SustainabilityMateriality

The Daicel Group identified its materiality in FY2021/3 as key sustainability issues toward achieving the Accelerate 2025 Mid-Term Management Strategy. We will carry out the CAPD cycle* according to this materiality and contribute to realizing a sustainable society in the Daicel way.

* Instead of a Plan, Do, Check, and Act (PDCA) cycle, the most widely known approach to continuous improvement, Daicel Group has adopted a CAPD improvement cycle to avoid the risk of overlooking crucial facts and realities that often lie hidden in the initial planning stage.

Background and Approach to Identifying Our Materiality

The Daicel Group’s materiality consists of two main categories.
For "Materiality aimed at achieving growth of the Daicel Group and value co-creation," our aim is to leverage the strengths of the Group to address the SDGs and other social issues and actively create value in line with the "Product, Process, and People" concept in our Sustainable Management Policy.
For "Materiality related to the foundations of the Daicel Group’s continuity and governance," we focused on the key foundations of Safety, Quality, and Compliance, which are essential for value creation, across each of the ESG domains: Environment, Society, and Governance.

Process of Identifying Materiality

Process of Identifying Materiality

STEP1Extract social issues

We referenced international guidelines, SDGs, the principles of the United Nations Global Compact and guidelines published by industry organizations to extract social issues that Daicel Group should address.

STEP2Prioritize

We assessed items extracted in Step 1 by considering the following aspects to identify key themes with high priority by plotting them on the materiality map according to “Importance to stakeholders” and “Importance to the Daicel Group.” We then sorted them into the two categories of “Growth of the Daicel Group and value co-creation” and “Foundations of the Daicel Group’s continuity and governance.”

  • Consistency with the Long-Term Vision and Mid-Term Management Strategy
  • Consistency with related policies such as the Sustainable Management Policy, the Daicel Group Code of Conduct, and the Ethical Standards of Daicel Group
  • Consolidation of opinions from relevant departments

Materiality Map

Materiality Map

STEP3Confirm validity

The Corporate Sustainability Division and other relevant divisions discussed the validity of important themes identified through Steps 1 and 2. The results were reported and approved at the Management Meetings and subsequently endorsed by the Board of Directors.

STEP4Formulate materiality and KPIs

By going through Steps 1 to 3, we identified 15 material issues. We designate a key performance indicator (KPI) and target for each. We will review our materiality, KPIs and targets in response to future changes in society and our business.

Monitoring Materiality

The progress toward identified materiality is regularly monitored alongside defined KPIs and targets. Regular evaluations are conducted at the Sustainable Management Committee and the Board of Directors provides oversight.

Materiality and KPIs

List of Materiality KPIs and Results [PDF:331KB]

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Materiality aimed at achieving growth of the Daicel Group and value co-creation

Classification Materiality Content KPIs Target FY2023/3
Results		 FY2024/3
Results		 FY2025/3
Results
Sustainable Product Contribute to beauty and health
  • Providing solutions for the pharmaceutical and medical markets
 Number of our chiral columns used in pharmaceutical analysis methods*1 FY2026/3: 95 cases
(cumulative)		 88 cases 113 cases
(cumulative)		 124 cases
  • Providing sustainable cosmetic raw materials and health food
 Total number of people provided with functional food ingredients per year FY2026/3: 2.23 million
(twice the FY2021/3 figure)		 1.24 million people 1.69 million people 1.62 million people
Contribute to the smart society
  • Providing solvents for semiconductor processing and polymers for resists
 New product rate of safe, high-boiling point solvents essential for advanced semiconductor manufacturing processes*2 FY2026/3: 23.9% 3.2% 7.7% 8.4%
Provide safety and security for society
  • Providing products that ensure the safety and security of mobility
 Average number of our safety devices installed per vehicle*3 FY2026/3:
3 units/vehicle		 2 units/vehicle 2.2 units/vehicle 2.2 units/vehicle
Diversified small mobility*4 devices and new safety devices to prevent home accidents*5 put on the market FY2026/3: New safety device proposals, with a total of 2 cases by FY2031/3 New business proposals: 2 under review New business proposals: 2 cases New business development initiatives: 2 cases
Provide environment-friendly materials and technology
  • Providing materials and technology that reduce environmental impact, such as environment-friendly plastics
 Rate of recyclable raw materials*6 used in products FY2031/3: 30% or more 15.9% 15.8% 16.5%
Production volume of environment-friendly (highly biodegradable, etc.) cellulose acetate FY2026/3: 10,000-20,000 tonnes/year 7,993 tonnes/year 7,625 tonnes/year 8,282 tonnes/year
Sustainable Process Contribute to the development of a circular society (Only in Japanese)
  • Building Biomass Value Chain
  • Reuse of waste and CO2
 Number of external proposals for resource recycling systems using natural materials FY2026/3: 3 cases Under research and development 1 case 1 case
Respond to climate change
  • Reduction of GHG emissions through production innovation, energy innovation, and process innovation
 GHG emission reduction rate of our Group*7 Scope 1 and 2 FY2031/3: 50% reduction (compared to FY2019/3) 1% increase 3.5% reduction 0.5% reduction
Sustainable People Promote DE＆I
  • Creating a workplace where everyone can work with energy, regardless of their gender, age, nationality or disability
 Ratio of women in management positions*8 FY2026/3: 10% or more 4.9% 5.6% 6.3%
Ratio of persons with disabilities that have been with the company more than three years*8 (1 - persons with disabilities that left the company in three years after joining / total number of employed persons with disabilities) × 100 Sustain 95% or more 96.0% 97.4% 100%
Support personal growth
  • Personnel development for honing expertise
  • Framework to support employees who take on challenges
  • Building highly fair evaluation systems
 Status of initiatives for personnel development, review of human resource system, introduction and review of career seminars or management training for department managers*8 Disclose results
  • Strengthened system to support employees' career autonomy
    • Implemented of age-specific career training for employees in their 30s, 40s, and 50s
    • Established a Career Support Center in the Human Resources Division to provide career consultations for employees
    • Launched an expertise development program (for talent cultivation of administrative personnel)
    • Introduced coaching training given by external lecturers for department managers
    • Offered AI training to all employees (voluntary participation)
  • Introduced career support expenses (30,000 JPY/person)
  • Planned and implemented training for managers

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Materiality related to the foundations of the Daicel Group’s continuity and governance

Classification Materiality Content KPIs Target FY2023/3
Results		 FY2024/3
Results		 FY2025/3
Results
Environment Reduce environmental impact
  • Promotion of waste reduction and recycling
 Percentage of industrial waste recycled by our business sites and domestic Group companies FY2026/3: 99% or more 98.4% 98.0% 98.6%
Social Ensure process safetyand
disaster prevention, occupational health and safety
  • Elimination of process incidents
 Number of serious occupational accidents*8 Continue 0 (zero) cases 0 cases 1 case 0 cases
Number of serious process safety incidents*8 Continue 0 (zero) cases 0 cases 0 cases 0 cases
  • Minimization of damages based on crisis assessments
 Percentage of safety training held based on past incidents (occupational accidents and process safety incidents)*8 Continue to 100% 100% 100% 100%
Ensure chemical safetyandenhance product quality
  • Reinforcement of quality management to prevent recurrence of quality defects
  • Centralized management and sharing of chemical substance information
 RC-related regulation audit rate*8 ●Continue to 100% 41% 100% 100%
Number of violations of chemical regulations Continue 0 (zero) cases (Initiative from FY2024/3) 0 cases 0 cases
Number of problems caused by product safety Continue 0 (zero) cases (Initiative from FY2024/3) 0 cases 0 cases
Rate of initial response to customer complaints within 24 hours*9 FY2026/3: 100% 88.0% 89.0% 87.4%
Rate of completion of customer briefings within 25 days FY2029/3: 100% (Initiative from FY2025/3) 70%
Respect human rights
  • Establishment and implementation of human rights due diligence
  • Development of a framework for corrective actions, and employee education
 Rate of progress in annual plans for human rights due diligence targeting the Daicel Group FY2026/3: 100% 88.7%
(FY2020/3–FY2025/3)
(19 out of 19 domestic Group companies, 28 out of 34 overseas Group companies)*10
Rate of progress in annual plans for human rights due diligence targeting suppliers 100% continuation (Drafting and implementation of plans for human rights due diligence targeting suppliers) （Conducted human rights due diligence for domestic and overseas suppliers, followed up with suppliers on identified issues and improved 50 cases） 100%
Foster a corporate culture that meets employee needs
  • Shortening of working hours and improvement in the annual paid leave acquisition ratio
 Rate of continuous paid leave taken*8 (a five-day consecutive leave once per year) FY2026/3: 100% 56.3% 72.3% 69.2%
  • Support for flexible work styles
 Percentage of male employees who have taken parental leave*8 FY2026/3: 100% 97.9% 89.3% 94.1%
  • Promotion of employee health
 Status of efforts to promote employee health*8 Disclose results
  • Organized an “Employee Wellness Promotion Center” as a health management organization that promotes the mental and physical health of each employee on four different levels: company-wide, by business site, by workplace, and individually
  • Promoted health management aimed at the physical and mental health of each and every one of employees and their families, business partners, and local residents by holding sports events, etc.
  • Expanded babysitter subsidy benefits
  • Distributed "Guidance for Taking Parental Leave" to eligible employees and their supervisors
  • Recognized as a "Certified Health & Productivity Management Outstanding Organization (White 500)" for the sixth consecutive year
  • Certified as a "Sports Yell Company" for the second consecutive year
Promote sustainable procurement
  • Improvement of CRS levels across the supply chain
 Sustainable procurement rate (new item set in FY2025/3)
Implement FY2025/3 version of SAQ and achieve 100% rate of suppliers (2) that meet standard (1) of our Group.
  1. (1)Benchmark points (4 points or higher for 9 key items; 3 points or higher for 24 other items)
  2. (2)Suppliers accounting for over 85% of purchasing value and suppliers of critical raw materials (165 companies in total)

*The following old KPI was achieved in FY2024/3 (past targets/performance are shown in parentheses)
"Percentage of raw fuel suppliers who meet our benchmark points as a result of SAQ"

 FY2026/3: 100%
(FY2024/3: 100%)		 （79%） （100%） 62%
Governance Strengthen foundation for Group governanceand compliance
  • Reinforcement of corporate governance
 Status of efforts to strengthen the supervisory function by the Board of Directors
Evaluation target of the Board of Directors by Outside Directors and Outside Audit & Supervisory Board Members: (out of 5 points)		 Average of 4.0 points or above (Initiative from FY2024/3) 4.4 points 4.3 points
Rate at which legal checks are made and response measures taken for material matters requiring executive decision Continue to 100% 100% 100% 100%
  • Enforcement of thorough compliance
  • Strengthening of risk management
 Number of issues reported to the Help Line Disclose results 76 cases 102 cases 126 cases
Percentage of executives and employees who know how to use the Help Line System and can contact the Help Line when they discover compliance violations*11 ( = percentage of employees who have taken Help Line reporting training) FY2026/3: 100% 10% 18%
（1,074 personnel）		 97%
（5,988 personnel）
  1. *1 Targets: Pharmacopoeias in Japan, the U.S. and Europe
  2. *2Highly safe high boiling point solvents: Solvents for electronic materials with high solubility and low toxicity such as MMPGAC
  3. *3Targets: Products for Japanese automakers
  4. *4Bicycles, mobility scooters, electric kick scooters, etc.
  5. *5Drowning while bathing indoors, infant suffocation, falls, etc.
  6. *6Recyclable raw materials: biomass raw material, use of atmospheric CO2, reuse of waste, and recycling
    Targets: Main resin materials of Daicel, Polyplastics and Daicel Miraizu.
  7. *7Realization of carbon neutrality in FY2051/3 (Scopes 1, 2, 3)
  8. *8Scope: Daicel Corporation
  9. *9Scope: Domestic manufacturing sites of Daicel Corporation
  10. *10The base number of group companies represents the companies that are candidates for human rights due diligence as of April 2024
  11. *11Daicel and domestic Group companies