unicharm

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SustainabilitySustainability Top

Climate Change

 

Our basic approach and strategy

Unicharm takes seriously its contribution to achieving the 2℃ scenario in the COP21 Paris Agreement adopted in 2015, advocates for the SBT (Science-based Targets) initiative and presents climate change progress reports via the CDP Climate Change Report.

Risks and opportunities with climate change

Since 2017, the MIT Technology Review has published the results of research in the United States (Stanford University and the University of California) that indicates that the Asian region, where our company focuses its business activities, will be affected the most if climate change mitigation and adaptation measures are not implemented. In order to avoid these kinds of risks, we are working with our stakeholders, not just our company, to promote improvements.

In 2018, we calculated the financial impact on energy based on the IEA 450ppm scenario and the operational impact due to physical risks based on the RCP 2.6 scenario. We also proceeded with the confirmation of issues for 2030/2050 under the 2°C scenario, the greater than 2°C scenario and the ego-system economy first scenario on two axes: the international cooperation or own country-first axis and the environmental harmony or economy-first axis (driving forces are assumed to include success of women socialization, urban concentration, waste problems, ESG investment, use of renewable energy, etc.)

Concepts of Climate Change
  • 2℃ scenario: (see IEA Sustainable Development Scenario)
    Prices of forest-derived raw materials will rise moderately and energy prices will rise sharply. The GDP of the Asian region will grow moderately and Unicharm's ROE will stay at current position and we will be able to maintain CAGR 7%. Markets will also expand over the ultra-long term and our performance will also increase (sustainable growth and expansion outside of Asia).
  • Greater than 2°C scenario: (see IEA Current Policies Scenario)
    Prices of forest-derived raw materials will rise quickly, but increases in energy prices will be curbed. Costs will rise relatively, but GDP growth in the Asian region will also accelerate and Unicharm's ROE will also rise with upturn in CAGR 7%. Over the ultra-long term, the market will contract due to extreme weather (not sustainable).
  • Ego-system economy first scenario:
    Climate change will be further amplified and restrictions will arise on procurement of forest-derived raw materials. However, there will be economic development with increases in both sales prices and volumes. Over the ultra-long term, major revisions of business strategy will be required due to very extreme weather.

Fast-paced climate change is not desirable in terms of the impact on Unicharm's business. Unicharm will work in partnership with diverse stakeholders to implement action in compliance with the Paris Agreement.

Also, our company is using our technology for recycling used disposable diapers as an opportunity to promote forest protection and decarbonization by means of this technology.

Management structure

Four times per year, our company's CSR Committee, chaired by the Group's President & CEO, shares plans and progress on environmental activities, quality issues, social issues and other important governance matters. Specific plans are reported based on Eco Plan 2020, under the recommendations of the TCFD (Task Force on Climate-related Financial Disclosures), which was proposed in August 2017.

Med-term activity goals

We established goals for 2020 under the Eco Plan 2020, which was instituted in 2016, and promote activities for achieving annual 2% reductions to Scope 1 and 2, and, for Scope 3, we are aiming in our supply chain to reduce environmental impacts within the life cycle compared to the baseline figures of 2005 and for a 100% introduction of upgraded environmentally-friendly products.

CO2 emissions come, in the order of, approximately 47% from purchased materials under Scope 3, approximately 32% from disposal of products after use and approximately 11% from the manufacturing stage under Scope 1 and 2.

For Scope 1 and 2, we carry out energy reduction working activities with the EMS activity promoters at each location four times a year, implement annual plans and check progress to plan.

Regarding CO2 emissions from materials, which make up the major part of Scope 3, LCA (Life Cycle Assessment) is calculated for each material from the design stage and product designers work with our CSR Division to implement measures for climate change from the standpoint of product function and CO2 emissions.

Furthermore, at the Quality Policy Briefing Session held with suppliers in November 2017, we explained our company's CO2 emissions status and the importance of reducing CO2 emissions and requested their cooperation.

Eco Plan 2020, goals and results of measures against climate change (from "Eco Plan 2020")
Implementation items 2015
results
2016
results
2017
results
2018
targets
2018
results
Evaluation 2019
targets
2020
targets
(3)
Measures for
climate change
■Environmentally Friendly Products (Japan) 72% 78% 80% 83% 86% 93% 100%
■Products with the Eco Charming label (Japan) 50% 56% 58% 60% 66% 60% 60%
■Products with the Eco Charming label (Overseas) 0% Survey Understanding Completion Operation Start Operation Start Delay × Operation Start 10%
■CO2 emissions base unit during manufacturing compared to 2015 (Japan) Base year -2.4% -4% -6% -6% -8% -10%
■CO2 emissions base unit during manufacturing compared to 2015 (Overseas) Base year -- -3% -6% -6% -8% -10%
■Collection of overseas site data (compared to sales) 73% 77% 81% 83% 83% 85% 80%

Third party assurance

In order to increase the reliability of non-financial data, we are receiving Third party assurance from PwC Sustainability LLC, based on ISAE3000/3410.

[Japan] CO2 emissions throughout the supply chain (overall picture of Scope 1 - 3)

Our company (in Japan) estimates its CO2 emissions according to the Greenhouse Gas Protocol*, the standard for calculating greenhouse gases (GHG) most widely used in the world today.

The results of calculations following this standard indicate that 47% of Unicharm's emissions are from materials procurement and 32% from the disposal of products after use. We will continue to carry out activities aimed at establishing a low-carbon society.

  • * In 1998, the GHG Protocol Initiative was established as a meeting for developing standards of calculating and reporting GHG primarily by the World Resources Institute (WRI), an environmental NGO based in the United States, and the World Business Council for Sustainable Development, comprising 200 multinational corporations.
    In 2001, version one of the GHG Protocol was established and since then this approach to GHG calculation has become a worldwide standard.
CO2 emissions by Scope (Japan)
Scope Category Emissions (thousand tons-CO2)
Scope 1 29
Scope 2 160
Scope 3 1 Purchased goods and services 800
2 Capital goods 119
3 Fuel- and energy-related activities 2.7
4 Upstream transportation and distribution 47
5 Waste generated in operations 1.2
6 Business travel 0.4
7 Employee commuting 1.8
8 Upstream leased assets 1.2
9 Downstream transportation and distribution not applicable
10 Downstream-processing of products sold not applicable
11 During product use not applicable
12 End-of-life treatment of products sold 538
13 Downstream leased assets not applicable
14 Franchises not applicable
15 Investment not applicable
Scope 3 total: 1,512
Scope 1, 2 and 3 total: 1,701

*Scope 3 Category 2 increased due to payments at the Kyushu Factory during the term.

[Japan and overseas] CO2 emissions from corporate activities (Scope 1 and 2)

In fiscal 2018, CO2 emissions were 29,000 tons for Scope 1 and 160,000 tons for Scope 2. Going forward, we will promote activities to lower CO2 emissions in each country and work to lower base unit per net sales.

Reducing CO2 emissions

In fiscal 2018, we added Hartz in America to the data range for non-financial audit. As a result of these activities, we were able to lower the base per unit and reduce emissions in countries within the existing data range. In each country, the results reflected the accomplishments of energy conservation initiatives, but we are continuing to promote emissions reduction activities.

[Overseas] Achieving 100% renewable energy use at Brazil Factory (Scope 2)

At the Brazil Factory, renewable energy provides all the electricity and we are promoting activities to reduce CO2 emissions.

[Japan] Initiatives to reduce CO2 through products (Scope 3, Categories 1, 4 and 12)

Framework of environmentally-friendly products

Our company has set a target ratio for environmentally-friendly products as part of its environmental goal and is working on product development by having an environmentally-friendly mind. Products with improved environmental performance are defined as environmentally friendly products based on an evaluation of whether environmental impacts are successfully reduced within the life cycle from the baseline figures of FY2005. Certification is performed by the CSR Division, which is independent from development, by calculating LCA (Life Cycle Assessment). In 2018, we achieved our goal of 83% environmentally-friendly products. In 2019, we will work to further increase this percentage.

Additionally, Eco Charming products are a further evolved version of environmentally friendly products defined as top tier products that help contribute to the realization of a sustainable society. As of today, a total of 158 items fulfilled this definition (certification was extended to pet care products and institutional-use products in addition to personal care products starting in 2017).

Going forward, we will continue to introduce environmentally-friendly products as a means to lowering CO2 emissions of procured materials and reducing CO2 emissions during product disposal after use.

An example of Eco Charming products
Example - Sanitary Product

Sofy Ultra-Sound-Sleep Best-Fit Slim, a newly released product from the Sofy Ultra-Sound-Sleep brand of nighttime feminine napkins, features two-thirds the thickness of the ordinary Sofy Ultra-Sound-Sleep Guard. This means the product weighs 84.0% of conventional products and as a result CO2 emissions from manufacturing and distribution processes are 82.4% of usual.

Sofy Ultra-Sound-Sleep
Best-Fit Slim (right)

[Japan] Sharing importance of measures against climate change with suppliers (Scope 3 Category 1)

At the Quality Policy Briefing Session held with suppliers in November 2017, we presented Eco Plan 2020 as support for procurement of sustainable materials. 70% of CO2 emissions comes from materials procurement and from disposal of products after use. Once again, we came to realize the importance of tackling these together with suppliers. Going forward, we will require cooperation in introducing environmentally-friendly products.

[Japan and overseas] Initiatives to reduce waste at production sites (Scope 3 Category 5)

At our overseas subsidiary in Thailand, we installed facilities to crush out-of-scope products from the production process, with more than 90% of the waste generated at the site being recycled. In conjunction with domestic recycling activities, we have achieved zero landfill waste.

  • Please see CSR Key Topic 3 on “Commercializing waste from factories to achieve zero emissions.”

[Japan] Initiatives to reduce CO2 in distribution and retail (Scope 3 Category 4 and 9)

Fukushima Factory and New Logistics Center

Unicharm Products is actively promoting initiatives to reduce environmental impact. In fiscal 2018, it established a new logistics center alongside the Fukushima Factory and has dramatically reduced the volume of products conveyed on roundabout routes by truck through the installation of a product conveyor between the factory and the logistics center. In a similar initiative, a new logistics center will be established close to the Shizuoka Factory in fiscal 2019. Initiatives have also been launched in partnership with other industries aimed at expanding modal shift. Through such initiatives, CO2 emissions were 98.6% compared with those in fiscal 2017 (a reduction of 560 tons-CO2). Going forward, we will continue promoting further initiatives aimed at reducing our environmental impact.

Evaluated by CDP Japan 500* for disclosure of climate change information

Unicharm cooperates with a survey of 500 companies selected for their inclusion in the FTSE Japan Index as part of its efforts to address CDP climate change. In fiscal 2018, Unicharm received a disclosure score of B. This indicates that the PDCA cycle for climate change is functioning at a high level to address our company's overall efforts. Unicharm was also recognized for moving forward with information disclosures to shareholders. Going forward, Unicharm will continue to carry out activities that are even more mindful of climate change.

Participation in Japan Climate Initiative (JCI) since its establishment

The Japan Climate Initiative (JCI) was launched in Tokyo on July 6, 2018 and Unicharm has endorsed its declaration, “ Joining the front line of the global push for decarbonization from Japan”, and has participated in the JCI. Unicharm will strive to achieve the COP21 Paris Agreement while collaborating with companies, local governments, organizations, NGOs and others that are working proactively on measures for climate change.

[Japan] Utilization of SBT activities as a concrete climate change mitigation plan

In order to draft concrete climate change mitigation plans, our company has endorsed SBT (Science-based Targets), an international initiative, in May 2017 and uses the SDA tool (Ver. 8) to perform simulations up to 2050 and to draft reduction plans. In June 2018, in consultation with SBT, we received Japan's 17th certification for a plan that is aligned with the 2°C target.

[Japan] Commendation of initiatives aimed at establishing a low-carbon society

The Low-Carbon Cup is a program for commending activities of various organizations for preventing global warming in an attempt to build a low-carbon society for the next generation. The program shares know-how and information about excellent initiatives taking place across Japan and fosters cooperation and motivation for further activities. The year 2019 marks the ninth year of the program.

As a partner that advocates for the initiatives of the Low-Carbon Cup, from 2016 our company established the Unicharm Eco Charming Award for Excellence to be presented to companies or organizations.

At Low-Carbon Cup 2019, after presentations by 28 finalists, the Unicharm Eco Charming Award was presented to the “Global Warming Countermeasures Eco Action by High School Students ” as part of the Hiroshima Municipal Technical Green Project of Hiroshima Municipal Technical High School.

Introduction of SDGs-related activities at EcoPro 2018

Unicharm Booth Thronged with many Visitors

Unicharm exhibited at EcoPro 2018 which was held at Tokyo Big Site in December 2018 with the theme “EcoPro 2018 – Environment and Society in the age of SDGs and to the Future”. A total of 162,217 people visited EcoPro 2018, according to EcoPro Secretariat Office, and more than 5,000 people visited Unicharm.

This year, we used the theme of “O (zero/circle)” for our exhibits and introduced the manufacturing method of paper sand® (a toilet product for cats) which achieves zero waste emissions for factories, recycling of disposable used diapers aimed at resource recycling (circular economy) and social walking®, which aims for zero social isolation.

 

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