旭化成（3407） – Asahi Kasei Report 2021

Creating for TomorrowAsahi Kasei Report 2021Asahi Kasei Report 20211Group MissionWe, the Asahi Kasei Group, contribute to life and living for people around the world.Group VisionProviding new value to society by enabling “living in health and comfort” and “harmony with the natural environment.”Group ValuesSincerity—Being sincere with everyone.Challenge—Boldly taking challenges, continuously seeking change.Creativity—Creating new value through unity and synergy.Group SloganCreating for Tomorrow2Contents Asahi Kasei Group OverviewBusiness OverviewEditorial policy3 At a Glance46 Review of Operations5 Financial and Non-Financial Highlights 46 Material7 Addressing Social Issues and Advancing Business 48 HomesPortfolio Strategies — Our Path to Three Sectors — 50 Health Care Management Strategy10 Message from the President1 8 Value Creation ModelPeople and the EarthCorporate Governance and Risk Management19 The Asahi Kasei Group’s Vision for the Future of 53 Corporate Governance57 Directors and Audit & Supervisory Disclaimer22 Pursuit of Carbon Neutrality and a Circular EconomyBoard Members27 Initiatives Regarding Climate Change Disclosure 60 Interview with an Outside DirectorBased on the TCFD Recommendations62 Risk Management 32 New Business Creation Utilizing Corporate 29 New Business Creation Venture Capital 34 Digital Transformation39 Human Resource Strategies 66 Consolidated Financial Statements43 Financial and Capital Policy71 Corporate Profile / Stock InformationCorporate Information72 Information DisclosureFor greater ease of understanding among our stakeholders regarding the Asahi Kasei Group’s operating climate and overall business activities, the Asahi Kasei Report focuses on such areas as our management strategy, business conditions, and management configuration as well as our efforts toward sustainability in society. Detailed sustainability-related information is disclosed on our website. The period under review is fiscal 2020 (April 2020 to March 2021). Some qualitative information pertaining to April to July 2021 has also been included.Period under reviewOrganizational scopeThe scope of the report is Asahi Kasei Corp. and its consolidated subsidiaries (in other cases, noted in the text). Asahi Kasei’s three operating segments are Material, Homes, and Health Care. The titles and positions of corporate officers and other personnel as shown in this report are current as of September 2021.Guidelines consultedThe GRI Standards, the standards of the Sustainability Accounting Standards Board, ISO 26000, and other guidelines were consulted during the preparation of this report.The forecasts and estimates shown in this report are dependent on a variety of assumptions and economic conditions. Plans and figures depicting the future do not imply a guarantee of actual outcome.Photographs at the beginning of each section We have used a selection of prize-winning photographs from our Sustainability Photo Contest held in March and April 2021. The contest solicited photographs from all Asahi Kasei Group employ-ees and executives that would inspire people to think about and act on sustainability in their daily lives. More than 2,300 submis-sions were received from our sites around the world. Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate InformationAsahi Kasei Report 202133.6% Material Homes Health CareFiscal 2020 Operating Income¥171.8 billion47.4 %Fiscal 2020 Net SalesNotable Facts (as of March 31, 2021)¥ 2,106.1billionEmployees44,497Of which, overseas employees account for nearly 40%Global basesMore than 20 countries and regionsConsolidated subsidiariesOverseas sales ratioCredit rating*22842.8 ％AAJapan Credit Rating Agency (JCR)* As of June 30, 20213Net Sales by RegionNote: As of March 31, 2021At a Glance19.5 %34.2 %Note: Percentages shown exclude the “Others” category and “corporate expenses and eliminations”33.1 %32.2%Europe¥124.9 billion5.9 %China¥198.9 billion9.4 %Asia (excluding China)¥ 215.3 billion10.3 %Japan ¥1,204.3 billion57. 2 %The Americas¥ 335.9 billion15.9 %Other Regions¥ 26.8 billion1.3 %Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate InformationAsahi Kasei Report 2021Priority Fields for Provision of Value and Related ProductsMaterialHomesHealth CareEnvironment & Energy Home & Living Health Care 4Hipore™ and Celgard™ separators for lithium-ion Ion-exchange membrane chlor-alkali electrolysis Pharmaceutical productsprocessHebel Haus™ unit homesHebel Maison™ apartment buildingsLamous™ artificial suedeDinamica™ automotive interior materialHebel Village™ apartments for seniorsPlanova™ virus removal filtersbatteriesMobility Engineering plasticsLife Material Ceolus™ microcrystalline celluloseHousehold productsAtlas™ condominiumsZOLL AED Plus™ automated external defibrillatorManagement StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate InformationAsahi Kasei Report 2021Financial HighlightsNet sales (domestic & overseas), operating income, operating marginEBITDA1, depreciation and amortization, EBITDA marginNet income attributable to owners of the parent, EPS(¥ billion)(¥ billion) (¥ billion) 2,042.22,170.42,151.62,106.1198.5209.6159.2177.3171.8268.4311.9313.6295.6305.114.514.315.314.513.78.59.79.78.28.2109.2113.5104.0118.3133.3170.2147.5115.0121.93105.66103.982.3479.874.8557.49(¥ billion) 2,5002,0001,883.01,5001,000500030025240201801512010600502015105020162017201820192020(FY)20162017201820192020(FY)2016 Depreciation and amortization (tangible, intangible, and goodwill) 2020201720182019(FY) EBITDA EBITDA margin (%)1 Operating income, depreciation, and amortization EPS (right scale) Net income attributable to owners of the parent (left scale) The amount of depreciation and amortization is increasing with proactive capital expenditures and M&A activity. EBITDA is regarded as a key perfor-mance indicator (KPI) signifying the generation of cash flow. The decrease in depreciation and amortization in fiscal 2018 resulted from a change in the method of depreciation of property, plant and equipment from the declining-balance method to the straight-line method.Net income attributable to owners of the parent in fiscal 2020 decreased due to a one-off increase in tax expenses due to the reconfiguration of organizations related to Veloxis Pharmaceuticals, Inc. (hereinafter Veloxis). As a result, EPS also decreased.ROE2, ROIC3Capital expenditure, R&D expensesInterest-bearing debt, D/E ratio(¥ billion)(¥ billion) 154.1153.7136.290.679.6101.385.790.191.089.7703.8659.00.52402.8424.90.45301.70.350.230.31 Domestic sales Overseas sales (left scale) Operating income (right scale) Operating margin (%)In fiscal 2020, both sales and operating income were largely flat year on year as earnings in the Health Care sector offset declines in the Material and Homes sectors that stemmed from COVID-19. Overseas sales accounted for over 40% of total net sales in fiscal 2020, reflecting an increase in overseas sales due to overseas business expansion, including through M&A.(%)2015105014.09.711.18.810.57.87.66.65.64.9 ROE ROIC2 Net income per shareholders’ equity3 (Operating income – income taxes) / average annual invested capital20162017201820192020(FY)20162017201820192020(FY)20162017201820192020(FY) Capital expenditure R&D expenses Interest-bearing debt (left scale) D/E ratio (right scale) The Company positions ROE and ROIC as KPIs to indicate its efficiency in generating profits. In fiscal 2020, ROE declined due to the decrease in net income. ROIC also declined due to the one-off increase in tax expenses due to the reconfiguration of organizations related to Veloxis and an expansion in invested capital associated with an increase in interest-bearing debt following the acquisition of Veloxis. The Company proactively carries out capital expenditure geared toward growth, including sustainability- and digital transformation-related investments, and research and development (R&D) aimed at the Health Care sector and in new business creation. However, in fiscal 2020, both capital expenditure and R&D expenses were flat year on year due to strict scrutiny over investments in light of the impact of COVID-19. Although interest-bearing debt increased in fiscal 2019 due to the acquisition of Veloxis, it decreased in fiscal 2020 because of the repayment of loans payable following an improvement in cash flows. As a result, the D/E ratio at the end of fiscal 2020 decreased by 0.07, remaining in line with our target ratio of around 0.5.200150100500800600400200040030020010002001501005005(¥)2001501005000.80.60.40.20Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate InformationAsahi Kasei Report 202165432103002001000Non-Financial HighlightsGreenhouse gas (GHG) emissions(Million tons CO2 equivalent)4.354.224.163.993.89Energy intensity 1(Index)100100100101969285Target: –30% or more by FY2030compared with FY2013 (5.11 MtCO2e)Workplace injury frequency rate2,32.791.811.931.260.350.300.410.840.440.21 Japan Overseasmillion man-hours workedResponsible Care Program2 Number of accidental deaths and injuries resulting in the loss of one or more workdays, per 3 Among domestic and overseas subsidiaries and affiliates applying the Asahi Kasei Group While the frequency rate of lost-workday injuries among employees in Japan improved significantly, this rate deteriorated among overseas employees. We are making improvements by applying measures to avoid recurrence based on analysis of the causes of injuries that have occurred, while implementing preventive measures based on risk assessments.3.02.52.01.51.00.5016,00012,0008,0004,000020162017201820192020(FY)20162017201820192020(FY)20162017201820192020(FY)1 Indexed to energy consumption per unit of production in fiscal 2016 as 100The Asahi Kasei Group has thus far targeted the reduction of greenhouse gas emissions relative to sales (emissions intensity). However, we changed to an absolute emissions reduction target to indicate a clearer path toward the achievement of carbon neutrality. We are steadily reducing emissions to achieve our target and will endeavor to reduce emissions going forward.We promote energy conservation at every stage of our business activities to prevent global warming and conserve limited resources. Over the past five years, we have made steady improvements, lowering our energy consumption per unit of production by 1% annually on average.Number of Group MastersNumber of women working as managers4Number of patents250229180212193171257231124906,5096,7807,2197,7217,8037,3597,4587,4727,4567,41120162017201820192020(FY)2017/62018 /62019 /62020/62021/62016 /122017/122018 /122019 /12 2020/12 Japan Japan Overseas4 Results for personnel employed by Asahi Kasei Corp., Asahi Kasei Microdevices Corp., Asahi Kasei Homes Corp., Asahi Kasei Construction Materials Corp., Asahi Kasei Pharma Corp., and Asahi Kasei Medical Co., Ltd.To foster the growth of our human resources while simultaneously capturing external human resources, we appoint, nurture, and reward as Group Masters individuals with the potential to proactively engage in and contribute to the creation of new businesses and the enhancement of established businesses.Asahi Kasei believes that it is essential for a diverse range of human resources with a variety of values and backgrounds to play active roles. For this reason, we foster an environment to support the advancement of women to positions in organizational management.We are focused on building and maintaining an intellectual property network to secure competitive advantage. We evaluate whether to maintain or abandon our intellectual property every year, aiming to form an optimal intellectual property portfolio. As we expand our business globally, it is becoming increasingly important to obtain patents overseas.9080706003002001000Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate InformationAsahi Kasei Report 2021Addressing Social Issues and Advancing Business Portfolio Strategies —Our Path to Three Sectors—In every era, the Asahi Kasei Group has addressed social issues by dynamically transforming its business portfolio and supplying products and services that meet the changing needs of the times. We will continue to contribute to life and living for people around the world by Creating for Tomorrow.Founding and Japan’s first production of synthetic ammoniaExpansion into petrochemicals and synthetic fibersExpansion into homes, health care, and electronicsProgress in overseas business, focus on business restructuringAccelerated globalization through M&A, expansion of health care business(¥ billion)2,5002,0001,5001,000“As industrialists, we must always remember that our ultimate mission is to improve people’s standard of living by supplying an abundance of the highest-quality daily necessities 500at the lowest prices.”(Founder Shitagau Noguchi, 1933)Net sales (left scale): Material Homes Health Care OthersOperating income (right scale)Notes: 1. Non-consolidated figures are shown through fiscal 1976; consolidated figures are shown from fiscal 1977. 2. Color-coded sales are based on classifications at the time of disclosure; results of health care–related businesses through fiscal 1988 are included in “Others.”01922194019501960197019801990200020102020Social needs and timesAsahi Kasei’s evolutionBusiness portfolio transformationNew business entry, M&AWithdrawal, downsizing, divestment1922–Establishing the basis for modern life• Development of chemical industry and modern agriculture• The Great Depression and World War IIFounding and Japan’s first production of synthetic ammoniaAsahi Kasei contributed to establishment of the basis for modern life through its businesses such as the production of Bemberg™ cupro, a regenerated fiber.• Ammonia• Regenerated fiber (cupro, viscose rayon)• Chemical fertilizer• Foods (monosodium glutamate)Chemical fertilizers, regenerated fiber, explosives, etc.FY1940 Net sales¥56 million7(¥ billion)250200150100500Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate InformationAsahi Kasei Report 20218Social needs and timesAsahi Kasei’s evolution1940 s–Sufficiency of daily necessities• Post-war recovery and modernization of industry• Start of period of high economic growthExpansion into petrochemicals and synthetic fibersAfter World War II, the modernization of industry advanced in Japan, driving the independence and growth of the Japanese economy. Asahi Kasei embarked on various new businesses that helped improve the quality of people’s lives.Business portfolio transformationNew business entry, M&AWithdrawal, downsizing, divestment• Polystyrene• Synthetic fiber (acrylic fiber)ChemicalsFoodsFibersFY1960 Net sales¥ 44.9 billion1960 s–Improvement in quality of homes, development of public infrastructure• Period of high economic growth• Transition to stable economic growthExpansion into homes, health care, and electronicsAs the Japanese economy transitioned from a period of high economic growth to a period of more stable growth, Asahi Kasei entered new fields to address diversifying social needs.1980 s–Increased comfort and convenience• Emergence and collapse of economic bubble• Two decades of meager economic growthProgress in overseas business, focus on business restructuringAfter the collapse of Japan’s economic bubble, Asahi Kasei divested, withdrew, and downsized businesses to achieve a selectively diversified portfolio. It was also during this time that we built our platforms for global management.• Saran Wrap™• Acrylonitrile• Synthetic rubber• Ethylene (construction of naphtha cracker)• Autoclaved aerated concrete• Hebel Haus™ unit homes• Artificial kidneys• PharmaceuticalsOthersFoods/Health careFibersHomes/ Construction materialsFY1980 Net sales¥ 800.1billionChemicals• Hall elements• LSIs• Lithium-ion battery separators• Hebel Maison™ apartment buildings• Insulation panels• Acquisition of Toyo Jozo Co., Ltd. (pharmaceuticals and liquors)• Virus removal filters• FoodsOthersHealth careFibersChemicalsFY2000 Net sales¥1,269.4billionElectronicsHomes/ Construction materials2000 s–Increasing awareness of the envi-ronment and quality of life• Regional diversification• Effect of global economic crisis• Advancement of digital technologies• Aging populations and pursuit of health and prosperity• COVID-19 pandemic• Rising interest in carbon neutrality and the circular economyAccelerated globalization through M&A, expansion of health care businessAsahi Kasei accelerated the globalization of its operations and expanded its health care business through mergers and acquisi-tions. We reorganized our operations in the three business sectors of Material, Homes, and Health Care for thorough portfolio man-agement with optimal allocation of management resources and greater generation of synergies between business domains.• Electronic compasses• UVC LEDs• Hydrogen production system (process verification)• New businesses for homes (seniors, medium-rise, overseas)• Critical careOthersMaterialHealth careFY2020 Net sales¥2,106.1billion• Viscose rayon, acrylic fiber, polyester• Restructuring of petrochemical Homesbusiness• LiquorsManagement StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate InformationAsahi Kasei Report 20219Management StrategyAsahi Kasei Sustainability Photo ContestNameWei GuCompanyAsahi Kasei Transfusion Technology Co., Ltd.Country/regionChinaCare for People, Care for EarthAsahi Kasei Report 2021Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate InformationMessage from the President10In this time of uncertainty, we will pave the way for the next 100 years by taking the initiative in realizing a virtuous cycle between “contributing to a sustainable society” and “sustainable growth of corporate value” while leveraging our “diversity” and “capability to change.”Hideki KoboriPresidentAsahi Kasei Report 2021Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate Information11Working to thoroughly reinstitute safety and to restore trustThe Asahi Kasei Group implements Responsible Care, a chemi-accidents occurred at Asahi Kasei plants in fiscal 2020. A recurrence. Furthermore, we are raising the level of safety cal industry initiative promoting dialogue with society with the worker died in an explosion at our Moriyama Works in Shiga awareness of the organization as a whole and of each and every goal of preserving the environment and ensuring safety, health, Prefecture, while the outbreak of a fire at our semiconductor employee by communicating the preventative measures and quality by thoroughly practicing the three fundamental plant in Nobeoka in Miyazaki Prefecture also affected our throughout the Asahi Kasei Group. Respect for human life and “actuals,” which focus on the actual place, actual thing, and business partners. I once again offer my sincere apologies to safety are core values of our business. We will strive to regain actual fact throughout the life cycle of all of the products and everyone concerned. We are investigating the causes of each trust by earnestly working to ensure the safety of communities services that we provide. Despite these efforts, two serious accident and thoroughly implementing measures to prevent any and our employees. Dramatic change in our business environment triggered by the COVID-19 pandemic and the positioning of “Cs+ for Tomorrow 2021”The global spread of COVID-19 continues to bring about discon-rights issues such as forced labor. In this fast-changing world, value that will be highly regarded by society going forward, and tinuous and uncertain change. As the pandemic brought new we must maintain an awareness of all manner of opportunities we are continually focusing the allocation of management social and environmental issues into focus, people’s awareness and risks and boldly take on challenges as a company at the resources to these five priority fields. of life, health, and hygiene as well as their values in relation to forefront of change. Wherever there is change, there are business opportunities. work and lifestyles have changed dramatically. I believe that In 2019, the Asahi Kasei Group launched the “Cs+ for In this era of great uncertainty, we will take a proactive approach increasing emphasis will be placed on the fulfillment of individu-Tomorrow 2021” medium-term management initiative. While we by leveraging our strengths, which are the “diversity” of our als in their lives and careers due to these changes.promoted various measures for the two mutually reinforcing human resources, technologies, and businesses and the “capa- Meanwhile, global warming—the primary cause of climate aspects of sustainability of “contributing to the sustainability of bility to change” created by the ingenuity of our individual change—has become a pressing issue for mankind. Amid these society” and “the sustainable growth of corporate value,” our employees, organizations, and the company as a whole.circumstances, public- and private-sector initiatives aimed at basic approach remains unchanged. In regard to “contributing realizing carbon neutrality by 2050 are proceeding at a rapid to the sustainability of society,” we set forth “Care for People, pace that would have been unimaginable a year ago. We also Care for Earth” to clarify our stance of continuing to contribute to need to urgently respond to changes in international affairs the sustainable development of people and the earth. We also resulting from the decoupling of the United States and China, identified Environment & Energy, Mobility, Life Material, Home & and to all aspects of the entire supply chain, including human Living, and Health Care as priority fields where we can provide Asahi Kasei Report 2021Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate Information12Progress on “Cs+ for Tomorrow 2021” In fiscal 2020, the second year of “Cs+ for Tomorrow 2021,” we In Health Care, the acute critical care business, which we The Health Care sector performed well in fiscal 2020, proceeded steadily with initiatives in our priority fields for provi-have positioned as a core driver of growth, entered into the recording increased net sales and operating income. On the sion of value amid a business environment that continues to respiratory dysfunction field by acquiring Respicardia, Inc. In other hand, results in the Material sector fell significantly short of change unpredictably.addition, we steadily expanded the pharmaceutical business our plan at the time of formulating “Cs+ for Tomorrow 2021” In Environment & Energy, we are incrementally increasing through such measures as working to increase sales of Envarsus due in part to a deterioration in business stemming from the our production capacity for lithium-ion battery separators in XR™, an immunosuppressive drug for kidney transplant decoupling of the United States and China and a decline in line with the growth of the market for eco-friendly electric patients manufactured by Veloxis Pharmaceuticals, Inc., which demand for products for the automotive market and petrochemi-drive vehicles. In Mobility, we are expanding the business of we acquired in fiscal 2019. cals. Meanwhile, in the Homes sector, results lagged one year Sage Automotive Interiors, Inc., a manufacturer of automobile While the Asahi Kasei Group was steadily promoting such behind the plan due to a decrease in orders received resulting interior fabric, while generating synergies with Lamous™, an initiatives, lockdowns were implemented in major cities around from restrictions on customers visiting model homes in Japan environment-friendly artificial suede. In Life Material, we the world and a state of emergency was declared in Japan in because of COVID-19. However, we are beginning to see a decided to build a second plant for Ceolus™ microcrystalline response to the spread of COVID-19. As the shortage of medical recovery in the Homes sector as a result of efforts to attract cellulose, which is scheduled for completion in spring 2023, products became a serious issue due to the global suspension customers in ways other than through model homes.in order to expand our output of high-performance products of production and distribution, we acted quickly to provide a Our financial condition is sound, reflecting our emphasis for pharmaceuticals.response. Our actions included temporarily ramping up produc-on financial discipline, careful selection of capital expenditure In Home & Living, we are working to contribute to the tion capacity of ventilators to 10,000 per month, the equivalent and investment projects, and thorough implementation of achievement of a carbon neutral society and to enhance resil-of 25 times that of our usual output, increasing the production of appropriate control of inventories and expenses taking into ience to disasters with the aim of building sustainable urban material for medical gowns and masks, and supplying virus consideration the circumstances in each sector. Going forward, environments. Meanwhile, to make the expansion of the over-removal filters required for the development of vaccines and we will improve our capital efficiency and cash-generation seas business in the United States and Australia a pillar of pharmaceuticals. These actions exemplify how we leverage our capabilities by steadily implementing investments in projects growth, we are developing business models adapted to the “diversity” and “capability to change” to quickly identify changes that will contribute to growth over the medium to long term and specific characteristics of each of these countries.in the business environment and adapt in a flexible manner. the transformation of our business portfolio, with a focus on the Asahi Kasei Report 2021Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate Information13Performance and Outlook by SectorCurrent Situation by Sector*OutlookHealth CareMaterial)nigram gnitarepo( ytilibatfiorPGrowth (revenue growth rate)Dotted circle: current termSolid circle: mid-term targetCircle size: operating income amountMaterial• Slower growth and lower income due to environmental change• Recovery under way, but performance below targetSalesOperating incomeOperating marginFY20191,093.192.48.4%FY2020991.266.56.7%FY20211,168.0100.08.6%Homes• Domestic business recovering from COVID-19 impact but 1 year behind planSalesOperating incomeOperating marginFY2019704.472.710.3%FY2020692.663.59.2%FY2021791.067.08.5%Health Care• Increased demand for ventilators and virus removal filters; income growth forecast to achieve target SalesOperating incomeOperating marginFY2019337.843.512.9%FY2020407.967.616.6%FY2021400.055.013.8%* FY2019–FY2020 results, FY2021 forecasts (announced in May 2021); ¥ billion• Prioritization of profitability and capital efficiency over increased scale; acceleration of portfolio transformation• Thorough financial discipline; strict selection of growth investments• Domestic growth in homes for seniors and medium-rise homes; overseas expansion in the U.S. and Australia• Use of IT to raise profitability; continued cash flow contribution• High earnings growth and profitability through returns on previous investments• Continued investment for further expansion as growth driver Homes• Consolidation of McDonald Jones Homes cost of capital while maintaining our sound financial condition. continuous dividend increases from a medium- to long-term We plan to deliver returns to our shareholders at the level perspective through the sustained generation of cash flow envisaged when formulating “Cs+ for Tomorrow 2021” by while paying close attention to the balance between invest-adhering to our policy of aiming for stable dividends and ments for growth and our financial position.Asahi Kasei Report 2021Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate Information14Proactively reformulating our business strategy to accelerate the transformation of our business portfolioIn fiscal 2020, we advanced the allocation of management monitored conditions in these 15 businesses and have already COVID-19 pandemic, our businesses that hold the leading or resources to our priority fields for provision of value and proac-begun taking action with a view to implementing structural second-leading market share have maintained and strengthened tively reformulated our business strategy to accelerate the reform in several of them.relationships with customers and business partners. Moreover, transformation of our business portfolio. In a business environ- Going forward, we will further emphasize the perspective of these businesses have also succeeded in obtaining and lever-ment subject to discontinuous and uncertain change, it is market position to evaluate businesses. In fact, even in a busi-aging a range of market information. We will further solidify becoming increasingly necessary to grow earnings sustainably ness environment in which it is challenging to develop face-to-businesses with strong market positions with the aim of achiev-using limited capital in order to continuously meet the expecta-face relationships with new customers due to the ongoing ing a more profitable portfolio of value-added businesses.tions of various stakeholders. Given such circumstances, we strengthened evaluations of our business portfolio from the perspective of capital efficiency while integrating evaluations of the sustainability of our busi-nesses from the perspective of social issues and global environ-mental problems. Specifically, building on evaluations using profitability (operating margin) and growth (revenue growth rate), we implemented business evaluations that added capital efficiency (ROIC) and cost of capital perspectives, sustainability perspectives (making use of quantitative indicators such as GHG emissions), and the perspectives of profit amount, profit volatil-ity, and business stage. Based on the results of the business evaluations, we identi-fied 15 businesses as strategy reformulation businesses from among approximately 60 businesses evaluated, centered on businesses handling commodity products in the Material sector in particular. Senior management, including myself, and the leaders of each business carried out strategy reexaminations taking into consideration the discontinuous and uncertain com-petitive environment in the future. After setting key performance indicators (KPIs) and milestones, we have continuously Business Portfolio TransformationBusiness evaluationStrategy study for individual businessesStrategy reformulation businesses Evaluated by profitability (operating margin) and growth (revenue growth rate) Additional evaluation to classify businesses in 4 categories• ROIC, cost of capital• Sustainability (GHG emissions, etc.)• Profit amount, profit volatility, business stage4 categoriesHigh earnings baseStrategy reformulationGrowth driverStrengtheningAmong approx. 60 businesses evaluated15 businesses Mainly commodity products in Material sector Reconsidered strategy based on view of competitive environment impacted by COVID-19 pandemic Set KPIs and milestones for strategy refor-mulation, continually monitoring progressProcess stages1) Study strategies/directions of businesses2) Formulate specific measures/action plans3) Execute measuresActions begun for structural reform of several businessesAsahi Kasei Report 2021Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate Information15Pursuing sustainability aimed at achieving carbon neutrality and a circular economyWe pursue “Care for People, Care for Earth” under “Cs+ for the collective knowledge of the Asahi Kasei Group.efficiently by consolidating projects for environmental contribu-Tomorrow 2021.” By “Care for People” we aim to contribute to The goal of realizing carbon neutrality by 2050 represents a tion technologies and products, such as those for green hydro-the achievement of a society in which people can lead active major challenge that transcends generations. I believe our gen-gen using alkaline water electrolysis technology, CO2 separation lives in the new normal, while “Care for Earth” indicates our eration must begin to do what we can now as a party with a and recovery systems, and next-generation CO2 chemistry tech-contribution to the creation of a sustainable world through the stake in realizing carbon neutrality and pass on the results of our nology, while unifying contact points with external organizations.achievement of carbon neutrality and a circular economy.efforts to the next generation, rather than leave tackling this We also recognize that the material industry has a major The Asahi Kasei Group has been implementing various major challenge to those who come after us. We will formulate a part to play in the creation of a circular economy. With this in initiatives contributing to the achievement of carbon neutrality road map and accelerate initiatives to achieve our targets of mind, several of our organizations are examining fields where and a circular economy. Amid these efforts, in May 2021 we energy consumption reduction, energy decarbonization, manu-we can make a contribution. As one example, we have built a announced our goal of achieving carbon neutrality (net-zero facturing process innovation, and the transformation of our platform in partnership with IBM Japan, Ltd., that visualizes carbon emissions) by 2050* to create a sustainable world. We business portfolio to low-carbon businesses centered on the and manages the supply chain utilizing blockchain technology have also set a target to reduce our GHG emissions by 30% or Material sector.for the recycling of used plastic. During fiscal 2021, we will more by 2030 compared with fiscal 2013. In April 2021, we established the Green Solution Project, conduct demonstration trials and carry out verification to In the process leading up to our announcement on carbon which is under my direct authority as president, with the aim of ensure traceability.neutrality, senior management, including myself, and the lead-strengthening business creation to achieve carbon neutrality. ers of each business carefully carried out repeated discussions Based on an overarching view of markets related to decarbon-to verify the impact of carbon neutrality on all of our stakehold-ization, this project will create new businesses leveraging our ers. Ultimately, based on our Group Mission of contributing to superior technologies to accelerate commercialization while life and living for people around the world, we concluded that promoting partnerships with other companies, the public sector, we could achieve carbon neutrality by 2050 if we drew upon and academia. We will endeavor to develop businesses * Direct GHG emissions from business activities as indicated by Scope 1 (direct GHG emissions) and Scope 2 (indirect GHG emissions from use of electricity, heat, and steam supplied by other companies)Asahi Kasei Report 2021Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate Information16Implementing digital transformation and strengthening our human resource foundations for creating new valueThe Asahi Kasei Group proactively promotes digital transforma-acquiring digital human resources. We are strengthening DX telecommuting, bolstering the development of professional tion (DX) as a pillar of our growth strategy to transform business training for employees to promote measures for cultivating all human resources by enhancing the Group Masters program, models and create value. In April 2021, we established Digital employees to digital human resources, under which we aim for implementing measures aimed at revitalizing our organizations Value Co-Creation. By transferring digital-related organizations all employees to work with a mindset for utilizing digital technol-and spurring the growth of our human resources based on the that had been divided among multiple units under the oversight ogy, including through the Open Badge system. At the same results of a new engagement survey, and nurturing the next of the new unit and consolidating human resources and knowl-time, we will increase the number of digital professional person-generation of leaders. In these ways, we are providing support for edge therein, we will entrench DX initiatives group-wide, which nel to 230 by the end of fiscal 2021 via the implementation of the growth of employees of all ages and positions in accordance will enable us to transform our business models and create new development programs and new recruitment.with the career plans of their choice.businesses. In May 2021, we formulated our DX Vision 2030 to From the perspective of strengthening our human resource We are also proactively advancing measures in relation to clarify our aspiration for DX.foundations, we are encouraging “lifetime growth” in which health and productivity management. I believe that maintaining In January 2021, prior to establishing Digital Value diverse individuals enhance their expertise and grow continu-and improving the physical and mental health of employees and Co-Creation, we opened CoCo-CAFE, a digital co-creation labo-ously even in times of dramatic change. We are once again their families is the foundation for employee vitality and growth. ratory. With the opening of this laboratory, we aim to fortify our reviewing workstyles and mechanisms for developing human To create opportunities for employees to play active roles and DX foundations and create value by gathering together digital resources while creating foundations that support the autono-achieve growth, we will focus on reducing the rate of absence human resources from various functions, such as marketing, mous growth of employees and enable diverse individuals to due to ill health, enhancing motivation for work, and fostering a research and development, and production technology, to con-thrive, guided by the basic principle that “people are our core strong organizational culture of ambition, which will in turn help nect knowledge held inside and outside the company.assets; everything starts with people.” Examples of our endeav-raise productivity. Besides these efforts, we are also proactively developing and ors include recommending diverse workstyles such as Strengthening corporate governance and risk management to improve corporate valueCorporate governance and risk management are vital elements Audit & Supervisory Board Members and their various back-of corporate value while incorporating the perspectives of a wide for steadily implementing our management strategies and the grounds as we make the most of our “diversity” and “capability range of stakeholders in a timely manner. These discussions business activities and initiatives to strengthen our foundations to change.” In a fast-evolving business environment, we will included the sharing of a broad range of information on the based on them, as well as for enhancing our operations.continue to review corporate governance as a mechanism for substance of communications with investors and shareholders With our corporate governance structure, we have in place a making optimal decisions transparently, fairly, promptly, and and on the promotion of sustainability as well as deliberations system to gain appropriate oversight and advice, paying atten-boldly. At Board of Directors’ meetings in fiscal 2020, we carried concerning the transformation of our business portfolio.tion to the proportion of Independent Outside Directors and out free and open discussions on our policy for the improvement Asahi Kasei Report 2021Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate Information17Hideki KoboriPresident In respect to risks, we have placed particular priority on consideration for the environment, safety, health, and quality. In business and draft contingency plans in response to important export control regulations due to the decoupling of the United order to heighten the risk awareness of each and every risks. In addition, the Risk Management & Compliance States and China, human rights issues encompassing the entire employee, as well as the Asahi Kasei Group as a whole, and deal Committee, which I chair, thoroughly confirms and follows up on supply chain, cyber security including the dissemination of decisively with risks, managers responsible for risk management the progress of group-wide risk countermeasures.information centered on social networking services, and and compliance identify, assess, and analyze risks in each Our Commitment toward the Next 100 YearsFiscal 2022 will see the launch of the Asahi Kasei Group’s next Kasei Group will take on the challenge of achieving a new trans-medium-term management initiative and mark the centennial of formation to ensure that our commitment to “Care for People, Asahi Kasei’s founding. Shitagau Noguchi, our founder, stated Care for Earth” endures for another century thanks to the “diver-that “As industrialists, we must always remember that our ulti-sity” of our human resources, technologies, and businesses and mate mission is to improve people’s standard of living by supply-the “capability to change” that springs from the ingenuity of our ing an abundance of the highest-quality daily necessities at the employees, organizations, and the company, cultivated over the lowest prices.” By continuing to adhere to this vision, the Asahi past century.Management Direction for the Next 100 Years1. Realize the two aspects of • Providing solutions for a sustainable society through innovative technologies and sustainability for Asahi Kaseiadvanced initiatives• Providing value expected by society to realize sustainable growth of corporate value2. Strengthen corporate governance and management of operations in the three business sectors• Pursuing both high profitability and capital efficiency and sustainable profit growth• Pursuing synergies between businesses and dynamic portfolio transformation3. Further enhance business platform, • Providing a venue where diverse individuals can thrive with high motivationthe fundamental strength of Asahi Kaseiaccumulated know-how• Maximizing use of intangible assets such as diverse core technologies and • Upgrading and streamlining operations and reforming business models through DXAsahi Kasei Report 2021Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate InformationValue Creation Model18Contribution to sustainability (non-financial indicators identified in the materiality analysis) Sustainable growth of corporate value (average between fiscal 2018 and 2020) OutcomeContribution to the global environmentContribution to health and longevityContribution to comfortable lifeNet sales ¥ 2,142.7 billionOperating income ¥186.2 billionEBITDA ¥ 304.8 billionROE 8.1 %EPS ¥ 79ROIC 6.8 %Business portfolio management capabilityContributing to sustainable societyContributing to sustainable societyAbility to manage diversified businessAbility to ascertain business characteristicsAbility to transform business portfolioGroup Mission Contributing to life and living for people around the worldMaterialHomesHealth CareEnvironment & Energy Mobility Life Material Home & LivingHealth CareCare for People, Care for EarthEmployee action principlesCreating new valueComplianceCommunicationConnectChallengeDiversity & Capability to ChangeStrengthening business foundations through the “Cs”Care for People, Care for Earth The Asahi Kasei Group’s Vision for the Future of People and the Earth (P19–21), Pursuit of Carbon Neutrality and a Circular Economy (P22–26) Materiality (P19), Risk Management (P62–64)ComplianceCommunication Human Resource Strategies (P39–41), Health and Productivity Management (P42)Challenge/Connect Pursuit of Carbon Neutrality and a Circular Economy (P22–26) New Business Creation (P29–33) Digital Transformation (P34–38)InputStrong financial foundationD/E ratio: 0.451Credit rating: AA (JCR)2Technologies in a wide range of fields( polymers, compound semiconductors, homes, pharmaceuticals, etc.)Human resources involved in multiple businessesNumber of employees: 44,497 1Bases: More than 20 countries and regions 1Contact points with various markets ( automotive, electronics, hospitals, consumers, etc.) Financial and Capital Policy (P43–44) New Business Creation (P29 –33) Human Resource Strategies (P39 –42) Review of Operations (P46 –51)1 As of March 31, 20212 As of June 30, 2021Asahi Kasei Report 2021Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate Information19The Asahi Kasei Group’s Vision for the Future of People and the EarthThe Asahi Kasei Group contributes to solutions for various social issues through business activities aimed at achieving sustainability. With a uniform aspiration of “Care for People, Care for Earth” when creating value in all of our businesses, we will deliver new value in a variety of fields that contribute to the sustainability of society.MaterialityIn fiscal 2017, we identified the important issues and themes that Process for Identifying Materialitywe should prioritize as the materiality of the Asahi Kasei Group. 1) Identification of Issues3) Evaluation of AppropriatenessWe have since added two new material issues—Initiatives toward We identified issues in light of requirements of society and our We verified the appropriateness of the material issues by examining Carbon Neutrality and Initiatives toward a Circular Economy—in Group Mission, Group Vision, and Group Values while making them from a diverse range of perspectives, such as through delib-consideration of the further growing sense of urgency regarding reference to international guidelines such as ISO 26000 and the erations involving the leaders of various divisions, discussions with the global environmental impact of climate change and resource Global Reporting Initiative (GRI) Standards as well as the evalua-outside companies, and consultations with Outside Directors.extraction and depletion as well as the importance of these mat-tion criteria of the major ESG rating institutions.4) Examination and Approvalters to the management of the Asahi Kasei Group.2) Determination of Degree of Importance The Board of Directors approved the material issues after exami-ExtremelyimportantWe evaluated the degree of importance both to society and to the nation at the Management Council.Asahi Kasei Group and mapped it on two axes. Highest priority as premiseCompliance/sincerityGovernanceHuman rightsSafety/qualityGovernanceAsahi Kasei is constantly pursuing an optimal state of corporate governance. ( P53–56)Extremelyimportantsredlohekats rof ecnatropmIWastewater( WEB)Industrial waste( WEB)Business Contribution toGlobal environmentHealth and longevity( P21)Comfortable lifeDecarbonization( P23, 24, 26)Circular economy( P25)Supply chain management( WEB)Communication with stakeholders WEB) WEB)((Biodiversity( WEB)DiversitySocial contribution( WEB)Human resources( P39 – 42)Risk management( P62– 64)Compliance/ sincerityHuman rightsWhile strictly following laws, regulations, and internal rules, Asahi Kasei strives to practice a high level of corporate ethics while engaging in various business activities in good faith. undergo thorough training in their departments, including case study sessions in fiscal 2020.All executives and employees of the Asahi Kasei Group adhere to the Asahi Kasei Group Code of Conduct and Asahi Kasei endorses and is a signatory to the United Nations (UN) Global Compact. In addition, we are formulating a human rights policy in accordance with the UN’s Guiding Principles on Business and Human Rights and will imple-ment human rights due diligence to ascertain human rights violation risks in the business value chain and take action to prevent or reduce such risks.Operational Safety; Workplace Safety and HygieneThrough our Responsible Care program, we aim to achieve zero severe industrial accidents and zero occupational injuries. We provide employees with education and training, perform risk assessments during construction in order to ensure safe and stable plant operation, and repeatedly review existing processes.Safety/qualityQuality AssuranceImportance for the Asahi Kasei GroupExtremelyimportantHarmony with the natural environmentHealth and comfortBasic activitiesAsahi Kasei focuses on activities to improve quality in order to continue providing reliable quality to our customers. In fiscal 2020, we strengthened the quality assurance system, augmented employee training to develop human resources for managing and ensuring quality, performed on-site quality audits, and conducted verification and inspection activities.Asahi Kasei Report 2021Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate Information20Provision of Value through Our Businesses for Realizing a Sustainable SocietyTo achieve our vision for the future of people and the earth and Mobility, and Life Material in the Material sector, Home & Living business activities while pursuing the development of a portfolio provide greater value to society, we have determined five priority in the Homes sector, and Health Care in the Health Care sector. of high-profitability and high-value-added businesses from the fields for provision of value and are allocating management In these priority fields for provision of value, we will continue perspective of “Care for People, Care for Earth.” resources to them. These fields are Environment & Energy, contributing to the future of people and the earth through our Social issues and trends• Expansion of clean energy• Transition to carbon neutrality and a circular economy• Progress of CASE (Connected, Autonomous, Shared & Services, and Electric)revolution• Rising global population• Next-generation communications • Diversifying lifestyles• Intensifying natural disasters• Advancement of longevity societyEnvironment & Energy Life Material MaterialMobility Asahi Kasei Group’s priority fields for provision of valueContributing to the environment with wide variety of technology (CO2 chemistry, semiconductors, etc.)Contributing to the future of mobility with technology for safety, comfort, and the environmentContributing to healthy and comfort-able daily life with distinctive prod-ucts and technological strengthHomesHome & LivingHealth CareHealth CareContributing to superior social infrastructure and comfortable living through our know-how gained in urban marketsContributing to healthy longevity with pharmaceuticals and medical devices discerning the needs of the aging societyCare for PeopleContribution to secure and comfortable life and to health and longevityCare for EarthBusiness contribution to the global environment• Clean energy• Conservation of energy and improve-ment of the environment• Contribution to carbon neutrality and a circular economyProvision of value to society• Society with safe and comfortable • Comfort and convenience• Safety and reliability • Achievement of society with mobility• Human health• Comfortable and healthy lifehealthy longevityAsahi Kasei Report 2021Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate Information21Increasing Opportunities through Care for People, Care for EarthCare for PeopleActive life in the new normalCare for EarthCarbon neutral sustainable worldWith the aim of creating a society in which health and longevity and a secure and comfortable We are accelerating innovations for addressing a variety of environmental issues, such as realizing life are available to all, we facilitate high-quality medical care and fulfilling life through our tech-carbon neutrality and a circular economy, and offering solutions through our businesses.nologies, products, and solutions.Social IssuesSolutions through Our BusinessesSocial IssuesSolutions through Our BusinessesContribution to secure and comfortable lifeBusiness contribution to the global environmentStorm and flood damage / Intense heat• Resilient homes/communities (total resilience)Circular economyNew styles of living and working• Homes/consumables/apparel meeting new needsCarbon recyclingDigitalization• Products related to next-generation communications • Material recycling• Chemical recycling• CO2 separation/recovery• CO2 chemistry(glass fabric, etc.)Next-generation energy• Alkaline water electrolysis (green hydrogen)Contribution to health and longevityResponse to COVID-19Facilitation of high-quality medical care• Ventilators• Therapeutic apheresis• Virus removal filters• Surface disinfection solution• 3Cs visualization solution• Medical gowns• Masks• Defibrillators• Implantable neurostimulator device• Osteoporosis treatment• Rheumatoid arthritis treatment• Immunosuppressive agent• Artificial kidneysElectric drive vehicles• Lithium-ion battery separator• Lightweighting resinsOther environmental contribution productselectrolysis• Ion-exchange membrane process for chlor-alkali • Purging agent for plastic molding machines• Elastomer for asphalt modification• CO2 sensors• S-SBR synthetic rubber for fuel-efficient tires• Hebel Haus™, Hebel Maison™• High-performance insulation• Biomass feedstock products• Manufacturing process for acrylonitrile• High-volume water filtration module• Bio-PLA (polylactic acid) nonwoven fabricAsahi Kasei Report 2021Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate Information22Pursuit of Carbon Neutrality and a Circular EconomyDetermined to help resolve social issues, the Asahi Kasei Group contributes to solutions through business activities. As climate change and other environmental issues become increasingly serious, the need for sustainability is greater than ever. We utilize our diverse technologies and human resources to create new value in the pursuit of carbon neutrality and a circular economy.Carbon neutrality and a circular economy are essential to the businesses and products that contribute to reduced environ-achievement of a virtuous cycle of contributions to a sustainable mental impact across the entire life cycle, and recycling society and sustainable growth of corporate value. Our wide-technology. Looking ahead toward 2050, we are developing ranging efforts include technology for hydrogen production using technologies and supplying products and services that contrib-• Promotional activityrenewable energy, CO2 chemistry that uses CO2 as a resource, ute to life and living for people around the world.CollectionBlue enclosures indicate Asahi Kasei’s major areas of contributionElectricityRecycled materialProduct developmentReduceRecycleSolar powerWind powerHydroelectric powerRaw material• Material recycling• Chemical recycling P25• Resource conservation (thinner parts)• Greater recyclability• Recycled material• Biomass feedstockRenewable energy• Alkaline water electrolysis system P23H2Household electricity consumptionIndustrial electricity consumptionElectric vehiclesChemical products (manufacturing)Consumers (use)ReuseCO2Outflow• Elucidating mechanism of microplastic formationGreen methanolGreen fuel• CO2 separation/recovery• CO2 chemistry 　　　 P24• Greater durability• Biodegradable technology (research subsidy)Asahi Kasei Report 2021Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate Information231975 we commercialized the ion-exchange membrane process Development of Business Models for Quest for Practical Application of for chlor-alkali electrolysis. With technology built up over many Supporting a Hydrogen SocietyHydrogen EnergyLeadership in Creating a Hydrogen SocietyThe Asahi Kasei Group is aiming for the practical use of low-cost green hydrogen derived from renewable energy through the development and verification of an alkaline water electroly-sis system. Hydrogen is garnering global attention as a next-generation form of energy, and we are working to meet high expectations for the future of hydrogen by allocating manage-ment resources to this area in order to play a leadership role in the creation of a hydrogen society. Around the time of our founding we began producing ammo-nia using hydrogen obtained through water electrolysis, and in years, Asahi Kasei is now the only company in the world that sup-plies both electrolysis systems and ion-exchange membranes developed in-house, which is a significant competitive advantage. In March 2020, our alkaline water electrolysis system with the world-leading scale of 10 MW was adopted at the Fukushima Hydrogen Energy Research Field (FH2R), a project supported by Japan’s New Energy and Industrial Technology Development Organization (NEDO). Hydrogen supply using this system has begun, and we are advancing verification in order to achieve higher levels of performance, lower equipment costs, and increased durability as the development project proceeds toward commercialization.Green Solution ProjectThe Green Solution Project was launched in April 2021 with the mission of creat-ing businesses that contribute to carbon neutrality. Directly reporting to the President of Asahi Kasei, this project examines the potential of various business models for contributing to decarbonization based on an overarching view of the decarbonization market and the Asahi Kasei Group’s various technologies in addi-tion to hydrogen production technology for the development of action plans.Satoru TamuraAsahi Kasei Senior Executive OfficerSenior General Manager, Marketing & Innovation /ProjectSenior General Manager, Green Solution Nobuko UetakeDeputy Senior General Manager, Green Solution ProjectAchieving a hydrogen society requires coordination The alkaline water electrolysis system we are devel-that extends beyond the production of hydrogen to oping is expected to reduce total cost through encompass aspects of the supply chain such as stor-increased scale. Nevertheless, total cost with our age, transportation, and use. The Asahi Kasei Group alkaline water electrolysis system still exceeds the is a member of the Japan Hydrogen Association and target set forth in the Ministry of Economy, Trade and is engaged in joint hydrogen-related initiatives with Industry’s The Strategic Road Map for Hydrogen and various companies. For example, we participate in a Fuel Cells. We need further innovation, and we are NEDO verification project in Namie Town, Fukushima advancing technology development to reduce cost (FH2R). We are also advancing joint initiatives over-and improve reliability by scaling up the equipment. seas, such as supplying an alkaline water electrolysis At the same time, we are looking at projects where system as we participated in the ALIGN-CCUS project conditions such as electricity cost, power supply sta-for realizing a low-carbon society in Germany, where bility, and other characteristics of the location and the transition to a hydrogen society is gaining customer may enable commercialization as soon as momentum. We are working to create higher-value possible. We will continue to work together with other business models with hydrogen as a key focus.relevant companies in order to achieve a level of cost that will make a hydrogen society possible.Asahi Kasei Report 2021Management StrategyAsahi Kasei Group OverviewBusiness OverviewCorporate Governance and Risk ManagementCorporate Information24Utilization of CO2 as a ResourceJapan is pursuing a goal of achieving carbon neutrality in 2050 Blu-ray discs, housings for smartphones and home electronics, by cutting GHG emissions as well as by promoting carbon recy-automotive light covers, and windows for airplanes and high-cling by using CO2 as a resource to address both global warming speed trains. We are also developing a process to produce isocy-and resource issues. The concept of finding ways to utilize emit-anates using CO2 as a raw material. Once completed, this ted CO2 as a measure for combating global warming originates in process is expected to be applied in the production of a variety of Japan, and many Japanese companies are advancing develop-polyurethane materials, such as foams, cushions, thermal insula-ment projects based on this concept. The global carbon tion, elastomers, paints, adhesives, and fibers.recycling market is projected to reach the scale of ¥5.7 trillion in Regarding CO2 separation and recovery, we are developing 2030. For commercial application in the efficient co