Climate Change Data

Nippon Thompson Co., Ltd.

Climate Impact & Sustainability Data (2021-04 to 2022-03, 2022-04-01 to 2023-03-31, 2023-04-01 to 2024-03-31)

Reporting Period: 2021-04 to 2022-03

Environmental Metrics

Total Carbon Emissions:35,563 t-CO2e
Scope 3 Emissions:260,000 t-CO2e (FY2022, Reference)
Total Energy Consumption:63,847 MWh
Water Consumption:162,000 m3
Waste Generated:2,995 tonnes

ESG Focus Areas

  • Environment
  • Social
  • Governance

Environmental Achievements

  • Reduced per unit CO2 emissions from bearing operations by 38.6% from FY1998 levels
  • Achieved a recycling rate of 96.6%
  • Reduced final disposal volume by 97.8% compared with FY2001

Social Achievements

  • Increased the percentage of females among all employees to 12.3%
  • Increased the number of people taking childcare leave to 10
  • Maintained a low employee turnover rate

Governance Achievements

  • Appointed a female outside director to ensure diversity in the Board of Directors
  • Established the Sustainability Committee
  • No compliance violations reported in FY2022 self-inspections

Climate Goals & Targets

Long-term Goals:
  • Carbon neutrality throughout the entire Group by 2050
  • Carbon neutrality throughout the entire supply chain by 2050
Medium-term Goals:
  • Reduce per unit CO2 emissions from bearing operations by 28% compared with FY1998 levels by 2030
  • Achieve a recycling rate of at least 96% in FY2031
  • Reduce final disposal volume by 92% in FY2026 compared with FY2001
  • Achieve carbon neutrality by FY2051
  • Increase the percentage of women among all full-time hires to 20% or more by March 2025
  • Increase the number of women in management positions and above by 1.5 times or more compared with March 2022 by March 2025
Short-term Goals:
  • Reduce greenhouse gas emissions by 50% or more by FY2031 from the baseline year

Environmental Challenges

  • Meeting customer demand due to supply constraints
  • Fluctuating demand in the bearing industry
  • Intensifying cost competition
  • Geopolitical risks impacting the supply chain
  • Securing stable profits and achieving sustainable growth in a volatile business environment
Mitigation Strategies
  • Strengthening Q, C, and D in production, including reducing lead times and strengthening production technology capabilities
  • Promoting automation and the use of digital technology
  • Establishing a stable production and supply system anticipating demand trends
  • Developing new products and renewing existing products
  • Securing an appropriate level of financial reserves
  • Improving capital efficiency and ROE while accelerating growth strategies
  • Promoting ESG management

Supply Chain Management

Responsible Procurement
  • Green Procurement Implementation Standards (2003)
  • IKO Group Supplier CSR Procurement Guidelines (2022)

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: International Integrated Reporting Framework by the IFRS Foundation, Guidance for Integrated Corporate Disclosure and Company-Investor Dialogue for Collaborative Value Creation by METI, Environmental Reporting Guidelines 2018 by the Ministry of the Environment, GRI Sustainability Reporting Standards

Certifications: ISO 14001, ISO 9001

Sustainable Products & Innovation

  • C-Lube linear way (oil-minimizing construction)

Reporting Period: 2022-04-01 to 2023-03-31

Environmental Metrics

Total Carbon Emissions:32,129 t-CO2e/year
Scope 1 Emissions:Not disclosed
Scope 2 Emissions:Not disclosed
Scope 3 Emissions:Not disclosed
Renewable Energy Share:Not disclosed
Total Energy Consumption:61,731 MWh/year
Water Consumption:160,000 m3/year (domestic production centers)
Waste Generated:3,147 tons/year
Carbon Intensity:0.47 t-CO2/million yen

ESG Focus Areas

  • Environment
  • Social
  • Governance

Environmental Achievements

  • 3.5% reduction in unit energy consumption year on year
  • Achieved a recycling rate of 96.8%
  • Achieved a 98.7% reduction in final disposal amount compared with FY2001
  • Implemented on-site PPA in the Mugegawa area
  • Created a disclosure report in line with TCFD recommendations

Social Achievements

  • Formulated the IKO Group Human Rights Policy
  • Increased percentage of female employees
  • Implemented a new HR personnel system to foster a culture that emphasizes a willingness to take on challenges and diversity
  • Low employee turnover rate

Governance Achievements

  • Established the Sustainability Committee
  • Appointed a female outside director to the Board of Directors
  • Announced endorsement of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations
  • Joined the TCFD Consortium

Climate Goals & Targets

Long-term Goals:
  • Carbon neutrality throughout the entire Group by 2050
  • Consolidated net sales of 100 billion yen or above, an operating profit of 15 billion yen or above, and an ROE of 10% or above in FY2031
Medium-term Goals:
  • Reduce actual greenhouse gas emissions from business operations by 50% or more from the baseline year
  • Achieve carbon neutrality throughout the entire supply chain
  • Increase the number of women in management positions and above by 1.5 times or more compared with March 2022 by the end of March 2025
  • Increase the number of women in management positions and above by 5 times or more compared with March 2022 by the end of March 2030
  • Increase the percentage of male employees taking childcare leave to 85% or more by FY2031
Short-term Goals:
  • Reduce unit energy consumption by more than 1.0% every year
  • Achieve a recycling rate of at least 96% in FY2031
  • Reduce final disposal volume by 92% in FY2026 compared with FY2001

Environmental Challenges

  • Soaring raw material and energy prices
  • General inflation
  • Sharp exchange rate fluctuations
  • Intensifying cost competition
  • Negative impact of geopolitical risks on supply chain
  • Slow response to climate change (in terms of reputation)
  • Labor shortages
  • Supply chain issues
  • High proportion of sales in specific industries (electronics)
  • Low P/B ratio
Mitigation Strategies
  • Maintaining prices with the cooperation of customers
  • Strengthening the financial position
  • Improving capital efficiency
  • Increasing shareholder returns
  • Expanding sales in industries with stable demand (medical devices, environmental fields)
  • Implementing proper climate change measures and enhancing information disclosure
  • Reinforcing collaboration with partner companies
  • Strengthening global production system including construction of new factories
  • Improving the accuracy of demand forecasting
  • Reviewing operations for improving reuse rate
  • Implementing renewable energy
  • Implementing energy-saving equipment
  • Engaging more with shareholders and investors
  • Strengthening and enhancing growth investments and shareholder returns

Supply Chain Management

Supplier Audits: As needed

Responsible Procurement
  • Green Procurement Standard
  • IKO Group Supplier CSR Procurement Policy Guidelines

Climate-Related Risks & Opportunities

Physical Risks
  • Rising sea levels
  • Intensification of extreme weather
Transition Risks
  • Carbon tax implementation
  • Increase in carbon tax rate
  • Rising costs for raw materials due to carbon tax implementation
  • Changes in customer demand
  • Slow response to climate change
Opportunities
  • Popularization of renewable energy
  • Contribution toward transitioning to a decarbonized society
  • Promotion of electrification
  • Expansion of the EV and storage battery markets

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards, TCFD recommendations

Certifications: ISO 9001, ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

  • Not disclosed

Not disclosed

Sustainable Products & Innovation

  • C-Lube Linear Way
  • LRX ZERO
  • Liquid crystal lubricant

Awards & Recognition

  • Not disclosed

Reporting Period: 2023-04-01 to 2024-03-31

Environmental Metrics

Total Carbon Emissions:27,277 t-CO2e/year
Scope 1 Emissions:Not disclosed
Scope 2 Emissions:Not disclosed
Scope 3 Emissions:Not disclosed
Renewable Energy Share:Not disclosed
Total Energy Consumption:49,942 MWh/year
Water Consumption:144,000 kg/year
Waste Generated:2,425 tons/year
Carbon Intensity:Not disclosed

ESG Focus Areas

  • Climate Change
  • Recycling
  • Product Quality and Safety
  • Supply Chain Management
  • Human Resources
  • Corporate Governance

Environmental Achievements

  • Reduced CO2 emissions by approximately 14.6% (27,277t-CO2) from the previous year due to production cutbacks and renewable energy initiatives.
  • Reduced electricity consumption by 19.1% to 49,942 MWh from the previous year.
  • Became the first company in the domestic bearing industry to conclude a virtual PPA, sourcing 100% of electricity used at sales offices in Japan by renewable energy.
  • Implemented an on-site PPA for solar power generation at the Gifu factory complex.

Social Achievements

  • Increased the percentage of female employees to 13.3%.
  • Increased the percentage of male employees taking childcare leave to 65.5%.
  • Increased the percentage of outside directors to 37.5% with the appointment of a female outside director.
  • Donated 3 million yen to support victims of the Noto Peninsula Earthquake.

Governance Achievements

  • Signed the United Nations Global Compact (UNGC).
  • Registered as a TNFD Early Adopter.
  • Improved the operation of Board of Directors meetings with active discussion and participation from outside directors.
  • Implemented a revised shareholder returns policy with a total return ratio target of 50% or above.

Climate Goals & Targets

Long-term Goals:
  • Achieve carbon neutrality in all of Scope 1, 2, and 3 by FY2051.
  • Net sales of 100 billion yen or above, operating profit of 15 billion yen or above, ROE of 10% or above, and market capitalization of 100 billion yen or above by FY2031.
  • Achieve a P/B ratio of 1 or higher.
Medium-term Goals:
  • Reduce greenhouse gas (Scope 1 and 2) emissions by 42% or above from the base year.
  • Reduce greenhouse gas (Scope 3 Category 1) emissions by 25% or above from the base year.
  • Achieve operating profit of 9 billion yen or above and ROE of 8% or above on average for three years from FY2025 to FY2027.
  • Increase the number of female managers to five times the number in FY2022 by FY2031.
  • Increase the rate of male employees taking childcare leave to 85% by FY2031.
Short-term Goals:
  • Not disclosed

Environmental Challenges

  • Sluggish Chinese market and continued demand adjustment phase for electronics-related devices.
  • Large inventory levels.
  • Strengthening handling of large-lot projects.
  • Establishment of an efficient production system that forecasts demand trends.
  • High volatility of performance due to dependence on the electronics industry.
  • Underperformance of TSR compared to TOPIX and the Machinery Index.
  • Low P/B ratio.
  • Securing human resources due to a declining workforce.
Mitigation Strategies
  • Improve inventory turnover ratio through inventory optimization.
  • Maximize earnings during the demand recovery phase by strategically building up inventories.
  • Revise product prices to optimize the value of the products offered.
  • Improve profitability through selective order-taking.
  • Expand sales in areas with strong medium- to long-term growth potential.
  • Strengthen IR activities and shareholder returns.
  • Active disclosure of growth stories.
  • Strengthening of sustainability activities to enhance corporate value.
  • Agile acquisition of treasury shares to improve ROE.
  • Promote local production for local consumption by expanding the production capacity of local subsidiaries.
  • Expand sales to high-functional equipment for priority fields.
  • Differentiate from competitors by providing high-quality, high-precision products.
  • Secure earnings based on sales strategies targeting the high-end market.
  • Strengthening global production capacity, mainly in Vietnam and China.
  • Investment in R&D, with a particular emphasis on human resources.
  • Promoting automation and manpower saving in factories and improving operational efficiency through DX promotion.
  • Secure diverse human resources through active recruitment.

Supply Chain Management

Supplier Audits: As needed

Responsible Procurement
  • Green procurement
  • IKO Group Supplier CSR Procurement Guidelines

Climate-Related Risks & Opportunities

Physical Risks
  • Rising sea levels
  • Lower production capacity resulting from disaster impact at company manufacturing bases
  • Lower capacity utilization resulting from disaster impact to major suppliers
Transition Risks
  • Carbon tax implementation
  • Rising costs for raw materials due to carbon tax implementation
Opportunities
  • Increasing demand for low-friction, durable bearings
  • Increasing demand for “the oil-minimum” products
  • Increasing demand for customization tailored to customers
  • Expansion of the EV and storage battery markets

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, Guidance for Integrated Corporate Disclosure and Company-Investor Dialogue for Collaborative Value Creation, Environmental Reporting Guidelines 2018, GRI Sustainability Reporting Standards, TCFD Recommendations, TNFD Recommendations

Certifications: ISO 9001, ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

  • Not disclosed

Not disclosed

Sustainable Products & Innovation

  • LRX ZERO
  • Linear motor unit products
  • Linear motor table LT
  • Eco-Products

Awards & Recognition

  • Not disclosed