Message from the President

Representative Director,
President and Chief Executive Officer
Shunichi Kito
As of November 2023

Our group has set Vision for 2050 '' Shaping Change,'' and in November 2022, we will create Medium-term Management Plan starting from fiscal 2023 in order to significantly transform our business structure toward the realization of a carbon-neutral, circular society. It was announced on.

I see this Medium-term Management Plan as not just a three-year income and expenditure plan, but an ''action plan'' that serves as a touchstone for us to break away from our dependence on fossil fuels and become a main player in new energy and materials. We believe this is an important turning point that will affect the future.

In the wake of Russia's military invasion of Ukraine, the energy policies of each country are shifting from a focus on decarbonization to a more realistic discussion with an awareness of transition. Our goal will not change as we steadily promote provide for society towards the future.

Identifying future energy and materials that simultaneously satisfy the "3E+S" of economic efficiency, energy security, environmental compatibility, and safety, which are the criteria for determining energy policy, and misjudging the timeline to reach that point. I will continue to work on it without any hesitation.

We would like to introduce our recent efforts to transform our business portfolio from five existing businesses to 3 business domains (" Energy one step ahead," "Diverse resource conservation / circulation solutions," and "Smart Yorozuya").

We have decided to construct a 20,000-ton oil chemical recycling facility that will use used plastic as raw material at our Chiba Complex. Currently, only about 20% of the 8.2 million tons of used plastic in Japan is used for recycled products. Through this facility, used plastics are converted back into the raw material oil, literally establishing a recycling chain. We believe that this initiative is an example of how Refinery and Complex can become carbon-neutral social infrastructure, and we will expand the scale of the project through various verifications, with a view to commencing commercial operations in 2025.

Next, we will develop solid electrolytes for all-solid lithium battery, which is expected to exceed the performance of currently mainstream liquid-type lithium-ion batteries. Utilizing the manufacturing technology we have cultivated over the past 30 years, we are moving forward with the practical application and mass production of solid electrolytes.

While collaborating to realize the mass production of all-solid-state batteries lithium battery for EVs, we are also working on further technological development to broadly deliver better materials to the world in preparation for the transition to EVs that will contribute to carbon neutral society.

Next, I would like to talk about our human capital strategy (investments in human capital), which is a combination of business structure reforms investment.

Looking back at the 20th century, humankind discovered fossil fuels, a highly energy-dense, cheap and convenient energy source, and enjoyed its benefits to the fullest as the foundation of industrial development. However, with the advent of a decarbonized society, we are facing many social issues that are difficult to predict.

In order to overcome this difficult situation with an uncertain future, it is essential to discover and develop human resources who can embrace diverse opinions and viewpoints and co-create and collaborate with various players. We believe that this is an extremely important management issue.

Since our company's founding, we have valued the concepts of "people are our capital" and "People-Centered Management," but we have once again placed human capital strategy at the core of our management strategy. No matter what the future holds, I recognize that it is my responsibility as president to create a group of human resources who will be flexible, strong, and able to carve out a path to the future.

As specific initiatives, over the past year we have deepened our DE&I efforts, including promoting the empowerment of women, childcare leave for men, understanding of LGBTQ, and expanding the employment of people with disabilities. We have also created an environment where employees can take on the challenge of creating new value through an in-house side job system, cross-departmental workshops, and external exchanges with educational institutions, including domestic and international graduate schools, and local governments. This fiscal year, we will further enhance our life and career plans and review our personnel and evaluation systems so that all employees can fully demonstrate their abilities and individuality. In addition, by promoting a company-wide 30% productivity improvement project to ensure that employees have the mental and time space to take on new challenges, we are encouraging employees to take on various challenges without fear of failure. We will support human resources who take on challenges and lead to the sustainable growth of our company.

Because we are mainly engaged in the energy business, mainly fossil fuels, which have a large environmental impact, we have positioned environmental and social issues as management issues and will take the initiative in contributing to their resolution. We will strive to increase the value of our business structure reforms and human capital as an offense, and at the same time, we will promote sustainability management as a defense and strive to improve our corporate value.

Here are two examples of our recent initiatives. The first is to set targets for Scope 3. In order to further clarify our stance on efforts to achieve carbon neutrality society by 2050, we will also provide CO ₂ In addition to the target value for Scope 1+2 emissions, CO for the entire supply chain ₂ We have set a new target for Scope 3 emissions. CO as a percentage of energy supplied ₂ Carbon Intensity, which is the intensity of emissions ^※ We aim to reduce emissions by 10% by FY2030 compared to FY2020 and by half by FY2040 compared to FY2020. Because our company's main business is energy, centered on fossil fuels that have a large environmental impact, we position environmental and social issues as management issues and take the initiative in contributing to their resolution. At the same time as we strive business structure reforms offensively and improve the value of our human capital, we will also promote sustainability management as a defensive measure to increase our corporate value.

Here are two examples of recent initiatives. The first is to set targets for Scope 3. In order to further clarify our initiative to achieve a carbon neutral society by 2050, we have set a new target for Scope 3, which is the CO₂ emissions of the entire supply chain, in addition to the target for Scope 1+2, which is the CO₂ emissions from Idemitsu’s operations. Idemitsu has introduced Carbon Intensity^* as an indicator of CO₂ emissions per unit of energy supplied, and aims to reduce Carbon Intensity by 10% from the FY2020 level by FY2030, and by half from the FY2020 level by FY2040.

* An indicator that shows how well the energy supplied to society can be converted to low-carbon energy.

Going forward, in order to help a wider range of stakeholders understand our company, we will significantly renew our official website in the spring of 2024 and communicate our group's initiatives more specifically and in real time. Please look forward to it.

Achieving "innovation" toward achieving the 2030 and Vision for 2050 requires many challenges, and through challenges, thinking through and working hard, people grow. This is the very purpose of our business. In that sense, we believe that the current environment is a perfect opportunity to nurture people, and a unique opportunity to embody management philosophy of ''truly inspired'' throughout society. This is the time when our capabilities will be put to the test. We would like to ask all of our stakeholders for their continued understanding and support.