Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Rights
• Quality Management
• Corporate Governance
• Supply Chain Management
• Local Communities

Environmental Achievements

• 41.9% reduction in CO2 emissions (compared with fiscal 2013)
• Recycling rate of 95.2% (excluding slag and refractories)
• 5.3% renewable energy use in fiscal 2022

Social Achievements

• Established The Japan Steel Works Group Human Rights Policy
• Increased number of employees who took childcare leave (11 in 2020, 16 in 2021, 34 in 2022)
• Various initiatives to improve employee health and safety, resulting in a low accident frequency rate

Governance Achievements

• Established ESG Promotion Committee (April 2021) and ESG Promotion Office (April 2022)
• Increased percentage of outside directors on the Board of Directors to 44.4%
• Implemented measures to prevent recurrence of inappropriate conduct at Japan Steel Works M&E, Inc.

Climate Goals & Targets

Environmental Challenges

• Inappropriate conduct in quality inspections at Japan Steel Works M&E, Inc.
• Relatively low percentage of female employees and managers
• Addressing climate change risks and opportunities
• Strengthening Group governance at overseas subsidiaries

Mitigation Strategies

• Implemented comprehensive measures to prevent recurrence of inappropriate conduct, including system, culture, process, and governance reforms
• Initiatives to promote diversity and inclusion, including targeted recruitment and support programs for women
• Setting CO2 emission reduction targets and promoting renewable energy use
• Strengthening internal controls and risk management systems

Supply Chain Management

Supplier Audits: CSR Procurement Survey initiated in fiscal 2023

Responsible Procurement

• The Japan Steel Works Group Basic Procurement Policy
• Request to Business Partners

Climate-Related Risks & Opportunities

Transition Risks

• Imposition of a carbon tax
• Introduction of border adjustment tax
• Decreased demand for thermal power-related products

Opportunities

• Increased demand for renewable energy power generation
• Expansion of the EV market
• Expansion of power electronics market and 5G infrastructure market
• Response to the demand for nuclear power plants

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 14001, ISO 45001

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Rights
• Governance
• Supply Chain Management
• Occupational Health and Safety

Environmental Achievements

• 43.4% reduction in CO2 emissions (compared with FY2013)
• Recycling rate of 95.3% (excluding slag and refractories) in Industrial Machinery Products Business
• Recycling rate of 65.9% in Material and Engineering Business
• Increased the percentage of electricity generated from renewable energy sources to 30% of Scope 2 at the Hiroshima Plant, 23% at the Yokohama Plant, and 20% at the Meiki Plant.

Social Achievements

• Implemented measures to prevent recurrence of inappropriate conduct in product quality inspections at Japan Steel Works M&E
• Launched Organizational Culture Reform Project
• Increased percentage of female new graduate hires for career-track positions to 25%
• Established a new recruitment path for new graduates in fiscal 2024 called the “passionate recruitment course”

Governance Achievements

• Formulated a new medium-term management plan, JGP2028
• Established ESG Promotion Committee and ESG Promotion Office
• Increased the number of outside directors on the Board of Directors to five
• Appointed one female outside director and one female outside Audit & Supervisory Board member
• Introduced a leniency system within the whistleblowing system

Climate Goals & Targets

Environmental Challenges

• Inappropriate conduct in product quality inspections at Japan Steel Works M&E
• Relatively low percentage of female employees and managers
• Need to strengthen middle management
• Need to improve profitability for products with high market value and high technical capability
• Maintaining the same business structure will increase amortization costs

Mitigation Strategies

• Formulated measures to prevent recurrence of inappropriate conduct, including Quality Assurance System Reform, Organizational Culture Reform, Process Reform, and Governance Reform
• Implementing initiatives to increase the ratio of women in new graduate and mid-career hires, creating dialogue opportunities between management and female employees
• Strengthening middle management through various HR systems and training
• Improving profitability through business transformation and leveraging JSW’s negotiating power
• Boosting competitiveness through business transformation and focusing resources through “selection and concentration”

Supply Chain Management

Supplier Audits: 40 suppliers surveyed in FY2023 (covering over 34% of the order amount)

Responsible Procurement

• The Japan Steel Works Group Standards of Business Conduct
• The Japan Steel Works Group Human Rights Policy
• The Japan Steel Works Group Basic Procurement Policy
• Request to Business Partners

Climate-Related Risks & Opportunities

Transition Risks

• Policies and regulations (carbon tax, border adjustment tax)
• Technology (cost of switching fuels)
• Markets (decrease in demand for products)

Opportunities

• Markets (expansion of EV market, power electronics market, 5G infrastructure market)
• Energy sources (increased demand for renewable energy power generation)
• Resource efficiency (tax relief after the introduction of carbon pricing)
• Products and services (expansion of products and services that contribute to the demand for the reduction of CO2 emissions)

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 14001, ISO 45001