Climate Change Data

Environmental Metrics

ESG Focus Areas

• Global warming prevention
• Waste reduction
• Air pollution control
• Biodiversity preservation
• Green procurement
• Employee well-being
• Compliance
• Information security
• Human rights
• Community engagement

Environmental Achievements

• Reduced CO2 emission intensity by 2.1% from fiscal 2019 levels
• Reduced waste disposal intensity by 3.0% from fiscal 2019 levels
• Reduced PRTR substance emission intensity by 27.4% from fiscal 2018 levels
• Reduced water consumption intensity by 5.7% from fiscal 2019 levels
• 97.3% of new products green certified
• 77.2% of all sales accounted for by green products

Social Achievements

• Implemented various measures to ensure employee health and safety during the COVID-19 pandemic (work from home, reduced workdays, web-based meetings, health measures, etc.)
• Introduced a mentoring program for new recruits
• Improved employment options for employees with childcare or nursing care responsibilities
• Supported employees pursuing study abroad or business startups
• Provided long-term disability insurance
• Implemented a Corporate Action Plan to increase women's participation in the workplace
• Promoted employment of persons with disabilities
• Established a Compliance Committee and Helpline
• Strengthened information security measures
• Provided compliance training

Governance Achievements

• Increased the number of independent outside directors to one-third of the board of directors
• Enhanced decision-making and supervisory functions of the board of directors
• Improved investor relations activities
• Implemented a group-wide risk management system

Climate Goals & Targets

Environmental Challenges

• Slow replacement demand for power distribution equipment in Japan
• Delayed installation of large-class transformers in Southeast Asia due to the COVID-19 pandemic
• Slump in equipment investment during the first half of fiscal 2020
• COVID-19 pandemic impacting business operations
• Information security risks
• Intellectual property risks

Mitigation Strategies

• Cost reductions and productivity improvements
• Implemented various measures to mitigate the impact of the COVID-19 pandemic
• Strengthened information security policies and measures
• Provided training in contracting and intellectual property rights
• Developed a compliance guide summarizing laws and regulations

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Green procurement guidelines
• Basic policy on materials procurement
• Avoidance of conflict minerals

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Expansion of sustainable energy sources

Reporting Standards

Frameworks Used: GRI Guidelines 2013, Environmental Accounting Guidelines (Fiscal 2005 Version), Ministry of the Environment, Japan, Environmental Reporting Guidelines (Fiscal 2012 Version), Ministry of the Environment, Japan, JIS Z 26000

Certifications: ISO 14001:2015, ISO 9001

Third-party Assurance: Not disclosed

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)

DAIHEN's business activities contribute to these goals through the development and sale of energy-efficient products, promotion of sustainable energy sources, waste reduction initiatives, and efforts to mitigate climate change.

Sustainable Products & Innovation

• Energy-efficient transformers
• Energy-efficient welding machines
• Energy-efficient RF generators
• EV charging systems
• EMS for sustainable power plants

Awards & Recognition

• Machine and Robot Parts Award at the 18th “CHO” MONODZUKURI Innovative Parts and Components Awards (JoyPEN)

Environmental Metrics

ESG Focus Areas

• Environmental Management
• Social Responsibility
• Corporate Governance

Environmental Achievements

• Reduced CO2 emissions intensity by 6.7% from fiscal 2020 levels.
• Reduced waste disposal intensity by 13.8% from fiscal 2020 levels.
• Reduced water consumption intensity by 7.3% from fiscal 2020 levels.
• Reduced atmospheric emissions of PRTR substances by 12.1% from fiscal 2020 levels.
• Achieved 78.2% of sales from green products.

Social Achievements

• Implemented a mentoring program for new employees.
• Introduced a career autonomy program for young employees.
• Implemented measures to support employees with childcare and nursing care responsibilities.
• Offered workplace COVID-19 vaccinations.
• Promoted employment of persons with disabilities.

Governance Achievements

• Established a Compliance Committee and a Risk Management Committee.
• Developed a compliance guide and helpline.
• Strengthened information security infrastructure and initiatives to protect intellectual property.
• Increased the number of independent outside directors to one-third of the board.

Climate Goals & Targets

Environmental Challenges

• Soaring prices of materials and electronic components.
• Global semiconductor shortage.
• COVID-19 pandemic.
• Climate-related risks (increased procurement costs, procurement challenges, supply chain instability, intensifying weather disasters).

Mitigation Strategies

• Cost reductions through automation and VE/VA proposals.
• Aggressive capital investment to increase production capacity.
• Implemented various measures to support employees and business operations during the pandemic.
• Strengthening R&D related to environmental considerations, promoting eco-friendly design, strengthening the supply chain, and developing a business continuity plan.

Supply Chain Management

Responsible Procurement

• Green Procurement Guidelines
• Basic policy for material procurement (fair evaluation, mutual development, compliance with the law).

Climate-Related Risks & Opportunities

Physical Risks

• Increased costs of shutdowns and disaster recovery due to intensifying weather disasters.
• Increased cost of countermeasures against flood risk at business locations due to rising sea levels.

Transition Risks

• Increased procurement costs for fuels and other materials due to the introduction of carbon taxes and emissions trading.
• Increased costs from product design changes and production equipment resulting from stricter regulations.
• Market shrinkage or loss of markets for our products due to innovation.

Opportunities

• Expanding business opportunities by leading the development of eco-friendly technologies.
• Growing demand for eco-friendly products.

Reporting Standards

Frameworks Used: GRI Guidelines 2013, Environmental Accounting Guidelines 2005 (Ministry of the Environment, Japan), Environmental Reporting Guidelines 2018 (Ministry of the Environment, Japan), JIS Z 26000

Certifications: ISO 14001:2015, ISO 9001

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)

The report details how DAIHEN's business activities contribute to these goals through various initiatives.

Sustainable Products & Innovation

• Energy management systems (EMS)
• EV charging systems
• Laser-arc hybrid welding system
• Eco-friendly welding machines
• Clean transfer robots
• High-efficiency transformers

Awards & Recognition

• 2021 Technology and Development Award from Toyota Motor Corporation
• Excellence Award at the 70th Nikkei Advertising Awards

Environmental Metrics

ESG Focus Areas

• Climate Change
• Labor Shortages
• Digitalization
• Diversity & Inclusion
• Employee Well-being
• Governance
• Supply Chain Sustainability
• Community Engagement

Environmental Achievements

• Reduced CO2 emissions by 25.7% (Scope 1+2) from 2013 levels by 2023.
• Reduced CO2 emissions by 7.2% (Scope 3, Category 11) from 2020 levels by 2023.
• Achieved 82.0% environmental consideration product sales ratio in 2023.
• Introduced solar power generation equipment at major bases.

Social Achievements

• Launched the “Work and Childcare Reconciliation Support Project”, including the opening of a company-run nursery.
• Improved employee engagement scores.
• Donation of 1% of operating profit to support children's welfare in local communities.
• Continued efforts in diversity and inclusion, exceeding the legal employment rate for persons with disabilities.

Governance Achievements

• Established the Nomination and Remuneration Advisory Committee.
• Implemented a compliance hotline.
• Strengthened internal audit functions.

Climate Goals & Targets

Environmental Challenges

• Fluctuations in demand for products.
• Fluctuations in sales and purchase prices.
• Changes in the overseas business environment.
• Changes in the value of assets held.
• Fluctuations in interest rates.
• Large-scale disasters.

Mitigation Strategies

• Risk management committee established.
• Active efforts in cost reduction and diversification of procurement.
• Risk hedging through foreign exchange reserves.
• Development of business continuity plans.
• Active efforts in cost reduction and diversification of procurement.
• Risk hedging through foreign exchange reserves.
• Development of business continuity plans.

Supply Chain Management

Responsible Procurement

• Green procurement activities
• Sustainable procurement guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Severe weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products and systems

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, Value Co-creation Guidance

Certifications: ISO 14001, ISO 9001

Sustainable Products & Innovation

• Unit-type power conditioners for battery systems
• Collaborative robots
• High-voltage 1500V unit-type power conditioners for battery systems
• Wireless rapid charging system (15kW)

Awards & Recognition

• 2023 Energy Conservation Grand Prize (for air heat exchange cooling method)
• Chairman's Award, JECA FAIR 2024 Product Contest (for large-capacity battery package)