Natural Capital and Biodiversity

Policy and Basic Approach
Information Disclosure based on TNFD Proposals
Initiatives

Policy and Basic Approach

In addition to climate change, recent years have seen the decline of ecosystem services brought on by losses of natural capital and biodiversity gain increasing focus as a cause of serious harm to business activities. We now have a heightening realization of not only business dependency on natural capital, but of how business activities hugely impact the natural environment.
Against that backdrop did the 2022 UN Biodiversity Conference (COP15) adopt a new Kunming-Montreal Global Biodiversity Framework with its vision of “living in harmony with nature” by the year 2050. Furthermore, its targets for 2030 require companies to evaluate the dependency and effects of their business on the natural environment, as well as associated risks and opportunities, and disclose relevant information.
The Nippon Kayaku Group supports that line of thinking and, based on the framework provided by the Taskforce on Nature-related Financial Disclosures (TNFD), is identifying and evaluating how our business depends on natural capital and what kinds of impacts upon nature that brings. We are also continually analyzing and examining the nature-related risks and business opportunities that potentially stem from the above.
Going forward, we will work on improving our resilience and human capital conservation though procurement of sustainable raw materials, increasingly efficient use of water resources in the production process, and reductions in chemical usage. In that way shall we aim for a sustainable society in which we live in harmony with nature.

Information Disclosure based on TNFD Proposals

Governance

In addition to climate change mitigation, the environmental aspects of our Group’s sustainability issues include “Reductions in Waste and Wastewater” and “More Efficient Use of Water Resources,” showing how sustainable use of natural capital occupies a prominent position in our Key Sustainability Issues. These issues are managed under a similar promotion and audit system to that surrounding our climate change mitigation measures.
Our Sustainable Management Meeting, chaired by our President, considers our natural-capital-related initiatives pertaining to, for example, use of water resources, waste and pollutants. It discusses these initiatives in tandem with climate change mitigation measures as part of business planning, coordinating and evaluating current activity status. The results of such discussions are reported to the Board of Directors, which performs the Audit and Supervisory functions for this particular system.
Furthermore, one of the Sustainable Management Meeting’s advisory committees, the Environment, Safety, Quality Management Committee (chaired by the Director In-charge of the Technology Unit), coordinates all environmentally-related policies including those pertaining to climate change mitigation. By taking a cross-cutting perspective on Group matters, this committee helps deepen discussion over issues concerning natural capital and biodiversity.
While driving forward our nature-related initiatives, we believe it important to consider our links with stakeholders and the local communities surrounding our operation sites. We have therefore installed respect for human rights as the foundation of sustainable management under our Nippon Kayaku Group Human Rights Policy–based on international human rights standards–and are carrying out this commitment across all business activities.
We require all suppliers (business partners) to observe our human rights policies and, out of consideration for the safety and health of local residents, also conduct human rights impact assessments which include anti-pollution and water stress elements. We therefore plan how to avoid or reduce risk in line with international standards.
We have additionally fixed a Sustainable Mineral Procurement Policy to govern our purchases of mineral resources. Avoiding raw material purchases from conflict zones and high-risk regions allows us to also avoid complicity in human rights violations, environmental destruction and dishonest practices. We require that our suppliers attend our Sustainable Procurement Guidebook seminars and sign a related consent form. We have also carried out a Sustainable Procurement Survey aimed at both suppliers comprising the top 90% of our purchases and all new suppliers. Step-by-step are we advancing our human rights system for all regional stakeholders involved in our business, including indigenous peoples, and looking to expand the scope of our human rights due diligence going forward.
For details on our human rights due diligence, please see here. For details on Sustainable Procurement, please see here.

Strategies

In expanding several businesses onto a global scale, the Nippon Kayaku Group feels it essential to ascertain and evaluate the nature-related risks and opportunities facing each business unit. As such, we have utilized the LEAP approach recommended in the TNFD framework to implement our risk and opportunity assessments for natural capital and biodiversity.
FY2024 saw our analysis trained on two of our Group’s three business units: Mobility & Imaging’s Life Sciences Group (automobile safety parts) and Fine Chemicals. We prioritized such an analysis as these business units make use of raw materials which have significant impacts on nature and mineral resources, while their products also impact the natural environment during the stages of processing and use.
Our analysis focused on both the product manufacturing sites and main supplier bases of the business concerned, thereby allowing us to identify risks and opportunities across the entire business process.

Schematic Diagram of the Main Value Chain

Analysis Flow based on the LEAP Approach

Locate: Identification of Regions Requiring Attention

As our relationship with nature means that we greatly depend on the environments around our business bases, we studied these environments from three standpoints: “Key Biodiversity Areas,” “Highly-Sufficient Ecosystem Areas” and “High Water-Risk Areas.” The tools we used and the relevant standpoints are listed in the table below.

External Tools used in our Regions Requiring Attention Assessment

Tool Name	Outline	Supplied/ Developed by	Research Perspectives
IBAT（Integrated Biodiversity Assessment Tool）	An online tool providing highly reliable data on protected areas across the world, important habitats, distribution of information on endangered species etc., and biodiversity	International Union for Conservation of Nature and Natural Resources (IUCN) World Conservation Monitoring Center (WCMC) BirdLife International Conservation International	Are business bases present in important biodiversity areas? (IUCN protected areas and Key Biodiversity Areas (KBA))?
Global Forest Watch	An online platform providing high-frequency, high-resolution satellite data on worldwide deforestation, tree-felling and regeneration	World Resource Institute（WRI）
GLOBIO Model	An estimation model for making integrated evaluations and predictions about human impacts on biodiversity, such as land use, climate change and infrastructure preparation	Netherlands Environmental Assessment Agency (PBL)	Are business bases located in areas with a highly-sufficient ecosystem?
Aqueduct	An online water risk evaluation tool for assessing and mapping out systematic risks and multiple water-related factors such as water stress, water shortage, flooding and droughts.	World Resource Institut (WRI)	Are business bases located in regions with high physical water risks such as water stress?
Climate Vision	An online platform for analyzing climate change risks such as flooding and storm tides on a global scale with high-resolution images, and which allows for risk assessments and financial impacts to be calculated based on future climate scenarios	Gaia Vision Inc.	Are business bases located in high-flood-risk regions?

List of Regions Posing Risks to Directly-operated Business Bases

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Related Units	Business Base Name	Important regions for biological diversity	Regions with high ecosystem sufficiency	Regions with high physical risks
Safety Systems Business	Safety Head Plant	Located in a Designated Conservation Area in which biological diversity takes on high importance	-	-
	Kayaku Safety Systems (Huzhou) Co., Ltd.（KSH）	-	-	Located in a high water stress region
	Kayaku Safety Systems de Mexico, S.A. de C.V.（KSM）	-	-	Located in a high water stress region
Fine Chemicals Business Unit	Asa Plant	-	-	Located in a high flood-risk region
	Tokyo Plant	-	-	Located in a high flood-risk region
	KAYAKU CHEMICAL (WUXI) CO.,LTD.（KCW）	-	-	Located in a high flood-risk region
	WUXI ADVANCED KAYAKU CHEMICAL CO., LTD.（WAC）	-	-	Located in a high flood-risk region

As shown in the table, the results of our study helped us identify that, of the Nippon Kayaku Group’s operation bases, the Safety Head Plant (Himeji) is located in a region of importance to protecting biodiversity, while KSH (China) and KSM (Mexico) are situated in high water-stress regions. Though KSH and KSM do not use large quantities of water per se, we have realized they need to strengthen their water resource management. We also recognize the flood risks posed by climate change and are studying the effects in detail through a scenario analysis in line with TCFD disclosure requirements. Of the business sites analyzed this time, four (Asa Plant, Tokyo Plant, KCW (China) and WAC (China)) fall under high-risk status, and we are continually looking at how to strengthen relevant response measures. Meanwhile, all business sites assessed from the ecosystem sufficiency standpoint are located in areas which have changed beyond a certain degree due to human social activities; none can therefore be said to be located in a “sufficient” ecosystem. Henceforth, to ensure that no further ecosystem sufficiency is lost due to business activities, we will continue to mount initiatives aimed at reducing environmental burdens. We have also analyzed the sites of our 20 biggest suppliers by volume and, through an audit process, have pressed for improvements at sites located in regions with high environmental risks. We are therefore promoting consideration of the natural environment across the entire supply chain.

Evaluate: Identification and Assessment of Dependency and Effects

For our assessment of how our Group’s business activities depend and impact upon natural capital, we made use of ENCORE^* to construct a heat map of every step of the manufacturing process from the upstream stage. The analysis results can be found in the table below.

*ENCORE（Exploring Natural Capital Opportunities, Risks and Exposure）was co-developed by organizations such as the Natural Capital Finance Alliance and the UN Environment Program World Conservation Monitoring Centre. It is a tool which helps us visualize the types of natural capital on which the business sector and industrial activities depend, and the concomitant effects.

Results of the ENCORE Dependency Item Assessment

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Activity				Dependency
Activity				Service supplied	Adjustment and maintenance services
Business	Value Chain Step		Business Activity	Water supply	Climate matters for the region as a whole	Rain pattern adjustments	Regional climate matters	Air purification	Soil and sediment preservation	Purification treatment for solid waste	Water purification	Water current adjustments	Flood controls	Storm relief	Others (Natural excesses)
Across all business areas	Upstream	Crude oil/ Natural gas	Drilling for crude oil and natural gas	M	H	-	L	VL	L	L	VL	M	H	L	M
			Manufacture of refined oil products	L	VL	-	L	VL	M	L	H	M	M	M	L
			Manufacture of plastic products	L	VL	VL	L	VL	L	L	M	M	M	M	L
		Minerals	Mining of ferrous and non-ferrous metals	H	H	VH	L	VL	M	L	VH	H	H	M	M
			Manufacture of Type 1 steel, precious metals, non-ferrous metals	H	VL	M	L	M	L	L	M	H	M	M	-
			Manufacturing business for other metal products, metal processing service activities	M	VL	-	L	-	L	M	M	M	M	M	L
		Common	Manufacture of electrical parts and circuit boards	M	VL	VL	L	VL	L	L	M	M	M	M	L
Safety Systems Business	Direct operations	Automobile parts manufacturing		L	VL	VL	L	VL	M	L	M	M	M	M	L
Fine Chemicals Business Unit	Direct operations	Chemical manufacturing		M	VL	VL	L	VL	M	M	M	M	M	M	L

Results for the ENCORE Effect Item Assessment

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Activity				Effect
Activity				Impact					Output
Business	Value Chain Step		Business Activity	Land are used	Freshwater area used	Seafloor area used	Water use	Non-bioresource use	GHG emissions	Air pollutant emissions	Soil and water pollutant emissions	Emissions of soil and water-polluting nutrient salt	Solid waste	Interference (noise pollution, light etc.)
Across all business areas	Upstream	Crude oil/ Natural gas	Drilling for crude oil and natural gas	L	VH	VH	M	-	H	H	VH	-	M	VH
			Manufacture of refined oil products	L	-	-	L	-	M	H	VH	-	M	VH
			Manufacture of plastic products	L	-	-	L	-	M	M	VH	-	M	M
		Minerals	Mining of ferrous and non-ferrous metals	M	VH	VH	M	H	M	H	VH	-	VH	VH
			Manufacture of Type 1 steel, precious metals, non-ferrous metals	L	-	-	M	-	H	H	VH	M	M	VH
			Manufacturing business for other metal products, metal processing service activities	L	-	-	M	-	L	L	VH	-	L	M
		Common	Manufacture of electrical parts and circuit boards	L	-	-	L	-	VL	L	H	-	L	M
Safety Systems Business	Direct operations	Automobile parts manufacturing		L	-	-	L	-	VL	L	M	-	L	M
Fine Chemicals Business Unit	Direct operations	Chemical manufacturing		L	-	-	M	-	M	M	VH	-	M	VH

Our assessment results revealed that manufacturing bases in both our Safety Systems and Fine Chemicals business have a moderate level of dependency on their surrounding environments, as the self-maintenance functions of nearby soil and river environments are influenced by natural-disaster risks. As it was also indicated that traces of pollutants could be present in wastewater produced from manufacturing activities, these sites have been assessed as moderately dependent on underwater microorganisms and their water purifying actions.
We also noted that our Fine Chemicals business, through its dependency on water resources, emissions of pollutants, waste production and noise pollution, is having an increasingly sizable impact on nature. We have not only appropriately grasped the amounts of activities behind the inputs and outputs, but are taking steps and conducting relevant monitoring to try and limit these activities below the applicable regional standards. As it has furthermore been indicated that pollutant emissions and noise pollution are having major environmental impacts across our entire value chain, we consider it important to grasp the extent of those issues at supplier business sites, especially those located in Regions Requiring Attention. As natural environmental impacts are especially pronounced in mineral mining at the commencement of the upstream stage, we will strive for a more detailed grasp of upstream processes and are fully aware of the need to encourage that necessary steps be taken.

Assessment: Identification and Evaluation of Risks and Opportunities

Our consideration of nature-related risks and opportunities was based on the Regions Requiring Attention analyzed in our Locate and Evaluate phases, as well as the dependency and effect relationships. We also made use of environmental data from business sites to identify both risks and opportunities posed by nature to our business, and, conversely, the impact our business has on nature. The risks and opportunities we identified can be found in the table below.

Risk Chart

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Category	Main risks to business activities	Impact on nature	When the risk will emerge	Financial impact	Chief measures
Policy, legal and regulatory	Increased costs of responding to strengthened emissions regulations for air, water and soil pollutant, and operational restrictions	Improved local environments through strengthened emissions regulations on air, water and soil pollutants	Medium to long-term	Moderate	・Emissions status for every pollutant measured and disclosed ・Combustion facilities renewed at high VOC-producing plants; emissions reductions confirmed ・Waste water treatment equipment renewed ・Zero emissions into soil of PRTR listed substances
	Raw material price increases stemming from strengthened emissions regulations for air, water and soil pollutants		Medium to long-term	Moderate	・Engaging our suppliers with the aim of promoting sustainable procurement
	Increased costs of responding to strengthened regulations on waste emissions	Fewer hazardous substances emitted through reduction of waste	Medium to long-term	Moderate	・Tracking implemented in pursuit of newly-fixed 1% or less zero-emissions targets ・Waste volume measurements per-sales-unit completed for high-waste-producing business sites
Market	Raw material price increases due to demand concentrating around eco-friendly materials	Loss of existing ecosystems due to excess felling of biomass materials and human land reclamations	Medium to long-term	Large	・Engaging our suppliers with the aim of promoting sustainable procurement
Reputational	Worsening ESG evaluations and reputation from non-eco-friendly operations including raw material purchases, leading to blacklisting by customers	An improved environment through heightened importance of environmental considerations	Medium to long-term	Moderate	・Zero use of restricted chemical substances inside Japan and in certain overseas countries ・Taking steps to ensure zero procurement of raw materials containing chemical substances appearing in a survey based on Green Procurement Regulations
Acute physical risks	Suspended operations and repair costs incurred at certain business sites due to flooding of nearby rivers and landslides caused by typhoons and heavy rain etc.	Collapse of ecosystems in surrounding regions, including rivers; soil deterioration	Short to long-term	Moderate	・Quantification of financial impacts, and firming up of flood measures based on flood simulation results
Chronic physical risks	Operational restrictions or suspensions due to water shortages	Declining river levels and groundwater shortages will cause the balance of river and neighboring ecosystems to collapse, triggering biodiversity loss	Medium to long-term	Moderate	・Strengthening of water-saving measures during the production process; examination of water reuse and recycling methods ・Water intake efficiency with respect to sales ascertained through water intake measurements ・Measures to reduce water use and introduce water storage tanks at water-stress-risk business bases have commenced

Opportunities Chart

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Category	Main opportunities for business activities	Impact on nature	When the opportunities will emerge	Financial impact	Chief measures
Resource efficiency	Production cost savings due to more efficient use of water resources	Water resources in the rivers and ground will be conserved, in turn preserving the ecosystems of rivers and surrounding areas	Short to long-term	Small	・Water use reduction measures implemented at every plant ・Specific targets under examination
Resource efficiency	Cost savings due to waste recycling and reuse	Fewer hazardous waste emissions due to sustainable reuse of resources	Short to long-term	Small	・Measures for recovery of heavily-used solvents generally implemented ・Investigating and exploring the merits of other solvent recoveries
Products, services and market	Expanded demand for products that contribute towards reducing environmental burdens across their entire life cycle	Improved environment due to reduced environmental burdens	Medium to long-term	Large	・Looking at switching over from petroleum-derived to biomass-derived organic materials ・Aiming for development of lighter products which use fewer resources and reduce environmental burdens at the point of use
Reputational	Increased corporate value from improved ESG evaluations and reputation due to natural conservation activities during the conduct of business	Improved environment due to promotion of eco-friendly activities	Medium to long-term	Moderate	・Proactive disclosure of environmental information ・Examination of environmentally-related goals

Scenario Analysis

Our identified risks and opportunities were then assessed against TNFD Scenario Analysis Guidance. With a focus on the present, we imagined several possible future worlds (scenarios) and considered the uncertainty each would add to nature-related risks and opportunities, and the various degrees of impact.
Based on TNFD guidance, our analysis for FY2024 saw us think up four potential nature-related scenarios, applicable to any company, around the twin pillars of “Ecosystem Service Deterioration (Physical Risk)” and “Market and Non-Market Adjustability (Transfer Risk).” The prospective scenarios are outlined in the table below.

Scenario Images

Based on these four scenarios, each business site’s interactions with nature and environmental data,
and the policy directions of regions and national governments, the strategies demanded of the Nippon Kayaku Group can be organized as follows.

Scenario Ⅰ

In order to appropriately catch up with domestic and international environmental regulations, suitable establishment of product development and business processes becomes a must. Furthermore, the promotion of nature-positive-focused initiatives means environmental decline lessens and risks become more limited, but reducing the environmental burdens of business activities remains important from a reputational perspective in the eyes of stakeholders. Additionally, appropriate and highly-transparent information disclosures will take on added importance.

Scenario Ⅱ

Water resources become the natural capital on which business activities most depend and, based on previous water extraction restrictions imposed due to droughts, drought policies modeled on water shortage assumptions will grow in importance. Furthermore, as monitoring of natural environment decline will only strengthen, we will face a greater onus on devising initiatives designed to increase water use efficiency and disclosure of related information-especially appropriate information on the external effects of business activities.

Scenario Ⅲ

Similarly to Scenario II, of primary importance will be to heighten our resilience against physical risks through water-resource-related initiatives. Additionally, in a market which prioritizes short-term profit and prices, value should presumably be created through aiming for short-term profits and deployment of physical risk mitigation measures from the standpoint of lowering running costs through better resource efficiency.

Scenario Ⅳ

Climate change proceeds apace, meaning natural capital conservation falls down the list of priorities. This suggests that over the longer term, the situation will move to somewhere in-between Scenarios II and III. We therefore assess that initiatives conducted from long-term viewpoints will take on especial importance. In order to enable prompt responses to physical risk manifestations and increased focus on nature conservation, we will also find it important to prepare for the gathering and disclosure of nature-related information, and developing a product design process which contributes to lowering environmental burdens and more efficient natural resource use.

Material Regions

Based on the results of the above scenario analysis, we have determined that the Nippon Kayaku Group’s appropriate response to nature-related risks and opportunities is to prioritize securing water resources and promote highly efficient use of them, and install a product development process which contributes to nature conservation. With this in mind, we have identified a water-resource-dependency standard based on water-intake-to-sales, and have defined high-dependency regions as “Material Regions.” The affected business sites can be found in the table below.

Materiality Regions for Directly-operated Business Bases

Related Business	Business Base Name
Fine Chemicals Business Unit	Nippon Kayaku Fukuyama Plant
Fine Chemicals Business Unit	WUXI ADVANCED KAYAKU CHEMICAL CO., LTD.（WAC）

Going forward, with the focus on the above business bases and those with high levels of water stress, we will examine the setting of targets for water use amounts and efficiency, and promote relevant initiatives.
（For the Nippon Kayaku Group’s current initiatives on water resource use, please see here）.

Upcoming Analysis

While our FY2024 analysis focused on our Safety Systems Business and Fine Chemicals Business Unit, our upcoming analysis will cover our PolaTechno and Life Science businesses in identical style. Based on results which showed particularly strong interactions with natural capital in the raw material procurement stage, we shall also survey our mining partners, strengthen initiatives, and aim to construct a due diligence system covering the entire value chain.

Management of Risks and Impacts

The Nippon Kayaku Group has fixed “Reduced Energy Consumption and Greenhouse Gas Emissions,” “Reductions in Waste and Wastewater,” and “Efficient Use of Water Resources” as Key Sustainability Issues, and is proactively tackling these issues as important elements of its companywide responsible care activities. (For more on how we identified our Key Sustainability Issues, please see here).
Our Responsible Care and Technology Division takes the lead in identifying and evaluating our dependencies and effects on natural capital, as well as nature-related risks and opportunities. It conducts investigations and analyses based on the TNFD-recommended LEAP approach, and uses the results to determine our Group’s key priority issues.
The issues are organized along the lines of the LEAP approach and assessed against two criteria: seriousness and frequency. “Seriousness” is evaluated from the size of the figures in the relevant indexes for business sites facing the risks in question, “frequency” is evaluated from the number of bases related to each particular business, and the issues receiving the highest overall scores are selected for prioritization.

Selected issues are then reported to our Environment, Safety, Quality Management Committee which coordinates our responsible care activities. Such reports consist of current policy and status updates, issues, problematic points and response status updates, and form the basis for examination of policy drafts for the next financial year. Our Sustainable Management Meeting then discusses that financial year’s policy further before making its final decision.
Based on the new fixed policy for the financial year, each business site and group company rolls out its responsible care activities which include natural-capital related initiatives, the status of which is confirmed and audited through periodical Central Environment, Safety and Health Inspections.
（For further information on our Responsible Care Policy and key issues, relevant systems and audits, please see here）.

Metrics and Targets

The Nippon Kayaku Group has installed “Reduced Energy Consumption and Greenhouse Gas Emissions”, “Reductions in Waste and Wastewater” and “Efficient Use of Water Resources” as Key Sustainability Issues, and has set the following targets geared towards their realization.

Nature-related Targets

Indicators(KPI)	FY2025 Targets	FY2024 Results	FY2024 Initiative-related Topics
Greenhouse gas emissions (Scope 1+2)	(Target achieved in FY2030) Under 70,598 tons (a reduction of over 46% on FY2019) (Target achieved in FY2024) Under 111,838 tons	111,102 t-CO₂	We received our first A-List Rating in the CDP's Climate Change Field Promotion of MFCA and solar-powered PPA models were sequentially introduced Emissions increased for every item due to increased production volumes, but recycling rates and zero-emission rates still improved Environmentally-friendly products and technologies are being developed 【Safety Systems Business】 KMY commenced production of a light cylinder inflator (new generation inflator) whose CO₂ emissions are 30% down on previous generation inflators. A green propellant MGG was developed. 【Functional Materials Business】 A prototype of a CFRP/GFRP-use thermosetting resin targeted for use in aircraft was tested and assessed on a real aircraft. Development of a biofuel-containing thermosetting resin that is high-temperature resistant and highly reliable. 【Color Materials Business】 Development of industrial-use inkjet ink (for coated paper and soft packaging). Expanded sales of developers for phenol-free thermal paper. 【Catalysts Business】 Advancement of joint-development of a hydrogen-producing catalyst. Development of a catalyst using materials informatics techniques which contributes to reducing amounts of, and improving yields from, raw materials used. Development of a catalyst to manufacture basic chemicals such as propylene from biofuel. 【Pharmaceuticals Business】 Promoted the adoption of materials posing lesser environmental burdens in response to moves towards resource conservation in the field of packaging.
VOC emissions	(Non-consolidated) Disclose results	(Non-consolidated) 60.3 tons
COD emissions	(Non-consolidated) Disclose results	(Non-consolidated) 222.2 tons
Total waste output	(Non-consolidated) Disclose results	(Non-consolidated) 28,225tons
Recycling rate	(Non-consolidated) 80% or higher	(Non-consolidated) 86.5%
Zero emission rate	(Non-consolidated) 1% or less	(Non-consolidated) 0.6%
Goal setting in line with SBT and consideration and implementation of specific measures	Progress disclosed	Published in Topics
Disclosure in line with TCFD recommendations	Progress disclosed	Information disclosed
Develop products and technologies with consideration for environmental issues	Progress disclosed	Published in Topics

Furthermore, disclosure status for nature-related indexes whose disclosure is either encouraged or requested by TNFD guidance can be seen in the table below.

Nature-related Index Calculation Table

Index Number	Index	Measurement Index	Disclosure location
ー	GHG Emissions	Scope1,2	ESG Aggregated Data＞Greenhouse Gas Emissions
C2.0	Total amounts per-type of pollutants released into soil	Total amounts per-type of pollutants released into soil	ESG Aggregated Data＞Industrial waste and Pollutants＞PRTR substances
C2.1	Waste water	Waste water amount（Total and breakdown）	ESG Aggregated Data＞Water
		Main pollutants within wastewater（COD, total phosphorus, total nitrogen, SS）	ESG Aggregated Data＞Industrial waste and Pollutants＞Wastewater Management
C2.2	Generation and treatment of waste	Waste amounts (hazardous/non-hazardous, general waste, industrial waste breakdown, waste breakdown, treatment method breakdown)	ESG Aggregated Data＞Industrial waste and Pollutants＞Waste
C2.3	Plastic Pollution	Plastic use amounts（Plastic packaging materials）	ESG Aggregated Data＞Material Flow＞Amounts of Raw Materials Used
C2.4	Air-pollutants other than greenhouse gases (GHG)	Breakdown of non-GHG air pollutants (VOC, NOx, SOx etc.)	ESG Aggregated Data＞Industrial waste and Pollutants＞Air Emissions
C3.0	Water removal and consumption from water-scarce regions	Per-country water use amounts and numbers of bases given for Water-stress Regions	ESG Aggregated Data＞Water＞Water-stress Investigation Results for Nippon Kayaku Group Manufacturing and R&D sites (FY2024)
C7.3	Opportunities	Capital outlays on nature-related opportunities; capital financing and invested amounts	ESG Aggregated Data＞Environmental Accounting＞Environmentally-related capital investments

Moving forward, we will press on with the releases of indexes not yet disclosed and, based on the results of such analyses as the LEAP approach, plan to determine targets centered upon the water-resource-related indexes deemed most important.
In such a way shall we strive to improve transparency around the environmental burdens of business activities, and aim to continuously reduce environmental impact on a groupwide scale.

Initiatives

Water-related Initiatives

Preventing Pollution

Water Resource Conservation

Business Site Initiatives

Takasaki Plant
Plant operations in harmony with the natural environment

Following the disposal of the former Tokyo 2nd Army Arsenal Gunpowder Manufacturing Plant into company hands, the site of the current Takasaki Plant restarted operations in April 1946 as a manufacturer of black gunpowder, before subsequently switching to medical manufacturing operations in August 1971. From the off, the plant aimed for “coexistence with nature”, and ultimately secured ISO14001 certification in January 2001.

Surrounded by the natural environments of Gunma Prefectural Park Gunma-no-Mori and the Karasu River, the plant’s slogan reads: “The Takasaki Plant: Continuing to Protect Life and the Environment.” Based on this has the plant fixed its environment policy as: “Each and every person here shall be sufficiently conscious of working in an industry connected to human life, and, based on such consciousness, work towards promoting environmental conservation and plant harmony with the abundant natural environment.”

The plant occupies a vast site of some 560,000m², with the 110,000m² of green land reported under the Factory Location Act remaining virtually in a state of natural vegetation, meaning its original ecosystem remains intact amid this natural cluster of trees within the Takasaki urban landscape. The site’s eastern, southern and northern sides are enclosed by three rivers within the Tonegawa river system: the Class A Karasu River; the Ino River, a tributary; and the Class A Kasu River within the Hirose River tributary. The northern side also abuts Gunma Prefectural Park: Gunma no Mori, which is home to deer, racoon dogs and kingfishers. We will continue to protect this abundant natural environment and ecosystem.

In addition to the Green Zone, our on-premises environmental facilities include a creek. This is part of the facility which used hydropower to drive manufacturing equipment in the days when the site served as a gunpowder factory. The vertical axis water turbine used at the time has also been carefully stored and preserved. The creek temporarily pools the water subjected to activated sludge processing by the onsite wastewater treatment facility. Only after confirming that creek water quality complies with water management standards do we release it into the river, thereby taking every precaution to prevent environmental pollution. Located far away from residential areas within a natural cluster of trees, and close to various rivers, the creek represents a safe place for animals to come, and serves as an annual oasis for migratory birds seeking food from the forests and rivers. Observing the arrival or migratory birds and their northward departures makes for an interesting seasonal employee event.

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Natural Capital and Biodiversity

Policy and Basic Approach

Information Disclosure based on TNFD Proposals

Governance

Strategies

Schematic Diagram of the Main Value Chain

Analysis Flow based on the LEAP Approach

Locate: Identification of Regions Requiring Attention

External Tools used in our Regions Requiring Attention Assessment

List of Regions Posing Risks to Directly-operated Business Bases

Evaluate: Identification and Assessment of Dependency and Effects

Results of the ENCORE Dependency Item Assessment

Results for the ENCORE Effect Item Assessment

Assessment: Identification and Evaluation of Risks and Opportunities

Risk Chart

Opportunities Chart

Scenario Analysis

Scenario Images

Scenario Ⅰ

Scenario Ⅱ

Scenario Ⅲ

Scenario Ⅳ

Material Regions

Materiality Regions for Directly-operated Business Bases

Upcoming Analysis

Management of Risks and Impacts

Metrics and Targets

Nature-related Targets

Nature-related Index Calculation Table

Initiatives

Water-related Initiatives

Business Site Initiatives

Takasaki PlantPlant operations in harmony with the natural environment

Takasaki Plant
Plant operations in harmony with the natural environment