Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental impact reduction
• Human rights
• Supply chain CSR
• Diversity
• Governance

Environmental Achievements

• Reduced CO2 emissions by 21.2% compared to fiscal year ended March 31, 1998 (Scopes 1 and 2)
• Reduced CO2 emissions intensity by 1.2% compared to fiscal year ended March 31, 2015 (Scopes 1 and 2)
• Achieved 99.8% minimum recycling rate
• Installed solar panels at NTN-SNR Cevennes plant, reducing annual CO2 emissions by about 500 metric tons
• NTN Noto Corporation installed energy-saving heat treatment equipment, reducing annual power consumption by about 1.1 million kWh/year

Social Achievements

• Increased number of women in management positions to 32 (NTN only)
• Opened a second intra-company child daycare center (Bear Kids Land) at Kuwana
• Established three “Dream Workshops” for employees with intellectual disabilities
• Achieved a 62% rehiring rate for retired seniors
• Reduced the number of workplace incidents causing lost work time

Governance Achievements

• Established a new corporate philosophy system and NTN Spirit code of conduct
• Increased transparency and objectivity of director and executive officer compensation with a Compensation Advisory Committee
• Strengthened internal control worldwide
• Implemented BCP (Business Continuity Planning) and BCM (Business Continuity Management)
• Endorsed the United Nations Global Compact

Climate Goals & Targets

Environmental Challenges

• Leakage of confidential information
• Computer virus/cyberterrorism
• Violation of Anti-Monopoly Act
• Natural disaster
• Fire disaster/explosion
• Issue of human rights
• Industrial accident
• Complaint about product quality
• Violation of bribery-related laws
• Dependence on specific industries (automotive)
• Declines in market prices
• Rise in raw materials prices
• Foreign exchange fluctuations
• Product defects
• Global operations risks
• Intellectual property infringement
• Statutory regulations
• Disasters and accidents

Mitigation Strategies

• Established and properly operated compliance rules
• Improved employee work-life balance
• Improved information security management
• Clarified initial response procedures for disasters
• Ensured use of conflict-free materials
• Implemented policies to achieve a balanced sales structure
• Implemented measures to deal with cost increases of steel materials
• Implemented exchange rate hedges
• Enforced quality assurance globally
• Monitored management of Global Risks
• Implemented BCP/BCM systems
• Strengthened global procurement functions

Supply Chain Management

Supplier Audits: 293 business partners surveyed on conflict minerals, CSR procurement activities, subcontracting self-audits at 21 domestic bases

Responsible Procurement

• NTN Group Green Procurement Standards
• NTN CSR Procurement Guidelines
• Conflict minerals survey
• Subcontracting self-auditor system

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters (earthquakes, floods, fires)

Transition Risks

• Stricter global environmental regulations
• Rise of renewable energy industry

Opportunities

• Development of energy-efficient products
• Growth of renewable energy industry

Reporting Standards

Frameworks Used: UN Global Compact

Certifications: ISO 9001, IATF 16949, ISO 14001, ISO 45001

Third-party Assurance: SGS Japan

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)

NTN's initiatives contribute to these goals through energy-efficient products, sustainable manufacturing practices, and support for renewable energy

Sustainable Products & Innovation

• Low-Friction Hub Bearing II
• Asymmetrical Spherical Roller Bearings for Wind Turbine Main Shafts
• NTN Micro Hydro Turbine
• NTN Hybrid Street Light
• Electric Motor and Actuators
• eHUB
• sHUB
• i-WRIST

Awards & Recognition

• CHO MONOZUKURI Innovative Parts and Components Awards (ULTAGE Tapered Roller Bearings)

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced CO2 emissions intensity by 4.8% compared to fiscal year ended March 31, 2011 (Japan)
• Reduced CO2 emissions intensity by 5.4% compared to fiscal year ended March 31, 2011 (Overseas)
• Maintained 99% reduction in Styrofoam compared to fiscal year ended March 31, 2000 (Japan)
• Achieved 97.4% recycling rate (Japan)
• Achieved 98.6% recycling rate (Overseas)
• Received Nikkei Global Environmental Technology Award for NTN Micro Hydro Turbine

Social Achievements

• Launched NTN Rotating School, a mobile environmental education program for children
• Increased percentage of hired female graduates to 16%
• Achieved 90% post-retirement rehiring rate (NTN only)
• Improved employee satisfaction survey responses to 95% 'Excellent' or 'Good'

Governance Achievements

• Transitioned from a Company with Board of Company Auditors to a Company with Nominating Committee, etc.
• Increased the number of Outside Directors from 2 to 5
• Established the Compensation Committee

Climate Goals & Targets

Environmental Challenges

• Declining return on investment in domestic production
• Increased expenses in the head office in Japan
• Increased prices of steel and supplementary materials
• U.S.-China trade frictions
• Demand decline in Europe due to new fuel efficiency measurement standards
• Shrinking working-age population in Japan
• Intensifying competition due to commoditization of bearings and influx of low-priced products
• Low brand recognition in some overseas regions for aftermarket business

Mitigation Strategies

• Accelerated structural reforms in manufacturing divisions in Japan
• Expanded outsourcing of pre-manufacturing processes
• Promoted variable cost reformation
• Restructured production of radial bearings, focusing on high-performance products
• Increased investment in regions with significant growth potential (ASEAN countries and India)
• Introduced a new core IT system to improve IT governance, information security, and supply chain management
• Strengthened supply system by minimizing the gap between demand forecasts and production arrangements
• Expanded the use of products manufactured in Italy, Germany, Canada, and Taiwan for aftermarket business
• Enhanced technical services and improved product quality for aftermarket business
• Consolidated domestic branch of Aftermarket Business Headquarters with NTN Bearing Service Co., Ltd.
• Developed new products for electrification and autonomous driving (sHUB, eHUB, Electric Motor and Actuator)
• Developed module product for robots, “i-WRISTTM”

Supply Chain Management

Supplier Audits: 489/year

Responsible Procurement

• NTN CSR Procurement Guidelines
• Green Procurement Standards

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters

Transition Risks

• Changes in end-user needs
• Demands for energy-saving products

Opportunities

• Development of energy-efficient products
• Growth of the renewable energy industry

Reporting Standards

Frameworks Used: International Integrated Reporting Council (IIRC) International Framework

Certifications: ISO 14001, ISO 45001

Third-party Assurance: SGS Japan

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)

NTN's initiatives contribute to these goals through energy-efficient products, sustainable procurement, waste reduction, and renewable energy development.

Sustainable Products & Innovation

• NTN Micro Hydro Turbine
• N3 N-CUBE
• sHUB
• eHUB
• Electric Motor and Actuator
• i-WRISTTM
• Sensor Integrated Bearing Unit

Awards & Recognition

• Nikkei Global Environmental Technology Award
• CHO MONODZUKURI Innovative Parts and Components Award

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Rights
• Diversity & Inclusion
• Supply Chain Sustainability
• Community Engagement

Environmental Achievements

• Reduced CO2 emissions due to production reduction from the coronavirus pandemic; Developed Low Friction Hub Bearing III, reducing rotational friction by 62% and improving fuel efficiency by approximately 0.53%; Implemented long distance wireless transmission experiments between bases for building disaster mitigation and surveillance systems using renewable energy and IT; Switched to renewable-energy-derived electricity at NTN-Antriebstechnik G.m.b.H. (Germany), reducing CO2 emissions by approximately 6,000 tons/year; Reduced fuel consumption by 2.7% by introducing heat pumps that utilize waste heat from cooling towers in boilers at NTN-SNR; Eliminated the use of approximately 150 plastic cups per day at NTN Driveshaft do Brasil by introducing eco-cups.

Social Achievements

• Formulated a Human Rights Policy and a Safety and Health Basic Policy; Promoted work style reform, including no overtime days, flextime, and an interval system; Maintained a high average utilization rate of annual paid leave, exceeding 80% for over 25 years; Established three “Dream Workshops” at Kuwana, Iwata and Okayama Works for employees with disabilities; Held sales events for people with disabilities; Conducted online graduate recruitment campaign; Implemented online training programs for new employees; Promoted the appointment of female managers; Obtained Kurumin certification for supporting child-rearing.

Governance Achievements

• Transitioned from a Company with Board of Company Auditors to a Company with Nominating Committee, etc.; Increased the number of Outside Directors from 2 to 5; Added two new Outside Directors in July 2020; Appointed a female Director (Outside Director) for the first time; Established the Sustainability Committee; Established the Rules for Managing Sustainability Promotion Activities; Strengthened internal control globally; Established the Compliance Committee and the Fair Trade Monitoring Committee.

Climate Goals & Targets

Environmental Challenges

• Sharp deterioration in business performance due to the impact of the new coronavirus; Sluggish global demand; Soaring material costs; Cyber threats; Spread of infectious diseases; Changes in end-user needs; Demands for energy-saving products; Water shortage; Laws and regulations associated with climate change; Global governance; Foreign exchange fluctuations; Rise of low-cost products; Medium- to long-term labor shortage; Growth of emerging countries; Trade frictions and tariffs; Violations of antimonopoly and competition laws; Rise of the renewable energy industry; Response to natural disasters; The rise of low-cost products; Commoditization of bearings; Influx of low-priced products due to globalization; Counterfeit bearings; Lower brand recognition in some overseas regions; Insufficient supply capacity; Intensified price competition in the automotive industry; Reduction in the total number of bearings used per vehicle; Risk of shakeout in the automotive industry; Declining sales due to changes in economic conditions, exchange rates, steel material prices and tariffs; Deterioration of competitive advantage in Japan; Impact of COVID-19; Difficulty in operating a human rights due diligence mechanism; Slow speed at which decisions made by top management are disseminated and put into practice; Issues with internal control of overseas Group companies; Difficulty in grasping problems at overseas sites; Slow speed of production reform and inventory reduction; Weak cost competitiveness; Insufficient investment for renewal of aging facilities and rationalization; High dependence on the automotive industry; Risks from unforeseen changes in tax systems or laws; Difficulty in hiring and retaining appropriate staff; Evolving technology levels and unstable labor relations in emerging economies; Political instability in emerging economies; Information security risks; Risks from violation of laws and regulations; Ongoing investigations by competition authorities; Class action suits in the U.S.; Lawsuits in Europe.

Mitigation Strategies

• Established a Business Operating Policy for the fiscal year ending March 31, 2021; Implemented measures to ensure the health and safety of employees, secure cash and continue business, and prepare for future growth; Focused on business continuity by reducing working capital and securing business funds; Froze investment for capacity expansion and concentrated on investment for efficiency improvement and maintenance; Accelerated transformation of business structure; Shifted focus to highly profitable fields, businesses and regions; Expanded outsourcing; Reduced procurement and logistics costs; Reduced fixed costs; Decreased inventories; Promoted production reforms; Improved cash flow; Strengthened supply capacity; Strengthened product appeal; Increased the value of the NTN brand; Strengthened service & support; Improved profitability by focusing on core products and profitable products; Promoted the use of outsourced products; Established a prompt delivery structure; Created a business model with future potential; Selected industries and established profitable business models; Strengthened profit control; Acquired highly profitable businesses; Established a fabless system; Reduced cost through optimal procurement; Established a system for the post-coronavirus world; Concentrated resources on areas where technological strengths can be leveraged; Improved profitability by promoting cost reductions, requesting price increases, and withdrawing from the market; Promoted mass production and commercialization of electric module products; Strengthened global procurement; Implemented centralized purchasing; Established regional headquarters; Promoted local procurement; Implemented risk-reducing measures for high-risk suppliers; Created a crisis management database; Strengthened supply chain BCP activities; Implemented a certification system for “subcontracting self-auditors”; Actively switched regulated substances; Promoted the switching from lead-containing procured products; Established NTN CSR Procurement Guidelines; Conducted annual surveys of business partners; Periodically investigated conflict minerals; Implemented risk management for suppliers; Established a global safety support system; Introduced a new core IT system; Improved IT governance; Strictly managed intellectual property; Reduced cost through variable cost reformation; Proposed products for advanced medical treatment; Provided CMS technologies; Reduced water consumption; Strictly prohibited the use of regulated substances; Further promoted energy saving activities; Provided products that meet the growing demand for machinery; Supported business continuity through dialog with suppliers; Implemented measures to raise awareness of human rights; Established a human rights due diligence system; Implemented measures to improve the effectiveness of the Group; Promoted integrated management of the natural environment, health and safety; Acquired certification for occupational safety and health management systems; Implemented risk assessments and safety measures; Developed a BCP/BCM structure; Established the Central Headquarters to respond to emergencies; Promoted telework and staggered working hours; Implemented measures prioritizing the health and safety of employees; Implemented measures to improve profitability without relying on scale; Promoted local procurement and optimal procurement; Strengthened collaboration with alliance partners; Promoted further cost reductions, requested price increases, and withdrew from the market; Implemented measures to instill corporate philosophy; Implemented measures to improve the effectiveness of the Board of Directors; Created a channel for information sharing between overseas sites and the Head Office; Implemented measures to speed up management; Implemented production reforms; Implemented sales reforms; Allocated budgets to investment for renewal of aging facilities and rationalization; Implemented control measures to prevent problems with old equipment; Implemented measures to strengthen the “Product Portfolio” and “Business Portfolio”; Implemented measures to respond to the new coronavirus infections; Implemented digitization of operations; Reviewed operational procedures; Streamlined operations through the use of AI; Implemented measures to pass on techniques to the next generation; Implemented measures to accelerate management by effectively using AI through the use of IoT; Implemented measures to create social value in new business fields.

Supply Chain Management

Supplier Audits: 240 suppliers surveyed annually; Risk assessments conducted before starting new transactions; Annual surveys for existing business partners; Crisis management database established.

Responsible Procurement

• NTN Group Green Procurement Standards; NTN CSR Procurement Guidelines; CSR questionnaires to suppliers; Promotion of CSR procurement; Promotion of local procurement; Green procurement; Periodic investigation of conflict minerals.

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters

Transition Risks

• Changes in laws and regulations; Shift to renewable energy; Intensified price competition; Declining demand for bearings in transmissions due to EV shift.

Opportunities

• Development of energy-efficient products; Development of natural energy products; Expansion of the wind turbine business; Development of sensor technologies and abnormality detection functions.

Reporting Standards

Frameworks Used: GRI, IIRC International Framework

Certifications: ISO 14001, ISO 45001, ISO 9001, IATF16949, JIS Q9100, Nadcap, IRIS, CRCC

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)
• Goal 8 (Decent work and economic growth)

Initiatives contribute to these goals through energy-efficient products, renewable energy solutions, sustainable supply chain practices, and job creation.

Sustainable Products & Innovation

• Low Friction Hub Bearing III; N3 N-CUBE; NTN Green Power Station; NTN micro hydro turbine; Sensor Integrated Bearing Unit; Wind DoctorTM; i-WRISTTM; Electric Motor and Actuators.

Awards & Recognition

• Deming Prize

Environmental Metrics

ESG Focus Areas

• Reduce energy loss
• Realize a sustainable society using natural energy
• Provide safety and comfort
• Resource recycling and pollution prevention
• Respect for human rights
• Promote safety and health
• Human resource development
• Promote diversity
• Thorough compliance
• Strengthen governance
• Respond to climate change

Environmental Achievements

• Reduced CO2 emissions from domestic product transportation by 10.9 thousand tons-CO2/year (compared with our target reduction of 12.7 thousand tons-CO2/year)
• Generated 619,614 kWh/year in Japan and 12,158,778 kWh/year overseas through renewable energy, achieving CO2 reductions of 236 tons-CO2/year in Japan and 6,393 tons-CO2/year overseas
• Sales of S- to B-eco grade environmentally friendly products comprised 51.6% of net sales in the fiscal year ended March 31, 2021
• Reduced CO2 emissions intensity to 0.0369 tons-CO2/million yen (compared with our target of 0.0345 tons-CO2/million yen)

Social Achievements

• 92% of respondents in a 2020 customer satisfaction survey rated their overall ratings as “Excellent” or “Good”
• Established three “Dream Workshops” at Kuwana, Iwata and Okayama Works for employees with disabilities
• Increased rate of men taking childcare leave by 5 times compared to the previous year in fiscal 2020
• Achieved 100% quality management system certifications at consolidated subsidiaries

Governance Achievements

• Transitioned from a Company with a Board of Company Auditors to a Company with Nominating Committee, etc. in 2019
• Increased the number of Outside Directors from 2 to 5
• Appointed a woman as an Outside Director in 2020
• Established the Compliance Committee and the Fair Trade Monitoring Committee

Climate Goals & Targets

Environmental Challenges

• Significant decrease in net sales due to the impact of the COVID-19 pandemic
• Low brand awareness abroad in the aftermarket business
• Intensified price competition due to the rise of manufacturers in emerging countries
• Shortage of semiconductors impacting automotive sales
• Urgent need for reformation of cost structure in manufacturing
• Globalization of the business and integration of Japan and overseas operations
• Medium- to long-term labor shortage
• Changes in demographics
• Response to climate change
• Human rights issues in the supply chain

Mitigation Strategies

• Implemented cost reduction measures, including fixed cost reduction and inventory reduction
• Strengthening supply capacity and services in the aftermarket business
• Production reform activities aimed at reducing lead times and improving the inventory turnover ratio
• Variable cost reformation and other measures to thoroughly reduce variable costs
• Outsourcing production of standard products
• Promoting the use of renewable energy sources
• Establishing a human rights due diligence framework
• Promoting green procurement
• Strengthening corporate governance

Supply Chain Management

Supplier Audits: Annual CSR questionnaires for suppliers

Responsible Procurement

• NTN CSR Procurement Guidelines
• NTN Group Green Procurement Standards

Climate-Related Risks & Opportunities

Opportunities

• Development of environment-contributing products
• Expansion of renewable energy-related products

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Certifications: ISO 9001, ISO 45001, IATF 16949, JISQ 9100, Nadcap, IRIS, CRCC

Third-party Assurance: SGS Japan

Sustainable Products & Innovation

• Low Friction Hub Bearing III
• eHUB
• sHUB
• Ra-sHUB
• Green Power Station (GPS)
• N3 N-CUBE
• i-WRISTTM
• Sensor Integrated Bearing Unit

Awards & Recognition

• Sports Yell Company 2021
• Health and Productivity Management Organization 2021 Large enterprise category (White 500)
• Eruboshi 3-star grade

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced CO2 emissions (Scope 1 and 2) by 50% compared to FY2018 by FY2030. Achieved 62% reduction in friction (compared to 2009). Driveshafts and hub bearings contributed to CO2 reduction of 1,613 thousand tons in FY2023. 55.7% of total net sales in FY2023 from environment-contributing products.
• Launched Carbon Neutral Strategy Promotion Department and Carbon Neutral Promotion Committee in 2023 to establish a global promotion system for carbon neutrality.

Social Achievements

• Established Human Rights Policy and conducted human rights questionnaire for overseas affiliates to assess human rights risks.
• Held 10th Stakeholder Dialogue focusing on disseminating sustainability information and human capital management.

Governance Achievements

• Introduced ESG-related targets in goal management sheet for officers since FY2022, linking ESG performance to officer remuneration.
• Established a system to promote carbon neutrality activities globally.

Climate Goals & Targets

Environmental Challenges

• Scope 3 emissions accounting and reduction.
• Data collection difficulties for value chain performance in CSRD compliance.
• Misperception about information disclosure and materiality evaluation.
• Difficulty in measuring the return on investment in human capital when trained employees resign.

Mitigation Strategies

• Participating in the “GX League Basic Concept” to accelerate decarbonization activities.
• Signed a Sustainability-linked Loan agreement to accelerate efforts towards a sustainable society.
• Developing a system for visualizing electricity and air consumption at manufacturing sites.
• Partnering with suppliers to reduce Scope 3 emissions and improve logistics efficiency.
• Implementing internal carbon pricing (ICP) system since April 1, 2023.
• Focusing on measuring the impact of human capital development on business outcomes.

Supply Chain Management

Supplier Audits: 226 business partners traced back in FY2023 to identify smelters; more than 97% reported no use of conflict minerals.

Responsible Procurement

• CSR Procurement Guidelines
• Responsible mineral procurement policy

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI

Sustainable Products & Innovation

• Environment-contributing products (S-eco to D-eco grades)
• Green energy products