Mitsubishi Chemical Holdings (MCHC) believes that chemistry is a key technology to resolving many of the challenges that society confronts, and to achieving KAITEKI.
As a global chemicals company, MCHC has been thinking about the role of chemistry, and about its long-term aspirations and goals. One of the outcomes of that process was the Management of SUSTAINABILITY (MOS) indexes, a specific means of visualizing and quantifying MCHC’s continuing progress towards KAITEKI.
The following section describes the process leading to the introduction of the MOS indexes, the first step to putting KAITEKI into practice.
- October 3, 2005
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- Established Mitsubishi Chemical Holdings Corporation (MCHC)
- Established a basic philosophy for the entire MCHC Group: "Good Chemistry for Tomorrow – Creating better relationships among people, society, and our planet"
- October 2005
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- Started to look into Project (PJ) 10/20 , proposed by Yoshimitsu Kobayashi (current MCHC President), which envisages society and the role of chemistry and MCHC in 2015 (10 years later) and in 2025 (20 years later)
- Proceeded with discussions and detailed studies, focusing on the year 2025
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- March 2006
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- A one-year project starting in April 2006 was officially approved by the MCHC Management Committee. Agreed that the results of the project would be positioned as the basis for the direction of the MCHC Group's corporate activities.
- April 2006
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- PJ 10/20 officially launched
Outputs of PJ 10/20
Long-term trend in social environment
Trend discussions
The philosophy of Mitsubishi Chemical Holdings Corporation and its aspirations 20 years from now
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- March 2007
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Project results
- When considering what the society would be like in 2025, discussed what role Chemistry should play. Through this, MCHC’s aspiration in 2025, as well as what MCHC should be in 2015, were determined. Our present status was confirmed, and proposals for roadmaps to the goal were made.
- Then, to respond to the paradigm shift in the next 20 years, the three keywords of Sustainability, Health and Comfort were selected as our important direction. This was proposed as MCHC’s corporate direction.
- April 2007
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- Yoshimitsu Kobayashi assumes position as MCHC President & Chief Executive Officer
- April 2007
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- MCHC Management Committee approves PJ 10/20 proposal
- MCHC is determined to be "a global leading company based on the infinite potentials of Good Chemistry" as the aspiration for 2025.
- To achieve this, the three keywords of Sustainability, Health, and Comfort were settled on as the corporate direction.
- May 2007
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- Publicly announced the results of PJ 10/20 and explained the thinking behind our next mid-term management plan (fiscal 2008 onwards) at the Analyst Meeting
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- May 2008
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- Unveiled APTSIS 10 mid-term management plan
(April 2008 – March 2010)
- Clarified our aspirations for 2025 and accompanying goals for 2015
- Defined sustainability, health, and comfort as our three decision criteria for corporate activities, as outlined previously in our Direction of Corporate Activities
- Management targets for the year ending March 2010: Operating income of at least ¥190 billion, ROA of at least 6%, and a reduction in CO2 emissions (basic unit) of at least 20%
Achievements to date and subsequent priorities
Achievements up to this point
Defined criteria for our corporate activities and clarified our aspirations for 2025 and goals for 2015
Subsequent priorities
Despite setting out Sustainability, Health, and Comfort as the decision criteria for our corporate activities in order to achieve our aspirations, at this point, we were still uncertain as to how best to verify that we were taking the right direction.
- June 2008
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- Launched a prototype of the KAITEKI Project, with the aim of helping to resolve global challenges such as climate change and resource depletion
- Made a commitment as part of the project based on:
- rather than focusing solely on short-term profits,
- the incorporation of environmental and social sustainability into business activities as a new dimension, and
- taking into account the global environment with a medium- to long-term perspective.
- Trends during the summer of 2008
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- Soaring oil and other resource prices due to speculative investment
- Financial instability triggered by the Lehman Brothers crisis (September)
Global trends
Soaring oil and other resource prices over the summer prompted concerns about the potential impact on economic activity. This was compounded by the global financial crisis, triggered by the collapse of Lehman Brothers in September. While serious concerns already existed about the over-reliance on financial markets, not least because of the issue of subprime loans, speculative investment also began to have a major impact on the real economy.
A new management axis
- Considering the juxtaposition of financial markets concerns with environmental issues, the MCHC Group continued to debate the future. The result led a growing realization that a new management axis was needed; one that would maintain sustainable corporate development while also accommodating increasingly diverse values and helping to resolve environmental issues.
- Recognizing that this new management axis for the future would need to consider public interest and the environment, and would be based on SUSTAINSBILITY.
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- April 2009
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- Established The KAITEKI Institute Inc. (think tank and research institute)
- Growing recognition of KAITEKI as a major direction for MCHC
- November 2009
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- Concept of Management of SUSTAINABILITY (MOS) presented publicly for the first time on a Management of Technology (MOT) Conference
Management of SUSTAINABILITY (MOS)
MOS represents the ideas that underlie a new management axis, and is based on the concept that corporate activities have an important role to play in processes such as protecting the environment, preserving natural resources, and improving living standards and public health worldwide, both directly and indirectly.
Proposal for "Management of SUSTAINABILITY" (MOS Axis)
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- January 25, 2010
(KAITEKI anniversary)
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- APTSIS 15 Basic Strategy below, approved by the MCHC Management Committee
- Specified KAITEKI as the MCHC Group’s goal
- Set out the MOS indexes, to measure progress with Management of SUSTAINABILITY and to act as an indicator of MCHC’s corporate value, alongside existing financial indexes
- Made the decision to set numerical targets for both indexes for 2015
- January 25, 2010 onwards
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- Finalized factors for MOS indexes and began the process of devising numerical targets
Working process of MOS indexes
Determination of key indexes
- Detailed examination of the context of operations for all 69 business units of the MCHC Group
- Examination of the status of indirect departments, including procurement and human resources
- Clarification of the relationship with index candidates, and simulation
- Discussions with external intellectuals
- Discussions with board members
- June 2010
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- Publicly announced the basic thinking behind our APTSIS 15 mid-term management plan (fiscal 2011 onwards) at the Analyst Meeting
- Defined KAITEKI and publicly redefined our aspirations to become a company that achieves KAITEKI by 2025
- Set out the concept that MCHC's corporate value is a combination of its economic corporate value and MOS value
What is KAITEKI
- December 2010
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- Confirmed items of MOS indexes and decided to incorporate those indexes into management targets
- Introduced items as MOS indexes based on criteria that are of particular importance to MCHC and that are able to be monitored, as a result of careful deliberation about a year
- Set out three items apiece for sustainability, health, and comfort, making a total of nine, and incorporated fiscal 2015 targets into management targets
- Set out plans to monitor progress and implement the PDCA (plan, do, check, act) cycle, with financial indexes and progress to be released to the public
MOS indexes
Sustainability index
Monitor progress and manage PDCA cycles
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- December 8, 2010
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- Held an Analyst Meeting to explain our new APTSIS 15 mid-term management plan
- Provided an additional explanation on the introduction of the MOS axis as a new management axis, and made plans to promote KAITEKI management as a four-dimensional approach to management, including Time as a fourth axis alongside the existing BA and MOT management axes
- Set out a direction based on KAITEKI value, indicating a balance between BA axis, MOT axis, and MOS axis as a vector
(Aiming to enhance KAITEKI value to achieve KAITEKI )
- Good Chemistry for KAITEKI: A Challenge to a Sustainable, Healthy and Comfortable Society (ed. Yoshimitsu Kobayashi) published
APTSIS 15 Management Targets (year ending March 2015)
Financial indexes:
Operating income of ¥400 billion, ROA of at least 8%, net debt-to-equity ratio of 1.0, overseas sales ratio of at least 45%
MOS indexes:
Example Sustainability index targets
A 30% reduction in environmental impact (domestic) and a 17% reduction in greenhouse gases compared to fiscal 2005
Example Health index targets
A 30% increase in contribution to the treatment of diseases (based on the difficulty of treatment and the number of patients undergoing treatment) compared to fiscal 2009
Example Comfort index targets
Ratio of new products in performance product and health care sectors of at least 35%
- January 17, 2011
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- The first meeting of the Inaugural APTSIS 15 with MOS index Presentation Conference for operating companies
The evolution of MOS indexes
The MCHC Group aspires to create an environment in which all of its corporate activities are linked to KAITEKI value
- Planning ways to promote KAITEKI value, through MOS index presentations, etc.
- Instructing operating companies to start the specific work linking existing activities (responsible care, corporate citizenship, etc.) to MOS indexes
- Approving items unique to individual operating companies, in addition to the nine basic factors
The above describes the development of MOS indexes as a means of visualizing the progress of Management of SUSTAINABILITY to share it with not only every member of the MCHC Group but also every stakeholder.
The indexes remain a work in progress. Nonetheless, it is a starting point, MCHC that encourages individual the Group employees to think about how to incorporate KAITEKI into their own activities and act accordingly. The MOS indexes will then continue to evolve.
The MCHC Group is determined to develop new ideas and work in partnership with its stakeholders in order to achieve KAITEKI.
