Environmental Reporting

【Notes】As a result of the change in months in each fiscal year, the environmental data and information contained in this report including graphs are as follows.

    ・Fiscal 2014: Actuals for 9 months from April to December + Actuals for January to March 2014 (or estimated value) [Partially overlaps with fiscal 2013]
  • ・After fiscal 2015 : Actuals for 12 months from January to December

Global Warming Prevention

Initiatives of the Kuraray Group

The Kuraray Group in Japan has set annual targets for GHG emission reduction measures (13,000 tons-CO2e/year or more) and GHG emission intensity index (an improvement of 1.0 percentage point or more from the previous fiscal year) in its three-year Medium-Term Environmental Plan starting from fiscal 2018. The results for fiscal 2020 are shown below.
Link to Carrying Out the Medium-term Environmental Plan
In fiscal 2020, in addition to continued efforts to reduce GHG emissions at each production site, production activities were restricted due to a decrease in global demand caused by the impact of the COVID-19 pandemic. As a result, GHG emissions declined by 81,000 tons-CO2e from fiscal 2019, to 1,229,000 tons-CO2e. As for the target amount of measures to reduce GHG emissions, we exceeded the target by 14,000 tons-CO2e (a cumulative total reduction of 68,000 tons-CO2e since fiscal 2016) by improving the yield of each product, recovering and using raw materials and utilities, replacing them with energy-saving equipment, and implementing energy-saving activities (waste elimination activities). On the other hand, the GHG emission intensity index, another target, deteriorated significantly to -14.3 percentage points compared to fiscal 2019. This reflected the impact of COVID-19, which forced us to cut production of key products, resulting in energy-inefficient operation of many processes.
 In the Kuraray Group outside Japan, GHG emissions totaled 1,816,000 tons-CO2e, a decrease of 105,000 tons-CO2e from fiscal 2019. This reflected the reduction in production volume at each production site due to efforts such as energy saving and product yield improvement as well as the impact of COVID-19, as was the case with the Kuraray Group in Japan. Since most of the electric power and steam at our production sites outside Japan are purchased, we have set annual targets (an improvement of 1.0 percentage point or more from the previous fiscal year) based on the intensity index using energy consumption rather than GHG emissions, which are affected by the utility supplier (a change in CO2 emission coefficient), as an index to properly evaluate the results of environmental improvement activities at our production sites. The energy intensity index for fiscal 2020 improved by 0.2 percentage points compared to fiscal 2019, a slight improvement but still short of the target. As in Japan, overseas production of many products fell due to the impact of COVID-19, resulting in operation with poor energy efficiency. However, we were able to minimize the impact because of strong demand for certain products for hygiene products with a relatively small energy intensity index.
 Since fiscal 2014, the Kuraray Group’s total GHG emissions have increased due to the incorporation of businesses through M&A, such as the acquisition of the vinyl acetate business and the activated carbon business (Calgon Carbon Corporation). In particular, the acquisition of Calgon Carbon Corporation in 2018 resulted in a significant rise in the Kuraray Group’s GHG emissions, from 2,360,000 tons-CO2e in fiscal 2017 to 3,045,000 tons-CO2e in fiscal 2020. The GHGs emitted by Calgon Carbon Corporation consist largely of the CO2 generated as a byproduct in the process of producing activated carbon products. (Activated carbon is produced by burning a part of coal used in the process to form micropores on its surface. At this stage of the process, the carbon removed from the surface of the coal to form the micropores is released into the atmosphere as CO2. In this way, activated carbon emits a large amount of CO2 during production.) Activated carbon is widely used as an indispensable product for the adsorption and removal of hazardous chemical substances contained in factory exhaust gas and for the purification of industrial effluents and raw water for drinking. Activated carbon contributes greatly to improving the global environment and reducing the environmental impact. The Kuraray Group has evaluated the environmental impact and contribution of activated carbon throughout its life cycle, and has confirmed that the contribution to the environment exceeds the environmental impact of manufacturing.

2016 2017 2018 2019 2020
Kuraray Group in Japan GHG emissions
1,000 t-CO2e 1,303 1,330 1,320 1,310 1,229
Scope1 emissions 1,000 t-CO2e 1,128 1,147 1,138 1,121 1,067
Scope2 emissions 1,000 t-CO2e 175 183 182 189 162
GHG emission intensity index Target Improve by 1% or more from the previous fiscal year
Result 2.9% -3.5% -1.7% -14.3%
Reduction (1,000 t-CO2e) Target Implement measures to reduce GHG emissions by 13,000 tons-CO2e or more from the previous fiscal year
Result 11 9 13 21 14
Kuraray Group outside Japan GHG emissions
1,000 t-CO2e 933 1,032 1,868 1,921 1,816
Scope1 emissions 1,000 t-CO2e 76 93 862 939 978
Scope2 emissions 1,000 t-CO2e 856 939 1,006 981 838
Energy consumption crude oil equivalent, 1,000 kl 437 500 595 606 553
Energy consumption intensity index Target Improve by 1% or more from the previous fiscal year
Result -7.5% 9.1% -5.9% 0.2%

Emissions of Scope 3 GHG

The GHG Protocol* classifies GHG emissions into three categories: Scopes 1, 2 and 3.

Scope 1: Direct emissions
GHG emissions generated by fuel combustion at the plants and other facilities of one’s own company
Scope 2: Indirect emissions
GHG emissions generated by the use of purchased energy such as electricity, heat, and steam supplied by other companies
Scope 3: Other indirect emissions
The other indirect emissions. GHG emissions along the entire supply chain (from raw materials to product disposal.)

Mandated under the law by which businesses voluntarily calculate and report Scope 1 and Scope 2 to the government, we have been reporting these to the government and publishing the results mainly in the Kuraray Report and on the Kuraray Group’s website.
 On the other hand, Scope 3, which means the GHG emissions based on the entire supply chain related to us other than Scope 1 and Scope 2, is indirect GHG emissions generated from the viewpoint of a life cycle such as raw material procurement, product distribution, product use and disposal as well as the direct emissions related to our business activities. We have continued to make Scope 3 calculations since fiscal 2013.
 Among the 15 categories in the total of Scope 3, we calculated actual values for fiscal 2020 for 5 categories [(1) to (5)] with a relatively large emission amount, excluding those not applicable to us and those having a limited calculation coverage in the products of the Kuraray Group. We will also continue to quantify our environmental contribution based on evaluations on the life cycle of our products.

* GHG Protocol (Greenhouse Gas Protocol) is an initiative to develop international standards and related tools on greenhouse gases and climate change led by the World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD) and participated in by corporations, NGOs, government institutions and other organizations throughout the world.

Conceptual Image of Control on Emissions of Greenhouse Gases in Entire Scope 3 Supply Chain ((1) to (15) show categories of Scope 3) (Scope covered: Kuraray Co., Ltd.)

<Scope3 GHG emissions*1

(Unit:1,000 t-CO2e)

2016 2017 2018 2019 2020
Upstream Purchased goods and services*2 610 698 767 667 443
Capital goods 97 92 121 170 108
Fuel and energy related activities not included in Scope1,2 8.0 8.4 8.4 8.9 7.8
Transportation and distribution 11 12 12 12 10
Waste generation in operations 32 25 24 27 26
Business travel Not calculated
Employee commuting
Leased assets*3
Downstream Transportation and delivery
Processing of sold products The Data is not disclosed because the scope of the calculation covers very limited Kuraray products.
Use of sold products
End-of-life treatment of sold products
Leased assets*4 0
(*4,5,6 Not Applicable)
Others *7 Not calculated
Total 759 836 933 884 595
  • *1 Boundary is Kuraray Group in Japan. (Coverage:40%)
  • *2 Calculation method: Purchased amounts of major sixty two raw materials were multiplied by emission index(purchasing price and amount basis) of each raw material.
  • *3 Offices, electric appliances and company cars are leased. These are included in Scope 1, 2.
  • *4 No assets are leased to other company.
  • *5 Franchise system is not applied.
  • *6 Other company's stock was not held for investment purpose as reported in the security report.
  • *7 Optional category indirectly related to corporate activity except for Category 1 to Category 15

Response to TCFD Recommendations

The Kuraray Group considers climate change to be one of the key issues that it must address, and it will steadily enhance the disclosure of governance, strategies based on scenario analysis, risk management, and indicators and targets as recommended by the Task Force on Climate-Related Financial Disclosure (TCFD)*.
In fiscal 2021, a TCFD Promotion Team will be established in the relevant departments to study ways to promote information disclosure in reference to “Guidance on Climate-Related Financial Disclosures 2.0 (TCFD Guidance 2.0)” published by the TCFD Consortium. Specifically, we will assess the risks and opportunities posed by increasingly stringent policies and regulations in the transition to a low-carbon economy, market changes resulting from technological innovation, and changes in consumer preferences, as well as climate-related risks and opportunities, such as physical risks that could impact the business environment, including natural disasters and extreme weather.

* Refers to the Task Force on Climate-Related Financial Disclosures established by the Financial Stability Board (FSB) to consider how to disclose climate-related information and respond to financial institutions. Kuraray endorsed the TCFD recommendations in November 2020.

Internal Carbon Pricing(ICP)

The Kuraray Group will use ICP to incentivize energy saving, identify revenue opportunities and risks, and inform investment decision making, aiming to realize a low-carbon society.

The Kuraray Group's ICP

Internal carbon price ¥5,000/t-CO2 (calculated using internal exchange rates overseas)
Scope Capital investment entailing a change in CO2 emissions
Method of application The costs of changes in CO2 emissions will be calculated using the internal carbon price and used as a criterion for investment decisions

Utilization of Renewable Energy

At the Kurashiki Plant, we have installed a power generation system for biomass fuel* (wood chippings from construction debris and other sources). The system can generate electricity stably even when compared with other renewable energy sources. In fiscal 2020, 43,000 tons of biomass fuel was consumed, contributing to a reduction of about 64,000 tons-CO2e in its emissions. Going forward, the Kuraray Group will continue its efforts to reduce CO2 emissions through biomass fuel power generation.

* Biomass takes CO2 in from the atmosphere as it grows, and can be considered to emit no CO2 (carbon neutral) when the CO2 that is generated when burning lumber using biomass as a raw material is subtracted from the CO2 that is taken during its growth.

Reducing the Environmental Load during Product Transportation

The Kuraray Group is also reducing its greenhouse gas (GHG) emissions in the distribution stage of delivering its products to users, in addition to GHGs it emits during the manufacture of products at its production sitesand other facilities. Kuraray is continuously active in the “modal shift” in which the transportation means is changing from trucks to cargo trains, ships and other methods with less environmental impact. In addition, we endorsed the “White Logistics” movement promoted by the Japanese government and submitted a Declaration of Voluntary Action in 2019. As specific initiatives to improve transportation efficiency and reduce GHG emissions, we are steadily promoting the integration of product storage locations (warehouses) to transfer products shipped from multiple locations from one location, as well as the switching from the transportation of multiple trucks to one trailer, by increasing the size of one transport unit to a larger lot. As a result, GHG emissions from product transportation in fiscal 2020 were 10,000 tons-CO2e.