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Third-party Evaluation and Independent Reviews

Social Issues Attributable to JSR Group's Corporate Activity / Climate Change Mitigation

1. Energy Consumption

JSR's Responsible Care Committee adopted a "Medium-Term Environmental and Chemical Management Plan." This plan contains per-unit targets for energy reduction, which serve as measures to help prevent global warming. In order to reach these targets, JSR is engaged in E-100 Plus project activities targeted at reducing energy and resource use. Although we were unable to meet our per-unit energy reduction targets in FY2016, JSR remains committed to energy conservation activities and will continue to work toward reducing energy consumption.

(1) Energy Reduction Targets

1% average annual reduction in per-unit energy consumption in line with the Energy Conservation Act

(2) Energy Consumption (Crude Oil Equivalent) and Per-unit Index*1

Energy Consumption (Crude Oil Equivalent) and Per-unit Index

2. Initiatives to Reduce Greenhouse Gases

With increasing moves in recent years by businesses to manage greenhouse gases indirectly emitted from their supply chains and disclose their emissions at the global level, JSR has launched initiatives to calculate and ascertain emissions and reduce emissions based on the Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout the Supply Chain issued by Ministry of the Environment, Government of Japan.

Scope1 :
Direct greenhouse gas emissions by sources owned or managed by a company or household (use of fuel: factory, heater, private automobile, etc.)
Scope2 :
Indirect emissions from the use of electricity, steam, or heat (use of purchased electricity, etc.)
Scope3 :
Other indirect emissions besides Scope 2.
("Company" includes the procurement of raw materials, employee business trips, subcontracting of waste disposal, etc.
"Household" includes the purchase of products, travel, subcontracting of waste disposal, etc)

Scope of Greenhouse Gas Emissions from Businesses (conceptual illustration)

Scope of Greenhouse Gas Emissions from Businesses (conceptual illustration)

(1) Accounting for Greenhouse Gas Emissions Throughout the Value Chain

Category FY2015 emissions FY2016 emissions Emissions subject to calculation
CO2
(t)
Percentage
(%)
CO2
(t)
Percentage
(%)

Ⅰ. Direct emissions
(Scope1)

379,019 54.8 397,252 28.2

- Direct emissions from the use of fuel and industrial processes by the reporting company

Ⅱ. Energy-derived indirect emissions
(Scope2)

272,225 39.3 260,455 18.5

- Emissions from the use of electricity and heat purchased by the reporting company

Ⅲ. Other indirect emissions
(Scope3)

40,597 5.9 749,048 53.2

- Added as a new calculation item in FY2016.

Other indirect emissions (breakdown of Scope 3)
Category 1 Purchased goods and services - - 668,734 89.3 Emissions from activities up to the manufacture of raw materials, parts, purchased goods, sales-related materials, etc.

- Calculated from FY2016.

Category 2 Capital goods - - 37,553 5.0 Emissions from the construction and manufacturing of the reporting company's capital goods

- Calculated from FY2016.

Category 3 Fuel and energy related activities not included in Scope 1 or 2 6,551 16.1 6,713 0.9 Emissions from the procurement of fuel used in power generation, etc., for electricity and heat procured from other entities
Category 4 Transportation and distribution (upstream) 12,172 30.0 14,133 1.9

(1) Emissions from the distribution of raw materials, parts, purchased goods, sales-related materials, etc., up to delivery to the reporting company

(2) Emissions (emissions from the distribution paid for by the reporting company) amount of activity from distribution services other than (1) above (transport, handling, and storage) purchased in the fiscal year of the report: Amount of domestic and overseas shipment distribution

Category 5 Waste generated in operations 9,343 23.0 9,152 1.2 Emissions from the transportation and processing of waste generated by the reporting company
Category 6 Business travel 327 0.8 330 0.0 Emissions from employee business travel
Category 7 Employee commuting 1,182 2.9 1,194 0.2 Emissions from employee transportation when commuting to and from the place of business
Category 8 Leased assets (upstream) 47 0.1 46 0.0 Emissions from the operation of assets leased to the reporting company (excluding emissions calculated under Scope 1 or 2)
Category 9 Transportation and distribution (downstream) 10,916 26.9 11,156 1.5 Emissions from the transport, storage, cargo handling, and retail sales of products (limited to those items not paid for by the reporting company)
Category 10 Processing of sold products - - - - Emissions from the processing of intermediate products by the reporting company

- This category is excluded from calculation because the company is a chemical intermediates manufacturer.

Category 11 Use of sold products - - - - Emissions from the use of products by users (consumers and companies)

- This category is excluded from calculation because the company is a chemical intermediates manufacturer and the category is not applicable to the use of sold products.

Category 12 End-of-life treatment of sold products - - - - Emissions from the transportation and processing of products upon disposal by users (consumers and companies)

- This category is excluded from calculation because the company is a chemical intermediates manufacturer.

Category 13 Leased assets (downstream) 59 0.2 38 0.0 Emissions from the operation of assets leased to other entities
Category 14 Franchises 0 0.0 0 0.0 Emissions from franchises

- No emissions; business structures are not franchises.

Category 15 Investments - - - - Emissions related to the management of investments

- This category is excluded from calculation because it is not applicable to "investment to earn profit."

Scope 3 total
(Categories 1 through 15)
40,597 100 749,048 100.0

(2) Actions for Scope 1

JSR is endeavoring to reduce its greenhouse gas emissions through various energy saving activities under the Medium-Term Environmental and Chemical Management Plan.

1. CO2 Reduction Targets and Current Emissions

CO2 Emission (JSR's three plants)
CO2 Emission (JSR's three plants)
CO2 Emissions Reduction Target

Promotion of CO2 reductions with attention to government goals

In FY2012, JSR established its "System to Reduce Total CO2 Emissions from Three plants by 6% Compared to FY1990" by upgrading its energy-saving technologies through the introduction of fuel conversion at the Kashima Plant (Kashima South Joint Power Corporation) and a sludge dewatering system at the Yokkaichi Plant. In FY2016, JSR successfully reduced CO2 emissions by approximately 9% over FY1990 levels. The per-unit index was 68 in FY2016, which represents a continuing decrease in comparison with FY1990 on a scale of 100.

2. Examples of Measures Taken to Reduce CO2 Emissions

Example 1: Introduction of a natural gas-fired turbine cogeneration system

Natural gas-fired turbine cogeneration system (Yokkaichi Plant)

Natural gas-fired turbine cogeneration system (Yokkaichi Plant)

The Yokkaichi Plant installed a natural gas-fired turbine cogeneration system in April 2010. By using natural gas instead of coal, a heavy oil-fired steam boiler and condensing steam turbine system, this new system helped us to cut CO2 emissions by approximately 39,000 tons in FY2016.

Example 2: Introduction of a sludge dryer system that makes sludge combustible

Sludge dryer system (Yokkaichi Plant)

Sludge dryer system (Yokkaichi Plant)

In FY2012 a sludge drying system was adopted at the Yokkaichi Plant in order to dry the sludge generated from its general wastewater treatment facility. Previously, sludge containing a high percentage of water was burned with combustion support fuel (heavy oil); but drying allows us to use the sludge itself as fuel, which in turn allows us to reduce the amount of combustion support fuel we use. This led to a reduction in CO2 emissions of approximately 2,500 tons in FY2016.

(3) Actions for Scope 2

1. Measures to Cut Power Consumption at the Head Office

Power Saving Target for the Head Office

8% reduction compared to the average power consumption from the base years of FY2009 and FY2010

Major Efforts

  • - Policy of turning off lights and office equipment such as printers when not in use.
  • - Implemented the so-called "Cool Biz" dress code.
  • - Changed work schedules so that employees begin work and return home earlier than usual two days per week from June to September.
  • - Maintained a proper air-conditioned room temperature that achieves a balance between energy savings and operational efficiency.

Power Consumption at the Head Office

Power Consumption at the Head Office

The Tokyo Metropolitan Government requires major tenants of a building occupying 5,000 square meters or more in floor area or consuming six million kWh or more of electricity annually to reduce its CO2 emissions under the Tokyo Metropolitan Ordinance on Environmental Preservation.
Although we are not subject to this obligation, we are promoting energy conservation on our own initiative by voluntarily setting a specific power saving target.
In FY2016, as a result of these efforts, our power consumption decreased by 19% over the average consumption of the base years.

(4) Actions for Scope 3

1. Environmental Measure in Logistics: Improving Transport Efficiency

As part of our environmental efforts in transportation, we have taken steps to reduce our transport energy use as a designated shipper under the amended Energy Conservation Act. We are working to reduce per-unit transport energy by using larger tanker trucks and making a modal shift from road to rail and water transport.
In FY2016, as a result of new policies to transport goods and raw materials by railway and ship, we improved our modal share over the previous fiscal year and successfully decreased per-unit transportation energy over the previous fiscal year.

Transport Statistics
FY 2012 2013 2014 2015 2016
Transport volume (million ton-kilometers*3) 471 492 523 511 562
Rail/Sea transport ratio (%) 82 83 85 86 87
Energy consumption level (kiloliters: converted to crude oil) 8,655 9,026 9,388 9,112 9,898
Energy per-unit (kiloliters/1,000 ton-kilometers) 0.0184 0.0184 0.0180 0.0178 0.0176
CO2 emission level (tons) 21,907 22,960 23,984 23,333 25,495
- Transportation and delivery of raw materials and other materials (tons) 9,686 10,489 12,028 12,172 14,133
- Transportation of waste from plants (tons) 175 164 186 245 206
- Transportation and delivery of products (tons) 12,046 12,307 11,770 10,916 11,156

*3 Ton-kilometer: Freight Tonnage (Ton) x Transport Distance (km)

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