Environment

The Matsuda Sangyo Group has decided on its important environmental issues as set out below, and will strive to reduce environmental burden in its business activities going forward.

(1) Energy consumption and greenhouse gas emissions

(2) Emissions into atmosphere

(3) Hazardous substances

(4) Solid waste

(5) Pollution prevention and resource reduction

(6) Water management

(7) Biodiversity

Abnormal weather conditions accompanying climate change are now intensifying around the world, and causing severe damage to nature and human society.

According to scientific studies led by the Intergovernmental Panel on Climate Change (IPCC), if the rise in average global temperature due to global warming is not kept under 1.5℃ from pre-industrial levels  (1850s and before) to 2050, global warming will become irreversible. In other words, they are reaching the shocking conclusion that the situation may be irretrievable.

Matsuda Sangyo considers it the mission of people and companies to resolve this situation based on the scientific grounds that climate change was caused by the activities of human society. In view of that, all of our Group companies, including domestic sites, domestic subsidiaries, and overseas subsidiaries, are engaged in efforts to achieve carbon neutrality by 2050.

Our Group positions climate change and decarbonization initiatives as one of our materiality issues, and is advancing efforts in this respect. As a part of these efforts, we have indicated our agreement to the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) in October 2022.

Under this item, we have disclosed important climate change-related information (governance, strategy, risk management, indicators, and targets) based on the TCFD recommendations.

With a view to striking a balance between the realization of a sustainable environment, society, and economy, and enhancing the corporate value of the Matsuda Sangyo Group, we established the Sustainability Committee in May 2022 under the direct supervision of the Board of Directors, for the purpose of facilitating the promotion of decisions and initiatives on important matters related to ESG and SDGs.

The Sustainability Committee is composed of the Directors (including Outside Directors) and members nominated by the Board of Directors from among the Executive Officers. The President and Representative Director chairs the Committee, assisted by the Executive Vice President as the Vice-Chairperson of the Committee. The CSR/IR Dept. serves as the secretariat overseeing the overall management and operation of initiatives related to ESG and SDGs.

The roles of the Sustainability Committee are as follows: (1) Formulation of overall policy; (2) Deciding on important matters that should be addressed; (3) Evaluation of risks and opportunities; (4) Setting of targets; (5) Formulation of action plans and development of systems; (6) Monitoring of initiatives. It convenes regular meetings four times a year in principle.

The Chair of the Sustainability Committee is responsible for ESG and SDGs initiatives, and reports on activity status and other matters to the Board of Directors and Audit & Supervisory Committee through the Secretariat.

The Board of Directors checks and supervises the important matters decided upon by the Sustainability Committee, including processes, while keeping in mind the need to strike a balance between social trends, particularly recommendations by international initiatives as well as domestic and overseas policies, with the business growth of the Matsuda Sangyo Group. The important matters related to climate change are resolved upon discussion by the Sustainability Committee and reported to the Board of Directors.

*Please refer to the Corporate Governance Structure for details on the governance system.

The Matsuda Sangyo Group has established “striking a balance between reducing environmental burden and business growth” as an important sustainability issue in the Medium-term Management Plan (FY2022–2025) announced in May 2022. With regard to reducing environmental burden, we view the reduction of greenhouse gas emissions as a particularly important theme, and have conducted reviews on initiatives toward setting and achieving targets in line with the science-based targets  (SBT)* approach that is consistent with climate scenario analysis and science. These contents were discussed and decided upon by the Sustainability Committee in July 2022. Going forward, we will continue to review response measures to climate-related risks and opportunities, and to monitor the progress of initiatives toward the achievement of targets.

*Greenhouse gas emission reduction target based on scientific evidence

In climate scenario analysis, we set out two hypothetical scenarios: the 1.5℃ scenario with increased risks for transitioning to a low-carbon/decarbonized society, and the 4℃ scenario with increased physical risks accompanying climate change without achieving low-carbon/decarbonization goals. Based on these, we select the key drivers for our corporate Group and extract, evaluate, and identify the risks and opportunities.

With regard to the results of this analysis, the validity of the evaluation is checked and shared within the Sustainability Committee after an exchange of opinions with the relevant Executive Officers.

 (Reference information for the scenarios)

• International Energy Agency (IEA), “World Energy Outlook ,” 2021
• IPCC, “Special Report on Global Warming of 1.5℃ ,” 1998
• IPCC, “Special Report on Climate Change and Land ,” 1999
• Ministry of the Environment, “Report on the Market Size and Employment of the Environmental Industry, ” 2021
• World Resources Institute (WRI), “Aqueduct Water Risk Atlas 3.0,” 2019

The Matsuda Sangyo Group has established the Total Risk Management (TRM) Committee to identify the actualization of risks that have a serious impact on our business and corporate management (compliance, environment, disaster, quality, information security, credit management, commodity market prices, foreign exchange control, etc.), and to manage them as company-wide risks.

The TRM Committee, as an advisory body of the President and Representative Director, is an organization chaired by the Director and Senior Managing Executive Officer (see diagram below). It evaluates potential risks, carries out centralized management of company-wide risks, promotes response, and monitors the management status, among other activities, then reports the results of the activities to the Board of Directors and Audit and Supervisory Committee.

The standard for risk evaluation is based on references such as the relevant laws and regulations and international standards, IEA’s “World Energy Outlook 2021,” IPCC’s “Special Report on Global Warming of 1.5℃” (1998), and the probability of occurrence and degree of impact of potential risks are evaluated for each business and region. Company-wide risks that should be addressed as priority are identified. Through this method, we comprehensively evaluate the business risks of the corporate Group, and formulate the response policy for risks of high priority.

With regard to climate-related risks, we have drawn up two hypothetical scenarios (1.5℃ scenario, 4℃ scenario), based on which we select the key drivers for our corporate group, and extract and evaluate risks and opportunities. The Sustainability Committee then verifies them and identify the risks.

The risks identified will be integrated into the risk management system of the TRM Committee in the future, and we plan to promote responses and monitor progress in an expert subcommittee established for the purpose of managing the risks recognized as important to the business and corporate management, and which require company-wide and medium- to long-term management from an expert viewpoint. The expert subcommittee under the TRM Committee formulates the response policy to the high-priority risks identified by the Sustainability Committee as well as the annual plans, reports the progress monitoring results at the regular meeting held every month, and provides feedback on the contents of consultation, etc. to the executive departments (risk management system chart).

*Matsuda Sangyo has established a corporate governance system in preparation for risk management.
*Refer to “Corporate Governance Initiatives: Organizational Chart of Corporate Governance, Organizational Chart of the TRM Committee.”

The Matsuda Sangyo Group established its greenhouse gas emissions reduction targets for the whole corporate group in July 2022.

These targets are aligned with the science-based target (SBT)* of 1.5℃, and we have also committed to the Science-Based Targets initiative (SBTi).

Going forward, in addition to acquiring SBT certification, we will also strive to reduce emissions (greenhouse gas emissions reduction target).

*Greenhouse gas emissions reduction targets based on scientific grounds
 

 (Main measures toward reduction)

• Improve energy consumption efficiency
• Expand the adoption of renewable energy
• Review and improve manufacturing and treatment processes

(including fuel conversion, CO_{2} capture)

• Introduce and update high-efficiency facilities
• Enhance the efficiency of logistics, modal shift
• Provide eco-friendly products and services
• Cooperation through engagement with the supply chain