Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Corporate Social Responsibility
• Product Responsibility
• Supplier Management
• Human Resources

Environmental Achievements

• Reduced CO2 emissions of newly sold vehicles in China to 159.2 grams per kilometer (a 3.7% decrease from 2015)
• Reduced VOC emissions per vehicle produced from 0.45 kg in 2015 to 0.40 kg in 2016 (an 11.1% decrease)
• Reduced waste for disposal by 26.5%, and hazardous waste by 63.9%
• New engine plant designed to be wastewater-free, recycling 90% of sand used for casting
• Reduced energy consumption by 30% in Dadong plant's new paint shop compared to previous installations

Social Achievements

• Honored with top employer awards (linkedin.com and dajie.com)
• 91% of employees fully support BMW Brilliance’s targets and are satisfied with their work
• Launched Tsinghua BMW Innovation Center for Intangible Cultural Heritage Safeguarding
• BMW Children’s Traffic Safety Education program reached 400,000 children and adults
• Expanded BMW Warm Heart Customer Clubs to 16 clubs with 2,700 members

Governance Achievements

• Established a comprehensive compliance management system
• Implemented systematic reporting structure for legal and compliance monitoring
• Updated anti-fraud policy and Signature and Approval Power Guideline
• Provided company-wide communication and training on compliance
• Investigated a notification of alleged child labor in the supply chain (no involvement found)

Climate Goals & Targets

Environmental Challenges

• Fluctuating production volume making it difficult to accurately predict the economic and environmental impacts of energy efficiency measures
• Changing Chinese energy market with reduced subsidies for renewable energies
• Maintaining sustainability standards within a complex global and local supply chain
• Lead time and transportation of raw materials for suppliers

Mitigation Strategies

• Setting up an energy data management system for better transparency
• Implementing an energy management system in accordance with ISO 50001
• Installing 7.3 megawatts of photovoltaic capacity at Tiexi plant and the new engine plant
• Supplier Risk Management (SRM) process with on-site assessments and corrective action plans
• Developing local alternatives to reduce carbon footprint from international sourcing

Supply Chain Management

Supplier Audits: 227 on-site assessments by year-end 2016 (88% coverage)

Responsible Procurement

• BMW Group Supplier Sustainability Policy
• General Terms and Conditions for the Purchase of Goods and Services
• BMW Group’s International Terms and Conditions for the Purchase of Production Materials and Automotive Components
• Sustainability risk filter
• Supplier self-assessment questionnaire
• On-site sustainability assessments

Climate-Related Risks & Opportunities

Physical Risks

• Air pollution

Transition Risks

• Changes in energy market and subsidies for renewable energies

Opportunities

• Development of energy-efficient products and electromobility

Reporting Standards

Frameworks Used: GRI Standards: Core option, UN Global Compact Communication on Progress

Certifications: ISO 14001, OHSAS 18001

Third-party Assurance: External auditors and experts audited indicators from environmental protection and occupational health and safety

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• All-new BMW X1 plug-in hybrid
• ZINORO 60H

Awards & Recognition

• Best Employer in the Industry Award by linkedin.com
• Employer Excellence Award by 51job.com
• Annual Extraordinary Employer Award by liepin.com
• Among top 30 in the China Best Employers Award by dajie.com
• 2015 CSR Outstanding Contribution award
• 2015 Boyuan Vitality CSR Project
• 2015 Most Responsible Auto Corporate award
• 2016 Excellent CSR Project award
• Best Corporate Social Responsibility of 2015 award
• 2016 Most Responsible Corporate award
• Best Corporate Citizen award
• Excellent Influence Award
• 2016 Excellent Corporate Citizen award

Environmental Metrics

ESG Focus Areas

• Satisfied customers
• High availability
• Responsible lending
• Responsible sales and advisory services
• Integrity and confidentiality
• Local presence
• Financial stability and profitability
• The Bank should not be a burden on society
• The Bank as a taxpayer
• Direct environmental impact
• Responsible lending
• Responsible investment
• Responsible employer
• Working conditions and union rights
• Employee commitment
• Leadership and development
• Health and work environment
• Gender equality and diversity
• Business culture
• Salaries and remuneration
• Anti-corruption and bribery
• Counteracting money laundering and terrorist financing
• Creating shareholder value

Environmental Achievements

• Total CO2 emissions in the Bank’s six home markets decreased by 4 percent.
• Since 2013, the Bank has reduced its carbon dioxide emissions by 42 percent, and total electricity consumption has decreased by 19 percent.

Social Achievements

• More satisfied private and corporate customers than the average for the banking sector in all of the Bank’s six home markets.
• Launched green loans for buildings meeting specific environmental and climate-related criteria.
• The number of women on boards where Handelsbanken Fonder serves on the nomination committee increased to 38 percent.
• External staff turnover was 4.7 percent in the Group.
• The total sickness absence rate for employees in the Bank’s six home markets was 2.5 percent.

Governance Achievements

• In 2017, employees of the Bank completed a mandatory training programme on ethical standards and sustainability at Handelsbanken, including a module on anti-corruption.
• The principle of only having a fixed salary applies to 98 percent of the Group’s employees and is applied without exception to executive officers, all staff who decide on the Bank’s granting of credits, and employees in the Bank’s control functions.
• Handelsbanken Asset Management intensified its active corporate governance by participating in and voting at 75 percent more AGMs.

Climate Goals & Targets

Environmental Challenges

• Climate change and its impact on the financial system
• Maintaining a balance between digitalization and local branch presence
• Managing sustainability risks in lending and investment

Mitigation Strategies

• Updated procedures for assessing sustainability risk in connection with lending to companies.
• Continued investment in digital services while maintaining a strong local branch network.
• Integration of ESG criteria into investment decisions and active engagement with companies.

Supply Chain Management

Supplier Audits: 73% coverage in Sweden

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Third-party Assurance: Ernst & Young AB

UN Sustainable Development Goals

• Goal 5: Gender equality
• Goal 8: Decent work and economic growth
• Goal 9: Industry, innovation and infrastructure
• Goal 11: Sustainable cities and communities
• Goal 13: Climate action
• Goal 16: Peace, justice and strong institutions

Handelsbanken contributes to these goals through its operations and business relationships.

Sustainable Products & Innovation

• Green loans
• Criteria funds

Awards & Recognition

• Best Private Bank (UK)
• Best Innovation in Retail Banking Sweden
• Best service among banks in Sweden
• Business Bank of the Year
• Sweden’s Small Enterprise Bank

Environmental Metrics

ESG Focus Areas

• Human Rights
• Labour
• Environment
• Anti-Corruption
• Quality
• Sustainable Innovation
• Diversity and Integration
• Employee Development
• Occupational Health and Safety
• Climate Change Mitigation
• Responsible Sourcing
• Responsible Consumption and Production

Environmental Achievements

• Reduced VOC emissions by 92-95% in several plants using RTOs.
• 100% renewable electricity in Spain sites since March 2016.
• Implemented energy saving activities across manufacturing plants.
• Reduced water consumption intensity by 3% in most plants.
• Improved waste reporting systems to comply with GHG Protocol.
• Implemented initiatives to increase recyclability ratio.

Social Achievements

• Opened new production center in Morocco, employing 700 people.
• Inaugurated e-Mobility Hub in Viladecavalls, employing over 120 engineers.
• Implemented employee satisfaction surveys in several sites.
• Launched various employee wellbeing initiatives (e.g., mindfulness training, flexible work arrangements).
• Reduced non-production indirect turnover by 25%.
• Increased percentage of female staff in top executive positions by 8%.

Governance Achievements

• New release of Corporate Code of Ethics approved and acknowledged by 97% of employees.
• Implemented a whistleblowing channel to report breaches of Code of Ethics.
• Implemented stricter rules in 3Q3 audits for supplier management.
• Launched a Compliance Information and Training Programme.
• Received Value Analysis award from Toyota.

Climate Goals & Targets

Environmental Challenges

• Competition for specialists in global labor markets.
• Reducing the number of repetitive complaints.
• Reducing VOC emissions.
• Reducing GHG emissions.
• Reducing water consumption.
• Ensuring conflict-free minerals in supply chain.

Mitigation Strategies

• Implementing mechanisms to attract and retain best professionals.
• Assigning teams to work on repetitive complaints, standardizing solutions.
• Installing catalytic burners (RTOs) to reduce VOC emissions.
• Defining annual GHG emission reduction targets for each site.
• Implementing new technology to reduce water consumption.
• Implementing annual supplier inquiry on conflict minerals.

Supply Chain Management

Supplier Audits: More than 100 audits per year.

Responsible Procurement

• ISO 9001, IATF 16949, OHSAS 18001, and ISO 14001 certifications required.
• General Purchasing Conditions establish relationship with suppliers.
• Annual supplier inquiry on conflict minerals.
• Supplier Quality Manual details procedures and systems for supplier selection and management.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and solutions for electric vehicles.

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 14001, OHSAS 18001, IATF 16949, ISO 9001, ISO 50001 (Ficosa do Brasil)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 3 (Good Health and Well-being)
• SDG 8 (Decent Work and Economic Growth)
• SDG 12 (Responsible Consumption and Production)
• SDG 13 (Climate Action)
• SDG 16 (Peace, Justice and Strong Institutions)

Ficosa's activities contribute to these SDGs through initiatives related to road safety, employee well-being, sustainable manufacturing, climate change mitigation, and responsible sourcing.

Sustainable Products & Innovation

• Electric powertrain technologies
• Energy-efficient products
• Camera Monitoring Systems (CMS)
• V2X units
• Driver monitoring systems
• Shift-by-wire systems
• Integrated antennas

Awards & Recognition

• Value Analysis award from Toyota
• Best supplier award from Groupe PSA in Iberian Peninsula

Environmental Metrics

ESG Focus Areas

• Climate Change
• Community Investment
• Colleague Wellbeing
• Ethical Sourcing
• Responsible Retailing

Environmental Achievements

• 39% reduction in direct Greenhouse gas emissions since 2016
• 77% of own-brand packaging easy to recycle (up from 72%)

Social Achievements

• £17 million given to over 4,400 local causes
• 6 more Co-op Academy Schools opened
• Co-op Health launched
• Increased colleague engagement scores

Governance Achievements

• Improved financial control frameworks
• Strengthened risk management framework

Climate Goals & Targets

Environmental Challenges

• High street closures and competitive market
• Challenging year for Funeralcare business
• Increased crime against store colleagues
• Brexit uncertainty
• Accounting errors in Nisa

Mitigation Strategies

• Continued like-for-like growth in food stores and new store openings
• Turnaround strategy for Funeralcare
• 'Safer Colleagues and Safer Communities' campaign
• Brexit contingency planning
• Improved financial control frameworks in Nisa

Supply Chain Management

Responsible Procurement

• Fairtrade sourcing
• Sustainable soy sourcing
• Ethical Trade programme
• GNFR Sustainability Strategy
• Shared Value Supplier Charter

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• GRO plant-based brand
• Recyclable packaging

Awards & Recognition

• The Grocer’s Gold award for ‘Grocer of the Year’
• Consumer Business of The Year at The London Evening Standard Awards

Environmental Metrics

ESG Focus Areas

• Climate change
• Diversity & Inclusion
• Governance
• Regional Revitalization
• Carbon-neutral society

Environmental Achievements

• Progress in energy conservation activities at refineries and plants ahead of schedule, resulting in larger than expected CO2 emission reduction.
• Launched a research group to develop carbon recycling technology.
• Launched a business to supply black pellets (wood biomass) to reduce CO2 emissions.

Social Achievements

• Increased percentage of employees who report that their work is rewarding.
• Launched Japan’s first carwash app, "AND WASH."
• Began a pilot test of Auto Share, an EV car sharing business.
• Began a pilot test of Park & Charge, a multipurpose EV charging station service.
• Introduced AI to forecast shipments for oil depots, enhancing inventory management accuracy and operational efficiency.
• Successfully automated ship allocation plans, improving transport efficiency by up to 20%.

Governance Achievements

• Established the Next Generation Business Department, Digital Innovation Department, and Innovation Strategy Planning Department to promote new business creation.
• Revamped the corporate brand in July 2020 and will unify service station brands under the apollostation brand from April 2021.
• Conducted a survey of all directors and Audit & Supervisory Board members to evaluate the effectiveness of governance.
• Implemented unconscious bias training company-wide.

Climate Goals & Targets

Environmental Challenges

• Sharp decline in demand for petroleum products due to COVID-19 pandemic restrictions.
• Plunge in crude oil prices.
• Decline in domestic petroleum demand.
• Intensifying competition in the domestic retail business.
• Construction delays and rising connection costs for power source development.
• Falling sales prices for solar panels.
• Procurement risk from globalization of supply chains for solar modules.
• Mass disposal of used solar modules expected from 2030 onward.
• Deterioration in the supply-demand balance due to continued decline in domestic fuel oil demand.
• Changes in international affairs involving oil-producing countries.
• Economic slowdown and lower demand for basic chemicals due to the COVID-19 pandemic.
• Lower demand for and tougher regulations on general-purpose plastics.
• Stagnant demand for lubricants in the first half of 2020 due to reduced plant operations.
• Decline in demand for electronic products and parts impacting sales of electronic materials.
• Declining domestic population and depopulation in rural areas impacting bitumen demand.
• Labor shortages in construction and transport.
• Stagnation of the pesticide market in Japan.
• Shift in demand from chemical to biological pesticides.
• Potential market entry of other companies and intensifying competition in various markets.

Mitigation Strategies

• Established a task force in February 2020 to address the COVID-19 pandemic.
• Implemented various measures to prevent the spread of infection at refineries, plants, and service stations.
• Reforming operational processes, promoting digitization, and enhancing cost competitiveness.
• Reorganizing refineries to enhance international competitiveness.
• Expanding overseas operations in growth fields.
• Accelerating structural business reform to realize a resilient business portfolio.
• Developing new business models at service stations, including EV charging and daily life services.
• Implementing digital transformation (DX) across the business.
• Strengthening alliances with neighboring refineries and petrochemical complexes.
• Improving profitability at the Nghi Son Refinery in Vietnam.
• Developing products suited to electric-powered units and grease for EVs.
• Developing high-performance environmentally friendly industrial lubricants.
• Expanding production facilities in Japan and overseas for advanced materials and performance chemicals.
• Promoting open innovation to leverage external knowledge.
• Developing and promoting renewable energy, storage battery-related businesses, carbon recycling, and solar panels.
• Participating in the "SmartCityX" Project.
• Implementing measures to collect data from industrial groups and spur collaboration between government and industry.
• Working to realize a circular business that uses oil refining cracking equipment to revert waste plastic into chemical feedstock.
• Strengthening measures in preparation for natural disasters, including earthquakes.
• Introducing AI and digital technologies to enhance refinery security, optimize logistics systems, and introduce marketing strategies.

Supply Chain Management

Supplier Audits: In FY2019, a survey of around 300 major suppliers was conducted; in FY2020, dialogue with 75 of these companies was initiated to encourage improvements.

Responsible Procurement

• Sustainable Procurement Guidelines based on ISO 26000, ISO 20400, SDGs, and UNGC principles.
• Criteria for selecting suppliers based on social and environmental standards.
• Self-assessment of sustainable procurement for suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Impact of sea-level rise on manufacturing and distribution bases
• Damage due to abnormal rainfall

Transition Risks

• Strengthening of IMO regulations
• Decline in demand for petroleum products due to the spread of EVs and changes in consumer awareness
• Departure from the business portfolio depending on fossil fuel

Opportunities

• Development of renewable energy sources
• Development of energy-saving materials
• Development of distributed energy resource systems
• Development of the circular economy
• Development of recycling technologies

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IIRC), Task Force on Climate-related Financial Disclosures (TCFD), METI’s Value Creation Guidance, GRI Standards, SDGs, UNGC

Certifications: ISO 9001 (37 business units and affiliates)

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 13 (Climate action)

Idemitsu's initiatives in renewable energy, carbon recycling, and sustainable materials contribute to these goals.

Sustainable Products & Innovation

• Black pellets (biomass fuel)
• Solid-state electrolytes for all-solid-state lithium-ion batteries
• Biological pesticides
• CIS thin-film solar cells
• Ultra-lightweight film modules and solar cells for vehicles

Awards & Recognition

• Excellent Invention Award at the Fiscal 2018 National Commendation for Invention Program
• Industry Prize of the New Energy Awards received by Takigami Binary Power Plant
• Certified Health & Productivity Management Organization Recognition Program 2020

Environmental Metrics

ESG Focus Areas

• Climate change
• Diversity and Inclusion
• Supply chain management
• Product sustainability
• Worker's rights
• Community investment
• Employee well-being

Environmental Achievements

• Piloted a digital technology to visualize products as 3D images, reducing the number of physical samples ordered.
• Launched Little Planet apparel brand, which includes mostly organic cotton certified by GOTS.
• Began piloting KIDCYCLE, a program to recycle baby and children’s clothing.

Social Achievements

• Established a cross-functional Diversity and Inclusion Steering Committee and a Diversity and Inclusion Advisory Council.
• Formalized responsibility for D&I under the SVP, Corporate Social Responsibility.
• Provided more than 17,000 hours of paid parental leave across the U.S. workforce.
• Supported communities and front-line medical professionals through product and PPE donations.
• Partnered with suppliers to modify orders and payment terms during the COVID-19 pandemic.

Governance Achievements

• Developed a five-year sustainability strategic plan.
• Improved diversity and inclusion efforts and encouraged employee voices.
• Strengthened responsible sourcing efforts to address social challenges across the global supply chain.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting operations and supply chain.
• Racial injustice and the need for improved diversity and inclusion.
• Incomplete environmental data due to supplier limitations.
• Significant volume of apparel ending up in landfills.

Mitigation Strategies

• Shifted employees to remote work, implemented safety protocols, and provided employee support during the pandemic.
• Formalized D&I initiatives, established committees, and increased diversity training.
• Partnered with suppliers to improve data collection and reporting.
• Launched KIDCYCLE recycling program in partnership with TerraCycle.

Supply Chain Management

Supplier Audits: 100% of new Tier 1 suppliers screened; 69 unannounced audits conducted (2020)

Responsible Procurement

• Vendor Code of Ethics
• Social Responsibility Policy
• Commitment to Responsible Recruitment

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards: Core option

Sustainable Products & Innovation

• Little Planet brand

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Good Governance
• Sustainable Mobility
• Circular Economy
• Responsible Investment and Finance
• Supply Chain Resilience
• Health, Safety and Wellbeing
• Supporting Society

Environmental Achievements

• First Carbon Footprint Assessment of GB Auto Group for 2020-2021 and set Science-Based GHG Reduction Targets
• Phased out diesel fuel completely at Prima Plant, implementing phase-out across all manufacturing facilities to be replaced with natural gas and renewable sources
• Planned installation of solar PV systems at Prima and El Sadat manufacturing facilities by March 2022 and January 2023 respectively, supplying 40% and 25% of facilities’ annual energy needs
• Launched four CNG-powered passenger car models
• Launched the “For a Better Future” campaign to reduce electricity consumption
• Planned installation of another wastewater recycling system at El Sadat factory (to operate in 2022)
• Improved indoor air quality by installing a new ventilation system in welding and paint shops at Badr and Prima factories

Social Achievements

• 24% of total workforce represented by women
• Conducted 52,150 training hours to over 10,000 attendees through GB Academy
• 531 differently-abled employees across GB Auto
• Ghabbour Foundation opened admission to female students for the academic year 2021-2022
• Contributed EGP 69.3M to various local NGOs and ministries
• Launched cycle 3 of GB Ventures, our acceleration program
• Vaccinated over 2,800 employees against COVID-19

Governance Achievements

• Developed GB Auto Group ESG Policy
• Developed GB Auto Group ESG Strategy 2022-2025 with 2030 Vision
• Engaged with GB Auto employees and top management on ESG issues and conducted a group-wide ESG workshop
• In the process of acquiring the ISO 45001 certification for GB Logistics

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions and fluctuating demand
• COVID-19 pandemic impacts
• Raw material shortages
• Limited data for comprehensive GHG emissions assessment
• Need for enhanced customer database for accurate scope 3 emissions tracking

Mitigation Strategies

• Continuous improvements across the value chain
• Seamless delivery and robust performance
• Investing in people and supporting their development through GB Academy
• Digitalization and automation of internal processes and customer experience
• Updates to group policy architecture and procedures, including a new Sustainability Policy
• Developing alternative sourcing strategies
• Developing a group-wide data collection and management system

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• GB Auto Suppliers Code of Conduct (Transparency, Confidentiality, Equal Opportunity, Longevity)
• Digital invoice system
• Egyptian Advanced Cargo regulation

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Market risk due to higher demand for low-carbon products

Opportunities

• Shifting to renewable energy sources
• Exploring low-carbon technologies and products

Reporting Standards

Frameworks Used: GRI Standards, SASB, UNGC, TCFD

Certifications: ISO 14001 (4 facilities), ISO 45001 (4 facilities, GB Logistics in process)

Third-party Assurance: Masader, Corporate Sustainability Consulting Firm (S.A.E.) - Limited assurance

UN Sustainable Development Goals

• Goal 1
• Goal 2
• Goal 3
• Goal 4
• Goal 5
• Goal 7
• Goal 8
• Goal 9
• Goal 11
• Goal 12
• Goal 13

The report maps its commitments to the UN Sustainable Development Goals

Sustainable Products & Innovation

• CNG-powered passenger car models
• Higer Electric bus
• Iveco bus (CNG, Electric, diesel)
• Chery Tiggo 7 Pro

Awards & Recognition

• IDC Excellence Award for “Excellence in Digital Innovation”

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Management
• Biodiversity
• Human Rights
• Community Relations
• Fair Labor Practices
• Responsible Business Management
• Product Responsibility and Innovation

Environmental Achievements

• Reduced emissions intensity per MUS$ by 70% compared to 2021
• Reduced continental water consumption by 25% by 2022 (aiming for 40% by 2030 and 65% by 2040)
• Reduced brine extraction by 25% by 2022 (aiming for 50% by 2030)
• Carbon neutral for lithium, potassium chloride and iodine products by 2030, and all products by 2040
• Completed phase 2 of ISO 14001 and 45001 certification at Salar de Atacama and Carmen Lithium Chemical Plant
• ISO 14001:2015 certification for potassium nitrate, sodium nitrate, and fertilizer storage, packaging, and shipping at the Port of Tocopilla
• Responsible Care re-verification at Nueva Victoria operation, achieving Level 1 accreditation

Social Achievements

• Achieved 20% female workforce in 2022 (aiming for 25% by 2025)
• 17.7% women in leadership positions
• 96% lost-time injury frequency rate for direct employees and contractors
• 0 fatalities among company employees in the past five years
• US$17,924,772 invested in social development
• Launched SQM Lithium Ventures social investment fund
• Construction of a Seabird Rescue Center in Tarapacá
• Inauguration of a drinking water plant in Camar benefiting over 100 families
• Expansion of Quillagua’s water collection dam
• Two new free mobile dental clinics in San Pedro de Atacama

Governance Achievements

• Implemented a comprehensive communications campaign to encourage use of the complaint and reporting channel
• Received 118 reports through complaint channels (49% more than 2021)
• Crime Prevention Model certified until September 2023
• Conflict of Interest Policy implemented and widely disseminated
• Board of Directors underwent a performance evaluation with EY

Climate Goals & Targets

Environmental Challenges

• Effects of climate change
• Human rights issues
• Transparency concerns
• Supply chain disruptions
• Water scarcity
• CO2 emissions

Mitigation Strategies

• Rigorous work plans to reduce water footprint and CO2 emissions
• Due diligence in Salar de Atacama operations to ensure respect for human rights
• Implementation of ISO certifications (14001, 45001, 50001)
• Development of alternative sourcing strategies
• Investment in sustainable technologies and processes
• Engagement with communities and stakeholders

Supply Chain Management

Responsible Procurement

• Code of Conduct for Business Partners
• Responsible Sourcing Policy

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Growth in solar salts business

Reporting Standards

Frameworks Used: GRI, TCFD, UNGC

Certifications: ISO 14001, ISO 45001, ISO 50001, ISO 9001, ISO 39001, NCh 3262, Responsible Care, Protect & Sustain, IRMA (in process)

Third-party Assurance: Deloitte Advisory SpA

UN Sustainable Development Goals

• SDG 1
• SDG 2
• SDG 3
• SDG 4
• SDG 5
• SDG 6
• SDG 7
• SDG 8
• SDG 9
• SDG 10
• SDG 11
• SDG 12
• SDG 13
• SDG 14
• SDG 15
• SDG 16
• SDG 17

The report details how various initiatives contribute to these goals.

Sustainable Products & Innovation

• Water-soluble fertilizers
• Solar salts

Awards & Recognition

• Gender Equity Champions (IMPULSA 2022)
• S&P Sustainability Yearbook 2022
• Dow Jones Sustainability Index (MILA and Chile indexes)

Environmental Metrics

ESG Focus Areas

• Plastic resource recycling society realization
• Contribution to low-carbon society
• Contribution to ultra-smart society
• Strengthening of human capital and diversity & inclusion
• Investment in the future and innovation management
• Strengthening of governance in the JSW Group

Environmental Achievements

• CO2 emissions reduced by 41.9% compared to 2013
• Energy consumption unit improved by 15.5% compared to the previous year and 3.0% compared to the 5-year average
• Recycling rate of 95.2% (excluding slag and refractories)
• PRTR Act target chemical substance emission/transfer unit improved by 15.5% compared to the previous year and 1.9% compared to the 5-year average
• Zero legal violations

Social Achievements

• Launched various initiatives to improve employee wellbeing and engagement
• Increased new graduate female employee ratio to 15%
• Improved female ratio in supervisor level to 10.2%
• Implemented CSR procurement survey for major suppliers

Governance Achievements

• Increased the ratio of outside directors to 44.4%
• Appointed the first female outside director and auditor
• Strengthened internal audit functions and whistleblowing system
• Established a quality control department and a quality control office

Climate Goals & Targets

Environmental Challenges

• Rising procurement, material, and fuel costs
• Inappropriate conduct in manufacturing inspection at Japan Steel Works M&E
• Low profit margin
• Need to improve speed and efficiency of decision-making
• Need to strengthen group governance of overseas subsidiaries

Mitigation Strategies

• Negotiated with customers for price adjustments
• Implemented four-pronged reform: quality assurance system reform, corporate culture reform, process reform, and governance reform
• Established the Innovation Management Headquarters
• Accelerated digital transformation (DX) initiatives
• Strengthened internal control functions

Supply Chain Management

Supplier Audits: CSR procurement survey initiated in FY2023

Responsible Procurement

• Japan Steel Works Group Procurement Basic Policy
• Request to Suppliers

Climate-Related Risks & Opportunities

Transition Risks

• Carbon tax
• Border carbon adjustment
• Shift from conventional thermal power plants to renewable energy
• Shift from blast furnaces to electric arc furnaces

Opportunities

• Expansion of EV market
• Expansion of power electronics and 5G infrastructure markets
• Increased demand for renewable energy
• Reduction of CO2 emissions from production facilities
• Expansion of products and services contributing to CO2 emission reduction

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, GRI Sustainability Reporting Standards

Certifications: ISO 14001

Sustainable Products & Innovation

• Various plastic processing machines contributing to circular economy
• Electric injection molding machines
• Magnesium injection molding machines for lightweight automotive parts

Environmental Metrics

ESG Focus Areas

• Climate change
• Ethics and responsible business
• Cybersecurity
• Emiratization
• Women Empowerment
• Employee well-being
• Data Privacy & Security
• Human Rights

Environmental Achievements

• Reduced electricity consumption by using power-saving LED lights and implementing lights-off rules after office hours.
• Recycled over 1,500 kg of paper per year through the GreenBox program.
• Energy savings increased from 66% in 2019 to 85% in 2023.
• Stopped offering plastic water bottles and initiated a program to offer water in glass bottles and use paper cups.

Social Achievements

• Implemented programs to recruit more culturally diverse candidates, resulting in increased diversity at executive, management, and overall company levels.
• Achieved 25% women representation in senior management roles.
• Conducted mentoring and leadership development programs for female employees.
• Supported and sponsored several activities for governmental, social, educational, and environmental agencies.
• Main sponsor of equestrian racing events in Dubai.

Governance Achievements

• Received an 'A' (Stable) rating by S&P.
• Successfully completed the ADHICS audit and found compliant with Abu Dhabi Healthcare Information Cyber Security Standards (ADHICS).

Climate Goals & Targets

Environmental Challenges

• Inefficiencies in operations identified post-acquisition.
• Losses in takaful portfolio prior to 2H 2023.
• Need to enhance customer service in a price-sensitive market.

Mitigation Strategies

• Comprehensive assessment of operations and strategic measures to enhance operational efficacy.
• Restructuring, optimizing resources, and cost efficiencies.
• Corrective actions on takaful portfolio and solvency bolstering steps, including divestment of non-core assets.
• Adequate adjustment of pricing and close monitoring.
• Digitalization of products, processes, and platforms to improve customer service and understanding.

Supply Chain Management

Responsible Procurement

• Commitment to ethical conduct and compliance with all applicable laws and regulations for business partners, contractors, and representatives.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: S&P Rating 'A' outlook stable, ADHICS compliant

Third-party Assurance: Independent assurance provider (name not specified)

Environmental Metrics

ESG Focus Areas

• Realization of a plastic-resource-recycling society
• Contribution to a low-carbon society
• Contribution to a super-smart society
• Human capital improvement and DEI&B
• Investment in the future with innovation management
• Governance reinforcement of JSW Group

Environmental Achievements

• 43.4% reduction in CO2 emissions (compared with FY2013)
• 5.2% improvement in energy usage intensity over the previous year
• 6.6% improvement in average change in energy usage intensity over 5 fiscal years
• Increased the percentage of electricity generated from renewable energy sources to 30% of Scope 2 at the Hiroshima Plant, 23% at the Yokohama Plant, and 20% at the Meiki Plant

Social Achievements

• Launched Organizational Culture Reform Project Teams to address inappropriate conduct in product quality inspections
• Opened Quality Exhibition Room “VOICE509” to share lessons learned from past misconduct
• Established the Muroran Branch of the Quality Management Office to strengthen supervision and guidance of quality assurance activities at M&E
• Implemented training for all organizational managers to drive organizational transformation and promote management skills
• Introduced a skills certification system to promote autonomous learning and growth
• Enhanced onboarding training for experienced hires and those with disabilities
• Implemented measures to support work-life balance, including telecommuting and staggered work hours

Governance Achievements

• Increased the number of outside directors by one, changing the number of members on the Board of Directors to ten with five internal and five outside directors
• Increased the number of outside female directors by one, changing ratio of women on Board of Directors to 20%
• Established the ESG Promotion Office to promote ESG activities throughout the entire Group
• Partially revised the officers’ remuneration system to strengthen the incentive function for medium-to-long-term improvement of corporate value and to further promote the sharing of interests with shareholders
• Established a dedicated enterprise risk management (ERM) department
• Introduced a leniency system within the whistleblowing system

Climate Goals & Targets

Environmental Challenges

• Inappropriate conduct in product quality inspections at Japan Steel Works M&E
• Global increases in resource and energy prices due to supply chain disruptions
• Delays in the procurement of various parts
• Postponement or cancellation of various investment plans by customers due to inflation or economic slowdown
• Global plastic pollution
• Worldwide climate change (CO2 emissions)
• Japan’s 2025 digital cliff
• Japan’s declining birthrate and aging population
• Geopolitical risks such as raw material supply issues due to trade tensions between the US and China
• Risk of a decrease in market value due to price competition with rival companies
• Risk of declining demand due to the shift toward existing alternative technologies
• Limited international recognition
• Adaptability to economic fluctuations in Japan and overseas
• Lack of experience in supporting overseas standards for some models
• Disruption of international supply chains due to political and geopolitical threats
• The increasing performance of overseas manufacturers
• Decline in demand for refillable bottles due to the shift toward pouches (blow molding machines)
• Extensive range of products in specialized fields, leading to low individual sales volume
• Limited production capacity resulting from a rapid increase in orders
• Late entrant in the semiconductor manufacturing equipment market
• Difficulty in securing personnel due to decrease in the local population and falling birthrate
• A sudden slowdown in demand due to tighter regulations related to the environment
• Shrinking market for oil- and gas-related products (rapid shift to renewable energy generation)
• Limits to in-house machining capabilities due to constraints on large-scale machining facilities
• Difficult to standardize due to our build-to-order production system
• Not enough automation of tasks
• Capacity to accommodate new demand for small and medium-sized products and small lot production (compared to the large-sized products handled by M&E)

Mitigation Strategies

• Implemented measures to prevent recurrence of inappropriate conduct in quality inspections, including quality assurance system reform, organizational culture reform, process reform, and governance reform
• Promoting digital transformation (DX) and capital investment to enhance production efficiency
• Expanding the capabilities of our local subsidiary in India and considering establishing a technical center there
• Bolstering our after-sales service
• Accelerate the adoption of electric machines to meet rising energy costs and the need to reduce CO2 emissions in Europe
• Establish a technical center to increase our presence and strengthen sales and service networks in India
• Introduce region-specific models in major markets such as Europe, the United States, Southeast Asia, and India
• Increase the production volume of F-ELA systems
• Strengthen our presence in emerging markets and expand our global footprint
• Establish a technical center within the Meiki Plant
• Leveraging our core competence in laser application technology to develop and market a laser annealing system for the thermal processing of SiC substrates
• Investing in the renovation of core facilities to maintain production capacity and improve efficiency
• Leveraging our large-scale heat-resistant materials manufacturing capabilities to address demand for the forged steel components used in GTCC power generation
• Promoting the introduction of renewable energy power generation, solar power generation facilities, and non-carbon-emitting facilities
• Promoting human resource acquisition and diversity, strengthening employee development, and transforming workplace culture and employee mindset
• Verification of value creation capabilities, including the business portfolio
• Enhancement and strengthening of innovation management
• Formulation and evaluation of medium-term management plan and initiatives to reduce capital costs
• Improving information dissemination and engagement with stakeholders
• Restructuring of internal control and risk management, including quality management, and improving group governance and compliance
• Strengthening the risk management divisions
• Establishing a dedicated enterprise risk management (ERM) department
• Clarifying the functions of the second line in risk management
• Strengthening work processes and the management framework to secure work suitability and efficiency

Supply Chain Management

Supplier Audits: 40 suppliers surveyed in FY2023 (covering over 34% of the order amount)

Responsible Procurement

• The Japan Steel Works Group Basic Procurement Policy and Request to Business Partners
• CSR Procurement Survey

Climate-Related Risks & Opportunities

Transition Risks

• Imposition of a carbon tax
• Introduction of border adjustment tax
• Decrease in demand for products due to reduction in construction of conventional thermal power plants
• Damage to ESG evaluation and reputation due to delays in CO2 emission reduction measures

Opportunities

• Expansion of the EV market
• Expansion of power electronics market and 5G infrastructure market
• Increased demand for renewable energy power generation
• Tax relief after the introduction of carbon pricing on CO2 emissions from production facilities
• Expansion of products and services that contribute to the demand for the reduction of CO2 emissions
• Response to the demand for plastic recycling, contribution to social implementation of non-fossil-fuel-derived plastics
• Increased demand for nuclear power plants and high-efficiency GTCC power plants

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, IFRS Foundation, Guidance for Collaborative Value Creation 2.0, Japan’s Ministry of Economy, Trade and Industry, Environmental Reporting Guidelines 2018, Japan’s Ministry of the Environment, GRI Sustainability Reporting Standards, Global Reporting Initiative

Certifications: ISO 14001

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)

JSW's initiatives contribute to these goals through the development and implementation of industrial machinery and new materials that solve social issues, such as reducing CO2 emissions, promoting renewable energy, and improving resource efficiency.

Sustainable Products & Innovation

• Separator film manufacturing equipment for LiB in electric vehicles
• Pelletizers for solar panel protection film materials
• Materials for major nuclear power generation components
• Materials for offshore wind turbine construction
• All-electric plastic injection molding machines
• All-electric rubber injection molding machines
• Materials for high-efficiency GTCC power generation key components
• Large injection molding machines for large automotive parts (plastic/Mg)
• Twin-screw extruder (TEX) for non-fossil-fuel derived plastics
• TEX for biocomposites
• Physical foaming injection molding machines
• TEX for chemical and mechanical recycling
• Injection and blow molding machines for recycled plastics
• Film and sheet manufacturing equipment for recycled plastics
• Twin-screw extrusion dechlorination system
• Mono-material film manufacturing equipment
• Gallium nitride (GaN) crystal materials
• Lithium niobate (LN), synthetic quartz materials
• Substrates for optical communication and optical modulators
• AI robotics and industrial machinery

Environmental Metrics

ESG Focus Areas

• People
• Planet
• Products

Environmental Achievements

• 100% renewable electricity across all global locations (where the market exists)
• 38% reduction in hazardous waste disposed to landfill (after treatment) vs FY 2023
• 4% reduction in Scope 1 & 2 CO2 emissions vs FY 2023
• 34% Reduction in Scope 3 emissions compared to FY 2023

Social Achievements

• Improved safety metrics, based on the OSHA reporting standard
• 4,423 employee volunteering hours; first Biodiversity partnership
• 25% of females in leadership roles
• Further progress on DE&I with additional employee resource groups established including new Race, Ethnicity and Cultural Heritage group
• Employee Engagement Survey, with increase in engagement score to 73%

Governance Achievements

• Successful validation of our SBTi targets
• Enhanced Go to Market structure with increased regional and digital solutions

Climate Goals & Targets

Environmental Challenges

• Substantial inventory correction in the chemical industry
• Medical destocking
• Lower asset utilization
• Soft first half performance in Sustainable Solutions
• Global economic challenges
• Geo-political and macro-economic instability
• Raw material availability issues
• Changing workforce behaviors
• Supply chain disruptions
• Climate change impacts on supply chain and operations
• Evolving regulatory environment
• Changing customer demands for low-carbon products

Mitigation Strategies

• Self-help measures (Project Vista): enhancing sales and R&D effectiveness, smarter procurement, regional sales focus, digital solutions
• Cost control
• Inventory reduction
• Ramp-up of new China PEEK facilities
• Improved asset utilization
• Dual sourcing of key raw materials
• Business resilience plans
• Decarbonisation commitment through SBTi
• Enhanced workforce planning, attractive benefits package, digitalization of recruitment, skills development programs, succession plans, flexible working policies
• Robust Integrated Business Planning (IBP) process
• Strategic supplier sourcing, development, and performance management
• Review of business resilience and response plans
• Global Information Security Management System (ISO 27001, NIST standards)
• Robust regulatory standards and accredited quality management systems
• Risk and Warranty Committees
• Product liability insurance
• Compliance policies, procedures, and training
• Code of Conduct
• Regular review of strategy
• Investment choices review
• Annual objectives linked to strategic imperatives
• Strong value proposition as a solutions company
• Monitoring technological changes
• Robust protective controls for intellectual property
• Close monitoring of geo-political and macro-economic conditions
• Foreign exchange hedging
• Horizon scanning and scenario response planning
• Use of committed facility, deferral of capital expenditure, reduction in discretionary overheads, reduction in inventory levels, deferral/cancellation of dividends

Supply Chain Management

Supplier Audits: Regular supplier engagement programme (annually)

Responsible Procurement

• Supplier Code of Conduct
• Supplier Standards Handbook
• Due diligence process for vendors
• Modern Slavery policy
• Conflict Minerals policy
• Anti-bribery & Corruption policy

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (flooding, extreme temperatures)
• Water stress

Transition Risks

• Increased cost of carbon
• Increasing raw material, supply chain, or logistics costs
• Failure to meet changing customer demands for low-carbon products

Opportunities

• Development and expansion of low-emission materials for automotive and aerospace
• Increased demand for electric vehicles
• Increased use of greener energy sources
• Increased use of recycled materials

Reporting Standards

Frameworks Used: SBTi, TCFD, GRI, UN SDGs

Certifications: ISO 14001:2015, TISAX, Cyber Essentials Plus, Disability Confident Level 2

Third-party Assurance: SLR, KPMG

UN Sustainable Development Goals

• Not disclosed

Aligned to UN Sustainable Development Goals 2030

Sustainable Products & Innovation

• VICTREX XPI™ polymer grades for electric vehicles
• LMPAEK™ for aerospace composites
• 3D printed Porous PEEK spinal cage

Awards & Recognition

• The Sunday Times Best Places to Work 2024
• EcoVadis Silver rating
• MSCI A rating
• FTSE Russell Green Revenues Index
• Apple Clean Energy Supplier programme