Environment | Sustainable Action | Sustainability | GUNZE LIMITED

Environment

The Gunze Group is advancing efforts to reduce environmental load through its business activities. In the plastics films field, we are aiming to strengthen activities for resource recycling—including the reduction of waste plastic, conversion to environmentally friendly and recyclable raw materials, and the development of recycled products that transcend the boundaries of our business divisions— as we transform into a circular manufacturer. During the period of the Medium-term Management Plan, we will focus on environment-related investment (planning 8.6 billion yen over the three years up to fiscal 2024) and promote activities linked to sustainable management.

Environmentally Responsible Management

Activities to Reduce Environmental Load

Basic Approach

Gunze is working to balance both social and economic value by strengthening initiatives aimed at reducing environmental load with a focus on three major promotional items, namely, responding to climate change, realizing are source-recycling society, and promoting sustainable procurement. In responding to climate change, we will endeavor to save energy, create energy, and use renewable energy with the goal of reducing total CO2 emissions in Scope 1 and Scope 2 by at least 35% (compared to the2013 benchmark) by 2030. Moreover, we will promote environmentally responsible business operations by further considering the use of energy innovations. As a part of efforts to realize a resource-recycling society, we will reinforce efforts to recycle waste at all domestic business sites, spearheaded by the Moriyama Circular Factory™, in order to reduce waste throughout the Group. Finally, from a sustainable procurement perspective, we will promote the use of recycled, raw biomass, and other environmentally friendly materials, enhance relationships with suppliers, and work to reduce CO2 emissions from raw materials. Through these resource recycling and sustainable procurement initiatives, the Gunze Group will take positive steps toward upgrading and expanding its lineup of environmentally responsible products while reducingScope 3 emissions.

The Gunze Group’s Environmental Technologies and Initiatives
(1) Responding to climate change (saving energy, creating energy, and using renewable energy)

・ Reducing energy loss through the introduction of energy management systems (EMS)
・ Improving the efficiency of boilers, air conditioners, and other utility equipment
・ Saving energy through new buildings with airtight and thermal insulation (acquire ZEB and CASBEE certification)
・ Systematically installing solar power generation systems
・ Shifting to low CO2 emission fuels (from heavy oil to LPG and electrification)

Introducing the Konan Plant’s ZEB* Office Building (Konan City, Aichi Prefecture)
(Engineering Plastics Business)

Reflecting our desire and ideas to create comfort for customers and a fulfilling and comfortable work environment for employ- ees, a new office building was completed to serve as the face of the plant in February 2023.
The former office was a historic building completed in 1959. In light of the issues that continued to emerge as a result of age, there was an urgent need to secure and expand space to accommodate the expanding scale of business and the variety of products handled. To expand the production area, we therefore decided to consolidate the conference rooms and offices in the plant building and reconstruct the office building. In addition to consolidation, our goal was to also create a facility that was stylish, comfortable, and environmentally friendly.
A fusion of the past and present with an exterior that showcases the features of Gunze’s historical buildings, the architectural design also incorporates such accents as dimmable lighting and wood grain to create comfortable, pleasant spaces. In addition to improving convenience and comfort, there was a focus on renovating the dining hall. Ingenious efforts were made to make dining a relaxing and enjoyable experience, including offering a variety of seating styles and menus produced in collaboration with famous restaurants. Moreover, the layout was designed to enable its double use for casual meetings and other functions, which help improve communication among employees. In terms of environmental friendliness, we also incorporated a variety of energy-saving measures and were thus able to obtain ZEB certification.
By having a new office that incorporates various design features and measures, we devised a way to boost employee motivation.
We hope that our customers will understand Gunze’s corporate stance, and that the implementation of environmentally responsible management will lead to the sustainable growth of business.

*ZEB: Net Zero Energy Building
A building design that aims to reduce the balance of primary energy consumed by the building to zero. Having achieved a 102% reduction in standard primary energy consumption (energy saving 53%, energy creation 49%), the new office building at the Konan Plant was awarded the highest ZEB certification rating.

The Konan Plant’s ZEB office building

Producing comfortable and pleasant spaces

Engineering Plastics Division

(2) Realizing a resource-recycling society

The Gunze Group has taken steps to convert its Moriyama Factory, a key plant in the plastic films field, into a resource-recycling plant (a plant that recycles resources without producing waste). In the future, we will transition from a manufacturer that sells plastic films to a recycling-based circular manufacturer.

Circular Factory™ Visitor Hosting Activities (Plastic Films Business)）

In April 2023, work on the Circular FactoryTM was completed at our Moriyama Plant after around four years of planning with the aim of utilizing solar and groundwater energy, achieving zero emissions and the elimination of plastic waste, and producing sustainable products. From the completion ceremony until the end of May 2024, we received just under 1,200 visitors from approximately 200 companies (organizations). Due to the COVID-19 pandemic, sales representatives visited customers infrequently. As a result, there were fewer opportunities to obtain feedback regarding issues and needs. Visits to the Circular FactoryTM have contributed to concrete proposals for environmental responses, which in turn have led to a variety of collaborative projects. We are also holding online factory tours for overseas customers, and our real-time responses are being well received.
In the Moriyama Plant’s management office, there is a whiteboard that displays information for plant visitors and monthly tour schedules that are filled with almost no blanks and updated daily. The visitors are mostly business clients, but there are also many government and local government officials. Previously, due to concerns about maintaining confidentiality, we rarely had the opportunity to show people from outside the Company around the factory. The reason why the new plant even has walkways to welcome visitors is because resource recycling initiatives are difficult for a single company to achieve alone. For example, recycling requires cooperation from local governments and stakeholders, while the development of materials requires cooperation from customers with expertise in recycling technology and waste disposal. In terms of promoting resource circulation, it is necessary to involve the entire industry. For this reason, we have boldly shifted to a strategy of disclosing new initiatives.
The reactions from visitors have been positive, and we are beginning to see model cases of resource circulation. However, this activity will probably not immediately lead to an increase in sales. We will continue our activities in the belief that these initiatives serve as stepping stones for future strategies.

Online briefing for overseas customers

External view of the Circular Factory™

Plastic Film Company

(3) Promoting sustainable procurement

We will actively work to upgrade and expand environmentally responsible products, with the aim of increasing the use of such sustainable raw materials as recycled polyester, organic cotton, and biomass for packaging.

Threads and accessories

Sewing thread made of 100% recycled polyester

Threads and Accessories Division

Plastic Film Company

Hybrid shrinkable film with a recycled material ratio of 30%

Plastic Film Company

Initiatives to Enhance Corporate Value through Green Finance

Developing a Green Finance Framework

The Gunze Group put in place a green finance framework in fiscal 2022 with the support of Nomura Securities Co.,Ltd., the Group’s structuring agent. Based on the Green
Bond Loan Principles/Guidelines, Gunze’s green finance framework outlines the Group’s policies toward funds earmarked specifically for projects designed to improve the environment. These policies encompass details of (1) the use of funds, (2) the project evaluation and selection process, (3) management of the funds procured, and (4) reporting.
In recognition of the framework’s compliance with the subject principles and guidelines, Gunze received the highest Green1 (F) rating from Japan Credit Rating Agency, Ltd. (JCR). Representing Japan’s first overall resource-recycling initiatives at the time this rating was received, funds procured were allocated to the Circular Factory Project*1 that circulates plastic resources at the Plastic Film Company’s Moriyama Plant.

Executing Green Loans

Utilizing the aforementioned framework, Gunze procured funds through a syndicated, term green loan from MUFG Bank, Ltd. in September 2022. The funds were allocated on a progressive basis up to April 2023 and used for the construction of the Group’s circular factory CASBEE*2 A-ranked building, the installation of a new production line, and the construction of the Engineering Plastics Division’s Konan Plant office, which received the BELS*3 5-star and ZEB*4 certifications.
As a procurement initiative (loan) that helps improve the environment while fulfilling the requirements of the carbon dioxide emission control subsidy (initiative to support the development of a system to promote green bonds, etc.), this project received a grant from the Green Finance Promotion Corporation, which was selected by Japan’s Ministry of the Environment.

Future Policies

The framework developed in this instance, covers all of the Gunze Group’s environment-related investments and enables the execution of green bonds and green loans under the framework to finance the subject investments. Moreover, we believe that the cost advantage of sustainable finance compared with conventional financing methods will improve in the future owing to growing social awareness toward sustainability and changes in the financing environment resulting from revisions to the Bank of Japan’s policies.
The Gunze Group will proactively undertake the procurement of funds utilizing this framework to ensure both social and economic benefits.

*1 Circular Factory Project: A factory project designed to realize resources recycling without generating waste in the plastic films field by developing products suitable for recycling, establishing technologies for recycling, and reusing waste plastics.
*2 CASBEE: Comprehensive Assessment System for Building Environment Efficiency. A five-level rating system that comprehensively evaluates building quality, encompassing such environmental considerations as energy conservation, the use of materials and equipment with low environmental impact, as well as indoor comfort and landscaping.
*3 BELS: Building-Housing Energy-efficiency Labeling System. Established by Japan’s Ministry of Land, Infrastructure, Transport and Tourism based on the Guidelines for Displaying Energy-Saving Performance of Buildings, this system objectively evaluates and ranks energy-saving performance by the number of stars from one to five.
*4 ZEB: Net Zero Energy Building. A building that aims to achieve a comfortable indoor environment while creating energy from renewable energy sources, and reducing the balance of primary energy consumed by the building to zero through energy conservation using a structure with improved heat insulation and sensors, etc.

Efforts to Achieve the SDGs

Carbon Negative Products Designed to Contribute to Both CO2 Reductions and Sales

Our joint industry-academia project with the Center for Urban Research, Kyushu University, has shown that the amount of CO2 absorbed and fixed in the landscaping and greening business exceeds the amount of CO2 emitted during the production of BODY WILD “3D-MADE Boxers” and “Cutoff™ Boxers” products sold as part of the apparel business. As a result, these products received CARE Certification* from the Japan Institute of Metrology and Sustainability, an independent organization, thereby allowing us to commercialize these as carbon negative products that help improve the environment.

* CARE Certification
CARE Certification is the world’s first initiative to use a visual format as a means of indicating whether products and services appropriately consider the labor and natural environments during their production processes. CARE Certification includes both human rights and environmental frameworks, where Gunze has acquired CARE Certification under the environmental framework.

Ongoing Implementation of Midosuji Avenue Ginkgo Tree Project

Based on the Agreement on the Supply of Ginkgo Trees on Midosuji Avenue signed with the City of Osaka, we provided an additional 19 ginkgo trees in FY2023. The future vision for Midosuji Avenue is to “become a people-centered street.”
Although people are the main focus, the ginkgo tree promenade planted there provides a symbol of this vision. In the years to come, we would like to continue working on this project and contribute to creating a neighborhood full of greenery in Osaka.

Gingko trees on Midosuji Avenue

Planting for Forest of Silence at Expo 2025 Osaka Kansai Main Venue

In preparation for Expo 2025 Osaka, Kansai, Japan which will open in April 2025, we are delivering more than 500 trees of vari- ous sizes, ranging in height from three to 10 meters, to be planted in the Forest of Silence at the main venue. For the Cycle of Life project, by which nearly 1,000 trees will be transplanted from the former Osaka Expo site and other locations to the Forest of Silence, a new transplanting method that utilizes a special material developed in the textile materials field has been adopted.

Preparations for the transplant of trees from the site of Expo 70 in Osaka