Kuraray : Visualizing and Quantifying Social and Environmental Value（108KB）

Kuraray Report 2024	Kuraray Group Businesses "For People and the Planet" Toward Realizing the Vision Three Challenges Business and Growth Strategies Management Foundation	Corporate Data	26

Visualizing and Quantifying Social and Environmental Value

Seeking to expand the product lineup from the starting point of contributing to the natural and living environments

Procedure to Identify Materiality

The Kuraray Group has identified material issues relevant to the Company, following the steps shown at right. Among these issues, we are taking products and technologies that contribute to the natural and living environments as our starting point as we aim to create a sustainable product portfolio. To this end, we

STEP 1

STEP 2

STEP 3

STEP 4

STEP 5

constructed the Kuraray PSA system based on the PSA guidelines of WBCSD*, which offer a consistent methodology for evaluating products with a high degree of objectivity and transparency.

Looking at products, applications, and the regions where they are used, we evaluate products using a five-point scale based on criteria such as fundamental requirements, social and regulatory trends, and comparison of contributions to the natural and living environments against benchmark products. Products receiving the two top rankings are designated as products that contribute to the natural and living environments. We will build a more sophisticated business portfolio by expanding sales of such products, from 46% of all sales in 2020 to 55% in 2024 and 60% in 2026.

Identify and		Incorporate SDGs		Prioritize issues
organize issues
Social issues were		The four aspects		The 19 aspects that
extracted and		extracted from the		should be addressed
organized based on		"The Chemical Sector		as priorities were
international guide-		SDG Roadmap" of the		determined by
lines and the contents		World Business		evaluating compre-
of surveys conducted		Council for Sustain-		hensively along two
by sustainability		able Development		axes of the
assessment		(WBCSD), which do		"materiality for
institutions.		not overlap with the		stakeholders" and
Extracted items: 326		26 aspects in STEP 1,		"materiality for the
	make a total of		Kuraray Group."
Organized aspects: 26
	30 aspects.

Materiality candidate

determination

As a result of discussions with all division general managers of the Kuraray Group in Japan and overseas, five candidate material issues were determined by grouping the 19 aspects in STEP 3.

Materiality

determination

The candidate material issues mentioned at left were reported at a meeting of the Board of Directors and finalized.

* World Business Council for Sustainable Development.

Assessment of contribution using Kuraray PSA system

Materiality of the Kuraray Group

Procedure to Identify Materiality

Fundamental requirements

Creating Value through Business

Chemical and hazardous substance management

Application to Kuraray Action Guidelines

Economic value Reputational risks

Stakeholder requests

Assessment based on contribution by Kuraray products

5 Top performance

4 Positive performance

Improving the natural environment

Climate change measures-	Biodiversity conservation
GHG reduction and energy	Development of next-
conservation	generation applications,
Solution of marine plastics	products, and
and plastic waste	technologies
Water and air purification	Circular economy

Improving the living environment

Contribution to the safe	Promotion of health and
and reliable supply of food	wellness for all
and water	Development of
Improvement of quality	next-generation
of life	applications, products,
	and technologies

Regulatory trends by region Sustainability policies across the value chain

3 Neutral

Creating Value to Strengthen the Foundation of Kuraray

Eco labeling, certification, etc.

Performance assessment

Relative assessment against benchmark

2 Negative performance

1 High risk

Effective use of resources and

reduction of environmental impact

Reduction of GHG emissions

Reduction of chemical emissions

Reduction of waste volume and intensity

Reduction of marine plastics and plastic waste

Improving supply chain management

Sustainability procurement Improvement of product stewardship

Building a "company that people can take pride in"

Promotion of safety activities

Improvement of safety and disaster prevention preparedness

Enhancement of technology and working smarter

Promotion of workplace diversity and inclusion

P.31

Materiality

Kuraray Report 2024	Kuraray Group Businesses "For People and the Planet" Toward Realizing the Vision Three Challenges Business and Growth Strategies Management Foundation	Corporate Data	27

Maximizing Environmental Value

The Kuraray Group has formulated a roadmap for reducing Scope 1 and Scope 2 greenhouse gas (GHG) emissions, aiming to achieve net-zero carbon emissions in 2050. During "PASSION 2026," the roadmap calls for investments in energy saving, converting purchased electricity to renewable energy (including the purchase of renewable energy certificates), and other reduction measures to maintain GHG emissions below the 2019 benchmark, even while expanding our businesses. The roadmap includes a plan to invest ¥80 billion in GHG emissions reductions by 2030, targeting a further 30% reduction compared to 2019. This mainly entails establishing CCUS* technologies and shifting fuels used in in-house power generation. In 2050, we aim to achieve net-zero carbon emissions by identifying and harnessing emerging technologies that prove effec- tive, such as green hydrogen and green ammonia technologies.

Viewing carbon neutrality as a business opportunity as well, the Kuraray Group will maximize environmental value by reducing GHG emissions while simultaneously expanding the lineup of products that contribute to the natural and living environments.

• Carbon dioxide Capture, Utilization, and Storage: An initiative to utilize or store CO2 separated from exhaust gas from industrial facilities.

P.29

Roadmap towards net-zero carbon emissions in 2050

	Emissions					Emissions
	€,-€kt					-,-€	kt
Scope	Expansion	Energy-				€ %		Net-zero
of production	saving	Process			Reduction
By-products,	capacities	investments
		improvements				carbon
etc.
			Transition to
				renewable				emissions
				energy	CCUS*
Scope	Plans call for ••	billion in				Shift of
In-house				energy
			sources
power
capital expenditures
generation
	by - €	to reduce GHG emissions			New
			technologies
								New energy
Scope	Consider the earliest possible introduction				sources
Purchased	of practicable CO- reduction technologies
energy	by paying attention to emerging technological trends
	FY					FY		FY

Adoption of Internal Carbon Pricing (ICP) System

In 2021, the Kuraray Group adopted an internal carbon pricing (ICP) system to govern capital spending. In line with the start of "PASSION 2026," we revised our internal carbon pricing from 2022, to ¥10,000 per ton of CO2e. We will use this system in multiple ways as we aim to reach the goal of net-zero carbon emissions, including as an incentive to promote capital spending that leads to energy conservation, as a means of identifying profit opportunities and risk,

Operation of ICP system

Internal	¥10,000/ ton-CO2e
carbon	(calculated using internal exchange rates overseas)
pricing	Effective from January 1, 2022

and as a social and environmental value indicator for evaluating businesses and making investment decisions.

Already implemented

Capital spending to increase/decrease GHG emissions

Calculating virtual cost/profit with internal carbon pricing and using as a criteria in making investment decisions

Under consideration

Converting GHG emissions of each business and product to cost at an internal carbon price and evaluating their resilience to future carbon taxes, etc.