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Key Issues (Materiality)

The MGC Group has identified key issues (Materiality) it needs to address to clearly demonstrate to stakeholders its commitment to contributing to the harmonious development of a sustainable society over the medium/long term through wide-ranging value creation rooted in chemistry.

The Materiality was drafted by a CSR Committee comprising corporate sector heads and deliberated and determined in March 2020 by a CSR Council composed of directors and chaired by MGC’s President. The issues are classified into four categories: creating shared value (CSV), foundation for shared-value creation (Society), harmonization of shared-value creation with environmental preservation (Environment) and value-creative discipline (Governance). Additionally, the material issues are tied to 17 Sustainable Development Goals (SDGs) and 169 targets in the aim of contributing to attainment of the SDGs and realization of a sustainable society.

Materiality and Main Initiatives

Pursuing Creation of Value to Share with Society

Contribution through business operations

  • Contribute to development of ICT/mobility society
  • Solve energy and climate change problems
  • Solve medical and food problems

Why it is material

Pursuing creation of value to share with society leads to improvement in corporate value from economic, social and environmental standpoints.

MGC’s main initiatives

Helping to move society forward and solve problems through business operations, including by contributing to development of an ICT/mobility society with polycarbonates, polyacetal, super-pure hydrogen peroxide, electronic chemicals, optical polymers and semiconductor packaging materials (BT resin); solving energy and climate change problems with geothermal and LNG-fired power penetration projects and functional monomers; and solving medical and food problems with life science products (e.g., antibody drugs, fermented foods), oxygen absorbers and MX-Nylon

Cultivating a corporate culture of job satisfaction

Why it is material

An organizational culture that enables all employees to confidently give full play to their abilities over the long term while finding individualized meaning in their jobs is the foundation of corporate value creation.

MGC’s main initiatives

Promoting work-life balance; offering generous child/family care systems, creating dynamic workplace environments

Promotion of diversity and inclusion

Why it is material

A culture of collaboration among individuals with diverse values is conducive to new ideas and technological innovation.

MGC’s main initiatives

Providing more opportunities to women; supporting career advancement and work/life balance; promoting employment of individuals with disabilities

Stakeholder engagement

Why it is material

Corporate value creation is a result of stakeholders’ contributions, including the resources they provide.

MGC’s main initiatives

Disclosing information in compliance with laws and securities exchanges’ regulations; fairly and transparently disclosing information online and via news media

Promotion of socially responsible sourcing

Why it is material

Companies have a societal responsibility to upgrade CSR compliance throughout their supply chains with respect to the environment, working conditions, human rights, etc.

MGC’s main initiatives

Building safe, legally compliant and environmentally friendly supply chains

Occupational safety and health / Process safety and disaster prevention

Why it is material

Safety is the foundation of business activities. Companies have a societal duty to ensure safety.

MGC’s main initiatives

Continuing to conduct occupational safety and health risk assessments, daily safety activities and safety education/training in the aim of zero occupational injuries

Highly energy- and resource-efficient production

Why it is material

Companies have a duty to harmonize their operations with global environmental protection in accord with the principle of sustainable development.

MGC’s main initiatives

Minimizing environmental impacts in sourcing resources; efficiently using resources (energy, raw materials, water, etc.)

Chemical/product quality and safety assurance

Why it is material

Quality assurance is the basis of stakeholders’ trust. Companies have a duty to provide highly safe and reliable products and services.

MGC’s main initiatives

Promoting Company-wide quality assurance activities (Q-MGC) throughout supply chains

Promotion of innovative R&D

Why it is material

Developing valuable new products and technologies that help to move society forward and solve problems is the pursuit of creation of value to share with society.

MGC’s main initiatives

Developing/adopting new processes that maximally leverage core technologies cultivated over many years; founding and developing new businesses

Proactive response to environmental problems

  • Air quality control
  • Water and biodiversity conservation
  • Reduction of industrial waste

Why it is material

Addressing environmental problems is imperative for all of humanity. Companies must proactively do so as a prerequisite for their existence and activities.

MGC’s main initiatives

  • Formulating medium-term and annual RC* plans and endeavoring to achieve their targets
  • Reducing GHG emissions while supporting the Task Force on Climate-related Financial Disclosures

* RC: Responsible Care

Strengthen systems

  • Corporate governance
  • Compliance
  • Internal controls
  • Risk management

Why it is material

Developing disciplined ways steadily execute strategies to bring business models to fruition and to sustainably grow corporate value.

MGC’s main initiatives

Building effective internal control systems based on appropriate corporate governance, ensuring the soundness of business activities through compliance, risk management, etc.

Materiality Determination Process

Step 1Identification of issues

Compiled list of over 600 terms related to societal issues/changes from various sources, including requirements in GRI and SASB standards, ISO 26000 and SDGs and trends among other companies.

Step 2Winnowing

Keywords related to social issues and social change were classified by theme and winnowed them down to 39 materiality.

Step 3Prioritization

Assessed the importance of materiality from the standpoint of both stakeholders and the MGC Group. The CSR Committee drafted a prioritized list of materiality and submitted it to the CSR Council.

Materiality Matrix

Step 4Management deliberation/approval

The materiality submitted by the CSR Committee was deliberated and determined by the CSR Council.

Step 5Updating of identified materiality

Materiality is subject to change in response to changes in societal imperatives and stakeholders’ needs and preferences. Materiality will accordingly be updated as needed in response to changes in society and/or the MGC Group’s business activities.

Materiality KPI

Creating Shared Value(CSV)

Contribution through business operations

Contribute to development of ICT/mobility society

Solve energy and climate change problems

Solve medical and food problems

Pursuit of the potential of chemistry and advancing a balance between social and economic value, achieving even greater corporate value.

KPIs Fiscal 2020
Results
Fiscal 2023
Targets
Fiscal 2030
Targets
IIRC Capitals
(International
Integrated
Reporting
Council)
Relationship
to SDGs
(Targets)
Sales from
ICT and
mobility
applications
234.2 bil. JPY 320.0 bil. JPY Create new
businesses
that
accelerate
digital innovation
Financial Capital
Capital generated
through business
activities or
investments

3.6

9.4

Contribution
to solving
energy and
environmental
problems
Investment:
8.6 bil. JPY
(Consolidated: 2018-2020 cumulative)
Investment: Acquisition;
Financing: Approval
basis
Investment:
12.0 bil. JPY
(3-year cumulative)
Investment: Acquisition; Financing: Approval basis
Commercialize
carbon-negative
technology

9.4

Sales from medical
and food applications
39.4 bil. JPY 50.0 bil. JPY
  • Advance
    preventative
    /predictive medicine;
    enhance healthy
    longevity
  • Further
    advance
    food
    preservation
    technology

3.8

12.3

Foundation for shared-value creation (S)

Cultivating a corporate culture of job satisfaction

Promoting work-life balance; offering generous child/family care systems, creating dynamic
workplace environments

KPIs Fiscal 2019
Results
Fiscal 2023
Targets
Fiscal 2030
Targets
IIRC Capitals
(International Integrated
Reporting Council)
Relationship
to SDGs
(Targets)
Percentage
taking fewer
than 10 days
of annual paid leave*1,2
7.8%
(Fiscal 2018 results)
0% 0% Human Capital
Individuals'
capabilities,
experience and drive
for innovation

8.5
8.8

Occupational safety and health / Process safety and disaster prevention

Continuing to conduct occupational safety and health risk assessments, daily safety activities and safety education/training in the aim of zero occupational injuries

KPIs Fiscal 2019
Results
Fiscal 2023
Targets
Fiscal 2030
Targets
IIRC Capitals
(International Integrated
Reporting Council)
Relationship
to SDGs
(Targets)
Serious occupational accidents*1,3 0 0 0 Social and
Relationship
Capital

Social license
allowing an
organization to
engage in business

3.9

Serious accidents*1,4 1 0 0

Highly energy- and resource-efficient production

Minimizing environmental impacts in sourcing resources; efficiently using resources (energy, raw materials, water, etc.)

KPIs Fiscal 2019
Results
Fiscal 2023
Targets
Fiscal 2030
Targets
IIRC Capitals
(International Integrated
Reporting Council)
Relationship
to SDGs
(Targets)
GHG
emissions
intensity vs. Fiscal
2013*1
14.6%
reduction
19.9%
reduction
28.0%
reduction
Manufactured Capital
Manufactured goods
that can be used by
the organization in
the production of
products or in
service provision

7.3

Promotion of innovative R&D

Developing/adopting new processes that maximally leverage core technologies cultivated over many years; founding and developing new businesses

KPIs Fiscal 2019
Results
Fiscal 2023
Targets
Fiscal 2030
Targets
IIRC Capitals
(International Integrated
Reporting Council)
Relationship
to SDGs
(Targets)
R&D investments devoted to solving climate change problems*1,5 3.8%
of R&D
expenditures
5%
of R&D
expenditures
7%
of R&D
expenditures
Intellectual Capital
Organizational, knowledge-based intangible assets

9.5

Harmonization of shared-value creation with environmental protection ( E )

Proactive response to environmental problems

Air quality control

Water and biodiversity conservation

Reduction of industrial waste

・Formulating medium-term and annual Responsible Care(RC) plans and endeavoring to achieve their
  targets

・Reducing GHG emissions while supporting the Task Force on Climate-related Financial Disclosures

KPIs Fiscal 2019
Results
Fiscal 2023
Targets
Fiscal 2030
Targets
IIRC Capitals
(International
Integrated
Reporting
Council)
Relationship
to SDGs
(Targets)
GHG
emissions
vs. Fiscal
2013*1
23.3%
reduction
28.0%
reduction
36.0%
reduction
Natural Capital
All renewable and
non-renewable
environmental
resources and
processes that form
the foundation of an
organization's
success

13.2

Renewable
energy as a
percentage of
electric power
purchased*1
0% 10% 50%

7.2

Zero waste
emission
rate*1,6
0.8% 0.3% or less 0.15% or less

12.5

*1 On a non-consolidated basis

*2 For employees granted 20 days of annual leave

*3 Accidents resulting in lost work days eligible for disability compensation, including death and
    permanent disability, or potential disability, with four or more lost work days

*4 Accidents that threaten third parties, including those resulting in environmental pollution involving
    the community or that cause damage to local residents, and other accidents involving serious
    damage

*5 R&D investments including basic research, pilot plants, technical testing, etc.

*6 Amount of final disposal/total amount of waste generated