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CSR Report 2014

Doing Business Involves Consuming the Earth’s Resources; We Aspire to Become a Company that Does Business in the Best Way Imaginable

JSR Roppongi Club

What we realized after the plant inspection and the significance of communicating it in an easy-to-understand way

Dr. Adachi: We visited the Yokkaichi Plant the other day. I’d first like to discuss what we learned from the site visit.
Mr. Motoki:

Cogeneration facilities(1) Cogeneration facilities in the Yokkaichi Plant

It was my first visit to the plant and I was amazed by how well it was managed and how carefully the facility considers the neighboring residents and maintains harmony with the community. I was also impressed by the fact that the plant has achieved zero emissions, that its employees are trained and understand the importance of maintaining zero emissions, and that cogeneration facilities enable onsite power production using coal and LNG to cover the entire plant while CO2 emissions are minimized (1).
Dr. Suzue:

Green spaces(2) Green spaces near the front gate. This is a small showcase of local vegetation referenced using data gathered from local forests in nature and around temples and shrines reported in Yokkaichi City History, as well as from local vegetation maps of the Ministry of the Environment. The artificial hill(3) The artificial hill currently developed is home to mainly butterflies

Before the visit, I was inclined to think that plants existed on their own, but they are in fact connected with other companies through pipelines that deliver raw materials. I was simply amazed by the entire system of one of the largest chemical complexes in Japan. It was also pleasant to see green spaces near the front gate in consideration of biodiversity (2), as well as an artificial hill that was created and managed to blend in with the surrounding environment. One disappointing finding was the presence of high walls surrounding the hill. The hill would be a comfortable sight for employees, so I hope the company will do something to allow the hill to be viewed from inside the premises (3).
Dr. Adachi: I read about Yokkaichi pollution in a textbook when I was a child, and this formed my preconception of the plants there. But when I visited Yokkaichi for the first time the other day, I saw many residences and abundant green spaces, and even where factories operate, there were no odors or smoke. I realized that I had been misled by my biased image of chemical plants. Speaking about the artificial hill, I was impressed by the way that the hill is designed and managed under the company’s clear policy. The hill is managed in such a way that it is home to various species that live in the woods, both native and non-native; and edible grass for insects, particularly for butterflies, is also grown.
Kawasaki: Let me explain why we built the walls around the hill and our efforts to eliminate odors. There was an accident in the Yokkaichi Plant in 1994 in which a butadiene tank burst due to our lack of proper management. No employees or residents were injured; however, the explosion had hurled broken pieces of the tank as far as outside of the premises. The walls around the hill were built upon request from residents after the accident. The accident also led us to develop our own environment and safety management system before such systems were standardized by ISO and other organizations. Also, complaints about odors, vibrations, and light used to be common in the neighborhood until about 20 years ago, but thanks to our improvement efforts and the new facilities, no complaints are forthcoming at present.
Dr. Suzue: Another thing that I noticed was vapor from the smokestacks. The RC Report from the Yokkaichi Plant states that the temperature of the vapor has been lowered to 200˚C or below before being emitted, but I heard in the plant that the temperature of the vapor is actually 50 to 60˚C. You must be making tremendous efforts to decrease the temperature to that level and perhaps you should communicate these efforts to the public more actively.
Kawasaki: We basically try to collect heat from the vapor to the greatest extent possible in order to use it for our production operations. We also collect heat from wastewater as well to decrease its temperature before discharge. We have been taking these efforts for granted and were not aware of how important they are. Thank you for pointing this out.
Dr. Adachi: Cogeneration and waste heat utilization are activities that you have been carrying out for the benefit of the environment, so it is important to not take them for granted and communicate them more on an ongoing basis.
Dr. Suzue: I think these activities send a strong message to the world. It would be an even more effective message if you fully understand and publish the total expenses required for these activities and the amount of reduction of CO2 emissions achieved.
Hirano: These activities are not meant to be promotional, but I sometimes feel that maybe we should communicate more comprehensively what we are doing so that JSR’s environmental efforts will be rated more fairly.
Shimizu: The JSR Group has been committed to the environment under the concept of the E2 Initiative (4) for three years, but we are still pursuing the right balance between benefits and the huge time and cost investments required for this commitment.
(4) E2 InitiativeTM—value creation concept
E2 Initiative = Eco-innovation + Energy management
E2 Initiative

E2 InitiativeTM—the key to innovation

Mr. Motoki: I feel that in Japan, public consciousness of and interest in energy and carbon management issues have been declining slightly since their peak immediately following the Great East Japan Earthquake. However, there are a great number of people in countries around the world who are actually experiencing abnormal weather, and companies will sooner or later be required to deal with climate change. Companies therefore need to decide how they will shift their energies while closely monitoring movements around the world.
Having consideration for the environment and earning revenue were often considered as concepts that ran in opposition to each other—in other words, had a trade-off relationship. But now the idea that solving social and environmental issues leads to promoting the company’s growth is beginning to be accepted. To express this relationship, the term “trade-on” has been coined.
Kawasaki: The E2 Initiative provides a defensive approach aimed at reducing CO2 emissions and the use of energy in plants and production processes, as well as an aggressive approach that involves the development of environmentally considerate products. With regard to energy, as I said last year, renewable energy is still unstable and we need to think about the way we can store electricity.
Dr. Suzue: From that point of view, your lithium-ion capacitors are very promising. For example, offshore wind power is currently attracting attention, but the problem is how we can deliver electricity generated at a facility far from land where the power is needed. This problem, however, can be solved immediately if we have a high-performance capacitor. The E2 Initiative allows for creation of these kinds of innovative products that sport drastically new concepts, rather than simply adding an environmental consideration label to products, and I think this is the greatest advantage of the initiative.
Shimizu: When launching the E2 Initiative, we ensured that a life cycle assessment would be implemented in the initial stage of R&D. This made R&D staff more conscious of the degree of contribution their products make to society, including at each stage of product use.
Dr. Adachi: Some projects may carry great costs at the R&D stage. But such costs may pay off instantly if supply-demand balance turns favorable or if a product is adopted and used on a large scale in a country. So ideas should be generated constantly regardless of costs, and I think this is the way to create a totally new world.
Hirano: Innovation can spawn from any new materials or processes, so we try not to consider costs only in the course of our R&D activities.
Shimizu: When it comes to proposing a new idea with an eye to the future, Europe is excellent. Their environmental regulations are meant not only to regulate but also to promote innovation under the notion that regulation is the mother of invention. Since half of the JSR Group’s sales are now generated abroad, it is very important for us to closely monitor overseas regulations and markets. It is becoming increasingly important for us to keep a sharp eye on information from trade associations and other sources regarding future trends of regulations as well as on information collected from our frontline sales force.
At the same time, it is also important to realistically consider how much the public takes it upon itself to accept environmental responsibility. The problem is that consumers who are willing to pay extra for environment-friendly products are still a minority, and we need to solve this problem somehow. Generating electricity using LNG on the premises of the plant, producing environmentally-compatible products, and all other environmental efforts inevitably raise costs. These costs should ideally be spread across product prices. But if the public demands that the costs should be borne by companies, it will make it difficult for companies to continue doing business, which will then lead to a reduction in their environmental efforts. This is a vicious cycle, and we must do something to change it into a favorable one.
Hirano: We cannot sacrifice convenience entirely for the sake of decreasing environmental impact, for example, by forbidding the use of gasoline in consideration of the global environment. This also cannot be accepted by the public. So we need to carefully maintain the balance between convenience and the environment in the total value chain.
Mr. Motoki: One of the fundamental aims of “Creating Shared Value,” a concept advocated by Michael Porter and Mark Kramer, is for companies to reduce costs and increase revenue by reorganizing and increasing the efficiency of their value chain as well as by addressing their impact on society. We are now in the transitional period of this movement, and I understand that companies are in a difficult situation.
By communicating your efforts to help create a sustainable society through the internet or reports, you can show how advanced your Group is in this area. While technological innovation is important, I’d like you to put greater effort into this kind of communication as well.
Dr. Adachi: Speaking of appealing to society, I have the impression that Japanese companies are not eager to engage in lobbying activities. In contrast, U.S. and European companies actively engage in lobbying. Of course, lobbying aimed merely at improving disadvantageous situations for particular companies is difficult to achieve, but in my view, lobbying should be acceptable as long as it is aimed at revising the current systems to bring about more benefits to society, protect the environment, and realize more efficient use of natural resources.
Mr. Motoki: That is what we may call positive and transparent lobbying. I think it is important for companies to lobby the government while communicating their stance to society. A sustainable society cannot be created by companies or the government alone. I expect companies to focus more on lobbying as well as on technological innovation.
Dr. Suzue: I agree that companies should do lobbying actively for a good cause. In Europe, for example, NGOs cooperate with each other to lobby the government to provide subsidies—not just for large farmers—but also for small farmers who engage in environmentally-friendly farming and are making great achievements. I believe that the Japanese government will also listen—at least initially—if the purpose of the lobbying is to realize sustainability.

Dialogue text (2)


CSR Report 2014