“Materials Innovation” is JSR Group’s corporate mission. Based on this corporate mission, we aspire to be a company that contributes to society, and lives up to society’s trust in us, through materials that are indispensable for society. Unfortunately, it is rare for us to appreciate the actual impact of the final product which is handled by general consumers, since the JSR Group is a manufacturer and provider of chemical materials. Recognizing the social impact of our business activities, which encompass even end products, has both negative aspects and positive aspects, we, therefore, endeavored to re-engage with the question of where we stand as a sustainable company amid an ever-changing social environment.

1. JSR Group’s “JSR Sustainability Challenge”

We conducted a program called the “JSR Sustainability Challenge” for the JSR Group’s four primary business segments. The program involved interview surveys of each segment’s leaders and employees with practical knowledge, followed by joint discussions with business segments starting with third-party assessments of the initial surveys. The JSR Sustainability Challenge compiled both positive and negative impacts in a correlated fashion, such as instances where negative impacts of the production process can be transformed into positive impacts for the Group as a whole and examples that connect to positive impacts by offsetting negative impacts. Details of the program are included in the JSR Report. Results from the JSR Sustainability Challenge will be used in the new mid-term business plan, in materiality reviews, and for other purposes.

Implementation Process for "JSR Sustainability Challenge"

Overview of "JSR Sustainability Challenge"

• “JSR Sustainability Challenge”, JSR Report 2020

* JSR Report 2020 is scheduled for release on November 30.

2. Business Segment Interviews

A key part of the JSR Sustainability Challenge was the interview surveys at each of the four business segments, in which leaders and employees with practical knowledge exchanged frank opinions. This process unearthed many discoveries not readily noticed by the involved parties alone, such as examples that connect to positive impacts by offsetting negative impacts. Selected comments from the conversations are published below.

Sales ratios by business segment (FY2019)

Digital Solutions Business

1. Electronic Materials

• The negative impacts of electronic materials include the solvents used in manufacturing processes for photoresists and other products as well as the trace amounts of chemical substances subject to environmental emission controls. We take measures to mitigate these negative impacts based on regulatory controls.
• Solvents are contained in products as well as being used for other purposes, such as cleaning production tanks. However, production plants for electronic materials are small, and the amounts of solvents used are not large. Furthermore, solvents after cleaning processes are recycled into fuel systems.
• We have taken the lead on controlling chemical substances emissions. JSR has business offices globally and production sites in the United States and Belgium. We also have a prevailing culture of responding quickly to environmental problems. For example, we took prompt action on finding substitutes for perfluorooctanesulfonic acid (PFOS) when concerns about PFOS as an environmental pollutant first surfaced. Today, we have finished replacing PFOS in all electronic materials. Our early response allowed us to meet in advance the deadline stipulated by the Japanese government, which was moved up a year from the COP9^*1 usage ban deadline. We executed PFOS replacement so smoothly that we even received inquiries from other material manufacturers about why we could act so quickly.

• A negative environmental impact is the power consumed by the cleanrooms in which high-quality materials for semiconductors are manufactured and evaluated. This impact on the environment is thought to be modest; however, because cleanrooms are operated at temperatures similar to the ambient temperature and occupy only limited floor space.
• On the other hand, semiconductor devices manufactured using JSR products are expected to have positive impacts on the environment. Semiconductor development has made remarkable progress in achieving greater integration through miniaturization with each successive generation and in lowering power consumption from the design stage onward. High-performance semiconductor chips used in servers, data centers, and other applications can substantially reduce the energy consumed by the devices and facilities.
• Development is progressing of semiconductor chips that can dramatically improve energy efficiencies. A good example is AI chips, which have been gaining attention lately. GPUs^*2 and AI chips specialized for neural networks^*3 are much more efficient than CPUs, requiring just 1/10 and 1/100, respectively, of the power needed for image recognition. The science journal Nature reported that cutting-edge neural chips can achieve energy efficiencies as great as 280 times that of CPUs. JSR is a member of the IBM Research Frontiers Institute and is involved in the development of application-specific semiconductor chips. JSR contributes to higher energy efficiencies in semiconductor chips through materials development.

• The semiconductor chips discussed above appear in all kinds of end products such as smartphones and IoT devices, and they are directly connected to improving our quality of life. JSR, and the customers to whom we supply materials to, use materials to generate a diversity of value for society. As such, our relationships are a perfect fit for the partnerships called for in Goal 17 of the SDGs.

2. Display Materials

• A negative impact is the significant amounts of solvents nearly all JSR display material products contain, since the materials are dissolved in solvents when supplied to our customers. This poses only slight risks in our production and sales processes, but disposal of the solvents is a substantial risk on the customer side. The widely used, highly soluble organic solvents are subject to regulations. Although the use of these solvents has not been banned completely at this point, customers feel there are risks of a ban. JSR, therefore, routinely studies alternative solvents and is ready to propose alternative plans to customers. Although these alternatives are not yet sold, when the time comes, they can be deployed as a future strength of our business.
• Helping lower energy consumption is an obvious positive impact of the Display Materials Business. Two contributions of note are those to our customers’ production processes and those to end consumers through products with higher energy efficiencies.
• Our customers frequently tell us they want to reduce the number of photo masks and the number of processes in which photo masks are used. We, therefore, employ new materials based on customer needs to reduce production complexity. The new materials lower the amount of energy needed in manufacturing processes. For example, with the aim of further reducing energy consumption, JSR developed products curable at low temperatures, reducing curing temperatures from the conventional 230℃ to 150℃. We decided to make all JSR product lines curable at 150℃. This goal is nearly complete, and we are starting to market this to customers. These products are expected to reduce the power consumed in curing processes at customer plants by 25 to 30 percent. Reactions from customers have been positive.
• The televisions our customers produce also reduce energy consumption. Our newly developed alignment films boost display brightness, allowing for proportionally lower light emissions and less power consumption when driven. The alignment films and insulating films constituting the liquid-crystal alignment method that enables the realization of high-luminance LCD displays can cut the power consumption of LCD televisions by around 30 percent.
• As monitors get larger, naturally their power consumption goes up. This creates further demands for reduced energy consumption by monitors. It is an eternal problem. We must strive to develop display materials with drive methods that use less power.
• We believe the market recognizes the positive impacts of our display materials. JSR has a share of over 80 percent of the display materials in high-end 4K and 8K TVs marketed worldwide, and over 80 percent in high-end TVs globally.
• Augmented Reality (AR) and Virtual Reality (VR) started to pervade society and be increasingly used in business. AR is a technology that superimposes virtual visual information on an existing landscape to augment the world in front of us. VR is a technology that represents the real world on a screen to project a visual image. Displays are also used for AR and VR. These displays contribute to telemedicine and remote control of robots in hazardous locations.

Life Sciences Business

• Drug development cannot avoid animal testing with today’s technology, since it is essential to confirm drug safety and other characteristics thoroughly on animals before administering a drug to human subjects. The use of animals, consequently, is the biggest negative impact of JSR’s drug development assistance business. The 3Rs and other international guidelines have been established to ensure the humane use of laboratory animals. They include such principles as not allowing animals to suffer and minimizing the use of laboratory animals. Customers also demand observance of similar principles. The JSR Group strictly abides by these guidelines at the present time. In the future, however, technological advances are hoped to enable toxicological and other tests to be performed on artificial organs instead of animals. This will not only eliminate the use of laboratory animals; it will also increase the probability of a drug’s success at the clinical trial stage because tests are performed on subjects more similar to humans. JSR is working on the development of organoids and other technologies that will permit such testing.
• A big issue for drug development after animal testing is the inability to obtain the anticipated effects when a drug is administered to human subjects. Animals and humans are biologically different, so disparities are to be expected. Nevertheless, this is a huge issue for drug development. Higher success probabilities are wanted when transferring from animal to human trials. This is why we have devised special animal tests that mimic human subjects as close as possible in an effort to improve success probabilities when moving to human trials. For example, we have cultivated cancer cells from various patients in special laboratory mice and tested the efficacy of cancer drugs. From the tests, we can infer which type of cancer patients will benefit from a drug under development. With tests on special laboratory mice, we can clarify at the animal testing stage that a particular drug is effective for cancer patients with gene A, for example, and not particularly effective for cancer patients without gene A. Following this, we can improve the efficiency of clinical trials on actual human subjects because we know to select only patients with gene A, where the drug’s efficacy has been demonstrated, for clinical trials. And by screening patients for gene A before administering the drug, it is possible to cut down on unnecessary drug doses and contribute to patients’ quality of life. Initiatives like these by JSR benefit drug makers in terms of more efficient drug development, shorter development times, and lower development costs. Shortening drug development times means patients around the world can obtain and benefit from valuable drugs sooner.
• Efforts around the world are underway aiming for personalized healthcare, which provides healthcare tailored to specific individuals. Two key technologies are necessary to realize personalized healthcare: biopharmaceutical technologies able to provide pinpoint efficacy for the desired target, and diagnostic technologies able to predict in advance whether a drug will be effective for a particular individual. JSR is working on developing both kinds of technologies. For example, we established manufacturing technology to ensure stable mass production of biopharmaceuticals by our biopharmaceutical contract development and manufacturing organization (CDMO). And we are searching for biomarkers that determine a drug’s efficacy and developing technology to turn those biomarkers into diagnostic reagents. The capacity to assist both biopharmaceutical development and diagnostics will likely become a strength of the Life Sciences Business.

Elastomers Business

• The petrochemical industry is an energy-consuming industry, and JSR elastomers emit significant amounts of CO2. To counter these negative impacts, we are enhancing energy recovery and recycling efforts and working to cut CO2 emissions. We also plan to further optimize our energy mix, by expanding the renewable energy and relatively eco-friendly liquefied natural gas we use on a percentage basis. We have set a target of reducing CO2 emissions by 15 percent from 2013 levels by 2030.
• On the positive impact side, the Elastomers Business is pushing ahead with the 3Rs (rolling resistance, reduce, and recycle). The first R refers to lowering the rolling resistance of tires, which in turn cuts CO2 emissions. We contribute to society in this respect through the development and provision of SSBR, which gives lower rolling resistance. As for reducing the use of resources, we are developing high durability polymers for new high durability SBR and similar products. We are also engaging with the third R, recycling, where possible, although the technical barriers to recycling rubber are high because of its chemical structure.
• With regard to rolling resistance, we believe our polymers, which control the performance of tires for improved fuel efficiency, have significant and tangible positive impacts on society. Estimates of the CO2 actually generated in each stage of a tire’s lifecycle suggest 86 to 88 percent of total lifecycle emissions occur during tire use. Our preliminary calculations indicate that against the greenhouse gases the JSR Group emits during polymer production, our polymers contribute to society with more than double that amount in greenhouse gas reductions.

• LCA-based study of the GHG emissions reduction effects of synthetic rubber used in fuel-efficient tires
• Opinions on “the GHG emissions reduction effects of synthetic rubber used in fuel-efficient tires”

• In the area of reducing resource use, markets have given top marks to our polymers used to manufacture highly durable tires. Assuming polymers to date have had a durability score of 100, the polymers we developed raise this durability score to 150. For this reason, they are very highly regarded. Using our polymers increases the distance a single tire can travel by 1.5 times that of a conventional tire. Conversely, designing a tire to travel the same distance as conventional tires has the advantage of reducing the amount of rubber used, allowing for thinner and lighter tires. Lighter tires contribute to better fuel economy. High durability also means more consistent performance; thus, it is superior safety. Benefits include consistent driving conditions over longer periods of time and the ability to maintain constant braking timing for autonomous driving.
• Recycling requires cooperation with customers, since we manufacture materials. As a first step, however, we can implement recycling measures for waste rubber generated during production (i.e., usable rubber that does not end up in products, such as leftover product scraps and out-of-spec products). Waste rubber generated at our production sites is sold to selected businesses that reuse the rubber. So although the rubber does not end up in tires, it is made into rubber mats and other products. Among our products, the characteristics of thermoplastic elastomers make them excellent candidates for recycling. We hope industry as a whole will gradually enlarge the reuse of elastomers.

Plastics Business

• Curbing the Plastics Business’s negative impacts is limited by the extent wastewater and atmospheric emissions can be controlled in the manufacturing stage. Nevertheless, further reduction efforts are felt necessary. For example, attention is focusing on atmospheric emissions of acrylonitrile (AN). Although we meet AN emissions standards, we want to further enhance controls. Therefore, we plan to invest in AN control equipment in 2020 that will commence operations in 2021. Investments like these in atmospheric emission processing can also further cut CO2.
• One positive impact, in the sense of atmospheric emissions, are measures taken by customers for volatile organic compounds (VOCs). The Plastics Business supplies material products that prevent VOCs in response to frequent customer requests to reduce VOCs.
• Demands for lighter vehicles are part of a movement to reduce energy losses. A promising solution, although prices are still high, is using ABS in place of steel sheet (substituting hardened ABS for iron). ABS resins make vehicles lighter, and weight reductions of about 50 percent have been achieved using ABS resins that have the equivalent rigidity of steel.
• Regarding circular economy initiatives, the Plastics Business sells the ECO PELLET as a product recycled in the manufacturing process. On a larger scale, however, ABS is not collected from the market and there are no frameworks for ABS collections. Even if it were possible to collect ABS, its diverse physical properties would make recycling very complex, resulting in recycled products that cost more than new products. Further complicating ABS recycling is that ABS materials are often coated or plated, rather than being monomaterials (materials made of a single substance). Circular economy initiatives are a hot topic within industry, although they haven’t reached the public yet. There have been no calls to carry out specific initiatives, but the circular economy is already a trend.
• The main thrust of our proposals is adopting monomaterials: for example, suggesting that customers choose single, uncoated resins (in effect using monomaterials). They are high-added value products that have texture and high coloration (in effect using monomaterials). And another advantage of omitting coatings is lower costs on process. Materials themselves are also likely to change, as more stringent environmental measures are imposed on paints, coatings, and plating chemicals in the future. If coating solvents and other chemicals are banned, we can propose the use of monomaterials as a solution. Anti-squeak materials are a good example of adopting monomaterials, since they do away with grease and textiles used to alleviate squeaks. We have set a target of raising the percentage of new materials (uncoated materials and noise-reduction materials) to 15 to 20 percent of the total 250,000 to 260,000 tonnes of resins we sell.
• In addition to monomaterials, another product that contributes to the circular economy is compatibilizing AS. Polystyrene and ABS are collected and separated, but since both have almost the same specific gravity, they are hard to divide. The use of a special type of S, however, enables PS and ABS to mix thoroughly and become resins easy to recycle. This streamlines handling by recyclers.