Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Social infrastructure improvement
• Corporate governance

Environmental Achievements

• Resumption of dividend payments after a 12-year hiatus.
• Introduction of Japan’s first electronically controlled marine engines to reduce NOx and CO2 emissions.
• Construction of one of Japan’s largest biodiesel fuel production facilities in Kyoto.
• Development of production devices for plastic film substrates for next-generation solar batteries.
• Delivery of 330 SCR NOx removal systems worldwide.

Social Achievements

• Merger and integration of ten consolidated subsidiaries to improve profitability and strengthen corporate governance.
• Construction of Matsuyama City’s Shin Nishi Clean Center and Toyonaka/Itami City Clean Land Recycle Center.
• Community investment in various environmental protection activities (recycling and tree-planting).

Climate Goals & Targets

Environmental Challenges

• Extremely difficult economic situation with weak private-sector capital investment and declining corporate earnings.
• Global recession impacting sales and earnings performance.
• Alleged legal violations in tendering for the construction of refuse incineration plants resulting in an extraordinary loss.

Mitigation Strategies

• Implemented the medium-term management plan, “Hitz Innovation II”, focusing on returning all business areas to profitability and restoring dividend payments.
• Implemented various measures to improve financial position and increase profitability.
• Completed the handover of unprofitable projects in the EPC and bridge-building businesses.
• Undertook a top-down review and overhaul of the organization to execute the growth strategy.

Supply Chain Management

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products and renewable energy technologies.

Sustainable Products & Innovation

• High-efficiency waste-to-energy systems
• Low emission stoker-type incinerators
• Vapor compression MED (multi-effect desalination) method
• Bioethanol production
• High-performance dehydration film
• Laser welding technology
• Roll to roll continuous membrane formation equipment
• Electric discharge impulse crushing method
• Flap gates for tsunami and flood protection
• Electronic control marine engines
• Biodiesel fuel production systems
• NOx removal catalysts
• Solar battery production systems
• Seawater desalination plants
• Shield tunneling machines

Awards & Recognition

• 2009 Osaka Outstanding Invention Award (Patent No. 3194904)
• 2009 Kinki Regional Invention Awards (Patent No. 3247059, Patent No. 3100532)
• Japan’s National Invention Awards 2010 (Patent No. 3803177)

Environmental Metrics

ESG Focus Areas

• Environment/Green Energy
• Social Infrastructure and Disaster Prevention

Environmental Achievements

• Reduced CO2 emissions by 1,253,492 tons annually in Japan through 52 EfW plants (282,318 kW).
• Completed construction of an Energy-from-Waste plant in Tianjin, China.
• Received first order for a Japanese firm to build an EfW plant in India.
• Initiatives in biogas field, including a microgrid system demonstration at Chikkou Works and a methane fermentation facility in Ho Chi Minh City.
• First order received for Concentrated Solar Power (CSP) system.
• Consortium selected to develop Iwafune Offshore Wind Farm Project.
• Japan’s first extra-high voltage megasolar power plant using small inverters, reducing CO2 emissions by approximately 11,000 tons annually.

Social Achievements

• Completed construction and handover of the heat recovery facility and recycling center at the Fujigatani Disposal Center.
• Started operation, maintenance, and management of Fujigatani Disposal Center through a special purpose company.
• Initiatives in Ho Chi Minh City, Vietnam, including a garbage recycling system development project and a biogas supply system for Binh Dien Wholesale Market.
• Acquired Axpo Kompogas Engineering AG to enter the biogas plant construction business.
• Entered the Japanese retail electricity market using power from renewable energy.

Governance Achievements

• Enhanced corporate governance structure, appointing a woman to the position of independent outside director.
• Improved communications with shareholders and investors.

Climate Goals & Targets

Environmental Challenges

• Intense price competition in various markets.
• Soaring raw material costs.
• Order intake risk.
• Rises in interest rates and fluctuations in foreign exchange rates.
• Overseas business risks and country risks.
• Disaster risks.

Mitigation Strategies

• Business restructuring initiatives to create a more balanced portfolio of businesses.
• Efforts to reduce fixed costs and reform the structure of fixed overheads.
• Concentrating materials procurement functions and strengthening Group procurement and joint purchasing.
• Risk management through the Risk Management Group and Risk Examination Committee.
• Strengthening financial position and hedging against risks of changes in interest rates and foreign exchange rates.
• Concentrating information related to country risks and educating Group employees.
• Formulating a business continuity plan, conducting inspections and training.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Promoting ‘Green Purchasing’—purchasing products with as little environmental burden as possible.

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products and renewable energy technologies.

Reporting Standards

Frameworks Used: ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 13 (Climate action)

Initiatives in renewable energy, waste management, and resource efficiency contribute to these goals.

Sustainable Products & Innovation

• Energy-from-Waste plants
• Biomass utilization systems
• Water treatment systems
• Seawater desalination plants
• Gas turbine power generation facilities
• Wind power generation systems
• Methane fermentation system
• NeoSNCR® system
• Hitz Super Low Profile Fresnel (HSLPF) concentrated solar power system
• Movable Flap-Gate type Seawall system
• Electron beam sterilization equipment

Awards & Recognition

• Agency for Natural Resources and Energy Director’s Award for NeoSNCR®

Environmental Metrics

ESG Focus Areas

• Carbon neutrality
• Resource circulation
• Safe & prosperous community development
• Sustainable procurement
• Maximization of people’s well-being
• Enhancement of corporate governance
• Maximization of the environment’s recovery power
• Response to intensifying natural disasters

Environmental Achievements

• Reduced Scope 1 and 2 GHG emissions by 39.3% from fiscal 2013 levels in fiscal 2022.
• Products (including licensees) reduced CO2 by 22.06 million tons per year worldwide in fiscal 2022.

Social Achievements

• Launched Management Human Resources Training Program.
• Men taking childcare leave: 49.5% in fiscal 2022.
• Employee engagement index improved by approximately 5% in fiscal 2023.

Governance Achievements

• Established the Sustainability Promotion Committee in March 2022.
• Established an Environmental Data Management Committee in March 2022.
• Increased the number of independent outside directors to half of the Board in June 2023.

Climate Goals & Targets

Environmental Challenges

• Improving operating income margin.
• Responding to technical problems and reducing defect rate.
• Dealing with global supply chain disruptions.
• Geopolitical risks.
• Securing talent.
• Responding to globalization.
• Diversification of work style values.

Mitigation Strategies

• Enhance the added value of products and services.
• Promote business selection and concentration and allocate resources to growth areas.
• Achieve workstyle reform by improving operational efficiency and productivity.
• Strengthening human capital.
• Strengthening the global management system.
• Promoting business structural reforms.
• Expanding O&M services and improving profitability of new EPC projects.
• Execution of investment strategies.
• Investment in priority areas.

Supply Chain Management

Supplier Audits: 698 companies surveyed in fiscal 2022 (approx. 85% of non-consolidated order value)

Responsible Procurement

• Self-Assessment Questionnaire (SAQ) for suppliers
• Continuous communication with suppliers
• Formulating Basic Procurement Principles with an emphasis on sustainability

Climate-Related Risks & Opportunities

Physical Risks

• Worsening natural disasters (floods, lightning strikes, etc.)

Transition Risks

• Introduction of carbon taxes
• Higher raw material costs
• Changes in policies, regulations, and energy mix

Opportunities

• Expansion of overseas markets for waste treatment
• Increased demand for biogas and offshore wind power plants

Reporting Standards

Frameworks Used: GRI Standards, TCFD

Certifications: ISO 14001

Sustainable Products & Innovation

• Waste-to-fuel conversion technologies
• Biogas plants
• Wind power generation
• Hydrogen generation systems
• Methanation equipment
• LNG, methanol, and ammonia-fueled engines
• Ammonia tanks
• Casks and canisters for spent nuclear fuel

Awards & Recognition

• Highest Rating in DBJ (Development Bank of Japan) Environmentally Rated Loan Program (13 consecutive years)
• Digital Transformation Certified Company (Ministry of Economy, Trade and Industry)
• New Diversity Management Selection 100 Winner (Ministry of Economy, Trade and Industry) (2019)
• 2023 Certified Health & Productivity Management Outstanding Organizations (Ministry of Economy, Trade and Industry)
• ERUBOSHI (second stage) Certification (Ministry of Health, Labour and Welfare)
• “Kurumin” Certification (Ministry of Health, Labour and Welfare) (2013, 2015, and 2019)