Climate Change Data

Environmental Metrics

ESG Focus Areas

• Customer focus
• Employee diversity and development
• Supplier relations
• Environmental sustainability
• Community engagement

Environmental Achievements

• Reduced CO2 emissions by 1% annually through checklists and heat insulation in Japan.
• Collected more than 20 times the amount of used toner cartridges compared to 2005.

Social Achievements

• Brother Industries ranked 12th in the 2015 JAPAN BEST COMPANIES TO WORK FOR® survey.
• Increased number of female managers.
• Supported reconstruction efforts after the Great East Japan Earthquake and Philippines typhoon.
• Launched various social contribution activities globally, including the Golden Ring Project and support for local schools.

Governance Achievements

• Implemented the Brother Group Global Charter, translated into 27 languages.
• Established a Compliance Committee and Employee Hotline for Compliance Issues.
• Developed the Brother Group Information Security Regulation.

Climate Goals & Targets

Environmental Challenges

• Decreasing need to print on paper due to the spread of smartphones and tablets.
• Maintaining and improving compliance structure globally.
• Ensuring accurate data collection for greenhouse gas emissions.
• Increasing system utilization rate of leave for childcare, family care, and nursing care.

Mitigation Strategies

• Developing a new core business.
• Implementing training programs and a compliance handbook.
• Improving the accuracy of checklists for CO2 emissions and encouraging energy-saving practices.
• Providing support systems for employees to balance work and life.

Supply Chain Management

Supplier Audits: More than 300 companies in 2013

Responsible Procurement

• Green procurement
• CSR Procurement Standards covering human rights, labor, health & safety, fair trade, ethics, product quality, information security, and social contributions.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI’s “Sustainability Reporting Guidelines (G4)”

Sustainable Products & Innovation

• Energy-saving products
• Recyclable toner cartridges

Awards & Recognition

• Minister Prize in Equal Employment/Work-Life Balance for Fiscal Year 2014
• Responsible Business Award 2014 (BIUK)

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Achieved a 6.9% reduction in market standard compared to FY2018 in CO2 emissions.
• 88% of Brother Group's facilities received ISO14001 certification as of April 1, 2019.

Social Achievements

• Launched the "Brother Eco Point Program" to incentivize eco-conscious actions among employees.
• CSR awards program launched to recognize excellent CSR activities among suppliers.

Governance Achievements

• Board-level oversight of climate-related issues through the Chief Operating Officer (COO) and the Environmental Committee.
• Incentives provided for the management of climate-related issues, including attainment of targets.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to extreme weather events.
• Increased indirect costs due to emerging regulations.
• Increased indirect costs due to changing customer behavior.
• Increased direct costs due to rising mean temperatures.
• Decreased revenues due to reduced production capacity from extreme weather events.

Mitigation Strategies

• Expansion of product manufacturing to multiple factory sites.
• Development of eco-conscious products and technologies.
• Monitoring energy consumption at each facility and setting goals for reduction.
• Lobbying through industry associations.
• Implementing Green Procurement and Product Life Cycle Assessments.

Supply Chain Management

Responsible Procurement

• Green procurement practices
• CSR Procurement Standards

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity and frequency of extreme weather events
• Rising mean temperatures

Transition Risks

• Emerging regulation mandates on existing products and services
• Carbon pricing mechanisms

Opportunities

• Resource efficiency (reduction of utility costs through energy-saving equipment investment)
• Development and/or expansion of low emission goods and services

Reporting Standards

Frameworks Used: Greenhouse Gas Protocol, Science Based Targets initiative

Certifications: ISO 14001, ISO 14064-3, EPEAT, Blue Angel, Eco Mark, Nordic Swan, China’s Ten Circle Mark, Energy Star

Sustainable Products & Innovation

• Energy-efficient printers, All-in-Ones, Home Sewing Machines, Industrial Sewing Machines, Machine Tools, Reducers and Gears

Environmental Metrics

ESG Focus Areas

• Climate Change
• Resource Circulation
• Biodiversity Conservation
• Human Rights
• Supply Chain Responsibility

Environmental Achievements

• Remanufactured 2.59 million toner cartridges, reducing CO2 emissions by 5,300 tons.
• Reduced CO2 emissions (Scopes 1 and 2) by achieving a reduction rate of 7.4% from FY2015 levels in FY2020.
• Reduced Scope 3 (Categories 1, 11, and 12) CO2 emissions by achieving a reduction rate of 12.6% from FY2015 levels in FY2020.

Social Achievements

• Increased the proportion of female managers at Brother Industries, Ltd. exceeding the company’s target of at least 44 female managers by FY2020.
• Established a new target of at least 60 female managers by FY2025.
• Reduced voluntary turnover rate to 1.0% in FY2020.
• Launched the Side Hustle Campaign to support entrepreneurialism and side jobs using Brother products.

Governance Achievements

• Established the Nomination Committee and Compensation Committee to enhance the independence and objectivity of the Board of Directors.
• Adopted an executive officer system to ensure swift decision-making.
• Conducted an evaluation of the effectiveness of the Board of Directors.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the COVID-19 pandemic and semiconductor shortages.
• Contraction of the printing market due to reduced printing on paper.
• Increased competition in the market due to the rise of new manufacturers.
• Changed global economic situation and currency exchange risks.
• Risks related to parts and materials procurement and price hikes.
• CSR procurement challenges, including human rights violations and conflict minerals.

Mitigation Strategies

• Diversification of production facilities and inventory storage.
• Collaboration with parts suppliers to build a resilient supply chain.
• Shifting to new business models to secure stable profits and closer customer relations.
• Implementing initiatives for providing products and services that realize customer value.
• Building a speedy and cost-competitive business management base.
• Formulating CSR procurement policies and conducting briefings for business partners.
• Joining the Responsible Business Alliance (RBA) to enhance risk evaluation and correction systems.

Supply Chain Management

Responsible Procurement

• CSR Procurement Standards
• CSR Procurement Level-up Program
• Responsible Business Alliance (RBA) membership
• Conflict Minerals Response Policy

Climate-Related Risks & Opportunities

Physical Risks

• Intensified damage from extreme weather events such as cyclones and floods

Transition Risks

• Carbon neutral policies (carbon tax)
• Shift from gas/diesel vehicles to electric vehicles
• Strengthening of environmental regulations
• Growing market demand for circular economy

Opportunities

• Increased demand for energy-efficient products and low-carbon products
• Rising demand for machine tools to increase new manufacturing workpieces for electric vehicle-related parts
• Secure business opportunities through the expansion of cyclical businesses

Reporting Standards

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

UN Sustainable Development Goals

• Goal 3
• Goal 8
• Goal 9
• Goal 7
• Goal 12
• Goal 13
• Goal 15

Brother aims to contribute to the SDGs through its products and services, environmental initiatives, social contribution activities, and collaboration with business partners.

Sustainable Products & Innovation

• Energy-saving printers and All-in-Ones
• Recycling-compatible toner cartridges
• Garment printer using plant-derived ink

Awards & Recognition

• Gold Prize of the Aichi Environmental Awards

Environmental Metrics

ESG Focus Areas

• Supporting people's value creation
• Realizing a diverse and active society
• Pursuing a responsible value chain
• Reducing CO2 emissions
• Circulating resources

Environmental Achievements

• Achieved 38.2% reduction in Scope 1 and 2 CO2 emissions from the FY2015 level in FY2021
• Achieved 11.0% reduction in Scope 3 (categories 1, 11, and 12) CO2 emissions from the FY2015 level in FY2021
• Remanufactured 2.78 million toner cartridges, reducing CO2 emissions by 5,340 tons in FY2021
• Brother Industries (U.K.) Ltd. certified as a carbon neutral company based on PAS 2060
• Brother Industries (Slovakia) s.r.o. certified as a carbon neutral company based on PAS 2060

Social Achievements

• Increased local employees in management positions outside Japan to 67% in FY2021
• Brother Industries (Vietnam) Ltd. obtained RBA Gold certification
• Implemented various systems to support work-life balance, including childcare leave, family care leave, and telecommuting

Governance Achievements

• Established the Sustainability Committee chaired by the Representative Director & President in April 2022
• Established three subcommittees under the Sustainability Committee: Climate Change Subcommittee, Society Subcommittee, and Corporate Governance Subcommittee
• Endorsed the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations

Climate Goals & Targets

Environmental Challenges

• Climate change risks (transition risks, physical risks)
• Supply chain disruptions
• Meeting increasing stringent environmental laws and regulations
• Maintaining high levels of employee engagement

Mitigation Strategies

• Set medium-term targets to reduce CO2 emissions by FY2030 and implement planned activities
• Developed alternative sourcing strategies
• Strengthened supply chain risk assessment and corrective action implementation
• Implemented various initiatives to improve employee engagement and work-life balance

Supply Chain Management

Supplier Audits: More than 150 supplier audits conducted annually; audits on suppliers regarding their management systems for chemical substances; CSR procurement audits on high-risk suppliers

Responsible Procurement

• Brother Group Green Procurement Standards
• Environmental Guidelines for Suppliers
• CSR Procurement Level-up Program
• Conflict Minerals Response Policy

Climate-Related Risks & Opportunities

Physical Risks

• Intensified damage from extreme weather events

Transition Risks

• Carbon tax introduction or increase
• Shift from gas/diesel vehicles to electric vehicles
• Strengthening of environmental regulations

Opportunities

• Increased demand for energy-efficient products and low-carbon products
• Rising demand for machine tools for electric vehicle-related parts
• Secure business opportunities through the expansion of cyclical businesses

Reporting Standards

Frameworks Used: GRI's Sustainability Reporting Standards

Certifications: ISO 14001, ISO 45001 (some facilities)

Third-party Assurance: LR

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)
• Goal 15 (Life on land)

Brother's initiatives contribute to these goals through various environmental and social programs

Sustainable Products & Innovation

• High-capacity cartridges for inkjet printers
• Expendable inks for industrial printers with reduced plastic and packaging

Awards & Recognition

• Clarivate Top 100 Global Innovators 2022 (5th time)
• Japan Cancer Society award 2020 (Organization Category)
• EcoVadis Silver Medal

Environmental Metrics

ESG Focus Areas

• Supporting people’s value creation
• Realizing a diverse and active society
• Pursuing a responsible value chain
• Reducing CO2 emissions
• Circulating resources

Environmental Achievements

• 43.8% reduction in Scope 1 and 2 GHG emissions compared to FY2015
• 1.0% reduction in Scope 3 (Categories 1, 11, and 12) GHG emissions compared to FY2015
• Increased renewable energy share to 17.5% of total energy consumption from 2.3% in FY2021
• Use of recycled materials in some products
• Change to recyclable cushioning materials

Social Achievements

• Launched seven new models in the “SPEEDIO” series with high energy-saving performance and productivity
• Conducted an employee engagement survey
• Assessed the status of human resource policies
• Identified issues at major overseas facilities
• Expanded training program for female management candidates
• RBA Gold certification obtained for a manufacturing facility in Vietnam

Governance Achievements

• Formulated a new Human Resource Policy in April 2023
• Implementing a new HR system

Climate Goals & Targets

Environmental Challenges

• Rapid environmental changes (climate change, energy and resource procurement issues, supply chain vulnerabilities)
• Changes in consumer behavior due to digitalization and evolving technologies
• Changes in customer needs due to changes in people’s values and demands in the post-pandemic society
• Rapid economic growth in regions like China and India
• Major changes such as easing of travel restrictions, uncertainty in the global political and economic situation, and price hikes in resources and materials

Mitigation Strategies

• Announced the Brother Group Vision “At your side 2030”
• Business portfolio transformation
• Developing activities within BIL to help employees understand and align with the Vision
• Developing products that solve customers’ problems and accelerating the introduction of products that contribute to improving customers’ productivity and creativity
• Setting sustainability targets for 2024
• Implementing initiatives to achieve sustainability targets
• Reducing CO2 emissions through energy-saving and energy-creating activities
• Strengthening cooperation with suppliers
• Tackling CO2 emissions reduction throughout the product life cycle
• Implementing measures such as the use of recycled materials and a change to recyclable cushioning materials
• Investing in DX to enhance connection with customers
• Investing in plants that will contribute to a stronger supply chain
• Adopting and refining more advanced IT technologies

Supply Chain Management

Responsible Procurement

• Conducting assessments to ensure human rights are respected and worker safety is protected
• Formulating human rights policies
• Identifying human rights issues in the value chain

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• SPEEDIO series machine tools
• DIGITAL LINE series garment printers
• Pure Drive spot cooler
• BuddyBoard notebook application

Environmental Metrics

ESG Focus Areas

• Climate Change
• Biodiversity

Environmental Achievements

• Achieved a 54.92% reduction in Scope 1 + 2 (market standard) emissions in FY2022 compared to the FY2030 target with FY2015 as the base year.
• Achieved a 3.36% reduction in Scope 3 (categories 1, 11, and 12) emissions in FY2022 compared to the FY2030 target with FY2015 as the base year.
• 86% of Brother Group's facilities received ISO 14001 certification as of April 1, 2023.

Social Achievements

• Launched the "5R Award" to recognize efforts in emissions reduction and environmental activities.
• Implemented the "Brother Eco Point Program" to incentivize eco-conscious actions by employees.

Governance Achievements

• Established board-level oversight of climate-related issues with the COO responsible for environmental initiatives and chairing relevant subcommittees.
• Provides incentives for the management of climate-related issues, including monetary rewards for executive officers and non-monetary rewards for all employees.

Climate Goals & Targets

Environmental Challenges

• Risk of increased indirect costs due to emerging carbon pricing mechanisms.
• Risk of increased indirect costs due to changing customer behavior and reduced demand for certain products.
• Risk of decreased revenues due to reduced production capacity from chronic physical climate risks (flooding, cyclones).

Mitigation Strategies

• Developing systematic reductions in CO2 emissions to meet medium-term targets.
• Investing in R&D for machine tools compatible with electric vehicle parts.
• Implementing natural disaster countermeasures and considering risk management through production at multiple bases.

Supply Chain Management

Responsible Procurement

• Green procurement practices
• CSR Procurement Standards

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Cyclones

Transition Risks

• Carbon pricing mechanisms
• Changing customer behavior
• Shift from internal combustion engines to electric vehicles

Opportunities

• Development and expansion of low-emission goods and services (fuel cells, spot coolers)
• Increased demand for machine tools compatible with electric vehicle parts

Reporting Standards

Frameworks Used: TCFD, SBTi, ISO 14064-1, ISO 14064-3

Certifications: ISO 14001

Third-party Assurance: Third-party external verifier

Sustainable Products & Innovation

• Fuel cell systems
• Spot coolers

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Diversity & Inclusion
• CO2 emissions reduction
• Resource circulation
• Responsible value chain
• Sustainability

Environmental Achievements

• Not disclosed

Social Achievements

• Launched initiatives for gender balance in management and diverse working styles.
• Not disclosed

Governance Achievements

• Strengthened corporate governance through the establishment of a Sustainability Committee and various subcommittees.
• Improved board diversity with the addition of a female external auditor.
• Enhanced transparency and objectivity in corporate governance.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to geopolitical risks and global economic fluctuations.
• Shrinking printing market due to reduced demand for paper printing.
• Intensified competition from emerging manufacturers in China and Asia.
• Climate change transition risks (policy/regulation risks, market changes).
• Human rights issues within the supply chain.
• Resource scarcity and price volatility of materials.
• Geopolitical risks (US-China trade friction, Russia-Ukraine situation).
• Risk of impairment of goodwill and fixed assets in the Domino business.

Mitigation Strategies

• Information gathering on international situations and adapting accordingly.
• Expanding contract-based services and transforming business models.
• Expanding business in industrial labeling and Domino businesses.
• Developing products and services that deliver customer value in each market.
• Building a business operation base with speed and cost competitiveness.
• Promoting circular economy business from a sustainability perspective.
• Requesting initiatives for human rights respect from upstream suppliers and establishing a process for confirming their efforts.
• Joining the RBA and requesting compliance with the RBA Code of Conduct from suppliers.
• Establishing a “Responsible Mineral Procurement Policy” and conducting annual mineral procurement surveys.
• Long-term parts procurement and inventory management, diversification of procurement sources, and consideration of alternative products through product design changes.
• Reflecting raw material price increase risks in the business plan.
• Accurately grasping changes in market conditions and reducing procurement costs.
• Manufacturing products under strict quality control standards.
• Measures to suppress the expansion of damage in case of accidents.
• Setting employee behavioral standards and promoting activities to disseminate the Brother Group Global Charter.
• Establishing a compliance committee and consultation windows.
• Cooperation with external experts.
• Communication with tax authorities.
• Utilizing APA (Advance Pricing Agreement).
• Setting medium-term goals for greenhouse gas emission reduction by 2030 and implementing reduction measures.
• Developing products that meet processing needs for EV parts.
• Setting medium-term goals for improving resource circulation by 2030.
• Analyzing the financial impact of climate change based on the TCFD recommendations and disclosing appropriate information.
• Establishing green procurement standards.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• RBA membership, responsible mineral procurement policy, CSR procurement standards.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Policy and regulatory changes, market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Energy-efficient products

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Supporting people's value creation
• Realizing a diverse and active society
• Pursuing a responsible value chain
• Reducing CO2 emissions
• Circulating resources

Environmental Achievements

• Achieved a 45.1% reduction in Scope 1 and 2 CO2 emissions from the FY2015 level in FY2023.
• Achieved a 14.2% reduction in waste volume from the previous fiscal year (per unit of sales) in FY2023.
• Achieved a 10.7% reduction in water intake from the previous fiscal year (per unit of sales) in FY2023.
• Achieved the FY2024 target of 81% or less virgin materials used in products one year ahead of schedule.
• Brother Industries (U.K.) Ltd. and Brother Industries (Slovakia) s.r.o. attained carbon neutrality and completed PAS 2060:2014 verification.
• Kariya Factory achieved carbon neutrality in FY2023 and completed verification of compliance with the ISO 14068-1:2023 standard.

Social Achievements

• Expanded employee engagement survey to the entire Group in FY2023.
• Implemented programs to promote understanding of health and nursing care to promote diverse work styles.
• Three Group manufacturing facilities attained RBA Platinum Certification in FY2023.
• Expanded the number of businesses and suppliers covered in supply chain human rights due diligence.
• Introduced a new human resource system in FY2023 to implement the Human Resource Policy of “true autonomy and effort” and “properly reward achievements and contributions.”

Governance Achievements

• Executive remuneration is linked to the progress of major climate change-related targets.
• Established a Sustainability Committee chaired by the Representative Director & President to promote materiality initiatives globally.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to component shortages (FY2022)
• Meeting stricter environmental regulations in various countries and regions.
• Maintaining high levels of employee engagement globally.
• Ensuring responsible mineral procurement throughout the supply chain.

Mitigation Strategies

• Formed a concurrent team to maintain production of four major products by changing designs and sourcing parts from alternative suppliers (FY2022).
• Developed and implemented the CSR Procurement Level-up Program to improve CSR procurement at suppliers.
• Implemented an employee engagement survey and various initiatives to enhance employee engagement.
• Conducted annual surveys on first-tier suppliers regarding forced labor and child labor, and expanded the scope to include some second-tier suppliers in FY2023.
• Established a working group to practice responsible procurement of minerals.

Supply Chain Management

Supplier Audits: 10 companies in FY2023

Responsible Procurement

• Brother Group Green Procurement Standards
• Environmental Supplier Guideline
• Brother Group Paper Product Procurement Standards
• RBA Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Intensified damage from extreme weather events

Transition Risks

• Carbon tax or increase in carbon tax rate
• Shift from gas/diesel vehicles to electric vehicles
• Strengthening of environmental regulations

Opportunities

• Increased demand for energy-efficient products and low-carbon products
• Rising demand for machine tools for electric vehicle-related parts
• Secure business opportunities through the expansion of circular-economy-based businesses

Reporting Standards

Frameworks Used: GRI's “Sustainability Reporting Standards”

Certifications: ISO 14001, RBA Platinum

Third-party Assurance: BSI, LRQA

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• SPEEDIO series machine tools
• Recycled toner cartridges
• Eco-conscious toner cartridge packaging
• Compact and lightweight molded pulp cushioning material

Awards & Recognition

• Blue Angel
• Eco Mark
• EPEAT
• Nordic Swan Ecolabel
• China's Ten Circle Mark
• Eco Choice Aotearoa
• Green Mark
• Korea Eco-label
• Clarivate Top 100 Global Innovators 2024
• Health & Productivity Stock Selection (five times since 2017)
• Certified Health & Productivity Management Outstanding Organizations
• Physical Fitness National Conference Chair Award
• Sports Yell Company (six times since 2019)
• Cancer Control Partner Award