Sumitomo Bakelite Co., Ltd.

Material Issues

12 Material Issues

Aiming to realize Vision, which is to be a “company providing dreams for the future” through creating value with our customers, we have identified 12 material issues. We have identified “Creation of Environmental and Social Values,” which is directly linked to Vision, the four value creation accelerators, and the seven foundations for business continuity as material issues.

12 Material Issues

KPIs for Material Issues

We set KPIs for each of the 12 Material Issues and work to improve corporate value and further strengthen our business foundations with the aim of achieving Vision 2030.

Material Issues KPI Fiscal 2024 targets Fiscal 2030 targets
Creation of Environmental
and Social Values		 ❶ SDG-contributing product sale revenue ratio 63% or higher 70% or higher
❷ GHG emissions reduction*1 compared to Fiscal 2021 (compared to Fiscal 2013) 38% or higher 48%（57%）
or higher
Value Creation Accelerators Co-creation with Customers ❶ Number of themes co-created with customers per year as a result of One Sumibe Activities 10
❷ Number of cross-department based in-house exhibitions held per year 8 times
innovation ❶ Number of projects implemented 5 5
❷ Contribution to business profit ー ¥10.0 billion
Human capital
(active participation by human resources)
management		 ❶ Promotion of diversity (1) Promote the Advancement of Women ・Ratio of female management staff (non-consolidated) 4% 10%
・Ratio of male employees taking childcare leave (non-consolidated) 70% 90%
(2) Ratio of career employee recruitment*2 (non-consolidated) 30% 50%
❷ Enhancement of autonomy
Number of employees participating in 360° assessment-based education programs 		50 70
❸ Enhancement of organizational strength
Number of employees participating in management education programs 		50 70
Digital Transformation ❶ Core system integration Core system conceptualization Core system data integration (global)
❷ Human productivity*3 (1) Production departments*4 1.1 2.0
(2) Management departments*5 1.1 2.0
❸ Number of trained data scientists (1) Number of employees with data science-related certifications 50 150
(2) Number of employees that possess data science-related skills 150 450
Foundations for Business Continuity Health and safety ❶ Serious occupational accidents (per year) 0
❷ Accidents caused by fire and or explosion, resulting in operational stoppage (per year) 0
❸ Number of data leaks (per year) 0
Product Liability ❶ Critical quality complaints (per year) 0
Compliance ❶ Compliance training participation rate 100%
❷ Number of serious compliance violations (per year) 0
Cybersecurity ❶ Major cybersecurity incidents (per year) 0
❷ Cybersecurity training participation rate 100%
❸ Cybersecurity incident response training (times held per year) (non-consolidated) twice
Respect for human rights ❶ Human rights due diligence Identify human rights risks and understand current related conditions Conduct human rights due diligence
Sustainable Procurement ❶ Sustainable procurement rate*6 85% 100%
❷ Usage rate of smelters conforming to RMAP*7 related to 3TG 100% 100%
Corporate Governance ❶ Continuous improvement of the effectiveness of the Board of Directors from the viewpoint of board composition and operation Evaluate the effectiveness of the Board of Directors and address priority issues
Material Issues
Creation of Environmental and Social Values
KPI Fiscal 2024 targets Fiscal 2030 targets
❶ SDG-contributing product sale revenue ratio 63% or higher 70% or higher
❷ GHG emissions reduction*1 compared to Fiscal 2021 (compared to Fiscal 2013) 38% or higher 48%（57%） or higher
Material Issues
Value Creation Accelerators
Co-creation with Customers
KPI Fiscal 2024 targets Fiscal 2030 targets
❶ Number of themes co-created with customers per year as a result of One Sumibe Activities 10
❷ Number of cross-department based in-house exhibitions held per year 8 times
innovation
KPI Fiscal 2024 targets Fiscal 2030 targets
❶ Number of projects implemented 5 5
❷ Contribution to business profit ー ¥10.0 billion
Human capital
(active participation by human resources) management
KPI Fiscal 2024 targets Fiscal 2030 targets
❶ Promotion of diversity
(1) Promote the Advancement of Women ・Ratio of female management staff (non-consolidated) 4% 10%
・ Ratio of male employees taking childcare leave (non-consolidated) 70% 90%
(2) Ratio of career employee recruitment*2 (non-consolidated) 30% 50%
❷ Enhancement of autonomy Number of employees participating in 360° assessment-based education programs 50 70
❸ Enhancement of organizational strength Number of employees participating in management education programs 50 70
DX
KPI Fiscal 2024 targets Fiscal 2030 targets
❶ Core system integration Core system conceptualization Core system data integration (global)
❷ Human productivity*3
(1) Production departments*4 1.1 2.0
(2) Management departments*5 1.1 2.0
❸ Number of trained data scientists
(1) Number of employees with data science-related certifications 50 150
(2) Number of employees that possess data science-related skills 150 450
Material Issues
Foundations for Business Continuity
Occupational health and safety
KPI Fiscal 2024 targets Fiscal 2030 targets
❶ Serious occupational accidents (per year) 0
❷ Accidents caused by fire and or explosion, resulting in operational stoppage (per year) 0
❸ Number of data leaks (per year) 0
Product Liability
KPI Fiscal 2024 targets Fiscal 2030 targets
❶ Critical quality complaints (per year) 0
Compliance
KPI Fiscal 2024 targets Fiscal 2030 targets
❶ Compliance training participation rate 100%
KPI Fiscal 2024 targets Fiscal 2030 targets
❷ Number of serious compliance violations (per year) 0
Cybersecurity
KPI Fiscal 2024 targets Fiscal 2030 targets
❶ Major cybersecurity incidents (per year) 0
❷ Cybersecurity training participation rate 100%
❸ Cybersecurity incident response training (times held per year) (non-consolidated) 2 times
Respect for human rights
KPI Fiscal 2024 targets Fiscal 2030 targets
❶ Human rights due diligence Identify human rights risks and understand current related conditions Conduct human rights due diligence
Sustainable Procurement
KPI Fiscal 2024 targets Fiscal 2030 targets
❶ Sustainable procurement rate*6 85% 100%
❷ Usage rate of smelters conforming to RMAP*7 related to 3TG 100% 100%
Corporate Governance
KPI Fiscal 2024 targets Fiscal 2030 targets
❶ Continuous improvement of the effectiveness of the Board of Directors from the viewpoint of board composition and operation Evaluate the effectiveness of the Board of Directors and address priority issues
  • *1 Scope1 and Scope 2 emissions
  • *2 Career track recruits
  • *3 2023 is set as 1
  • *4 Calculated based on marginal profit/direct man-hour for major products
  • *5 Calculated for management departments and the Information Systems & Data Processing Department using the formula target time/ (target time - reduction time)
  • *6 The percentage of major suppliers that meet the specified criteria through which the Company makes 90% of purchases by segment based on self-assessment sheets from the JEITA Responsible Business Conduct Guidelines
  • *7 3TG: Tin, Tantalum, Tungsten and Gold, Responsible Minerals Assurance Process (RMAP)

Material issues determination process

Material issues were selected with the following process, which involved first broadly identifying issues and then narrowing down the list of key issues. Based on the results of this process, material issues were arranged and key issues identified with the approval of management.

STEP1 Identification of issues

To identify issues in a broad manner, issues were extracted in line with the following

  • Information on social issues
  • UN Guidelines, External ESG Assessment Agency items
  • Sumitomo Bakelite Group policies, details of initiatives of each department
  • Discussions during the Medium-term Business Plan formulation process
  • Dialogue with stakeholders

STEP2 Selection and organization of proposed material issues

Issues of high importance were selected in terms of the following two axes

  • “Importance to Society”
  • “Importance to Sumitomo Bakelite Group”

Issues were organized based on the following perspectives in light of the anticipated benefits

  • “Value Creation”　
  • “Value creation accelerators”
  • “Foundations for Business Continuity”

STEP 3 Discussion and approval by management

Material Issues decided on with the approval of the Board of Directors

The Sustainability Promotion Committee confirms the comprehensiveness and appropriateness of items for the identified proposed material issues, reports them to the Management Committee and the Board of Directors for further discussion, and obtains approval of the Board of Directors.

Relationship between Material Issues and ESG

Topics E S G
Creation of Environmental and Social Values ● ● ●
Co-creation with Customers ●
Innovation ●
Human Capital (Human Resource Participation) Management ●
Digital Transformation ●
Sustainable procurement ●
Occupational health and safety ●
Respect for human rights ●
Cybersecurity ●
Product Liability ●
Compliance ●
Corporate Governance ●

Materiality and Performance in 2023

The targets and results for the Fiscal 2023 are as follows.

○: Target attained △: Target unattained

Material Issues Major items Fiscal 2023 targets Fiscal 2023 results Achievement evaluation
1. Environmental initiatives Reduction in CO2 emissions Domestic: Compared to fiscal 2013 64% reduction Domestic: Compared to fiscal 2013 66% reduction ○
Overseas: Compared to fiscal 2013 32% reduction Overseas: Compared to fiscal 2013 36% reduction ○
Reduction in the amount of material loss Domestic: Compared to fiscal 2013 21% reduction Domestic: Compared to fiscal 2013 21% reduction ○
Overseas: Compared to fiscal 2013 30% reduction Overseas: Compared to fiscal 2013 34% reduction ○
Reduction in chemical substance emissions Domestic: Compared to fiscal 2013 69% reduction Domestic: Compared to fiscal 2013 63% reduction △
Overseas: Compared to fiscal 2013 46% reduction Overseas: Compared to fiscal 2013 44% reduction △
2. Resource and energy conservation Energy conservation activities As in fiscal 2022, continue to provide technical support by establishing an energy conservation plan and raising the level of energy-saving technology by sharing information across all our business sites in Japan, and to achieve this overseas by promoting the rollout of best practices through collaboration between the mother plants in Japan and offices throughout the company.
In addition, the installation of solar power generation facilities will be examined at each of the bases in Japan and overseas as CN promotion.
 In Japan, the implementation of the concrete plan will reduce the energy equivalent of crude oil equivalent 2,952 kL.
As part of our efforts to promote CN, the contracts for all purchased electricity at all domestic business sites will continue to be derived from renewable energy sources in fiscal 2023.
Overseas, we reduced energy consumption by 4,188 kL in crude oil equivalent by continuing to promote the roll-out of best practices.		 ○
3. Biodiversity Biotope conservation
  • ・ Continue with self-led conservation activities.
  • ・ Continue to be open to the public and communicating externally, including regular dialogue with schools.
  • ・ Promoted conservation through voluntary activities (maintenance by the relevant parties) and site-wide activities (beautification activities within business sites).
  • ・ Reopened to the public for the first time in three years, drawing 113 visitors.
  • ・ Due to ongoing dialogue with schools, 314 schoolchildren visited on school excursions.
 ○
Initiatives to protect forest ecosystems Continuing to support forest thinning mainly in Iwate Prefecture through the use of Paper Products that Contribute to Forest Thinning (Forest Neighborhood Association). Contributed to thinning of 0.42 ha of forest by using 6,316 kg of paper from the Forest Neighborhood Association. 〇
4. Safety and security Prevention of occupational accidents 　Fatal accidents at domestic sites: 0 　Fatal accidents at domestic sites: 1 △
　Fatal accidents at overseas sites: 0 　Fatal accidents at overseas sites: 0 〇
Security and disaster prevention 　Serious accidents (fires/explosions): 0 　Serious accidents (fires/explosions): 0 〇
　Leakage-related incidents: 0 　Leakage-related incidents: 0 〇
5. Management of chemical substances Management of chemical substances Promotion of compliance with laws and regulations in each country: Monitoring information and establishing policies for the revision of laws and regulations concerning chemical substances in Japan and overseas. Continued implementation of measures accompanying the revision of the Health Act.
Response to changes in chemical regulations, particularly in the EU.
  • ・Utilized quantity counting functions of Japan’s Act on the Evaluation of Chemical Substances and Regulation of Their Manufacture such as REACH to check the chemical substance content, and made a report about it in 2023.
  • ・ The European Poison Center Notification System was launched, and notification and SDS revisions were implemented.
 〇
6. Product liability “Monozukuri” Audit
  • ・ Domestic: 7 business sites under our direct control/belonging to subsidiary companies.
    Overseas: Specify priority business sites in China, Southeast Asia, as well as North America and Europe.
  • ・ Improve system to further enhance internal audits.
  • ・ Domestic: 7 business sites under our direct control/belonging to subsidiary companies.
    Overseas: Carried out at 1 business site in Southeast Asia and 1 business site in North America
  • ・ To enhance internal audits, the content of questions was reviewed and a standardized method of guiding findings toward corrective actions was revised to facilitate deeper investigation.
 〇
7. CSR procurement CSR procurement
  • ・ Investigate use of minerals survey templates in relevant supply chains for existing raw materials in order to continue our efforts for responsible mineral procurement.
  • ・ Conduct surveys of major suppliers using CSR check sheets.
  • ・ Secure stable procurement of green chemicals.
  • ・ Support procurement of green power and adoption of solar power generation
  • ・ Develop the Sumitomo Bakelite Group's responsible minerals sourcing policy.
  • ・ Conduct a sustainability procurement survey of major suppliers, and posted the results on our website.
  • ・ Continue to secure and investigate green chemicals
  • ・ Secure green power and expanded installation of solar power generation
 〇
8. Improvement of stakeholder satisfaction Improvement of customer satisfaction Promote making activities visible and encourage change in employee awareness to take the extra step beyond “customer satisfaction” to “impressing customers.”
Under our policy of “making customer satisfaction (CS) a top priority,” our CS Promotion Committee highlights QCDS activities throughout the entire company, and strives to implement CS activities that facilitate participation by departments with few points of contact with customers, as well as employees at overseas locations and subsidiaries.
 As part of reforms to awareness, the catchphrase and posters were renewed and also put on display at overseas sites.
Reported on the CS perspective at QCDS company-wide policy meetings, and rolled out content throughout the entire company. Materials were disseminated company-wide.
At the CS Awards, presentations were made, not only from the Sales Division but also from the Manufacturing Division and Research & Development Division, leading to an increased awareness of CS activities.		 ○
Dissemination/Advertising of company information
  • ・ Develop and update contents for information dissemination tools through a wide range of media including external advertising, billboards, and websites.
  • ・ Provide company-wide support for social contribution activities.
  • ・ Continued to revamp advertisements with electric lettering inside Shinkansen trains, and revised the location of outdoor advertisements at baseball stadiums.
  • ・ Continue to provide support for the Japan Inclusive Football Federation and “Paralym Art,” which the company signed partnership agreements with.
 ○
Development of products that contribute to the environment and SDGs Expanding ratio of sale revenue from SDG-contributing product and technology sales
Fiscal 2023 target: 50% or higher
(Progress toward fiscal 2030 target of 70% or higher)		 Fiscal 2023 results 61.9% ○
9. Human resource training Internal human resource training
  • ・ Continue to carry out employee training at SB School*.
  • ・ Continue to carry education for management staff.
  • ・ A total of approximately 67,000 employees attended, approx. 77,000 hours of education provided.
  • ・ Continue to provide training for line managers, leadership development and education, etc., as training for management staff.
 ○
Women’s empowerment
  • ・ Continue a ratio of female career-track recruits of 20% or greater.
  • ・ Establish DE&I Promotion Office.
  • ・ Establish Women’s Empowerment Working Group.
  • ・ Conduct education and awareness-raising activities with the goal of increasing the trends in the proportion of female management staff to 5% by 2025.
  • ・ Start activities for LGBTQ people, and employees with employment restrictions due to nursing care, disabilities, etc.
  • ・ Ratio of female employed: 26% (7 of 27 career track recruits hired upon graduation).
  • ・ Established the DE&I Promotion Office within the Personnel Division
  • ・ Launched the Women’s Empowerment Working Group comprising 22 members.
    Conducted roundtable discussions with all female employees at each business site, and applied the results to revisions of systems and other measures.
  • ・ Conducted diversity management training for line managers.
    Provided leader education and smart work education to female employees.
  • ・ Conducted education for supporting balancing work and nursing care, and published a handbook to support balancing work and nursing care.
  • ・ Implemented LGBTQ education and inclusive (a company where people with disabilities are able to play an active role) education for all employees.
 〇
10. Work-life balance Employment Rate of People with Disabilities
  • ・ Employment rate of people with disabilities: Maintain statutory employment rate of 2.5% or more.
    (From April 2024 the statutory employment rate is set to increase to 2.5%)
  • ・ Continue internships for people with disabilities.
  • ・ The employment rate of people with disabilities was 2.84%, maintaining an employment rate that exceeds the statutory employment rate, and is also expected to exceed the statutory employment rate after it is increased to 2.5%.
  • ・ Two internships with disabilities were accepted, one of whom joined the company in April 2024.
 ○
Work-style reform
  • ・ Continue to support work with both childcare & nursing care.
  • ・ Continued promotion of the taking of birth leave and parental leave for men.
  • ・ Flexible start time when working from home.
  • ・ Increased number of days of annual paid leave.
  • ・ Expansion of menstrual leave.
  • ・ Liberalization of dress codes at work.
  • ・ Promoted men taking childcare leave, increasing the ratio of those taking leave from 25.9% to 65.5%.
  • ・ Starting times for telecommuting have been subdivided in one-hour increments from 7:00 a.m. to 10:00 a.m. to 30-minute increments, to promote flexible work styles.
  • ・ The number of days of annual paid leave granted was increased in both the first and second years, and PMS was added as a requirement for menstrual leave.
  • ・ No dress code day, which had been adopted once a week on Fridays, was expanded to twice a week.
 ○
Promoting
  • ・ Continue implementing the Data Health Plan, preventing the worsening of illnesses in our company and certain Group companies in Japan.
  • ・ Continue to achieve a 100% rate of employees receiving regular scheduled health checks.
  • ・ Increase the specific health guidance rate.
  • ・ Achieve recognition under Certified Health and Productivity Management Organization Outstanding Recognition Program.
  • ・ Continue efforts to prevent illnesses from becoming severe, achieving a guidance rate of 100% during fiscal 2023.
  • ・ Also achieve a 100% rate of employees receiving regular scheduled health checks.
  • ・ Increased the specific health guidance rate from 15.0% to 27.1%
  • ・ Acquired “Excellent Health Management Corporation 2024 (Large Corporation Category)” certification
 ○
11. Compliance Compliance promotion
  • ・ Implementing company-wide compliance training in the Compliance Enhancement Month (Our Code of Conduct, Group Code of Ethics, overview of internal whistleblowing system etc.).
  • ・ Compliance awareness by publishing “Way to Become a Compliance Master!” (4-panel comics + commentary) in our in-house newsletter.
  • ・ Company-wide compliance education participation rate during Compliance Awareness Month in October 2023: 100% (number of participants: 8740)
  • ・ Number of times “Way to Become a Compliance Master!” included in our in-house newsletter: 12 times
 〇
  • *3 SB School is an internal educational institute for all employees, from new recruits to corporate officers.