Environmental Report

Approaches to the Environment

Global Warming Prevention

Kuraray Group in Japan has been making CO2 reduction activities such as increasing biomass fuel volume, using of waste plastic as a fuel, higher operating efficiency, installing of energy saving equipment and steady energy saving activities. In fiscal 2016, we implemented measures to reduce GHG emissions by 10,000 tons-CO2e and total GHG emissions of Kuraray Group in Japan were 1,303,000 tons-CO2e.

As a result, the “Environmental Efficiency” of Kuraray Group in Japan improved by 5% compared with fiscal 2010. However, this performance is behind the target of 24% improvement as of fiscal 2016 envisioned in the Medium-Term Plan. On the other hand, the energy consumption of overseas affiliates was 437,000 kL (crude oil equivalent) almost equal to fiscal 2015 in spite of launching new production site by their energy saving activities.

However, the "Environmental Efficiency" of the Overseas affiliates has been decreasing since 2014, and in fiscal 2016 it was below by 6.5% compared with the benchmark year of 2010.

This is because we have acquired the vinyl acetate business which produces raw material of Poval resin to change our business model from purchasing to self-manufacturing. For this reason, energy consumption increased. However the sales did not increase as much as energy consumption.

Actual GHG emissions and energy consumption in 2016 are as follows. follows.

Kuraray Group in Japan Total: 1,303,000 tons-CO2e
[FY2015 : 1,265,000 tons-CO2e]
Overseas Affiliates 437,000kL (crude oil equivalent)
[FY2015 : 443,000kL (crude oil equivalent)]

Power Generation by Biomass Fuel

At Kurashiki Plant of Kuraray in Japan, biomass fuel* (wood chippings from construction debris and other sources) has been used as a substitute fuel of coal and the consumption of biomass fuel has steadily been increasing. In fiscal 2016, about 50,000 tons of biomass fuel, roughly the same level as that in fiscal 2015, was consumed, contributing to a reduction of about 75,000 tons-CO2e in its emissions.

Kuraray Group will continue its activities to increase the ratio of biomass fuel consumption accounted for by the fuel in boiler.

  • *Biomass absorbs CO2 in the atmosphere as it grows and can be considered to emit no CO2 when the CO2 that is generated while biomass is burnt is subtracted from CO2 that is absorbed during its growth.

Trends in GHG Emissions at Kuraray Group

Trends in Energy Consumption at Overseas Affiliated Compamies

Reducing Environmental Load during Product Transportation

Kuraray is also reducing its environmental load in the distribution stage of delivering its products to the users, in addition to GHGs emitted by itself during the manufacture of products at its plants and other facilities. Kuraray is continuously active in the “modal shift” of changing transportation means from trucks to cargo trains, ships and other means. Since fiscal 2010, its emissions of GHGs and nitrogen oxides during product transportation have gradually been decreasing. In fiscal 2016, Kuraray emitted almost the same levels of GHGs and nitrogen oxides as those of fiscal 2015.

Emissions of Scope 3 GHG

The GHG Protocol* classifies GHG emissions into three categories, Scopes 1, 2 and 3.

  • Scope 1; Direct emissions GHG emissions generated by fuel combustion at the plants and other facilities of own company
  • Scope 2; Indirect emissions GHG emissions generated by the use of purchased energy such as electricity, heat, and steam supplied by other companies
  • Scope 3; Other indirect emissions GHG emissions generated by other companies related to activities of their own company except Scope 1 and 2

Mandated under the law by which businesses voluntarily calculate and report Scope 1 and Scope 2 to the government, we have been reporting these to the government and publishing the results in our CSR Report and elsewhere.

On the other hand, Scope 3 means the GHG emissions based on the entire supply chain related to Kuraray. We can understand how the indirect GHG emissions are generated from the viewpoint of life cycle such as raw material procurement, product distribution, product use and disposal as well as the direct emissions related to Kuraray’s business activities. Kuraray started Scope 3 calculations in fiscal 2013.

Among the 15 categories in total of Scope 3, we calculated 5 categories (① ~ ⑤) that is available in 2016. We will also continue quantitatively to evaluate the CO2 reduction related to carbon life cycle of Kuraray Group products.

  • *GHG Protocol (Greenhouse Gas Protocol) is an initiative scheme to develop international standards and related tools on greenhouse gases and climate change led by the World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD) and participated by corporations, NGOs, government institutions and other organizations throughout the world.

Image of Control on Emissions of Greenhouse Gases in Entire Scope 3 Supply Chain(① to ⑮ show categories of Scope 3)

Topics 2016

Review of the Medium-Term Environmental Plan

Kuraray Group has been taken up the review of the Medium- Term Environmental Plan (see page 16) as an issue since 2014 when the business environment of Kuraray Group greatly changed due to large scale of M& in overseas and increase in production. We have been working on the issue to revise the plan during the period of GS-STEP (Kuraray’s Medium-Term Management Plan) from fiscal 2015 to fiscal 2017.

“Environmental Efficiency” as an evaluation index for environmental conservation activities, was defined as “sales/ environmental load” to enable us to evaluate “how business activities were conducted with a small environmental load.” Nevertheless, the business situations of Kuraray Group have unexpectedly changed compared with the time when the plan was mapped out. This was because we acquired vinyl acetate business and food packaging film business which resulted in the drastic increase in energy consumption and the increase in the selfmanufacturing ratio of raw material of Poval resin.

As a result, the achievement of environmental improvement activities in the workplaces no longer accurately reflected through the current plan starting in 2010 as the base year.

In fiscal 2016, therefore, we discussed this issue in CSR Committee and other conferences. Through the discussion, we organized our basic concepts about the review of the Medium- Term Environmental Plan. In terms of the evaluation index, we have been aiming to find out the new one and have made some case studies by referring to the actual companies examples of inside and outside of Japan. New index will have the benefits which should not be easily affected by the changes of business environment and the achievement of environmental improvement activities in the workplaces will be appropriately reflected.

We will map out the revised plan within fiscal 2017 and will start to operate together with the next Medium-term Management Plan from fiscal 2018.