Climate Change

The effects of climate change are having a serious impact on the environment, society, people's lives, and corporate activities.

With the conclusion of the Paris Agreement in 2015 to promote the reduction of greenhouse gas emissions worldwide, expectations for the role to be played by the private sector are increasing.

The NAGASE Group believes that it is important to respond to changes and expectations in the world and has set “Realize a Decarbonization” as one of our materiality. We also analyze the medium- to long-term risks and opportunities posed by climate change and their financial impact and develop business strategies required for a low-carbon society and a circular economy. In addition, we also identify the GHG emissions from our own business activities and the entire value chain and set medium- to long-term targets and activity plans for the reduction process.

The NAGASE Group endorsed the suggestions of the Task Force on Climate-related Financial Disclosures (TCFD) established by the Financial Stability Board (FSB) on January 25, 2022. And in line with the TCFD, information related to climate change is actively disclosed under the themes of Governance, Strategy, Risk Management, and Metrics and Targets.

Monitoring system of climate-related risks and opportunities by the Board of Directors

The NAGASE Group recognizes climate change as one of its important management issues and has established the Sustainability Committee and the Risk Management and Compliance Committee under the supervision of the Board of Directors to study and discuss policies and issues. Each committee reports regularly to the Board of Directors, so our actions on climate change are regularly and directly monitored by the Board of Directors.

Sustainability Committee, Risk Management & Compliance Committee

Risks and business opportunities related to the environment, including climate change, and our policies on these issues are deliberated by the Sustainability Committee, and in particular, risks are also reported to the Risk Management & Compliance Committee as part of our overall company-wide risk management. The content of the deliberations, such as dealing with disasters that pose physical risks due to climate change, changes in regulations that pose climate risks, issuing new regulations, and risks related to market changes and reputation, are reflected in business activities through the Corporate Sustainability Office, which is the organization responsible for business execution.

In addition, the Nagase Group has set up the Carbon Neutral Project as a subordinate organization of the Sustainability Committee. This project is an advisory body at the executive level, and specific policies and initiatives related to climate change are realized through discussions within the project.

• ※ Only the content related to sustainability and climate change is excerpted for the Risk and Compliance Committee.

Since the NAGASE Group has manufacturing and processing functions in addition to its trading company functions, we have categorized our activities into two axes and four quadrants, Trading/Manufacturing and Visualization/Reduction, and will work to achieve our goals under The NAGASE Group Carbon Neutral Declaration(pdf:421 KB), which consists of overall measures and measures 1 through 4.

In addition, based on our Basic Approach to Climate Change, we analyze and identify the medium- to long-term risks and opportunities posed by climate change and their financial impact, in order to develop business strategies that will help create a low-carbon and/or circular economy.

2 axes and 4 quadrants of “Trading company/manufacturing” and “Visualization/reduction”

NAGASE Group's Risks and Opportunities

NAGASE Group identifies and analyzes the medium- to long-term risks and opportunities posed by climate change and its financial impact in order to develop business strategies that contribute to a low-carbon and circular economy.

We have trading, manufacturing and R&D functions, and we are developing our business globally and in a variety of ways. Our group's business is currently divided into five segments: Functional Materials, Advanced Materials & Processing, Electronics & Energy, Mobility, and Life & Healthcare, and we provide a wide range of products, such as resins, plastics, electronic and semiconductor materials, and pharmaceuticals and cosmetics.
In addition, we have more than 110 bases around the world and have a very extensive value chain with about 18,000 global business partners.

While taking our company's characteristics into account when identifying risks and opportunities related to climate change, we evaluated the levels of importance as “Large,” “Medium,” or “Small” from the perspectives of “impact on business” and “likelihood of occurrence.”(Please refer to “Risk Management” for details on the specific method.)
As a result, for our company, a failure to meet the stricter regulations and social demands related to climate change, and changes in customer demand, was assessed as having a high level of importance as a transition risk due to climate change. On the other hand, we believe that if we can grasp these social, customer and market changes and provide appropriate materials, products and solutions to the society, it will lead to a great business opportunity.
As for physical risks, the impact of natural disasters and other incidents is a significant risk that needs to be considered not only for the company's own sites but also for sites in the supply chains. With our foundation in the trading business, we have set “Achieve a Sustainable Supply Chain” as a materiality, and we are committed to maintaining and ensuring a stable supply of our products through our network of approximately 18,000 global business partners.

• ※ Influenced functions
  ・Especially affected functions among trading, manufacturing and R&D functions.
  ・The term “whole company” refers to the company-wide impact of all trading, manufacturing and R&D functions.
• ※ Influenced value chain
  ・The stage of the value chain that is particularly affected, among “Upstream” “Downstream” and “Our Group”.
  ・“Upstream” mainly refers to the influence of procurement and logistics (transportation), and, ‘Downstream’ mainly refers to the influence of sales and logistics (transportation). “Whole value chains” refers to the impact on the entire value chain, including
  ・“Upstream“, “Downstream” and “Our Group”.

Response to Risks and Opportunities

The NAGASE Group is taking the following initiatives to minimize risks and maximize opportunities.

The NAGASE Group has identified the risks and opportunities that are important for our group, while there are various risks and opportunities related to climate change. The identified risks and opportunities are reported to the Group Management Committee, Board of Directors and other bodies by the Sustainability Committee and Risk Management & Compliance Committee.Then, we reflect them in our business activities while receiving necessary instructions and advice, and we are regularly and directly monitored by the Board of Directors through this process.
In addition, responses to identified risks and opportunities are reflected in business activities through the Corporate Sustainability Office, which is the organization responsible for business execution.

Monitoring by the Board of Directors

Responses and initiatives related to climate change are reported by the Sustainability Committee to the Group Management Committee, Board of Directors, and other bodies, and are discussed, decided, and implemented. In particular, the Risk Management & Compliance Committee reports on risks, including those related to climate change, to the Board of Directors and other bodies as part of the company's overall risk management.
When making decisions and taking action on climate change, we report progress to the Board of Directors and each committee, and receive necessary instructions and advice, etc., and are subject to monitoring.

Sustainability Committee

This committee continuously monitors “risks” and “opportunities” that are specific to sustainability issues. In addition, the Carbon Neutral Project has been established as a subordinate organization of the Sustainability Committee. This project is an advisory body at the executive level. Specific policies and measures related to climate change are discussed by this project and reported to the Sustainability Committee and other bodies for implementation.

Risk Management & Compliance Committee

This committee identifies, evaluates and manages overall company-wide risks. As part of this risk assessment, the risks that environmental issues such as climate change pose to our group's business are also considered and reflected in management. This risk assessment is evaluated and reviewed at least once a year.

• Risk assessment

In addition, we used “impact” and “likelihood of occurrence” as indicators in line with the company-wide risk assessment to evaluate the risks and opportunities associated with climate change on a 4-level scale. The results were then classified into “High”, “Medium” and “Small” categories according to their importance to our business.

Risk Management System

Environmental Management System (ISO14001)

The NAGASE Group's main manufacturing sites have acquired ISO 14001 certification. Under this ongoing initiative, we are also evaluating risks and opportunities through environmental impact assessments and surveys of related regulations, and we have a system of internal and external audits.

• Environmental Management

Process for identifying risks and opportunities

FY2021

When the NAGASE Group endorsed the TCFD in FY2021, we identified and assessed the significance of risks and opportunities related to climate change. We finally identified them through discussions at the Carbon Neutral Project and at the “Climate Change Workshop” involving the business division and group companies.

FY2024

The Nagase Group has declared its commitment to achieving carbon neutrality by 2050, with the aim of reducing GHG emissions to zero (Scope 1 and 2), and by 2030, reducing Scope 1 and 2 emissions by 46% (compared to 2013) and Scope 3 emissions by at least 12.3% (compared to 2020). ※The Scope 3 target may be revised in the future after dialogue with the supply chain.

Commitment to SBT　（Science Based Targets）

Nagase & Co., Ltd. has committed to set near-term company-wide emission reductions in line with climate science with the SBTi in September 2024. We will also review our goals for acquiring SBT certification.

NAGASE Group greenhouse gas emissions (Scope 1 and Scope 2)

Actual results for FY2023

Carbon Neutral Project Major Initiatives for FY2023

Major Initiatives for FY2023

In FY2023, Nagase has conducted “On-site PPA with in-house consumption” and “Virtual PPA Service Agreement”.

In addition, we are aware that we have made further progress in accumulating knowledge and know-how toward carbon neutrality through collaboration with Zeroboard, which offers GHG emissions visualization services, and carbon footprint (CFP) calculation consulting services with DNP.

• Sustainability Data (Environment: Climate Change)
• Third-party assurance report(pdf:1.6MB)

The NAGASE Group is a member of the Japan Foreign Trade Council. The NAGASE Group's approach to climate change is consistent with that of the Japan Foreign Trade Council, and the goals set by the Japan Foreign Trade Council are shared within the Environment ISO Secretariat.

Membership in organizations working on climate change issues

Japan Climate Initiative

Japan Foreign Trade Council / Sustainability Promotion Committee

Our Company’s Representative Director, President and CEO serves as Executive Director of the Japan Foreign Trade Council. As a member of the Sustainability Promotion Committee, our Company participates in committee activities and promotes activities related to climate change and other issues.

Zero Emission Challenge

Engagement with policymakers

The NAGASE Group is engaging with policymakers as shown below.

In addition, we support the Japanese government's statement to reduce greenhouse gas emissions by 46% from the FY2013 level by 2030 and have established our Company target to manage greenhouse gas emissions from a long-term perspective.

Issuance of Sustainability Linked Bonds

In June 2022, we issued our first Sustainability Linked Bond (*1) with the aim of contributing to solving social and environmental issues through our corporate activities.

• *1 A Sustainability Linked Bond is a bond whose terms vary depending on whether or not it meets predetermined sustainability/ESG objectives. The issuer of a Sustainability Linked Bond commits to improving future sustainability outcomes within an initially defined time horizon. Specifically, the instrument is based on the issuer's assessment of future performance using predetermined Key Performance Indicators (KPIs) and Sustainability Performance Targets (SPTs), and the terms of the bond change depending on whether the SPTs set as target values to be achieved with respect to the KPIs are achieved. The terms of the bond will vary depending on whether or not the target figures set to be achieved with respect to the KPIs are achieved.
• *2 Sustainability Performance Targets (SPTs) are targets based on the issuer's management strategy that determine the terms of issuance of Sustainability Linked Bonds.
• *3 A structuring agent is a person who assists in the implementation of a Sustainability Linked Bond by providing advice on the development of the Sustainability Linked Bond framework and obtaining a second party opinion.

For more information on Sustainability Link Bonds, please see

• The NAGASE's Sustainability Linked Bond Framework(pdf:604KB)

Independent Assessment of Sustainability Linked Bond Eligibilit

We have commissioned Rating and Investment Information, Inc. (R&I) to obtain a second party opinion on the credibility and environmental and social benefits of the Framework and its conformance with SLBP 2020.

• Second party opinion by Rating and Investment Information, Inc. (R&I)(pdf: 1,142 KB)

Sustainability Linked Loan Framework developed

The Sustainability Linked Loan (SLL) (*1) framework developed by NAGASE & CO., LTD. and Mitsubishi UFJ Bank Limited has been selected by the Ministry of the Environment as a model case study for the 2022 Green Finance Model Case Study Creation Project (*2).
In addition, on October 28, 2024, Nagase & Co. concluded a sustainability-linked loan agreement utilizing this framework and procured 20 billion yen.

Framework Scheme

• *1 Loans that encourage borrowers to meet ambitious, pre-determined Sustainability Performance Targets (SPTs).
• *2 For model cases and project summaries of the FY2022 Green Finance Model Case Study Creation Project, please refer to the following Selection of Model Case Study for FY2022 Green Finance Model Case Study Creation Project （NAGASE & CO., LTD.)

Features of the Framework

・Adoption of primary data (*1) ratios of GHG emissions as Sustainability Performance Targets (SPTs)
・The framework is designed to enable not only the company itself but also its suppliers to borrow using the framework, so that the entire supply chain can visualize and reduce GHG emissions.

NAGASE Group's Scope 3 reduction targets and SPTs

• *1 ① obtained from the company itself or its suppliers, ② company-specific activity data, emissions, or emissions intensity.

For details of the Sustainability Link Loan Framework, please refer to the following

• Sustainability Linked Loan Framework(pdf:854KB)

Independent Assessment of Sustainability Linked Loan Eligibility

Our Sustainability Linked Loan Framework has been confirmed by the Ministry of the Environment and its contractor, Japan Credit Rating Agency, Inc. to be compatible with the Green Loan and Sustainability Linked Loan Guidelines 2022 and the Sustainability Linked Loan Principles 2022. Ltd.

• Conformity Verification Report(pdf:2.2MB)

Overview of Sustainability Linked Loan (October 28, 2024)

Date of contract	October 28, 2024
Arranger	Mitsubishi UFJ Bank, Ltd.
Amount funded	20 billion yen
SPTs	SPT 1: Reduce the NAGASE Group's greenhouse gas emissions (Scope 3) in FY2030 by at least 12.3% compared to FY2020. SPT 2: Calculate and disclose at least 30% (on an emissions basis) of the NAGASE Group's greenhouse gas emissions in Scope 3 Category 1 in FY2030 using actual measurements received by the borrower from suppliers.

• Conclusion of a Sustainability-Linked Loan with The Bank of Tokyo-Mitsubishi UFJ, Ltd. (October 28, 2024)(pdf:253KB)

LCA Initiatives

Life Cycle Assessment (LCA) is a method to quantitatively evaluate the input resources, environmental impact, and potential environmental impact on the earth and the ecosystem of a product throughout its life cycle, from procurement of raw materials to production, distribution, use, and disposal. The NAGASE Group is promoting efforts to calculate environmental impact indicators such as CO2 emissions at the design stage through the calculation of LCA products.

Endorsement of the GX League Concept

Joint Development of Adult Disposable Diapers with Bio-based Super Absorbent Polymers

Toward commercialization of an EV battery residual value evaluation service

DNP and Nagase launch joint CFP quantification consulting service.

The carbon footprint of cosmetics and pharmaceuticals is visualized in the entire lifecycle of the product, including raw materials and packaging. (hereinafter referred to as “CFP”) calculation consulting service from July, 2023.

DNP has long been engaged in GHG accounting for the entire lifecycle of packaging products, from raw material procurement and manufacturing to disposal and recycling, while Nagase Sangyo has been promoting visualization and reduction of GHG emissions throughout the entire supply chain, including suppliers and customers, based on its network and know-how accumulated through its experience as a specialized chemical trading company. By combining the strengths of Nagase Sangyo, which has been promoting the visualization and reduction of GHG emissions throughout the entire supply chain, including suppliers and customers, based on its network and know-how cultivated as a specialized chemical trading company, we will provide comprehensive consulting support for CFP calculations and aim to achieve carbon neutrality.