Information Disclosure Based on the TCFD Recommendations

In 2015, the Financial Stability Board (FSB) established the Task Force on Climate-related Financial Disclosures (TCFD) at the request of the G20. As the world strives to limit the increase in the earth’s average temperature to below 2˚C above pre-industrial levels as stipulated in the Paris Agreement in 2015, the aim of the TCFD is to encourage companies to disclose climate-related financial information to enable investors to make appropriate investment decisions. At Chori, we will work to appropriately disclose information on the recommended disclosure items in accordance with the Recommendations of the Task Force on Climate-related Financial Disclosures, the final report released by the TCFD in June 2017.


The Board of Directors’ system for monitoring climate-related risks and opportunities and management’s role in assessing and managing such risks and opportunities

The Company’s response to climate change and other environmental issues is reported twice a year at Board of Directors’ meetings and discussions are held based on the details of these reports. Ultimately, it is the responsibility of the Board of Directors to assess, respond to, and disclose details of the Company’s risks and opportunities related to climate change.
With the general manager of the Corporate Planning Division, who also serves as a director, in charge and the Corporate Management Department as the responsible division, the Company manages and promotes organization-wide measures against climate change, including the TCFD recommendations, and other environmental issues as well as compiling important Companywide policies and measures, which are reported and proposed to the Board of Directors for discussion at Board meetings. With regard to business-specific strategies, etc., on climate change and other environmental issues, the general managers of the respective sales departments, in cooperation with the general manager of the Corporate Planning Division and the Corporate Management Department, report summaries of such strategies, etc., to the Board of Directors, which are then assessed and discussed at Board meetings.

Moreover, please refer to our medium-term management plan Chori Innovation Plan 2025 which was disclosed on April 28, 2023, for information on our overall sustainability strategy and initiatives, including the Task Force on Climate-related Financial Disclosures (TCFD).


Short-, medium-, and long-term climate-related risks and opportunities identified by the organization and the impact thereof on the organization’s business, strategies, and financial plan

Chori conducts scenario analyses to assess the transition risks and physical risks of climate change. In fiscal 2021, we analyzed the 2℃ and 4℃ scenarios, and in fiscal 2022, we reanalyzed and examined the 1.5℃ and 4℃ scenarios. Under the 1.5℃ scenario, similar to the 2℃ scenario, the increase in physical risks is expected to be moderate, and we expect an increasing number of opportunities to develop and expand sales of environment-friendly products. Meanwhile, under the 4℃ scenario, physical risks, such as unseasonable weather, will likely increase due to the lack of progress in climate change measures.

Based on the above assumptions and background, we conducted a scenario analysis for the period up to 2030. On the basis of these results, we identified the following risks and opportunities related to climate change and determined their impact on our business and the measures we will take in response.

Major Risks and Opportunities Related to Climate Change, Their Impact on Our Business, and Measures to Take in Response

Risk Type Risks and Opportunities Impact on Business
Key Countermeasures Financial Impact
1.5℃ 4℃
Transition risk Policies and regulations Strengthening of decarbonization measures Introduction and expansion of carbon taxes
  • Increase in purchase prices and various costs
Continue to monitor the actual amount and impact of the Company’s GHG emissions
Strengthening of lineup of zero-carbon products
Low impact
Strengthening of regulations on China, our largest export partner
  • Temporary declines in trading volume due to reduced production
Strengthen and expand global supply chain Medium impact
Technology Rapid expansion of circular economy Expansion of waste-reduction efforts
  • Greater demand for recycling-related products
  • Greater demand for products that contribute to waste reduction
Expand trading of recycled products
  • Recycled plastic chips
  • Recycled polyester fiber (ECO BLUE)
Medium impact
Increased use of renewable resources
  • Greater demand for bio-related products
Expand trading of biodegradable resin products Medium impact
Market Market changes associated with the transition to decarbonization Expansion of policies and initiatives aimed at achieving carbon neutrality throughout the automotive lifecycle
  • Greater demand for lithium-ion-related products due to the shift to electric vehicles
Expand trading of lithium-ion-related materials Medium impact
Expansion of policies and initiatives aimed at achieving a carbon-free supply chain in the textile industry
  • Reduced cost of decarbonization measures by spearheading sustainability initiatives across the supply chain
Promote sustainability initiatives throughout Chori’s unique supply chain (BLUE CHAIN Medium impact
Increased stakeholder interest in sustainability Greater demand for non-petrochemical products and other sustainable products
  • Greater demand for environmentally conscious products
【Enhance lineup of environmentally conscious products】
Medium impact
Reluctance to buy petrochemical products
  • Temporary decline in trading volume arising from the shift to environmentfriendly products
Low impact
Strengthening of information disclosure requirements related to climate change measures
  • Decrease in corporate value and investments due to inadequate response
  • Increase in customers and investments due to climate change measures
Medium impact
Physical risk Acute/chronic Increasing frequency and severity of natural disasters and unseasonable weather Water shortages
  • Temporary declines in trading volume due to reduced production
Strengthen global supply chain
Low impact
Large-scale natural disasters
  • Temporary reduction in trading volume and longer lead times due to supply chain disruptions
Low impact
Rising sea levels Low impact
Rising average temperatures
  • Reduced trade of fall and winter apparel
  • Greater demand for agrochemical-related products
  • Greater demand for disinfection (mouthwash)-related products
【Examples of Products】
  • Strengthen lineup of next-generation products
  • Agrochemical ingredients (disinfectants, rice herbicides, acaricides, and herbicides)
  • Pharmaceutical products (iodine)
Medium impact
  • *Classified according to the scale of impact on sales and segment profit. Those deemed to have a greater impact are indicated with a darker shade.
  • *Key reference scenarios include the World Energy Outlook 2022 of the International Energy Agency and the Intergovernmental Panel on Climate Change’s Shared Socioeconomic Pathways
Financial Impact of Introducing and Expanding Carbon Tax (Quantitative Assessment of Business Impact)*
1.5℃ Scenario
2030 US$103,000 (approx. ¥14 million)
2050 US$185,000 (approx. ¥25 million)

* Calculated by multiplying fiscal 2022 GHG emissions by the amount of carbon taxes projected under the 1.5℃ scenario (for Scope 2 emissions, calculated by multiplying the CO2 emissions factor).
No estimates were made under the 4℃ scenario as carbon trading in Japan is expected to remain unchanged.

In both scenarios, we found that the impact on our business will be very minimal and that opportunities to develop and expand sales of environment-friendly products will increase. We will continue to conduct business impact assessments to ensure appropriate risk management and translate business opportunities, such as the greater demand for environmentally conscious products, into increased earnings.

Risk Management

The process for identifying, assessing, and managing climate-related risks and the approach to integrating this process into the organization’s overall risk management

Operation of Risk Management Regulations
At Chori, we have established and operate risk management regulations with the aim of identifying potential risks in our business activities, reducing risks and preventing crises from occurring during the course of normal business conditions, establishing a system for responding to crises that may pose a significant impact on our business activities, and responding promptly and appropriately to prevent the situation from deteriorating and recover and normalize the situation as swiftly as possible.
Risk Management under Normal Business Conditions
Under the guidance of the risk management deputy officer (the president of the Company), the risk management promotion officer (the deputy general manager of the Corporate Planning Division, in charge of the Human Resources & General Affairs Department) and the Human Resources & General Affairs Department (the organization responsible for risk management) identify material issues within the organization; formulate various measures to mitigate, prevent, and promptly detect risks that may exist within the Company; and implement the necessary educational and training programs in a voluntary and systematic manner. They also follow up on the results of crisis response measures, verify their impact, identify issues, and seek measures toward improvement.

In the Company’s risk management regulations, climate-related risks are defined as risks that relate to either the “external business environment, including society, the economy, and politics,” or the “business continuity plan,” and are addressed by the Corporate Management Department in cooperation with the risk management promotion officer and the Human Resources & General Affairs Department. As demonstrated by the results of the aforementioned scenario analyses, ensuring a stable supply chain is extremely important to the continuation of our business. With respect to transaction-related risks classified in our risk management regulations, in order to address the risk of supply chain disruptions that stem from various supplier-inflicted issues and to fulfill our social responsibilities for procurement activities in Japan and overseas, the Company has established CSR procurement guidelines and promotes procurement activities that underline the importance of corporate ethics, legal compliance, safety, disaster prevention, environmental conservation, product safety, quality assurance, human rights, and working conditions.
Crisis Response Measures
In the event of a crisis, placing the highest priority on ensuring the safety and protecting the lives of each individual, the following measures must be taken in accordance with Company regulations: communicate and report details of the crisis based on the crisis communication system; establish a crisis response headquarters under the direction of the Risk Management Deputy Officer; and execute tasks, communicate the emergency, report the results of investigations, and implement measures to prevent recurrence through the crisis response headquarters.

Indicators and Targets

Indicators used to assess climate-related risks and opportunities in accordance with the organization’s strategies and risk management processes, targets used by the organization to manage these risks and opportunities, and progress toward the achievement of these targets

The Group has been compiling data on the actual amount of GHG emissions produced by its business activities since fiscal 2020 and is aiming to reduce GHG emissions (Scope 1 and Scope 2) and achieve carbon neutrality by 2050. We will also look to reduce Scope 3 emissions in order to reduce GHG emissions throughout our entire supply chain.

In regard to our GHG emissions reduction targets, we are considering material issues in the Sustainability Promotion Preparatory Committee. This body was established in July 2023 as a preparatory committee, with a view to establishing a specialized committee to promote sustainability in the future.

GHG Emissions Results

  Category Type Actual Amount of FY2020 (t-CO2) Actual Amount of FY2021 (t-CO2) Actual Amount of FY2022 (t-CO2) Scope of Calculation
Scope 1 Direct emissions 385 330 312 Consolidated
Scope 2 Indirect emissions 956 866 872
  Total (Scope1+Scope2) 1,341 1,196 1,184  
Scope 3 Category 1 Purchased goods and services 1,090,766 1,209,416 Nonconsolidated
Category 2 Capital goods 131 372
Category 3 Fuel- and energy-related activities not included in Scope 1 or Scope 2 41 36
Category 4 Upstream transportation and distribution 113,462 126,087
Category 5 Waste generated in operations 102 108
Category 6 Business travel 126 128 168 Consolidated
Category 7 Employee commuting 238 243 317
Category 9 Downstream transportation and distribution 461 454 Nonconsolidated
Category 12 Processing of sold products 1,318 1,292
Scope 3 Total 364 1,206,654 1,338,251  
Scope 1: Direct emissions
Scope 2: Indirect emissions
Scope 3: Supply chain emissions (actual amounts for fiscal 2020 consist only of emissions from “business travel” (category 6) and “employee commuting” (category 7))

* GHG emissions are estimated using the GHG emissions calculation method defined in the GHG Protocol.