Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Initiatives
• Social Contributions through Business Activities
• Respect for Human Rights
• Commitment to Fairness

Environmental Achievements

• Concluded a technology license agreement with Larsen & Toubro (L&T) to provide its proprietary “Chiyoda Thoroughbred 121 (the CT-121)” flue gas desulfurization process (FGD) technology for promotion in the Indian market.
• Participating in the construction of Japan’s first renewable jet and diesel fuel demonstration plant.
• Development of SPERA Hydrogen® System technology for large-scale transportation of hydrogen.
• Submitted an average of 319 environmental proposals annually over the past five years, with 221 accepted in 2016.
• Yabase oil field produced-water treatment demonstration plant commenced operations in March 2017.

Social Achievements

• Yamal LNG project: 1,300 JV staff members and 12,000 workers on-site; safety measures implemented at all project sites and offices.
• Yamal LNG project: 15 students from Moscow State University of Civil Engineering worked at the Sabetta site office.
• Yamal LNG project: 11 female members participated in La Parisienne marathon, entry fees supporting breast cancer research.
• Provided internships to students from the Masdar Institute of Science and Technology (MIST).
• Various training programs for RasGas and Qatargas engineers.

Governance Achievements

• Transitioned to a “company with the audit and supervisory committee” in June 2016.
• Appointed three independent outside directors.
• Implemented a Compliance Consultation and Reporting System (Whistleblowing System).

Climate Goals & Targets

Environmental Challenges

• Harsh environmental conditions in the Arctic for the Yamal LNG project.
• Meeting the growing global demand for energy while adhering to environmental regulations.
• Maintaining safety standards across various international projects and continually updated regulations.

Mitigation Strategies

• Modular construction method adopted for Yamal LNG project.
• Development and implementation of advanced produced-water treatment technology.
• Design Safety Induction Course for engineers involved in project execution.
• Global operation platform (GOP) task started at Group headquarters to share risk management personnel.

Supply Chain Management

Responsible Procurement

• Green procurement guidelines based on the Ministry of the Environment’s Green Purchasing Law

Climate-Related Risks & Opportunities

Opportunities

• Development of renewable energy-related business
• Development of hydrogen energy
• Transition risk represents a new business opportunity for Chiyoda

Reporting Standards

Frameworks Used: ISO26000, United Nations Global Compact, SDGs, Paris Climate Agreement

UN Sustainable Development Goals

• Goal 7: Affordable and Clean Energy
• Goal 9: Industry, Innovation and Infrastructure
• Goal 13: Climate Action

Chiyoda's activities contribute to these goals through renewable energy projects, technological advancements, and environmental initiatives.

Sustainable Products & Innovation

• SPERA Hydrogen® System
• CT-121 flue gas desulfurization technology

Awards & Recognition

• Nikkei Global Environmental Technology Awards (top prize for SPERA Hydrogen® system)
• FTSE4Good Index Series
• FTSE Blossom Japan Index

Environmental Metrics

ESG Focus Areas

• Environmental Initiatives
• Social Contributions
• Respect for Human Rights
• Commitment to Fairness

Environmental Achievements

• Launched Flare Reduction Project (FRP) with goals of reducing CO2 emissions by reusing gas rather than combusting it.
• Calculated quantitative contributions toward CO2 emissions reductions from LNG and renewable energy facilities, estimating a 1.18 billion metric ton total reduction by 2030.
• Participating in CCS (Carbon dioxide Capture and Storage) demonstration project to capture CO2 from flue gas.

Social Achievements

• Held nine training sessions in FY2018, with 124 trainees from four nations, focusing on technology transfer and cultural exchange.
• Implemented internships and university courses to develop the next generation of human assets.
• Engaged in various community initiatives including tree planting, beach cleanups, and donations to charities.

Governance Achievements

• Issued Human Rights Policy in September 2018.
• Established a Group consultation and reporting system to detect and prevent illegal activities or unethical conduct.
• Increased the ratio of independent external board members to 40% and enhanced external monitoring functions.

Climate Goals & Targets

Environmental Challenges

• FY2018 financial losses.
• Complex social problems and environmental issues.
• Need to rapidly respond to changes in the operating environment and be proactive in tackling global issues.

Mitigation Strategies

• Developed a Medium Term Management Plan “Chiyoda’s Revitalization - Initiatives for Revitalization and the Future”, to enhance risk management and EPC project execution.
• Established a Decarbonization Advancement Office (restructured to a Carbon Management Business Office) to draft strategies for a carbon-recycling society.
• Reinforced corporate governance system by increasing independent external board members and establishing new Chief Officers.

Supply Chain Management

Responsible Procurement

• Confirmation of subcontractors and vendors' human rights compliance

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products
• Growth in renewable energy sector

Reporting Standards

Frameworks Used: UN Global Compact, SDGs

Certifications: ISO 9001, ISO 14001, ISO 45001, ISO 31000

Sustainable Products & Innovation

• SPERA Hydrogen® system
• Plant Digital Twin

Awards & Recognition

• Engineering Commendation Award 2018 of The Engineering Advancement Institution of Japan (ENAA)
• GCC Winner, Industrial project of the Year in the MEED 2019 Project award

Environmental Metrics

ESG Focus Areas

• Climate Change
• Industry, Innovation and Infrastructure
• Affordable and Clean Energy

Environmental Achievements

• Secured order for North Field East LNG project in Qatar, including CO2 capture and storage facility to reduce GHG emissions by over 25%
• Completed demonstration of world’s first international hydrogen supply chain (Brunei-Kawasaki, Japan)
• Completed a demonstration plant capturing over 50% of CO2 emitted from a biomass power plant

Social Achievements

• Implemented a unique voluntary participation system whereby 70 employees are registered as CSR Promotion Staff
• Provided 1,386 school lunches to children in developing countries through TABLE FOR TWO
• No occupational accidents on construction sites in fiscal year ending March 31, 2021

Governance Achievements

• Ratio of ‘outside directors’ on the Board of Directors increased to approximately 40%
• Improved objectivity and transparency in processes for appointing and determining Director remuneration
• Established the position of Chief Compliance Officer (CCO) and a Compliance Committee

Climate Goals & Targets

Environmental Challenges

• Accelerating transition to a carbon-free society
• Increasing project size, complexity, and duration leading to escalating execution risks
• Need to increase employee financial ambition and cognizance of Company profitability

Mitigation Strategies

• Updated medium-term management plan to strengthen existing businesses and accelerate expansion into new fields
• Developed sophisticated risk management structure
• Enhanced corporate governance and improved EPC execution and management capabilities
• Reinforced human resources and implemented a new human resource system

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Collaboration with long-standing and trusted business partners

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Headwinds against petroleum and gas
• Increased emphasis on reducing LNG plant CO2 emissions

Opportunities

• Growth in hydrogen and carbon recycling businesses
• Expansion of EPC operations in renewable energy, energy storage, and energy management systems

Reporting Standards

Frameworks Used: TCFD

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 7 (Affordable and Clean Energy)
• SDG 9 (Industry, Innovation and Infrastructure)
• SDG 13 (Climate Action)

Chiyoda's initiatives in hydrogen, carbon recycling, renewable energy, and digital transformation contribute to these goals

Sustainable Products & Innovation

• SPERA HydrogenTM technology
• EFEXISTM digital solutions
• CCS and CCU technologies

Awards & Recognition

• 2021 Distinguished Engineer’s Special Commendations Award for PlantStreamTM

Environmental Metrics

ESG Focus Areas

• Climate Action
• Affordable and Clean Energy
• Industry, Innovation and Infrastructure

Environmental Achievements

• Reduced GHG emissions by more than 25% compared to existing LNG plants in the North Field East LNG Project in Qatar.
• 95% industrial waste recycling rate (excluding sludge) at domestic construction sites in 2022.
• 5.6% industrial waste recycling rate at overseas construction sites in 2022.

Social Achievements

• Launched a new human resource system in 2021 with a CHRO and four HROs to enhance employee career development.
• Reduced the Total Recordable Incident Rate (TRIR) by more than half compared to the previous year on domestic projects.
• Consistently met TRIR targets for three consecutive years on overseas projects.

Governance Achievements

• Established a Sustainability Committee chaired by the President (acting as CSO) to address sustainability issues.
• Declared commitment to becoming net carbon neutral by 2050.
• Improved objectivity and transparency in Director appointment and remuneration processes.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the geopolitical crisis in Ukraine and COVID-19.
• Increasing materials, equipment, and logistics costs.
• Large lump-sum contracts carrying significant cost and schedule risks.

Mitigation Strategies

• Implemented stringent and comprehensive risk management processes.
• Successfully combined global supply chains to maintain project schedules.
• Applied Chiyoda AWP to integrate engineering, procurement, and construction schedules.
• Utilized lessons learned from previous projects.

Supply Chain Management

Responsible Procurement

• Collaboration with suppliers to improve transportation efficiency and reduce CO2 emissions.

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters (heat waves, floods, typhoons, wildfires, drought)

Transition Risks

• Changes in client needs and market shifts towards decarbonization.

Opportunities

• Development of hydrogen and carbon recycling technologies.
• Growth in renewable energy projects.

Reporting Standards

Frameworks Used: UN Global Compact

UN Sustainable Development Goals

• SDG 7
• SDG 9
• SDG 13

The company's initiatives contribute to these goals through decarbonization efforts, renewable energy projects, and sustainable development.

Sustainable Products & Innovation

• SPERA Hydrogen
• Ammonia production technology
• CO2 separation and capture technologies
• Carbon recycling technologies

Environmental Metrics

ESG Focus Areas

• Governance
• Diversity & Inclusion
• Sustainability
• Climate Change

Environmental Achievements

• Declared support for TCFD recommendations and performed TCFD analysis.
• Established medium to longer-term GHG targets and issued a carbon neutral declaration aiming for carbon neutrality by 2050.

Social Achievements

• Established Diversity and Inclusion Policy in October 2023.
• Established the Third General Employer Action Plan in March 2024 to increase the ratio of female employees in main career tracks.
• Increased the ratio of women in management positions from 6.3% at the end of fiscal 2021 to 9.2% at the end of fiscal 2023 (under the aggregation method up to the previous consolidated fiscal year).

Governance Achievements

• Transitioned from a company with a Board of Auditors to a company with an Audit and Supervisory Committee in June 2015.
• Appointed five outside directors to ensure objective and neutral management oversight.
• Introduced performance-based compensation and a Performance-Based Stock Compensation Plan for directors (excluding outside directors and Audit and Supervisory Committee members).

Climate Goals & Targets

Environmental Challenges

• Maintaining and increasing the ratio of female employees in main career tracks.
• Improving the cost of shareholders’ equity and increasing corporate value.
• Strengthening risk management systems for projects in new fields.

Mitigation Strategies

• Creating an environment where women can fully demonstrate their abilities through interviews, system changes, PR activities, and training.
• Implementing measures to reduce earnings volatility and improve the cost of shareholders’ equity.
• Establishing a permanent department responsible for managing project risk from start to finish, conducting cold eye reviews, and involving the Executive Committee and Board of Directors in high-risk project decisions.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD

Certifications: ISMS (Chiyoda and two overseas Group companies)