Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance
• Supply Chain Responsibility
• Safety and Health

Environmental Achievements

• Reduced CO2 emissions by 16% compared to FY2013 levels.
• Achieved a 95.7% water recycling rate.
• Achieved a 99.3% by-product recycling rate.
• Launched Kobenable Steel, a low-CO2 blast furnace steel product.

Social Achievements

• Increased percentage of women in new graduate hires.
• Increased percentage of male employees taking special leave for childcare.
• Reduced overtime hours.
• Improved employee training hours.

Governance Achievements

• Strengthened the monitoring function of the Board of Directors.
• Established various committees to promote cross-organizational discussions.
• Implemented KOBELCO Total Quality Management (TQM) activities.

Climate Goals & Targets

Environmental Challenges

• Soaring commodity and energy prices.
• Supply chain disruptions.
• Yen weakness.
• Intensified price competition from Chinese manufacturers.
• Declining demand for steel products in Japan.
• Shift to EVs.
• Climate change related risks (physical and transition).

Mitigation Strategies

• Passing on increased procurement costs to selling prices.
• Streamlining businesses and restructuring unprofitable businesses.
• Promoting DX and automation.
• Developing alternative sourcing strategies.
• Implementing CO2 reduction initiatives (MIDREX® Process, Kobenable Steel).
• Strengthening risk management systems.
• Developing new businesses and solutions (e.g., hydrogen gas supply system, K-DIVE CONCEPT).

Supply Chain Management

Supplier Audits: Survey of 330 major suppliers (82% response rate)

Responsible Procurement

• Compliance with laws, regulations, and social norms.
• Fair and impartial transactions.
• Coexistence with the global environment.
• Strengthening partnerships with business partners.
• Management of confidential information.

Climate-Related Risks & Opportunities

Physical Risks

• Floods
• Typhoons
• Rising sea levels

Transition Risks

• Stricter environmental regulations
• Carbon pricing schemes

Opportunities

• Growing demand for low-CO2 products and services
• Expansion of MIDREX® Process

Reporting Standards

Frameworks Used: GRI Standards, ISO 26000, IIRC Framework, METI Guidelines, UN Global Compact, SDGs, TCFD Recommendations

Certifications: Platinum Kurumin, Gold award in PRIDE Index

Sustainable Products & Innovation

• Kobenable Steel
• MIDREX® Process
• Heat pumps
• Fuel-efficient construction machinery
• Nano-carbon composite coat (NC) titanium

Awards & Recognition

• METI Minister’s Award for NC titanium development
• Gold in PRIDE Index

Environmental Metrics

ESG Focus Areas

• Climate Change
• Resource Recycling
• Safety and Security
• Human Resources
• Responsible Supply Chains
• Social Contribution
• Governance

Environmental Achievements

• Reduced CO2 emissions in production processes by 20% compared to fiscal 2013 (15.6 million tons in FY2023)
• Contributed to a 61.2 million tons reduction in CO2 emissions through technologies, products, and services in FY2023
• Reduced CO2 emissions by 25% in aluminum rolled product production compared to conventional methods
• Established Closed Loop Recycling (CLR) for Automotive Panel Materials in China

Social Achievements

• Improved employee engagement, with positive response rates to questions on the Group Corporate Philosophy increasing to 80% in 2024
• Increased percentage of women in new graduate hires for career-track positions (44% in FY2023)
• Implemented various D&I initiatives, including a Kobelco Group D&I forum and Universal Manners Test
• Improved safety and health, reducing LTIFR to 0.31 in FY2023 (target 0.10)
• Invested approximately 60 billion yen to improve the work environment

Governance Achievements

• Established Sustainability Management Meetings to strengthen the Board’s monitoring function
• Introduced ESG indicators for director and executive officer remuneration
• Increased the number of female directors to 3 out of 13

Climate Goals & Targets

Environmental Challenges

• Achieving carbon neutrality by 2050
• Reducing Scope 3 emissions in aluminum production
• Maintaining a low LTIFR
• Improving employee turnover rate

Mitigation Strategies

• Investing in technologies to reduce CO2 emissions in production processes (e.g., MIDREX® Process)
• Implementing initiatives to increase the use of recycled aluminum and low-CO2 aluminum ingots
• Conducting safety audits and implementing safety and health DX efforts
• Investing in improving the work environment and employee engagement initiatives

Supply Chain Management

Supplier Audits: Safety and health audits of 55 locations (28 domestic and 27 overseas) planned for fiscal 2024-2026; Human rights due diligence efforts enhanced

Responsible Procurement

• Kobelco Group’s Basic Policy on Human Rights and Basic Policy on CSR Procurement
• Distribution of a guidebook for supporting human rights-related improvements to business partners

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD, TNFD, UNGC

Certifications: 2024 White 500 Health and Productivity Management Organization

Sustainable Products & Innovation

• Low-CO2 aluminum rolled products
• Explosion-resistant containers for unexploded ordnance disposal

Awards & Recognition

• CDP Climate Change category A-
• Gold Award