Sustainability

Climate Change Initiatives

The Teijin Group has announced its support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Toward climate change mitigation and adaptation, we will contribute to the transition to a carbon-free society by utilizing our technologies for reducing weight and increasing efficiency and make efforts to reduce greenhouse-gas emissions in our business activities.

Governance

Under our corporate governance system, policies and plans relating to the Teijin Group’s initiatives to tackle climate change are deliberated and reported in the Board of Directors, and the Board of Directors monitor progress. In the Medium-Term Management Plan 2020–22, we view “climate change mitigation and adaptation” as one of material issues for us, and it has been adopted as such by the Board of Directors. Executive functions on climate change are under the control of the Chief Social Responsibility Officer (CSRO), and the direction, planning, and progress of relevant efforts are deliberated by the organizations mentioned on the right. The Board of Directors provides instruction on these efforts.

  • Deliberations on basic plans and reports of their progress take place at the Total Risk Management (TRM) Committee. The details of these discussions are then reported to the Board of Directors (twice a year).
  • Reports on executive functions are provided to the Board of Directors by the CSRO (once a year).

Strategy

Risks and opportunities related to climate change

Toward the realization of a sustainable society, the Teijin Group is striving to contribute to climate change mitigation through the supply of “Environmental value solutions” utilizing our technologies for reducing weight and increasing efficiency that we have fostered so far and to climate change adaptation through the supply of “Safety, security, and disaster mitigation solutions” that will be useful in reducing and promptly restoring from the damage by natural disasters.

In addition, since the Teijin Group engages in wide-ranging business globally, we recognize that our business activities do place a considerable burden on the global environment. Premising our approach on the ensuring of safety, we endeavor to reduce this environmental load with the aim of achieving the sustainable growth of both society and the company.

During the formulation of the Medium-Term Management Plan 2020–22, we analyzed the opportunities and risks relating to the Sustainable Development Goals (SDGs) backcasting from the desired image in 2030. We analyzed the impact of climate change risks on our business from the following three perspectives. We also identified the opportunities of climate change for each of our businesses and incorporated them into business strategies. Accordingly, the Medium-Term Management Plan 2020-22 sets the distribution of resources (capital investment, investments and loans) to “Environmental value solutions” and “Safety, security, and disaster mitigation solutions” with the aim of expanding the business. It also sets long-term environmental targets as we tackle the reduction of CO2 emissions. We are considering the introduction of internal carbon pricing to achieve this goal.

Risks
  • Physical risks (typhoons, floods, etc.)
  • Transitional risks (carbon tax, EU emissions trading system, etc.)
  • Group CO2 emissions
Opportunities
  • Providing solutions that contribute to “climate change mitigation and adaptation”

Scenario analysis related to climate-change

Regarding trends in the aviation industry and the automobile industry, which are the customers of our carbon fiber and composites businesses and could be significantly impacted by climate change, we carried out an analysis of the 2℃ and 4℃ scenarios in FY2019. The results of the analysis showed that in the 2℃ scenario, although there was a drop in demand compared with the 4℃ scenario in the aviation industry, the impact on business strategy and earnings was slight since the use of lightweight materials can be assumed to be increased. Also, in the automobile industry, in the 2℃ scenario, while the demand for electric vehicles and the need for lighter weight increased, the rising trend of car sharing limited the increase in car sales. In the 4℃ scenario, while there was a rise in the number of car sales, the need for lighter weight was limited, and the positive and negative impacts on demand cancelled each other out. In both scenarios, it was confirmed that the impact of the difference on demand was either slight or fifty-fifty, so there would be no serious impact on business strategy or earnings. We will keep a close eye on trends and consider the appropriate timing of investments and resource distribution.

Risk Management

Groupwide management methods for climate change risks

The Teijin Group has in place a Total Risk Management (TRM) system targeting both strategic and operational risks, as a preventative measure against the uncertainty that the Company may face.

Physical risks and transitional risks due to climate change are managed within our TRM framework and analyzed along with other risks through TRM risk assessment. In this way, we identify important risks. In addition to formulating BCPs to respond to physical risks, we are monitoring the status of CO2 emissions both in Japan and overseas, including at affiliated companies.

Risk management structure

  1. 1.Each business implements risk management in accordance with the frontline operations.
  2. 2.CSRO confirms and makes instructions on the risk management status of each business at the CSR Committee and the CSRO review.
  3. 3.CSRO reports and makes proposals related to Groupwide risk management at the TRM Committee, followed by discussions and instructions.
  4. 4.CSRO reports the contents of discussions at the TRM Committee to the Board of Directors. The Board of Directors deliberates on basic TRM plans.

Indicators

Avoided CO2 emissions

The Teijin Group aims to reduce CO2 emissions throughout the entire supply chain by using its long-cultivated technologies for reducing weight and increasing efficiency. Also, we calculate the impact of using our products on reducing CO2 emissions in the downstream supply chain as “avoided emissions.” By fiscal 2030, we aim to make the amount of our avoided emissions larger than our total emissions, which comprise our Groupwide CO2 emissions and CO2 emissions from the upstream supply chain (Scopes 1 and 2 and upstream Scope 3).

The Group’s targets

Achieve goal of making the amount of avoided CO2 emissions larger than total CO2 emissions by fiscal 2030

Group CO2 emissions

In FY2019 we updated our target for the reduction of emissions, which until then was a target for FY2020. In the new target, we aim to reduce our greenhouse gas emissions by 20% compared to the FY2018 level by FY2030 and to achieve net zero emissions by FY2050.

The Group’s targets (KPI)

FY2030: 20% reduction (vs. 1.48 million tons-CO2 in FY2018)
FY2050: Net zero emissions

Efforts to Reduce CO2 Emissions

Avoided CO2 emissions

We are contributing to the realization of a carbon-free society by utilizing our technologies for reducing weight and increasing efficiency, and so on that we have fostered so far. In FY2019 our avoided emissions amounted to 3.3 million t-CO2 against total CO2 emissions of 4.4 million t-CO2.

Group CO2 emissions

Due to the transfer of the film business, the CO2 emissions of the Teijin Group in FY2019 amounted to 1.43 million t-CO2, a decline of 3% from FY2018.

Emissions in Japan are down by 77% from the FY1990 level, so we have achieved our target of achieving a decline of 20% or more (compared with the FY1990 level) by FY2020. The average annual rate of decline in the Group from the base year of FY2011 is 4.6%, so we have also achieved our target of making an annual improvement of 1% or more (compared with the base year of FY2011) by FY2020.

Toward the realization of a carbon-free society, we are working to abolish all in-house power facilities that use coal-fired thermal power as early as possible and gradually replace our current source of electricity with renewable energy sources. By doing so, we are working to decouple our business growth with greenhouse gas emissions.

Trends in Group CO2 Emissions

  • * Includes CO2, methane, and N2O. CO2 emissions are calculated according to the coefficients specified in the Law Concerning the Promotion of the Measures to Cope with Global Warming. (Adjusted emissions coefficients of individual electric power companies are used for power purchased in Japan, and the latest available IEA country-specific emissions coefficients are used for power purchased in other countries.) However, for power purchased overseas, where known, power company-specific emissions coefficients are used for the calculations. We deduct an amount of CO2 emissions equivalent to the amount of energy sold to other companies.

Reducing CO2 emissions associated with use of company vehicles

In Japan, the Teijin Group set independent numerical reduction targets by business site for CO2 emissions associated with the use of company vehicles. Common measures include updating vehicles used for sales activities to eco-cars and recommending fuel-efficient driving. These measures have achieved a reduction in CO2 emissions per distance traveled.

As a result, total CO2 emissions related to the use of company vehicles in FY2019 were 6,408 tons (5% reduction compared to FY2018).

Reducing CO2 emissions in logistics

In FY2019 CO2 emissions in logistics amounted to 7,079 tons, down 1,568 tons from FY2018.

Against the backdrop of decreased demand for industrial materials and automobiles in FY2019, the overall volume of freight transportation declined (down by 274,000 t-km/year). The main reasons were a fall in demand for resin, high-performance fiber, etc. and, as part of our portfolio transformation, the transfer of our film business subsidiary to Toyobo Co., Ltd. in October 2019.

As an ongoing measure to reduce the environmental load, in FY2019 we also improved our truck loading rate and implemented a modal shift (utilizing Japan Railway transportation and shipping). For example, the Carbon Fiber Business Unit for the first time shifted from trucks to rail transportation (Mishima Station – Matsuyama Station), and, in the Fibers & Products Converting Business Group, we attempted to improve loading rates by means of combined transportation.

As a result of the implementation of these measures and business reforms, CO2 emissions have decreased. In the entire Group’s logistics, CO2 emissions per unit of transportation dropped by 3.8% compared with FY2018. The standard basic unit per 1,000 t-km (tons-CO2/1,000 t-km) was 1.054 (against 1 in FY2011).
In FY2020 we will continue our efforts to lower emissions per unit by increasing vehicle size (expanding bulk transportation), improving the truck loading rate, and promoting a modal shift.

  • *Until FY2013, the scope for calculating CO2 emitted by logistics comprised Teijin Limited (excluding the aramid fiber business), Teijin Film Solutions Ltd., and the former Teijin Fiber Co., Ltd.’s apparel business that was consolidated with Teijin Frontier Co., Ltd.
  • *From FY2014, Teijin Limited’s aramid fiber business, Teijin Pharma Limited, and Toho Tenax Co., Ltd. were added to the scope.
  • *From FY2015, Teijin Cordley Limited has been included in the scope, with the further addition of Teijin Engineering Ltd. in FY2017 and Teijin Limited’s healthcare new business division in FY2018.
  • *Also, in FY2017, the manufacturing division of former Teijin Fiber was transferred and integrated into Teijin Frontier. In FY2018, the former Toho Tenax was transferred and integrated into Teijin Limited.
  • *The maximum load and fuel consumption per ton-kilometer of certain vehicles were revised in FY2014.
  • *The FY2019 record of Teijin Film Solutions Ltd. reflects its performance until September 2019.

Efforts to reduce CO2 emissions from offices

We are taking measures to improve the efficiency of energy use at Teijin Limited, group company head offices, sales branches and other business sites. A particular measure in summer/winter, besides encouraging suitable operation of office air-conditioning, is the Teijin Cool Biz/Warm Biz initiative, which encourages clothing appropriate for the season (dress code) to facilitate less power consumption and comfortable office environments.

In FY2019, the total CO2 emitted was 5,459 tons (a 2% reduction compared to FY2018) due to energy-saving measures implemented at our business sites.