Responding to the Task Force on Climate-Related Financial Disclosures (TCFD) | Sustainability

Addressing global environmental issues, such as the transition to carbon neutrality, is a high priority for the Ube Group, and our medium-term management plan “UBE Vision 2030 Transformation ~1st stage~” addresses growth in specialty chemicals and helping to solve global environmental problems as a singular issue. We regard this issue as the most crucial of its kind with regard to securing continuous Group growth and increasing our corporate value. Resolving problems pertaining to global environmental issues is a chance for us, a corporate group working with specialty chemicals, to aim for continuous global growth.

1. Governance Structure

The UBE Group established the Global Environmental Issues Committee to identify and act on problems related to global environmental issues. The President and CEO chairs the Strategic Management Meeting (Sustainability Committee), which receives deliberation reports from the Global Environmental Issues Committee, deliberates on action plans and important issues, supervises relevant efforts, provides instructions, and constantly monitors progress on countermeasures. Reports on important matters go to the Board of Directors regularly, which the Board of Directors uses to provide appropriate oversight.

2. Strategy

In view of efforts to tackle climate change and transition to a low-carbon, decarbonized economy, management assessed a range of scenarios for 2030 and beyond, analyzed risks and opportunities for the UBE Group under each scenario, and formulated the required strategies. The scenarios covered all business units, including the Construction Materials Company, although the assessment below excludes information relating to that entity.

We explored and developed 2ºC and 4ºC transition scenarios as well as a physical risk scenario and analyzed Group risks and opportunities in each scenario. Our findings showed that while impacts are unavoidable in various scenarios if risks materialize as predicted, we were able to verify the potential for continued improvement in corporate value if we take advantage of opportunities that we expect to arise simultaneously with such materialization.

Scenario Analysis Assessment Steps

Evaluate business unit performances under each scenario, including forecasts for private power generation
Analyze UBE Group prospects based on findings for each scenario
Develop a long-term resilience strategy for 2030 in preparation for 2050

Findings from the aforementioned scenario analysis with heavy financial impacts in the vicinity of 2030 are as follows.

Findings from Scenario Analysis

In addition, we will begin to operate a Green Transformation Emission Trading Scheme (GX-ETS) in fiscal 2026, and in fiscal 2028 we plan to introduce carbon tax credits. We predict that these initiatives may drive up costs around ¥2 billion.

3. Risk Management

The Ube Group’s responses to climate change have been registered and managed under a risk management system that monitors the unitary management of risk information and the status of countermeasures taken. Risks registered in the system are classified as operational, major, medium, and minor in line with their risk impacts. Operational and major risks are deliberated upon in Strategic Management Meetings, and are reflected in specific strategies and measures.

Regarding climate change countermeasures, content deliberated upon in Strategic Management Meetings (Sustainability Committee) related to global environmental issues is regularly reported to the Board of Directors, which conducts appropriate monitoring. In this way, risks related to climate change across the entire Group are identified and classified, enabling the Environmental Issues Committee, which is a Companywide entity chaired by the executive officer in charge of the Sustainability Department, to formulate and implement countermeasures and initiative policies.

4. Metrics and Targets

The Ube Group has designated targets for fiscal 2030 regarding initiatives addressing global environmental issues as follows.

GHG emissions:	50% reduction (compared to fiscal 2013)
Total range:	Main business locations of consolidated subsidiaries (Scope 1&2)
Consolidated percentage of net sales comprising environmentally friendly products and technologies:	At least 60%

While we research the possibility of stopping domestic ammonium production by 2030, the Ube Group plans to shift our business toward specialty chemicals, which we predict will allow us to meet the aforementioned GHG emission reduction targets.

Furthermore, GHG emissions in fiscal 2023 totaled 3.50 million tons due to such initiatives as the adoption of energy saving activities. This figure’s total excludes cement-related operations transferred to Mitsubishi UBE Cement, which when compared similar data from fiscal 2013 shows a 26% reduction in GHG emissions. In addition, the percentage of consolidated net sales accounted for by environmentally friendly products and technologies for fiscal 2023 was 47%.