[Feature] The NAGASE Group’s Ideal Future

Turning a Pivot to a Recycling-Oriented Society into a Business Opportunity

We have positioned the NAGASE Group’s Sustainability Basic Policy as a way of thinking shared throughout out value system, which comprises our management philosophy, vision, and the “Ideal NAGASE” for 2032.

Our corporate strategy now emphasizes strategies based on a long-term view that takes into consideration the natural environment and people in addition to the conventional perspectives of economic development and pursuit of profit. This is also evident in our medium-term management plan, ACE 2.0, which started in FY2021 and requires us to pursue “quality” in both economic and social value.

Back in around 2005, the Company had a department called the Eco-Materials Department, which handled various environmentally considerate materials, such as environmental products made by combining artificial wood and resin. Although our business partners showed some interest in these at the time, economic rationality was still the highest priority in those days, making it difficult to grow the business. Today, over 15 years later, one can sense that the world has clearly changed. Particularly in these past few years, there have been obvious changes in our business partners’ social policies and purchasing policies, and demand has increased for materials and products with high environmental value. Looking ahead, I am certain that this trend is going to accelerate.

The NAGASE Group recognizes the following as important social issues: technological innovation, climate change and resource shortages, demographic changes, and industrial reorganization. We consider climate change and resource shortages in particular to be the most important of these, and we view it as both a risk and a significant opportunity. Assuming that the traditional pattern of mass production, mass consumption, and mass disposal is now coming to an end, then by changing from a linear economic model of make, use, and discard to a cyclical model of make, use, and reuse, I feel that new business opportunities will open up for us in areas such as recyclable materials.

Two Major Themes: Decarbonization and Employee Engagement

The NAGASE Group established the Sustainability Committee in June 2020. The committee is chaired by the President and is currently composed of members including representatives of the Group’s trading business, manufacturing business, R&D functions, and areas. I am also a member.

In its first year, the committee formulated the Sustainability Basic Policy, and in the second year, 2021, it established the Employee Engagement Improvement Project and the Carbon-Neutral Project. These two projects have been positioned as important issues to be addressed by the entire Group.

With regard to the Carbon-Neutral Project, in January 2022, the Group announced its Carbon Neutral Declaration. In addition to trading company functions, the NAGASE Group has manufacturing and processing functions that occupy a distinctively large position in the Group and are categorized into two axes and four quadrants of “trading/manufacturing” and “visualization/reduction.”

Up until the fiscal year ended March 31, 2022, I was working as the person in charge of plastic-related business. Decarbonization initiatives are an urgent issue for this industry, and I have always been acutely aware of them personally in my activities. These days, demands on companies to reduce greenhouse gas (GHG) emissions and pressure to disclose them are increasing more and more. In fact, companies on the Prime Market are required to disclose Scope 3 information in accordance with the Task Force for Climate-related Financial Disclosures (TCFD) recommendation. However, complying with Scope 3 is difficult to achieve with the efforts of the Company alone. Cooperation along the supply chain is becoming necessary, and in the current situation, standard method of calculating GHGs hasn’t been determined. Since the Company is able to approach companies both upstream and downstream on the supply chain, it will use its strengths to bolster initiatives for supporting decarbonization among business partners.

As a specific initiative, the Company entered a business alliance with Zeroboard, Inc. in September 2021, aiming to develop a cloud service business for calculating and visualizing GHG emissions. Currently, we are rolling out this service for initiatives across all of our business divisions.

Through these activities, we are seeing an increase in opportunities to talk with people in the corporate divisions of our business partners, with whom we have had no interaction until now, and they are now also sharing their management issues with us. Therefore, in addition to calculating and visualizing GHG emissions, as a leading player in the chemical industry we consider it our mission and also our role as a partner to propose and lead solutions and facilitation to reduce emissions, and we are actively pursuing these initiatives.

Meanwhile, in the Employee Engagement Improvement Project, the President himself has taken the role of project owner and has positioned this issue as the highest priority. This demonstrates our thinking that employees are essential for realizing our philosophy, vision, and the “Ideal NAGASE.” We will continue to promote open communication between the Company (organization) and employees with the objective of increasing understanding of employee engagement and promoting it internally.

Using My Own Experience to Instill a Sense of Crisis

In April 2022, the Corporate Communication Department was renamed the Corporate Sustainability Department, and launched as an organization under direct supervision of the President. I believe that the mission of this team is to prepare tools and create mechanisms for promoting sustainability activities across the entire NAGASE Group. On the other hand, there remain significant disparities in understanding and awareness of sustainability between the business divisions, Group companies, and areas of the NAGASE Group. I will share my sense of crisis that if we do not tackle this now, we will be left behind with people concerned, using my own experience on the sales front line to drive the NAGASE Group’s sustainability forward.