Climate Change Data

Environmental Metrics

ESG Focus Areas

• Industrial and technological innovation
• Climate change
• Clean energy

Environmental Achievements

• Reduced total CO2 emissions in Japan (specific numbers not clearly stated, but progress is mentioned)
• Achieved 30% productivity increase at Kyotanabe Plant two years ahead of schedule (indirectly related to environmental impact reduction)

Social Achievements

• Launched Tsubaki Techno School to cultivate young engineers and pass on skills
• Implemented health and safety initiatives and strived to create a comfortable workplace environment
• 100% childcare leave acquisition and return ratio among female employees in FY2019
• Increased ratio of female employees from 6.1% in FY2016 to 8.6% in FY2020
• Community investment and volunteer activities in various regions (details provided but not quantified)

Governance Achievements

• Reformed management system, separating management strategy formulation and supervision from business execution in June 2019
• Established a Nomination and Remuneration Committee chaired by an outside director

Climate Goals & Targets

Environmental Challenges

• Product defects
• Changes in economic trends and market environment
• Fluctuations in exchange rates and prices of raw materials
• Leakage of confidential information and cyber terrorism
• Natural disasters and work-related accidents
• Sluggish automobile production in China
• Higher depreciation and amortization expenses due to increased production capacity

Mitigation Strategies

• Strengthened quality management system by establishing a Quality Management Department
• Diversified operations and dispersed customer base
• Diversified supply regions
• Globally optimized production
• Tightening rules and raising awareness regarding information leakage
• Utilizing e-learning for information security education
• Established an Initial Response to Crisis Manual and implemented initial response training
• Proactive capital investments and shareholder returns
• Expanding overseas production bases to cope with increased orders

Supply Chain Management

Responsible Procurement

• Basic Procurement Policy (fair and equitable dealings, mutual trust, developmental procurement, legal compliance, environmental prioritization)

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: Ecofactory Certification (internal)

Sustainable Products & Innovation

• Lambda Chain (lube-free chain)
• Enedrive Chain (for electric vehicles)
• Zip Chain linear motion products
• LaboStocker automated ultra-low-temperature storage system

Environmental Metrics

ESG Focus Areas

• Environmental conservation
• Society
• Corporate Governance

Environmental Achievements

• Reduced total CO2 emissions (percentage relative to FYE 2014)
• Improved waste recycling rate
• Kyotanabe Plant received Platinum Award for environmental criteria

Social Achievements

• Maintained industrial accident frequency rate less than half the domestic manufacturing industry average
• Expanded employment of diverse human resources
• Launched LinK2025 for next-generation manufacturing plant

Governance Achievements

• Completely separated strategy formulation and oversight from business execution
• Established Nomination and Remuneration Committee chaired by an outside director
• Introduced a restricted stock compensation system

Climate Goals & Targets

Environmental Challenges

• Decline in working population in Japan
• Acceleration of response to environmental issues
• Changes in international affairs
• Acceleration of the information revolution
• Economic slowdown impacting sales and income

Mitigation Strategies

• Bolstering creation of comfortable workplace environment, global human resource acquisition, and diversity initiatives
• Developing environment-friendly products
• Accelerating swift understanding of market needs and product development
• Strengthening M&As and alliances to leverage technological bases
• Implementing structural reforms, concentrating resources on high-value products, improving productivity

Supply Chain Management

Responsible Procurement

• Fair and equitable dealings
• Developing relationships of mutual trust
• Promotion of developmental procurement
• Legal compliance
• Prioritizing the environment
• Avoiding the use of conflict minerals

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 9001, ISO 14001

Sustainable Products & Innovation

• Eco products (SDG-oriented products)
• Zip Chain Lifters
• Low-friction type timing chains
• LaboStocker
• Enedrive Chain

Awards & Recognition

• 2019 Award for Excellence under the Toyota Quality Control Award

Environmental Metrics

ESG Focus Areas

• Climate change
• Recycling-oriented society
• Respect for human rights
• Promotion of diversity
• Cultivation of human resources
• Workstyle reforms
• Health and safety
• Quality assurance
• Contributions to local communities
• Sustainable procurement
• Compliance
• Disaster resilience
• Business continuity planning
• Crisis management
• Information security
• Information disclosure
• Management of intellectual property

Environmental Achievements

• Total CO2 emissions decreased by 31.1% in Japan and 11.6% overseas (compared to base years)
• Achieved a renewable energy usage rate of about 40% at the Saitama Plant
• Waste recycling rate increased to 97.0%
• Obtained SBT certification in May 2023

Social Achievements

• Launched T-Startup, a new internal business proposal system, receiving 100 proposals
• Ratio of female employees increased to 9.6%
• Ratio of return to work after taking maternity/childcare leave was 97.2%
• Increased number of male employees taking childcare leave to 29
• Ratio of employees with disabilities above the legal requirement at 2.43%

Governance Achievements

• Half of the six directors are outside directors
• Strategy formulation and oversight by the Board of Directors and operational execution by executive officers are clearly separated
• Established a Nomination and Remuneration Committee chaired by an outside director
• Zero serious violations of Company regulations

Climate Goals & Targets

Environmental Challenges

• Global environmental issues
• Labor shortages
• Supply chain disruptions
• Climate change (physical and transition risks)
• Geopolitical risks
• Exchange rate fluctuations
• Quality-related risks
• Information security risks
• Human rights risks
• Skyrocketing prices of energy and materials
• Risk of disasters and pandemics
• Risk of intellectual property infringements

Mitigation Strategies

• Initiatives aimed at global environmental conservation
• Development of sustainable products
• Strengthening the global network
• CO2 emission reduction targets
• Internal carbon pricing
• Renewable energy procurement
• Diversification of suppliers
• Business continuity planning
• Cyber security measures
• Human rights due diligence
• Green procurement guidelines
• Thorough quality control
• Compliance awareness-raising programs
• Disaster preparedness training

Supply Chain Management

Responsible Procurement

• Basic Procurement Policy
• Supplier Sustainability Guidelines
• Green Procurement Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Rising temperatures
• Rising sea levels
• Abnormal weather

Transition Risks

• Government policies
• Market trends
• Technological development
• Evaluation and assessment

Opportunities

• Renewable energy infrastructure business
• Environment-friendly products
• V2X bi-directional EV charging systems
• SDG-oriented and carbon-neutral products
• New personal mobility products
• In-vehicle products for electric vehicles

Reporting Standards

Frameworks Used: GRI, TCFD, CDP, SBT

Certifications: ISO 14001, ISO 9001, Eco-First Company

Sustainable Products & Innovation

• eLINK
• Automation equipment for plant factories
• LaboStocker

Awards & Recognition

• 17 quality awards from automobile manufacturers (2022)

Environmental Metrics

ESG Focus Areas

• Capital efficiency
• CO2 emissions reduction
• Shareholder returns
• Sustainability

Environmental Achievements

• SBT certification for greenhouse gas emissions reduction goals

Social Achievements

• Consolidated head office functions and renewed office environment
• Share buyback and cancellation of treasury stock

Governance Achievements

• Added ROIC to divisional metrics and calculated WACC as management indicators
• Appointment of new outside director with experience in business restructuring and new business development

Climate Goals & Targets

Environmental Challenges

• Difficulty achieving numerical targets in mid-term management plan (sales, operating income, ROE)
• Sluggish Materials Handling Operations business
• Weak demand in Chinese market for Mobility Operations business
• Declining machine tool orders
• Increased expenses for personnel, R&D, and other areas
• Inflated material prices
• Widening operating loss in U.S. subsidiary CCC due to project delays

Mitigation Strategies

• Various operational efficiency improvements and measures to reduce working capital
• Strategic investments, new business development, and strengthening shareholder returns
• Product price increases
• Cost reductions associated with productivity improvements
• Synergies with acquired ATR Sales Inc.
• Enhanced after-sales service
• Production reforms
• New product launches
• Developing new applications and expanding product lineup
• Building a business foundation using data
• Strengthening the maintenance business
• Expanding the regenerative medicine business

Supply Chain Management

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used:

Certifications: SBT certification

UN Sustainable Development Goals

• Not disclosed

Sustainable Products & Innovation

• EnedriveChain for BEVs
• Clutches for vehicles and e-bikes

Awards & Recognition

• Eco-First Company