August 2, 2005
Sekisui Chemical Co., Ltd.

About our Environmental and Social Activities

- Emphasizing dialogue with stakeholders
- "Honesty" as the foundation and "Prominence" as the pillar of our business activities

Since 2003, Sekisui Chemical Co., Ltd. (President: Naotake Okubo) has focused on "Creating Social Value through Environmental Activities" as a primary business challenge, striving to reduce the burden of our operations on the environment as well as offering environmentally friendly products. In fiscal 2004, we also began focusing on "CS Quality Management" as a new business priority by establishing a CS & Quality Management Department. In this report for our stakeholders, we outline a broad range of recent initiatives towards the creation of social value that we have implemented under these two business themes.

The Foundation of Environmental and Social Activities: 3 Areas of "Honesty"

Through our business philosophy, "Meeting the Expectations of our Stakeholders and Creating Social Value," Sekisui Chemical aims to be a company that can, through both our operations and our products, make a contribution to all of our stakeholders, which consist of 5 groups of people: customers, shareholders, employees, local communities, and the global environment. We also believe that responding adequately to stakeholder expectations is a precondition for the sustainable growth of our business. Honesty in the areas of compliance, risk management, and information disclosure and dialogue is the foundation of our environmental and social activities and the source of social value creation.

The Pillars of Environmental and Social Activities: 3 Areas of "Prominence"

Our business consists of a wide variety of activities for the creation of social value, but the three pillars are environmental activities, CS quality management (products), and human resources.

1. Environmental Activities
   In fiscal 2003, in keeping with our objective of being an "Environmentally Prominent Business," we established an Environmental Management Department. Since then, we have undertaken various initiatives, from environmentally friendly products and business activities to nature conservation activities. Then, in April of this year, we finalized our new medium term vision for environmental activities, "Plan to Achieve Top Environmental Performance," which lays out our objectives through fiscal 2010.
   
   [Objectives of the "Plan to Achieve Top Environmental Performance"]
   
   • CO2 Emissions (fiscal 2010): 10% reduction from fiscal 1990 level
   • Net sales ratio of environmentally friendly products (fiscal 2010): 50%
   
   
2. CS Quality Management (products)
   In fiscal 2004 we established a CS & Quality Management Department as the cornerstone of our "Environmentally-lasting Management" philosophy. With "The First Step in Making Something is Listening to the Customer's Voice" as our motto, we are undertaking various activities that focus on product quality and meeting customer expectations.
   
   In fiscal 2005, in order to establish a mechanism for listening to the customer's voice in good faith and ascertaining potential complaints, we have made a number of efforts to increase our information disclosure and dialogue with customers. With features such as our "Customer Consultation Office" and "Haya-mimi Net," (Keen-eared net) we have enhanced the avenues through which we field customer comments and inquiries, and we are also providing upgraded information disclosure features mainly on our homepage. These efforts are intended to improve customer satisfaction, while at the same time making it possible for us to incorporate customer feedback into our product development process.
   
   ["The First Step in Making Something is Listening to the Customer's Voice"]
   
   • Creation of a mechanism for incorporating customer feedback into product development.
   • Improvement of the Customer Consultation Office
   • Expansion of "Haya-mimi Net" (a database of customer feedback)
   
   
3. Human Resources
   At Sekisui Chemical, we look at each of our employees from two perspectives: as a member of our company, and as a stakeholder in our company.
   
   As members of our company, we support our employees as "Human Resources with a Prominent Role in Society." We encourage our employees to be strong, independent members of society with a global perspective. By implementing a completely performance-based compensation system, we are fostering a business culture where employees act independently and readily take on new challenges.
   
   Viewing employees as stakeholders in our company, we encourage frequent and honest dialogue between management and employees, striving to be an enterprise that our employees value highly.
   
   We also encourage each employee to adopt a work style that best fits his/her values and life plan, and we continue to provide a safe workplace where our employees can work with peace of mind.
   
   [Supporting Employees as "Human Resources with a Prominent Role in Society", and Creating our Business Culture]
   
   • Creating a business culture where employees act independently: Each company does its own hiring and training.
   • Entirely performance-based compensation system
   • Providing peace of mind at the workplace: Employees can choose where they work according to their life plan.
   
   [Dialogue between Management and Employees]
   
   • Lunch meetings, Roundtable conferences with management and executives, and Employee opinion surveys

Publication of the 2005 Environmental & Social Report

In order to gain the public's understanding of our environmental aims and activities, we have been publishing a yearly Environmental Report since 1999. This year we have expanded the content in order to provide a broader view of our activities: our new Environmental & Social Report will be available at the end of September.

Largely through two publications, this Environmental & Social Report and our Annual Report (which provides financial information), Sekisui Chemical Group will continue to move forward with our efforts to provide information disclosure of our business activities.

Environmental & Social Report
Target readership: customers, corporate clients, shareholders/investors, residents living near our facilities, CSR/environmental experts/scientists, NPO/NGOs, schools/students, employees, etc.

Press Contact Sekisui Chemical Co., Ltd. Corporate Communication Department Fax: (+81) 3-5521-0510 pr_group@sekisui.jp

Disclaimer This press release may contain forward-looking statements. Such forward-looking statements are based on current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements due to changes in global economic, business, competitive market and regulatory factors.