JSR Group’s Materiality (Priority Issues)

1. JSR Group’s Materiality

We have identified materiality (priority issues) aiming to help bring about a sustainable environment and society by creating value through corporate activity, following our Corporate Mission of “Materials Innovation - We create value through materials to enrich society, people and the environment.” This materiality is reflected in the Medium-term Management Policy announced in March 2021 and positioned at the center of our resilient management foundation.

JSR Group’s Materiality (Priority Issues)
JSR Group’s Materiality (Priority Issues)

(1) Materiality Identification Process

Based on the findings from dialogue held with experts in 2019, we began reviewing the existing materiality (formulated in 2015) from the same year.

From FY2019 to FY2020, as part of JSR Sustainability Challenge, we reorganized our materiality into two perspectives: business activity and management foundation. In implementing this process, we received opinions and summaries from Mr. Keisuke Takegahara of the Development Bank of Japan as an outside expert.

* JSR Sustainability Challenge: An initiative where hearings were conducted to grasp the positive and negative social impacts of the Group’s five business segments to determine the material impacts, both positive and negative, of JSR Group’s business activities.

(2) Future Reviews

We believe that our materiality will evolve amid continuing changes in what society demands of us as well as in our various stakeholders' views and needs. Going forward, we will therefore continue to identify and review materiality through the following operations.

  1. 1.We will respond accordingly whenever the need to review the validity of materiality arises through engagement with experts and employees as well as Responsible Care activities, etc.
  2. 2.Whenever we formulate new medium-term management policies, we will ensure (and periodically review) the transparency and acceptability of the processes that we apply when specifying materiality by exchanging views with experts.

2. Establishment and Advancement of KPIs for Materiality

(1) Establishment of Key Performance Indicators (KPIs) for Materiality

In FY2021, we established Key Performance Indicators (KPI) for our issues of materiality. During this process, the Sustainability Promotion Department, with the support of the Corporate Planning Department, discussed and shared sustainable management issues facing JSR Group together with business departments, corporate departments, and Group companies to determine specific KPI and numerical targets.

Regarding materiality initiatives to be implemented from FY2022 onward, we will review the situation every six months using KPIs and take additional actions as necessary. In addition, we will share the evaluation results of each fiscal year with the Sustainability Promotion Committee and the Executive Committee, and reflect this information in activities in the next fiscal year and beyond. For details on the content and progress of materiality KPIs, please see the table below “Materiality Initiatives and KPI.”

(2) Progress of Materiality KPIs

The materiality of Business Activity stipulates that the Group contributes to society by providing products and services that demonstrate various effects in “Contribution to Quality of Life and Happiness,” “Contribution to a Healthy and Long-Living Society,” and “Contribution to Preservation of the Global Environment,” in each of the Digital Solutions, Life Sciences, and Plastics businesses that the Group engages in.

Based on this, we have defined "sustainability products" in each business domain from among all the products provided by JSR Group, set KPIs such as sales, sales volume, and sales ratio, and established targets for FY2024.

In FY2022, sales of sustainability products in the Digital Solutions Business grew 2.3 times compared to FY2020, and the sales ratio of the entire business to total net sales nearly doubled. In the Life Sciences Business, sales of sustainability products also rose significantly, far exceeding our FY2024 target. In the Plastics Business, sales volume of sustainability products grew steadily.

In this way, in FY2022, sales of sustainability products grew across all business domains. We will continue to strive to provide value to society through all of our business activities in the form of “Contribution to Quality of Life and Happiness,” “Contribution to a Healthy and Long-Living Society,” and “Contribution to Preservation of the Global Environment.”

In addition, the “Management Foundation” that supports our business activities has five forms of materiality: “environmental conservation and impact reduction,” “employees, DE&I, and ways of working,” “health and safety,” “respect for human rights,” and “supply chain.” Therefore, we have set medium- to long-term issues and KPIs for each of these.

In FY2022, we advanced all activities described in the action plan for the fiscal year to be implemented toward the targets of each materiality KPI. While we are making steady progress in reducing GHG emissions and improving employee engagement, there are many issues that take time to produce results, such as the advancement of DE&I and strengthening supply chain management. We will continue to work toward the goals together with related departments.

The background and characteristics of the materiality of “Management Foundation” are as follows. Detailed progress of materiality KPIs is described in the relevant sections of each.

Environmental Conservation and Impact Reduction

Climate change and resource depletion are issues threatening the very future of humankind. To resolve these worldwide social issues, JSR Group will begin by aiming to reach net zero GHG emissions by 2050 and eliminate waste bound for landfills entirely.

Employees, DE&I, and Ways of Working

We believe that promoting flexible and diverse ways of working, utilizing each other's individual abilities and approaches, and working with higher engagement will improve organizational competitiveness and ultimately elevate corporate value.

In particular, we believe that the advancement of DE&I in managerial grades, which plays a central role in organizational management, will lead to improved resilience of JSR Group as a whole. Therefore, based on the social issues unique to Japan, we have set the ratio of female managers at JSR (non-consolidated basis) as a KPI. We regard this as one of the indicators that reflects the results of ensuring "fairness of opportunities" for each employee's challenges, active participation, and growth, and we will accelerate the creation of a DE&I culture using this KPI as a driver.

Safety and Health

For safety, we will use the number of accidents occurring after safety activities and results of the safety culture survey for measuring the progress of this process as KPI and adopt uniform standards for evaluating safety performance globally.

For health, we targeted White 500 certification for JSR. During and after the pandemic, we have positioned the balance between employee health and productivity as an important management issue that we are now working diligently to address.

Respect for Human Rights

Companies are responsible for setting an example when it comes to respect for human rights. To fulfill this responsibility, each and every JSR Group employee must deepen their understanding of human rights. Based on this approach, through e-learning and other means, we will focus on initiatives that educate our people about human rights continuously and systematically.

Supply Chain

To share societal needs and JSR Group’s philosophy with suppliers and to prevent risks before they materialize, we distribute booklets containing JSR Group’s CSR/sustainable procurement and human rights policies to foster supplier understanding and we ask that they submit a written endorsement.
With regard to conflict minerals and cobalt, which pose concerns in terms of child labor and other human rights abuses, we will use commonly used questionnaires worldwide to monitor JSR Group’s use of these commodities and suppliers’ responses to preventing human rights abuses.

Materiality Initiatives and KPI
Materiality Initiatives and KPI