In recent years, social issues, including climate change, have worsened at a global level, necessitating sustainability management. Under such circumstances, the Hodogaya Chemical Group is committed to achieving the realization of a sustainable environment and society as specified in the VISION (“Target Corporate Image”) in the mid‑term management plan SPEED 25/30 effective since FY2021, adhering to the concept of “balancing the pursuit of economic interest and solutions to social issues and providing value to all stakeholders.”
The VISION (“Target Corporate Image”) under SPEED 25/30 is “a corporation that contributes to establish a sustainable society by means of our original portfolio and environmentally friendly manufacturing, with a focus on specialty products” and we position mid‑ to long‑term sustainability, including the elements of ESG, as a crucial management challenge.
In relation to the TCFD recommendations, as a chemical company, we take climate change seriously, strive to conduct initiatives to solve it, and promote information disclosure.
In November 2022, we declared our support towards guidance from TCFD.
The Sustainability Development Committee is a committee organization that actively promotes responsibility toward the realization of a sustainable earth and society in accordance with the “Management Philosophy” and “Corporate Action Guidelines.” We reorganized our existing CSR Committee as the Sustainability Development Committee and established the Global Environment Subcommittee, which promotes activities related to preservation and improvement of the global environment, and the TCFD Subcommittee, which promotes disclosure activities in response to guidance from the TCFD, in addition to the conventional RC/QM Subcommittee.
The Risk Management Committee discusses companywide risk recognition, evaluation and mitigation measures. The Risk Management Committee also discuss environmental risks, such as climate-related risks, opportunities and countermeasures recognized by the TCFD Subcommittee.
The content of discussions in each committee and subcommittee is submitted and reported to the Board of Directors and Management Committee.
Our purpose is to contribute to the creation of an environmentally conscious society through constant innovation in response to social changes. Reducing greenhouse gas emissions has been an urgent issue requiring global effort since the Paris Agreement was adopted in 2015, and the Hodogaya Chemical Group has been committed to reducing these emissions for many years. We successfully reduced CO2 emissions from 211K tons to 48K tons (i.e., by approx. 75%) over 30 years from FY1990 to FY2020 by implementing various measures such as the promotion of fuel conversion at our plants.
We forecast an increase in production volume as “constructing a new business portfolio,” which is the business strategy roadmap of the current mid‑term management plan SPEED 25/30, is promoted; therefore, we have classified foreseeable risks into TCFD risk categories from the long-term viewpoint, targeting 2030 according to our climate scenario analysis. We have analyzed the risk of achieving a carbon-free society as “1.5℃ Scenario,” and the risk due to intensifying climate change as “4℃ Scenario.” Based on the results of these scenario analyses, we will promote new initiatives to respond to transitional and physical risks.
| 1.5°C scenario |
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| 4°C scenario |
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| Risks and Opportunities | Risk | Opportunities | Measures | Impact on business | ||
|---|---|---|---|---|---|---|
| Transitional risk 1.5°C scenario | ||||||
| Policy/ Regulation |
|
〇 |
|
Increase in energy costs and raw material procurement costs due to the introduction of a carbon tax, etc. | ||
| Strengthening environment management | 〇 | Strengthen the internal structure by leveraging the knowledge gained thus far | Increased cost burden for maintenance and improvement of management system | |||
| Technology | Creation of new technologies for environmental friendliness | 〇 | 〇 |
|
[Risk] Increase in R&D and manufacturing costs [Opportunity] Maintain and expand market share by providing products and services that meet demand |
|
| Market | Eco-friendly market formation | 〇 | 〇 | Revise and strengthen business strategies by deepening market and customer needs, and improve R&D and manufacturing technology capabilities corresponding to them | [Risk] Increase in R&D and manufacturing costs [Opportunity] Maintain and expand market share by providing products and services that meet demand |
|
| Reputation | Stakeholders making environment as important matters | 〇 | 〇 | Enhancing dialogue with local communities, personnel, and shareholders and securing a system | ー | |
| Physical risk 4°C scenario | ||||||
| Chronic | Rise in average temperature | 〇 | 〇 | Labor saving and automation of manufacturing equipment | [Risks and Opportunities] Response to market changes, especially in the agrochemicals business |
|
| Acute | Increase in earthquakes, typhoons, and floods | 〇 | Promote multiple purchases, strengthen BCP | Shutting down of factories and inability to procure raw materials | ||
| Segment | Opportunity |
|---|---|
Functional Colorants Segment |
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Specialty Polymers Segment |
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Basic Chemicals Segment |
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Agro-Science Segment |
|
The Hodogaya Chemical Group has set the following non-financial targets (climate change-related) for FY2025 in its Mid-term Management Plan SPEED 25/30.
• Reduction of CO2 emissions
• Reduction of energy intensity
• Industrial waste volume reduction
Regarding CO2 emissions, we have set targets for both volume and intensity reductions, taking into account changes in emissions due to increases and decreases in production volume. These are examined by the Global Environment Subcommittee, discussed by the Sustainability Development Committee, and progress is confirmed by the Board of Directors and Management Committee.
In FY2024, we achieved our FY2025 targets for reduction of CO2 emissions and reduction of energy intensity. However, the amount of industrial waste generated increased compared with the previous year. While this increase was partly due to differences in the composition of production items, we take this fact seriously and will further strengthen our initiatives to reduce industrial waste.
| Non-financial targets | FY2023 results | FY2024 results | FY2025 management targets |
|---|---|---|---|
| CO2 emissions (CO2 emission intensity) |
35,600t-CO2 (0.805t-CO2/million JPY of net sales) |
31,700t-CO2 （0.652t-CO2/million JPY of net sales) |
43,400t-CO2 (0.868t-CO2/million JPY of net sales) |
| Energy intensity (per million JPY of net sales) |
0.495kl/net sales million JPY |
0.466kl/net sales million JPY |
0.606kl/net sales million JPY |
| Industrial waste volumes | 2,523t | 3,076t | Less than the amount generated in the previous year |
Most of the greenhouse gases (GHG) emitted by Hodogaya Chemical are CO2. The GHG emissions in FY2024 are approximately 31,700 t-CO2*1. In anticipation of increased production volumes in the future, we will address climate change from both mitigation and adaptation perspectives with a long-term view towards FY2030.
In addition to leveraging Hodogaya Chemical’s technology, we have introduced Internal Carbon Pricing (ICP) in FY2022, alongside initiatives for energy saving, energy creation, and the use of renewable energy. By establishing a framework that supports investment as part of our climate change measures toward a low-carbon society, we aim to reduce emissions by 38% in FY2030 compared with the FY2013 baseline.
*1 Non-energy-originated CO2 emissions are not included
*1 Non-energy-originated CO2 emissions are not included
*2 Reduction targets for FY2030 are based on government-announced reduction targets by industry
