Report in Line with the Recommendations of the TCFD
In October 2018, Mitsubishi Chemical Group Corporation announced its support for the final recommendations prepared by the Task Force on Climate related Financial Disclosures (TCFD*).
The Mitsubishi Chemical Group is working to enhance its climate change-related measures in areas such as environmental impact reduction, driving energy-saving activities, promoting renewable energy use, and adding to the range of products that contribute to GHG emissions reduction. Through these measures and progressive enhancement of information disclosure, we are targeting increase in our corporate value.
The TCFD is a body established by the Financial Stability Board in 2015. In June 2017, it announced the final recommendations concerning disclosure of information to encourage companies to voluntarily disclose to investors the impacts of climate change-related risks and business opportunities on corporate finances.
Governance
At MCG, we have identified GHG reduction, environmental impact reduction, and circular economy as the material issues to be addressed in our medium-term management plan, APTSIS 25. In parallel, we have set management indicators and targets (see Metrics and Targets) to measure progress with these initiatives to mitigate and adapt to climate change. Monitoring of progress toward the target values takes place with the involvement of the MCG president and other members of the management team.
| Structure | Rolls | Content of report | |
|---|---|---|---|
| Board of Directors |
･Formulation of the basic management policy |
･Supervision through the execution reports of executive officers |
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| Director Liaison Committee |
･Sharing of important information on management |
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Sustainability Committee [Structure] Chairperson: President & CEO Committee members: Corporate Executive Officers, etc. Secretariat: Sustainability Department |
･Deliberations on the Group's sustainability policy and related matters |
･Monitoring based on the management indices |
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Recommended Disclosures of TCFD
Governance
a) Describe the board’s oversight of climate-related risks and opportunities.
b) Describe management’s role in assessing and managing climate-related risks and opportunities.
Director remuneration
Content of report
The performance-based evaluation of the remuneration of corporate executive officers and executive officers is determined based on the degree of achievement of the targets for each fiscal year. In addition to economic benefit and capital efficiency, the evaluation considers indices relating to improvement in sustainability and other factors, including GHG emissions reduction. For detailed information, please see the Securities Report.
Recommended Disclosures of TCFD
Metrics and Targets
a) Disclose the metrics used by the organization to assess climate related risks and opportunities in line with its strategy and risk management process.
Related pages in KAITEKI Report
Strategy and risk management
Transition plan
Content of report
In December 2021, MCG announced a new management policy entitled “Forging the future.” The policy includes a plan for the transition to carbon neutrality in line with the basic policy for the realization of carbon neutrality that had been announced in October of the same year.
The plan sets the new targets of a 29% reduction in GHG emissions by fiscal 2030 compared to fiscal 2019, and a further reduction to net zero in 2050 to achieve carbon neutrality. It also sets out a concrete roadmap. Going forward, our portfolio management will include a carbon-neutral perspective, which will enable us to remain competitive in a society that is in transition to carbon neutrality.
Related pages in KAITEKI Report
Business opportunities and risks from perceived social issues
Content of report
In the formulation of its medium- to long-term basic management strategy KAITEKI Vision 30 (KV30), the MCG Group identified the business opportunities and risks arising from the challenges facing society in the period up to 2030. As part of this, KV30 gives a quantitative evaluation of the risks envisaged if the social issues are left unmanaged.
A climate change-related risk that we recognize as having a particularly large impact is a decrease in product demand and profitability due to factors such as an increased carbon tax burden and regulation of the usage of plastic products.
Meanwhile, to prepare for major natural disasters, in addition to taking steps to minimize damage and ensure business continuity, we will work to realize a safe and secure society by presenting solutions that contribute to disaster prevention and mitigation.
Recommended Disclosures of TCFD
Strategy
a) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.
Related pages in KAITEKI Report
Business opportunities
Content of report
As set out in our new management policy, we will also devote resources to businesses that contribute to realizing carbon neutrality based on portfolio management with a focus on growth, performance, and sustainability.
We will progressively expand the business scale and strengthen the profitability of specific focus businesses that offer climate change-related business opportunities, including lighter mobility materials, vehicle-mounted battery materials, bioplastics, and carbon fiber and composite materials.
Impact on business scale and risks from perceived social issues
Content of report
･In fiscal 2022, the target year of Step 1 of the medium-term management plan APTSIS 25, we aim to raise to 12% the proportion of sales revenue from products that contribute to the circular economy or mitigate and adapt to climate change.
･We estimate risk associated with social issues and structural change in 2030 at around ¥1 trillion.
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New Management Policy, “Forging the future”
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Overview of Business Domains (Performance Products Domain)1
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Overview of Business Domains (Performance Products Domain)2
Recommended Disclosures of TCFD
strategy
b) Describe the impact of climate related risks and opportunities on the organization’s businesses, strategy, and financial planning.
Process of risk identification, evaluation, and management
Portfolio management
Content of report
As announced in the new management policy, MCG has designated carbon neutrality as a selection criterion for its focus businesses. Incorporating a carbon-neutral perspective, our portfolio management will focus on growth markets where we have a competitive advantage.
Risk management
Content of report
We will strive to avoid the occurrence of major risks and minimize losses when they occur under our risk management system.
In addition, we have begun studying the introduction of Enterprise Risk Management (ERM), which comprehensively manages risk relating to Group business activities that are linked to significant issues identified from the perspective of material issues, and promotes minimization of loss and appropriate risk acceptance from a Company-wide standpoint.
Recommended Disclosures of TCFD
Risk management
a）Describe the organization’s processes for identifying and assessing climate-related risks.
b）Describe the organization’s processes for managing climate-related risks.
c）Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management.
Related pages in KAITEKI Report
Metrics and targets
Metrics and targets to assess risks and opportunities
Content of report
The management indices (MOS Indices) set to measure progress with material issues include the GHG emissions reduction rate and the percentage of sales revenue from products that contribute to the circular economy or mitigate and adapt to climate change. We have also established medium-term targets and will measure progress year by year (“Strategy and risk management”). As indicated under Strategy, the GHG emissions reduction targets have been changed to targets for the realization of carbon neutrality.
Recommended Disclosures of TCFD
Metrics and Targets
a）Disclose the metrics used by the organization to assess climate related risks and opportunities in line with its strategy and risk management process.
c）Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.
Scope 1,2,3 GHG emissions
Content of report
Please see GHG emissions in “Non-Financial Highlights” for the performance in fiscal 2022. We have received independent assurance for GHG emissions, and are working to disclose highly reliable information.
Recommended Disclosures of TCFD
Metrics and Targets
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.
Related pages in KAITEKI Report
