Countermeasures against Climate Change

Thoughts on Climate Change

Climate change has become an issue of concern for all of humanity, and is an issue no one can escape. The Group considers climate change to be one of its most important management issues, and following internal discussions and interviews with experts from various fields, has declared that the entire Group shall work to address this issue. In November 2021, we announced new Materiality that serves as the core of our activities and it includes “Realizing decarbonization” and “Enhancement of achieving resource and economic circulation” as initiatives to address climate change.

In November 2021, we announced our support for the TCFD. Along with climate change initiatives, we will promote information disclosure based on the TCFD, and also analyze scenarios, identify risks and opportunities, and disclose information. In promoting these initiatives, we are examining the impact of climate change on the market environment in which the company operates, as well as regional characteristics around the world, through industry-academia collaboration with Kyoto University.

In our scenario analysis, we assume changes in the market environment while considering impacts in the climate change countermeasure scenario (1.5°C rise) and the Business-as-Usual scenario (4°C rise). Based on these assumptions, we are reassessing risks and opportunities in each business unit.

Kansai Paint Climate Change Measures 2030 “KPCCM2030”

Last year, the Group selected four Materialities, and also reconfirmed and announced it would work on these four issues with Group companies. These four Materialities include (1) Realizing decarbonization, and (3) Enhancement of achieving resource and economic circulation, both of which are important issues directly linked to the environment. Until now, each Group company and organization has individually worked on environmental issues that are also important for stakeholders.Furthermore, in order to promote these activities effectively, we will strengthen Group-wide efforts.

Specifically, we will take the following three steps: (1) We will visualize major indexes related to environmental load, as well as various information related to sustainability activities and measures for Materialities with reference to GRI standards and CDP environmental information disclosure items; (2) We will set and manage Group-wide targets and KPIs in order to deal with Materialities, including environmental issues; (3) We will make a specific action plan to achieve each target, manage progress, and disclose information.

We will materialize and announce these activities as soon as possible in the 17th Medium-term Management Plan.

Flow of Climate Change Measures

Items and Targets under Consideration for KPCCM2030

			FY2030 Targets (Draft)	FY2021 Results Head Office Results	Scope of Application
					Head Office	Group Companies
					Head Office	Japan	Overseas
Initiatives for Materialities	Realizing decarbonization	Energy consumption	20% reduction (from 2021)	769,919 GJ	✔	（✔）	（✔）
		Renewable energy ratio	15% or more of energy usage rate	More than 1%	✔	（✔）	（✔）
		GHG emissions (Scopes 1 and 2)	30% reduction (from 2021)	39,053 t-CO2	✔	（✔）	（✔）
		GHG emissions (unit of production)	Under consideration	329 kg-CO2/kg	✔	（✔）	（✔）
	Improvement of QOL	Deployment of sustainability products	30% or more of target product rate	Under consideration	✔	（✔）	（✔）
	Enhancement of achieving resource and economic circulation	Water usage (water intake)	20% reduction (from 2021)	5.4 x 105m3	✔	（✔）	（✔）
		Amount of waste	30% reduction (from 2021)	15,611 t	✔	（✔）	（✔）
		Usage rate of recycled containers	50% or more	Under consideration	✔	（✔）	（✔）
Reduction of environmental load		Ozone-depleting substances	Not handled	Not handled	✔
		Atmospheric emissions of nitrogen oxides (NOx)	Under consideration	1,899kg	✔
		Atmospheric emissions of sulfur oxides (SOx)	Under consideration	4,124kg	✔
		COD emissions	Below 2016 results	0.89t	✔
		Soot and dust emissions	Below 2016 results	21.9kg	✔
		Amount of lead (Pb) in products sold*1	Continuation of complete prohibition	Continuation of prohibition of use	✔
		Amount of hexavalent chromium in products sold*2	Under consideration	Under investigation	✔
		Amount of T, X, EB3 in products sold4	Under consideration	Under investigation	✔
		Reduction of nonylphenols*5 in products sold	Under consideration	Under investigation	✔

　✔　Already applied, confirmed, and managed in past activities
（✔）Application under consideration. Consider setting KPIs such as monitoring and reduction in the future.

Notes:

1. Amount of lead (Pb): Amount of elemental lead content
2. Amount of hexavalent chromium (Cr VI): Amount of elemental hexavalent chromium content
3. Finished products: Includes thinners sold
4. “T, X, and EB”: Abbreviations for “toluene, xylene, and ethylbenzene”
5. Nonylphenols: Poly (oxyethylene) octylphenyl ether, Poly (oxyethylene) nonylphenyl ether

Countermeasures against Climate Change

Green Energy Plan

In November 2021, we announced our aim to achieve carbon neutrality by 2050. This is in line with society's calls for a major transformation of social infrastructure. As a responsible member of society, we will also undertake concrete measures to achieve this.

One of these measures is the Green Energy Plan. We will review the efficiency of energy used in the company, and work to reduce our energy consumption, as well as reconsidering our energy sources and shifting to those with lower GHG emissions. In Scope 1, when upgrading facilities we will change the types of fuel used. We will eliminate equipment that uses fuel oil such as heating oil and heavy oil. While we cannot stop the use of gas, which is relatively efficient as a high-grade heat source, we will explore alternative fuels. We will replace Scope 2 power supplies with high-efficiency equipment, and promote ZEB and the ZEB Ready standard at relatively small-scale color matching centers and sales offices.

Targets for Reducing Energy Consumption and CO2Emissions

In order to achieve carbon neutrality by 2050, it is necessary to (1) reduce energy consumption, (2) switch to energy sources that can reduce CO2 emissions (Green Energy Plan), and (3) introduce carbon fixation.Set targets to achieve by 2030 and work toward them as a Group.

Reduce energy consumption by 20% (from the FY2021 level)

Reduce CO2 emissions by 30% (from the FY2021 level)

* GHGs other than CO2 are not handled in the Group’s business activities.