Third Party Opinion

When putting transformation into high gear

Takeshi Mizuguchi

Takeshi Mizuguchi
Professor, Faculty of Economics, Takasaki City University of Economics
Obtained a PhD from the School of Business Administration (Meiji University). Specializes in responsible investment and non-financial information disclosure. He assumed his current position in 2008 after becoming a lecturer in the Faculty of Economics at Takasaki City University of Economics in 1997, and then an Associate Professor in the same faculty. He worked in positions as Director of the Society for Environmental Economics and Policy Studies, Chair of the Green Bonds Working Group (Ministry of the Environment), and member of the ESG Financial Workshop (Ministry of the Environment). His publications include The Age of Sustainable Finance: ESG/SDGs and the Bond Market (editor, Kinzai), ESG Investing̶ New Form of Capitalism (Nikkei Publishing Inc.) and Responsible Investment̶ Changing the Future through the Flow of Capital (Iwanami Shoten, Publishers). All publications are in Japanese.

That which changes survives.

In his Message from the President, Hidetaka Shirozume, president of ADEKA, quoted Charles Darwin’s Origin of Species when he said that only those capable of change can survive. I agree. And today we’re in an age when change is demanded more than ever. The structure of industry has begun to change at the global level, as witnessed in the “European Green Deal,” a policy package made public by the European Commission late last year. The world is changing, and it is moving in the direction of zero carbon, circular economies and protection of biodiversity.

Let’s take the example of one eco-friendly product, ADEKA Sakura-Lube. It makes an incredible contribution to reduced CO₂ emissions by improving the fuel efficiency of vehicles. However, the US state of California is signaling that sale of gasoline-powered cars will be prohibited by 2035, and the EU Taxonomy Regulation is moving toward recognizing as sustainable only those vehicles that have zero emissions. Over the long term it seems that gasoline-powered vehicles are on the decline. So while ADEKA’s contribution is highly praised today, further transformation is necessary.

The “circular economy” is one that uses few resources and uses them in a completely closed cycle, so that ultimately any resources extracted from the earth are returned to it. I believe the role of plastics in this economic structure will become one point of focus. Your company earns kudos for its polymer additive technologies, which add a palette of functions and performance enhancements to plastics, but in the future its status as an eco-friendly product will no longer be regarded as adequate. You will need to devise a comprehensive vision in which your entire product lineup accords with the circular economy. That vision will empower ADEKA to lead the competition to transform, thereby shaping the future of plastics.

Also, as part of the European Green Deal, the European Commission is signaling a 50% reduction in the use of agricultural chemicals. In the severe regulatory environment of the European market, your Group’s Nihon Nohyaku is fighting hard, but it will have to undertake even more bold innovations, such as agricultural chemicals with even less ecological risk and entry into the field of biological control agents.

Focusing on the“ S” in“ ESG”

Amid the COVID-19 pandemic, interest in the“ S” in“ ESG”, “Social,” is intensifying. Companies are being asked questions such as:“ What direct actions are you taking to protect your employees from infection?” and“ How are you maintaining employment levels amid the faltering economy?” On this point, your company, which lists occupational safety as the first item in your Safety Quartet, has stated that it is responding appropriately to the pandemic.

On the other hand, the fact that some people who want to mount a defense against the pandemic are unable to do so points toward the problem of economic inequality in society. This is a problem of social and employment systems as a whole and cannot be solved by individual companies alone. In that light, it is important for ADEKA to indicate its stance as a company with regard to this major social problem of economic inequality.

Response to Third Party Opinion

Thank you very much for your valued opinion regarding the CSR activities of the ADEKA Group.

In receiving your third-party opinion, I am sincerely grateful for your views regarding our products’ contribution to the environment and our technologies, and for your wide-ranging advice from the standpoint of sustainability.

The operations of the ADEKA Group are intimately bound up with the problems of environmental pollution from plastics, inadequate food supplies and food loss. We are marshalling resources Group-wide to focus our technologies on the continuing search for solutions to these challenges.

Recognizing the impact that global warming and declining biodiversity have on our business activities and our lives as individuals, we are contributing not merely to reducing waste in the manufacture of our products but more broadly to recycling across the entire product life cycle. As we do our part to promote the circular economy, we are moving forward on partnerships with other industries and fields to drive still further innovation.

The ADEKA Group is transforming its business foundations in response to the new social environment. As we do so, we will apply the valued third-party opinion you have provided us to the betterment of our Group management, to meet and exceed the expectations of our stakeholders.

Susumu YasudaDirector and Operating Officer


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