Risk Management

In order to identify significant risks and enact the requisite controls, the Nippon Kayaku Group undertakes the following “Business Unit Risk Control Activities” and “Top Five Risk Control Activities” on an annual basis.
Business Unit Risk Control Activities cover our three business units, our R&D Department, and our Head Office Administration Department. They involve extracting the risks most impactful to each business unit and department from a managerial perspective, and examining ways to deal with them.
Our “Top Five Risk Control Activities” cover all plants, research labs and business sites inside Japan, as well as domestic and overseas group companies. Each business site extracts its five key risks from its own perspective and explores possible response measures.
Risks and response measures identified for each business unit and site are reported to the Internal Control Management Division, which serves as the office for the Crisis Management Committee. The Internal Control Management Division comprehensively grasps and analyzes risk trends, passes on its findings to the Crisis Management Committee for discussion and final decision on the major risks and responses, then makes twice-yearly reports on initiatives and progress updates to the Sustainable Management Meeting and Board of Directors.

The principal risks identified by management as having a potentially major impact on the consolidated group financial situation, management results and cash flow are listed below. Each risk has been evaluated against an effect and frequency scale of three sizes (large, medium, small). The risks noted here do not serve as a comprehensive list; there remains the possibility for risks not noted below to have future impact upon Group business, business results and financial situation. We have established a Crisis Management Committee to respond to emergencies, and are constructing a system which enables a rapid and appropriate Group response. (For more on our emergency situation responses and the composition and administration of our Crisis Management System, please see here).

In addition to the financial effect perspective, our Group also identifies risks and opportunities from the standpoints of significance to the environment and society. Significant risks in non-financial fields have been organized systematically as part of our materiality reassessment, with their contents and related policy responses “Key Sustainability Issues（Materiality）”.

The Nippon Kayaku Group believes in the necessity of appropriately grasping the risks and opportunities associated with sustainable management, and linking the acts of reducing those risks and gaining new business opportunities to further business growth.
Having recognized the above, we have disclosed information based on the risks and opportunities surrounding our Key Sustainability Issues, and TCFD and TNFD proposals. By working towards resolving environmental and social issues through our business activities we are aiming to achieve a sustainable society and additional corporate value.
In order to continue our appropriate responses to the diversification of business activities and changing social and environmental issues, we will periodically review these risks and opportunities, and work towards disclosing information of substantial quantity and quality.

In anticipation of the most critical risks posed to our business activities, we have fixed our Crisis Management Regulations and are currently preparing our Crisis Management System. We are also using our Detailed Crisis Management Regulations to work on building an emergency response structure which allows for more accurate responses based on the preventative measures outlined in various response manuals.