Climate Change Data

Environmental Metrics

ESG Focus Areas

• Stable energy supply
• Robust energy platform
• Decarbonization
• Lively organization
• Stakeholder relationships
• Public mission

Environmental Achievements

• Reduced CO2 emissions at customer sites by 4.52 million tons from FY2011 levels
• Achieved 96% recycling rate of industrial waste
• Reduced energy usage intensity at LNG terminals to 210 GJ/million m3
• 100% recycling rate of used gas pipes since 1999
• Received Japan's first carbon-neutral LNG cargo

Social Achievements

• 100% of employees who took parental leave returned to work
• Increased ratio of women in management to 8.0% in 2019
• Organized 47 relief volunteer activities related to the Great East Japan Earthquake, with 2,100 participants
• Dispatched 1,200 personnel to support Osaka earthquake recovery

Governance Achievements

• Established Sustainability Committee chaired by the president
• Board of Directors composed of nine directors, including four outside directors (two women)
• Implemented e-learning on CSR and environment for 9,652 employees

Climate Goals & Targets

Environmental Challenges

• Intensified competition in the gas and electricity business
• Decreasing domestic energy demand
• Climate change impacts on infrastructure and supply chain
• Aging gas pipes and other facilities

Mitigation Strategies

• Diversifying LNG procurement sources, contract conditions, and networks
• Improving operational processes and boosting productivity
• Earthquake-proofing of gas pipelines and facilities
• Developing Smart Energy Networks (SENs)
• Replacing aging pipes and equipment
• Implementing business continuity plans (BCPs)

Supply Chain Management

Supplier Audits: 509 suppliers surveyed (89.2% response rate)

Responsible Procurement

• Purchasing Guidelines for Suppliers
• Green Purchasing Promotion Guidebook
• Specifications for Common Environmental Management

Climate-Related Risks & Opportunities

Physical Risks

• Localized torrential downpours
• Storm surges
• Flooding

Transition Risks

• Emissions trading systems
• Carbon taxes
• Regulations on fossil fuel use

Opportunities

• Development of energy-efficient products and services
• Expansion of renewable energy business

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards 2016/2018, ISO 26000:2010, UN Global Compact

Certifications: ISO 14001

Third-party Assurance: KPMG AZSA Sustainability Co., Ltd.

UN Sustainable Development Goals

• Goal 7: Affordable and clean energy
• Goal 9: Industry, innovation and infrastructure
• Goal 11: Sustainable cities and communities
• Goal 13: Climate action
• Goal 5: Gender equality
• Goal 8: Decent work and economic growth
• Goal 10: Reduced inequalities
• Goal 16: Peace, justice and strong institutions
• Goal 17: Partnerships for the goals

Initiatives contribute to these goals through stable energy supply, infrastructure development, decarbonization efforts, promotion of diversity and inclusion, work-life balance programs, and community engagement.

Sustainable Products & Innovation

• ENE-FARM residential fuel cell
• Eco-JOES water heater
• GHP XAIR II gas heat pump air conditioner
• Smart Multi hybrid air conditioning system

Awards & Recognition

• Development Bank of Japan's Environmentally Rated Loan Program (highest rating)
• Energy Conservation Grand Prize Awards
• Environment Minister's Award for Global Warming Prevention Activity
• Kurumin certification
• Eruboshi Certification
• Nadeshiko Brand company

Environmental Metrics

ESG Focus Areas

• Gambling addiction countermeasures
• Supply chain management (child labor, forced labor, hazardous chemicals)
• Corporate governance
• Environmental responsibility (3Rs)
• Social responsibility (minor protection)

Environmental Achievements

• Promoting the use of water-based adhesives with less environmental impact
• Committed to the “3Rs” (Reduce, reuse and recycle) throughout all business processes
• Reuse initiatives in the Pachislot and Pachinko Machines Business

Social Achievements

• Age authentication for certain digital game titles to set upper limits on monthly fees
• Established and implemented in-house guidelines to avoid vague terms that can give players overly high expectations and to prevent the charging of excessive fees
• Industry–academia joint research with Kyoto University on gambling addiction prevention
• Supply chain management in accordance with principles such as the elimination of child labor and forced labor

Governance Achievements

• Strengthening corporate governance by consolidating internal audit and control functions at the holding company
• Consolidation of Group companies’ head office functions
• Overall revision of the system for the compensation of directors
• Introduction of a stock compensation plan with restriction of transfer

Climate Goals & Targets

Environmental Challenges

• Regulatory revision in February 2018 significantly affected the marketability and unit sales of pachislot and pachinko machines (low approval rates)
• Lack of hit titles in the Digital Games area
• Stagnation of existing titles in the Digital Games area
• Intensified competition in the Japanese digital games market
• Social problems associated with minors who incur excessive fees when playing games based on the Gacha system
• Gaming disorder (addiction)

Mitigation Strategies

• Improving approval rates by applying for multiple specifications for both pachislot and pachinko machines
• Developing pachislot machines reflecting market trends
• Investing resources in focusing areas such as overseas packaged games
• Shifting outsourced work on existing titles to insourcing
• Optimizing the number of titles under development and operation in the Digital Games area
• Concentrating resources on areas of strength in the Entertainment Contents Business
• Strengthening collaborations with studios in respective countries
• Bolstering and improving the profitability of mobile games
• Age authentication and in-house guidelines to avoid excessive fees in digital games
• Industry–academia joint research with Kyoto University on gambling addiction prevention

Supply Chain Management

Responsible Procurement

• Supply Chain Procurement Guidebook
• Group Code of Conduct
• AM Material Procurement Policy
• Standards for Chemical Substances in Sega machines and Products

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environment
• Addiction
• People
• Products and Services
• Governance

Environmental Achievements

• Game machine recycling ratio: 98.6%
• 100% recycling of amusement machines through manual dismantling
• Purchase of Green Power Certificates (1,000,000 kWh actual/year)
• Sponsorship of the Yokohama City Wind-Power Electricity Generation Project (completed in September 2021)
• Signing of Mori no Sato-Oya (adopt-a-forest) agreement with the village of Minamiaiki in Minamisaku-gun, Nagano Prefecture
• Management, protection, and cultivation of black pine on the Seagaia property (Approx. 2,417,000m2)
• Transition to fully recyclable packaging materials for all PC packages (Sega Europe Ltd.)
• 100% Use of Environment-Friendly Timber (Sammy Kawagoe Factory)

Social Achievements

• Joined the Valuable 500—an international initiative to promote an active role in society for people with disabilities.
• Introduced a color adjustment function in SEGA’s Puyo Puyo eSports to facilitate use by people with color vision deficiency.
• Participated in ePARA 2020, a barrier-free esports competition.
• Grand opening of Dance Base Yokohama.
• Opened a Tokyo office for SEGA SAMMY BUSINESS SUPPORT to create new employment opportunities.
• Established the Sports Darts Project.
• Co-hosted the 2020 Art of The Rough Diamonds, an exhibition and auction of art created by people with disabilities.
• Raised awareness through e-learning programs, lectures, and other activities designed to improve understanding about LGBT issues.
• Selected for the highest “Gold” rating for the second consecutive year under the PRIDE INDEX.
• Released a message regarding anti-Asian hate crimes through Sega of America’s social media platform.
• Partnership with Shinagawa City
• Comprehensive Partnership Agreement with Shichigahama-machi
• Special Programming Classes for elementary school students in Shinagawa City using Puyo Puyo
• Voluntary Flowerbed Maintenance Activities by employees

Governance Achievements

• Compliance with the corporate governance code, establishment of the Independent Advisory Committee and Management Strategy Committee
• Management of the Group Compliance and Risk Liaison Committee, promotion of training for SEGA SAMMY HOLDINGS Executives
• Reporting to the Board of Directors about the assimilation of the Group Missions and Code of Conduct
• Implementation of various training programs at 18 Group companies (e-learning already introduced)
• Establishment of the Corporate Ethics Hotline

Climate Goals & Targets

Environmental Challenges

• Gaming disorders
• Addiction to Pachinko and Pachislot games
• Gambling addiction
• Environmental impact caused by business activities
• Global environmental resources
• Regulatory restrictions
• Countermeasures against fraud
• COVID-19 pandemic

Mitigation Strategies

• Implementing countermeasures for user safety and enjoyment
• Development and increased supply of low power consumption products
• Development and commercialization of Eco-Pachinko machines
• Establishment of a system for tracking environmental impact figures at 11 major Group companies
• Responding to regulatory restrictions, countermeasures against fraud
• Joint research with Kyoto University on gambling addiction
• Workstyle reforms (e.g., modification of the flextime system, introduction of tests for teleworking allowances, promotion of subsidiary employment and teleworking)
• Introduction of electronic contract systems
• Adoption of workstyles that combine remote and onsite work
• Formulation of the SEGA SAMMY Group Crisis Management Rules
• Workplace vaccination program

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Exclusion of antisocial forces in contracts with suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI

Certifications: PEFC

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Eco-Pachinko machines
• Low power consumption products

Awards & Recognition

• Gold rating in PRIDE Index (2 consecutive years)
• 2020 Good Design Award (Dance Base Yokohama)

Environmental Metrics

ESG Focus Areas

• Sustainability
• Social Commitment
• Governance
• Environmental Efforts
• Well-being
• Diversity
• Risk Management
• Climate Change
• SDGs

Environmental Achievements

• Received the Grand Prize (the MLIT Award) in the Disaster Prevention and Disaster Alleviation Category of the 2nd Green Infrastructure Awards for the Oya coastal seawall project.
• Developing an acoustic survey using AI to identify water infiltration points in sewer pipes, reducing research costs and improving safety.

Social Achievements

• Launched the CTI Engineering Well-Being Declaration to ensure employee well-being.
• Received the Two-Star Eruboshi certification for promoting female participation.
• Implemented Initial Professional Development (IPD) for young engineers.
• Engaged in community-based neighborhood creation activities in Nihonbashi Hamacho.
• Provided CTi Mobi, a mobility service for on-demand ride sharing.

Governance Achievements

• Established a Code of Corporate Conduct and Basic Policy on Corporate Governance.
• Revised the Compliance Regulations and Regulations on Whistleblowing Procedures.
• Implemented various compliance training programs.
• Established the Energy Business Promotion Office to develop energy-related businesses.

Climate Goals & Targets

Environmental Challenges

• Reducing work hours and addressing work style issues.
• Expanding into local governments and private markets.
• Developing business in accordance with the needs of each country (overseas).
• Addressing climate change and the natural environment.
• Developing infrastructure to revitalize communities.
• Addressing energy issues such as carbon neutrality.
• Human resource recruitment and development.
• Expanding overseas business, including employing overseas engineers and responding to social conditions in target countries.
• Exchange rate fluctuation risks in overseas operations.

Mitigation Strategies

• Developed a new mid- to long-term vision (SPRONG 2030) and mid-term management plan (2024).
• Promoting cooperation among Group companies.
• Improving profitability through quality system upgrades and active support from CTI Engineering.
• Strengthening Group governance and compliance.
• Implementing measures to solve social issues, as embodied by the SDGs.
• Promoting work style reforms, including home working.
• Investing in productivity-enhancing technologies utilizing DX.
• Investing in human resource development, including overseas secondment training.
• Promoting collaboration and cooperation among technical sectors.

Supply Chain Management

Responsible Procurement

• Proper Outsourcing Administration

Climate-Related Risks & Opportunities

Physical Risks

• Heavy rain disasters

Opportunities

• Renewable energy business
• Green infrastructure development

Reporting Standards

Frameworks Used: International Integrated Reporting Council (IIRC)

Certifications: Two-Star Eruboshi certification

Sustainable Products & Innovation

• CTi Mobi
• Laser hammering system
• Acoustic AI analysis technology

Awards & Recognition

• Grand Prize (MLIT Award) in the 2nd Green Infrastructure Awards
• Special Award, Fifth Infrastructure Maintenance Awards
• Chairman’s Prize, 2020 New Energy Awards
• 2019 Book of the Year Award from the Japan Society of Dam Engineers

Environmental Metrics

ESG Focus Areas

• Climate change mitigation and adaptation
• Achievement of a circular economy
• Safety and security of people and local communities
• Realization of healthy and comfortable living for people
• Further strengthening of our sustainable management base

Environmental Achievements

• 11% reduction in Group CO2 emissions compared with fiscal 2018
• 11% reduction in supply chain CO2 emissions compared with fiscal 2018
• Developed technologies for recovering and recycling end-products created through the use of Twaron to produce partly regenerated fibers

Social Achievements

• Increased the number of female managers by approximately 1.5 times between fiscal 2019 and fiscal 2023
• Launched a new portable oxygen concentrator that is one of the lightest models in Japan
• Developed VitalLink, a multidisciplinary information sharing system

Governance Achievements

• Revised officer compensation system, introducing “restricted stock” and “performance share units” compensation
• Raised the ratio of independent outside directors on the Board to 50%
• Transferred the CEO nomination and compensation advisory function from the Advisory Board to the Nomination Advisory Committee or Compensation Advisory Committee

Climate Goals & Targets

Environmental Challenges

• Significant decline in profitability due to cost increases and failure to reach targeted production volumes
• Delays in realizing profitability in the carbon fibers business due to declining aircraft demand
• Inability to eliminate shortages in our product pipeline in the Healthcare Business Field
• Decline in sales volume of FEBURIC following the market entry of generic alternatives
• Significant delays in the development of applications for next-generation aircraft

Mitigation Strategies

• Implementing roughly 130 newly formulated improvement measures in the areas of sales, procurement, and production in the composites business
• Improving productivity and enhancing profits through increased production and sales in the aramid business
• Promoting the transition to a business structure focused on rare diseases and intractable diseases in the healthcare business
• Strengthening financial discipline and improving capital efficiency
• Reorganizing our executive officer structure and clarifying the respective duties and responsibilities

Supply Chain Management

Supplier Audits: 842 companies surveyed out of 1,706

Responsible Procurement

• Teijin Group CSR Procurement Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Increased intensity of natural disasters
• Long-term temperature increases
• Rising sea levels

Transition Risks

• Increase in costs due to carbon tax, EU Emissions Trading Scheme
• Decrease in corporate value and worsening of reputation due to an increase in Group CO2 emissions

Opportunities

• Provision of solutions that leverage lightweight and energy-efficient technologies
• Provision of solutions that help reduce damage and facilitate a prompt recovery in the event of a natural disaster
• Increase in profits through the provision of solutions that contribute to “climate change mitigation and adaptation”

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC

Sustainable Products & Innovation

• Lightweight solutions
• Regenerative medical products
• Recycled polyester
• Bio-based material

Environmental Metrics

ESG Focus Areas

• Quality of Life Improvement through Innovative Technology Services
• Regional Revitalization
• Culture, the Arts, Design
• All-Inclusive Human Resources
• Environment

Environmental Achievements

• CO2 emissions (Scope 1 and 2) down 50.7% from 2019
• CO2 emissions (Scope 3) down 45.9% from 2019
• Water consumption down 25.7% from 2019
• 28.6% of the Group’s products switched to sustainable designs

Social Achievements

• Launched POLA Premium Pass, integrating customer IDs from all sales channels
• ORBIS app has over 5 million downloads
• Received the highest-ranking “Best Workplace” certification at D&I AWARD 2023
• Jurlique received “B Corporation” certification

Governance Achievements

• New management structure implemented in 2023
• Established a regional headquarters for operations in mainland China in January 2024
• Linked the degree of success in five performance indicators to management targets and medium- to long-term incentive evaluation criteria for executive compensation, starting in 2024.

Climate Goals & Targets

Environmental Challenges

• Lingering pandemic-related issues significantly impacted operations
• Mainland China experienced a sharp decline in purchasing momentum
• Growing overseas businesses’ profitability remains a huge issue
• Jurlique still needs to address some issues to return to profitability
• Competition between domestic and overseas brands remains intense

Mitigation Strategies

• Invested robustly in marketing activities to rebuild customer base and promote OMO
• Established a regional headquarters in Shanghai to oversee business in mainland China
• Revised outlook for the Chinese market, assuming more gradual growth
• Accelerating expansion of business in ASEAN region and North America
• Restructuring efforts at Jurlique
• Review of brand portfolio for brands under development

Supply Chain Management

Supplier Audits: On-site factory audits at particularly important suppliers were conducted.

Responsible Procurement

• CSR procurement guidelines provided to business partners
• Emphasis on CSR procurement and purchase of certified palm oil
• RSPO supply chain certification acquired at Fukuroi Factory
• Goal of 100% RSPO-certified palm oil procurement by 2029

Climate-Related Risks & Opportunities

Physical Risks

• Damage to supply chains from worsening extreme weather events
• Higher costs due to rising raw material prices as a result of environmental changes

Transition Risks

• Higher costs due to tighter GHG emissions regulations or the introduction of carbon pricing
• Higher costs for research and development of alternative materials due to regulations on plastic
• Decreased sales due to inability to adapt to shifts in customer demand

Opportunities

• Cost reductions through the establishment of a recycling-based model
• Cost reductions through energy conservation and DX
• Increased sales due to development and sale of products to address growing skin concerns
• New demand arising from changes in consumer preferences

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IIRC), Guidance for Integrated Corporate Disclosure and Company-Investor Dialogues for Collaborative Value Creation (METI)

Certifications: ISO 9001, ISO 14001, B Corporation (Jurlique), SBT 1.5°C by 2029

Sustainable Products & Innovation

• Refills
• Biomass plastic
• Recycled plastic
• Eco-friendly materials

Awards & Recognition

• Best IR Award (2015, 2017)
• CDP Climate Change A List (three consecutive years)
• Supplier Engagement Leader (three consecutive years)
• GOLD Impact Prize (Wellbeing Awards 2023)
• D&I AWARD 2023: Best Workplace
• Numerous best cosmetics awards for various products