Issues Facing the Denka Group

Recognizing the global issue of climate change, the Company also recognizes that limited water resources are a global issue. In addition to maintaining and improving water quality in discharged water from business sites to public water areas such as oceans and rivers, the Company recognizes that water resources are indispensable for continuing production activities and that efficient utilization is important. The Company effectively utilizes water resources to generate hydroelectric power. Water resources are also related to climate change, and the Company’s sites are predicted to be affected by droughts, heavy rains, and floods. Therefore, the Company believes that it is important to assess and prepare for risks that are expected in the future.

Specific Initiatives

The Denka Group is working to reduce water usage at all of its business sites. At major plants such as the Chiba Plant and Omi Plant, efforts to reduce water usage at the plants are being promoted through the installation of water purification facilities to reduce water intake and the introduction of cooling towers to recycle cooling water. In addition, since fiscal 2021, the Denka Group has been conducting water risk assessments at each of its Group locations using water risk maps (Aqueduct).
For each of its domestic locations, the Denka Group is conducting more detailed risk assessments through current evaluations of water intake, discharge, and recycling. In fiscal 2024, water usage increased slightly from the previous fiscal year for the Group as a whole due to an increase in production volume. In addition to the initiatives at the major plants mentioned above, each business site is also grasping and monitoring water intake, discharge, and consumption, and reviewing manufacturing processes and updating equipment to improve water efficiency.

Water Resource Data

• ※1There is no water withdrawl from water-stressed areas at the 8 major production bases in Japan.

Water Risk Assessment

The Denka Group conducts a global water stress assessment using the WRI Aqueduct “Comprehensive Risk” and “Baseline Water Stress” indicators for its business locations. If a location is classified as “High” or higher for both “Comprehensive Risk” and “Baseline Water Stress,” it is determined to be under high water stress. As a result of the assessment, four locations in Vietnam and China were determined to be under “High” risk, which accounts for 16% of all manufacturing sites in the Group.
In business activities in regions exposed to water stress, we will contribute to the conservation of water resources through dialogue with stakeholders. At our water-stressed site in China (Tianjin), we set up water-saving targets in consultation with the local government and report our water usage status on an annual basis. If a review of the water-saving targets or an increase is required, we will apply for this in accordance with relevant laws and regulations and comply with proper procedures.
Going forward, we will continue to assess and improve water risks in accordance with the establishment of new sites and business activities.

Violation of water-related laws and regulations

There were no environmental-related law violations (water-related) for the fiscal year 2024.

Water-related costs

The costs related to water among the environmental conservation costs disclosed in environmental accounting are as follows.

Costs related to response to water issues (cost of equipment installation for water quality pollution prevention, water conservation, and water efficiency improvement): 422.8 million yen
Investment cost for R&D to mitigate water-related risks: 363.7 million yen