Climate Change Data

Environmental Metrics

ESG Focus Areas

• Quality Improvement
• Stakeholder Relationships
• Employee Development
• Community Engagement
• Environmental Sustainability

Environmental Achievements

• Implemented waste reduction and recycling measures (details not quantified)
• Improved energy efficiency through process improvements (details not quantified)
• Initiated environmental improvement activities at various locations (details not quantified)

Social Achievements

• Established a Quality Improvement Committee to enhance customer satisfaction
• Launched employee training programs and improved welfare benefits
• Engaged in community activities to strengthen local ties
• Implemented a suggestion system resulting in increased employee participation and improvements
• Supported employee participation in international volunteer programs

Governance Achievements

• Improved information disclosure to shareholders and investors through IR events and tools
• Strengthened relationships with suppliers through fair and equitable practices
• Implemented a system for evaluating suppliers based on a fair and equitable criteria

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Fair and equitable practices
• Supplier evaluation system

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: ISO 9001, ISO/TS 16949

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Quality
• Customer Satisfaction
• Stakeholder Relations
• Employee Safety and Health
• Employee Development
• Community Engagement

Environmental Achievements

• Not disclosed

Social Achievements

• Launched TAPS training program for sales agents to improve customer service.
• Achieved zero major accidents in 2009.
• Established a health center at headquarters with a resident nurse.
• Implemented an e-learning system for employee development.
• Consistently exceeded legal requirements for disability employment.
• Participated in community activities such as disaster drills and tree planting.

Governance Achievements

• Implemented a fair and equitable procurement process.
• Established an improvement suggestion system.
• Regularly held shareholder meetings and provided transparent financial information.

Climate Goals & Targets

Environmental Challenges

• Maintaining consistent quality across global production facilities.
• Meeting evolving customer needs in a rapidly changing market.
• Ensuring employee safety and health across all operations.

Mitigation Strategies

• Implemented a global quality management system (ISO 9001 and ISO/TS16949).
• Developed the TAPS training program to enhance sales skills and customer service.
• Implemented various safety initiatives, including safety education, patrols, and hazard reporting.

Supply Chain Management

Supplier Audits: Annual assessment of suppliers based on a set of criteria.

Responsible Procurement

• Fair and equitable procurement practices, adherence to purchasing management regulations, supplier evaluation based on various factors including management, quality, technology, cost competitiveness, environmental initiatives, and 5S.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: ISO 9001, ISO/TS16949

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Renewable Energy
• Social Contribution through Product Development (Medical/Welfare)
• Energy Efficiency

Environmental Achievements

• Installed 28kW solar panels generating approximately 33,000 kWh annually.
• Reduced heavy oil consumption by approximately 18,500 liters (equivalent to 19 kℓ of energy) through compressor exhaust heat reuse.
• Developed a low-torque shaft unit for wind turbines, improving energy efficiency by 3 percentage points (from 25% to 28%).
• Utilized wind energy for factory parking lot lighting.

Social Achievements

• Developed and supplied SEED Solutions for a walking assist robot, improving rehabilitation effectiveness.
• Provided UGR linear guides for an electric wheelchair, enhancing tilting functionality and safety.
• Supplied syringe units for an automated blood cell counter, improving diagnostic accuracy and efficiency.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Lightweighting of walking assist robots.
• Scaling up small-scale water turbine technology to full scale.
• Initial failure in using coolant water for power generation.

Mitigation Strategies

• Continued research and development for lightweighting walking assist robots.
• Ongoing testing and development of small-scale water turbine technology.
• Exploring alternative methods for energy efficiency and renewable energy utilization.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and renewable energy solutions.

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 7 (Affordable and Clean Energy)
• SDG 3 (Good Health and Well-being)
• SDG 9 (Industry, Innovation and Infrastructure)

Initiatives contribute to these goals through renewable energy adoption, development of medical devices, and energy efficiency improvements.

Sustainable Products & Innovation

• Low-torque shaft unit for wind turbines
• SEED Solutions for walking assist robots
• Customized syringe units for medical equipment

Awards & Recognition

• 2013 Global Niche Top 100 (by Ministry of Economy, Trade and Industry)

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced CO2 emissions by 5.9% (from 162,460 t-CO2 to 152,929 t-CO2)
• Reduced PRTR substance use from 38,293 kg in 2019 to 37,962 kg in 2020
• Achieved an emissions rate (volume of waste disposed/total discharged) of 0.18% in 2020, reaching the annual target of less than 0.50%

Social Achievements

• Launched the THK Education Outreach Program
• Developed contactless robots (thermometric robot, transfer robot, autonomously moving digital signage) in response to the COVID-19 pandemic
• Implemented several systems to create a more accommodating workplace, including a rehiring program

Governance Achievements

• Established the THK Group Human Rights Policy
• Strengthened governance with a committee structure including a Board of Executive Officers, a Global Management Strategy Meeting, and a Compliance Committee
• More than one-third of the Board of Directors comprises independent outside directors

Climate Goals & Targets

Environmental Challenges

• Coronavirus pandemic impacting revenue, sales, and production activities
• Supply chain disruptions
• Economic downturn

Mitigation Strategies

• Established a coronavirus response task force
• Transitioned to virtual sales activities and technical meetings
• Developed contactless products and services
• Implemented remote work and other safety measures

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Green Procurement Guidelines
• Act against Delay in Payment of Sub-contract Proceeds, Etc. to Subcontractors

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of products for renewable energy field

Reporting Standards

Frameworks Used: GRI Standards, Ministry of the Environment’s “Environmental Reporting Guidelines” (2018)

Certifications: ISO 14001, ISO 9001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• 3 Good health and well-being
• 7 Affordable and clean energy
• 9 Industry, innovation, and infrastructure
• 11 Sustainable cities and communities
• 8 Decent work and economic growth
• 12 Responsible consumption and production
• 13 Climate action

THK's activities contribute to these SDGs through various initiatives such as BCP implementation, development of renewable energy products, energy conservation, waste reduction, and employee well-being programs.

Sustainable Products & Innovation

• Products for renewable energy field
• Seismic isolation systems
• Contactless robots

Awards & Recognition

• Selected for Global Niche Top Companies Selection 100 program
• Selected as a “Noteworthy DX Company” for 2020

Environmental Metrics

ESG Focus Areas

• Creating an affluent society and solving social issues through innovation
• Decarbonization and realization of a recycling-oriented society
• Realization of a diverse and meaningful work environment
• Strengthening of a sustainable value creation platform

Environmental Achievements

• 3% reduction in CO2 emissions compared to 2018 (THK Japan and Group companies in Japan)
• 18% reduction in CO2 emissions compared to 2018 (THK Japan's distribution departments)
• 49% increase in solar power generation compared to 2021 (six facilities)
• Annual CO2 reduction of 540 tons/year (Yamagata plant hot water boiler transition)
• Approximately 80% reduction in CO2 emissions compared to gasoline vehicle (single-seat electric vehicle introduction)

Social Achievements

• Established a Sustainability Committee
• Redefined material issues
• Information disclosures in line with TCFD recommendations
• Continued THK Education Outreach Program
• Launched EntSherpa (startup company support)

Governance Achievements

• Established a Sustainability Committee
• Established a Risk Management Committee
• Established a Compliance Committee
• Expanded the outside director system to include five members, welcoming Junko Kai as the first female director
• Introduced an executive officer system

Climate Goals & Targets

Environmental Challenges

• Global supply chain disruptions
• Increased procurement costs due to carbon taxes
• Increased operating costs due to carbon taxes
• Increased energy procurement costs due to renewable energy transition
• Supply chain interruptions due to disasters
• Rising temperatures increasing air conditioning costs
• Intense competition to secure excellent talent
• Worsened labor/management relations
• Major quality incidents
• Worsened supplier quality
• Stricter environmental regulations
• Major environmental incidents
• Increased interest rates

Mitigation Strategies

• Strengthened value chain using a diversified approach
• Reduced raw material input
• Switched to raw materials with low carbon taxes
• Developed energy-saving production technology
• Transitioned to low-carbon, non-fossil fuel energy
• Procured renewable energy internally by installing solar power generation systems
• Strengthened provision of THK products that contribute to energy savings
• Established a development, production, and sales structure that can respond promptly and flexibly
• Expanded IoT services that boost productivity
• Decentralized raw material suppliers
• Secured alternative suppliers
• Improved heat insulation performance of buildings
• Creating a work environment that welcomes diverse talent
• Training program that utilizes e-learning
• Creating an environment where women can thrive
• Talent development program
• Various benefit programs
• Conducting supplier quality audits
• Obtained ISO 9001, JIS Q 9100, and IATF 16949 certification
• Distributed the THK Green Procurement Guidelines
• Obtained ISO 14001 certification
• Complying with RoHS Directive, REACH Regulation, and PRTR Law
• Developing products related to renewable energy
• Developing products to achieve carbon neutrality
• Derivative transactions such as interest rate swaps

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Distributed THK Green Procurement Guidelines
• Supplier audits
• Developing new technology through quarterly THK Association idea exchanges and VA proposals
• Expanding our global procurement network
• Promoting recycling and reusing

Climate-Related Risks & Opportunities

Physical Risks

• Serious damage from weather-related disasters

Transition Risks

• Introduction of carbon taxes
• Change to renewable energy
• Increased demand for environmentally friendly technology solutions
• Increased need for energy savings

Opportunities

• Increased business opportunities in semiconductors
• Increased demand for failure diagnosis/predictive failure detection service
• Advancement of electric vehicles
• Expansion of environmental business
• Increased ESG investment

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, Guidance for Integrated Corporate Disclosure and Company-Investor Dialogue for Collaborative Value Creation, GRI Standards

Certifications: ISO 14001, ISO 45001, ISO 9001, JIS Q 9100, IATF 16949

Third-party Assurance: Japan Quality Assurance Organization (limited assurance)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Low-Torque Shaft Unit
• Seismic isolation system
• SEED-Solutions service robots
• IoT service
• Aluminum products
• Electric actuators
• New ball screws for automotive applications

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Solving social issues through innovation
• Decarbonization and realization of a recycling-oriented society
• Realization of a diverse and meaningful work environment
• Strengthening of a sustainable value creation platform
• Quality and safety of products
• Climate change
• Sustainable procurement
• Recycling and conserving resources
• Managing harmful substances
• Respecting and considering human rights
• Promoting diversity
• Occupational health and safety
• Talent development
• Corporate governance
• Compliance
• Risk management
• Information security

Environmental Achievements

• Reduced CO2 emissions to 85,103 tons (20% reduction from 2018 baseline and 17% reduction from 2022)
• Increased solar power generation to 10,875 MWh (159% increase over 2022)
• Achieved zero emissions rate of 0.12%

Social Achievements

• Implemented online human rights training with 100% completion rate
• Achieved 95% completion rate for basic data utilization training
• Implemented various health and safety initiatives resulting in a severity rate of 0.00 and an incident rate of 1.22 (target: 0.01 and 0.50 respectively)

Governance Achievements

• Strengthened corporate governance through the establishment of an Audit and Supervisory Committee, a Nomination Advisory Committee, and a Remuneration Advisory Committee
• Implemented an executive officer system to clarify roles and responsibilities
• Conducted annual evaluations of the effectiveness of the Board of Directors

Climate Goals & Targets

Environmental Challenges

• Decreased demand in industrial machinery business due to global turmoil and delayed capital investment
• Higher cost-to-sales ratio due to decreased revenue
• Increased SG&A ratio due to growth measures
• Profitability of automotive and transportation business
• Geopolitical risks and supply chain disruptions
• Labor shortages
• Intense competition to secure excellent talent
• Major quality incidents
• Stricter environmental regulations
• Major environmental incidents
• Risks associated with information utilization

Mitigation Strategies

• Implementing growth strategies focused on full-scale globalization, development of new business areas, and change in business style
• Promoting DX and IoT services to improve productivity and reduce energy loss
• Developing new products for growing markets
• Strengthening cost competitiveness through automation and in-house sourcing
• Expanding sales network and production structure
• Implementing BCP measures
• Strengthening internal audits and internal controls
• Creating a work environment that welcomes diverse talent
• Conducting supplier quality audits
• Obtaining ISO certifications
• Developing products related to renewable energy
• Establishing an information security structure

Supply Chain Management

Supplier Audits: 7 companies visited in 2023

Responsible Procurement

• THK Group Supplier CSR Procurement Guidelines
• THK Green Procurement Guidelines
• VA proposals

Climate-Related Risks & Opportunities

Physical Risks

• Serious damage from weather-related disasters
• Rising temperatures increasing air conditioning costs

Transition Risks

• Increased procurement costs due to carbon taxes
• Increased energy procurement costs due to the change to renewable energy
• Supply chain interruptions due to supplier disasters

Opportunities

• Increased demand for energy savings solutions
• Increased business opportunities in semiconductors and electric vehicle components
• Increased ESG investment

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, Guidance for Integrated Corporate Disclosure and Company-Investor Dialogue for Collaborative Value Creation, GRI Standards

Certifications: ISO 9001, IATF 16949, JIS Q 9100, ISO 14001, ISO 45001, ISO 14064-3

Third-party Assurance: Japan Quality Assurance Organization (limited assurance)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• LM Guide with eight raceways
• Miniature LM Guide
• Wheel guides and utility slides
• SIGNAS autonomous transfer robot
• Products for electric vehicles
• Products for self-driving technology

Awards & Recognition

• 2022 Workplace Excellence Encouragement Award
• Award from the Ogaki Labor Standards Inspection Office