FY2025 Sustainability Targets and Results

The Nippon Kayaku Group’s Sustainability Action Plan makes use of the SDG Compass to tie each important issue to one or more of the 17 SDGs. Through managing and disclosing our KPI progress reports on an annual basis, and promoting sustainability activities in general, does the Nippon Kayaku Group aim to create environmental, social and economic value, achieve the SDGs (hence the realization of a sustainable society) and improve corporate value.

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	Key sustainability issues	Corresponding SDGs	Action plans	Indicators（KPI）	FY2025 Targets	Results		FY2025 Initiative-related Topics
	Key sustainability issues	Corresponding SDGs	Action plans	Indicators（KPI）	FY2025 Targets	FY2024	FY2025	FY2025 Initiative-related Topics
Most important issues for corporate survival	Ensuring Compliance		Exercise thorough compliance, which is a basic principle for conducting corporate activities, and engaging in fair business operations Maintain and enhance an open corporate culture with a high sense of ethics	Number of serious compliance violations^*1	0	0	0	Zero serious compliance violations FY2025's mandatory compliance training took the theme of: "From 'I Conveyed' to 'Properly Conveying': How misunderstandings stem from thinking you have conveyed the situation." and was delivered to all domestic group companies
				Compliance training take-up rate	100%	97.7%	99.8%
				Percentage of group companies with compliance / whistleblowing hotlines	100%	100%	100%
	Strengthening Corporate Governance		Strengthen corporate governance of the entire group and manage in a highly transparent and sound manner	Number of times that the assessment on the effectiveness of the Board of Directors meetings is evaluated	Once per year	1	1	A Board of Directors Effectiveness Evaluation was conducted, the present situation grasped, issues extracted, and an action plan fixed. Improvements are currently ongoing "Measures geared towards the realization of capital-cost and stock-conscious management" were appropriately disclosed Selection of a female Senior Executive Officer Internal work audits by the Audit Division conducted 71 times in 4 years, thus achieving (total) targets
	Strengthening Corporate Governance			Number of times internal business audits are performed by the Audit Division	60 times in four years	17 (56)	15 (71)
Most Important Issues	Quality and Customer Safety		Enhance our quality control and quality assurance systems by continuously improving our quality management system and ensuring thorough quality-related governance Implement quality management, improve production efficiency and reduce process abnormalities through digitalization	Number of serious complaints by customers^*2	0	0	0	Our "Quality Month" of November adoped the theme of "Communication and Psychological Security protect Quality and People" and saw us stage a seminar on eliminating quality defects
	Quality and Customer Safety			Number of serious quality process abnormalities in processes^*2	0	1	0
	Environmental and Social Considerations in the Supply Chain		Practice supply chain management with consideration for environmental and social aspects, based on the Sustainable Procurement Guidelines	Response rate for confirmation of consent to Sustainable Procurement Guidelines	(Non-consolidated) 90%	(Non-consolidated) 91%	(Non-consolidated) 95%	FY2025 saw us send a survey, in line with Sustainable Procurement Guidelines, to 21 new suppliers, and obtain consent declarations from 20 of them As no Sustainable Procurement Survey responses revealed suppliers to be causing harm to either human rights or the environment, it was deemed unnecessary to submit an Improvement Request form
	Environmental and Social Considerations in the Supply Chain			Formulation and implementation of improvement plans using questionnaires to suppliers	(Non-consolidated) Progress disclosed	Published in Topics	Published in 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.	GHG 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	90,057 t-CO₂	Named to CDP's Climate Change A List for the Second Consecutive Year Promotion of MFCA and solar-powered PPA models were sequentially introduced GHG emissions have fallen due to the adoption of solar-power generators and an integrated energy service for multiple sites, as well as expanded use of renewable energy Quantities for Volatile Organic Compound (VOC) emissions and Chemical Oxygen Demand (COD) also decreased due to operation rates and changes to product lineup composition Amount of waste generated dropped owing to operation rates and changes to product lineup composition. Conversion to recycling also progressed, reflected in improved rates of both recycling and zero emissions 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. (165t-CO₂ down on the previous year) 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 Dye selection standards fixed with a view to expanding "fiber to fiber" recycling in conjunction with other companies 【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 【Agrochemicals Business】 Development and sale of a biostimulant contributing to both reduced environmental burdens and ecosystem conservation
				VOC emissions	(Non-consolidated) Disclose results	(Non-consolidated) 57.3 tons	(Non-consolidated) 45.3 tons
				COD emissions	(Non-consolidated) Disclose results	(Non-consolidated) 222.2 tons	(Non-consolidated) 173.6 tons
				Total waste output	(Non-consolidated) Disclose results	(Non-consolidated) 28,225tons	(Non-consolidated) 24,014tons
				Recycling rate	(Non-consolidated) 80% or higher	(Non-consolidated) 86.5%	(Non-consolidated) 85.2%
				Zero emission rate	(Non-consolidated) 1% or less	(Non-consolidated) 0.6%	(Non-consolidated) 0.4%
				Goal setting in line with SBT and consideration and implementation of specific measures	Progress disclosed	Published in Topics	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
Important Issues	Occupational Health and Safety in the Workplace		Strengthen the foundation for safe operation by thoroughly enforcing basic rules on safety and health and improving equipment and work procedures Implement health and productivity management and provide a workplace environment with a healthy work-life balance where employees can work with enthusiasm	Number of serious accidents^*3	0	0	1	A major incident occurred at our Asa Plant, for which root cause analysis has been completed, and recurrence prevention measures fixed and implemented. We will continue to drive forward recurrence prevention measure initiatives in FY2026 Continued accreditation as a Health and Productivity enterprise. To keep this up, we continue to encourage employees to maintain and improve personal health Paid Annual Leave take-up rates have not only met targets, but improved upon the previous year. The Yu-You Plan bringing at least five days of customized vacation for individual employees has been drawn up, shared, and proactively promoted by HR managers at each business site. Further success has been achieved by the fixing of Paid Leave Promotion Days. Going forward, we plan further such paid leave promotions to aid rises in employee productivity and motivation, and guarantee employment and retention of excellent human resources Periodical health check take-up rates remain at 100% Our third Employee Engagement Survey has been carried out. Our overall score of 49.7 was 1.3 points above last year's. The action plan fixed and implemented in response to analysis of, and issues within, each workplace structure can be credited with this improvement. Companywide, while we scored highly for "manager support" and "workplace unity", we tended to score lowly on "appropriate recruitment and placement" and "prospects for busines growth and business future." Each workplace has set up an action plan aimed at increasing employee engagement, and is undertaking improvement activities
				Acquisition of certifications under the Certified Health & Productivity Management Outstanding Organizations Recognition Program (Large Enterprise category)	(Non-consolidated) Continued certification	(Non-consolidated) Continued renewed	(Non-consolidated) Continued renewed
				Percentage of paid leave taken	(Non-consolidated) 70% or higher	(Non-consolidated) 73%	(Non-consolidated) 74.4%
				Percentage of employees who take mental health training	(Non-consolidated) 100%	The second year of the three-year plan has proceeded as planned	(Non-consolidated) 100%
				Percentage of employees receiving regular health checkups	(Non-consolidated) 100%	(Non-consolidated) 100%	(Non-consolidated) 100%
				Ascertaining and improving employee satisfaction through questionnaire surveys	(Non-consolidated) Progress disclosed	Published in Topics	Published in Topics
	Maintaining and Expanding Employment, Developing Human Resources, and Respecting Human Rights		Promoting diversity and inclusion through the recruitment of diverse human resources, effective HR assignment and exchanges Pass down and strengthen technical capabilities in monozukuri (manufacturing) and achieve globalization in human resources through ongoing human resource development Engage in business operations that pay care and consideration to the human rights of employees and all other people involved in the supply chain	Percentage of female employees in management posts^*4	(Non-consolidated) 10% or higher	(Non-consolidated) 8.3%	(Non-consolidated) 9.0%	With respect to female manager candidates, we have set up our Women's Career Support Program, promoted personnel exchanges with other companies through participation in Keidanren's Training for Women, and urged women to challenge for management positions. We have also increased our percentage of female hires. (New female hires are up by 4.5 points on the previous FY) With the aid of specialist support and advice, we are preparing better work introductions and working environments for disabled people, and continue to promote disabled hires as well as expanded job opportunities. We have also increased our disability employment rate through the fixing of Key Initiative Business Sites, expansion of recruitment, preparation of a suitable internal environment, and partnering with a Special Education School. We shall keep going with efforts to boost the preparation of a workplace environment in which people with disabilities can output their individual abilities, perform, and continue to work In addition to re-disseminating our Nippon Kayaku Group Human Rights Policy, we have set up online learning sessions to highlight the importance of initiatives promoting respect for human rights across the entire supply chain. The aim is to deepen understanding of the human rights issues to be considered in the conduct of business activity Based on the risks identified as requiring priority measures from Nippon Kayaku employees as identified in our Human Rights Risks Impact Assessment, we are continually implementing corrective measures to reduce and eliminate human rights negatives
				Percentage of employees with disabilities	(Non-consolidated) Achieve legal minimum employment rate	(Non-consolidated) 2.11%	(Non-consolidated) 2.33%
				Amount invested in education and training per employee	(Non-consolidated) Disclose results	(Non-consolidated) 72,015 yen/person	(Non-consolidated) 68,719 yen/person
				Training hours per employee	(Non-consolidated) Disclose results	(Non-consolidated) 15 hours	(Non-consolidated) 18 hours
				Number of training sessions held on human rights	Once or more per year	1	1
				Human rights due diligence: human rights impact assessment rate	(Non-consolidated) FY2022: 100% (Consolidated) FY2025: 100%	We are continuing to implement corrective measures for risks requiring priority measures to reduce and eliminate human rights negatives.	We are continuing to implement corrective measures for risks requiring priority measures to reduce and eliminate human rights negatives.
	Risk Management		Respond to various business-related risks and ensure business continuity by maintaining production systems, ensuring the proper procurement of raw materials, and strengthening measures against disasters	Implementation rate of risk control activities for business, etc., and top five risk control activities	100%	100%	100%	Top Five Risk Control Activities conducted at seven domestic factories and all group companies. (The lack of outstanding human resources emerged as an increasing risk-trend) Certain domestic and overseas business sites picked up for hearings related to their Top Five Risks BCP drill conducted at several sites within the Life Science Business Unit, based on a Kanto-region-epicentered earthquake scenario BCP drills conducted at Chinese and Malaysia group companies
	Risk Management			Number of BCP drills conducted	Once or more per year	3	3