Basic Approach to 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 analyze the medium- and long-term opportunities and threats posed by climate change, as well as its financial impact, and develop business strategies required for a low-carbon and recycling-oriented society. In addition, we identify the GHGs emitted by the business activities of our Company and the entire value chain, and set medium- to long-term goals and action 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.

In addition, 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.

Membership in organizations working on climate change issues

Japan Climate Initiative

The NAGASE Group is a member of the Japan Climate Initiative (JCI), which calls for "Joining the front line of the global push for decarbonization from Japan."

ISCC PLUS

Japan Foreign Trade Council / Global Environment Committee

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

Zero Emission Challenge

NAGASE & CO., LTD. is participating in the Ministry of Economy, Trade and Industry’s Zero Emission Challenge for the realization of 2050 carbon neutrality with the project Development of Production Technology for Bio-based Products to Accelerate Carbon Recycling.s

ISCC PLUS

Governance

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. In FY2021, the Board of Directors approved the NAGASE Carbon Neutral Declaration and Supporting Statement of TCFD, and the action policy based on this declaration was set as a non-financial target of ACE 2.0, the mid-term management plan, leading to the disclosure of single-year results. In this way, climate change is regularly and directly supervised by the Board of Directors.

Risk Management & Compliance Committee, Sustainability Committee

Risks and business opportunities related to the environment, including climate change, as well as policies for addressing them, are discussed at the Risk Management and Compliance Committee and the Sustainability Committee. The content of the deliberations, including disasters that are physical risks associated with climate change, changes in regulations that are climate risks, the issuance of new regulations, and responses to market changes and risks related to reputation, is reflected in our business activities through the Sustainability Office, which is the executive organization for the business.

It was also decided that in FY2020 climate change related KPIs will be set in the mid-term management plan (2021-25) within the KPI setting for climate change related and non-financial information.

Meeting committee structure Content of deliberation
Risk Management & Compliance Committee Risks related to damage caused by natural disasters such as floods and large typhoons that may occur owing to climate change
Sustainability Committee (Chairperson: Representative Director and President) Incorporating risks and opportunities for sustainability issues that include climate change into business strategies (consideration of setting climate change related KPIs)

Engagement with policymakers

The NAGASE Group is engaging with policymakers as shown below.

Focus of the law Corporate position Specific details of the collaboration Proposed legislative solutions
Mandatory carbon reporting Support More than 99% of the Scope 1 and Scope 2 emissions from the NAGASE Group come from within Japan. For this reason, the NAGASE Group is working with Japanese regulations. In accordance with the Act on Promotion of Global Warming Countermeasures ("Global Warming Countermeasures Act") and the Act on the Rationalization etc. of Energy Use ("Energy Saving Act"), both of which cover businesses in Japan, the NAGASE Group has been reducing greenhouse gas emissions and energy consumption, and reporting the amount of emissions and consumption. We support these laws and policymakers in implementing reduction activities and reporting appropriately. Support without exception (laws and regulations concerning reduction of greenhouse gas emissions and energy consumption)

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.

Strategy

Risks and opportunities

In FY2021, we conducted a risk and opportunity materiality assessment within the NAGASE Group's climate change strategy. Amid various risks and opportunities related to climate change, we have identified the following important risks and opportunities for the NAGASE Group.

Specific processes for climate-related risks and opportunities

The Carbon Neutral Project was established in July 2021 as a project within the Sustainability Committee. In the project, we started discussions on supporting TCFD and setting and disclosing long-term goals on climate change within FY2021. Analysis of the risks and opportunities that arose from the discussions was reported to employees at a climate change briefing in November 2021, and a climate-change workshop was held by representatives of business units in December. In the workshop, we shared and discussed issues that should be addressed across the Group, focusing on opportunities related to climate change.

Climate Change Workshop

Climate Change Workshop

Risk

Transition risks

Classification Main content Degree of influence
Policies and laws and regulations ・Regulations such as carbon pricing and emissions trading
(in particular, considering the impact of price shifting by material manufacturers with high GHG emissions)

・Cost of measures to comply with relevant laws and regulations
(Act on Promotion of Global Warming Countermeasures, Act Concerning the Promotion of Resource Recycling for Plastics, Reinforcement of Regulations on Petrochemical Products, etc.)
Large
Market and technology ・Decreased customer preference for petrochemical products, reduced market demand, and reduced sales

・The era of mass production, mass consumption, and mass disposal comes to an end, and there is a delay in the transition to environmentally friendly products.
Large
Reputation ・Decline in stakeholder trust and external evaluation due to lack of initiatives and information disclosure Small

Physical risk

Classification Main content Degree of influence
Acute ・Supply chain disruption due to large-scale natural disasters and sluggish sales and production activities

・Interruption of water supply due to flood or drought

・Increase of temperature control energy due to higher temperatures or colder temperatures
Large
Chronic ・Serious impact on areas around coastal activity sites due to sea level rise (submergence and tsunami response)

・Increase in market prices for procurement of primary commodities

・Additional measures to ensure the safety of employees' lives and reduced labor productivity
Large

Opportunity

Classification Main content Degree of influence
Products and services ・Providing alternative materials that contribute to improving energy efficiency (weight reduction, heat insulation, heat dissipation, etc.)

・Development of resource recycling-oriented materials (low carbon, biotechnology and biodegradability, recycling)

・LCA disclosure (visualization of emissions by product) and provision of high environmental value products

・Providing energy reduction solutions such as electricity and gas

・Visualization of emissions and provision of reduction solutions in the supply chain

・Provision of manufacturing technology and materials for new foods that contribute to the reduction of the global environmental impact, such as plant-based proteins and insect foods
Large
Market ・Materials market requiring reduction of raw material emissions (B to B in general)

・Product markets that require emission reductions in end products (mobility, OA, etc.)

・Consumer markets where demand is expected to increase owing to rising temperatures (skin care, daily necessities, home appliances, etc.)

・Emerging markets created by behavioral change of consumers with new values (alternative meat, circulars, emission disclosure products)
Large

Strategy: Promote initiatives to achieve targets in two axes and four quadrants: Trading/Manufacturing and Visualization/Reduction

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.

グループ全体

Risk management

Under the guidance of the Risk Management and Compliance Committee, all departments and six sales Group companies have developed an environmental ISO management organization and are carrying out continuous activities for the ISO 14001 environmental management system. Specifically, the environmental impact assessment, survey on related laws and regulations, internal and external issues, needs and expectations of stakeholders, etc. are confirmed in the documents and forms of the environmental management system, risks and opportunities are recorded in the environmental aspect survey form, and internal and external audits are implemented. Meanwhile, the ISO 14001 environmental management system is determined in accordance with the environmental management manual and business procedures. For newly discovered risks, we conduct an environmental impact analysis in the documents and forms of environmental management system, and determine priorities based on the evaluation method.

Metrics and targets

We are also committed to achieving carbon neutrality, which means virtually zero GHG emissions by 2050 (Scopes 1 and 2). We will also reduce Scopes 1 and 2 by 46% from 2013 level and Scope 3 by more than 12.3% from 2020 level by 2030.

We will consider updating the target value of Scope 3 through future dialogue with our supply chain.

Please refer to The NAGASE Group Carbon Neutral Declaration(pdf:421 KB) for details.

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

環境管理体制

Results for FY2020

The NAGASE Group is a member of the Japan Foreign Trade Council. By the end of the fiscal year ended March 2020, we had achieved a 13.1% reduction from the target, “Strive to reduce the basic unit of power consumption (power consumption per floor area of the company as a whole) by 15.7% in FY2030 compared to FY2013,” set by 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.

Examples of initiatives

Calculation and visualization of CO2 emissions in the supply chain using the zeroboard

The NAGASE Group considers the calculation and visualization of CO2 emissions in the supply chain related to climate change issues as an important challenge. With the aim of supporting the decarbonization of corporate management, NAGASE & CO., LTD. has agreed to a business alliance for the sales and business development of zeroboard, a cloud service for calculating and visualizing CO2 (carbon dioxide) emissions developed by Zeroboard Inc. and will market this service, ascertain customer needs, and develop and provide solutions for reducing CO2 emissions, mainly to the chemicals industry. As countries around the world strive to become carbon neutral by reducing CO2 emissions to zero as a whole, zeroboard has been developed not only to improve the efficiency of calculating CO2 emissions for the company, but also to visualize CO2 emissions in the supply chain. In FY2022 and beyond, the two companies plan to use the database to develop businesses such as a business-to-business matching platform to provide solutions for reducing CO2 emissions, and to propose efficient methods for calculating environmental data that capture changes in the external environment. Through this partnership, Zeroboard Inc. and NAGASE & CO., LTD. will contribute to the realization of a decarbonized society by supporting the decarbonization of corporate management.

zeroboard

Acquisition of ISCC PLUS certification

The NAGASE Group considers the promotion of biomass production related to climate change issues as an important challenge. NAGASE & CO., LTD. has obtained ISCC PLUS certification, one of the international certification systems for sustainable products. ISCC (International Sustainability and Carbon Certification) is already widely used in Europe as a certification system for biomass, and ISCC PLUS certification is a certification system that manages and secures products such as biomass raw materials and recycled raw materials produced by the mass balance method (*1) in the supply chain. ISCC PLUS certification for products from all over the world, including those from outside the EU, enables the handling of certified products. We will continue to contribute to the fight against global warming through the handling of ISCC PLUS certified products.

  • ※1A management and calculation method for products containing sustainable materials, such as those derived from biomass, and non-sustainable materials, such as those derived from petroleum. It is mainly used to promote biomass production in supply chains with complex production processes.
ISCC PLUS

Data on climate change