Mr. Tanaka: Our company is a research and development company that supports global manufacturing with its technology in the fields of surface treatment, inorganic materials, and food. For over 20 years, we have been working on environmental measures in each department, such as reducing hazardous substances in the surface treatment department and reducing food waste in the food department. In particular, in recent years, there has been an increasing demand for environmentally friendly products in the surface treatment industry as a whole.

Many of our customers in the surface treatment sector are involved in automobiles and electronic components, and there is an increasing demand for disclosure of GHG emission amount related to decarbonization. As a BtoB supplier, we also felt the need to respond and began initiatives with a focus on decarbonization.

Our business partners have asked us to calculate the CO2 emission amount(CFP) for each product, but we have not yet been able to provide a satisfactory answer. We have been able to provide answers for Scope 1 and 2, and are currently working on calculating Scope 3, which accounts for 9% of the total. It is not to the point where we would cease doing business with them if we do not fully disclose their CFP (carbon footprint), but we felt that we needed to take immediate action, which is what prompted us to do this.

Ozaki: Nagase & Co., Ltd., a company with which we have a close business relationship, established a Sustainability Promotion Office in 2022 and came to explain the plan to us. I was invited to attend the first "Environment and Sustainability Consortium," a sustainability-related study group hosted by Nagase & Co., Ltd., and was very inspired when I attended. Although they are listed companies, the group was made up of small Company and small- and medium-sized chemical manufacturers, and some of them were more advanced in decarbonization measures than we are.

Nagase & Co., Ltd. introduced us to the Zeroboard while continuously providing information on decarbonization. In addition to being recommended by the trustworthy Nagase & Co., Ltd., we also learned that Zeroboard is a leading company in GHG emission amount visualization Service and is participating in demonstrations and rule formation by the Ministry of Economy, Trade and Industry, so we started working with confidence. I was able to.

Mr. Ozaki: We started our environmental initiatives about 20 years ago. For example, we are working to reduce waste that places a burden on the environment. The electroless nickel plating solution used in plating, one of our main products, is usually disposed of after 3 to 6 rotations (MTO: Metal Turnover). However, through research and development into electrodialysis, we have extended the lifespan before disposal to over 100 rotations (MTO).

Tanaka: We have been developing environmentally friendly products for some time, but we feel that the need for them has recently increased. In response to these modern needs, when deciding on research and development themes, we consider the SDGs as a key element in addition to performance and cost. We make decisions by considering environmental aspects, such as "this product can contribute to this item of the SDGs" or "it can appeal to this aspect from an environmental perspective." Our company is an R&D-oriented company, and 30% of our employees are R&D personnel. Researchers are not confined to laboratories but also have contact with customers, so perhaps we were able to get started quickly because they had already developed an awareness of environmental initiatives.

We are also working to reduce CO2 emissions from electricity, which has a large amount of emission amount. Many of these efforts are modest, such as switching to LED lighting, adopting hybrid vehicles, and selecting a power Company and plan. We have also begun work on improving the operating efficiency of our glass melting furnaces, and estimates suggest that we can reduce emissions by around 50%.

Ozaki: When we introduced "Zeroboard" in 2022, we set up a small, specialized project team within the company. Although we are a small- to medium-sized enterprise, we were already aware that we had to take decarbonization measures at the same level as large corporations. Everyone shared a sense of crisis that if we didn't respond to climate change, we would lose our business, and thanks to the management's judgment, the project progressed smoothly.

The other day, our vice president said, ``The earth is one, so we have to work on it, regardless of the Company size.'' We have been working on the psychological safety and work comfort of our employees, keeping in mind the SDGs perspective, so we are moving forward with the shift toward decarbonization without any discomfort.

Tanaka: Although all project team members have multiple responsibilities, we have been able to divide up the work effectively, so each person's workload is about 10 to 20 percent of their normal duties. Once the Scope 3 calculations are complete, we will hold a company-wide kickoff and plan to publish the calculation results on our website.

To reduce CO2 emission amount, we are planning to reduce CO2 emissions by 2,400 tons per year by using electric furnace steel when rebuilding our surface treatment factory and installing solar panels that can be installed on windows.We are also promoting company-wide initiatives, such as installing high-pressure washer equipment to clean tanks and reducing water usage by 85%.We hold decarbonization meetings within the company and set reduction targets to ensure they are effective.

Ozaki: Our employees' awareness of environmental issues has naturally changed. For example, when building the R&D building, we started to use double-glazed glass to reduce utility costs, and our employees now take it for granted.

Additionally, some employees also discussed decarbonization during company-wide skill-up training. Employees from the logistics department held a seminar on the theme of "The 2024 Logistics Problem," touching on CO2 reduction. Our company has multiple production location, including in Tokyo, Osaka, and Nagoya, and even more inventory location. Therefore, if we can reduce truck transportation by manufacturing products near the areas of greatest consumption, we can ultimately reduce CO2 emission amount. While this is not easy, as we also need to consider the efficiency of our production plants, we are trying to solve the 2024 problem and reduce CO2 emissions at the same time. We also plan to increase the proportion of modal shifts, such as switching to rail.

We need to keep CO2 emission amount low while increasing sales. Because we have to do two contradictory things, it seems that many companies are still skeptical. However, in Europe, there are regulations requiring battery manufacturers to declare CFP and there is also talk of a border carbon tax [Carbon Border Adjustment Measures (CBAM)].

Although decarbonization efforts may increase costs, we view them as up-front investments, just like research and development costs. We believe that by working on decarbonization now, we can meet companies that will become our future customers.

Tanaka: Our decarbonization efforts have a positive impact on recruitment. Like many small and medium-sized enterprises, we have had a tough time recruiting new graduates, but more people have become interested in us after learning about our decarbonization efforts. Many students these days are highly conscious of environmental issues, and I was surprised to find that three out of the 10 people we recently hired cited environmental concerns as a reason for choosing our company.

In addition, the results of environmentally friendly research and development are mainly emerging from existing business partners. There are some customers who ask us to develop a product that completely eliminates this substance without considering cost, and environmental efforts are sometimes the deciding factor in a transaction. Although we have not yet had a track record of attracting New business partners, we receive a good response when we exhibit at trade shows, and we are confident that people will choose an environmentally friendly version of the same product.

Tanaka: The function to calculate in "Zeroboard" by simply retrieving our company's figures from accounting software or core systems is very convenient. We ask our suppliers, raw material manufacturers, and partner factories that manufacture our products to provide their figures in a questionnaire format, and we calculate the figures derived from raw materials using coefficients. We believe that calculating across the entire supply chain will result in accurate figures.

Ozaki: I'm also in charge of accounting, so I appreciate the fact that it can calculate from accounting data and also calculate logistics-related data by inputting data extracted from core business systems. After analyzing with "Zeroboard," I was shocked to find that most of our emissions were Scope 3, which has me thinking about what to do next. Some of our suppliers are European companies that are already taking decarbonization seriously, while others are domestic companies that are just starting to work on it. For this reason, we are looking forward to the support it will provide in surveying suppliers, which was also a deciding factor in choosing "Zeroboard."

Next time, when we propose similar products from our competitors, we believe that our decarbonization efforts will be recognized and our environmentally friendly products will be more likely to be chosen. Our company will also implement various measures to reduce CO2 emission amount, but we will also continue to research and develop products that emission amount less CO2 when in use compared to conventional products, and will continue to make upfront investments in decarbonization.