Tanaka: Before we started working on decarbonization, we had been working on environmental measures since the 1990s. The trigger was the Wakayama City Discharge Water Color Regulation Ordinance, which was enacted in 1991 and whose regulatory standards came into effect in 1994, making it rare nationwide. To comply with the ordinance, as a dye manufacturer, we have always treated wastewater with our own proprietary technology and maintained strict standards. This ordinance is also known as the "color removal ordinance," and requires treatment until the wastewater is nearly colorless and transparent, so we decolorize the colored wastewater generated in the Manufacturing process. At the time, each company responded by making capital investments at the level of their operating profits.

One of the reasons we started working on decarbonization is the growing awareness of environmental issues in society as a whole. There is a growing sense of value that addressing environmental issues is a good thing, and I feel that the times are changing. In the past, when ordinances were enacted, to put it bluntly, we were "forced" to do something. However, times have changed, and more importance is being placed on balancing the economy and the environment. I feel a strong change in values ​​regarding sustainability, especially among young people.

Tanaka: When my grandfather founded our company in 1920, the Spanish flu was widespread. 100 years later, in 2020, the COVID-19 pandemic struck. Looking ahead to the next 100 years, we decided that we had to build a good Company, and have begun various initiatives. One of these was to revamp Company website during the COVID-19 pandemic, and begin disclosing detailed information such as CO2 emission amount. With support from Zeroboard, we are now calculating up to Scope 3.

Koshigaya: We have been calculating Scope 1 and 2 on our own, but Scope 3 is difficult, so we are working with Zeroboard. We have been keeping track of Energy usage since October 1977.

We have formed a company-wide team with representatives from each department, and are examining how to reduce CO2 emission amount while looking at data calculated using " Zeroboard ." Our calculations revealed that heavy oil and electricity account for a large proportion of Scope 1 and 2 emissions. Within Scope 3, CO2 contained in Category 1 raw materials accounts for a large proportion. For a chemical Company, changing the raw materials themselves is an extremely difficult task. However, there are efforts we can make. For example, we are considering selecting raw materials with lower CO2 emission amount during development, and sourcing from nearby locations to reduce CO2 emission amount during transportation. Using "Zeroboard" has allowed us to grasp detailed figures, enabling us to take concrete measures.

Tanaka: Like many small and medium-sized enterprises, we do not have the in-house specialists to advance decarbonization efforts. That's why we ask Zeroboard for specialized support. When undertaking a new initiative, we of course need to study ourselves, but if we just go ahead with it, productivity will be low. We rely on the guidance and support of experts, as this is essential.

Tanaka: We see decarbonization as one of the social Issue that we must address in order to become a good Company . A company is a public institution for society. In other words, it is public interest capitalism. For a company to survive, it needs to contribute to society, have credibility, technology, respect for people, and be timeless. And a company is its people. These are the foundations of management.

Companies must respond to social Issue and needs that change with the times. In today's world, as a public institution, businesses must balance solving social Issue, including environmental problems, with business and economic success. We want to solve social Issue through our business and realize the happiness of our employees and their families. To achieve this, we have set a medium-term vision for 2030 and are taking on the challenge of change. To achieve this, we ourselves must change with the times while preserving what is important.

Decarbonization will incur additional costs, but that is a separate issue from whether or not we tackle social Issue. We believe that companies will lose their value if they do not contribute to society, so it is not a matter of whether they can do it or not, but something that they must do. There is no logic to it. Therefore, we must create value ourselves so that we can absorb the costs. This means increasing labor productivity per person and creating a structure that can absorb costs.

Tanaka: The business environment is changing rapidly, and we were strongly aware that we couldn't continue doing things the way we had been doing them, and this became even more apparent with the COVID-19 pandemic. The first thing we did was to develop our human resources. We revised our personnel and human resource development systems to ensure that our work meets the demands of society going forward. We also revamped our website and worked on a BCP (business continuity plan), and then we formulated our vision and medium-term management plan. We are working to create a "good Company" under our long-term vision of becoming a "200-year-old company" and our medium-term management plan extending to 2030.

We had our executives participate in formulating the vision and identified Issue to be addressed to realize it. We used backcasting to create business strategies, personnel strategies, and environmental (functional) strategies. For example, these range from factory reorganization and optimization to DX and GX. We have clarified Issue based on the strategies and are working to resolve Issue over the 8 year mid-term plan, while also taking into account our performance targets.

Tanaka: Until now, we have acquired ISO 9001 certification and have been implementing it in our business operations. Furthermore, in order to address environmental issues, we plan to acquire 14001 certification in February 2024, and are working to evolve our environmental management system into an effective one. We are using "Zeroboard" to grasp the current situation and are thoroughly promoting energy conservation by replacing equipment, improving manufacturing methods and processes, and introducing solar power generation.

Koshigaya: We are currently converting fluorescent lights used in factories and other facilities to LEDs. We plan to increase the LED conversion rate from the current 15 % to 60% in three years. We also have some old equipment, so we are replacing it with more Energy efficient equipment, starting with the ones that emission amount the most CO2 and are used the most.

Tanaka: Promoting decarbonization has a ripple effect. For example, if we promote the use of LED lighting in factories, we can reduce power consumption while making them brighter, which also has the effect of making them age-friendly (ensuring the safety and health of older workers). As we promote capital investment while incorporating decarbonization elements, we are thinking about not just talking about costs, but also about having a ripple effect on improving productivity and added value. GX, DX, and innovation are all connected.

We are also participating in Wakayama Prefecture's "Corporate Forest" project. We are activity to protect Wakayama's abundant forest resources while promoting interaction with the local community and contributing to the development of the region. We have named a part of the forest in Ryujin Village, Tanabe City, Wakayama Prefecture, "NIPPON CHEMICAL WORKS CO.,LTD. Forest," and are engaged in forest conservation activity such as planting trees, mowing, and thinning. This was also started as a way to fulfill our corporate social responsibility, and the idea is that it will ultimately help prevent disasters and contribute to the absorption of CO2.

The Corporate Forest activity and decarbonization efforts were both initiated by me. However, we need to get our employees involved and move forward as one heart, one team. I want to clarify the Company's position and the direction it is heading in through purposeful management, and make it a Company where everyone can face the right direction and voluntarily do what they want to do.

Koshigaya: Purpose-based management has changed our structure, assigning goals to each employee and shifting to a system where everyone works together to accomplish the business. Through our decarbonization efforts, more people are acting with a sense of purpose, and I feel that this has taken root as part of our organizational culture.

The "Corporate Forest" signing ceremony in June 2023

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