Environmental Management

Policy and Basic Approach

The Nippon Kayaku Group has defined contributing to conservation of the Earth’s environment as a key management issue, and drives forward environmental management as the core of its Sustainability Strategy laid down in the Long-Term Management Plan: Evolution2035. Our basic approach is based on the principles of Responsible Care, seeing us appropriately recognize and evaluate the environmental risks at various stages of business activity, and continuously work on improvements.
We also observe environmental laws and regulations, and signed protocols, both inside and outside Japan, and engage in environmental risk reduction and preventative anti-pollution measures stemming from product development, manufacturing processes and business activities.
Furthermore, we are mapping out our path to reducing environmental burdens through climate change measures, promotion of energy-saving and resource-conserving practices, and waste reduction, and have established contributing towards realizing a sustainable society as a basic policy.

Our Declaration on the Environment, Health, Safety and Quality

Responsible Care Targets

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

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Indicator	FY2028 Target	FY2035 Target	Scope
GHG emission amounts (Scope1+2) *Compared to FY2019	36% reduction	64% reduction	Consolidated
Major Environmental Accidents	0 cases	0 cases	Consolidated
Environmental Law Violations	0 cases	0 cases	Consolidated
Recycling Rate	82% or higher	85% or higher	Non-consolidated
Zero-emissions Rate	0.8% or less	0.6% or less	Non-consolidated
VOC Emission Amounts Compared to FY2024	1% per-unit reduction	3% per-unit reduction	Consolidated
Waste Amounts Compared to FY2024	1% per-unit reduction	3% per-unit reduction	Consolidated

FY2025 Sustainability Targets and Results

Medium-term Environmental Targets and Results

Since FY2021, the Nippon Kayaku Group has fixed new Medium-Term Environmental Targets as it advances its environmental conservation activities.
In the climate change field, we initially conformed to the 2℃ Standard, and the target of achieving FY2030 greenhouse gas emissions (Scope 1 + 2) at least 32.5% lower than those of FY2019. Since then, based on the increasing severity of environmental issues and international movements towards carbon neutrality, we have adopted the 1.5℃ Standard as our new tougher emissions target, aiming for at least a 46% reduction on FY2019 levels by FY2030, and carbon neutrality by FY2050. In tandem have we signed up to the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations in March 2022, and moved forward with information disclosures pertaining not only to progress on emission reductions but also climate change risks and opportunities.
In the field of chemical emissions, we have fixed output-unit-based targets for volatile organic compound (VOC) emissions as we work on reducing environmental burdens. While it is the case that absolute quantities of VOC emissions have shown an upward trend due to increased production quantities and product lineup changes, we are nevertheless pressing ahead with improvements to output-unit emissions.
The field of waste reduction, meanwhile, has seen us adopt FY2024 as the standard for our output-unit reduction targets, and aim for a 1% per-output-unit reduction by FY2028. We have also fixed targets for recycling and zero-emission rates; at least 82% for the former and 0.8% or less for the latter.
FY2025 saw us achieve reductions in total waste generated due to improved utilization rates and changes to product line composition. On recycling and zero-emission rates, we continue to promote recycling at every business site, and have delivered further improvements on top of achievement of targets.

Trends in Medium-term Environmental Target Results

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Area	Covering	Items	Target Figures	2021	2022	2023	2024	2025
Climate change prevention^*1	Consolidated	GHG, Scope 1+2^*2 emissions	FY 2030 Targets No more than 70.6 kilotons (Over 46% down on FY2019) (Reference: FY2024 standards) No more than 111.8 kilotons	112.5 kilotons (14.2% reduction)	108.3 kilotons (17.5% reduction)	102.7 kilotons (21.7% reduction)	111.1 kilotons (15.3% reduction)	90.1 kilotons (31.4% reduction)
Reductions in amounts of chemical compounds produced	Non-Consolidated	VOC^*3(Quantities of Volatile Organic Compounds produced)	(Results Report)	52.1 tons	38.7 tons	32.9 tons	57.3 tons	45.3 tons
Reductions in amounts of chemical compounds produced	Non-Consolidated	COD^*4emissions	(Results Report)	124.2 tons	171.8 tons	210.9 tons	222.2 tons	173.6 tons
Industrial waste reduction	Non-Consolidated	Waste quantities	(Results Report)	28,424 tons	27,621 tons	20,974 tons	28,225 tons	24,014 tons
		Recycling rates (excluding container reuse)	No less than 80%	82.3%	85.0%	83.8%	86.5%	85.2%
		Rate of zero emissions^*5	No more than 1%	1.0%	0.8%	0.7%	0.6%	0.4%

*1Medium-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)
*2Scope 1: GHG 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
*3The 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.
*4COD (Chemical Oxygen Demand): A leading water quality index based on chemical oxygen demand and the amounts of oxygen necessary for oxidizing materials in water.
*5Rates 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

Furthermore, as we strive towards strengthening environmental response capacity in line with individual business practices, we have set up academic training which contributes towards reducing environmental burdens, observation of laws and stable operations, based upon the particular characteristics of each business.

Anti-pollution（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

The Nippon Kayaku Group is actively working on preventing violations of environmental regulations and accidents, and has prepared a swift policy response system for such eventualities. Across the entire Nippon Kayaku Group, FY2025 thankfully saw zero major accidents or legal/regulatory violations impacting upon the environment, as well as zero instances of related punishments or fines.
There were, however, three cases of minor environmental accidents (CFC leakage, pit overflows, noise pollution). Each instance saw us promptly contact the relevant authorities, and implement appropriate initial responses and corrective measures based on internal company regulations. Our subsequent site inspections and root cause investigations enabled us to confirm that impact on the environment was minor. The chief reasons behind such incidents were determined as equipment deterioration and insufficient prior checks. We are now moving forward with efforts to strengthen our information sharing and management systems to ensure no repeat of such cases.

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Indicators		Scope	Unit	2025
Number of violations of environmental laws and regulations		consolidated	cases	0
	Among the above, number of water-resource-related legal violations (water quality, water quantity etc.)	consolidated	cases	0
Total number of environmental accidents		consolidated	cases	3
Number of major environmental accidents^*		consolidated	cases	0
Violations of laws and regulations; fines issued for environmental accidents; punishment costs		consolidated	yen	0

*Environmental accidents such as leaks of toxic substances triggering neighborhood evacuation orders, media coverage and improvement orders.

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

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