Aiming to step up sustainability
initiatives while backed by tailwinds
in the aluminum products market
Director, Managing Executive Officer
Chief Executive of the Corporate
Enhancing UACJ’s value by promoting sustainability through structural reforms
UACJ implemented structural reforms for three and a half years since October 2019, and profitability has improved as a result. The Company has posted higher profits in Japan and generated substantial returns on large capital investments in Thailand and the United States. The Company has also strengthened its management system and structure through the reforms by reorganizing decision-making bodies and renewing the UACJ Group’s corporate philosophy. The structural reforms were a means to improve earnings and reorganize management, but those activities evolved into ongoing efforts to create new businesses while providing solutions to issues facing the world today. In other words, we shifted our focus to sustainability, and have begun taking this approach to the next level. To lead these efforts, the Company established its Corporate Sustainability Division in April 2023, replacing the former Corporate Sustainability Department that had been responsible for promoting sustainability initiatives in the past. Under this new structure, we will shift to a more aggressive stance by drawing from the Company’s increased earnings capacity—an outcome of the structural reforms—to channel more resources to sustainability-related activities going forward.
Global environmental issues have grown more serious in recent years, and in that context, the Group’s operating environment has also changed. The Group is now expected to pursue sustainable economic development and apply technologies to tackle environmental problems. Amid these shifts, customers’ needs continue to diversify, and products that help reduce environmental impacts are increasingly demanded. To respond to these needs and demands, the Corporate Sustainability Division will work closely with operational departments that routinely deal with customers, and leverage its expertise in recycling and climate change countermeasures. Indeed, all members of the Corporate Sustainability Division recognize its important responsibility to provide value to customers and create new business models. Toward this end, the Climate Change Countermeasures Steering Committee, which is overseen by the division’s Climate Change Task Force Department, is currently sharing information about customers’ needs along with trends in various countries, and deliberating on appropriate responses and initiatives to take. Most recently, it has been setting up a system for distributing such information throughout the Group, and organizes meetings for that purpose with members of the flat rolled products, automotive parts, extruded products, foil, casting and forging, and precision-machined components businesses.
The Corporate Sustainability Division has only begun collaborating with the Group’s operational departments, but I am confident that our wide-ranging initiatives will ultimately help protect the global environment while also benefitting people. We want the division to play a leading role in helping the Group grow as an enterprise that fulfills its dual responsibilities of creating benefits for society and devising solutions for sustainability issues of today.
Having aluminum recognized and chosen as an eco-friendly material
Amid the growing seriousness of climate change and ocean plastic pollution, the shift to EVs and movement away from plastic have both been accelerating. Consequently, demand for aluminum has been rising rapidly. In fact, every year we have been receiving an increasing number of customer enquiries about our CO2 emissions during product manufacturing and about how our products help reduce CO2 emissions. This indicates how manufacturers are now placing greater importance on environmental performance in their material selection criteria.
The more aluminum is produced with electricity from renewable energy sources—green aluminum—and with recycled materials, the more CO2 emissions can be reduced. The majority of the Group’s CO2 emissions fall under Scope 3, and within that scope, most emissions originate from electricity consumption during the smelting of new aluminum ingots. By using green and recycled aluminum instead of these new ingots, we can substantially reduce CO2 emissions, and, consequently, help our customers lower their Scope 3 emissions. Based on this approach, we are working to establish a circular economy for aluminum with a view of providing more value to customers while lowering environmental impacts.
This involves developing materials that are easy to recycle, integrating used aluminum product collection networks into supply chains, and switching to recycled and green aluminum. In these ways, we intend to help build a more sustainable planet and offer environmental benefits through aluminum. The UACJ Group cannot establish a circular economy on its own, of course, so we have initiated projects to use and recycle aluminum in partnerships with customers, used aluminum product collection firms, and other companies in our industry in Japan. By proactively demonstrating the environmental benefits of aluminum through a circular economy, we hope to raise awareness of the metal’s advantages and convince more customers to use it. Moreover, to form a larger aluminum recycling network in the future, we believe that the Group must play a central role in driving progress and bringing together partners that place importance on protecting the global environment.
Initiatives aimed at providing solutions and creating benefits for society
To carry out sustainability initiatives group-wide, our biggest resource is the Group’s employees. Motivating all employees across is essential, so we provide them with full explanations of how our sustainability activities are unique to the UACJ Group, what our responsibilities are as an international enterprise, and how the properties of aluminum benefit the environment. Employees will drive our efforts to broaden the scope of the Group’s sustainability by including customers and suppliers, and they have appeared increasingly enthusiastic about our sustainability initiatives over the past few years. Likewise, members of the Climate Change Countermeasures Steering Committee have been highly engaged in discussions recently, and its meetings often last longer than scheduled. The mood is completely different compared with the time when the committee was first set up. These changes are very positive in terms of promoting sustainability. I also want employees to get individually involved in our sustainability initiatives while considering how these activities can bring benefits to society.
As part of our efforts to protect the global environment, in addition to building a circular economy, we have begun taking steps to address climate change, water-related issues, and biodiversity. We have specified climate change as a materiality issue and implemented measures to address it more effectively, such as by conducting risk assessments and scenario analyses based on the recommendations of the Task Force on Climate-related Financial Disclosures. In an assessment by CDP, an environmental disclosure organization, completed in December 2022, the Company received a score of B for the categories of Climate Change and Water Security. We have also set up in-house organizations to study nature positive initiatives, and are exploring ways for the Group to protect biodiversity and natural capital in the future.
As the officer in charge of leading our sustainability initiatives, I have a mission to clarify the Group’s social responsibilities and explain to employees and the public what we need to do to create benefits for society and devise solutions for today’s sustainability issues. Three years ago, we declared our intention to put sustainability at the heart of management in our mid-term management plan, currently underway. Over that period, the significance and necessity of sustainability has become widely appreciated throughout the UACJ Group as a whole. While preparing to commence our next mid-term management plan in 2024, management is currently examining how to update the Group’s materiality issues while engaging in wide-ranging discussions to address growing awareness and stronger demands for sustainability. Given the favorable outlook for the aluminum products market, we intend to step up the UACJ Group’s sustainability initiatives together with employees, customers, and suppliers, with a view of passing down a better world over the next century.