Policies and Basic Approach
The Inabata Group views sustainability not merely as a risk management measure but as an opportunity for sustainable growth. Accordingly, we are advancing various initiatives aligned with our materiality. As a trading company, we consider human resources are our most important capital. Therefore, strengthening human capital directly enhances our value creation capabilities and serves as a vital foundation for sustaining the Group's competitive advantage. In the environmental field, we focus on environmentally conscious plastics such as recycled and bio-based materials. This approach contributes not only to the realization of a decarbonized society and a circular economy but also strengthening competitiveness in our synthetic plastics business. To further enhance the corporate value of the Group, we regard sustainability as a key management priority. The spirit of love (ai) and respect (kei) that underlies the Group’s commitment to empathizing with and supporting our clients and society, is deeply aligned with the principles of sustainability. We aim to enhance long-term corporate value while contributing to the realization of a sustainable society.
In November 2021, we established the Sustainability Basic Policy based on the corporate philosophy of the Inabata Group. In addition, taking into account environmental and social issues as well as international trends, we established the Sustainability Code of Conduct, which consists of nine key areas, including human rights and the environment.
Inabata Group Sustainability Basic Policy
The Inabata Group’s corporate mission is to value people and contribute to society with a spirit of “love (ai)” and “respect (kei)”. Under this mission, we will also make it a management priority to address various environmental and social issues.
We will continue to respond to society’s evolving needs in all the Group’s business activities, as we aim to enhance our long-term corporate value and contribute to building a sustainable society.
Inabata Group Sustainability Code of Conduct
1. Respect for Human Rights
We will respect human rights and adhere to international norms that protect them. We will not tolerate any human rights infringement, including discrimination or harassment concerning race, nationality, ethnicity, religion, beliefs, gender, age, disabilities, social status, or sexual orientation. Nor will we tolerate inhumane acts, such as forced labor, child labor, and slavery.
We will conduct human rights due diligence to ensure that our business activities avoid causing or contributing to infringements on human rights.
2. Healthy, Safe, and Secure Working Conditions
We will strive to maintain a working environment where all employees can continue to work in healthy, safe, and secure conditions. We will actively seek to identify and eliminate all conditions that could negatively impact the health and safety of our employees.
We will respect the rights of workers and comply with all labor laws and regulations in each of the countries where we do business.
3. Fostering an Open Culture for Active Participation by Diverse Staff
We will continually provide opportunities for all employees to pursue their interests and develop their strengths according to their capabilities. We will create a working environment that encourages interaction, where diverse people respect each other’s unique characteristics and abilities and feel a sense of unity as they work . Our goal is to foster a culture of open and active participation.
4. Environmental Conservation
We will earnestly address climate change and other environmental issues and take active steps to protect the environment. Recognizing that our business activities affect the environment, we are implementing a comprehensive range of protective measures. These measures include reducing greenhouse gas emissions and other steps to respond to and mitigate climate change, managing energy usage, using resources efficiently, reducing waste, preventing pollution, managing chemical substances, conserving water resources, and preserving biodiversity.
We utilize an environmental management system to ensure that we comply with all environmental laws and regulations and take steps to appropriately monitor and manage the environmental impact of our activities.
We will contribute to environmental conservation through our business activities, such as by developing and selling products that help reduce the environmental footprint of our customers and society.
5. Crisis Management
The fundamental objectives of our crisis management are first and foremost to protect people’s lives and then to ensure business continuity and reestablish normal operations as quickly as possible in the event of a natural disaster, such as a major earthquake, typhoon, or flood, as well as a pandemic, terrorist action, accident or incident, cyber attack, or security incident. We regularly review our business continuity plan to confirm that it is up to date. When a crisis event occurs, the plan ensures that we can quickly resume operations to minimize the impact on our customers and suppliers, which is essential to maintaining trust in our company.
In the event of a major disaster, our business sites will participate in the restoration and reconstruction efforts of local communities.
6. Constructing a Sustainable Supply Chain
We will construct a sustainable supply chain by working together with all of our supply chain’s stakeholders to address environmental issues such as climate change, as well as human rights and other social issues. We will share the Inabata Group Sustainable Supply Chain Policy with our suppliers, and based on those guidelines, we will communicate closely with them and strive to strengthen our partnerships.
We will endeavor to be just and equitable in our business transactions, and we will not abuse our dominant bargaining position. We will conduct fair business in compliance with each country or entity’s regulations governing fair competition and transactions, including antitrust laws.
7. Compliance
We will engage in fair and honest business practices that comply with all laws and regulations on business activities. We will implement thorough anti-bribery and corruption measures to avoid conflicts of interest and to ensure the appropriate handling of information. In addition, the Inabata Declaration of Compliance sets high ethical standards for the behavior of everyone working in the company.
We will maintain an internal whistleblowing system through which we accept and respond to anonymous and confidential reports of non-compliance issues.
We will continue to strengthen the Group’s risk management and compliance systems through regularly scheduled internal audits as well as those conducted by Audit and Supervisory Committee.
8. Collaboration with External Stakeholders
We will engage in ongoing dialogue through various platforms with stakeholders, including customers, suppliers, shareholders, investors, industry groups, and local communities to discuss and understand underlying issues and communicate our corporate policies and intentions.
We will use information obtained through that dialogue to improve our business efficiency, enhance our corporate value, and form action strategies to address environmental and social issues. We will also work with stakeholders when implementing our strategies to improve their effectiveness.
We will fulfill our duty as a good corporate citizen by actively contributing to the development of the local community.
9. Sustainability Information Disclosure
We will provide timely and appropriate disclosure of information related to sustainability and maintain transparency and accountability. We will actively monitor and act on international sustainability initiatives, including disclosing information in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures. We believe these are essential for us as a company to maintain our stakeholders’ trust and fulfill their expectations.
Sustainability Committee
Established in November 2021
Revised in June 2022
Revised in December 2024
Governance
The Inabata Group established the Sustainability Committee to further promote company-wide initiatives to address sustainability issues in October 2021.
The Committee is chaired by the president, and the senior managing executive officer in charge of sustainability serves as vice chairperson. Its members include one director and two executive officers responsible for the four business segments, as well as six heads of key administrative offices. In addition, seven independent directors and two non-executive directors participate in the Committee as observers, providing their views and advice as necessary. By having all directors participate in the Committee, the Board of Directors fulfill its oversight function.
In principle, the Committee meets at least once a year, with extraordinary meetings held as necessary. It is responsible for formulating, approving, and monitoring the Group’s sustainability policies and initiatives.
Per the Regulations of the Board of Directors, the director in charge is required to report to the Board of Directors at least once a year on the status of sustainability initiatives. These issues include global environmental concerns such as climate change, respect for human rights, consideration for employee health and working conditions and fair and appropriate treatment, fair and proper transactions with business partners, and crisis management for natural disasters. Furthermore, the status of sustainability initiatives is reported to the Board of Directors quarterly through business execution reports. Matters deliberated and approved by the Committee, together with the progress of related initiatives, are also reported through this process, thereby ensuring oversight by the Board.
Recognizing that addressing sustainability is a key management issue, the Company has incorporated sustainability-related indicators into performance-linked remuneration for directors*1. Specifically, we have adopted “ESG scores from multiple external evaluation organizations (FTSE Russell and MSCI)” as an indicator for directors’ performance-linked remuneration, and “the Group engagement survey achievement rate” as a performance metric for calculating the performance coefficient under the Board Benefit Trust (BBT)*2, thereby enhancing the effectiveness of the Board of Directors’ oversight of sustainability issues.
Matters resolved by the Committee are implemented and managed through collaboration between the dedicated Sustainability Promotion Department and the Sustainability Committee Secretariat, which consists of members of key administrative departments. This structure promotes sustainability initiatives across the entire Group. In addition, to support effective deliberations by the Committee, the Sustainability Promotion Department works together with Sustainability Promotion Members drawn from each sales division and key administrative departments to compile and provide sustainability-related information on a company-wide basis.
- *1 Performance-linked remuneration for directors is calculated by multiplying the fixed remuneration for each position: profit before taxes and non-controlling interests (excluding gain on sales of investment securities), return on capital (ROIC and ROE), stock price, and ESG scores from multiple external evaluation organizations (FTSE Russell and MSCI).
- *2 For each position, 50% of the base points determined for each position is designated as Service points (fixed points), and Performance points (Service points × Performance coefficient) are added to determine the total points granted for the current fiscal year. The Performance coefficient is determined based on the achievement rates of the consolidated operating profit target and the Group engagement survey. The achievement rate of the consolidated operating profit target refers to actual performance compared to the rate externally announced in the medium-term business plan. The Group engagement survey achievement rate refers to the achievement rate employee engagement survey KPI set under the Sustainability Medium-Term Plan.
Main sustainability-related matters discussed by the Sustainability Committee and reported to the Board of Directors
| FY2021 | Establishment of Sustainability Basic Policy and Code of Conduct / Establishment of Human Rights Policy |
|---|---|
| FY2022 | Participation in the United Nations Global Compact / Identification of materiality / Carbon Neutrality Declaration 2050 / Information disclosure in accordance with TCFD recommendations / Status of external ESG evaluations (FTSE, MSCI, etc.) / Calculation of GHG emissions (Scope 1, 2, and 3) / Progress on TCFD-compliant scenario analysis / Progress on human rights due diligence |
| FY2023 | Endorsement of TCFD and TCFD Consortium / Information disclosure in accordance with TCFD recommendations / Calculation of GHG emissions (Scope 1, 2, and 3) / Progress on human rights due diligence |
| FY2024 | Formulation of the Sustainability Medium-term Plan 2026 / Carbon Neutral Transition Plan / Status of external ESG evaluations (FTSE, MSCI, etc.) / Revision of Human Rights Policy and establishment of Sustainable Supply Chain Policy / FY2023 performance against the Sustainability Medium-term Plan 2026 / Purchase plan for renewable energy certificates / Human rights training for directors |
Strategy
The Inabata Group established the Inabata Group Sustainability Basic Policy and Code of Conduct in 2021 based on its core philosophy, Mission, Vision, and IK Values. Building on this foundation, we conducted a materiality assessment in 2022 that examined the significance of issues from multiple perspectives, including risks and opportunities, impact on management strategy and business activities, stakeholder interests, social and environmental effects, medium- to long-term outlooks, and industry trends.
We believe it is important to appropriately address both risks and opportunities in order to achieve sustainable corporate growth while fulfilling our responsibility to contribute to the formation of a sustainable and healthy society. Based on this approach, we identified six material issues (see the table below) from two perspectives. In terms of financial impact, the three material issues under “creating sustainable value” tend to have a more short-term and direct effect, whereas the three under “strengthening the foundation for business continuity” are likely to have more medium- to long-term and indirect effects.
For details on the materiality identification process and other information, please refer to the Materiality (Key Issues) page.
Furthermore, in 2024 we formulated the Sustainability Medium-term Plan 2026, which outlines a long-term vision of our desired future and sets KPIs and targets developed through backcasting to address these material issues. This plan is being steadily implemented under the oversight of the Sustainability Committee and the supervision of the Board of Directors.
For details, please refer to the Sustainability Medium-term Plan 2026 page.
Risk Management
At the Inabata Group, sustainability-related risks and opportunities are managed by the Sustainability Committee as we believe that traditional risk management methods alone are insufficient to manage long-term impacts that include elements of uncertainty. Based on scenario analysis and other methodologies, risks and opportunities—identified and examined from both qualitative and quantitative perspectives—are assessed by the committee. These assessments are incorporated into the metrics and targets
of the Sustainability Medium-term Plan 2026, with progress toward these targets regularly monitored by the same committee.
Through this process, risks and opportunities are effectively managed under the oversight of the Board of Directors.
In the Sustainability Medium-term Plan 2026, risks and opportunities for each materiality were thoroughly reviewed and organized, and the main initiatives addressing them were clarified and incorporated into the metrics and targets.
For details, please refer to the section on Materiality : Risks, Opportunities, and Main Initiatives within the Sustainability Medium-term Plan 2026 page.
Metrics and Targets
In the Sustainability Medium-term Plan 2026, we present our long-term vision for approximately FY2030 to FY2050. Using a backcasting approach from this vision, we have established three-year KPIs and targets for FY2024 to FY2026 aligned with our materiality.
For details, please refer to the section on Long-term Vision, Strategy, KPIs, and Targets related to Materiality within the Sustainability Medium-term Plan 2026 page.