【Dialogue: Implementing Sustainability in Business】It has been three years since Resonac’s “second founding.” Are we ready for the next stage?

※This article is a reprint of the integrated report "Resonac Report 2025," published in August 2025.

We held a discussion between CSuO Matsuko and the Sustainability Advisors to evaluate Resonac’s sustainability initiatives so far, identify challenges, and outline future expectations.

Three years after our “second founding,” what have we changed?

Matsuko: Since our second founding, Resonac has focused on reforming our business portfolio and developing cocreative talent and a corporate culture essential for completing this. All of this is to practice our Purpose, to “Change society through the power of chemistry,” while increasing corporate value and creating the future we envision. We see sustainability as embedded into this Purpose. Over the past three years, we have aimed to position sustainability at the core of management. The first step was to implement reforms in the mindset towards sustainability within the company. We repositioned sustainability, which had merely been a defensive tool or branding tool, as a management issue. To support this change, we set up the Sustainability Promotion Council, which meets monthly and includes all CXOs (Chief X Officers). This Council, a meeting body linked to the Board of Directors and Management Committee, has defined our material issues and related non-financial KPIs, and has begun monitoring the progress and reviewing them. Through these efforts, we have created a “common language” for sustainability among the top management team. 

　Among the three material issues, “Gain credibility through responsible business management” lays the foundation for our aim of becoming a World-class Functional Chemical Company. Each CXO, including the CMEO/CQO, CRO, and CDIO, is driving this initiative with responsibility, and the achievement of the 2025 KPIs is now within reach. 

　The CEO and CHRO are leading our push to “Develop autonomous, creative, and active human resources and culture,” with all members of Team Takahashi steadily advancing in their respective roles. 

　From the second year, we have increased the participation of officers in charge of each business in the Sustainability Promotion Council. Starting this year, meetings are held every other month with all officers present. Each session includes a discussion on business initiatives, such as analysis of climate-related business opportunities and risks aligned with TCFD scenario analysis, Resonac Pride Products and Services, and customer sustainability strategy analysis. 

　Sustainability Partners in each division work with the Sustainability Department to embed these top-down type discussions into practical actions. This ensures that initiatives align with each division’s strategies and situations. Meanwhile, we are working to foster a sustainability mindset among employees to support bottomup efforts.

　From 2023 onward, we launched a company-wide Carbon Neutrality Project and integrated sustainability evaluations into the remuneration for directors and corporate officers. These initiatives established a foundation for competing on the world stage and earned some external recognition.

　As Advisors, how do you evaluate our progress with sustainability so far? Are we ready for the next decade?

Hasegawa: It is striking how sustainability is organically coordinated into the management strategy, driving company-wide transformation through the cultivation of corporate culture, talent development, and strengthened governance. In particular, the corporate culture is led by employees, which closely links to the development of co-creative talent, and sustainability is incorporated into decision-making processes. This an excellent example of how to achieve effective integrated management. 　

　Looking ahead, Resonac needs to turn this sustainability foundation into a competitive advantage. For this purpose, it would be crucial to create a sustainability-driven investment decision model, and communicate more effectively with external stakeholders by showing how non-financial and financial factors connect. By taking this approach, you can clearly show your commitment and strategic intent. This will help deepen stakeholders’ understanding and trust.

Matsubara: I also highly evaluate that sustainability is positioned at the core of the corporate strategy, which is revitalizing the key strategies. Material issues are also an effective framework. That is why Resonac should consider what it aims to achieve through co-creation beyond ten years from 2030. I ask you to envision the type of society you want to create, identify necessary reforms, and understand how these will enhance corporate value. This requires an approach from a high-level perspective. I expect to see Resonac enhance its functionality, integration, and credibility over the next decade, building on the sustainability management system design it has established over the past three years.

Matsuko: Thank you for the words of encouragement. I feel confident that the direction we have proceeded in has been correct, and while the upcoming challenges are daunting, they’re also exciting. You have shared insights on the significance of sustainability for corporate value and the links between non-financial and financial factors. This prompted us to take a fresh look at what constitutes the corporate value we should aim for. In place of our traditional value creation process diagram, we’ve developed a new value creation “hypothetical” diagram. 

　The value creation hypothetical diagram outlines our recipe to enhance true corporate value (assuming such a thing exists). It hypothesizes key areas we should focus on and what we want our stakeholders to evaluate, as well as what kind of measures they will be and the metrics they will be reflected in. Going forward, we aim to deepen our engagement with stakeholders through ongoing dialogue.

Itsubo: I was concerned about how effectively the message was being communicated both internally and externally. No matter how impressive a vision or set of initiatives might be, it’s meaningless if it doesn’t effectively reach the intended audience. When developing products aimed at reducing environmental impact, for instance, it might be more effective to focus on customers who can truly appreciate their value instead of a wide range of stakeholders. By highlighting the technological value to these customers and gathering their feedback, you can potentially enhance economic value. Please consider how to deliver information effectively.

Matsuko: Thank you for your advice. In past Integrated Reports and Sustainability Meetings, we have defined our target audience broadly as important stakeholders with whom we want long-term relationships and sought to address their shared concerns. We keep in mind to clearly communicate our financial strategy while emphasizing value creation through non-financial means by citing the real voices of employees as evidence. I believe this approach has fostered a good degree of understanding among our audience. 

　However, we realized that we are now at the stage of implement initiatives through dialogue and our co-creation “kata”, or model, by assuming individual and specific customers and products by name, also in the area of sustainability.

Making environmental and social value visible with Resonac Pride Products and Services

Matsuko: The certification of Resonac Pride Products and Services is gaining momentum as we aim to connect our sustainability initiatives with economic value, which you have mentioned. This aligns with the third material issue, “Strengthen co-creativity & competitiveness and create social value through innovation and business.” 

　Launched in 2023, the Resonac Pride Products and Services certification system visualizes how our products and services realize our Purpose, to “Change society through the power of chemistry,” and evaluates and certifies them by incorporating third-party perspectives. 

　Materials are essential components of the finished products used in society. However, they are often found in powdered or liquid forms in particular, so it’s not only difficult to track where and how these materials are used but also challenging to assess how they contribute to society when considered independently. Demonstrating some kind of social impact to stakeholders, including our customers, to gain their understanding of how we are changing society, is our challenge in areas where linking sustainability efforts to economic value is not easy. This whole context is expected to instill pride in employees who work on this initiative, and foster a sense of accomplishment in practicing our Purpose and Values. 

　The standards for deciding Resonac Pride Products and Services are not only the current sales and profits, but also their potential to increase sales and market share, become the center of our business, drive future growth, and expand their social development in the future. The certification process involves visualizing and quantifying contributions to society, the environment, and customers, as well as their validity, including any negative impacts. It also requires presenting a qualitative social value creation narrative (hypothesis) and gathering opinions from a wide range of stakeholders from a co-creation perspective. From 2025, these factors are evaluated incorporating the perspectives of the Sustainability Advisors, and certification is decided by the Sustainability Promotion Council. 

　We have certified the co-creation activities of the Kawasaki Plastic Chemical Recycling business and the Packaging Solution Center. By 2025, we plan to certify the core products of the remaining five businesses. We also plan to incorporate the initiative into directors’ and corporate officers’ evaluations.

Hasegawa: The effort to present a social value creation narrative and link it to non-financial KPIs is a proactive effort and a meaningful challenge for the whole industry. 

　On the other hand, when you visualize social value, you should show not only the benefits to society but also how it links it to financial results. I believe this connection is crucial for future dialogue with stakeholders and investor relations activities. I encourage you to explore how certifying Resonac Pride Products and Services can bring economic returns over the medium to long term. I would like to ask you to craft a narrative that connects social value with financial impact.

Itsubo: I view Resonac Pride as an excellent initiative that demonstrates the intent and strategy to compete on the world stage. I can see that adopting it as an internal KPI has quickly raised awareness. To develop these into growth businesses, please conduct an annual review of the certified projects. I expect you’ll quickly visualize the societal benefits of implementing these initiatives and link them to investment and growth.

Matsubara: What role do companies play in stakeholder capitalism, and what exactly is a company? If Resonac was to cease to exist, what legacy would it want to leave behind? I believe that by looking further into the future, you can gain a clearer vision of what lies ahead. I hope you will find your guiding star and build the drive to pursue it, alongside remarkable initiatives like Resonac Pride Products and Services.

Matsuko: Thank you for your words. We will strengthen our communication to show how the materials we make create social value, which should be shared interests with our customers. Looking further ahead, we’re committed to advancing our efforts, based on the belief that we will be able to connect the social value to financial outcome, in other words, transform it into economic value. We won’t stop at certification. We’ll continue our dialogue with stakeholders to show business growth and new developments. We’ll thereby ensure that stakeholders understand how our certification considers future challenges like scaling up and horizontal deployment.