Climate Change Data

Environmental Metrics

ESG Focus Areas

• Safety
• Waste Reduction
• Energy and CO2 Reduction
• Sustainable Value-Added Products
• Responsible Sourcing and Transportation
• Employee Development
• Ethics and Compliance

Environmental Achievements

• Reduced greenhouse gas emissions by 1% compared to the previous year through improved facility utilization and energy-saving initiatives.
• Exceeded the 50 percent landfill waste reduction target by 2015 (on a 2007 baseline) in 2013. Waste to landfill in 2014 was 26kt (13% reduction on the 2013 baseline).

Social Achievements

• 91% of shop floor FT employees had an annual training and development review in 2015.
• 2014 Employee Survey led to improved learning and development plans.

Governance Achievements

• Introduced NSG Group Corporate Governance Guidelines in May 2015, supporting the Principles of the Tokyo Stock Exchange Corporate Governance Code.
• Relaunched Code of Ethics.

Climate Goals & Targets

Environmental Challenges

• Poor market conditions prevented a reduction in specific energy usage for eight key products.
• Did not meet the 2015 economic target to exceed a 10 percent operating profit margin (operating profit margin was 4%).
• Supply chain risks and impacts, especially those related to the sustainability of raw material and the environmental and human rights performance of suppliers.

Mitigation Strategies

• Energy pilot plants implemented to reduce energy costs.
• Operational Cost Saving program to reduce operational costs, including energy.
• Supplier Code of Conduct communicated to all suppliers and >280 suppliers evaluated against it.
• Assessment of key suppliers’ sustainability practices.

Supply Chain Management

Supplier Audits: >280 suppliers evaluated against the Supplier Code of Conduct by the end of 2015

Responsible Procurement

• Supplier Code of Conduct
• Supplier sustainability evaluation

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Producing products that conserve energy in buildings and vehicles.

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001 (81 certified sites representing 70% of business by turnover), ISO 50001 (Tampere and Ylojarvi plants in Finland)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Pilkington Energy Advantage™, Pilkington Spacia™, Pilkington Spacia™ Cool, Pilkington Pyrostop®, Pilkington Pyrodur®, Pilkington Pyroclear®, Pilkington EZ-KOOL®, NSG Angelguard99, Metashine®, Spacia 21®

Awards & Recognition

• Spacia 21® certified ‘L2-Tech 2015 Summer’ by the Ministry of Environment in Japan

Environmental Metrics

ESG Focus Areas

• Safety
• Waste Reduction
• Energy and CO2 Reduction
• Sustainable Value-Added Products
• Responsible Sourcing and Transportation
• Employee Engagement
• Ethics and Compliance

Environmental Achievements

• Exceeded target in FY2018 with a 10kt (33 percent) reduction in waste to landfill vs. FY2014
• Achieved a one percent reduction in CO2 intensity each year to FY2018

Social Achievements

• NSG Group overall Engagement score increased by 4 points to a score of 76
• 71 percent of employees achieved a personal or collective development plan
• 100 percent completion rate of the FY2018 ethics and compliance online education campaign

Governance Achievements

• Relaunched Code of Ethics
• Launched an online annual conflict of interest disclosure process
• Established a Global Ethics Network

Climate Goals & Targets

Environmental Challenges

• Higher input costs
• Volume reduction in some regions for Architectural Glass
• Sales of solar energy glass fell during a period of re-tooling at a major customer (North America)
• Slight decline of market volumes in North America (Automotive)
• Severe price competition in the cover glass market for smartphones (Technical Glass)
• Attracting and retaining talent, particularly in emerging markets

Mitigation Strategies

• Restarted a previously dormant float line in Venice, Italy
• Repair of a float line damaged by a tornado in Ottawa, IL, USA
• Increased VA ratio
• Further cost savings and disposal of tangible fixed assets (Technical Glass)
• Policies to address challenges in attracting and retaining talent

Supply Chain Management

Supplier Audits: 6 5% of Key suppliers have now agreed to our SCoC or can demonstrate their own equivalent code.

Responsible Procurement

• Supplier Code of Conduct
• Supplier sustainability evaluation

Climate-Related Risks & Opportunities

Physical Risks

• Tornado damage to Ottawa plant

Transition Risks

• Changing economic situation
• Product supply/demand shifts
• Currency exchange fluctuations
• Environmental regulations

Opportunities

• Sustainable and innovative product design
• Energy-saving products

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Guidelines

Certifications: ISO 14001 (vast majority of glass manufacturing and automotive manufacturing sites)

Sustainable Products & Innovation

• Pilkington OptiView™ Anti-reflective glass
• Pilkington Sunplus™ BIPV
• Pilkington AviSafe™
• Super Spacia® vacuum insulating glass

Awards & Recognition

• General Motors (GM) Supplier of the Year
• Agency for Natural Resources Director-General's Prize for Super Spacia®

Environmental Metrics

ESG Focus Areas

• Energy saving
• Renewable energy
• Environmental conservation
• Depletion of natural resources
• Safety and health
• Mobility technology innovation
• Employee safety
• Employee labor conditions and human rights
• Anti-corruption and competitive behavior
• Human resources development
• Waste reduction
• Responsible Sourcing
• Ethics and Compliance

Environmental Achievements

• Reduced CO2 emissions from 46.4 PJ in 2015 to 43.3 PJ in 2018
• Reduced energy usage from 50 PJ in 2015 to 40 PJ in 2018
• Reduced water usage from 25 Mm3 in 2015 to 20 Mm3 in 2018
• Reduced operational waste to landfill from 60 Kt in 2015 to 42 Kt in 2018
• Increased recycling (non-glass) from 20 Kt in 2015 to 30 Kt in 2018

Social Achievements

• Improved employee engagement (SCoC acceptance rate increased from 71% in 2016 to 80% in 2019)
• Improved supplier sustainable assessment (increased from 60% in 2016 to 76% in 2019)
• Reduced significant injury rate (SIR) from 0.4 in 2015 to 0.1 in 2018

Governance Achievements

• Company with a committee governance structure, separation of execution and management, and oversight by mostly independent external directors

Climate Goals & Targets

Environmental Challenges

• Achieving financial sustainability and transforming into a VA glass company (targets not fully achieved in FY2020 forecast)

Mitigation Strategies

• Executing Phase 2 of the Medium-Term Plan (MTP) focusing on 'Shift to VA + Growth', including operational efficiency improvement, exit from unprofitable businesses, and increased VA ratio

Supply Chain Management

Supplier Audits: 76% (2019)

Responsible Procurement

• Supplier Code of Conduct (SCoC)

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Smart windows
• Building-Integrated Photovoltaics (BIPVs)
• PicoGene® PCR1100

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Capital
• Responsible Sourcing
• Ethics & Compliance
• Shift and Innovation
• Safe and High-Quality Products and Services

Environmental Achievements

• Achieved a 6% decrease in CO2e emissions in 2019 due to reduced production, increased renewable energy use, and operational initiatives.
• Settimo Torinese, Italy site became fully decarbonized, reducing emissions by 1,650 tonnes of CO2 per year.
• Corrected previous mistakes in waste to landfill reporting; achieved 28% reduction in waste to landfill versus 2014 baseline.

Social Achievements

• Employee engagement score improved by 3 points from the base year 2017 and 8% from the prior year.
• All managers completed Unconscious Bias training.
• Completed training for all managers in the new Appraisal Model and Talent System.

Governance Achievements

• Improved CDP Climate Change 2020 score from B to A-, demonstrating commitment to transparency and climate action.
• Received highest rating as "especially progressive environmental initiatives" by Development Bank of Japan, Inc. (DBJ).

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic severely impacted Architectural and Automotive businesses.
• Deteriorating market conditions in Europe, Americas, and Asia.
• Reduction in new car production in Europe.

Mitigation Strategies

• Implemented COVID-19 infection prevention measures prioritizing employee safety.
• Focused on minimizing cash outflow through strict working capital management and expense curtailment.
• Consolidated or downscaled production facilities and suspended line operation in multiple sites.
• Disposed of non-core businesses and assets.

Supply Chain Management

Supplier Audits: 36% of suppliers assessed by EcoVadis (2020)

Responsible Procurement

• NSG Supplier Code of Conduct
• EcoVadis assessments
• Requirement for ISO 14001 or equivalent certification for HEI suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Damage to production facilities by abnormal weather

Transition Risks

• Cost increase by carbon pricing policy

Opportunities

• Expanding the market for products that contribute to reducing GHG emissions

Reporting Standards

Frameworks Used: TCFD, SASB, IIRC, UNGC, SDGs

Certifications: ISO 14001, ISO 50001

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)

Initiatives contribute to these goals through GHG emission reduction, renewable energy use, sustainable material sourcing, waste reduction, and development of eco-friendly products.

Sustainable Products & Innovation

• Solar glass products (NSG TEC™, Pilkington Optiwhite™)
• Solar control glass (Pilkington Solar-E™, Pilkington Suncool™)
• Insulating low emissivity glass (NSG Spacia™, Pilkington Optitherm™)
• Lightweight automotive glazing
• Glass cord engine timing belts
• Battery separators

Awards & Recognition

• EcoVadis Silver rating
• CDP Climate Change A- rating
• CDP Water B rating
• WWF Japan "Business & Biodiversity Katte-ni (Arbitrary) Award" Special Prize

Environmental Metrics

ESG Focus Areas

• Environment
• Social Shift and Innovation
• Safe and High-Quality Products and Services
• Ethics and Compliance
• Human Capital

Environmental Achievements

• 8 percent reduction in CO2 intensity across glass manufacturing operations compared to FY18
• 20 percent reduction of waste to landfill compared to FY20
• Reduction of Significant Injury Rate (20 percent vs. FY20)
• World's first successful production for building glass using hydrogen energy

Social Achievements

• 17% increase in Procurement spend covered with EcoVadis assessments
• Average scoring of all suppliers Ecovadis average 50 sustainability score for all assessed suppliers increased by 3 pts to 55
• Back-to-school project in North America delivering 11,400 backpacks
• Tree4us project in South America planting 700 seedlings

Governance Achievements

• Adopted “Company with Three Committees” system
• CDP Climate Change 2020 score improved from B to A-
• CDP Water 2020 score improved from B- to B
• First Time Inclusion in FTSE Blossom Japan Index

Climate Goals & Targets

Environmental Challenges

• Commoditization of products and competition intensifying in the float glass industry
• Climate change and the need to reduce greenhouse gas emissions
• COVID-19 pandemic impact on demand and operations
• Shortages of computer chips and other components disrupting manufacturing

Mitigation Strategies

• Formulated Revival Plan 24 (RP24) for business transformation
• Set scientifically based CO2 reduction targets (SBTs)
• Optimizing glass manufacturing processes, developing energy-saving technologies, and expanding the use of renewable energy
• Fundamental cost structure reforms, business structure reform, and corporate culture reform
• Restoration of financial stability and transformation into more profitable business portfolio

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct
• EcoVadis assessments
• ISO 14001 certification for HEI suppliers
• Chain of custody certification for wooden packaging

Climate-Related Risks & Opportunities

Physical Risks

• Flood, typhoon

Transition Risks

• Regulatory changes (e.g., EU Energy Directive, ETS)
• Market shifts (e.g., EV market growth, low energy buildings)

Opportunities

• Supplying high performance products associated with stricter environmental regulations
• Development of energy-efficient products
• Expansion of solar glass business

Reporting Standards

Frameworks Used: SASB, IIRC, TCFD, CDP

Certifications: ISO 14001, ISO 50001, SBTi

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

Initiatives such as renewable energy use, waste reduction, CO2 emission reduction, and sustainable sourcing contribute to these goals.

Sustainable Products & Innovation

• NSG TEC™
• Pilkington Optiwhite™
• Pilkington Solar-E™
• NSG Spacia™
• Pilkington Optitherm™
• Pilkington Suncool™
• NSG Purity™
• Birdsafe™
• Sanitise™

Awards & Recognition

• Business & Biodiversity Katte-ni (Arbitrary) Award Special Prize from WWF Japan
• Highest rating as "especially progressive environmental initiatives" by DBJ

Environmental Metrics

ESG Focus Areas

• Climate Change
• TCFD
• Energy
• Water
• Social Shift and Innovation –R&D Strategy
• Safe and High Quality Products and Services
• Suppliers
• Ethics and Compliance
• Human Resources

Environmental Achievements

• 8 percent reduction in CO2 intensity across glass manufacturing operations compared to FY18
• 20 percent reduction of waste to landfill compared to FY20
• World's first successful experiment in the production of architectural glass using hydrogen as a low-carbon alternative fuel
• World's first to successfully manufacture float glass using bio-based fuel oil
• Settimo Torinese site became the NSG Group's first fully decarbonized site

Social Achievements

• Improved employee engagement scores
• Increased female manager representation
• Launched new employee survey 'Your Voice'
• Implemented various wellbeing initiatives
• Platinum Kurumin Certification by Japanese Ministry of Health, Labor and Welfare

Governance Achievements

• Enhanced management transparency by further separation of functions between business execution and its supervision
• Strengthened role of independent external directors
• Implemented annual evaluation process for Board effectiveness
• Formulated “NSG Group Basic Policy on Sustainability”

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Energy price spikes
• Russia’s invasion of Ukraine
• Delay in the recovery of vehicle production
• Rising raw materials and energy costs
• Restricted levels of vehicle build
• Shortages of computer chip components
• Increased costs associated with pricing of GHG emissions
• Potential recessionary conditions
• Natural gas supply disruption in Europe

Mitigation Strategies

• Headcount reductions
• Cost reduction initiatives
• Sales price increases
• Active risk-based hedging
• Price increase negotiations with vehicle manufacturers
• Emergency plan to ensure European float lines can operate with liquid fuel in case of severe gas shortage
• Investment in additional production capacity of solar glass in Malaysia
• Development of new products to support society decarbonization

Supply Chain Management

Supplier Audits: EcoVadis sustainability assessments completed for 52% of external supplier spend in FY2022

Responsible Procurement

• NSG Supplier Code of Conduct
• ISO 14001 or equivalent national environmental certification
• EcoVadis assessment
• Chain of Custody (CoC) certification from the Forest Stewardship Council (FSC) or PEFC

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Flooding
• Drought
• Sea level rise

Transition Risks

• Increased costs of raw materials
• Investment risk
• Changing consumer preferences
• Pricing of GHG emissions
• Costs to transition to lower emission technologies
• Cost of Capital
• Regulatory requirements

Opportunities

• Development of energy-efficient products
• Growth of the energy-efficient buildings market
• More stringent product demand
• Opportunities for sharing high-performance energy-saving products

Reporting Standards

Frameworks Used: GRI, SASB, IIRC, TCFD, CDP

Certifications: ISO 50001, ISO 9001:2015, IATF 16949, ISO 14001

Sustainable Products & Innovation

• Energy Advantage™
• Pilkington Eclipse Advantage™
• Pilkington Spacia™
• NSG Botanical™
• MAGNAVI™
• SLA-5DG™

Awards & Recognition

• CDP Supplier Engagement Leader
• EcoVadis Sustainable Procurement score of 70 (top 3% of glass companies)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Capital Management
• Energy consumption reduction/ GHG emission
• Water consumption & management
• Landfill waste
• Expand use of eco-friendly products
• Protect of bio-diversity
• Reducing packaging environmental impact
• Remanufacturing
• Diversity & Inclusion
• Employee health and safety
• Development and retention of talent
• Transformation of corporate culture
• Data privacy & security
• Community relations
• Customer welfare
• Sales practices
• Contribution to economic development of developing countries
• Contribution to a safe and secure society
• Contribution to development/ enhancement of social infrastructure
• Support for recovery from disaster
• Business model resilience
• Product quality and safety
• Trade and geopolitical conflicts
• Supply chain management
• Stronger brand management
• Investment in newly emerging markets
• Ethics and compliance
• Competitive behavior/ fair business practice
• Risk management
• Corporate Governance
• Finance sustainability
• Country risk

Environmental Achievements

• 8 percent reduction in CO2 intensity across glass manufacturing operations compared to CY2018
• 20 percent reduction of waste to landfill compared to FY2020/3
• World's first successful production of float glass using hydrogen energy
• Successful production of glass using 100% biofuels
• Glass production using 'Dolime' (CaOMgO) successfully achieved in a float furnace in Chile

Social Achievements

• Reduction of Significant Injury Rate (20 percent vs. FY2020/3)
• Employee Engagement, "Our Vision" penetration ratio (80 percent)
• Female managers in NSG Group increased by 1.7 points
• Launched a new sustainability communications platform, make changeTM

Governance Achievements

• Established the “Leadership behavior Charter”
• Developed Inclusion &Diversity into DEI
• Enhanced its education interface and changed the name from the “NSG Ethics & Compliance Education Center” to “NSG Learn”
• Established aGlobal Ethics Network

Climate Goals & Targets

Environmental Challenges

• Energy price volatility and potential recession concern mainly in Europe and the USA
• High input costs
• Shortages of components including semiconductors
• Rising raw materials and energy costs
• Vehicle production volumes in the Group’s main markets are not expected to recover to the pre-pandemic levels during RP24
• IT market slowdown
• Covid lockdowns and a general economic slowdown
• Supply chain issues
• Global warming
• Bird collisions on glass
• Water scarcity
• Flood planning and prevention strategies
• Cyber security threats
• Natural gas shortage risk

Mitigation Strategies

• Price pass-throughs
• Cost reduction efforts
• Expansion of value-added products
• Strengthening sales and distribution network
• Resource allocation will have to be more selective and focused
• Continuous cost saving efforts
• Business growth
• Capacity optimization
• Prices pass-through reflecting the hiked energy and material costs
• Expansion of the value-added products including windscreens with ADAS and HUD system
• Development of new technologies, new products, and new businesses
• Development and implementation of new technologies
• Procurement/generation of renewable energy
• Data collection, workshops
• Use of alternative fuels
• Electric melting of glass
• Substitution of glassmaking raw materials
• Carbon capture
• Long-term contracts with suppliers
• Securing production sites and stable supplies of fuels
• Investment in on-site power generation
• Power Purchase Agreements (PPA agreements)
• Launched a Sustainable Supply Chain Committee
• Working with actual suppliers to obtain emissions data and share best practice
• Annual mandatory Cyber Security training for all users
• Regular patching cycle for devices
• 3 Lines of Defense model
• Emergency plan to ensure that each EU float is prepared to go on hot hold in a controlled manner by firing liquid fuel in case of severe gas shortage
• Regular monitoring of gas shortage risk, consulting external energy and gas providers

Supply Chain Management

Supplier Audits: 60% of external supplier spend (EcoVadis)

Responsible Procurement

• NSG Supplier Code of Conduct
• Sustainable Supply Chain Charter
• ISO 14001 or equivalent national environmental certification
• EcoVadis assessment
• Chain of Custody (CoC) certification from the Forest Stewardship Council (FSC) or PEFC forest certification programs

Climate-Related Risks & Opportunities

Physical Risks

• Drought Stress
• Chronic Heat
• Flood, typhoon risk impact to operations & value chain

Transition Risks

• Pricing of GHG emissions
• Costs to transition to lower emissions technology
• Increased cost of raw materials
• Investment risk

Opportunities

• Opportunities to supply high-performance products in relation to the European Energy Directive
• Opportunities for sharing high-performance energy-saving building products
• Opportunities for more stringent product demand
• Opportunities for specific product development e.g. storm glazing

Reporting Standards

Frameworks Used: GRI, SASB, IIRC, TCFD, CDP

Certifications: ISO 50001, ISO 9001:2015, IATF 16949, SBTi, SCS Recycled Content Certification, Platinum Kurumin Certification

Sustainable Products & Innovation

• Pilkington AviSafeTM
• Pilkington SunplusTM
• Pilkington MiraiTM
• HeatComfortTM
• Pilkington SuncoolTMQ
• MAGNAVITM
• SELFOC® Micro Lens

Awards & Recognition

• Environmental Award of the NSG Group EHSAward (2022)
• CDP Supplier Engagement Leader (2022)

Environmental Metrics

ESG Focus Areas

• Environment
• Social Shift and Innovation
• Human Capital
• Health and Safety
• Ethics and Compliance
• Safe and High-quality Products and Services

Environmental Achievements

• Launched the world’s lowest carbon glass range of its kind in Europe.
• Successful start of Europe’s first carbon capture trial in the flat glass industry.
• Revised CO2 emissions intensity target to 3% year-on-year reduction and introduced a new target of 65% renewable energy electricity ratio by FY2027.

Social Achievements

• Increased female managers in each business and functional division of the entire group from 12.7% as of 30th June 2021 to 16% by FY 2024/3.
• Set new targets to increase the ratio of female managers in the entire group to 24% by FY2027/3, and to 30% by FY2030/3.
• Awarded Platinum Kurumin Certification by Japanese Ministry of Health, Labour and Welfare in 2019.
• Promoting measures to globally demonstrate our attractiveness as a workplace that offers opportunities for professional development.

Governance Achievements

• Implemented all of the principles of the Corporate Governance Code (after revision dated 11th June 2021 including the principles for the Prime Market).
• Established a committee-based governance structure with a Nomination Committee, Audit Committee, and Compensation Committee, all chaired by Independent External Directors.
• Adopted the “Board of Directors Charter” setting forth the basic stance and expectations for the Board of Directors.

Climate Goals & Targets

Environmental Challenges

• Climate change
• Poor product quality
• Human resources

Mitigation Strategies

• Developed Science Based Targets (SBTs) certified by SBTi to reduce GHG emissions (Scope 1 and Scope 2) by 30% compared to 2018 levels by 2030 and added Scope 3 as a reduction target.
• Implementing enterprise risk management (ERM) process in accordance with ISO 31000.
• Investing in human capital and intellectual properties.

Supply Chain Management

Responsible Procurement

• Introduction of the Supply Chain Charter

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: TCFD, CDP

Certifications: Science Based Targets (SBTi)

Sustainable Products & Innovation

• World’s lowest carbon glass range

Awards & Recognition

• Platinum Kurumin Certification