DAIKEN

Initiatives for Climate change

Environment management

Basic Approach

Toward the realization of the Daiken Group Environment Policy, the Daiken Group has formulated the mediumterm ESG plan and raises the level of environmental activities in the entire group while improving the Environment Management System (EMS). To efficiently operate it integral with the Quality Management System (QMS), we promote and deploy activities as the Quality and Environment Management System (QEMS).

Structure to promote Environment Management

Initiatives toward the CO2 Emissions Reduction

As a response to the worldwide climate change risks, the Japanese government upholds the target of reducing greenhouse gas emissions by 26% (compared to fiscal 2014) by fiscal 2031 based on the Paris Agreement in fiscal 2016. To positively contribute to this target, our company positioned the reduction of CO2 emissions in our business activities as the highest priority issue, accelerated the target that we initially aimed to achieve in the final fiscal year (fiscal 2026) of the long-term vision GP25, and set the target to achieve it in fiscal 2022, which is the final fiscal year of the medium-term management plan GP25 2nd Stage. On the other hand, in the wake of the new reduction target set by the Japanese government in fiscal 2022, we will continuously promote the initiatives in the medium-term management plan for the next term in order for our company to aim for further contribution.

Utilization of Renewable Energy that is Linked to the Business Activities

Regarding MDF and the insulation boards that are the primary products in the industrial materials business, we use wood chips from offcuts and demolished houses as primary raw materials based on the idea of the pursuit of using timber as a material to the extent possible. Furthermore, we use wood chips, which cannot be used as product raw materials, as fuel for woody biomass boilers as the necessary heat source in the manufacturing process. Likewise in the building materials business that manufactures doors and flooring materials by processing wood materials, offcuts and wood powder generated in the manufacturing process are used as fuel. Our group puts effort into reducing CO2 emissions by using renewable energy linked to these business activities. Woody biomass boilers (13 units) have been introduced to 9 bases out of 12 production bases in Japan, such as the Okayama plant and the Takahagi plant, which are the primary plants for the industrial materials business. By striving for stable operation, we increase the renewable energy ratio to 50%, which leads to the reduction of CO2 emissions. In fiscal 2021, because of the impact of the decrease in production due to the COVID-19 pandemic mainly in the first half of the year, in addition to these initiatives, emissions decreased by 35% as compared to fiscal 2014 and we achieved the 26% reduction, which was the goal in fiscal 2022, a year ahead of schedule.

Scope 3 emissions

Greenhouse Gas (Scope 3) *Scope: Group consolidation in Japan FY2019 FY2020 FY2021
Emissions
(1,000 t-CO2
Percentage (%) Emissions
(1,000 t-CO2
Percentage (%) Emissions
(1,000 t-CO2
Percentage (%)
Category 1.
Purchased goods and services
763.6 65.2 794.9 65.6 720.1 66.0
Category 2.
Capital goods
19.7 1.7 12.4 1.0 9.9 0.9
Category 3.
Fuel and energy-related activities (not included in Scope 1 and 2)
8.6 0.7 16.8 1.4 15.3 1.4
Category 4.
Upstream transportation and distribution
117.3 10.0 130.3 10.8 119.6 11.0
Category 5.
Waste generated in operations
3.1 0.3 3.2 0.3 3.1 0.3
Category 6.
Business travels
0.3 0.0 0.3 0.0 0.3 0.0
Category 7.
Employee commuting
0.8 0.1 0.8 0.1 0.8 0.1
Category 8.
Upstream leased asset
- - - - - -
Category 9.
Downstream transportation and distribution
13.6 1.2 13.0 1.1 11.6 1.1
Category 10.
Processing of sold products
19.9 1.7 21.9 1.8 20.2 1.9
Category 11.
Use of sold products
41.1 3.5 36.7 3.0 28.6 2.6
Category 12.
End-of-life treatment of sold products
89.6 7.6 90.3 7.5 78.9 7.2
Category 13.
Leased asset (Downstream)
- - - - - -
Category 14.
Franchises
- - - - - -
Category 15.
Investments
- - - - - -
Scope 3 Total 1,077.7 92.0 1,120.6 92.5 1,008.5 92.4
Scope 1 (Direct emissions) 35.4 3.0 35.4 2.9 31.2 2.9
Scope 2 (Indirect emissions) 58.6 5.0 55.7 4.6 51.3 4.7
Total 1,171.7 100.0 1,211.8 100.0 1,091.0 100.0

* Regarding the emission factor for electricity use associated with the calculation of greenhouse gas emissions, the actual emission factor in the said fiscal year by electric power supplier is used. However, if the factor is not released, the most recent value is used.