Sustainability

Relationship Between Priority Topics (Materialities) and SDGs

Relationship Between Priority Topics (Materialities) and SDGs

At Idemitsu group, we value contributing to society through our business. Our mission is to continue supplying energy that supports people's lifelines while contributing to social development. In recent years, the environmental impact of energy use has become a major social issue, and we recognize that harmony with the global environment and society is an important and urgent issue. Accordingly, with a longterm perspective, we have identified priority topics that it should prioritize during the medium-term management plan as materiality. The entire our group will work as one to resolve issues of materialities, with the aim of achieving our sustainable development with the global environment and society.

Materiality Major initiatives Mainly related SDGs Risks and opportunities (impact on society and Idemitsu group)
Structural reform to core
revenue base businesses
Build a strong supply chain and
further strengthen stability and
competitiveness through collaboration
with partners in the revenue
base business centered on petroleum
products and chemicals.
  • Pursuing profitability in the petroleum business
    (maximizing integration synergies, making refineries more reliable)
  • Enabling Nghi Son Refinery to contribute to profits
  • Using the pacific rim supply chain to meet growing demand in Asia
  • Southeast Asia gas development
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Risk
  • Resource (energy, water, materials and land) use may increase due to business expansion
  • Reputation decline and increased costs for environmental measures
Opportunity
  • GHG emissions reductions from energy efficiency improvements that could lead to cost
    savings in our company
  • Contributions to the improvement of accessibility to basic services such as energy infrastructure,
    employment, and income distribution in new business areas. With those
    contributions, it is expected that we will strengthen its ties with the local regions
Expansion of growth businesses
Expand business scale and scope
by strengthening R&D in growth
fields such as functional materials
and renewable energy, which are
becoming increasingly necessary
in the world.
  • Expansion of business scale and domains (M&As on a scale of ¥100
    billion during the medium-term management plan period)
  • Increasing the share of functional materials business to 30% by 2030
  • Increasing total power generated from renewable energy to 5GW by 2030
    (of which, 4GW is renewable energy)
  • Transformation of solar-power business
  • Development of black pellets (biomass fuel)
  • Strengthen development of functional materials through open innovation
3 7 9 13
Risk
  • Resource (energy, water, materials and land) use may increase due to business expansion
  • Reputation decline and increased costs for environmental measures
Opportunity
  • Promoting R&D can create new products and services that simultaneously create technological
    innovation, solve social issues, and increase our profits
  • Opportunities to expand low-carbon products and services
  • Opportunities to expand agribio businesses that contribute to safe and secure food
Creation of next-generation
businesses
Accelerate technological innovation
and innovation beyond organizational
frameworks to create new
businesses with an eye toward the
future.
  • Creating new businesses with an eye on social changes, diversifying
    customer needs, lessening environmental impact
  • Development of next-generation service stations
  • Distributed energy business development, etc.
  • Circular business
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Risk
  • Resource (energy, water, materials and land) use may increase due to business expansion
  • Reputation decline and increased costs for environmental measures
Opportunity
  • Promoting R&D can create new products and services that simultaneously create technological
    innovation, solve social issues, and increase our profits
  • Opportunities to expand the renewable energy business
  • New business establishments and reputation improvement through reduction of environmental
    impact and effective use of resources
Harmony with the
global environment and society
Promote measures to realize a
low-carbon and recycling-oriented
society in consideration of climate
change risks, and promote diversity
and inclusion in partnership
with business partners, communities,
and employees.
  • Efforts to reduce GHGs (2030: Down 2 million t-CO2 vs. 2017 (down 15%))
  • Contributing to areas in which we conduct business
  • Practice of diversity and inclusion
  • Improving employee satisfaction
  • SDGs educational activities
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Risk
  • Risk of increased costs such as capital investment to achieve GHG reductions
Opprtunity
  • Practices of specific measures to climate change can lead to improvement of our company's
    reputation
  • Opportunities for co-creation with partners through new initiatives
  • Opportunities for regional revitalization, invigorating local economic cycles, and strong
    partnership between our company and the region
  • Opportunities to promote understanding of diversity among employees, which can lead to
    improvements in the workplace environment and the creation of diversed innovations
Progress in governance
Strengthen governance functions
to maintain the trust of shareholders
and all other stakeholders.
  • Enhancing roles and functions of the Board of Directors
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Opportunity
  • Transparency and fairness enhancement.
  • Initiatives promotion support.
Acceleration of digital innovations
Capitalize on evolving digital technologies
to transform existing business
processes and management in
response to the business environment
and customer needs.
  • Utilizing digital technologies to create new values
  • Digitalization of core businesses
    (established in January 2020 "Digital Innovation Department")
8 9
Risk
  • Increased initial investment costs associated with the introduction of new systems and the
    risk of problems during the transition period
Opportunity
  • Opportunities to reduce costs and create time by improving operational efficiency.
  • Opportunities to solve social problems through technological innovation

We considered the impact on the SDGs through the promotion of key initiatives that are classified as materiality and linked to materiality. We realize that all goals of the SDGs are connected to each other. Therefore, our business activities will bring impact, not only to one specific goal, but also the SDGs as a whole, although the impact itself may vary from one goal to another. In particular, we believe that the following three areas can contribute to the achievement of goals through our business activities.

Areas where goals can especially be achieved
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While working to achieve the goals, there are also aspects in which promoting the achievement of the goals leads to increased use of resources and GHG emissions. We recognize that our business activities might impose burden to the following areas and keep us away from achieving the goals. Therefore, it is necessary to make serious efforts to address them.

Areas that especially need to be addressed due to possibility of risks arising from business activities
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