CONTENTS

Feature Story

Introduction

Feature Story

Environment

SocialGovernance

Data & Statistics

Initiatives of the Carbon Neutrality (CN) Committee

Building the Core Organization for Initiatives
to Tackle Environmental Problems
 Organizational structure
Energy Section
Committee

Raw Materials Section
Committee(Energy Saving Committee)(Global Technology Development Division)

The CN Committee is headed by a managing director. The
administrative office working directly under the committee sets
numerical targets and handles related tasks such as
management reports and awareness-raising activities. Specificactivities are coordinated by four section committees (Energy,Carbon Neutrality
Committee

Raw Materials, Logistics, and Departmental), each of which
has its own mission and will set (medium-term) goals for 2030,
three-year goals, single-year goals, and action plans, thenexecute them.

Logistics Section
Committee

Departmental Section
Committee(Logistics Section)(Development & Planning at Each Department)

CN Committee

Organizational chart

CN Committee

Section committees

Person in charge: Managing director
Carbon Neutrality Committee
Back row, from left: Hisao Tsuge, Naoki Tanaka, Nobuyasu Torii
Front row, from left: Nobuo Kondo, Takefumi Miura

CN Committee administrative office Background behind establishment
The dangers of climate change are now very real. One

neutrality in 2050. Concurrently with this movement,example is frequent heavy rain damage caused by abnormal

automotive manufacturers and many of our other clients now

weather patterns brought about by global warming. In

also heavily insist on CO2 emissions reductions. For that

response, in 2015 the COP21 set out the goal of “Holding thereason, we established our Carbon Neutrality (CN) Committee

increase in the global average temperature to well below 2°C

in September 2021 to strengthen our governance toward

compared to pre-industrial levels and pursuing efforts to limit

reducing CO2 and achieving carbon neutrality. Thus began

the temperature increase to 1.5°C.” In 2021, the Government

the committee’s cross-divisional coordination function toof Japan also announced its goals of reducing CO2 emissions

engineer environmental activities throughout the INOAC

by 46% (compared to 2013) in 2030 and achieving carbonGroup.

CSR REPORT 2022• Set medium- tolong-term term goals• Stay current on progressof section committees• Management reports• Awareness-raising
activities

Public relations

Energy Section
Committee

P9

Raw Materials
Section Committee

P10Logistics Section
Committee

P10

Departmental Section
Committee

P11• Outside publicity about
CN activities* Scope of activities is 14 facilities in Japan and 27 related locations (including affiliates)

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CONTENTS

Feature Story

Introduction

Feature Story

Environment

SocialGovernance

Data & Statistics

Initiatives of the Carbon Neutrality (CN) Committee

 Initiatives of the four section committees
CO2 emissions by year

Energy Section Committee

Scope 1

Scope 2

Goal50 emissions(tons)
100,000

Reduce scope 1 & 2 emissions by 50% in 2030
(vs. 2013: total overall emissions)

Mission Activities to reduce scope 1 & 2 CO2 emissions at each plant (case examples 01 & 02

Action Plan

This initiative began by creating a list of energy saving standards with 15 categories and 53 items. The
section committee manages score sheets for each item at 41 locations in Japan and is working to deploy
them in every department to ensure the standards are exhaustively implemented.

81,337

83,876

60,57160,45031,203

29,85527,72629,939

2013

2019

2020

2021

50,000reduction
vs. 2013

53,61153,93745,88725,0000

Drafting “the Energy Saving Standards 2022 and01
rolling them out to multiple departments%

90,30575,000below)

 Promote implementation of eco-friendly parts and materials at INOAC Group
companies (INOAC Housing & Construction Materials Co., Ltd.) Considerations for usage of solar power Drafting the recommended equipment for energy saving (guidelines) andpromoting its implementation

91,7742030

02 Using thermal cameras to stop heat leakage
We are working to detect heat leakages using thermal cameras. Measures to stop heat leaks are taken
after identifying the locations of the leaks. Afterward, we conduct regular follow-up inspections.

Air leakage diagnostic

Promote usage of Thermax(thermal insulator madeby INOAC)

Comparison of photo taken with thermal camera
Heat insulation sheets to insulate heat
CSR REPORT 202209

CONTENTS

Feature Story

Introduction

Feature Story

Environment

SocialGovernance

Data & Statistics

Initiatives of the Carbon Neutrality (CN) Committee

 Initiatives of the four section committees
04 Case example of shifting to biomaterials

Raw Materials Section Committee

We developed a polyurethane material with 50% biomass. Also having successfully made it compliant
with the Food Sanitation Act, we launched it first in sponge products. Going forward, we are considering
applications and commercializations for its usage in bedding, clothing, cosmetics, and the automotive field.

Setting 2030 monitoring targets for reducing scope 3 emissions

Mission(polyurethane, resin, rubber, and paint, which comprise a significant proportion of Category 1)

 Polyurethane (slabs)
Action Plan Reduce usage volume (waste reduction, weight reduction, thickness reduction)
 Shift to material and chemical recycling for materials (case example 03 below)
 Replace with eco-friendly materials (shift from rubber to resin and biomaterials)

2050

2040

2030
• Thinner sheets• Use biomaterials as raw materials• Chemical recycling• Build cycles for recovering
products from the market• Use biomaterials
as primary raw material• Release biofoam products

Resin• Recycle material cutoffs• Implement biomass• Bolster recycling rates and shift
toward biomaterials• Expand lineup of bioproducts
and recycled products

Rubber• Switch to low-emissions rawmaterials• Increase recycling rate of Gomspor• Implement usage of non-fossil
raw materials

Polyurethane

Food Sanitation Act compliant
Similar mechanical properties
as conventional products

BEH(case example 04 at right) Usage applications

Sponges

Mattresses

Pillows

Already launched

In development

In development

Coarse cell / Fine cellHigh hardness/Low hardness

Clothing products
Already launched• Establish desulfurization recycling• Expand lineup of desulfurization
recycled products

TextureCosmetics
In development
High density

High recovery / Slow recovery

AutomotiveIn development
Flame retardancy

03 Recycling business initiative
INOAC produces and offers olefin products and was successfully able to turn the material cutoffs thatarise in producing such products back into raw materials using a crosslink cleavage process (name ofrecycled material: Repeco®). The section committee will reduce overall usage volume of resin byincorporating a certain proportion of Repeco® in our products.

Logistics Section Committee

Application examples
Material cutoffs

Crushed powder

Additives

Recycle into PE-LITE®

Crushing
REPECO®

recycled materialcutoffs

Crosslink cleavage
Crushed powder

Illustration of the PE-LITE® recycling process

CSR REPORT 2022

Repeco®
composite
PE-LITE

Returnable box
materials forautomotive
components
Construction
material backer,
joint filler

MissionTargeting scope 3 (category 4 upstream transportation and distribution).
With 2023 as the base year, set monitoring targets for 2030 and work
to reduce CO2 emissions in logistics

Action Plan Build systems to visualize CO2 emissions in logistics
 Reduce CO2 emissions in logistics(increase loading efficiency, consider modal shifts, join client milk runs,
switch to low-emission vehicles)

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CONTENTS

Feature Story

Introduction

Feature Story

Environment

SocialGovernance

Data & Statistics

Initiatives of the Carbon Neutrality (CN) Committee

 Initiatives of the four section committees

 Awareness-raising activities of the administrative office
In-house exhibitions (March, July)

Departmental Section Committee
MissionPlan and execute medium- to long-term strategies for major products

Action Plan Perform scenario analyses considering risks and opportunities on a product basis
 Execute plans that consider financial impact (sales, profit, investment) on aproduct basis (case example of a commercialization 05 below)
 Coordinate with other section committees to achieve targets for scope 1 & 2 andscope 3

Case example of a05 commercialization

Temperature management system solution
The logistics industry is trending away from theusage of dry ice. Based on this, the section committee
is offering a temperature management system solutionthat combines cold storage agent and cool boxes with
operational management methods as an alternative to dry ice. The system is now in use at large logistics
companies and in business operations such as food transport and co-ops. Dedicated COVID-19 vaccine
transport box i-Medisys was also developed to expand this solution into more markets. With the ability totransport samples and specimen while keeping them between 2 and 8 degrees Celsius for 12 hours in outside
temperatures ranging between 5 and 35 degrees, orders for this box have been pouring in from local
governments throughout Japan.

Thermax high performance thermal insulator
INOAC manufactures and sells isocyanurate foam thermal insulator. It
has thermal conductivity of 0.020 W/mK and 2.3 times the heat resistancevalue of glass wool (16 kg). We also offer it in grades that have beencertified as incombustible materials by the Ministry of Land, Infrastructure,
Transport and Tourism, making it a formidable thermal insulator against
fires. Its usage applications include housing, waterproofing roofs ofbuildings, and heated pools. Since it also has superior fabricability, it isbeing deployed for uses such as drying ovens and air conditioning ducts in
production plants. Its usage is becoming more established through theactions of individuals such as automotive component salespeople inaddition to dedicated sales teams. With catalogs in hand, thesesalespeople approach affiliated clients about including Thermax in thedesigns for their production plants.
CSR REPORT 2022

As part of our internal awareness-raising
activities, “panels and actual samples” ofmaterials, products, equipment, and other items
that contribute to reducing our CO2 wereexhibited in March and July of this year alongwith presentations on the status of CN
Committee section committee activities. There
were approximately 400 overall attendees fromthe INOAC Group throughout the six total daysof the exhibitions.

New employee training (April)Workshops were held for new employees
joining us in 2022. Classroom-style lectures
were given on (1) why we must pursue carbon
neutrality, (2) numerical values that ourcustomers desire, and (3) our in-houseorganizations and activities. Then, in “panels andactual samples,” attendees were informed about
specific items at INOAC that contribute to CO2reductions.

Message
For some time, our company has been engaged in efforts to develop
eco-friendly materials and products plus reduce CO2 emissions in ourproduction plants. However, we did not have the governance in place forrelated company-wide target values or cross-divisional management. In
response to the 2021 turning point in demand from society and ourcustomers for heightened efforts toward reducing CO2, we established
our CN Committee and launched its activities. We still have a mountain ofchallenges to tackle, to expand these section committee activities
overseas and to our suppliers, address the remaining categories in scope
3, and create scenarios for an eventual declaration on carbon neutrality.
Therefore, I want to stay grounded and take steady action toward ourobjectives.

Motoyuki Asano

ダミー

Managing Director
Director of CN Committee

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