Climate Change Data

Environmental Metrics

ESG Focus Areas

• Reducing environmental impact and responding to climate change
• Building an environmentally responsible supply chain
• Social initiatives
• Investing in people
• Corporate governance

Environmental Achievements

• Expanding the use of non-ferrous and environmentally friendly materials such as aluminum and cadmium-free brass
• Promoting alternative use of materials to reduce industrial waste through recycling

Social Achievements

• Promoting diversity and inclusion
• Creating a healthy and pleasant work environment
• Improving employee education
• Collaborating with industry and academia
• Contributing to local communities

Governance Achievements

• Established an ESG/SDG management committee led by senior management
• Further strengthening management and supervisory functions of directors; executive structure and functions (management committee members); sustainability management to increase corporate value over the medium to long term; and the company's information security system, including through the acquisition of ISMS certification (ISO27001).

Climate Goals & Targets

Environmental Challenges

• Impact from conditions in raw material markets is liable to grow because the company frequently serves specific customer groups.
• A focus on small order quantities and rapid deliveries makes it difficult to achieve economies of scale in logistics and control logistics costs.
• The company has limited ability to meet the needs of Japanese customers that are expanding overseas.

Mitigation Strategies

• Boosting the processing capacity of its factories, expanding its ability to provide services.
• Enhancing its virtual supply capacity by building alliances with other processing companies and expanding its network of partner factories.
• Improving customer convenience through efforts like using CAD data to automate part quotations.
• Introducing a purchase management system to improve ordering efficiency and inventory management while reducing management expenses.
• Introducing a system to standardize operations among factories and reduce labor, thereby cutting costs and making delivery more efficient.
• Considering the merger of existing companies and expansion of supply capacity by adding new factories.
• Expanding into growth business fields: semiconductors, aerospace, automotive
• Expanding overseas business and entering new markets through alliances with local companies

Supply Chain Management

Responsible Procurement

• Promoting green procurement
• Strengthening relationships with suppliers

Climate-Related Risks & Opportunities

UN Sustainable Development Goals

• 3
• 7
• 8
• 9
• 11
• 12
• 13

Sustainable Products & Innovation

• ECO series products

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Capital Management
• Responsible Supply Chains
• Corporate Governance
• Social Contribution

Environmental Achievements

• Planned solar power installation at the Shiga Factory
• Planned purchase of FIT non-fossil certificates
• Improved delivery efficiency by restructuring the distribution network
• Reduced standby power consumption of facilities
• Decreased printing expenses for meeting materials through digitization

Social Achievements

• Established Hakudo Skating Club supporting national speed skating athletes
• Operates Hakudo Farm promoting employment for people with disabilities, with plans to expand
• Supports high school student Koma Battle in Kanagawa Prefecture
• Supplies materials for the Shita-machi Bobsleigh project
• Donates harvested vegetables from Hakudo Farm to a children's cafeteria and employees

Governance Achievements

• Company-wide certification for JIS Q9100 (aerospace industry quality management)
• JIS Q27001 certification for Risk Management Committee and IT System Department (information security)
• Established a new ESG & SDGs Promotion Office
• Integrated and restructured the Administration Division and Corporate Planning Division to establish a new Corporate Administration Division
• Planned to establish a human rights policy as a part of human rights due diligence

Climate Goals & Targets

Environmental Challenges

• Slowdown in the mainstay semiconductor production equipment (SPE) industry
• Increased electricity and labor costs related to manufacturing
• Increase in freight and other costs
• One-off expenses related to an acquisition made in the US
• Impact of COVID-19 restrictions in China

Mitigation Strategies

• Increased stock levels anticipating a recovery in semiconductor demand
• Initiatives to improve processing services, utilizing tools like water jet cutters and wire cutting machines
• Introduction of additional automated machinery to save manpower and standardize factory operations
• Conducting customer feedback sessions and relaying their needs to manufacturers
• Exploring potential investment opportunities in South Korea and Taiwan

Supply Chain Management

Responsible Procurement

• Hakudo Green Procurement Guidelines

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Reducing environmental impact and responding to climate change
• Building responsible supply chains
• Activities targeting society
• Investing in human resources
• Corporate governance

Environmental Achievements

• Reviewed specific measures to reduce CO2 emissions through solar power generation, carbon credit purchases, etc.
• Conducted second campaign encouraging business partners to transition to online invoicing
• Engaged in proactive sales efforts aimed at expanding sales of environment-friendly products
• Exchanged MOUs with business partners to strengthen green procurement

Social Achievements

• Collaborated with a university engaged in R&D related to renewable energy
• Installed vending machines that facilitate donations
• Reviewed expansion of benefits for employees engaged in childcare
• Discussed measures to promote employment of persons with disabilities

Governance Achievements

• Engaging in activities aimed at zero compliance infractions
• Disseminated details of evacuation drills to head office employees

Climate Goals & Targets

Environmental Challenges

• Inventory adjustments continued in the mainstay semiconductor production equipment (SPE) industry
• Continuously rising aluminum raw material prices (though falling since March 2022)
• Ongoing inventory adjustment phase in the semiconductor production equipment industry

Mitigation Strategies

• Developing alternative sourcing strategies (implied by efforts to find green aluminum and recycled aluminum suppliers)
• Strengthening processing functions and supply capabilities, including development of processing company network
• Increasing procurement and supply capabilities through SCM restructuring

Supply Chain Management

Responsible Procurement

• Hakudo Green Procurement Guidelines

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Rights
• Supply Chain Responsibility
• Employee Well-being
• Community Investment

Environmental Achievements

• Achieved CO₂ emissions reduction target by FY2030 ahead of schedule through solar panel installation at Shiga Plant, preparation for installation at Fukushima Plant, introduction of EVs, and purchase of FIT Non-Fossil Certificates.
• Reduced standby power consumption of facilities
• Continued cutting oil recycling measures
• Introduction of environmentally friendly packaging materials
• Promoted paperless offices

Social Achievements

• Started sales of Eco63S square bar (environmentally friendly product)
• Operates Hakudo Farm, promoting employment for people with disabilities and donating harvested vegetables.
• Supports high school student Koma Battle in Kanagawa Prefecture by supplying materials.
• Supports Shita-machi Bobsleigh project by supplying materials.
• Started operation of employee training program for the new fiscal year.
• Revised personnel evaluation system

Governance Achievements

• Established “ESG/SDGs Promotion Office” as a dedicated department to promote ESG/SDGs.
• Executed compliance training sessions
• Conducted comprehension checks in compliance.
• Review of risk assessment points
• Carried out company-wide safety confirmation drills
• Conduct emergency drills

Climate Goals & Targets

Environmental Challenges

• Continued stagnation in the semiconductor production equipment (SPE) industry leading to lower sales volume.
• Increased freight, labor, and other costs.
• Weak domestic and foreign demand in China.
• Operating loss in North America due to PMI expenses.

Mitigation Strategies

• Strategically procuring more inventories and increasing personnel in preparation for a full-fledged recovery in demand.
• Expanding sales through overseas business expansion and improving profit margins with the evolution of Hakudo Network Service.
• Enhance blueprint processing services and implement automatic quotation features.
• Enhanced processing services through introduction of laser processing machines.
• Introduce additional automated machinery to save manpower and standardize factory operations.

Supply Chain Management

Responsible Procurement

• Green Procurement Guidelines

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Eco63S square bar

Environmental Metrics

ESG Focus Areas

• Decarbonized society
• Waste reduction
• Recycling
• Employee satisfaction
• Compliance
• Risk Management

Environmental Achievements

• Reduction of scrap ratio
• Reduction of industrial waste
• Promotion of recycling
• Improving delivery efficiency
• Reduction of power consumption
• Green Procurement Rate
• Sales of eco-friendly ECO series products

Social Achievements

• Improve employee satisfaction
• Employee health promotion
• Support for acquisition of qualifications
• Strengthen disaster countermeasures
• Support for joint research and manufacturing

Governance Achievements

• Implementation of compliance testing
• Information management and security
• Preparation for acquisition of ISO27001
• Company-wide acquisition of JISQ9100
• Preparation for acquisition of JISQ9100

Climate Goals & Targets

Environmental Challenges

• Unstable non-ferrous materials prices

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: JIS Q 9100 (Kanagawa Plant, Shiga Plant)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• ECO series products

Awards & Recognition

• Not disclosed