Measures against Climate Change

Basic ideas and policies

Governance and risk management

At the Resonac Group, the Group CEO supervises measures for sustainability, including those for climate change, and the Group CSO is responsible for the promotion of such measures. The Group’s strategies for contribution to society at large, including measures against climate change, are discussed under the company-wide carbon neutral project with a focus on opportunities as well as risks. The strategies are also regularly deliberated by the Sustainability Promotion Council, which is composed of CXOs including the CEO. Information about risks that could have an impact on the Group’s business management, such as climate change-related risks, is registered with the central risk management system through the company-wide risk inventory (risk assessment) activity, and high-frequency and high-impact risks are deliberated by the committee in charge (Risk Management Committee). Important issues discussed by the Council and the Committee are deliberated by the Management Committee, with final decisions reported to the Board of Directors.

Strategies and risk analysis

For impacts (risks and opportunities) of climate change on our businesses, we assumed the following risks for 2050 based on the framework set by the TCFD : (1) risks related to a shift to a low-carbon economy under the 1.5- and 2-degree scenarios, and (2) risks related to the physical impact of climate change caused by the failure to achieve the world’s CO2 emission reduction targets under the 4-degree scenario.

Possible shift-related risks that may have company-wide impacts include an increase in operating costs due to rise in carbon pricing and other energy taxes. GHG emissions after 2023, would be about 4.5 million tons/year. If GHG emissions in 2030 are constant and carbon pricing is 10,000 yen/t-CO2 based on the IEA’s^*1

2-degree scenario (SDS)^*2, the amount that the entire our Group should pay will increase by 45 billion yen/year. If the Group achieves a 30% reduction in emissions relative to the 2013 level by 2030, the Group should pay about 35 billion yen/year, meaning the cost increase due to carbon pricing would be restrained. The analysis results will be used for the continuous management of risks under the risk management system.

We assume that climate change will have a tremendous impact on its mobility, semiconductor and electronic materials, and carbon businesses and has been conducting scenario analyses for these businesses. We have already completed the analysis work for the mobility and semiconductor and electronic materials businesses.

In the mobility domain, under the 1.5- and 2-degree scenarios, our operating cost will increase due to the introduction of ICP^*3. However, business opportunities will also expand, driven by the need for energy conservation and the spread of electric vehicles (EVs) and fuel cell vehicles, which will boost demand for the related components. Therefore, we have concluded that we have sufficient resilience against climate change-related risks in the mobility domain. We will incorporate the examination results into our strategy for the mobility business, which we position as a Core Growth business in our long-term vision.

For semiconductor and electronic materials, we conducted examinations about the impact of climate change with a focus on data centers (DCs). Under both 4-degree and 2-degree scenarios, due to the advance of digitization in society, the DC market will expand, which will in turn boost demand for semiconductors and hard disks (HDs). On the other hand, with the progress of conversion to low-carbon energy sources, a substantial increase in the supply of electricity cannot be expected. Accordingly, the government will be under increasing pressure to offer proactive support for energy conservation, while our customers will likewise need to conserve more energy. Also, DCs will be required to make their CPUs, GPUs, memory devices, HDs and power supply equipment less energy-hungry. Semiconductors can be made more energy-efficient by further miniaturization, and we can contribute to this through our CMP slurries and high-purity etching gas. However, it is pointed out that there are limits to the miniaturization of CPUs. In response, we launched a consortium named “JOINT2” to speed up the development of materials that will help increase the packaging density of semiconductor devices in the back-end process and shorten the wiring distance for energy conservation. Furthermore, we can increase business opportunities for our materials by collaborating with related companies in the field of optoelectronics, which is expected to serve as a next-generation energy-saving technology, increasing the capacity of HD media, and by promoting the use of SiC devices for power supplies in line with the popularization of xEVs.

• *1 IEA: International Energy Agency
• *2 2-degree scenario: Sustainable development scenario
• *3 ICP: Internal carbon pricing

Climate change-related risks and opportunities and major responses to them

We carried out the scenario analyses of our semiconductor and electronic materials business to update the risks and opportunities posed to us in this business segment. As a result, we have confirmed the following: we need to implement more measures to make our semiconductor and electronic materials low-carbon materials, and they represent a Core Growth business for us and will bring us more opportunities rather than risks.

Indicators and targets

In preparation for the upcoming integration, we reviewed our greenhouse gas emission reduction targets for 2030 in 2021 and set the target of a 30% reduction relative to the 2013 level. We will review the medium- to long-term plans made for each of our sites, aiming at the creation of a low-carbon economy, and set the medium-term targets for our overseas Group companies. To achieve our greenhouse gas emission reduction targets for 2030, we will further reduce our greenhouse gas emissions and promote energy conservation. Carbon neutrality will also be pursued leading up to 2050, to accomplish the goal of becoming a company that contributes to a sustainable global society as put forth by our long-term vision.
For 2021, We reduced their GHG emissions by 9.6% relative to the 2013 level.

In order to reduce the environmental impact associated with logistics, we are promoting a modal shift from truck to rail and ship transportation as well as making efficient use of large trucks and increasing their loading efficiency to reduce our CO2 emissions.
In 2021, our transportation amount decreased, but the amount of CO2 emissions from transportation increased, leading to an increase in our energy consumption per unit of transportation. This is mainly due to a decrease in the amount of goods transported by ship, which is an energy-efficient transportation mode, and to a slight increase in the ratio of goods transported by truck (on a ton-kilometer basis).