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Risks and Opportunities

Applying our strengths to items of materiality to solve social issues and create business opportunities

Accompanying the expansion of our overseas operations, we reviewed our materiality in August 2020 based on our policy of integrating SDGs and ESG initiatives into our corporate management.

We identified items of materiality by creating a list of material issues which society requires us to address and by referencing international guidelines such as the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB) as well as items required by ESG research organizations. We then performed quantitative evaluations of each issue and verified their significance in terms of the degree of importance to stakeholders and the degree of importance to our businesses. We engaged external experts to gain objective viewpoints on the issues and held discussions with our partner companies around the world to identify material issues associated with our business model and the business environment. The issues were then designated as our items of materiality.

Risks and Opportunities Related to Materiality (Relevant SDGs)

Materiality (Relevant SDGs)
Risks
Opportunities
Climate change
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Risks
  • Enforcement/change of policies and legal regulations such as introduction of a carbon tax
  • Impact on production and shipment from extreme weather, such as typhoons and heavy rainfalls, that are becoming increasingly common in recent years
  • Changes in customer behavior toward transition to a decarbonized society
Opportunities
  • Expansion of the market for environmental products, such as products contributing to decarbonization
  • Development of new businesses through research and development
Resources and environment
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Risks
  • Impact on business activities from depletion of energy and water resources
  • Tightening of regulations on wastes and increase of waste disposal cost
  • Changes in customer needs related to raw materials
Opportunities
  • Expansion of the market for environmental products
  • Enhanced competitiveness by advancing recycling technologies, improving resource efficiency, and utilizing diverse raw materials
Diversity & Inclusion
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Risks
  • Difficulty of securing human resources that satisfy diversity requirements with a decrease in the university graduated population
  • Slowing of business activities that reflect diversity in customer needs
Opportunities
  • Securing diverse and competent human resource talent as a global company
  • Creating wealth for companies, workers, and local communities by creating diverse and inclusive organizations
Safe people and operations
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Risks
  • Significant impact on operations if a major accident occurs at a production site
  • Impact on safety assurance due to changes in manufacturing processes accompanying substantial increases in production
Opportunities
  • Improving worksite safety and hygiene by sharing best practices and education plans from around the world
  • Improving employee motivation and Company competitiveness for acquiring human resource talent
Growth with communities
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Risks
  • Significant damage to the corporate brand if the company is not perceived as a corporate citizen by local communities
  • Damage to the public image of the paint industry caused by inadequate activities oriented toward the local community
Opportunities
  • Improving public awareness of the corporate brand through value chain investment in communities
  • Promoting the sound growth of communities through social contribution activities to increase the positive public view of our Group
Innovation for a sustainable future
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Risks
  • Significant hindering to future corporate earnings owing to inability to generate innovation due to slow response to new markets
Opportunities
  • Expansion of market for products that contribute to controlling and adapting to climate change
  • Products and services that address social issues contribute significantly to society and help boost corporate earnings in the long term

For details of risks, please see"Business and Other Risks"on our website.



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