Environment

Gunze Environmental CharterAs part of the global community, we at Gunze are fully aware of our responsibility to safeguard the earth and its resources for future generations. Gunze is a responsible corporate citizen committed to building a prosperous global society that enjoys sustainable development. To support our efforts, we will actively address environmental issues to minimize the environmental impact of our activities and implement necessary measures to improve and maintain the environment. In accepting our social responsibility to help solve environmental problems, we have established a basic environmental philosophy and determined action guidelines.

Basic Environmental Philosophy

By offering environmentally responsible products and services, we aim to contribute to the development of an affluent, sustainable global society. We fully understand our reliance on the gift of nature, so we strive to maintain harmony with the global environment and promote the preservation of biodiversity.

Environmentally Responsible Action Guidelines

We will direct our efforts toward minimizing the environmental impact of all our corporate activities, considering the impact on biodiversity inside and outside Japan, and the local communities related to our business.
We will comply with all related laws and regulations, but also will strive to upgrade the level of our environmental management by establishing internal voluntary standards.
We will promote effective use of resources, including raw materials and energy, aiming to reduce greenhouse gas emissions.
We will reduce waste, and promote recovery and recycling for recirculation of resources.
We will promote research and development of environmentally sound products as well as manufacturing and environmental technologies to lessen the environmental impact of our activities.
We will implement programs to increase the environmental awareness of our employees, and encourage them to cooperate with and contribute to the environmental preservation efforts of local communities.
We will advance environmentally conscious practices, and promote the transfer of environmental technologies to our overseas operations.
We will immediately take action to reduce the damage in the event of an environmental accident.

Basic Policy for Plastic Resource CirculationThe problem of marine plastic waste is growing worldwide, and waste problems have worsened, particularly in emerging nations. This has led to stricter regulations for single-use and disposable plastics. Compliance with these regulations is also required by the SDGs (Sustainable Development Goals) adopted by all United Nations Member States in 2015. Activities to combat the problem of marine plastic waste are accelerating on a global scale, and GUNZE recognizes its social responsibilities as a company engaged in the manufacture and sale of plastic film packaging materials.

GUNZE proactively implements the “3Rs + Renewable^※” initiative for plastics,
to reduce the amount of plastic waste and help build a society
that promotes plastic resource circulation.

As such, we have established the following policies.

Reduce the volume of plastics and promote the reuse and recycling of plastic items.
Help implement effective and efficient plastic resource circulation through easy-to-classify and easy-to-recycle product design and by aggressively using renewable raw materials.
Help reduce the use of petrochemical raw materials by developing products using bio-based materials.
Conduct appropriate management of waste, and ensure that production activities have a smaller impact on the environment, so as to fulfill our responsibility as a manufacturer.

3R + Renewable3Rs stands for Reduce (using fewer resources for production and reducing waste), Reuse (using products and parts repeatedly), and Recycle (effectively using waste as raw materials or energy sources). “3Rs + Renewable” means adding the use of renewable resources to the 3Rs initiative.

TCFD climate change related disclosures

In October 2021, the Gunze Group expressed support for the recommendations put forward by the FinancialStability Board (FSB) Task Force on Climate-relatedFinancial Disclosures (TCFD). TCFD requires disclosure of the frameworks for examining climate change, indicators, and targets for evaluating the medium- and long-term impact of climate change on corporate value and for identifying risks and opportunities from climate change, and the way in which these examinations are reflected incorporate management.

①Governance

Governance on climate change is incorporated into the sustainability governance structure.

②Risk management

Major risks related to climate change are based on the Sustainability Governance Structure Chart. Important issues are reported from the Sustainability Committee and Risk Management Committee to the Corporate Officers’Meeting and then to the Board of Directors, thereby integrating and managing Group-wide risks.

③Strategy

We selected the plastic films field and apparel business (innerwear) as the Gunze Group’s main businesses for scenario analysis, and we identified short to long-term risks, studied countermeasures, and for these, extracted considerations and opportunities.

④Indicators and Targets

To systematically reduce CO2 emissions, we will strengthen our efforts to save energy, create energy, and use renewable energy in our business activities, and take measures to promote the 3Rs (reduce, reuse, and recycle) and implement other resource recycling and eco-friendly initiatives. Commencing in FY2023, new manufacturing machinery became operational at the Circular FactoryTM in the plastic films field, contributing to a reduction in energy consumption per unit of production. We are also actively developing and bringing to market products that address the risks and opportunities identified through scenario analyses. To give specific examples, in the plastic films field, we developed and launched Japan’s lightest shrink film, GEOPLASTM, an environmentally friendly shrink film for label packaging made using the mass balance method from more than 5% recycled materials that is compatible with automatic shrink sleeve label application machines. In the apparel business (innerwear field), in response to the summer heat that gets more severe with every passing year, we developed and launched the functional brand Asedoron, for which we used our own technology to eliminate the discomfort caused by perspiration. In the years to come, we will actively develop and bring to market environmentally friendly products, including those that support ethical consumption.

NZE2050（Net Zero by 2050）NZE2050 (Net Zero Emissions by 2050): One of the scenarios presented in the IEA’s World Energy Outlook 2020. It is a 1.5°C scenario that surpasses the target of the Paris Agreement and aims for zero CO2 emissions by 2050.
RCP8.5 ScenarioA scenario in Figure SPM6 of the summary for government policymakers of Synthesis Report (SYR) of the IPCC Fifth Assessment Report (AR5), which forecasts a temperature increase of 2.6°C to 4.8°C by 2100.

Responding to Climate Change related Risks and Opportunities

Risk items		Risks	Period	Degree of financial impact	Plastic films field	Innerwear field	Responding to Risks and Opportunities
Transition risk （1.5℃）	Coal prices	Emissions trading and carbon taxes introduced in many countries, increasing operating costs	Medium to long term	Large	○	○	Risk response:Reduce the financial impact of carbon taxes by increasing investment in renewable energy and shifting to low-carbon energy sources
	Plastics regulations in various countries	Raw material prices increased due to stricter regulations prompting the introduction of bio-materials and recycled materials	Short to long term	Large	○	○	Risk response:Establish technologies that break down and reuse waste plastic and provide products that meet customer needs
	Changes in energy mix (electricity prices)	Higher ratio of renewable energy to electric power has driven up electricity prices	Medium to long term	Small	○	○	Risk response:Use of equipment with low power consumption; promote the installation of self-consumption solar power generation
	EV and renewable energy penetration rates	－	Medium to long term	Large	○		OpportunitiesStrengthen sales of lithium-ion batteries and semiconductor film with the spread of EVs
	Price shifts in key commodities	Manufacturing costs for crude oil-derived synthetic fibers has increased	Short to long term	Large		○	Risk response:Promote a shift from petroleum-derived to green materials.
	Changes in customer behavior	More consumers are making purchasing decisions in line with their environmental impact	Medium to long term	Medium		○	Risk response:Increase sales of environmentally responsible products for ethical consumption
Physical risks （4℃）	Abnormal weather	Lower sales due to business activity suspensions and supply chain disruptions caused by wind and flood damage	Short to medium term	Medium	○	○	Risk response:Enhance supply chain disaster prevention at manufacturing sites and in logistics to strengthen business continuity capabilities
	Rising temperatures (volume of cotton cultivation)	Cotton prices up due to rising temperatures	Medium to long term	Medium		○	Risk response:Develop biomaterials and recycled materials
	Rising temperatures	－	Medium to long term	Medium	○	○	OpportunitiesProducts that address rising temperatures. Strengthened sales (shrink films, innerwear)

Time periodShort-term 1-2 years, medium-term 3-5 years, long-term 6-10 years
Financial impact in 2050Small = less than 100 million yen, Medium = 100 million yen to 1 billion yen, Large = 1 billion yen or more

CO2 reduction results (Scope 1, 2 ,3)

		FY2023	Compared to FY2022		Compared to FY2013
		Emission volume(t-CO₂)	Reduction volume(t-CO₂)	Reduction rate(%)	Reduction volume(t-CO₂)	Reduction rate(%)
Achievements	Scope1+2	115,517	2,807	2.4%	56,991	33.0%
	Scope1	34,732	3,912	10.1%	17,581	33.6%
	Scope2	80,785	-1,105	-1.4%	39.411	32.8%
	Scope3	390,856	33,005	7.8%	－	－

Scope 1 and 2 are calculated for all Gunze Group business sites in Japan and overseas (Scope 2 calculation is based on market criteria)
Scope 3 is calculated for all Gunze Group business sites in Japan.

CO2 Reduction Results and Future Initiatives

① Scope 1, 2 Results

The total reductions in Scope 1 and 2 CO2 emissions totaled 115,517t-CO2 (97.6% compared with the previous year), which amounts to 33% compared with the FY2023 target of “27% or more compared with FY2013,” and thus we were able to achieve our target. The Gunze Group is working to conserve energy and expand the use of renewable energy as a fundamental part of its efforts to reduce CO2 emissions. FY2023 results were affected by production adjustments in line with market trends and fluctuations in domestic and overseas electricity coefficients. Going forward, to minimize the impact of such external factors and to make our CO2 reduction activities sustainable, we will strive to increase the proportion of renewable energy by switching over to highly efficient equipment when it becomes obsolete, implementing sustainable energy-saving activities across all our business sites by visualizing energy losses centered on EMS,*3 and vigorously promoting the maximum use of conventional solar power generation panels across the Company. We will also actively promote efforts to introduce next-generation solar power equipment to achieve our 2030 CO2 emissions reduction target.

※3 EMS : Energy Management System

② Scope 3 Results

Scope 3 emissions for FY2023 amounted to 390,856t CO2, a year-on-year reduction of approximately 8%. This result was due to the Plastic Film Company’s significant contribution in promoting resource circulation strategies, including its Circular FactoryTM. The Gunze Group’s CO2 emissions are weighted more heavily in Scope 3 than in Scope 1 and 2, and we are focusing on resource circulation and sustainable procurement to reduce Category 1 (purchased products and services ) and Category 12 (end of life treatment of sold products ), mainly at the Plastic Film Company and Apparel Company, which account for a large proportion of the emissions volume. To further strengthen our Company-wide efforts toward Scope 3 reductions, we will consider setting and disclosing targets for resource circulation and sustainable procurement. We have begun our Scope 3 calculation and reduction efforts in Japan, but going forward we will also proceed to confirm the extent of the Scope 3 impact at our overseas business sites.

Chemical Substance ManagementChemical substances have many excellent functions and are beneficial to business activities. However, some chemical substances are harmful to people and the environment. By switching to safer substances or reducing the use of such chemical substances, it is possible to reduce the risk of harm to people and the environment.
In order to use chemical substances safely, we conduct scientific risk assessments based on the hazardous properties and exposure levels of each chemical substance, and aim to manage them appropriately according to the assessment results.
①Basic Approach
Gunze Group has established management standards for chemical substances used in all of its business activities and strives to reduce the environmental impact of these substances.
②Management Standards
All chemical substances used by the Gunze Group are managed in accordance with the standards for ranks A (Prohibited use), B (Strict management), C (Use reduction), and D (Emission reduction), taking into account applicable laws and regulations, carcinogenic potential, and environmental impact.
③Management System
The General Manager of the Technology and Development Department oversees the management of chemical substances within our Group, and the Technical Development Department works to improve the company-wide chemical substance management system. The management department of each business unit is responsible for managing individual chemical substances, investigating the hazardous properties of chemical substances, and studying countermeasures. Each business unit and the Technical Development Department work together to ensure that business operations are friendly to people and the environment.
④Training
The Technology and Development Department conducts regular training sessions for chemical substance managers at each business site to improve their skills in the following areas.