Key Themes ("Materiality") and Our Action Plan

The Nippon Kayaku Group is implementing CSR management that fosters trust among all stakeholders through its focus on the KAYAKU spirit, which calls for "continuously providing society with the best products through ceaseless progress and the combined forces of our consciences."
Practicing CSR management involves properly ascertaining the Key Themes facing our Group from both an internal and external point of view and formulating a mid-term CSR Action Plan that links to our business activities.

CSR and Business Strategy

We believe that CSR is integral to managing our Company. To realize the KAYAKU spirit and increase the value of the Company, we believe it is necessary to take the dual approach of implementing both a mid-term business plan and initiatives toward a sustainable society and environment, and that we need to integrate these initiatives into our business strategy.
We have the basic management policy which is “The Nippon Kayaku Group engages in CSR management by outlining a mid-term CSR action plan that reflects the trust we receive from all our stakeholders. We continuously implement this mid-term CSR action plan to expand our management resources. This enables us to work towards maximizing our corporate value, achieving sustainable growth, and contributing to a sustainable society and environment.”
Under this basic management policy, we ascertain our risks and opportunities by considering the business environment and listening to our stakeholders so that we can identify the Key Themes (CSR materiality) in our business over the medium-term, then we create our Mid-term Business Plan and Mid-term CSR Action Plan that syncs with Mid-term Business Plan. Our CSR activities, which are integral to our business strategy, are highly ethical and place priority on safe operations, strict compliance, and the environment in all of our businesses.

CSR Key Themes ("Materiality")

In creating our mid-term business plan, KAYAKU Next Stage, which began in fiscal 2019, Nippon Kayaku went through the themes that it needs address as it strives to contribute to a sustainable society and to achieve sustainable growth for the Company. This exercise yielded our CSR Key Themes.

CSR Key Themes ("Materiality") Identification Process

In formulating our mid-term business plan, KAYAKU Next Stage, which kicks off in fiscal 2019, we have organized the themes that we should address and identified the CSR Key Themes (CSR materiality).

CSR Key Themes (CSR Materiality) Identification Process

【Step 1 Recognition of the Themes】

Make a list of Themes, taking topics from the GRI standards on the items needed by a diversifying society and adding topics from the Nippon Kayaku Group's CSR Action Plan.

【Step 2 Assign Points from Internal and External Feedback】

A. Assignment of points from external assessments
Assign points from external assessments by linking the Themes on the list with assessment criteria for each of the Company's business segments from multiple international assessment organizations that promote responsible investing and SASB need criteria for each industry.

B. Assignment of points from internal assessments
Survey those responsible for Company's major departments, including its business divisions, to evaluate how much of an impact the Nippon Kayaku Group can have. Set up listening opportunities in the major departments to verify the Themes and rank them by priority. Assign points from the internal assessments by incorporating views on past key Themes addressed in CSR Action Plans.

【Step 3 Materiality mapping】

Make a matrix of the Themes that have been assigned points from the external and internal assessments to create a materiality mapping. Include thresholds in the point-based map so that those Themes with points that meet or exceed the threshold are considered key.

【Step 4 Validity testing and approval】

Get feedback on the identification process and identification results from experts who specialize in CSR, review the process and results at the CSR Management Committee, which is the Company's decision-making body, and approve them after two sessions of deliberation.

Nippon Kayaku Group's CSR Key Themes ("Materiality")

Nippon Kayaku Group's Key Themes (Materiality)

Identification and Implementation of Key Themes

Below, we describe the Nippon Kayaku Group’s recognition of its identified Key Themes and how we intend to accomplish them by focusing on the most important of these themes.

Innovation through business

Why Is This Key?

The world is moving in the direction of a better life for people. Technological progress is not the be-all and end-all. However, achievement of a sustainable society involves not only making the world more convenient, but also such major issues as enabling everyone to live safe and healthy lives, alleviating climate change, and protecting the global environment. Chemical companies need to take responsibility and tackle these issues seriously. At Nippon Kayaku, we believe that we need to acquire the new business opportunities and new technologies that will lead to innovation through continuous progress so that we can solve these wide-ranging, thorny problems and respond to the needs of society. We believe that tackling these Key Themes will enable us to contribute to a sustainable society by giving society the value that it is seeking.

Nippon Kayaku’s Initiatives

The Nippon Kayaku Group’s business vision is, “Continuing to provide the best products, technologies, and services that safeguard the life and health of consumers, and support a comfortable life.” Since its founding, Nippon Kayaku has been striving to solve social issues as it has grown. In the future as well, we will continue making contributions toward a sustainable society and environment as we alter our three “genes” of explosives, dyes, and pharmaceuticals so that we can keep providing the best products, technologies, and services using the many elemental technologies that we have nurtured over our past century of history. Our endeavors involve honing our elemental technologies, taking advantage of open innovation, and carrying out corporate and other research that will support future growth for realizing a super-smart society and SDGs. This includes distinctive products based on resins, colorants, and catalysts, pharmaceuticals and ancillary products in our cancer-related specialty areas, products for advanced automobile safety components and future mobility technologies, high-quality environmentally friendly agrochemicals for supporting stable agricultural production, and the development of products and creation of businesses in new fields that merge these technologies. To this end, we are working to consolidate our entire corporate foundation in the utilization of advanced IT and the enhancement of our entire work force’s skills.
Tackling these themes also entails the key themes’ economic performance. In view of our initiatives with respect to key environmental issues, such as “energy use and greenhouse gases,” “wastewater and waste,” “efficient use of water resources,” and “use of materials that contribute to resource conservation,” we believe that new technologies and other innovations that will contribute to society are just around the corner.

Click here to find out about other initiatives

Quality and customer safety

Why Is This Key?

Society is increasingly demanding quality and safety of products and services. Nippon Kayaku offers a wide range of products that includes functional chemicals, pharmaceuticals, automobile safety components, and agrochemicals, and it is incumbent upon us that all of our products be of appropriate quality. We are fully aware that any problems with quality defects will have an impact on our customers as well as on our entire supply chain. We believe that consistent product quality, improved safety and reliability, and technical services and information that facilitate proper use are linked to the enhancement of customer satisfaction.

Nippon Kayaku’s Initiatives

Based on the spirit of Responsible Care, the Nippon Kayaku Group has formulated The Declaration on Environment, Health and Safety, and Quality in order to maintain and enhance its environmental protection, health and safety, and quality assurance practices, and we are implementing this declaration through organized companywide activities. We have set up a Quality Management Division that is in charge of quality management across our businesses as well as quality management systems that address the specifics of each business, and we are implementing these initiatives on a global scale that incorporates all our group companies. We are working to improve quality by curbing quality process abnormalities using techniques ranging from education to actual practice. Examples of this include quality assurance initiatives for strengthening our technological prowess in quality assurance so as to ensure consist product quality, quality risk assessments to prevent the occurrence of quality issues, the creation and usage of our “Why Why Analysis Manual” that beefing up our efforts to prevent the recurrence of customer complaints and to curb quality process abnormalities, and training to enhance our design and development capabilities by having our researchers start using statistical techniques and quality engineering. In that these topics are related to the key theme, “provision of appropriate information on products and services," we are striving to provide technical data and the most recent academic information so that our customers will be able to use products that are safe. Providing our customers with the best products means that we will need to eliminate processing abnormalities and important customers’ complaints by tackling this issue head on, and this will result in improving the Group’s presence.

  • Responsible Care: An initiative whereby companies that manufacture or handle chemical substances actively work on ensuring an operation that is aware of the environment, safety, and health throughout its entire value chain; from product development to production, sales, consumption, and disposal of the chemical substances.

Supplier assessment

Why Is This Key?

Many crucial issues are involved in procuring the raw materials for our products, including consideration of workers’ human rights and meticulous health and safety management, creation of a better work environment, and measures to conserve resources and prevent global warming. The company must practice these not only within its Group but also with respect to its entire supply chain. The Nippon Kayaku Group believes it is our social responsibility to implement this key theme conscientiously as we maintain sustainable procurement practices, and we strive to become a company that customers seek out.

Nippon Kayaku’s Initiatives

In our quest to bring about a sustainable society, the Nippon Kayaku Group is aiming toward mutually sustainable development with its suppliers, for “they are important business partners who help us produce products of the best quality.” We have produced a CSR Procurement Guidebook that is based on the Nippon Kayaku Group Charter of Conduct, Basic Procurement Principles, and Basic Procurement Policy, and we are working to get all of our suppliers on board with our procurement practices. In fiscal 2020, we were unable to provide ongoing field assessments and briefings to our suppliers, but we attempted to help them understand our CSR Procurement Policy through business negotiations and talks carried out online.

Implementation of this theme is closely related to another key theme, that of maintaining business continuity, and we as a Group need to tackle these two themes simultaneously. Procurement risk entails supply risk as well as the risk that social issues will not be dealt with appropriately. With the recognition that both of these constitute key themes, we are striving to strengthen our ties with all of our business partners in order to provide the best products so that we will comply with our CSR Procurement Policy when we purchase our raw materials.

Energy consumption and greenhouse gases / Waste water and industrial wastes / Efficient use of water resources / Raw material use contributing to resource saving

Why Are These Key?

In recent years, we have come to hear the terms global warming and climate change almost every day. Regarding global warming countermeasures, in a policy address to parliament on October 26, 2020, Prime Minister Yoshihide Suga pledged to cut greenhouse gases to zero by 2050 and become a carbon-neutral society*1. In fact, abnormal weather conditions thought to be associated with global warming are occurring not only in Japan but all over the world, and it is expected that the threat of global warming will increase in the future. Greenhouse gases are released during the heating and cooling stages as electricity and thermal energy is consumed in the product manufacturing process. As such, the Nippon Kayaku Group must also immediately consider and implement appropriate measures to combat global warming.

Furthermore, chemical products are manufactured through various processes using raw materials derived from fossil fuels. Waste is also generated as water resources are used in the cleaning process and chemical substances are discharged into the air, water, and soil.

Moreover, as the number of cars on the world’s roads is expected to continue to grow, especially in developing countries, the demands for automotive safety components that incorporate the Nippon Kayaku Group’s explosives used in this vehicle growth trajectory, are important not only for safety but also for reducing the impact on the global environment by reducing their size and weight.

In this way, the business activities of the Nippon Kayaku Group may have a considerable impact on the global environment.

We believe that to reduce our impact on the environment and attain a sustainable society requires us to make ceaseless progress toward minimizing the adverse effects on the global environment throughout the product life cycle, reducing the impact on the environment and managing chemical substances appropriately.

  • *1 " Cut greenhouse gases to zero " means achieving zero by subtracting the amount absorbed by the forest from the emissions of greenhouse gases such as CO2.

Nippon Kayaku’s Initiatives

To confront these key themes head on, we have delved deeply into their particulars to identify the key environmental themes (materiality). Specifically, based on the TCFD recommendations*2, we solicited the views of experts as well as input from our production divisions and R&D divisions to help us elicit the risks and opportunities involved in climate change to identify them as key environmental themes.

Nippon Kayaku has been working on environmental measures as part of its mid-term environmental targets but these targets were already reached in fiscal 2020. Therefore, in order to seriously tackle the key issues mentioned above and to combat global warming, the Nippon Kayaku Group as a whole has established its mid-term environmental targets up to fiscal 2030. In terms of greenhouse gas emissions, as well as understanding the amount of emissions generated in our business activities to date, such as in our production processes, we are also understanding the amount of CO2 emissions in the supply chain, something which we are developing more in Group companies both in Japan and overseas. Furthermore, in order to reduce greenhouse gas emissions, currently we are continuing to use MFCA*3 methods in our assessments so that we can contribute to a sustainable global environment and facilitate our corporate business continuity by taking steps to broaden our scope of assessment such as by streamlining our production processes and using energy more appropriately.

In terms of measures to combat global warming, there are still various areas where we can reduce our impact on the environment such as by converting to low-carbon materials in the production process, installing energy-efficient equipment, reducing energy usage in the production process, and switching to renewable energy sources. As such, we will continue to consider the best ways for achieving our 2030 mid-term environmental targets.

The water used in heating, cooling, and product purification, which is essential in manufacturing our products, can have an impact on our business if the volume or quality of usable water changes. As such, each of our domestic and overseas group production sites is assessing the risks in its geographical areas and taking countermeasures.

Responsible Care is the starting point for the Nippon Kayaku Group's business activities as a chemical company. Going forward, we will continue to improve our management of chemical substances and provide appropriate information that will assist in keeping our employees and customers safe and protect the global environment.

  • *2 The TCFD (Task Force on Climate-related Financial Disclosures) was established in 2016 by the Financial Standards Board, an international organization for financial system stability.
  • *3 MFCA (Material Flow Cost Accounting) is a method for analyzing overall cost performance by looking at resource and energy losses during the production process and regarding the materials costs, processing costs, equipment depreciation costs that comprise these losses as “negative product costs.”

Occupational health and safety management / Compliance

Why Is This Key?

Operational safety is basic to everything in the manufacturing industry. Every company in the Nippon Kayaku Group practices safety initiatives in a common recognition of “safety above everything else,“ and we believe that we are responsible to all of our stakeholders for preventing accidents and disasters from happening. This is also the most important consideration for employees who work for the Nippon Kayaku Group. In addition, both our domestic operations and overseas affiliates are responsible for complying with local laws and regulations, so we believe that each employee must rigorously follow compliance procedures and that fair business dealings are indispensable to the company’s survival and the fulfillment of its social responsibilities. Other key themes that constitute the foundation of all our business activities include “strengthening corporate governance,” “maintaining and expanding employment and development of human resources,” “respect for human rights and assessment,” and “local communities,” and it is our belief that we will not be able to survive as a corporation unless we deal with these key themes in an appropriate manner. All of these themes are part of “building a strong corporate base capable of supporting growth,” which is one of the key themes of our mid-term business plan, KAYAKU Next Stage, indicating our recognition that sound initiatives are essential.

Nippon Kayaku’s Initiatives

In 2000, the Nippon Kayaku Group formulated the Nippon Kayaku Group Charter of Conduct and Code of Conduct as guideposts for our behavior, and these have been revised in response to the demands of the times, so that they are shared by all of our employees. The social responsibilities that corporations are expected to bear have become increasingly diverse and complex in recent years, now encompassing such areas as climate change and other environmental issues, relations with the supply chain regarding child labor and other labor issues, participation in society as a good corporate citizen, and respect for human rights. At Nippon Kayaku, it is essential for us to share a common awareness, as diverse employees of various nationalities, religions, native languages, and cultural backgrounds are helping us run many of our businesses. With this in mind, we amended the Nippon Kayaku Group Charter of Conduct and Code of Conduct in fiscal 2019 to add human rights, crisis management, local communities, and dialog, as new factors.
All the key themes that form the base of our corporate initiatives are synonymous with corporate initiatives that understand and respect the amended Nippon Kayaku Group Charter of Conduct and Code of Conduct. We are striving to take responsibility as the Nippon Kayaku Group and educate our employees so that everyone has a shared awareness in approaching these themes.

Mid-term CSR Action plan 2019-2021

Based on the materialities that we identified, we have formulated our Mid-term CSR Action Plan 2019-2021, which sets forth specific initiatives and goals. The themes and goals of the Mid-term CSR Action Plan have been integrated with the medium- and long-term key themes set by each corporate division in order to flesh out the major themes of our mid-term business plan, KAYAKU Next Stage. The medium- and long-term key themes are linked with the more specific organizational goals of the entire Nippon Kayaku Group, as well as with the performance goals of each individual employee. Therefore, the Mid-term CSR Action Plan is being put into practice by all of our employees as part of our business strategy.

Mid-term CSR Action plan 2019-2021

Mid-term CSR Action plan 2019-2021

Achievements of the Mid-term CSR Action Plan in Fiscal 2020

Below is a summary of the progress made in our Mid-term CSR Action Plan 2019-2021 in its second year of 2020.

Achievements of the Mid-term CSR Action Plan in Fiscal 2020

Achievements of the Mid-term CSR Action Plan in Fiscal 2020

Mid-term CSR Action Plan 2019-2021 for ISO26000 Core Subjects

The Nippon Kayaku Group has created a table of correspondence between the 37 Core Issues of ISO26000 and our each item of Mid-term CSR Action Plan 2019-2021.

Mid-term CSR Action Plan 2016-2018 for ISO26000 Core Subjects

Mid-term CSR Action Plan 2019-2021 for ISO26000 Core Subjects

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