Information disclosure in line with TCFD recommendations

Kumiai Chemical Group has grown through its core business of agricultural chemicals, which are indispensable for agriculture, with the main theme of "protecting and nurturing life and nature.“ Our business is closely related to the natural environment, and responding to climate change caused by global warming is an important issue for ensuring the sustainability of the company's management base.
We view the adverse effects of climate change, including natural disasters such as torrential rains and floods associated with global warming, and heat waves and droughts caused by rising temperatures, as business risks, and we strive to work toward a decarbonized society while also considering the aspect of opportunity of a new business in formulating our corporate strategy.
Kumiai Chemical Group supports the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and will proactively communicate our climate change initiatives in line with the framework of the TCFD recommendations.

The Sustainability Promotion Committee chaired by the Representative Director, President, 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 industrial health and safety and chemical substance management, and discusses measures to address these issues. Important matters discussed by the Sustainability Promotion Committee and other bodies are reported to the Board of Directors for decision-making and oversight. The Nomination and Remuneration Committee reviews our efforts in reducing 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.
For risk 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, as well as climate-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 group set FY2019 as the reference year, and set reducing Scope 1 and 2 GHG emissions of our seven key group companies by 30% compared to FY2019 by FY2030 as our target. 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 and working to achieve our targets. By FY2048, when we celebrates its 100th anniversary, we aim to achieve carbon neutrality by reducing the Scope 1 and 2 GHG 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, because net sales for FY2024 increased by approximately 56% compared to FY2019, but our GHG emissions decreased by approximately 22% compared to FY2019. Through continuous efforts to reduce environmental impacts, we will strive to achieve the targets and disclose related information.

Kumiai Chemical Group will continue its efforts to mitigate and adapt to climate change, including through the ongoing reduction of GHG emissions.
We conduct scenario analysis to identify Kumiai Chemical Group’s risks and opportunities with respect to climate change. Through scenario analysis, we have set the “safe, secure, and prosperous society” scenario (called the 1.5℃ scenario) that we aim to achieve and the “unsustainable society” scenario (called the 4℃ scenario) where social issues such as climate change worsen, and have evaluated the impacts of risks and opportunities on our group. Measures for major risks and opportunities that have a large impact are being examined. The contents of these examinations are reported to the Sustainability Promotion Committee, and Management, including the Representative Director, President, then discuss climate change risks and opportunities.