that are linked to our material topics as non-financial metrics for VISION 2030. By strengthening our managerial monitoring from both a financial and non-financial perspective, we aim to enhance our corporate value. For each KPI, we have designated an officer or a general manager responsible for monitoring progress, and the respective divisions manage these KPIs by incorporating them into their annual budgets and targets. In addition, the Corporate Sustainability Committee and the Company-wide Strategy Committee will review progress and related issues from the perspective of how progress toward KPIs each fiscal year will contribute to the achievement of non-financial targets for 2030 (appropriateness of KPI/target setting) and how efforts to achieve non-financial targets will contribute to the achievement of financial targets (relationship between financial and non-financial targets).

Company-wide promotion

In order to practice ESG management, the Mitsui Chemical Group believes that it is essential for each and every employee to understand ESG and to incorporate it into their work.
To that end, we have been holding ESG Link Café one-point lessons since fiscal 2020, which are dialogue-based online lessons for all employees to freely participate in, with the concept of “anyone can join as they please.” These lessons deal with and provide simple introductions of a wide variety of ESG-related topics with high social interest in addition to the Group’s ESG-related initiatives. With time set aside for free discussion after the lesson, the events are also utilized as a place for ESG-themed internal communication.
In addition to these lessons, we also work to instill understanding in the Company in a variety of ways, including a series of posts on the internal site explaining ESG-related terminology and workshops for workplaces and departments. Through a multi-layered approach, we will continue to support each and every employee in incorporating ESG into their own work, thereby facilitating the practice of ESG management.