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Message from Chairman of Group Sustainability Committee

“The Earth is now a stakeholder.” Always striving to be ahead of the future, which is vital for sustainability  Ichiro Otsuka President and Rpresentative Director  Tokyo Seikan Group Holdings, Ltd.
President and Representative Director
Toyo Seikan Group Holdings, Ltd.

Taking on the challenge of creating a circular economy

The leaders of the Group of Seven declared in the Communiqué of the G7 summit in June 2021 their commitment to carbon neutrality, net zero emissions of greenhouse gases by 2050. The Communiqué also states that they support a green revolution to “protect our planet.” I understood the message as “the Earth has now come to be a corporate stakeholder as well.”

Since the beginning of 2021, the Toyo Seikan Group has made a number of decisions to steadily advance its efforts to address environmental issues. In January, we became the first packaging manufacturer to join the Ellen MacArthur Foundation, a UK-based charity which promotes the circular economy(1) around the world. Many global companies who have joined the foundation are working together to achieve a circular economy by combining their knowledge. Dialogue with European companies with a high level of environmental awareness gives us an insight in finding ways to pursue both social contribution and business sustainability.

As demand for cans are growing in Europe and the United States amid the COVID-19 pandemic, Toyo Seikan, an operating company of the Group, is promoting resource and energy conservation through the production process of its new aluminum beverage can, thereby reducing environmental impact. Such production technology will pave the way for our expanding to European and US markets. For recycling, we should gain knowledge to promote PET bottle-to-PET bottle recycling in Japan, as more than 85% of used PET bottles are recycled in the country but only 15% of them are currently recycled into PET bottles.

Setting higher environmental targets for fiscal 2030

We have significantly raised our medium term environmental targets in the Eco Action Plan 2030, launched in 2019. We clearly state our commitment to being carbon neutral by 2050, setting new targets of a 35% reduction in emissions from our operations (Scope 1 & 2) and a 20% reduction in emissions from the supply chain (Scope 3) by fiscal 2030, compared to fiscal 2019.

To “protect the Earth as a stakeholder,” I believe that we need cooperation with business partners and consumers, on top of our own efforts, to generate synergies. This is reflected in our new Scope 3 target, and we will also start disclosure of additional information to achieve it.

We will work together with our business partners to calculate and disclose the emissions from individual processes from procurement to disposal of various materials, such as metal, plastic and paper. The disclosure will certainly enhance our commitment to identifying points to improve and reducing environmental impact.

Formulation of the Group's first long-term management vision and the significance of backcasting

Our recent initiatives are closely linked to our Long-Term Management Vision 2050 (“The Future, Wrapped for All”), Mid- to Long-Term Management Goals 2030, and Mid-Term Management Plan 2025, which were launched in May 2021. Backcasting from the future we aim for in the long-term management vision, we identified the interim targets and the current issues. In July, we announced our support for the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD)(2) to continue to communicate our efforts to address climate change to the world over the long term.

This is the first time in our history that we have formulated a long-term management vision that looks ahead 30 years. I have strongly felt the need to establish a long-term vision in the midst of a series of events that have a multiple impact on our living, including natural disasters of larger-scale, increasingly severe environmental problems, unexpected risk occurrence such as the COVID-19 outbreak, and digital acceleration in the society. Experiencing these events, I have come to believe that our traditional three- year management plan alone is not sufficient to take truly effective measures, and that we as a corporation need to have a solid base to commit ourselves to tackling social issues.

In developing the vision, younger employees in their twenties to forties from across group companies joined the process, freely discussing topics like “what the future looks like” and “what the Group can do,” while management had their own discussions. Our long-term vision was formulated by finding a common direction through such discussions on both sides. Here, I would like to add one more point. The vision slogan (The Future, Wrapped for All) uses a word “wrap.” The Chinese character we use to mean “to wrap” comes from an ancient pictograph of a pregnant mother who holds her belly with hands to protect her child in her womb. With this word, we want to convey our message that we will care about all human beings.

From packaging containers to “packaging solutions”

The new long-term vision has set a goal as to what we aim and want to be: a “daily living platform” for people all over the world to live safe, secure and fulfilling lives, and our approach to achieve the goal consists of two pillars: “responding to diversity” and “creating a sustainable society.” We believe that the current industrial structure with mass production and mass consumption is no longer sustainable for our planet, and that we can only survive by maintaining diversity in various forms while protecting the environment.

Taking this viewpoint into consideration, the Mid- to Long-Term Management Goals 2030 aims to achieve JPY 1 trillion in net sales and JPY 80 billion in operating income for its final year, while we aim to achieve the Eco Action Plan 2030 for the sake of the society and the environment. For all these objectives, we have specified key issues, including exploring, commercializing and monetizing new growth opportunities, in the Mid-Term Management Plan 2025.

While sales of our packaging segment remains almost flat beyond fiscal 2025 in our growth strategy, we aim to double the combined sales of engineering, filling and logistics businesses by fiscal 2030, compared to the current level, thereby enhancing the function of our “packaging solutions.” We are proud that this is a strategy that can only be realized by a corporate group that is capable of handling all kinds of packaging materials based on the technologies it has developed for over 100 years.

Diverse workforce is essential for driving sustainability

To realize our long-term management vision, it is essential to develop human resources and to reform the corporate culture with a vibrant workplace where everyone feels rewarded. I believe that diverse members and outstanding talents promote business creation. We therefore strive to foster a new corporate culture through a number of projects, such as developing an open recruitment system for employees who want to engage in new businesses and introducing members who are involved in unique activities outside work in the President's regular message.

In 2019, operating company Toyo Seikan received a surcharge payment order from the Japan Fair Trade Commission for violating the Antimonopoly Act. I would say that such misconduct typically occurs when you turn defensive and become inward-looking. Now we manage a regular auditing system and conduct various educational programs to increase compliance awareness. At the same time, to build a culture that does not allow non-compliance and eradicate the root of misconduct, we desperately need an established process that keeps our business active with members who make positive and constructive suggestions, and this is exactly the process to realize our long-term management vision.

Always strive to be ahead of the future by pursuing an original, proprietary technology. Even if it takes ten years, or even twenty years, to realize it, the efforts we make toward the goal should be the strongest power that drives us to create a sustainable future.

  • Note: ?
  • 1.A circular economy aims for a zero-waste system not just by focusing on the three Rs (reduce, reuse, recycle) but by sourcing materials and designing products with due consideration to the later stages of their lifecycle such as collection and recycling processes.
  • 2.The TCFD is a task force established by the Financial Stability Board (FSB) at the request of the Group of Twenty (G20). Following the TCFD's recommendations on disclosure of climate-related information, we will conduct a scenario analysis to identify climate-related risks and a qualitative and quantitative assessment of business impact, based on the results of our climate-related risk materiality assessment.

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