JSR Group's SustainabilityMateriality to be Addressed by JSR Group
As part of our efforts to integrate our management and CSR, we define our materiality (priority issues) to help realize a sustainable global environment and society. To assist us in this process, we arrange issues using a matrix comprised of two axes; namely, "Importance for JSR Group (Internal Factors)" and "Importance for Stakeholders (External Factors)." We then identify those that have high priority for our Group and for our stakeholders as "Materiality Considered by JSR Group."
In our mid-term business plan “JSR20i9,” which started in 2017, we arranged our materiality into three categories --“Social Issues that JSR Group Can Help Resolve,” “Social Issues Attributable to JSR Group's Corporate Activity,” and “Basic Issues in JSR Group's Corporate Activity” --with a view to advancing our CSR activities. During 2020, we are studying a reexamination of JSR's materiality to coincide with the formulation of our new mid-term business plan. In a dialogue JSR held with experts in 2019, it was pointed out that materiality must be thought of as a dualism by dividing it into “business fields” and “management foundation.” Taking note of this, we decided to incorporate this point into our study and reorganize JSR's materiality into “business activity” and “management foundation.” We then implemented a “JSR Sustainability Challenge*” to measure JSR's contribution to society, beginning with “business activity.”
* JSR Sustainability Challenge: An initiative that interviews five business departments to survey their positives and negatives on society and then summarizes the important positive and negative impacts that arise from JSR Group's business activities.
* JSR Report 2020 is scheduled for release on November 30.
In the “JSR Sustainability Challenge,” we aggregated impacts of the outcomes that JSR Group can provide through “business activity” into three areas: “contribution to quality of life and happiness,“ “contribution to a healthy and long-living society,” and “contribution to preservation of the global environment.” Then we positioned these impacts as materiality in “business activity.”
In the realm of “management foundation,” we classified our currently recognized materiality into three areas of social, environmental, and governance (known as ESG). We will closely examine, narrow down, and reorganize the materiality that JSR Group should share and pursue as a whole during the process of formulating the new mid-term business plan. The following chart presents JSR's materiality as we currently see it.
We believe that these areas of materiality will evolve with changes in society's demands on us and in accordance with our various stakeholders' views and needs. We will therefore review and re-specify them through the following operations.
1) We will confirm the issues' validity each year by conducting checks through engagement with experts, employees, responsible care activities, and the like.
2) We will periodically review JSR's materiality while maintaining the transparency and acceptability of the process for specifying it by exchanging views with experts whenever we formulate a new mid-term business plan.
In FY2020, we spoke to Mr. Keisuke Takegahara of the Development Bank of Japan, who gave us his views on our effort to clarify JSR Group's impact on society through the JSR Sustainability Challenge.
We will take Mr. Takegahara's views into account as we explore ways of enhancing activities to promote sustainability. This will include examining the ideal forms of materiality that JSR Group should pursue.
An attempt to measure JSR's impact on society
About the “JSR Sustainability Challenge”
During the 2019 dialogue held on the topic of “JSR Group's Materiality and the SDGs,” Mr. Keisuke Takegahara, Executive Officer of the Development Bank of Japan, pointed out the “importance of impact.” In light of this, we asked Mr. Takegahara to comment on the “JSR Sustainability Challenge,” which is an attempt to measure JSR Group's impact on society, and evaluate its results.
Mr. Keisuke Takegahara
Executive Officer,
Development Bank of Japan
Member of METI's "The Study Group on Environmental Innovation Finance"
Member of the "TCFD Consortium Steering Committee"
— What is your view of the “JSR Sustainability Challenge”?
Takegahara: The process, which gets each department involved and is built on layers of interview surveys and discussions conducted over time, is quite impressive. In fact, I don't think many companies can identify their impact cross-organizationally at the same level. Moreover, I was impressed that so many approaches and materials emerged from each department, particularly in the area of positive impacts. I also think the program's attempt to grasp the impact generated by the entire Group—both positive and negative—and not just individual business departments represents a pioneering initiative that will lead to discussion of JSR's business portfolio. I recommend that you disclose what the program's findings on your website wherever possible. This could include the details of discussions in each department and any hints you get from looking at impact from the standpoint of the Group.
— What impressions did you have concerning the impacts on society that were identified?
Takegahara: I thought the framework that applies the characteristics of B-to-B by which value (outcomes) is provided to society through client enterprises is a way of doing things that is distinctive of JSR Group, which operates under the banner of creating value through materials. Outcomes tend to be directly attributed to the company providing the final product. However, thanks to this framework, it is easy to see the structure by which many outcomes are actually provided by JSR Group. It is also clear that this shows how the impacts generated by JSR Group have effects on society through final products. So I hope you will present this point in a more concrete manner going forward. And if some of this data is disclosable to the public, I earnestly encourage you to present it.
Furthermore, in addition to mentioning products that have positive impacts in resolving social issues that are already evident, such as elastomers and plastics, how about looking at things from the standpoint of the current COVID-19 pandemic? In other words, how about presenting your contributions to society in the “with COVID-19” and “post-COVID-19” eras? It is said that “digital transformation” (DX)—centered on the keywords “remoteization” and “non-contact”—is rapidly accelerating around the world as a result of the pandemic. Its impact on society is likely to be huge. Your company has a history of leading the way in DX. For example, you have focused on quantum computing with an eye to improved productivity and better efficiency in R&D. I felt it may be a good time to explain your impact on a society heading toward a “new normal”—including the value that your Electronic Materials, Display Solution, and Life Sciences Business bring to the world—from a larger Group perspective.
— What do you think is particularly important to bear in mind with the “JSR Sustainability Challenge”?
Takegahara: Interested in making long-term investments, ESG investors consider whether a company looks at an uncertain future and is ready for various anticipated changes from the standpoints of both risk and opportunity. In other words, they pay attention to the sustainability and resilience of business models. What is important here is to properly grasp issues that could affect a future business model and to present a long-term strategy that sees those issues as opportunity, along with risk management, of course. For example, climate change should present business opportunities for JSR Group. In light of the positive impacts that were identified, we can see a scenario in which the value that your Elastomer and Plastics Businesses provide to society grows as climate constraints become stronger and stronger. Regardless of how powertrains change and how mobility shifts toward dispersed ownership or sharing, the properties of fuel efficiency and abrasion resistance brought by elastomer products will be extremely competitive. Moreover, demand for the lightweight car bodies that plastics help make possible will undoubtedly continue to grow. It is important to develop these perspectives with respect to various social issues outside of climate change. Even if we look at digitalization, health care, and other themes whose importance will grow during the COVID-19 pandemic and afterwards, I think there are numerous scenarios that will show JSR's strengths.
— If you have any concerns for the future with respect to JSR's sustainability, please tell us about them.
Takegahara: I think that spelling out a “long term perspective” more forcefully will be useful in putting JSR Group's characteristics to use. I think it is important to present a longer-term vision for the Group, one that looks ahead to 2050, for example. Looking at the climate change problem, where positive impacts from your main businesses are anticipated, “net zero emissions” of greenhouse gases by 2050 is already becoming a central topic. Many client enterprises who are your partners in generating impacts on society are beginning to draft visions for the year 2050. I admit that setting specific numerical targets is difficult at this time. However, I still believe that you should present such a vision through your Top Message and other avenues.
