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Environment
- Basic Environmental Policy
- The Path Toward
Achieving Carbon Neutrality - Climate-Related Disclosures
Based on TCFD Recommendations
Basic Environmental Policy
The Nippon Denko Group is undertaking activities to contribute to the development of a sustainable society by striving for regional environmental conservation through proper responses to environmental risks under our Basic Environmental Policy and in compliance with laws and regulations.
- The Nippon Denko Group will contribute to the development of a sustainable society on a foundation of environmental management.
- The Nippon Denko Group will establish and strive to continuously improve an environmental management system in addition to educating people and raising awareness of the environment.
- The Nippon Denko Group will make efforts to reduce environmental impact in all aspects of manufacturing activities.
- The Nippon Denko Group will develop and supply society with products that help reduce environmental impact.
- The Nippon Denko Group will proactively promote environmental business that contributes to society.
| Target | |
|---|---|
| Number of environmental incidents: | 0 |
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Environmental education (Tokushima Plant) -
Practical training (Koriyama Plant)
Response to environmental risks
The Nippon Denko Group uses its ISO 14001 Management System to undertake proper responses to environmental risks in addition to continuously promoting environmental conservation activities. Regarding the air, water, land, waste disposal, and other relevant matters, we conduct environmental impact assessments tailored to the materials we handle, our facilities, and more, and undertake necessary and proper measures to reduce environmental impact.
Environmental education
We make efforts to enhance education and training to prevent accidents, for example by regularly providing our employees with education and practical training on environmental management.
The Path Toward Achieving Carbon Neutrality
The Nippon Denko Group recognizes global climate change as a major threat to the survival of humanity, and thus views bold efforts to achieve carbon neutrality by 2050 to maintain a sustainable global environment and realize decarbonization as a key challenge of sustainability management.
To tackle this key challenge, in 2022, we formulated policy for achieving carbon neutrality by 2050, and are moving forward with business, and research and development to reduce CO2 emissions.
CO2 emissions reduction scenario
Although the Nippon Denko Group has engaged in proactive energy-saving activities, transitioned to higher energy efficiency, and made other efforts to reduce CO2 emissions, the entire Group has launched initiatives to achieve the target of reducing emissions by at least 45% from 2013 levels by 2030 in an effort to achieve carbon neutrality by 2050.
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Target for 2030
At least 45% reduction of CO2 emissions from 2013 levels
We aim to reduce CO2 emissions by at least 45% from 2013 levels by introducing in-house power generation utilizing renewable energy or the effects of energy-saving measures and efforts to improve energy efficiency
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Vision for 2050
Achieve carbon neutrality
We aim to tackle the challenge of developing and commercializing decarbonized manufacturing processes and flexibly utilize carbon offsets as we work to achieve carbon neutrality
CO2 emissions of the Nippon Denko Group (10,000 tons/year)
Scenarios: Scope 1, Scope 2
Note: The applicable year of the CO2 emission factor for general electricity utilities has changed (Document published on March 29, 2022)
Efforts to reduce CO2 emissions
The Nippon Denko Group produces ferroalloys—namely ferromanganese, one of its main products—by using a reduction reaction that removes oxygen from naturally occurring manganese ore. This reduction reaction inevitably produces CO2 emissions because coke is currently the optimal fuel for the process. The Nippon Denko Group will continue transitioning to higher-efficiency electricity and gas and converting to green energy in addition to tackling the challenge to develop and commercialize an innovative manufacturing process for reducing CO2 emissions in the process of manufacturing ferroalloys.
Climate-Related Disclosures Based on TCFD Recommendations
The Nippon Denko Group recognizes climate change and other environmental issues as key management challenges.
In February 2022, we announced our endorsement of the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). We will use the TCFD framework to analyze the impact of, and risks and opportunities presented by climate change on the business of the Nippon Denko Group, reflect our findings in our management strategies and risk management, and properly disclose the progress of our efforts, all with the aim of the sustainable development of society and the sustainable improvement of our corporate value.
1. Governance
The Board of Directors determines material issues pertaining to the management of the entire company, including the status of response to the TCFD.
In January 2022, we established a Sustainability Committee in order to promote climate change countermeasures and other efforts toward sustainability and further improve our corporate value over the medium-to long-term with the aims of sustainable growth and resolving social issues. The Sustainability Committee is chaired by the President and reports to the Board of Directors, and comprises the various task forces for resolving issues. The committee is tasked with drafting policy and the necessary strategies for sustainability management as well as promoting measures for sustainability by verifying and reviewing the status of efforts, reporting its findings to the Board of Directors at least once every six months, and accepting recommendations from the Board of Directors.
Facilitation framework
Sustainability Committee
| Chair | President & CEO |
|---|---|
| Vice chair | Officer in charge of corporate planning, officer in charge of production engineering |
| Frequency of meetings | Quarterly |
| Roles and responsibilities | Formulating policy for sustainable management as part of the Nippon Denko Group’s management strategies, and promoting measures for sustainability by drafting and evaluating the necessary strategies, verifying and reviewing the status of efforts, reporting findings to the Board of Directors, and accepting recommendations |
2. Risk Management
The Nippon Denko Group recognizes risks associated with climate change as risks that pertain to all aspects of company management; our Sustainability Committee identifies and assesses the transition risks, physical risks, and opportunities thereof. Notably, the committee, which is chaired by the Representative Director and President, meets at least once every six months to discuss and approve matters at meetings of Board of Directors and the like.
3. Strategies
The Nippon Denko Group believes that to realize sustainability management, it is important to analyze the impact of, and risks and opportunities presented by climate change on our business and ensure that our corporate management reflects appropriate responses.
Based on this belief, we analyzed the risks (transition risks, physical risks) and opportunities identified in two different scenarios: a world where climate change countermeasures have been promoted (the +2°C scenario) and a world without the countermeasures (the +4°C scenario).
Our analysis revealed the introduction of GHG emission regulations and carbon taxes and increased raw material procurement cost could pose risks. On the other hand, it could also present opportunities to expand eco-friendly products.
Main risks
| Type | Factors | Impact on business | Timeline | Probability | Indicator of impact on business | Degree of impact | |
|---|---|---|---|---|---|---|---|
| Transition | Policies/legal regulations | Introduction of GHG emission regulations, carbon taxes, and the like | Profitability compromised by the increased cost of fossil fuels and other elements of manufacturing | Medium term | High | Expenditures (fossil fuel procurement costs) |
Large |
| Increase in the rate of renewable energy (change in power supply structure) | Profitability compromised by the increased cost of manufacturing associated with procuring renewable energy power | Medium term | High | Expenditures (electricity fees) | Large |
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| Technology | Proliferation of products produced using renewable energy power | Sales of fossil fuel-dependent high-carbon ferromanganese products decline if it becomes more common for materials to be produced using renewable energy and the like | Long term | High | Net sales | Small | |
| Market | Increase in the cost of procuring manganese ore | Distribution costs increase as mining and transport shift away from carbon | Medium term | High | Expenditures (raw material procurement costs) | Large | |
| Increase in the cost of procuring reducing agents | The cost of procuring reducing agents increases if it becomes necessary to procure wood coke or the like | Medium term | High | Expenditures (raw material procurement costs) | Large | ||
| Reputation | Criticism against heavy power-consuming industries | The cost of capital (both banks and shareholders) increases as our reputation declines | Medium term | Medium | Cost of capital, share price | Medium | |
| Physical | Acute physical risk |
Extreme weather events cause supplier shutdowns and instability in transport | Production volumes decline and sales decrease due to instability in supply chains for imported materials caused by extreme weather events | Long term | Low | Inventory (raw materials), production volume | Large |
| Chronic physical risk |
Labor regulations (e.g. measures for summer heat) are revised or become stricter | Additional costs are incurred (e.g. installing cooling equipment) | Long term | Medium | Expenditures (capital investment) | Small | |
Main opportunities
| Type | Factors | Impact on business |
|---|---|---|
| Products and services | Consumer preference for low-CO2 products | Demand increases because equity method company Pertama Ferroalloys Sdn. Bhd. produces ferroalloys (green ferroalloys) using only hydropower |
| Evolution into a hydrogen-based society | Demand for pure water production equipment used in hydrogen production increases as hydrogen comes into more widespread use as a form of green energy | |
| Market | Popularity of EVs | Demand for battery materials, boron oxide, zirconium oxide, and ferroboron increase due to increasing demand for batteries and electronic components as EVs come into more widespread use |
4. Metrics and Targets
The Nippon Denko Group has announced a target to reduce CO2 emissions by at least 45% from 2013 levels by 2030. We will continue working to reduce CO2 emissions by introducing in-house power generation utilizing renewable energy, implementing energy-saving measures, and striving to improve energy efficiency. We will also start fundamental research on innovative decarbonized processes for manufacturing carbon-free ferroalloys, continue the transition to green-energy fuels, and make other efforts to proactively introduce the latest equipment and technology to dramatically improve productivity.
