Climate Change Data

Environmental Metrics

ESG Focus Areas

• Formation of a sustainable, sound material-cycle society
• Realization of carbon neutrality
• Creating resilient social infrastructure
• Security and development of diversified human resources
• Advancement of risk management system

Environmental Achievements

• Increased vessels for exclusive use for biomass energy transportation to three.
• Obtained RSB and GGL certifications and started providing a service to support the acquisition of certification.
• Established solar power generation facilities for in-house consumption at Hanwa Logistics Osaka Co., Ltd.
• Started large-sized solar carport business.
• 34% reduction in Scope 1 and 2 GHG emissions in Japan by FY2030 (compared to FY2021) target set.

Social Achievements

• Launched Hanwa Business School (HKBS) in 2022 for human resource development.
• Increased annual dividend per share, enhancing shareholder returns.
• Established the Risk Management Department in April 2024 to strengthen company-wide risk management.
• Introduced ROIC (return on invested capital) as a management indicator, linking it to performance evaluations.
• Established Hanwa Business Partners Co., Ltd. in April 2024 to promote the employment of people with disabilities.

Governance Achievements

• Revised the number of directors from 12 to 11, increasing the percentage of outside directors to 36.3%.
• Reviewed the compensation structure to strengthen the incentive function for the executive management team and introduced a restricted stock-based compensation system.
• Reviewed evaluation items to focus on “change and transformation,” “future orientation,” and “risk management.”
• Established the Risk Management Department in April 2024.
• Established the Supply Chain Action Guidelines to build a sustainable supply chain.

Climate Goals & Targets

Environmental Challenges

• Declining domestic demand for steel materials.
• Intensifying competition for resources.
• Social demands for decarbonization.
• Risk of supply chain disruption.
• Global economic uncertainty.

Mitigation Strategies

• Strengthening risk management structure.
• Promoting sales that respond to customers’ needs in detail (SOKOKA strategy).
• Practicing “M&A plus A (alliances)” to acquire companies specializing in processing and small-lot logistics.
• Developing a SOKOKA strategy for ASEAN countries.
• Further enhancing risk management structure.

Supply Chain Management

Responsible Procurement

• Supply Chain Action Guidelines
• Questionnaires on social and environmental aspects for business partners in primary metals, food products, and housing materials (lumber) businesses.

Climate-Related Risks & Opportunities

Physical Risks

• Rise in average temperature
• Rise in sea level
• Changes in weather patterns
• Intensification of abnormal weather

Transition Risks

• Reinforcement of environmental regulations
• Carbon pricing
• Changes in energy
• Changes in business models

Opportunities

• Increase in demand for PKS, RPF, and other fossil fuel alternatives
• Increase in demand for aluminum and copper for electric vehicles
• Increase in demand for environment-friendly products
• Increase in demand for lumber in housing and other construction

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Certifications: ISO 14001, MSC-CoC, ASC-CoC, FSC-CoC, PEFC, SGEC, GGL, ISCC EU, ISCC PLUS, SBP

Third-party Assurance: LRQA (Lloyd's Register Quality Assurance Limited)

Sustainable Products & Innovation

• Biomass energy
• Recycled energy
• Environmentally friendly packaging materials
• Products made from bio-based raw materials

Awards & Recognition

• Health & Productivity Management Outstanding Organization 2024 (large enterprise category)