In 2023, the Shin-Etsu Group formulated and announced a plan to reduce greenhouse gas emissions (Scope 1 and 2) to net zero with the goal of achieving carbon neutrality by 2050. Meanwhile, as an interim target, we have continued to work to achieve the target set in 2016 to “Reduce greenhouse gas emissions in terms of production intensity to 45% (i.e. down 55%) of the FY1990 level by FY2025” by maximizing production efficiency in terms of production intensity.

Since FY2025 is the final year of this interim target, we have set new interim targets as indicated below. Meanwhile, since approximately three years have passed since the announcement of our action plan for achieving carbon neutrality by 2050, we have revised it across the entire Group.

Shin-Etsu Group has been working to reduce greenhouse gas emissions by improving its energy and raw material consumption in terms of production intensity, that is, by using energy and raw materials thoroughly and efficiently without waste. This policy will continue in the future as each of our businesses pursues the most efficient production in the industry. Since much of the reduction in terms of production intensity can be achieved through our own internal efforts, we have set the interim target to be reached by 2035.

On the other hand, reducing greenhouse gas emissions requires reducing emissions from electric power, switching fuels, and CO₂ capture and utilization. These are measures that are difficult to implement through the efforts of individual companies alone, and can only be implemented through government leadership and collaborative efforts among the relevant industries. Since the development of the relevant infrastructure and policies requires time, we have set the interim target to be reached by 2040.

Our KPI is to increase both revenue and profit each fiscal year. To that end, each of our businesses has been working to expand sales by capturing growth in demand and augmenting production capacity to make that possible. In these investments to augment production capacity, it is our policy to always introduce the latest cutting-edge technology and to maximize productivity and energy efficiency to the utmost.

A prime example of this is Shintech, Inc. (USA), which continues to build and expand its polyvinyl chloride (PVC) resin manufacturing plants. Global demand for PVC resin has increased by approximately 20% over the past decade, and solid demand growth is expected in the future, mainly for housing and infrastructure. The final products made from PVC excel in insulation and durability, thus contributing to the reduction of greenhouse gas emissions themselves. However, looking at our currently available PVC production technologies from the perspectives of productivity, environmental impact, safety, and economic viability, it is possible to improve production efficiency in terms of production intensity, but it is not possible to reduce greenhouse gas emissions to zero.

By steadily capturing the ever-increasing global demand for PVC, Shintech has been able to expand its business and make numerous large-scale facility upgrades. Currently, PVC produced using outdated technologies like the carbide method accounts for 30% to 40% of the world's total. The outdated technology emits more than five times the amount of CO₂ compared to Shintech's state-of-the-art technology. Shintech's ability to capture the ever-expanding demand for PVC with its state-of-the-art technology is helping to reduce global CO₂ emissions.

The components of reduction measures toward 2050 that the Company currently supposes are as described below. We will select the optimal ways to reduce emissions as technology evolves in the future.

By conducting life cycle assessment, the Group will contribute to the reduction of greenhouse gases throughout the supply chain.

We are working to reduce greenhouse gas emissions during product transportation. This initiative will contribute to the reduction of scope 3 greenhouse gas emissions.

Our group's products are used in a wide range of fields, including housing, infrastructure, electric vehicles, DX and GX, and support the foundations of people’s lives and industries. Many of these products also help reduce greenhouse gases. In June 2021, The Japanese government has identified 14 essential areas to aim for carbon neutrality in 2050. The ratio of sales in these 14 areas to the Group's consolidated sales in FY2024 is approximately 70%. We will continue to contribute to the carbon neutrality of society as a whole by focusing on developing, manufacturing, and expanding sales of these products.