Mitigation of Climate Change and Environmental Impact

Having set mitigation of climate change and environmental impact, contribution to biodiversity, and contribution to a recycling-based society as materialities, our group aims to protect the global environment and realize a low-carbon society by fully utilizing its technologies, knowledge, and R&D capabilities. To align with the 2050 targets set out in the Ministry of Agriculture, Forestry and Fisheries’ Strategy for Sustainable Food Systems, MIDORI—reducing the risk-weighted use of chemical pesticides and expanding organic farming—, we will advance the R&D of safe and reliable chemical pesticides and accelerate the development of microbial pesticides and biostimulants. We also support the “30by30” target established in the Kunming-Montreal Global Biodiversity Framework and aim to be nature positive by registering the Kumika Refugia Kikugawa / Fukushima Town and promoting nature and biological conservation activities in the region. As part of our efforts to realize a recycling-based society, we have established an environmental management system in accordance with ISO 14001 and launched the ESG Project.

Basic Policy on Sustainability, Promotion Structure, and Other Policies

Kumiai Group Basic Policy on the Environment

The Sustainability Promotion Committee chaired by the Representative Director, President, formulates strategies on ESG issues, such as “mitigation of climate change and environmental impact” and “human capital development / human capital strategy based on the idea of human capital,” manages the progress of the action plan for each issue, and also formulates information disclosure strategies. Important matters discussed by the Sustainability Promotion Committee are reported to the Board of Directors for decision-making and oversight.

The Sustainability Promotion Committee, chaired by the Representative Director, President and composed of full-time Directors and Executive Officers, formulates strategies on sustainability issues, such as “mitigation of climate change and environmental impact” and “human capital development / human capital strategy based on the idea of human capital,” manages the progress of the action plan for each issue, and also formulates information disclosure strategies. The Responsible Care Promotion Committee also makes decisions on policies related to occupational health and safety and chemical substance management, and discusses measures to address these issues.
The Board of Directors comprises nine members, including Outside Directors with expertise in the environmental field. Based on reports from the Sustainability Promotion Committee and periodic updates from the Director, Senior Managing Executive Officer in charge of sustainability, the Board resolves and oversees the establishment and progress of key environmental policies and KPIs.
The Nomination and Remuneration Committee reviews our efforts in reducing greenhouse gas (GHG) emissions and their results, as well as our initiatives and achievements in the areas of anti-corruption, human rights, and decent work, and incorporates these factors into the determination of remuneration for Directors.
The Kumiai Chemical Group Top Management Strategy Meeting has been established to achieve sustainable growth and enhance corporate value over the medium- to long-term by ensuring stable business operations, promoting sustainability management, and achieving effective corporate governance. In line with the Kumiai Chemical Group Basic Policy on Sustainability, the Meeting is working to share and implement measures to help realize a sustainable society that meets the expectations and needs of our stakeholders. Under the Kumiai Chemical Group Top Management Strategy Meeting, the Sustainability Promotion Subcommittee is responsible for effectively implementing measures to promote sustainability management.

We identify risks and opportunities recognized by our divisions, and also identify issues by referring to the recommendations of external organizations such as TCFD^*1 and TNFD^*2, as well as climate- and nature-related risks and opportunities recognized by other companies in the same industry. The degree of importance of each issue identified is determined by conducting impact assessments, taking into account the financial impact.
Risk issues identified are discussed once a year by the Risk Management & Compliance Committee, a company-wide committee, and measures to address the issues are determined.
Our analysis of climate-related risks and opportunities, major risks and opportunities, measures to address them, and our GHG emissions data are disclosed on the Company’s official website.
Our analysis reaffirmed that the realization of a safe, secure, and prosperous society will benefit our group’s business continuity.

• *1TCFD (Task Force on Climate-related Financial Disclosures)
• *2TNFD (Taskforce on Nature-related Financial Disclosures)

Our group supports the Paris Agreement and has identified “mitigation of climate change and environmental impact” as one of its material issues. Setting FY2019 as the reference year, we aim to reduce Scope 1 and 2 greenhouse gas (GHG) emissions of our seven key group companies by 30% compared to FY2019 by FY2030. Specifically, we introduced CO2-free electricity generated from renewable energy sources at our main factories and institutes, including the Shizuoka Factory. We also promoted fuel conversion from heavy oil to fuels with lower GHG emissions, thereby continuing to reduce GHG emissions from our business activities. By FY2048, the year of our 100th anniversary, we aim to achieve carbon neutrality by reducing the Scope 1 and 2 emissions of our seven key group companies to virtually zero. In the future, we will also consider the use of low-carbon fuels (such as hydrogen and ammonia), innovative carbon-negative technologies, and carbon credits, as our carbon neutrality goals are difficult to achieve with existing technologies alone. Regarding the progress to date toward achieving the reduction targets, we believe that our group is making good progress in reducing GHG emissions, as our GHG emissions in FY2025 decreased by approximately 29% compared to FY2019. Since FY2024, we have conducted third-party verification of our GHG emissions to ensure the transparency and accuracy of our calculation data. Furthermore, we support the Japanese government's countermeasures against global warming and conduct corporate activities in compliance with the Act on the Rational Use of Energy (Energy Conservation Act) and the Act on Promotion of Global Warming Countermeasures. We aim to achieve an annual reduction of 1% or more in either the five-year average energy intensity or the fiveyear average electricity demand optimization intensity, both of which are non-binding targets under the Energy Conservation Act. Through continuous efforts to reduce environmental impacts, we will strive to achieve the targets and disclose related information.

Following the Act on the Rational Use of Energy and the Act on the Promotion of Global Warming Countermeasures, our group reports energy consumption and unit energy consumption by business category to the competent authorities. In addition, we have supported the TCFD and have been promoting information disclosure since 2022.

To achieve our GHG emissions reduction target (30% reduction from FY 2019 levels by 2030), we are considering installing solar panels, introducing CO₂-free electricity, and switching fuels at our plants.

We have been certified by the Eco-Rail Mark Operation and Examination Committee established by the Ministry of Land, Infrastructure, Transport, Tourism as a company committed to environmentally friendly rail transportation. We have set “reduce climate change and environmental impact” as one of our materialities, and are promoting reduction of GHG emissions and energy conservation. As part of this effort, we are working on a modal shift from truck to rail freight transportation to reduce CO₂ emissions from transportation.