Environmental Management

Policy and Basic Approach

The Nippon Kayaku Group’s environmental initiatives are aimed at contributing to global environmental conservation, and thus play a role in tackling the Key Sustainability Issues in the KAYAKU Vision 2025. They are also promoted in pursuit of targets published in our Responsible Care Policy, which are viewed as priority issues. Taken together, these initiatives constitute a companywide contribution to global environmental conservation. This involves observing both domestic and international laws and regulations related to the environment as well as any agreements we have signed, and, while picturing the environmental risks stemming from our business activities, showing consideration towards reducing environmental burdens, preventing pollution, saving energy and resources, the effects of climate change, and reducing waste.

Our Declaration on the Environment, Health, Safety and Quality

Nippon Kayaku Group Responsible Care Policy

System

Responsible Care Promotion System

Environmental Management System

ISO14001 Certification

Our current efforts to retain our certification status for ISO14001, the internationally recognized environmental management standard, see us consider the environment during the development and manufacture of products and the provision of services. Having first gained ISO14001 Certification for Environmental Management Systems in 1998, we have now achieved certification for all seven of our domestic plants and seven overseas Group companies. We will continue, going forward, to explore new ISO14001 certification options for Group companies, including for those based overseas.

ISO14001 Certification

Environmental Audit

In line with ISO14001 requirements, the Nippon Kayaku Group conducts internal environmental audits. These enable us to confirm the status of activities with respect to environmentally-related legislation and regulations, and help us map out how to promote and improve our groupwide environmental conservation activities.

Responsible Care Audit

Targets and Results

Sustainability Action Plan and Results

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Key sustainability issues	Corresponding SDGs	Action plans	Indicators（KPI）	FY2025 Targets	Results		FY2024 Initiative-related Topics
Key sustainability issues	Corresponding SDGs	Action plans	Indicators（KPI）	FY2025 Targets	FY2023	FY2024	FY2024 Initiative-related Topics
Reducing Energy Consumption and Greenhouse Gas Emissions Reduction of Wastewater and Industrial Waste Improving Efficiency of Water Resource Use		To achieve our FY2030 Environmental Targets by promoting energy-saving and global-warming response initiatives. To extract issues and clarify our strategies in order to achieve carbon neutrality by FY2050.	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	102,704 t-CO₂	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) 32.9 tons	(Non-consolidated) 60.3 tons
			COD emissions	(Non-consolidated) Disclose results	(Non-consolidated) 210.9 tons	(Non-consolidated) 222.2 tons
			Total waste output	(Non-consolidated) Disclose results	(Non-consolidated) 20,974tons	(Non-consolidated) 28,225tons
			Recycling rate	(Non-consolidated) 80% or higher	(Non-consolidated) 83.8%	(Non-consolidated) 86.5%
			Zero emission rate	(Non-consolidated) 1% or less	(Non-consolidated) 0.68%	(Non-consolidated) 0.6%
			Goal setting in line with SBT and consideration and implementation of specific measures	Progress disclosed	Medium-term Environmental Targets revised to 1.5℃ scenario	Published in Topics
			Disclosure in line with TCFD recommendations	Progress disclosed	Information disclosed	Information disclosed
			Develop products and technologies with consideration for environmental issues	Progress disclosed	Published in Topics	Published in Topics

Medium-term Environmental Targets and Results

FY2021 saw the Nippon Kayaku Group kick-start its environmental conservation activities afresh with the fixing of its new Medium-term Environmental Targets.
Our medium-term target for the 2℃ warming scenario initially saw us, in the Climate Change field, commence a roll-out of our Scope 1 and 2 greenhouse gas emissions item (for FY2030 emissions to be 32.5% or more down on FY2019 levels) to our (consolidated) group companies. However, with global environmental problems intensifying and moves towards carbon neutrality gaining momentum in recent years, we subsequently revised our standards to fit a 1.5℃ warming scenario, committing us to a 46% reduction in FY2019 Scope 1 and 2 emissions by 2030 and an aim of carbon neutrality by FY2050. In relation to these matters, we decided to approve the proposals of the Task Force on Climate-related Disclosures (TCFD) in March 2022, and will continue to follow these proposals as we proactively disclose information on not only greenhouse gas emission status, but climate change risks and opportunities and initiatives related to the building of a Sound Material-Cycle Society.
In the area of Reducing Chemical Substance Emissions, we are yet to fix targets for emissions of Volatile Organic Compounds (VOC) and Chemical Oxygen Demand (COD), and have merely published the current data. We can say that our VOC and COD emissions are increasing with production quantity, as well as due to changes in goods produced.
In the area of Reducing Waste, also, we are yet to fix target amounts for industrial waste produced and are merely reporting current figures. We are, however, working towards a fixed recycling rate target of at least 80% (excluding container re-use) and a zero-emission-rate target of less than 1%. Our amount of industrial waste produced during FY2024 was up on FY2023 due to increased production quantities. That said, with respect to rates for recycling and zero emissions, we not only met our targets but achieved improvements on top of those due to continued promotion of both recycling and environmental-burden-reduction measures at every business site.

Trends in Medium-term Environmental Target Results

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Area	Covering	Items	Target Figures	2020^*1	2021	2022	2023	2024
Climate change prevention^*2	Consolidated	Greenhouse gases, Scope 1+2^*3 emissions	FY 2030 Targets No more than 70.6 kilotons (Over 46% down on FY2019) (Reference: FY2024 standards) No more than 111.8 kilotons	118.2 kilotons (10.0% reduction)	112.5 kilotons (14.2% reduction)	108.3 kilotons (17.5% reduction)	102.7 kilotons (21.7% reduction)	111.1 kilotons (15.3% reduction)
Reductions in amounts of chemical compounds produced	Non-Consolidated	VOC^*4(Quantities of Volatile Organic Compounds produced)	(Results Report)	33.3 tons	52.1 tons	38.7 tons	32.9 tons	60.3 tons
Reductions in amounts of chemical compounds produced	Non-Consolidated	COD^*5emissions	(Results Report)	122.6 tons	124.2 tons	171.8 tons	210.9 tons	222.2 tons
Industrial waste reduction	Non-Consolidated	Waste quantities	(Results Report)	25,153 tons	28,424 tons	27,621 tons	20,974 tons	28,225 tons
		Recycling rates (excluding container reuse)	No less than 80%	81.6%	82.3%	85.0%	83.8%	86.5%
		Rate of zero emissions^*6	No more than 1%	1.6%	1.0%	0.8%	0.7%	0.6%

*1Including our Joetsu Plant. Until FY2020, under our old Medium-term Environmental Targets, the Joetsu Plant was left out of Scope emissions.
*2Medium-term Environmental Target for FY2030: A reduction of at least 46% on FY2019 levels (from 131.2 kilotons to no more than 70.6 kilotons)
*3Scope 1: Greenhouse gas emissions directly produced by our company itself (through fuel combustion, manufacturing process emissions, etc.)
Scope 2: Emissions our company indirectly produces through the use of electricity, heat and steam supplied by other companies
*4The total of VOCs (Volatile Organic Compounds) includes not only those that must be reported under government ordinances (the PRTR Law) but also those specified by the Japan Chemical Industry Association.
*5COD (Chemical Oxygen Demand): A leading water quality index based on chemical oxygen demand and the amounts of oxygen necessary for oxidizing materials in water.
*6Rates of zero emissions: Defined as the ratio of internal to external Nippon Kayaku waste disposed of at landfill sites.

ESG Aggregate Data

Initiatives

Use of LCAs (Life-Cycle Assessments)

We are also working to maintain and improve the environment, health and safety at every step of the product life cycle, from the research and development stage right the way through production, distribution, sale, recycling and disposal. We are trialing the design of a process which allows us to visualize the value of every Group product or service by assessing and analyzing environmental impacts and potential environmental contributions at every stage of the life cycle. Part of these activities involves promoting calculation of the carbon footprint (CFP) of every Nippon Kayaku product, which allows us to not only grasp its environmental impact but improve the accuracy of our LCA calculations for customer products. We are presently proceeding with such calculations for certain product lines, and are looking at how to systematize this process to enable emissions calculations to be made for every company product.

Development of Environmentally-conscious Technology and Products

The Products and Technologies Creating a Sustainable Future

Environmental Education

Through our online Sustainability Training for all Group directors and employees (including contract and part-time employees) and temp staff, we are presenting opportunities to learn about the environment.

Sustainability Training

Environmental Communication

Since publishing its CSR Report in 2013, the Nippon Kayaku Group has continually disclosed information pertaining to the environment. Since FY2021, we have integrated these actions into our website in order to enhance the information disclosed. Going forward, we will continue to talk to our stakeholders, and move information disclosures into line with international standards so as to further expand the types of contents disclosed. Furthermore, we will continue to proactively disclose information to stakeholders via Climate Disclosure Project (CDP) surveys concerning climate change, water security and supply chains, and through Environment, Social and Governance (ESG) institution surveys.

Cases of Environmentally-related Violations and Accidents

We are currently working on preventing violations of environmental regulations and accidents, and are preparing a rapid response system to deal with such incidents. Across the Nippon Kayaku Group in FY2024, there were no accidents, legal violations or regulatory violations which impacted upon the environment, nor any accidents related to water quality or volume, or violations of any related rules. Furthermore, no punishments or fines were issued.

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Indicators	Covering	Unit
Number of violations of environmental laws and regulations	consolidated	cases
Number of environmental accidents	consolidated	cases
Violations of laws and regulations; fines issued for enrivonmental accidents; punishment costs	consolidated	yen

Each of our business sites has signed various agreements with local authorities and regions. In addition to respecting various environmentally-related agreements and advancing activities designed to reduce environmental burdens, we are contributing to the safety and security of local communities. FY2024 produced no cases of legal violations or penalties incurred with respect to water quality and quantity.

Environmental Accounting

For the purpose of effectively driving forward environmental conservation efforts, Nippon Kayaku is publishing the aggregate costs of conserving the environment incurred during business activities.

ESG Aggregate Data(Environmental Accounting)

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Policy and Basic Approach

System

Environmental Management System

ISO14001 Certification

Environmental Audit

Targets and Results

Sustainability Action Plan and Results

Medium-term Environmental Targets and Results

Trends in Medium-term Environmental Target Results

Initiatives

Use of LCAs (Life-Cycle Assessments)

Development of Environmentally-conscious Technology and Products

Environmental Education

Environmental Communication

Cases of Environmentally-related Violations and Accidents

Environmental Accounting