Environment

Our Group believes that contributing to the reduction of global environmental impacts--through the effective use of resources such as water, energy, and raw materials, and the prevention of environmental pollution--is essential for sustainable business operations. With this belief, we will advance various initiatives and proactively leverage innovative technologies to build sustainable business operations.

Environmental and safety management

Basic approach

We recognize that identifying and managing the impacts chemical substances have on the environment and their safety is an important obligation of a paint manufacturer. Since we declared our commitment to Responsible Care (RC) in 1995, we have been conducting RC activities that apply not only to the environment, but also include areas of occupational safety and health and chemical and product safety, starting in fiscal 2010.
Japan Group conducts environment and safety management through measures and improvements on safety, environment and health based on its RC activities. We have established the Basic Policy for Responsible Care outlining tasks that must be undertaken by each employee and all organizations across the entire Group as the foundation of our business activities, and we strive to make this policy known throughout the Group.

Basic Policy for Responsible Care

Guided by the Purpose that defines the identity of the Nippon Paint Group, "Enriching our living world through the power of Science + Imagination," all our group employees are working together in the six core categories of responsible care: environmental protection, safety and accident prevention, occupational health and safety, logistics safety, chemicals and product safety, and engagement with society. We will conduct these activities in compliance with laws and regulations and by building trust with our stakeholders with the goal of contributing to the creation of a sustainable society.

* Responsible Care (RC) is a pledge from businesses within the chemical industry to exercise consideration for the environment, safety, and health throughout the processes of chemical product development, manufacturing, distribution, use, final consumption, and disposal. The pledge involves implementing voluntary environmental safety measures and improvements. Responsible Care started in Canada in 1985 and became adopted by chemical industries in other countries around the world. In Japan, the number of member companies has grown with the promotional activities conducted by the Japan Responsible Care Council (JRCC) since its establishment in 1995.

Management structure

Japan Group has established the Responsible Care Committee, which reports directly to the President. The committee is involved in setting goals and planning activities, as well as sharing information of each company at domestic Group meetings, including safety and environment meetings as well as product safety meetings, and promoting activities relevant to the environment, health and safety. And the Board of Directors oversees our sustainability activities including Responsible Care activities.

We have also established an environment, safety and health organization in each Partner Group Company, including overseas, which enable us to engage in effective and efficient operations through activities built around our primary business activities. The activities follow a PDCA cycle at each company and plant, and are subject to both external review for ISO 14001 and internal RC audits to clearly identify any areas of improvement. We also conduct regular management review to strive for continuous improvement.

Targets and Results of Responsible Care Activities

Japan Group has established the Responsible Care (RC) Activity Policy that encompasses the fundamental aspects of RC activities, including environmental conservation, occupational safety and health, security and disaster prevention, chemical and product safety, logistics safety, and community engagement. Furthermore, the Responsible Care Regulations have been implemented with the objective of enhancing the effectiveness and efficiency of RC activities while promoting their integration.
In 2023, RC activities were conducted based on targets set by each partner company and base in accordance with Group targets focused on the following priority themes. Starting in 2024, each partner company and base promotes RC activities based on annual targets established under a newly formulated Medium to Long-Term RC Policy, which sets quantitative targets for greenhouse gases, energy, water, and waste.

Priority themes	Group targets for 2023	Results in 2023	Evaluation of 2023
Occupational safety and health Security and disaster prevention Logistics safety	Conduct the following activities with the goal of achieving no serious injuries (occupational and physical injuries)	Achieved zero serious incidents Due to an increase in physical incidents involving forklifts, safety education and comprehension tests were conducted across the entire Japan Group Priority targets were set based on the RC plans of each partner company	+++
	▶Prevent disasters and accidents by improving comprehensiveness of assessments through continuous review of risk assessment and by implementing thorough risk measures (reduction and acceptance) based on the results of assessment (priority targets: contact with hazardous materials and rotating bodies)		+++
	▶Enhance safety management for logistics (contractor management, storage of hazardous substances, material handling and conveyance, transportation, etc.)	Based on the RC plans set by each partner company, education and guidance for logistics contractors were provided through training sessions and safety patrols	+++

Priority themes	Group targets for 2023	Results in 2023	Evaluation of 2023
Environmental preservation	▶Initiatives to prevent global warming - Scope 2: Started purchasing renewable energy for achieving GHG reduction target (Scope2：a 13.8% reduction compared with the 2019 level)	Continued to purchase non-fossil certificates, thereby reducing Scope 2 emissions by 13.8% compared to 2019 levels Started considering on-site/off-site PPAs based on the RC plans set by each partner company	+++
	▶Development and commercialization of sustainable products that benefit society and development of markets for these products - Products that have a smaller environmental impact - Products with social benefits	Implemented initiatives to reduce CO2 emissions in automotive coatings using a life cycle assessment (LCA) approach Commenced development of sustainable products in decorative paints, progressing as planned; launched new water-based paints and high-durability coating film products	+++
	▶Rationalization of energy use - Electricity: Promoting energy-saving activities (considering introducing LED lighting, etc.) - Fuels: Promoting energy-saving activities (improving fuel efficiency through fuel conversion, etc.)	Only some partner companies achieved their targets The decline in production volume was the primary factor, with the heat wave and an increase in employees returning to the office after the pandemic also having an impact	+
	▶Action for the proper management of waste - Reduced industrial waste generation and achieved and maintained zero industrial waste sent in landfills - Controlled plastic waste generation and promoted recycling (comply with the Plastic Resource Circulation Act) - Properly stored PCB waste and conducted survey and developed plans to dispose of PCB containing equipment	Temporary industrial waste treatment and landfill treatment were conducted Following the enactment of the Act on Promotion of Resource Circulation for Plastics, each partner company established operational systems for recycling, and implemented plastic segregation and emission reduction measures The presence of high-concentration PCBs was discovered at some bases, but registration was completed after coordination with the government	++
	Conduct the following activities with the goal of achieving zero incidents that lead to contamination of air, soil and water ▶Comply with voluntary management standards (air pollution: SOx, NOx, dust; water pollution: COD, total phosphorus, total nitrogen) ▶Reduce VOC emissions	Maintained compliance with the self-imposed standard values Continued the trend of reducing VOC emissions	+++

Priority themes	Group targets for 2023	Results in 2023	Evaluation of 2023
Chemicals and environmental safety	Chemical substances management framework Conduct the following activities with the goal of achieving zero serious violations (suspension orders, collection orders, penalty, public disclosures) ▶Maintain compliance with laws and regulations by establishing a system to ensure compliance by extracting product safety laws and regulations deemed particularly important for each PC, such as the Poisonous and Deleterious Substances Control Law, Act on the Evaluation of Chemical Substances and Regulation of Their Manufacture, etc., as well as revisions to overseas laws with deadline for notification	An inadequacy in the Chinese SDS/label content was detected, but it was promptly addressed, and permanent corrective measures were implemented	++

※ Assessment standards: Average achievement rate in Japan ＋＋＋：80％ or more; ＋＋：50％ or more; ＋：Less than 50%

Medium to Long-Term RC Policy
▶Nippon Paint Group is committed to addressing environmental issues, such as climate change and resource recycling, through its business operations. Contributing to resolving environmental issues through our products: Developing and launching sustainability products that respond to external environmental changes, such as international trends and customer requirements Completing the assessment of key products using the LCA approach by 2025, and utilizing the results to enhance development strategies and drive business promotion Contributing to reducing environmental impact in our business activities Aiming to reduce GHG Scope 1 and 2 emissions by 37% compared to 2019 levels by 2030, with the ultimate goal of achieving net zero by 2050 Targeting a 10% reduction in energy and water usage^*1 and waste generation in intensity compared to 2021 levels by 2030
▶Nippon Paint Group is committed to ensuring compliance and maintaining safe and stable operations as the foundation for business continuity. Continuously enhancing chemical substances management throughout the product life cycle: Continuously improving systems, policies, and training for managing chemical substances information in response to stricter laws and regulations Aiming to maintain zero penalties under chemical substances laws and regulations by continuously strengthening the management framework Continuously enhancing risk management and information disclosure frameworks for chemicals of high concern Continuously improving safety and environmental management within our business activities Continuously advancing and enhancing the efficiency of information management to improve our safety and environmental management systems Continuously improving the management system to maintain zero serious incidents^*2 and zero penalties under safety and environmental laws and regulations

Medium to Long-Term RC Policy

▶Nippon Paint Group is committed to addressing environmental issues, such as climate change and resource recycling, through its business operations.

Contributing to resolving environmental issues through our products:
- Developing and launching sustainability products that respond to external environmental changes, such as international trends and customer requirements
- Completing the assessment of key products using the LCA approach by 2025, and utilizing the results to enhance development strategies and drive business promotion
Contributing to reducing environmental impact in our business activities
- Aiming to reduce GHG Scope 1 and 2 emissions by 37% compared to 2019 levels by 2030, with the ultimate goal of achieving net zero by 2050
- Targeting a 10% reduction in energy and water usage^*1 and waste generation in intensity compared to 2021 levels by 2030

▶Nippon Paint Group is committed to ensuring compliance and maintaining safe and stable operations as the foundation for business continuity.

Continuously enhancing chemical substances management throughout the product life cycle:
- Continuously improving systems, policies, and training for managing chemical substances information in response to stricter laws and regulations
- Aiming to maintain zero penalties under chemical substances laws and regulations by continuously strengthening the management framework
- Continuously enhancing risk management and information disclosure frameworks for chemicals of high concern
Continuously improving safety and environmental management within our business activities
- Continuously advancing and enhancing the efficiency of information management to improve our safety and environmental management systems
- Continuously improving the management system to maintain zero serious incidents^*2 and zero penalties under safety and environmental laws and regulations

※1 Excluding water used for products
※2 Including the impact on local communities and the environment through our business activities

Acquisition status of management system certification

The acquisition of environmental management system certification (ISO 14001) is considered a fundamental tenet of environmental preservation in terms of management system. As for occupational safety and health, we are conducting activities based on the occupational health and safety management system (OHSMS).
Nippon Paint Group received ISO 14001 multi-site certification for seven operating companies in Japan and all (100%) of their subsidiaries (in total 63) upon audit by an external certification organization. In addition, we provide active support to our partner companies overseas for their health and safety activities and take actions to deepen communications for sorting out problems. In Asia, we provide support to enable our partner companies to establish improvement activities. In other regions, we conduct activities and provide support for corrective actions on an as-needed basis.

Environmental management system (ISO 14001)
Domestic: 66 bases (100％)
Overseas: 52 companies/bases

*Data for domestic operations are as of October 2024, including only key bases and excluding sales offices and other small-scale bases. For production bases outside Japan, based on interview as of 2020. The reporting boundary excludes affiliated parties, other affiliated companies, non-consolidated subsidiaries, affiliated companies, equity-method affiliates, scheduled closures, etc.

Safety and health management system (ISO 45001 / former OHSAS 18001)
Domestic: We have adopted the occupational health and safety management system (OHSMS) at almost all production bases (under development for a portion of bases) in order to continuously maintain and enhance RC-based occupational safety and health activities.
Overseas: 22 companies/bases

*For production bases outside Japan, based on interviews as of 2020. The reporting boundary excludes affiliated parties, other affiliated companies, non-consolidated subsidiaries, affiliated companies, equity-method affiliates, scheduled closures, etc.

Environment, safety and health education

In addition to legal education and training, the Group conducts basic knowledge and practical environment and occupational safety and health education in order to properly implement RC activities. Training conducted in fiscal 2023 was as follows.

Number of people participating in the road safety training program: 1,045