Climate Change Data

Environmental Metrics

ESG Focus Areas

• Local Communities
• Environment
• People

Environmental Achievements

• Received the 2020 Good Design Award for “Wood pellet air transfer unit” and “Wood chip drying container system”
• Reduced CO2 emissions through automation and robotization of work processes and promotion of the three “don’t” activities
• Increased percentage of eco-friendly company vehicles in corporate fleet (excluding trucks) to 63%
• Converted three plants to full LED lighting and 84% of lighting in Miki Plant to LEDs
• Completed construction of the “Nishitenpoku Thermal Recycling Factory,” a used disposable diaper fuel production facility
• Completed a food recycling biogas plant that performs methane power generation using food waste

Social Achievements

• Ranked seventh in the “Ranking of Large Companies with Low Turnover” in the “CSR Survey 2021”
• Kyokuto Kaihatsu Kogyo and Nippon Trex recognized as “Outstanding Health and Productivity Management Organization 2021”
• Launched “Vehicle management support system” application and Web service for Refuse truck and Tailgate lifter users
• Launched “Refuse truck safety support system,” a safety support system for Refuse trucks equipped with image recognition AI
• Implemented various measures for workstyle reform including telecommuting, staggered working hours, and reduced working hours
• Introduced video training service for employee skill development
• Provided experiential safety training using safety work training vehicles
• Opened “Kyokuto Kashiwa Farm” and “Kyokuto Yachiyo Farm” to create workplaces for people with disabilities
• Established the “Corporate Ethics Helpline” for reporting ethical violations

Governance Achievements

• Signed the United Nations Global Compact (UNGC)
• Participated in the Kansai SDGs Platform and SDGs for Regional Revitalization Public-Private Partnership Platform
• Certified as a “Kanagawa SDGs Partner”
• Obtained ISO 9001 and ISO 14001 certifications
• Implemented the Three “Don’t” Activities (don’t manufacture, don’t pass on to the following processes, and don’t accept defective products from previous processes) to improve quality

Climate Goals & Targets

Environmental Challenges

• Impact of COVID-19 on production and sales activities
• Decarbonization in manufacturing and product use
• Shortage of workers due to low birthrate and aging population
• Declining population of suburban cities impacting waste treatment
• Risks associated with climate change, such as heavy rain, floods, storms, and sea-level rise
• Supply chain disruptions

Mitigation Strategies

• Established business style in response to COVID-19 crisis
• Investing in energy conservation, reviewing production methods, and introducing products that contribute to decarbonization
• Promoting functional integration among Group companies for special purpose vehicles
• Providing products with universal design
• Improving work environments to prevent labor accidents and heatstroke
• Promoting automation and robotization of work processes
• Implementing risk assessments for suppliers
• Promoting workstyle reform, employee development, and social contribution

Supply Chain Management

Responsible Procurement

• CSR Procurement Guidelines (considering environment and human rights)

Climate-Related Risks & Opportunities

Physical Risks

• Intensification of abnormal weather
• Droughts and other water stress

Transition Risks

• Price of carbon
• Changes in the energy mix
• Rise in average temperature

Opportunities

• Increased demand for Sprinkler trucks for dust control and forestation maintenance

Reporting Standards

Frameworks Used: ISO 26000 guidelines, Ministry of the Environment Environmental Reporting Guidelines (FY2018 version), Ministry of Economy, Trade and Industry “Guidance for Collaborative Value Creation”, IIRC “International Integrated Reporting Framework”, GRI Standards, TCFD

Certifications: ISO 9001, ISO 14001

UN Sustainable Development Goals

• Goal 7
• Goal 9
• Goal 11
• Goal 12
• Goal 13

The report details how various initiatives contribute to these goals through the Kyokuto Kaihatsu Group SDGs Declaration

Sustainable Products & Innovation

• Wood pellet air transfer unit
• Wood chip drying container system
• Electric and hybrid vehicles
• Refuse truck safety support system

Awards & Recognition

• 2020 Good Design Award for “Wood pellet air transfer unit” and “Wood chip drying container system”

Environmental Metrics

ESG Focus Areas

• Organizational Governance
• Human Rights
• Labor Practices
• Climate Change and Environment
• Fair Operating Practices
• Consumer Issues
• Community Participation & Collaboration

Environmental Achievements

• Reduced CO2 emissions by 4.4% compared to FY2013 (based on output level)
• Achieved a 97.0% resource recycling rate
• Installed solar power generation systems at various locations, generating 4,528,470 kWh in FY2022

Social Achievements

• Increased female employee ratio to 11.0%
• Achieved a 58.1% satisfaction rate with work-life balance
• 74.2% of employees took paid leave

Governance Achievements

• Capital investment of 11,804 million yen
• 115 applications for industrial property rights

Climate Goals & Targets

Environmental Challenges

• Stagnation in chassis production due to soaring prices and semiconductor shortages
• Soaring prices from raw materials and energy
• Longer truck chassis delivery times due to a shortage of semiconductors
• Labor shortages
• Aging population
• Climate change risks (heat waves, droughts, floods, storms, sea level rise)
• Transition risks (regulatory changes, market shifts)
• Supply chain disruptions
• Human rights violations
• Environmental pollution in supply chains
• Population decline and depopulation
• Securing human resources

Mitigation Strategies

• Revised selling prices
• Increased productivity
• Planning to start a technical center in Toyota City for R&D
• Relocated head office to Osaka
• Promoting DX (digital transformation)
• Improving operational efficiencies
• Promoting diversity
• Improving workplace environment
• Conducting unconscious bias training
• Developing alternative sourcing strategies
• Implementing human rights due diligence
• Strengthening anti-harassment measures
• Promoting sustainable procurement
• Expanding management system regarding conflict minerals
• Adoption of universal design
• Establishment of a consultation desk
• Developing strategies for various climate-related scenarios
• Promoting energy conservation
• Switching to low-emission power plans
• Monitoring of carbon price policy trends
• Implementing procurement policies and guidelines
• Building a management system for supply chain risks
• Strengthening information security
• Expansion of systems related to privacy protection
• Implementation of education on related laws
• Conclusion of comprehensive collaboration agreements
• Improving automation rate in production process
• Promotion of health management
• Promotion of taking paid leave

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Sustainable procurement considering environmental and human rights impacts
• Reducing excessive packaging
• Reusing packaging materials

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Flooding
• Droughts
• Heat waves

Transition Risks

• Changes in emission factors
• Introduction of carbon tax
• Changes in energy mixes

Opportunities

• Increased demand for relief water tankers and vehicles for collecting disaster waste
• Increased demand for sprinkler trucks for dust control
• Development of energy-efficient products

Reporting Standards

Frameworks Used: ISO26000 Guidelines, Ministry of the Environment Environmental Reporting Guidelines, Ministry of Economy, Trade and Industry Guidance for Collaborative Value Creation, IIRC International Integrated Reporting Framework, TCFD, UNGC

Certifications: ISO9001, ISO14001, ISO45001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 11 (Sustainable cities and communities)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)

The company's initiatives contribute to these goals through various projects related to renewable energy, waste management, sustainable manufacturing, and community engagement.

Sustainable Products & Innovation

• EV special purpose vehicles
• Hybrid railway vehicles
• Lightweight and aerodynamically efficient products
• Electric vehicle (EV) tipper trucks

Awards & Recognition

• 2022 Good Design Award (Concrete distributor PZ01-10)
• FTSE Blossom Japan Sector Relative Index constituent stock
• Excellent Health Management Corporations 2023 (Kyokuto Kaihatsu Kogyo and NIPPON TREX)
• Sports Yell Company 2023 (Kyokuto Kaihatsu Kogyo)
• Aichi Brand (NIPPON TREX)
• Traffic Safety Activities Award (Kyokuto Kaihatsu Kogyo)