Proterial, Ltd.

Climate Impact & Sustainability Data (2022-04 to 2023-03, 2023-04 to 2024-03)

Reporting Period: 2022-04 to 2023-03

Environmental Metrics

Total Carbon Emissions:1913 kt-CO2/year

Scope 1 Emissions:818 kt-CO2/year

Scope 2 Emissions:1095 kt-CO2/year

Scope 3 Emissions:2356 kt-CO2/year

Renewable Energy Share:Not disclosed

Total Energy Consumption:Not disclosed

Water Consumption:14737000 m3/year

Waste Generated:758000 tons/year

Carbon Intensity:1.710 tons of CO2/million yen

ESG Focus Areas

Decarbonization
Circular Economy
Safety and Health
Diversity and Inclusion
Quality
Business Model Evolution

Environmental Achievements

Reduced CO2 emissions by 31% compared to FY2015
Increased renewable energy deployment by 50% to 35,000 MWh/year by 2030 (target)
Improved energy consumption unit by 14% compared to FY2015
Reduced waste landfill rate to 8.5% by 2030 (target)
Improved water use efficiency by 38.5% compared to FY2010
Developed technology to reduce CO2 emissions by more than 20% in lithium-ion battery cathode material manufacturing
Developed high-performance magnetic slot wedges increasing induction motor efficiency
Installed one of Japan's largest photovoltaic panel installations

Social Achievements

Certified as a Health and Productivity Management Organization
Implemented various diversity and inclusion initiatives, including the Proterial Young Women's Forum and unconscious bias seminars
Achieved 71% positive evaluation of engagement indicators in employee surveys
Increased diversity in recruitment (women, foreign nationals, career hires)

Governance Achievements

Established a Company-wide Risk Management Committee
Established the Quality Committee to oversee quality assurance and prevent recurrence of past issues
Implemented measures to prevent recurrence of quality assurance problems
Strengthened monitoring related to quality compliance

Climate Goals & Targets

Long-term Goals:

Achieve carbon neutrality by 2050

Medium-term Goals:

Reduce CO2 emissions by 38% by FY2030 compared with FY2015
Increase renewable energy deployment by 50% to 35,000 MWh/year by 2030
Reduce waste landfill rate to 8.5% by 2030
Increase ratio of women in management-level positions to 5.0% by fiscal 2030

Short-term Goals:

Not disclosed

Environmental Challenges

Stricter regulations on carbon pricing
Higher procurement costs of raw materials
Increased operating costs from new manufacturing processes
Decreased sales of ICE components due to xEV expansion
Changes in customer procurement standards
Increased costs of developing new products for a decarbonized society
Increased procurement risk due to increased demand for raw materials
Decreased sales due to lower customer evaluations
Delays in delivery due to natural disasters
Rising insurance costs
Intensifying competition in the Asian market
Tight procurement of main raw materials
Delays in responding to decarbonized-product requirements
Securing talent
Risks associated with product quality
Risks associated with environmental regulations
Fluctuations in exchange rates
Risks associated with M&As and business reorganization
Risks associated with information security
Risks associated with the global expansion of businesses
Risks associated with health and safety
Risks associated with earthquakes and other natural disasters
Risks associated with impairment losses on property, plant, equipment, and goodwill
Risks associated with financing activities
Risks associated with laws and regulations, and official regulations
Risks associated with intellectual property rights
Risks associated with retirement benefit obligations

Mitigation Strategies

Promoting energy-saving measures and productivity improvement
Strengthening surcharges and cultivating new suppliers
Examining equipment specifications to reduce operating costs
Targeting commercial-vehicle and agricultural/construction-equipment fields
Promoting energy conservation and renewable energy
Developing and launching environmentally friendly products
Developing processes that utilize overseas scrap alloys and low-grade raw materials
Strengthening cooperation between sales and R&D departments
Systematically improving production systems
Implementing disaster preparedness measures
Reducing costs by introducing high-efficiency equipment and procuring parts locally
Securing multiple procurement routes
Improving the ratio of renewable energy use
Restructuring its human resource system
Enhancing and strengthening its human resource development program
Implementing measures to prevent recurrence of quality assurance problems
Complying with environmental laws and regulations
Using foreign-exchange contracts and currency options
Employing outside advisers to analyze M&As
Taking security measures based on the severity and frequency of the risk
Continuously monitoring the political, economic, and social conditions of each region
Instilling a culture of safety, creating safe organizations, and improving facilities
Formulating a Business Continuity Plan (BCP)
Implementing selective capital investment
Using global cash pooling and working to optimize the flow of funds
Formulating the Proterial Group Code of Conduct
Investigating the patents of other companies in advance
Meeting regularly to deliberate and decide on appropriate investments

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

CSR-conscious procurement
Green Procurement
Responsible Mineral Procurement
Proterial Group Sustainable Procurement Guideline

Climate-Related Risks & Opportunities

Physical Risks

Natural disasters (earthquakes, storms, floods)
Abnormal weather impacting operations

Transition Risks

Stricter regulations on carbon pricing
Higher procurement costs of raw materials
Increased operating costs from new manufacturing processes
Decreased sales of ICE components due to xEV expansion
Changes in customer procurement standards
Increased costs of developing new products for a decarbonized society
Increased procurement risk due to increased demand for raw materials
Decreased sales due to lower customer evaluations

Opportunities

Increased sales by increasing product value through efficient production
Increased sales by improving customer evaluation of supplier selection
Increased sales by developing and launching environment-friendly products
Increased sales by expanding into new global markets

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 14001:2015

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

Goal 7 (Affordable and clean energy)
Goal 9 (Industry, innovation, and infrastructure)
Goal 12 (Responsible consumption and production)
Goal 13 (Climate action)

Proterial's initiatives contribute to these goals through decarbonization efforts, development of sustainable products, resource efficiency improvements, and responsible supply chain management.

Sustainable Products & Innovation

MetglasTM amorphous alloy
High-performance magnetic slot wedges
NEOMAX® neodymium magnets
Cathode materials for lithium-ion batteries
Environmentally friendly products

Awards & Recognition

Machinery and Robot Parts Award
Masuda Award
Shimane Prefectural Governor's Award
Asahi Shimbun Award

Reporting Period: 2023-04 to 2024-03

Environmental Metrics

Total Carbon Emissions:1062 kt-CO2/year

Scope 1 Emissions:234 kt-CO2/year

Scope 2 Emissions:828 kt-CO2/year

Scope 3 Emissions:2287 kt-CO2/year