Thank you for accessing our sustainability page.
I would like to talk about the Hodogaya Chemical Group’s approach and attitude toward sustainability management.
In FY2023, we achieved the FY2025 targets for energy intensity and carbon dioxide emission intensity (per unit of sales) ahead of schedule due to changes in product composition. In addition,external evaluations have improved, with our FTSE Russell score increasing to 3.6, maintaining the EcoVadis Silver Medal, our CDP (Carbon Disclosure Project) rank rising to B, and our “Integrated Report 2023” receiving the “Excellence Award” at the 3rd Nikkei Integrated Report Awards.
We recognize that these improvements in evaluation are not the result of significantly changing our efforts, but rather the result of enhancing ESG information disclosure, reflecting on the fact that our sincere efforts were not easily visible from the outside.
We also believe it is the result of each employee making efforts toward “environmentally friendly manufacturing” with high awareness, even with limited resources.
Our VISION: The corporate image we aim for, advocates “environmentally friendly manufacturing.” This includes two meanings: “creating environmentally friendly products” and “adopting environmentally friendly manufacturing methods.”
In Phase 2 of the Mid-term Management Plan SPEED 25/30, we aim to develop products and services that contribute to the harmony between the environment and chemistry, accelerate sustainability efforts, contribute to a sustainable planet andsociety, and contribute to the creation of an environmentally conscious society, and we will proceed with more in-depth consideration from Phase 1.
Also, as a chemical manufacturer, safe operation is our primary mission. In FY2023, we achieved zero accidents at all business sites. We will continue to further enhance our Responsible Care activities and work towards zero accidents, zero disasters, and safe operations.
Since becoming president in 2016, I have been working to make our Company “a place where personnel can have aspirations, experience job satisfaction and feel happy to work for the Company.” Our aim is to be a company with high productivity and profitability, and consequently high salary levels, as well as a company where people can take pride in their work, which leads to motivation and job satisfaction.
Furthermore, I believe that a safe work environment and appropriate work-life balance are necessary, and we have been advancing initiatives in these areas.
As a chemical manufacturer, we face the challenge of having few female recruits, but this is also an opportunity to promote diversity. In overseas chemical companies, the number of female employees active on site is increasing. In our Company too, by actively promoting DX and creating a work environment where we can shift to monitoring and decision-making tasks in instrument rooms, we can expand opportunities for women to play active roles.
We aim to increase the percentage of female managers to 13% by FY2025, and in 2023 we invited a female Outside Director, while in 2024 a female Executive Officer was also appointed. In the future, we want to actively appoint women to positions that participate in management meetings and raise awareness of participation in management.
Our Company’s educational programs are comprehensive, providing career education for next-generation management talent and female employees. In FY2023, as a new initiative, we sent young researchers for training in Korea. After the training, the researchers all mentioned the difference in sense of speed.
While working environments differ, we plan to send researchers to Korea on a rotation basis for relatively long-term training in the future, not only to feel the difference in speed but also to have a positive influence on their own work methods and to develop a global perspective. Also, for our Company, where 50% of sales come from overseas and we have many overseas bases, developing global talent is essential. In particular, it’s important to develop talent familiar with non-English languages and cultures, such as Chinese and Korean. Overseas business experience is very beneficial for career development, and I hope employees will take on these challenges more and more.
The drivers of value creation are those who can learn, think, and act on their own. Providing an environment where people can continue to learn leads to the development of new products and improved productivity. Regarding the development of talent to lead the next generation of management, we have non-members of the Board of Directors and Management Committee attend as observers to watch and learn from the discussions. Executive Officers attend the Board of Directors meetings, and manager-level personnel attend the Management Committee meetings, participating in case explanations and Q&A sessions as appropriate, making these venues that combine practical experience and education.
Recently, an Outside Director advised me, “You shouldn’t say everything. For the sake of developing talent, it’s better to let others answer.” I once again recognized the importance of meetings as educational venues, also to provide opportunities for Outside Directors to understand the personalities and thinking of next-generation management talent.
In overseas subsidiaries, especially in Korea, quick decisionmaking is often required, which I think is partly due to the national character. Also, in Korea, there seems to be a strong tendency to prioritize investment in research and development over dividends, with the idea of returning value to stakeholders, including shareholders, through corporate growth. In the Hodogaya Chemical Group, for our Korean subsidiaries, in addition to governance based on capital structure, we dispatch and station personnel from Director to Section Manager levels, having them handle practical operations. These individuals are highly trusted by the subsidiary’s management, and through close communication, they confirm the way business is conducted and its direction, acting as a bridge to the Company’s management.
While the importance of governance is increasing globally and external scrutiny of companies is becoming stricter, we aim to ensure the effectiveness of necessary governance while not stifling the uniqueness of our subsidiaries under the name of governance, aiming to enhance the corporate value of the entire Group. I believe this has become our hidden advantage.
An issue that I believe the Group must definitively address over the long term is Green Transformation (GX).
In addition to the development and manufacture of battery materials, we are undertaking research on perovskite solar cells*8 as part of our technological development activities to promote GX. Perovskite solar cells use organic compounds as an alternative to silicon, an area in which the Japanese government is also focusing its research efforts.
Hodogaya Chemical is endeavoring to contribute to early commercialization by providing highly durable and highly efficient materials.
Moreover, we will focus on the promotion of digital transformation (DX), an important issue under SPEED 25/30, as we believe that the accelerated promotion of GX will help secure our competitiveness by promoting innovation through the use of digital technology.
Our goals are also to develop sustainable products that reduce the environmental impact, especially in the agricultural and food fields as an extension of our technologies. Building on our collaboration with ASAHI AGRIA CO., LTD. announced in February 2023, we will focus on the similarities between our soil preparation and soil improvement technologies to develop a composite material of compost and oxygen supply materials that is expected to generate fertilizer effects, prevent moisture damage, and improve efficiency. We believe this initiative will contribute to the efficiency and stability of crop cultivation. We also see this as a significant step toward the reduction of chemical pesticides and fertilizers. More than just a pipe dream, we strongly believe that this business will help address the global social issue of food shortages attributable to population growth as it gets off the ground and expands through Asia to the rest of the world.
* Perovskite solar cells: Solar cells made from perovskite, which has a crystal structure that converts light into electricity. Expectations of reduced costs through coating and printing technologies that enable mass production.
I am now advocating the slogan “Changing Together.” The meaning of this slogan is not just a superficial partial change, but to achieve a “transformation” that changes significantly from within to the target figure and ideal figure set forth in SPEED 25/30, with the aim of continuing to grow as a company for the next 100 years. On the other hand, there are things we must cherish without changing, such as the DNA of the Group represented by the spirit of Hompo Koshi” (the first one to do so in the country) cultivated as a 100-year-old company, the technologies that have been passed down continuously, and the joy as a manufacturer of developing, producing, and selling high quality products.
The current Mid-term Management Plan SPEED 25/30, which started in April 2021, began preparation two years prior, drawing a growth strategy using a backcasting method from the assumed business environment in 2050, and in the process, we carefully considered what to “change” and what “not to change.” We will soon enter the preparation stage for Phase 2 of the Mid-term Management Plan, but amidst rapidly changing world conditions, we must reconsider how we envision the business environment in 2050. With the management philosophy of “contribute to the creation of an environmentally conscious society” as our axis, we will spend the next two years or so reviewing our “ideal figure” in FY2030, and discuss our vision, corporate image we aim for, and the composition of our business portfolio not only among management but throughout the entire Group.
We must not overly focus on immediate challenges and the current situation, but rather consider how to approach our ideal figure for FY2030.
While discerning carefully what needs to be changed and what should remain unchanged to realize our desired future vision speedily, all members of the Hodogaya Chemical Group will work on our business with great dedication, as a united team.
Lastly, we sincerely appreciate the continued support from all our stakeholders.