Material Issue Water and effluents

Management and Promotion Method of Water and effluents

[Responsible Departments]

• Manufacturing Planning Center
• Business divisions

Coordinating office: Company-wide Environment Committee (Secretariat: Environmental Promotion Department of Manufacturing Planning Center)

[Policy/Point of view]

The Group sets forth the preservation of the global environment in the “Group Code of Conduct” and the “Environmental Basic Policy” and strives to save resources and energy and reduce wastes and hazardous substances in each stage of technology development, design, procurement, production, sale, and use of products and services. We recognize the importance of water resource that is essential for our production activities and launched initiatives to confirm and reduce water risk.
As for the volume of water consumption, each business manages the total water withdrawal by source.
As for effluents, each business facility checks the volume and quality of water discharge to comply with the standards set by relevant local governments.

[Targets/Vision]

• Manage total water withdrawal per water source by actual value
• Comply with our voluntary standard for quality of discharged water and reduce water withdrawal at our production bases

[Measures]

• Manage the total water withdrawal per water source at each business facility
• Check the volume and quality of water discharge at each business facility

Launched an initiative to understand and reduce water risk

Although none of the Group’s production bases is currently located in areas with water restriction, we recognize the importance of water resources that is essential for our production activities and launched an initiative to understand and reduce water risk in fiscal 2018.
In fiscal 2025, we continued to conduct regular water quality monitoring and manage water withdrawal and discharge volumes at our production bases. We will continue our efforts to further reduce water risk and conserve water resources.

●Total water withdrawal and discharge (Fiscal 2023 to 2025)

	(FY)	Bando Chemical Industries	Domestic consolidated production subsidiaries	Overseas consolidated production subsidiaries	Bando Chemical Industries and consolidated production subsidiaries
Total water withdrawal (m3/year)	2023	685,214	5,316	427,110	1,117,640
	2024	670,573	5,054	466,655	1,142,283
	2025	622,073	4,038	400,064	1,026,175
Total water discharge （m3/year)	2023	183,892	1,063	84,939	269,895
	2024	188,376	1,477	103,694	293,547
	2025	223,245	1,880	86,120	311,244

Compliance with our voluntary standard for quality of discharged water

The quality of water discharge of production bases is managed using the voluntary standard set stricter than those set by relevant local governments. The Group’s production bases have in place a system to stop discharging and collect water when abnormality is found in water quality in daily operations, but recently, heavy rains that cause massive damages are becoming more frequent, raising the risk of leakage or effluence of contaminants, wastes, and liquid raw materials.
Some of the initiatives implemented by our plants to prevent damage to the surrounding environment and communities are as follows.

●Initiatives at each base

Nankai Plant upgraded its oil water separators to higher-performance equipment, installed oil film detectors in drains and cooling water collection tanks and continues to measure the water volume supplied to neighboring farmers.
Ashikaga Plant installed water quality monitoring equipment as water used in its production process and cafeteria, etc. is discharged into rivers via a purifying chamber and continues to monitor the water quality.
Ashikaga Plant and North Kanto Processing Center of Bando Industrial Components &smp; Services, Ltd. replaced the aging purifying chambers with high-efficiency ones.
Kakogawa Plant raised the oil weir of oil-water separation paths.
Wakayama Plant continues to implement measures to prevent rainwater ingress into and waste oil leaks at the industrial waste storage, compiled a manual on how to collect water withdrawal data for each water source, and continues to monitor water withdrawal.

Material Issue Emission

Management and Promotion Method of Emission

[Responsible Departments]

• Manufacturing Planning Center
• Business divisions

Coordinating office: Company-wide Environment Committee (Secretariat: Environmental Promotion Department of Manufacturing Planning Center)

[Policy/Point of view]

The Group sets forth the preservation of the global environment in the “Group Code of Conduct” and the “Environmental Basic Policy” and strives to save resources and energy and reduce wastes and hazardous substances in each stage of technology development, design, procurement, production, sale, and use of products and services.
Recognizing the seriousness of the escalation of climate change issues, the Company aims at reducing CO₂ emissions which is one of the aggravating factors for climate change risks, and has implemented various initiatives such as shifting to different fuels, switching to high-efficiency equipment and LED lighting, and installing high-efficiency boilers at business facilities, in addition to aggressively adopting modal shifts, joint deliveries, and milk run logistics. We are also proactively adopting new methods such as ESCO service and Joint Crediting Mechanism.
The Company has set a long-term target for the reduction of CO₂ emissions, with the actual results managed by each business facility.

[Target]

Bando Chemical Industries’ target for fiscal 2030	: 33,915t-CO2 (reduction by 38% from the fiscal 2013 level)
Bando Group target for fiscal 2050	: Carbon Neutrality
Bando Group target for fiscal 2033	: 53,257t-CO2 (reduction by 42% from the fiscal 2023 level)

[Measures]

• 1. Shift to energy-saving equipment
• 2. Reduce energy loss (investigate details of loss due to steam leak, implement necessary measures, etc.)
• 3. Achieve 100% of tasks set out in the roadmap toward CO2 emission reduction

Initiatives to reduce CO₂ emissions

In May 2022, to reduce CO₂ emissions from its business activities, the Group set a target on a non-consolidated basis of reducing CO₂ emissions by 38% from fiscal 2013 levels by fiscal 2030, toward achieving carbon neutrality across the Group by 2050. To achieve this target, we are implementing various initiatives, including upgrading to high-efficiency equipment at our business facilities, introducing high-efficiency boilers and LED lighting, switching fuels, and utilizing the Joint Crediting Mechanism.
In fiscal 2025, we focused on reducing energy loss as a priority issue. However, due to factors such as measures to address extreme heat and increased production volume, CO₂ emissions on a non-consolidated basis increased by 2.4% year-on-year to 40,708t-CO₂. On the other hand, the Group’s CO₂ emissions decreased by 1.1% year-on-year to 81,231t-CO₂.
In May 2026, we also set a new target to reduce the Group’s CO₂ emissions from fuel use and electricity by 42% from fiscal 2023 levels by 2033. We will continue to steadily advance initiatives to achieve this target in collaboration with our Group companies.
* Please see here for our efforts to capture climate-related opportunities and the created impact.

Environmental impact in value chain

From the perspective of global environmental conservation, the Group has worked to improve the accuracy of calculation of emissions from the entire value chain from procurement of raw materials to disposals (Scope 3), in addition to GHG emissions from our business activities (Scope 1 and 2), and has disclosed the figures since fiscal 2023.
From fiscal 2025, the scope of calculation for all applicable categories was expanded to a consolidated basis.

Scope 3 emissions by category

　　　

Category		Scope	Emissions in fiscal 2025 (t)
1	Products and services purchased	Consolidated	268,279
2	Capital goods	Consolidated	22,598
3	Fuel and energy related activities not included in Scope 1 and 2	Consolidated	14,843
4	Transport and delivery (upstream)	Consolidated	7,789
5	Wastes generated from businesses	Consolidated	7,381
6	Business trips	Consolidated	567
7	Employee commuting	Consolidated	1,803
12	Disposal of products sold	Consolidated	38,441
15	Investments	Consolidated	15,289

^*Categories 8, 9, 10, 11, 13, and 14 are excluded from the Scope 3 calculation due to their limited relevance to the Group’s business activities.

Reduction of VOC emissions

Volatile organic compounds (VOC) are considered as major causal substances of photochemical oxidants and are subject to the voluntary reduction effort under the Clean Air Act.
We work to reduce VOC emissions by installing the VOC processing equipment and ensuring proper handling and storage of the compounds. We set our voluntary reduction target at 55% reduction from fiscal 2000 levels, which is higher than the industry target of 50%, and have been successfully reducing emissions at levels exceeding the target.
In fiscal 2025, we continued to implement measures and achieved a 74.5% reduction from fiscal 2000 levels, achieving the reduction target.

Management and Promotion Method of Waste

[Responsible Departments]

• Manufacturing Planning Center
• Business divisions

Coordinating office: Company-wide Environment Committee (Secretariat: Environmental Promotion Department of Manufacturing Planning Center)

[Policy/Point of view]

The Group sets forth the preservation of the global environment in the “Group Code of Conduct” and the “Environmental Basic Policy” and strives to save resources and energy and reduce wastes and hazardous substances in each stage of technology development, design, procurement, production, sale, and use of products and services.
For waste, each business facility checks the waste generation to comply with the standards set by relevant local governments.

[Visions]

• Achieve zero emissions
• Waste plastic: 1% reduction from the results of the previous fiscal year (total volume)
• Compliance with the Plastic Resource Circulation Act

[Measures]

• Determine priority issues based on the waste analysis (reduction of loss and defective products) and promote initiatives on the recycling issues
• Expand research on measures for recycling waste plastic

Achieve zero emissions

We have already achieved zero emissions* through thorough waste separation. We will continue to work on reducing waste generation for the efficient use of resources.

*Definition of zero emissions: Final landfill disposal rate of less than 1% (final landfill disposal rate = final landfill disposal volume/volume of waste generation)

Compliance with the Plastic Resource Circulation Act

The Plastic Resource Circulation Act came into effect in April 2022. In fiscal 2025, we continued our efforts to reduce waste plastic by 1% year-on-year by reinforcing the segregation of reusable materials from waste to promote their conversion into valuable resources. Meanwhile, due to increased production volume, the volume of industrial plastic waste in fiscal 2025 increased by 8% to 881 tons compared to 818 tons in fiscal 2024.
In fiscal 2026, we will continue to promote their conversion into variable resources.

Emissions and transfer volumes of PRTR substances

In accordance with the Pollutant Release and Transfer Register (PRTR) system* under the Act on the Assessment of Releases of Specified Chemical Substances in the Environment and the Promotion of Management Improvement, we designate substances subject to the system as controlled substances and ensure their proper management in compliance with the Act.

*Pollutant Release and Transfer Register (PRTR) system: A system whereby business operators are required to identify the amount of chemical substances potentially hazardous to human health and ecosystems emitted from the plants into the environment (air, water, and soil) and the amount transferred out of the plants as part of the wastes and report them to the government, which then aggregates and publishes the emitted/transferred amounts based on the submitted data and estimates.

Compliance with environmental laws and regulations

[Responsible Departments]

• Each business facility
  Coordinating office: Company-Wide Health and Safety Committee (Secretariat: Safety and Quality Control Department of Manufacturing Planning Center)

[Policy/Point of view]

• Since fires can significantly impact not only employees but also business activities, we are committed to promoting fire prevention and recurrence prevention activities to ensure the safety of our employees and contribute to the continuity of our business.

[Targets/Vision]

• Fire: None

[Measures]

• The progress in fire prevention measures is regularly monitored by the Company-Wide Health and Safety Committee and the Safety and Health Committee at each business facility, with ongoing efforts made to drive continuous improvement.
  1. Implement fire prevention education
  2. Conduct fire prevention patrols, etc.

[Responsible Departments]

• Each business facility
  Coordinating office: Company-Wide Health and Safety Committee and Company-Wide Environment Committee

[Policy/Point of view]

• As the Company is engaged in manufacturing while interacting with society and local communities, we established the “Group Code of Conduct” and the “Health and Safety Policy” to set forth the compliance with the environmental laws and regulations and agreements with the local governments and industries, and are striving to prevent pollution in society and local communities with the target of achieving “No claims, accidents or emergencies.”

[Targets/Vision]

• Creating disaster-resistant working places

[Measures]

• Maintain the latest version of the environmental laws and regulations and agreements with local communities that are applicable to business facilities in accordance with the “Environmental Guidelines” Evaluate each business facility’s status of compliance with the applicable environmental laws and regulations, etc. in accordance with the compliance assessment of the “Environmental Manual” Provide education to employees using textbooks incorporating past incidents Participate in security and disaster readiness activities in local communities/Hold meetings for local residents near business facilities

Promotion of fire prevention and recurrence prevention activities

The Group aims at “No fires” by enhancing various initiatives to prevent them. In fiscal 2025, two fires occurred. An analysis of causes revealed issues such as insufficient awareness of fire risks and inadequate cleaning. In response, we provided training on fires and dust explosions and also implemented electrical outlet safety measures, including installing safety caps on unused outlets and distributing cleaning procedure manuals. In addition, we reinforced training on initial firefighting using fire extinguishers. Furthermore, for the past two years, we have developed a long-term repair plan and conducted comprehensive inspection of aging equipment to prevent fires caused by aging equipment. In fiscal 2026, we will continue our preventive activities and aim at “No fires.”

Security and disaster readiness activities

We also focus on security and disaster readiness activities in preparation for emergencies to ensure business continuity and safe operation. Specifically, the Bando Group suffered massive damages to its Head Office and production bases from the Great Hanshin-Awaji Earthquake, and therefore we continue to work on creating disaster-resistant working places.

• Earthquake countermeasures and emergency drills, etc.
  In addition to antiseismic reinforcement of the buildings at domestic offices, we conduct the Shakeout drills (actions to protect oneself from earthquakes) using the sound of the earthquake early warning. We are also promoting disaster prevention measures including conducting joint drills with local fire stations or brigades or in-house fire drills at each site of the Group as well as conducting safety confirmation drills assuming a disaster scenario and preparing stockpiles at domestic group companies.