旭化成（3407） – Sustainability Report 2021 Part2

EnvironmentEnvironmentEnvironmentEnvironmentThe Asahi Kasei Group will contribute to the achievement of a carbon neutral and sustainable world by reducing the environmentalimpact of our business activities and improving the environment around the world through our businesses.EnvironmentalManagementClimate ChangePollution and NaturalWater ResourceWe implement measures thatResourcesPreservationWe have established a group-deal with climate change byWe strive to use naturalWe strive to enhance waterwide management system inreducing greenhouse gasresources and energyuse efficiency in our businessrecognition of environmentalemissions and developingefficiently throughout theactivities while contributinginitiatives as importantinnovative technologies.entire life cycle of ourto the conservation of watermanagement tasks.products, as well as achieveresources worldwide.resource circulation insociety.BiodiversityEnvironmentalWe work towards theContribution Productssustainable use of biologicalWe define products that helpresources in our businessimprove the environmentactivities while takingthroughout their entire lifebiodiversity into account.cycle as environmentalcontribution products, and weare making efforts in thisarea.Asahi Kasei Group Sustainability Report 202132Environmental ManagementEnvironmental ManagementEnvironmental ManagementEnvironmental ManagementPolicyAs expressed in our Group Vision that includes “harmony with the natural environment,” the Asahi Kasei Group places high priorityon environmental initiatives. The Group Policy regarding global environmental measures is shown below.The Asahi Kasei Group’s Global Environmental Policy1. Building a low-carbon society(1)Taking into account Japan’s Plan for Global Warming Countermeasures and Nippon Keidanren’s “Proposal onJapan’s long-term growth strategy under the Paris Agreement,” the Asahi Kasei Group aims for greenhouse gasemissions related to its business activities to meet reduction targets by 2030.(2)The Asahi Kasei Group will promote energy conservation across the full range of our business activities with the aimof preventing global warming and conserving limited resources.(3)The Asahi Kasei Group will develop a plan to reduce CO2 (Scope 3) emissions from its supply chain.(4)The Asahi Kasei Group will help create a low-carbon society incorporating our proprietary technologies, contributingto the reduction of global greenhouse gas emissions by providing products, technologies, and services to the globalmarket.2. Preserving water resourcesits water usage.3. RecyclingThe Asahi Kasei Group will contribute to preserving global water resources through our water purification membranemodule business, water recycling service business, and the sale of water quality monitoring equipment and wastewatertreatment products. It will measure the quantity of its water intake while striving to maintain and improve the efficiency ofThe Asahi Kasei Group will promote the reduction of environmental impacts and the efficient utilization of resources andenergy throughout the entire life cycle in its business activities in order to contribute to a circular economy. Specifically, itwill promote the 3Rs of reduction, reuse, and recycling, and increase the usage of resources and energy with lowerenvironmental impacts as well as renewable resources and energy.Asahi Kasei Group Sustainability Report 2021334. Achieving harmony with natureThe Asahi Kasei Group will give due consideration to the conservation of natural capital and biodiversity, and promote thereduction of environmental impacts of its business activities. We will also monitor and carefully manage our use of land andbiological resources.5. Overseas plantsat its plants in Japan.6. Supply chainactivities.The Asahi Kasei Group will create monitoring items that enable environmental management practices equivalent to thoseThe Asahi Kasei Group will proactively collaborate with members of its supply chain to undertake the abovementionedThe Group’s global environmental measures are part of our Responsible Care program, and we have established a managementManagement frameworksystem based on ISO 14001 requirements. See below for the Responsible Care (RC) promotion framework.Asahi Kasei Group’s Responsible Care ProgramTargets and resultsBased on the Asahi Kasei Group’s Global Environmental Policy, we promote activities with the following indicators and targets.Regarding climate change measures, we have set greenhouse gas reduction targets to be met by fiscal 2030.Quantitative indicators and targets of global environmental measuresBy 2030, emissions reduction of 30% or more (from fiscal 2013)1. Low-carbon societyGHG emissionsBy 2050, carbon neutral Clean power generationNobeokaMaintain use of biomass fuel at 60% or more by energy content in mixed combustion at the biomass power plant inAsahi Kasei Group Sustainability Report 2021342. Energy management targetManagement targetImprove unit energy consumption by an annual average of at least 1% over a 5-year period3. Water resource preservation activity targetOur target is shown in the response to question W8.1a of the CDP Water Security Questionnaire 2021 posted on the WaterResource Preservation page.Click here to read our response concerning CDP Water Security 2021 （353.8KB）Concerning water resources, we are considering setting a new target.Details of activities and achievements for fiscal 2020 are posted here.FY2020 Responsible Care Targets and AchievementsEnvironmental impactsThe diagram below describes the environmental impacts of business activities at Asahi Kasei Group plants.Asahi Kasei Group (domestic) Main Environmental Impacts (FY2020)Violations of Environmental Laws and Regulations, Fines, etc.There were no violations or fines related to environmental laws and regulations in fiscal 2020.Asahi Kasei Group Sustainability Report 202135Climate ChangeClimate ChangeClimate ChangeClimate ChangeResponding to Climate ChangeDisclosure based on TCFD RecommendationsClick here to read our response concerning CDP Climate Change 2021 （589.3KB）Asahi Kasei Group’s Carbon Neutrality PolicyIn accordance with its Group Mission, the Asahi Kasei Group is committed to contributing to life and living for people around theworld. The Asahi Kasei Group has long been aware that climate change is a global issue that will have a significant impact on boththe natural environment and society, and we see it as our mission to use the scientific expertise we have cultivated since ourfounding to deal with this issue leveraging our combined strength. In May 2021, the Asahi Kasei Group adopted a new policy for carbon neutrality.Greenhouse gas (GHG) emission targets for the Asahi Kasei Group2050 ：Carbon neutral2030 ：Emissions reduction of 30% or more (from fiscal 2013)**Scope 1 (direct GHG emissions) and Scope 2 (indirect emissions use of electricity, heat, and steam supplied by other companies), absolute quantityWhile our former target was to reduce GHG emissions relative to sales (emissions intensity), we have changed to an absolutereduction target to clarify our path toward the goal of becoming carbon neutral.Initiative Policyneutral society. and technologies.In addition to reducing GHG emissions from our own business activities, we believe that it is also important to help to reduce GHGemissions in society through our diverse array of technologies and businesses to deal with climate change. In April 2021, welaunched a Green Solution Project reporting directly to the President, and we are working to create new businesses for a carbonRegarding “Care for Earth,” we are committed to addressing climate change issues group-wide, both in terms of (1) reducing theamount of GHGs emitted by our own business activities and (2) helping to reduce GHGs throughout society through our businessesAsahi Kasei Group Sustainability Report 202136Key Points of Effort for Carbon NeutralityAsahi Kasei Group Responsible Care PrinciplesThe Asahi Kasei Group’s Global Environmental PolicyReducing GHG EmissionsScope 1 and 2 GHG emissionsAll production sites (excluding sites of Sage Automotive Interiors, Inc. outside North America) of Asahi Kasei Corp. and itsconsolidated subsidiaries under management control are subject to calculation of Scope 1 and Scope 2 GHG emissions of the AsahiKasei Group, and GHG emissions from generation of electricity and steam sold outside the Asahi Kasei Group are included. In fiscal 2020, our Scope 1 GHG emissions were 2.99 million tons of CO2-eq, and Scope 2 GHG emissions were 0.9 million tons ofCO2-eq, bringing the total of Scope 1 and 2 to 3.89 million tons of CO2-eq. This is a reduction in GHG emissions of approximately24% compared to the 5.11 million tons of CO2-eq released in the baseline year of 2013.GHG emissionsGlobal greenhouse gas emissions by segment (ESG Data)Overseas greenhouse gas emissions by fiscal year (ESG Data)Asahi Kasei Group Sustainability Report 202137Global Scope 3 emissionsThe domestic Japanese portion of Scope 3* emissions has been calculated for all operations except for companies with insignificantemissions. In fiscal 2017 we began including Scope 3 emissions of overseas operations in our calculation.*Scope 3 emissions: Greenhouse gases emitted indirectly by a company throughout its supply chain. The methods for calculating Scope 3 emissionsGlobal GHG emissionsfrom Category 1 is described in Environmental data.Scope 3 emissions by fiscal year (ESG Data)Efforts to Reduce CO2 EmissionsRenewable energyThe Asahi Kasei Group has 9 hydroelectric power generation plants in the Nobeoka Region, which provided approximately 6% of thetotal electricity we used both in Japan and overseas in FY2020. Generation of the equivalent amount of power at thermoelectricplants would result in approximately 80 thousand tons* of CO2 emissions annually. Furthermore, our biomass power generation facility in Nobeoka started operation in August 2012.*Using Japan’s Ministry of Economy, Trade and Industry and Ministry of the Environment standard of 445g CO2/kWh.Electricity sources, FY2020 (global)Asahi Kasei Group Sustainability Report 202138Using Renewable Electricity in the Homes BusinessAs part of its efforts to address climate change, Asahi Kasei Homes joined the RE100 Initiative on September 10, 2019, aiming toachieve sustainable urban living with both decarbonization and resilience. Asahi Kasei Homes is targeting procurement of 100% of the electricity consumed by for its business activities from renewableenergy sources, and is on track to achieve this in 2025, significantly sooner than the initial outlook of 2038.Domestic energy saving in logisticsThe Asahi Kasei Group promotes environmentally friendly railway shipment. Product shipments for our operations in Japan amounted to some 1.1 billion ton-kilometers in fiscal2020―an 7% decrease from fiscal 2019―generating approximately 88 thousand tons of CO2 emissions―a1% increase. In cooperation with the transport firms contracted for shipment, a wide range of measuresare employed to reduce energy consumption and alleviate the environmental effects of physicaldistribution. We have received Eco-Rail Mark certification in recognition of our preferential shipment of products byThe Eco-Rail Markrail, an ecological mode of transport which results in lower CO2 emissions for a given weight and distanceThe Asahi Kasei Group is phasing in low-pollution vehicles for use in marketing and within plant grounds. In fiscal 2020, some 95%of company-owned vehicles were low-pollution vehicles.than many other means of transportation.CO2 emissions from product shipment (ESG Data)Domestic promotion of low emission vehiclesLow-pollution vehicles (ESG Data)Asahi Kasei green bondPlease see here for more details.Asahi Kasei green bond （218.0KB）Annual Reporting (fiscal 2020) （96.1KB）Asahi Kasei Group Sustainability Report 202139Climate ChangeClimate ChangeClimate ChangeClimate ChangeResponding to Climate ChangeDisclosure based on TCFD RecommendationsClimate Change Initiatives (Disclosure based on TCFD* Recommendations)Carbon dioxide emissions have increased significantly since the industrial revolution, and in particular during the 20th century withits major population growth. The global scientific consensus is that carbon dioxide accumulation is causing climate change. Theclimate change is progressing slowly but steadily, and we recognize that worldwide cooperation and the implementation of specificmeasures to address it is an urgent issue.In the century since our founding, we have developed our business in response to the needs of society. Now that climate changemeasures have become a social necessity, we are committed to Care for Earth as part of our management strategy to contribute tothe global environment. As the impact of climate change on business is of great concern to investors and other related parties, companies need to be clearabout its potential impact and maintain an ongoing dialogue with them. Based on the framework provided by the TCFD recommendations, we examined the shifts that are expected to occur as a result ofclimate change and their impact on our businesses from various perspectives in the business sectors of Material, Homes, andHealthcare. As a result, although the financial impact of climate change is expected to be significant in the medium term, thefinancial risk to the company as a whole was found to be limited due to a diversified business portfolio that mitigates risk andcreates opportunities. We also identified the potential to benefit from these new opportunities through our various businesses andWe will contribute to the realization of a sustainable society, making further effort to be an organization in harmony with theenvironment while reducing the risk of climate change and developing new business opportunities through adapting mitigationtechnologies. measures.*TCFD: Task Force on Climate-related Financial Disclosures, established and announced by the Financial Stability Board (FSB) in 2017.Asahi Kasei Group Sustainability Report 202140GovernanceMeasures to tackle climate change are an important management issue and we consider it one of the central themes of ourmanagement strategy. In our current Medium-term Management Initiative, “Care for Earth” is one of the pillars along with “Care forPeople.” The progress of their implementation is discussed at the Management Council and the Board of Directors. For example, to reduce GHG emissions from our business activities, in May 2021, the Board of Directors decided to targetemissions reduction by 30% or more by 2030 compared to fiscal 2013, and it set the goal of becoming carbon neutral (effectivelyzero emissions) by 2050. As important as reducing our own GHG emissions is reducing global GHG emissions by tens of billions oftons. We contribute to this through a system that promotes environmentally friendly products that do extremely well in life cycleassessments (LCA).To accurately identify climate change issues group-wide and discuss countermeasures, the President chairs a SustainabilityCommittee to discuss related issues. In addition, the Executive Officer for Technology Functions heads the Global EnvironmentCommittee̶a related subcommittee̶to hold more thorough discussions on the global environment. Details concerningimplementation from the Sustainability Committee are reported to the Board of Directors.Sustainability CommitteeA venue to discuss Environmental, Social, and CorporateGovernance (ESG) in general, including climate changeChair: Asahi Kasei President, Committee members: ExecutiveOfficer for Technology Functions, Executive Officer forBusiness Management Functions, Executive Officers for the 3business sectorsGlobal Environment CommitteeA venue to discuss issues of climate change and plasticwasteChair: Executive Officer for Technology Functions, Committeemembers: Presidents of SBUs, Senior General Manager ofthe Production Center, Senior General Manager of CorporateProduction Technology, Senior General Manager of CorporateResearch and Development, etc.Strategies: Analysis of Opportunities and Risks■Underlying assumptions A variety of scenarios could unfold regarding climate change depending on the implementation of prevention measures. Weexamined two standard scenarios, one where average global temperature rises by 4°C, and one where it rises by less than 2°C. Without sufficient steps to curb global warming, global temperatures rising by 4°C we consider a “physical risk” involving intenseheat and severe storms. A scenario where the temperature rises by less than 2°C we consider a “transitional risk.” It would involvesocial changes geared toward curbing global warming including technological innovation and tightened regulations. For each of these, we referred to various documents and examined the impact on the business from a 2050 perspective in thebusiness sectors of Material, Homes, and Health Care. The Asahi Kasei Group’s growth model adapts its business portfolio in response to the business environment, reducing risks fromclimate change and maximizing opportunities through changes to our portfolio. In this analysis, in keeping with the intent of TCFD’srecommendations, we show that the current state of our business would be at risk in light of the view from 2050.Asahi Kasei Group Sustainability Report 202141OpportunitiesImportant changesMain opportunitiesPrincipal initiativesGlobalSerious storm and・Increasing need forGreater emphasis on resilience in housingtemperaturesflood damagedisaster-resilient housingbuilding and urban development rising by 4°C・Hardware/software ・Unit homes/communityHigher incidences of・Increased demand for・Provision of emergency medicines and medicalheat stroke andexisting medicines, newequipment for infectious diseases and heatinfectious diseasesmedicines, and the criticalstroke care business・Provision of consumables, equipment, andservices for biopharmaceutical manufacturingprocessesGlobalDecarbonization・Promotion of the spread of・Decarbonization of homes and communitiestemperaturesrising by lessthan 2°CNet Zero Energy Houses(ZEH)* through governmentpoliciesSpread of electricIncrease in EV-related・Provision of components and systems for next-vehicles (EVs)demandgeneration mobility ・Battery components・Strengthening of collaboration with automobile・Materials for reducingand battery manufacturersvehicle weightAdvent of a hydrogen・Increased demand for・Utilization of alkaline water electrolysis systemsocietywater electrolysis thatutilizes renewable energy*ZEH: Houses with a net energy consumption of zero or less as a result of advanced insulation and energy saving combined with power generationsuch as solarAsahi Kasei Group Sustainability Report 202142RisksImportant changesMain risksPrincipal countermeasuresGlobalSerious storm and”Physical” production risks・Continuous revision of BCP and reinforcementtemperaturesflood damage・Suspension of productionof preemptive response (review inventory levels,rising by 4°Cdue to plant damage consider switching to multiple・Disruption of raw materialsuppliers/locations, etc.)Rise in temperature”Human” production risks・Promotion of industrialization and utilization of・Deterioration of workingIT in housing constructionsupply network due tosuppliers suffering fromdisastersenvironment andproductivity at constructionsitesGlobalDecarbonization・Rise in cost due to stricter・Expansion in utilization of renewable energy,temperaturesrising by lessthan 2°Cregulations* etc.(manufacturing and raw・More efficient energy use;material costs) development and commercialization of・Changes in materialsindustrial processes for decarbonization ・Decarbonization of raw materialsneeds (decarbonizationrequirements, necessaryspecifications)*Example: If the amount of GHG emissions in FY2020 is approximately 4 million tons, and this is multiplied by a carbon tax of 10,000 yen/t, thiswould total approximately ¥40 billion per year.What we are aiming forAsahi Kasei Group Sustainability Report 202143Risk managementresources. In the annual review of our Medium-term Management Initiative, we consider the climate-related opportunities and risks for each ofour businesses, and then assess and address the situation group-wide. A sustainable perspective that includes climate change isone of the decision-making criteria we use when determining our business portfolio, including the allocation of managementWe also confirm the sustainability of capital investments as they relate to GHG emissions. Regarding our emissions performance, the emissions of the entire Asahi Kasei Group are calculated once per year. Progresstowards our goals is managed by the Sustainability Committee and the Board of Directors.Metrics and goalsOur GHG emissions goal and target are as follows. By 2050, carbon neutral By 2030, emissions reduction of 30% or more (from fiscal 2013) Even in the midst of the COVID-19 pandemic, there was no significant reduction in global GHG emissions. Because we believe wemust further accelerate our efforts to achieve a sustainable society, we announced a new GHG emissions target on May 25, 2021and switched our target from one based on emissions intensity (emissions/sales) to one based on a reduction in absoluteemissions. Besides reducing GHG emissions from our own business activities, we believe that it is important to help reduce GHGemissions throughout society using our diverse array of technologies and businesses, and we will make group-wide efforts to dealwith global warming.Please refer to our “Reducing GHG Emissions” for changes in GHG emissions.Asahi Kasei Group Sustainability Report 202144Pollution and Natural ResourcesPollution and Natural ResourcesPollution and Natural ResourcesPollution and Natural ResourcesPolicyRecycling is a major plank of the Asahi Kasei Group’s Global Environmental Policy, and we work to efficiently utilize resources andenergy and to reduce the environmental burden throughout the entire life cycle in our business activities. In order to contribute to acircular economy, we have worked to reduce industrial waste, reduce the burden of chemical substances, prevent air and waterpollution, and use resources effectively. We are also contributing to the creation of a circular economy to achieve a carbon neutral and sustainable world as part of ourfocus on Care for Earth, under our “Cs+ for Tomorrow 2021” medium-term management initiative (fiscal 2019‒2021).Sustainability Vision – Asahi Kasei Group Vision > Sustainability with a View Toward 2050Reducing industrial wasteand recycling. industrial waste. The Asahi Kasei Group is working to reduce the amount of industrial waste for final disposal through the “3-Rs” of reduction, reuse,In fiscal 2020, 334.1 thousand tons of industrial waste was generated, of which 34.7 thousand tons was specially managedWe adopted targets of (1) an overall final disposal rate of 0.3% or less and (2) a final disposal rate for non-construction companiesof 0.1% or less of the total amount of industrial waste generated. As a result, we achieved our overall 2020 targets, with a finaldisposal rate of 0.1% and a final disposal rate for non-construction companies of 0.1%. We will continue to promote the reduction offinal disposal rates through sorting and the selection of disposal sites. We have also worked towards the goal of zero landfill waste plastic by fiscal 2021, and we have already reduced it to zero tons as offiscal 2020, thus achieving our fiscal 2021 goal. Waste containing PCBs* is stored under strict control in stainless steel vessels. Plans for disposal are advancing, including forwaste with minimal amounts of PCBs. We are also systematically advancing plans to identify the electrical equipment currently inuse that contains PCBs, and to implement early replacement. We enhanced our management of off-site treatment of industrial waste by expanding the use of electronic manifests. We alsoperformed periodic on-site inspections of consigned firms to ensure that proper treatment is performed in accordance with soundsystems of control.essentially prohibited in Japan.*PCBs(polychlorinated biphenyls) are persistent and pose a risk to the living environment and human health. Their manufacture and use areAsahi Kasei Group Sustainability Report 202145FY2020 flow of industrial wasteFinal disposal rates (overall, non-construction-related)Landfill volume of plastic wasteFinal disposal volumeFY2020 final disposal by category of waste* * Excluding waste generated at the construction sites of AsahiKasei HomesReducing industrial waste from construction materials and housing businessesAsahi Kasei Construction Materials recycles trimmings of Hebel™ autoclaved aerated concrete (AAC) panels in its own plants andothers, utilizing its certification for “wide-area recycling”* which permits the transport of waste from different construction sites.Asahi Kasei Homes is also reducing the volume of waste as well as implementing sorted waste collection at housing constructionsites. With these measures, waste for final disposal has been reduced to zero at new construction sites.Asahi Kasei Group Sustainability Report 202146Recycle flow for trimmings of Hebel™ AAC panelsFinal disposal industrial waste generated at construction sites*Certificate for wide-area recycling: For certain parties, who perform recycling in a wide-area, Japan’s Minister of the Environment eliminates theneed to obtain separate waste transport permits for each local area.The system was established to promote further recycling of industrial waste.Reducing emissions of chemical substancesThe Asahi Kasei Group works to reduce the release of chemicals substances specified in the PRTR1 Law and other chemicalsubstances which we have voluntarily designated for reduction with priority based on the degree of hazardousness and amount ofrelease. As shown in the graphs below, releases of PRTR-specified substances and VOC2 emissions were reduced by 94% and 91%,respectively from fiscal 2000. We will continue to enhance control of operation and equipment to prevent any accidental release.Releases of PRTR-specified substancesReleases of VOCs1PRTR ： Pollutant release and transfer register. Under the PRTR Law, releases to the environment and off-site transfers of specific hazardouschemical substances must be monitored and recorded for each production facility and operating site. Results are reported to the government,which publishes aggregated results.2VOC ： Volatile organic compound. Although the term generally applies to any organic compound which is in gaseous state at the time ofrelease, regulations for the control of their release exclude methane and some fluorocarbons which do not form oxidants.Asahi Kasei Group Sustainability Report 202147Air pollutionThe Asahi Kasei Group works to control emissions and prevent spills in order to avoid the pollution of air, water, soil, andgroundwater. Measures to prevent noxious odors include the installation of exhaust gas absorption equipment and increasing thecapacity of our wastewater treatment facilities. To prevent soil pollution, we perform tests and take appropriate measures inaccordance with the Soil Contamination Countermeasures Act and related regulations. Substances covered by the Air PollutionControl Act are managed within regulatory standards.SOx emissionsNOx emissionsSoot and dust emissionsEffective resource useAs indicated by the Osaka Blue Ocean Vision at the G20 summit in 2019, the issue of marine plastic waste will require globalcooperation to solve. In order to understand how marine microplastics are generated, we are working in collaboration with KyushuUniversity and participating in awareness-raising activities with industry groups dealing with proper use and disposal of plastics. Itis important to make effective use of used plastic resources, so we also promote the 3Rs (Reduce, Reuse, Recycle).Asahi Kasei Group Sustainability Report 202148Initiative for Achieving a Circular EconomyAs part of our sustainability efforts, which are symbolized by the SDGs (Sustainable Development Goals), we are working withacademia and other companies to achieve a circular economy. For the material recycling of polyethylene, we have launched the “BLUE Plastics” project* with the technical support of IBM Japan,Ltd. We are striving to make a circular economy a reality through collaboration with recycling company Toyama Kankyo Seibi;Mebius Packaging Co., Ltd., which specializes in molding and final product processes; and brand owner Lion Corporation.*Overview of the “BLUE Plastics” ProjectThe “BLUE Plastics” project was launched by Asahi Kasei Corp. to create a digital platform that promotes resource recycling. IBM Japan willsupport the construction of the digital platform by utilizing blockchain technology that runs on the IBM Cloud. Blockchain technology is anirreversible database technology that maintains a continuous record of operations, which ensures traceability as it is accessible to all partiesinvolved and cannot be altered. Toyama Kankyo Seibi, Mebius Packaging Co., Ltd., and Lion Corporation, which together specialize in thecollection, pelletizing, molding, and conversion of waste into final products, will collaborate using IBM Japanʼs blockchain technology to acceleratethe achievement of a circular economy.Asahi Kasei Group Sustainability Report 202149Water Resource PreservationWater Resource PreservationWater Resource PreservationWater Resource PreservationClick here to read our response concerning CDP Water Security 2021 （353.8KB）Policyefficiency of our water usage.Reducing water useit. shown above.Asahi Kasei Group’s business is intrinsically related to water resources. Ensuring their future viability is one of our societal missionsand a prerequisite for the continuity of our business. We will contribute to the conservation of water resources around the worldthrough our domestic and overseas water purification membrane module business, water recycling service business, seawaterdesalination business, the development of sludge reduction products for wastewater treatment, and the expansion of our surface oildetector series. We also have a policy of ascertaining the quantity of our water intake while striving to maintain and improve theThe Asahi Kasei Group endeavors to reduce the amount of water used in our plants and to make efficient use of water by recyclingThe targets of the Group’s water resource conservation activities are shown in Answer W8.1a in the CDP Water Security 2021Amount of Global Water IntakeAmount of Water Intake by Source (domestic)Asahi Kasei Group Sustainability Report 202150Prevention of water pollutionThe Asahi Kasei Group thoroughly manages emissions and prevents leakage so as not to contaminate bodies of water orgroundwater. In 2012, we issued our Guidelines on Wastewater Management. In addition to affirming our commitment to wastewatermanagement based on this, we are also working on enhancing the capacity of wastewater treatment facilities and other equipment.Items regulated by the Water Pollution Prevention Act are managed within those standards. In fiscal 2020, there were neither instances of leakage as related to the Water Pollution Prevention Act nor violations or finesrelated to environmental laws and regulations.Amount of Wastewater (domestic)Chemical Oxygen Demand (COD) LoadAsahi Kasei products and technologies for water conservationMicroza™ hollow fiber membrane filtration moduleWe are a top-tier supplier of water treatment membranes and filtration systems. Microza™ is a hollow fiber membrane we havedeveloped for water treatment. It is used in more than 1,600 water purification plants and wastewater plants worldwide, including inthe United States, China, Korea, Singapore, Thailand, Indonesia, and Middle Eastern countries. In fiscal 2017, Microza™ wasadopted at a seawater desalination plant in Kuwait, helping to alleviate chronic water shortages. Going forward, we will continue to work on global water and environmental issues with the aim of resolving various problemsrelated to water resources.Microza™ hollow fiber membrane filtration moduleSaran™ Polyvinylidene Chloride FiberOne important issue in wastewater treatment is reducing the amount of sludge generated, which is directly tied to decreasing itsenvironmental impact. The Asahi Kasei Group conducts research and development into new commercial products that feature aunique technology using microorganism immobilized carrier that flows, making use of the characteristics of Saran™ fiber, whichmicroorganisms inhabit easily. Existing facilities can adopt these products by making simple improvements like installing screens, without requiring majormodifications. This improves processing capabilities and reduces the amount of sludge generated.Saran™ fiber on the Asahi Kasei Home Products websiteAsahi Kasei Group Sustainability Report 202151Apolarm™ series environmental monitoring productsAsahi Kasei Technosystem’s Apolarm™ Series detects a wide range of oil leaks, including floating oil (oil film and oil layers),sediment oil, and water-soluble oil. We will continue to expand our product line and protect the aquatic environment with oildetection devices for specific applications.Apolarm COil layers of 3 mm or more trigger a capacitance shift and sound an alarm.Apolarm MA non-contact laser detector that can sense minuscule amounts of oil film on the waterApolarm BDetects oil and organic solvents that have a greater specific gravity than water, causingsurface.them to sink.Apolarm FDetects leakage of fluorescent water-soluble oils.Apolarm™ Series on the Asahi Kasei Technosystem websiteAsahi Kasei Group Sustainability Report 202152BiodiversityBiodiversityBiodiversityBiodiversityPolicyTo ensure the sustainable utilization of living resources, the Asahi Kasei Group gives due consideration to reducing the impact ofour business activities on biodiversity, and we have established guidelines for the preservation of biodiversity. Based on theseguidelines, we have been working to understand the relationship between our business activities and biodiversity since 2010. Inorder to promote business activity mindful of biodiversity, we are working to raise awareness among personnel by various meansincluding our Responsible Care (RC) education program.Investigation of impact on biodiversity by procurementRegarding the impact of our business activities on biodiversity when there is a newly used raw material or a change in use of rawmaterials, we use a survey sheet on the relationship between business operations and biodiversity to examine the country of originof raw materials, processers and manufacturers, and primary vendors (trading companies, etc.), in order to confirm the absence ofany problem.Group-wide activities for biodiversityAsahi Kasei Group Sustainability Report 202153We aim to increase value from the perspective of biodiversity while enhancing green spaces at Asahi Kasei Group operating sites inJapan. We will use Town Woods Pots as a tool to heighten understanding and awareness of the value of biodiversity amongWhat is the “Town Woods” Program?personnel.What are Town Woods Pots?This new way of landscaping by Asahi Kasei Homes combines four layers of vegetation of varying heights: Tall, medium, short, andgroundcover. While compact enough to integrate with urban residential areas, they increase the space for other plants and wildlifein artificial environments that otherwise have little greenery. Our Town Woods Program uses the phytosociological method toclassify green spaces at operating sites throughout Japan, selecting the most suitable regional vegetation when creating the TownWoods plantings.Town Woods Project: (FY2019‒2021) Phase 1 Targets and FY2020 ResultsFirst Phase Targets (FY2019‒2021)FY2020 ResultsTarget IInstall Town Woods Pots at all 41 AsahiAchieved goal of installing “TownKasei Group operating sites in JapanWoods” pots at all 41 sites in Japan byFY2020Target IIAccumulate a total of 2,600 “TownAchieved goal with cumulative MMPWoods Points” during the period.total of 1,934 points by FY2020*Town Woods Points (Machi-Mori Point: MMP) Initiatives at Asahi Kasei Group sites are divided into four stages. Each initiative earns Town WoodsPoints and the points are aggregated across the group.Asahi Kasei Group Sustainability Report 202154StageExample InitiativesStage 1: InstallationInstalling the Town Woods PotsPosting information about the Town Woods PotsMaintaining them properly so they thriveStage 2: ObservationRecording trunk thickness and tree heightPhotographing and recording information on features like flowering, fruiting, andfoliagePotsPhotographing and recording information on the wildlife that visits the Town WoodsPhotographing and recording information on naturally occurring vegetationAsahi Kasei Group Sustainability Report 202155StageExample InitiativesStage 3: DisseminationActively disseminating information including photographs and records of observedplant and animal life both within and outside the site. The dissemination will take place online, through bulletin boards, directlycommunicating with the local community, etc.Stage 4: Development Expanding the initiative to other locationsInitiatives in other locationsCollaborating with other programs both within and outside the site(In 2020, we refrained from holding the event due to COVID-19)FY2020 Project: “Town Woods” Red Dragonfly WatchingIn fiscal 2020, due to the increase in remote working as a result of the COVID-19 pandemic, in addition to “Town Woods” potviewings, we expanded the number of viewing locations, such as parks and home surroundings, and held a limited-time projectbased on a specific theme. Since dragonflies have been the most frequently observed creatures in submissions up until now, and because it was autumn, wechose red dragonflies as the theme and provided information about how to identify them. During the two-month period from September 15 to November 16, we received a total of 96 submissions from 11 offices andconfirmed 22 types of dragonflies. About 70% of the submissions were of red dragonflies, and the specimen that was mostcommonly submitted was the Sympetrum frequens red dragonfly. Experts said that we observed 11 species, more than half of the21 species of red dragonflies in Japan, and that these dragonfly records, particularly those of Sympetrum kunckeli, Sympetrumpedemontanum elatum, and Sympetrum darwinianum, which have been said to be declining rapidly in recent years, are veryvaluable as local biological information.Publishing News on the Town Woods ProgramIn fiscal 2020, in conjunction with the Town Woods Red Dragonfly Watching project, we published information prior to the projectexplaining its purpose, how to identify red dragonflies, an explanation of results and comments from experts after the event, acolumn on dragonflies, and offices’ initiatives.Asahi Kasei Group Sustainability Report 202156Notable activities in fiscal 2020Actions in the Moriyama Area Ex-situ conservation of smallhead stickleback, an endangered freshwater fish, and joint effortamong companies and communities for dragonfly conservationIn Moriyama, we draw groundwater for industrial use in cooling equipment. Its quality is strictly monitored, and it is discharged tonearby rivers after use. A portion of the discharged water from our Moriyama Works is also used for agriculture, which has becomevital for local farmers as well as wildlife inhabiting the waterfront areas. Against this backdrop, and since water is intrinsically related to our business operations, in fiscal 2010 we started initiatives toprotect biodiversity with a focus on water resources. In fiscal 2015, we began ex-situ conservation of smallhead stickleback, an endangered freshwater fish, and in fiscal 2016, we begandragonfly conservation activities in cooperation with companies that have operations located in Shiga Prefecture and localcommunities. In fiscal 2020, 15 smallhead sticklebacks were released into the newly established “Moribio” biotope, and a survey byexperts confirmed that the number of smallhead sticklebacks increased to more than 600. In collaboration with companies that have operations located in Shiga Prefecture (Biodiversity Biwako Network), we are involved in”Operation Dragonfly 100: Save Shiga’s Dragonflies!” This project involves working with local communities to survey the habitat ofthe Sympetrum kunckeli variety of dragonfly, which resides in wetlands, and to conserve it using a container biotope. As part of ourconservation activities, we also hold dragonfly observation sessions in riverside forests, which are inhabited by a variety oforganisms, including dragonflies. In recognition of its dragonfly conservation efforts, the Biodiversity Biwako Network, of which weare a member, was awarded the Japan Nature Conservation Grand Prize in the Education and Promotion category. We intend tocontinue our conservation work in collaboration with various organizations.Smallhead stickleback survey by experts at “Moribio”Observing dragonflies at a nearby riverside forestAsahi Kasei Group Sustainability Report 202157Actions by Asahi Kasei Juko Co., Ltd. Project to rediscover living with the woods and water in HigashiomiThe Shiga Plant of Asahi Kasei Juko (AKJ) is located in the Yuya area of Higashiomi City where there had formerly been a diverselakeside ecosystem of ponds, rice paddies, and woods. There was a culture of life centered around ponds for irrigation andfirefighting. By restoring some of the ponds, AKJ is preserving the habitat for local wildlife, conveying the importance of this tocommunity residents through activities like observation tours. We also hold events at the plant, creating a venue that will lead to theprotection of forests and crops as local resources. In fiscal 2020, we did not hold viewing sessions for the general public due to the COVID-19 pandemic, but under the guidance ofexperts, we protected and helped propagate the four-spotted skimmer, a rare species of dragonfly whose population is believed tohave been declining in recent years. We used the “Yuya Hebel Biotope” that was created on the plant site in 2017 for the purpose ofconserving the creatures residing in the waterside ecosystem. Based on the results of a survey of nearby habitats, we improved the biotope and reservoirs to create an environment where theemergent plants favored by the four-spotted skimmer thrive, leading to natural flight and breeding activities. In early May, weconfirmed the natural emergence of four-spotted skimmers within the biotope and reservoir. We also collected eggs from femalespecimens and transplanted them, and we confirmed the emergence of 55 four-spotted skimmers.A four-spotted skimmer emerges from a mound of dirtFour-spotted skimmers emerge in a container biotopewhere the environment has been improvedAsahi Kasei Group Sustainability Report 202158Actions in the Suzuka AreaThe Suzuka Works uses the Kiso River system as its source of industrial water, which is used to cool equipment. The used water isdischarged into a small river running through the plant. This small river converges with several other rivers and eventually flows intoIse Bay. abundant. The waterside ecosystem of this small river is inhabited by small fish such as minnows, as well as the turtles that prey on them.There are also herons and other birds that visit the area to prey on the small fish, forming a food chain. Several dragonfly specieshave also been observed. One of these, Ischnura senegalensis, has been reported to thrive best in areas where aquatic plants areTo maintain a waterfront inhabited by such a variety of organisms, river management is conducted with the aim of balancing thebiological habitat of the small river with its function as a method of flood control. For example, instead of repairing the banks withconcrete, we try to maintain the stone piles that currently exist and preserve the plants on the riverbank out of consideration for thevegetation. We also attempt to manage the flow of the river to maintain variable flow (keeping it slow in certain places) at thewater’s edge by utilizing the natural environment through the cultivation of aquatic plants such as Limnophila sessiliflora. Withregard to water quality, we are enhancing our management of the wastewater that flows from the plant into the river. We willcontinue to strive to maintain an environment where many waterside organisms can coexist.River sceneryLimnophila sessilifloraMinnowsActions in Nobeoka and the Hyuga AreaSince 2007 we have participated in a reforestation program led by Miyazaki prefecture to create forests in cooperation withcompanies. We planted more than 44 hectares of broad-leaf trees and other trees native to the area, replacing plantations of cedarand cypress. This included 20 hectares in Hinokagecho, 20 hectares in Takachiho, 1 hectare in Gokase, and 3 hectares inKitakatacho.In fiscal 2021, we planted 3,000 trees on 2 hectares from among the approximately 5 hectares of field provided by Hinokagecho.Ordinarily, about 400 people would be invited to participate in the event on each occasion, but due to measures to prevent thespread of COVID-19, we planted about 100 trees, including commemorative trees, with 15 individuals from Hinokagecho, theNishiusuki Forest Association, alumni associations, the Nobeoka Branch of the Labor Union, and the secretariat. The ForestAssociation was entrusted with planting the remaining trees.Tree plantingTree plantingAsahi Kasei Group Sustainability Report 202159The Asahi Kasei Group’s Environmental Contribution ProductsThe Asahi Kasei Group’s Environmental Contribution ProductsThe Asahi Kasei Group’s Environmental Contribution ProductsThe Asahi Kasei Group’s Environmental Contribution ProductsOur InitiativesDescription of Environmental Contribution ProductsWhat are Environmental Contribution Products?Under “Cs+ for Tomorrow 2021,” our medium-term management initiative, the Asahi Kasei Group is striving for sustainable societybased on the concept “Care for People, Care for Earth.” For sustainable society, we believe it is important to develop products and businesses that contribute to reducing the impact ofsociety on the environment in addition to reducing emissions, such as greenhouse gases, at the Group’s production sites. The AsahiKasei Group defines products that contribute to the improvement of the environment over the entire life cycle when compared withproducts considered to be the standard in the current market and products that contribute to the improvement of the environmentwhen compared with our existing products as Environmental Contribution Products.The Group has conducted Life Cycle Assessments (LCA) for its products to assess their environmental impact over their entire lifecycle, and has defined and certified as products that can contribute to CO2 reduction at the stage of product use as “GlobalWarming Conscious Products.” In January 2019, we formulated “Guidelines for Environmental Contribution Products”* and reviewedhow our products reduce our environmental impact, including in terms of CO2.*In preparing the guidelines, we referred to Guidelines for Assessing the Contribution of Products to Avoided Greenhouse Gas Emissions, TheInstitute of Life Cycle Assessment, Japan, Guideline for Calculating the Reduction in CO2 Emissions, Japan Chemical Industry Association,Guideline for Quantifying GHG Emission Reduction Contribution, Ministry of Economy, Trade and Industry, and other reference materials.In making the abovementioned calculations, we use MiLCA, an LCA tool provided by the Sustainable Management PromotionOrganization (SuMPO).Asahi Kasei Group Sustainability Report 202160What is Life Cycle Assessment (LCA)?Although CO2 is generated during the manufacture of materials and intermediate products in the Asahi Kasei Group, there are alsomany examples of products which contribute to improving the environment by reducing environmental impact, including CO2, duringuse considering the entire product life cycle, such as contributions to energy conservation. The evaluation of the environmental impact of products over their entire life cycle is Life Cycle Assessment (LCA).Internal Certification ProcessStrategic business units and core operating companies propose products for internal certification. The Asahi Kasei Group receivesadvice from a third-party organization on the suitability of the environmental contribution calculation methodology and approachfrom an LCA perspective for the proposed products, and defines products that have been internally certified as EnvironmentalContribution Products. reviewing certifications.We also receive advice on the appropriateness of the calculations of contributions to reductions from outside experts whenLCA Review Panel (held on July 26, 2021)Chair:Atsushi Inaba (Chief Director of Japan LifeCycle Assessment Facilitation Centre (LCAF))Members:Kensuke Kobayashi (Associate Professor,Prefectural University of Hiroshima) Keigo Matsuda (Associate Professor, YamagataUniversity) Hiroyuki Uchida (Senior Consultant, MizuhoResearch & Technologies, Inc.)(Reference) Fiscal 2019 meetingAt the LCA Review Panel, Asahi Kasei Group personnel explain the details of calculations and receive comments and advice fromthe outside experts on the suitability of the establishment of baselines and the approach to contribution to reductions. We held the event remotely in FY2020 and FY2021 to prevent COVID-19 infections.Asahi Kasei Group Sustainability Report 202161The Asahi Kasei Group’s Environmental Contribution ProductsThe Asahi Kasei Group’s Environmental Contribution ProductsThe Asahi Kasei Group’s Environmental Contribution ProductsThe Asahi Kasei Group’s Environmental Contribution ProductsOur InitiativesDescription of Environmental Contribution ProductsDescription of Environmental Contribution ProductsContributing to Resource and Energy Conservation for CustomersProduct nameReason for certificationSDGscontributed toLithium-ion battery (LIB) The separator is one of the four main components (cathode,separatorsanode, electrolyte, and separator) that make up the batteries(LIBs) for electric vehicles (EV/HEV/PHEV). As a result of their growing popularity, electric vehicles arecontributing to a reduction in CO2 during driving, comparedwith gasoline vehicles. Improving the battery performance(extending range and ensuring safety) is essential to thepopularization of electric vehicles, and our development ofseparator technology is playing a part in this.Hipore™Celgard™Asahi Kasei Group Sustainability Report 202162Product nameReason for certificationSDGscontributed toXyron™ lightweight resinXyron™, a type of engineering plastic, is an environmentally-Caustic soda and chlorine are manufactured through theelectrolysis of brine. The methods of electrolysis are themercury process, the diaphragm process and the ion-exchange membrane process. The ion-exchange process isan environmentally-friendly method that does not usemercury or asbestos. Asahi Kasei is the only manufacturer inthe world that manufactures and sells ion-exchangemembranes, electrolytic cells, and electrodes, and boasts thetop share of the global market. We have engaged in continualdevelopment to enable electrolysis using even less electricity,and our latest ion-exchange membrane grade has the lowestpower consumption (compared with Asahi Kasei products:approximately 2% less than the current grade).friendly material with non-halogen flame retardance andreduction of resin usage due to its low specific gravity. Itsproperties also include dimensional precision, mechanicalstrength, and resistance to electrolyte solution. Widely usedfor electric vehicle battery packs and modules, it has played amajor role in the spread of electric vehicles. It is also used in high-voltage photovoltaic systems due to itsexcellent insulation properties. The number of modulesrequired for high-voltage systems is small, which savesresources. Its low specific gravity also contributes to thereduction of CO2 emissions during transport.Ion-exchange membrane process forchlor-alkali electrolysisElectric vehicle battery modulematerialsSolar cell connector materialASACLEAN is a cleaning agent (purging agent) for use inplastic molding machines. At plastic molding work sites, when switching betweenproduction of different colors and resin types, it is necessaryto keep the materials flowing to a certain extent, whichinevitably results in loss. By using ASACLEAN during the production switching process,it is possible to make the switch using about 1/3 to 1/10 theamount compared to not using ASACLEAN, which contributesASACLEAN™to conserving resources and reducing CO2 by decreasingplastic waste.Asahi Kasei Group Sustainability Report 202163Product nameReason for certificationSDGscontributed toThis product is used as an additive for the modified asphaltused in road surfaces. This original elastomer specially designed by Asahi Kasei canimprove road durability and decrease the frequency ofmaintenance and repairs.This compact, highly accurate, energy-saving gas sensor candetect the concentration of CO2 in the air. Equipping thisproduct to industrial air-conditioning systems and optimizingthe amount of ventilation while monitoring the CO2 densitywill contribute to reductions in power consumption for airconditioning.S-SBR is used for the tread (the part in contact with theroad) on passenger vehicle tires. Based on the developmentof original technology, it balances low fuel consumption andbraking performance of tires at a high level, contributing todramatically increasing the fuel efficiency of automobiles.Long Life Homes and Net Zero Energy Houses: Compared with regular housing, our homes contribute toreduction of CO2 during manufacture of all components andconstruction by meeting the standards for Net Zero EnergyHouses, which balance household energy usage at zero orlower through power generation, advanced insulation, andenergy conservation, and providing Long Life Home productswith a basic structural life of at least 60 years.Elastomer for Asphalt ModificationCO2 SensorS-SBR synthetic rubber for fuel-efficient tiresHebel Haus™Hebel Maison™Asahi Kasei Group Sustainability Report 202164Product nameReason for certificationSDGscontributed toNeoma Foam™ Insulation MaterialUVC LED for water sterilizationaddition to water sterilization. This product boasts top-class insulating performance,providing high insulation even with little thickness andmaintaining its insulating properties for long periods of time. In addition, this insulation material is eco-friendly in a varietyof ways, such as by being the first in the industry to succeedin not using any CFC or CFC substitutes as foaming gases.The high-output UVC LED, which emits 265 nm deepultraviolet (UVC), the most effective wavelength forsterilization, is installed in water servers etc. Since UVC LEDs can be instantly turned on and off, it ispossible to design equipment that uses power only whensterilization is required, which helps to save energy. Recently, UVC LEDs have been used for air sterilization inIn addition, unlike the conventional mercury lamps (UVlamps) used for UV sterilization, these lamps do not usemercury, which is hazardous to the environment.No organic solvents are used during the developmentprocess, which reduces the emission of VOCs.Moreover, simplifying the drying process contributes toreduced CO2 emissions by lowering energy consumption.Printing losses can be reduced as well due to excellentprinting quality and high productivity during printing, whichcontributes to the reduction in CO2 emissions.AWP™ Photosensitive Resin forPrinting PlatesAsahi Kasei Group Sustainability Report 202165Contributing to Value ChainsTechnologyReason for certificationSDGscontributed toManufacturing process forAcrylonitrile, which is the raw material for ABS resin andacrylonitrileacrylic fiber, is manufactured by making propylene (orpropane) react with ammonia using a catalyst. Asahi Kasei has continually developed catalysts that enablethe efficient manufacture of acrylonitrile from less rawmaterials. Our catalysts can not only reduce raw material consumptioncompared with manufacturing acrylonitrile using other,ordinary catalysts (in the model case) but can also reduceemissions of by-products, particularly CO2, and the CO2emissions associated with waste processing. These catalysts,therefore, make a significant contribution to the manufactureof acrylonitrile with a low environmental impact.for producing cyclohexanol, an intermediate material fornylon and other chemical products. The cyclohexene process is notable in that it generatesvirtually no waste and has a carbon yield of nearly 100%.Compared to conventional methods, this method uses fewerraw materials and generates less CO2 in waste treatments,which reduces the impact on the environment.polycarbonate using CO2 as a raw material. This is a technology in which resin is manufactured byrecovering CO2 emitted as exhaust gas from other plants andusing it as a raw material for the process. We believe this willhelp reduce CO2 emissions. It is also notable for not usingany substances that are harmful to the human body.Cyclohexanol Production ProcessAsahi Kasei developed the world’s first cyclohexane processPolycarbonate Production ProcessWe are licensing a technology for manufacturingUsing CO2 as a Raw MaterialOther Environmental Contribution Products■Contributes to resource and energy conservation for customersMicroza™ water filtration modules■Use of materials with low environmental impactECORISE™ bio-PLA nonwoven fabric (for coffee cartridges)Biogreen Promax™ (for plastic cups)Asahi Kasei Group Sustainability Report 202166