Environmental 1. Addressing Global Climate Change (Carbon Neutrality)

Roadmap for Carbon Neutrality

GHG emission reduction targets

While continually promoting thorough energy efficiency and reforms to production processes, we also promote maximal use of renewable energies and minimal use of fossil fuels. Furthermore, because the development of revolutionary technology is indispensable to achieving carbon neutrality by 2050, we are tackling this issue from a medium- to long-term viewpoint and transitioning to non-fossil fuels, including via external collaboration, while further researching, developing and adopting technologies that utilize CO₂.

• *Top Runner Program: A system based on the Act on the Rational Use of Energy where machines and equipment showing the highest performance in efficient energy consumption are selected as Top Runners by the Ministry of Economy, Trade and Industry.

The UBE Group has formulated guidelines based on the revised ISO 14001:2015, and has defined environmentally friendly products and technologies.

Reforming business structure

The shift to specialty products, which have a relatively low energy burden, will help reduce the Group’s GHG emissions by minimizing the use of fossil resources, and will also facilitate the development of a resilient business structure that is not greatly influenced by market conditions for raw materials and fuel. The UBE Group aims to create a business structure with a low environmental impact focused on specialty products to drive profitability and growth potential, while creating high added value for basic chemicals and carrying out business structure reforms.

Domestic ammonium production, which utilizes a process that generates a high volume of GHG emissions, was to be halted by 2030, but we are investigating whether this plan can be accelerated. In addition, we reduced the domestic production of caprolactam by 40% in May 2024, as this operation has a high energy burden which causes difficulty in formulating a medium- to long-term outlook regarding improvement in profitability.

Through these reforms to business structures, we believe we will achieve our goal of halving GHG emissions by FY2030.

Fiscal 2023 Initiatives

Receiving SBT^*1Certification

In November 2023, we received an acknowledgement that our fiscal 2030 GHG emission reduction targets across the entire UBE Group supply chain were aligned with the standards and recommendations of the certification organization SBT initiative (hereinafter SBTi).^*2 In particular, the UBE Group’s GHG emission reduction targets for Scope 1 and 2 emissions were recognized as conforming with initiatives to limit the temperature increase to 1.5°C above pre-industrial levels.

Summary of Targets

Targets related to reducing corporate GHG emissions are evaluated in accordance with SBTi’s quantitative and qualitative standards as well as target inspection protocols, and are certified when satisfying all applicable requirements. A summary of two such items that were certified in this evaluation follow.

The range of reductions in Scope 3 covers emissions associated with purchased goods and services, end-of-life treatment of sold products, and investments (which are proportional to Scope 1 and 2 emissions attributable to equity method affiliates, etc., and accounted for by equity stakes)

• *1Science-Based Targets (SBT): GHG emission reduction targets set by companies in accordance with levels requested in the Paris Agreement.
• *2Science-Based Targets Initiative (SBTi): An international organization that urges corporations to set ambitious emission reduction targets based on cutting-edge climate science, with the goal of accelerating corporate initiatives to halve emissions by 2030 and achieve net zero emissions by 2050.
• *3Scope1: Emissions generated directly by a business (burning fuel, factory processes)
  Scope2: Indirect emissions generated through the use of electricity, heat and steam provided by other organizations
  Scope3: Covers all emissions throughout a business’s supply chain, including those from its upstream and downstream constituents, other than the emissions generated by the business itself

Participating in GX League and GX-ETS

UBE has participated in the GX League and the GX-ETS (Emission Trading Scheme) since April 2023, and submitted our three-year plan for fiscal 2023-2025 as well as our fiscal 2030 GHG emission reduction targets in September of the same year.

A framework that pushes ahead with movement toward carbon neutrality to promote GX,* the GX League was established based on the GX Basic Concept devised by the Ministry of Economy, Trade and Industry.* GX-ETS is an emission transaction system within the GX League, and, while it is being managed as an independent transaction marketplace in Phase 1 (fiscal 2023-2025), discussions are taking place with an eye to full-scale operation in fiscal 2026 or later. The UBE Group strives to disclose information and reduce GHG emissions through GX-ETS activities.

• *Green transformation (GX): Activities that aim to reform and realize the use of green energy while minimizing the use of fossil fuels

Deploying a System for Calculating Product GHG Emissions Data

UBE and NTT DATA Japan Corporation have jointly created a system to calculate product GHG emissions. In January 2023, we began providing data from that system to customers. This information makes it easier for customers to assess GHG emissions across their supply and value chains and helps them efficiently implement measures to reduce overall emissions.

We are using this system to make calculations for products produced at the Ube Chemical Factory, the Sakai Factory and the Ube Elastomer Chiba Factory.

Releasing the “U-BE-INFINITY™” Environmentally Friendly Product Brand

In April 2024, UBE launched “U-BE-INFINITY™,” an environmentally friendly product brand. UBE Group products and technologies designed to contribute to the environment that are deemed to have outstanding environmental performance are granted this brand, with the goal of enhancing their added value.

The brand name is intended to express our aspiration to realize infinite social development together with our stakeholders. In addition, the brand’s logo uses diverse colors to represent our determination to never be content with the status quo and continuously evolve in order to help resolve global environmental issues.

The “U-BE-INFINITY™” brand is thus aimed at recognizing products and technologies capable of contributing to carbon neutrality by reducing GHG emissions as well as those which are made using reused and biomass materials to help save resources or make recycling them easier. With the first two items chosen to bear the brand name from among our newly developed products, we plan to release various products and technologies under this brand going forward.

Furthermore, we have set up a specialized site for U-BE-INFINITY™.

• U-BE-INFINITY™

Engagement with Primary Suppliers

In May 2023, we conducted a survey related to initiatives addressing global environmental problems as our first step toward engagement with each of our main primary suppliers of important resources. The results of this survey helped us better understand the present condition of initiatives among our primary suppliers while pinpointing future issues. UBE will continue to improve cooperation with our primary suppliers through such activities as well as to strive to contribute to solving global environmental issues across the entire supply chain.