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Risks and Opportunities

While a variety of issues involving the environment and society may represent a risk that threatens corporate sustainability, working to solve those social issues can also lead to new business opportunities. Our goal is to achieve a sustainable society and sustained corporate growth by fully understanding the risks and opportunities related to materiality, striving to reduce the risks while creating a new business model that solves social issues.

Creating Shared Value (CSV)

Materiality Risks ♦ | Opportunities ♠ Main Initiatives
Contribution through business operations
Contribution through business operations
  • Contribute to development of ICT/mobility society
  • Solve energy and climate change problems
  • Solve medical and food problems
  • ♦ Increasing difficulty of development with intensifying competition; lengthening lead times
  • ♦ Shift in share of low-cost alternative materials
  • ♦ Existing product obsolescence
  • ♠ Strong in-house development technology capabilities
  • ♠ Customer credibility backed by multiple industry standards
  • ♠ Portfolio of distinctive, differentiated products
  • Transform business portfolio
  • Commercialize products that balance social value with economic value
  • Engage in new businesses that contribute to solving social issues

Foundation for shared-value creation (S)

Materiality Risks ♦ | Opportunities ♠ Main Initiatives
Cultivating a corporate culture of job satisfaction
Cultivating a corporate culture of job satisfaction
  • ♦ Declining labor productivity and outflow of personnel
  • ♦ Declining quality of stakeholder engagement
  • ♠ Strengthened foundation for creating innovation
  • ♠ Improved employee engagement in their work
  • Respect for human rights, achieving work-life balance
  • Enhancement of support system in skills development
Promotion of diversity and inclusion
Promotion of diversity and inclusion
  • ♦ Uniform thinking and loss of new business opportunities due to imbalance in personnel attributes and skills
  • ♠ Nurturing a culture of collaboration among diverse values that is conducive to new ideas and technological innovation
  • Strengthen diversity promotion system
  • Diversity management that leads to results
Stakeholder engagement
Stakeholder engagement
  • ♦ Loss of credibility among stakeholders, damage to corporate value due to inappropriate responses
  • ♠ Forming a fair market valuation
  • ♠ Improved management transparency
  • Voluntary, timely and appropriate information disclosure
  • Ongoing stakeholder communications
Promotion of socially responsible sourcing
Promotion of socially responsible sourcing
  • ♦ Negative impacts on business activity due to illegal actions and compliance violations by suppliers
  • ♠ Improved sustainability of society and long-term competitiveness
  • Encourage understanding among suppliers, strengthen collaboration
  • Internal communication and education
Occupational safety and health / Process safety and disaster prevention
Occupational safety and health / Process safety and disaster prevention
  • ♦ Risk of disasters or other problems due to insufficient education and training
  • ♦ Loss of societal trust due to accidents or scandals
  • ♠ Nurturing a culture of safety
  • ♠ Accumulating expertise in preventive maintenance
  • Ensure thorough education and training; verify and observe safety rules
  • Conduct occupational safety and health risk assessment
  • Promote LINK activities across plants
  • Promote Company- and Group-wide environmental safety activities
Highly energy-and resource-efficient production
Highly energy-and resource-efficient production
  • ♦ Cost of responding to regulations and societal demands
  • ♦ Cost of deploying high-efficiency equipment
  • ♠ Optimization of production conditions through deployment of AI/IoT;
    improving productivity by predicting and preventing problems
  • Ultra-stable operation of production equipment
  • Improve outputs through use of high-efficiency equipment
  • Introduction of remote monitoring and diagnostic technology using smart technology
Chemical / product quality and safety assurance
Chemical / product quality and safety assurance
  • ♦ Loss of societal trust due to inaccurate data handling and shipping of inappropriate products
  • ♦ Strengthened chemical substance regulations in each country
  • ♠ Facilitating continuous improvement and ensuring customer satisfaction through Company-and Group-wide quality assurance activities (Q-MGC)
  • ♠ Sharing and centralization of information to enhance customer satisfaction and societal trust
  • Promote Q-MGC Company- and Group-wide
  • Work to improve data management through DX
  • Ensure thorough safety assessments and provision of product information
  • Respond to chemical substance regulations in each country
Promotion of innovative R&D
Promotion of innovative R&D
  • ♦ Discontinuous change in social and industrial structures
  • ♦ Securing and developing personnel competent in cutting-edge technology fields
  • ♠ Strengthened technology platform and creation of innovation built on collaboration among Group’s own technologies
  • Centralize R&D structure; pursue Group synergies
  • Focus corporate resources on high-priority themes
  • Collaboration between MGC’s creativity and open innovation
  • Create a communicative research environment

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

Materiality Risks ♦ | Opportunities ♠ Main Initiatives
Proactive response to environmental problems
Proactive response to environmental problems
  • Air quality control
  • Water and biodiversity conservation
  • Reduction of industrial waste
  • ♦ Increased cost of responding to stronger environmental regulations
  • ♦ Decline in competitive advantage due to delays in technological response to resource and energy conservation needs
  • ♦ Reputational risks regarding environmental protection
  • ♠ Participation in Fukushima gas power station and geothermal project
  • ♠ Commercial development of methanol and ammonia as hydrogen carriers and CO2-free fuels
  • ♠ Participation in CCUS proof of concept testing
  • Create businesses that balance environmental and economic value
  • Promote Company-wide responsible care activities
  • Continuous improvement activities through ISO, RC-MS PDCA cycles
  • Contribute to environmental protection through business
  • Promote biodiversity preservation in alignment with stakeholders

Value-creative discipline (G)

Materiality Risks ♦ | Opportunities ♠ Main Initiatives
Strengthen systems
Strengthen systems
  • Corporate governance
  • Compliance
  • Internal controls
  • Risk management
  • ♦ Slumping business activity, loss of societal trust and damage to corporate value due to compliance violations
  • ♠ Establish a stable management foundation by improving decision-making transparency and responding appropriately to change
  • ♠ Gain stakeholder trust
  • Strengthen risk management in internal controls
  • Strengthen corporate governance structure