Nippon Soda Group's
Sustainability Management

Utilizing our Responsible Care activities as a foundation, we will promote sustainability-focused management to respond to society’s trust and contribute to sustainable development

Osamu Shimizu Director, Executive Managing Officer
Supervision of CSR, General Affairs Dept., Legal Dept., Finance & Accounting Dept.

At the Nippon Soda Group, to achieve sustainable growth and respond to the expectations of the next generation, we promote sustainability-focused management through CSR Activities to Protect Corporate Value and CSR Activities to Improve Corporate Value, with Responsible Care (RC) activities addressing the E (Environment) and S (Social) aspects of ESG as the foundation. We have continued to engage in RC activities since our Declaration on the Promotion of Responsible Care Activities in 1998. RC activities are voluntary environmental, health, and safety activities conducted by companies handling chemical substances throughout the entire lifecycle from development, manufacturing, logistics, and use, to post-use disposal and recycling of chemical substances. The results of these activities are disclosed, and social dialogue completes the PDCA cycle. RC activities are closely linked to the core elements of sustainability-focused management: ethical behavior; response to social needs and quick, continuous improvements; and proper information disclosure and communication with stakeholders. We consider these to be prerequisites for business continuity, and have positioned them as CSR Activities to Protect Corporate Value.

With our CSR Activities to Improve Corporate Value, we are also aiming to contribute to the creation of a sustainable society through our businesses. We have identified Agriculture, Healthcare, Environment, and ICT as fields through which we can tackle the issues facing society, and have identified materiality (important issues) within these fields. In addition to tackling social issues through our existing products and services, we are also working to do so through the establishment and advancement of core technologies and the creation of new businesses through our research and technology strategy, as well as the enhancement and expansion of our businesses through business partnerships and M&As. Our activities are also linked to the achievement of the Sustainable Development Goals.

For us to continue with CSR Activities to Protect Corporate Value and CSR Activities to Improve Corporate Value, it is essential that we thoroughly share our philosophy across the entire Group using a top-down approach and maintain a governance system. At the Nippon Soda Group, we have set up the Corporate Social Responsibility Administration Meeting, chaired by the president and executive officer, to serve as the chief decision making body to promote CSR activities. Held twice a year, the meeting is attended by all Company directors, executive officers, plant managers, and officers from main domestic group companies. Through these meetings, management sets CSR targets, assesses results, and revises the targets as necessary to continuously improve the PDCA cycle.

Reducing greenhouse gas (GHG) emissions is a key theme of sustainability-focused management. At Nippon Soda, through the Japan Chemical Industry Association, in 1997 we participated in the Voluntary Action Plan on the Environment,^* in 2013 the Commitment to a Low Carbon Society,* and in 2021 the Keidanren Carbon Neutrality Action Plan.* Moreover, in April 2022 we set up a cross-organizational working group for the reduction of GHG emissions. Ahead of the achievement of carbon neutrality in 2050, by FY 2031/3 we are aiming to reduce GHG emissions by more than 42% for direct emissions and energy-related indirect emissions (Scopes 1 and 2) and by more than 25% for other indirect emissions (Scope 3), compared to FY 2023/3 levels. Through these initiatives, the Group aims to develop a GHG emissions reduction plan aligned with the targets of the Paris Agreement, and to commit to international initiatives.

In response to the growing importance of human rights, we have begun formulating a human rights policy and exploring development of a human rights due diligence plan. These efforts reflect the UN Guiding Principles on Business and Human Rights and rising societal expectations for respecting human rights across the supply chain, and we consider them as key efforts in identifying and addressing human rights risks in our business activities as a management responsibility and to further strengthen stakeholder trust.

To achieve our long-term vision, Brilliance through Chemistry 2030, human capital is our most important management resource. In our human capital management vision, Make Employees Brilliant, we are promoting autonomy and growth of employees. Through flexible, efficient workstyles, we are aiming to create a virtuous cycle of value creation and greater employee fulfillment. Our ultimate aim is to create workplaces that fill employees with fulfillment and pride and that enable them to utilize their diverse values and strengths to maximum effect. We have also established the HR policy: Fostering Brilliance through Chemistry, and are working to build a human resources system that encourages employees to take on challenges, learn, and apply those lessons to their work. Through these measures, we will aim to achieve the KPIs in our medium-term business plan (Brilliance through Chemistry Stages Ⅰ–Ⅲ), working together as a group to drive a range of policies that will help us achieve them.

• * Led by Keidanren (Japan Business Federation).

ESG Initiatives Nippon Soda Participates in or Endorses

Signing of, endorsement of, and support for international initiatives (including declarations, charters, principles, and frameworks) related to economic, environmental and social issues

Membership categories at advocacy organizations and institutions in Japan and abroad

Materiality

In May 2020, Nippon Soda Group identified materiality (important issues) in the four fields of Agriculture, Healthcare, Environment, and ICT to contribute to the creation of a sustainable society and increase corporate value in the Group’s long-term vision Brilliance through Chemistry 2030, and its medium-term business plan 2020–2022 Brilliance through Chemistry Stage Ⅰ. As a framework for increasing the effectiveness of the Group’s materiality initiatives, we will utilize the monitoring functions of CSR Activities to Protect Corporate Value and CSR Activities to Improve Corporate Value.

Materiality Identification Process

Sustainable growth and relevance in our long-term vision was discussed and materiality was identified through the following steps:

• * History of Materiality Identification

Stakeholder Engagement

The management philosophy of the Nippon Soda Group is to meet expectations from stakeholders, including customers, shareholders and investors, business partners, employees and local communities, and promote environmentally conscious business practices and activities. The Nippon Soda Group will continue to play a significant role in realizing the sustainable development of society. At the same time, the Group is continuing to develop as a sought-after chemical group that meets 21st-century social needs by contributing to the creation of a prosperous society based on its desire to create new value through its unique technologies and products.