Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity and Inclusion
• Corporate Governance
• Risk Management
• Sustainable Resources
• Technological Innovation
• Employee Well-being
• Supply Chain Sustainability
• Compliance

Environmental Achievements

• Reduced CO₂ emissions intensity by 9% compared to FY2013 (non-consolidated)
• Reduced energy intensity by 8.1% compared to FY2013 (non-consolidated)
• Achieved world's top share of automotive engine half bearings and low-speed marine engine bearings (Company estimate)

Social Achievements

• Certified as a Health and Productivity Management Organization 2022
• Increased minimum annual paid leave to 10 days (attainment rate 99.3%)
• Employment rate for people with disabilities above the statutory rate
• Percentage of women in managerial positions increased to 5.3%
• Won GM Supplier Quality Excellence Award 2020

Governance Achievements

• Established a Board of Directors structure to enhance transparency and fairness
• Implemented an effectiveness evaluation system for the Board of Directors
• Established a Corporate Governance Committee
• Established the Nomination Committee and the Remuneration Committee
• Strengthened risk management system

Climate Goals & Targets

Environmental Challenges

• Decrease in automobiles equipped with internal combustion engines
• Tighter environmental regulations
• Soaring material and logistics costs
• Spread of infectious diseases
• Decline in labor force (especially in Japan)
• Risk from natural disasters
• Supply chain disruptions

Mitigation Strategies

• Strengthening profit structure, optimizing production to improve competitiveness and increase market share
• Entry to the EV market by expanding sales of aluminum die-casting products for EVs
• Establishing new businesses such as special bearings for wind power generation
• CO₂ reductions through energy-saving measures, the use of renewable energy, and the promotion of innovation
• BCP formulation, remote sales and services
• Developing new materials that do not contain environmentally hazardous substances
• Hiring women and foreign employees, re-hiring retired employees, and employing people with disabilities
• Supporting remote work
• Promoting health management
• Establishing a risk management system in line with the actual business conditions of overseas affiliates and strengthening internal controls
• Reorganizing the compliance education system and enhancing the whistle-blowing and reporting consultation scheme
• Building a backup system and information management system utilizing external data centers, and educating employees
• Formulating BCP and implementing disaster prevention drills

Supply Chain Management

Responsible Procurement

• CSR Procurement Guidelines
• Green Procurement Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Intensified abnormal weather events
• Rise in average temperature
• Rise in sea level

Transition Risks

• Carbon tax
• Carbon emission control
• Development of EV conversion
• Changes in evaluations by investors
• Changes in reputations among job seekers and employees

Opportunities

• Increase in demand for renewable energy
• Sales increase due to product development for ZEVs
• Penetration into EV market
• Increase in demand for high value-added products
• Increase in demand for bearings for vessels
• Demand for internal combustion engines using CN-fuels
• Increase in demand for air conditioning equipment
• Continued demand for turbine bearings for power generation facilities

Reporting Standards

Frameworks Used: GRI Standards, ISO 26000, TCFD

Certifications: ISO 14001, ISO 45001

Sustainable Products & Innovation

• Aluminum die-cast products for EVs
• Bearings for wind power generation
• Products contributing to energy saving

Awards & Recognition

• GM Supplier Quality Excellence Award 2020
• Thailand Quality Prize 2022 (Diamond Award)

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced CO2 emissions by 5.9% from FY2021 to 57,933 tons in FY2022.
• Installed a solar power generation system, providing approximately 1% of the total electricity consumed annually at Daido Plain Bearings Co.
• Developed deionization water treatment equipment using electrode sheet technology, reducing chemical usage compared to conventional methods.

Social Achievements

• Recognized as a 2023 Certified Health & Productivity Management Outstanding Organization.
• Established the DAIDO METAL GROUP Human Rights Policy in April 2023.
• Implemented various work-style reforms, including setting targets for minimum paid vacation days and increasing the ratio of women in managerial positions.

Governance Achievements

• Established a Sustainability Committee as an executive committee in April 2021.
• Announced support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in June 2022.
• Implemented a Board of Directors effectiveness evaluation system.

Climate Goals & Targets

Environmental Challenges

• Drastic rise in material costs (steel, nonferrous metals, aluminum) due to the COVID-19 pandemic, semiconductor shortage, and the situation in Ukraine.
• Increased energy and logistics costs.
• Decreasing demand for automotive engine bearings due to the shift to EVs.

Mitigation Strategies

• Price pass-through efforts in appropriate transactions.
• Improving logistics costs by increasing production efficiency.
• Efforts to double the percentage of sales from non-automotive products, aiming for 50%.
• Expanding sales of die-cast aluminum products for electric vehicles.
• Investing 6 billion yen in a new plant in the Czech Republic for wind power generation bearings.

Supply Chain Management

Responsible Procurement

• CSR Procurement Guidelines
• Green Procurement Guidelines
• Declaration on Building Partnership

Climate-Related Risks & Opportunities

Physical Risks

• Intensification of abnormal weather
• Rise in average temperature
• Heavy rainfall and flooding

Transition Risks

• Sales decline with declining demand for products for internal combustion engines due to the shift to EVs
• Increase in procurement costs due to rising raw material prices in response to decarbonization
• Increase in energy-related expenses

Opportunities

• Increase in demand for renewable energy
• Progress in shift to EVs
• Increase in demand for bearings for vessels
• Growing demand for CN fuel-powered internal combustion engines
• Increase in demand for air conditioning equipment
• Sales increased due to increased demand for sliding bearings for offshore wind power generation

Reporting Standards

Frameworks Used: IIRC, GRI, Ministry of the Environment’s Environmental Reporting Guidelines 2018, ISO26000, TCFD

Certifications: ISO 9001, IATF 16949, JIS Q 9100, ISO 45001, ISO 14001

Sustainable Products & Innovation

• Deionization water treatment equipment
• Polymer overlay surface treatments
• Lead-free overlay
• Lead-free copper alloys
• Bearings for wind power generation

Awards & Recognition

• 2023 Certified Health & Productivity Management Outstanding Organization

Environmental Metrics

ESG Focus Areas

• Environment
• Society
• Governance

Environmental Achievements

• Installed solar power generation facilities in Mino, Gifu Prefecture
• Reduced CO2 emissions (Scope 1 and 2) by an unspecified amount (target is 35% reduction by FY2030 compared to FY2019)
• Introduced ultrasonic cameras to detect compressor air leaks, reducing energy consumption
• Implemented waste reduction initiatives, including reducing plating waste liquids and reusing lubricants and solvents
• Participated in tree planting activities at the Nagara River headwaters and mangrove planting in Thailand
• Provided wooden pallets to the Japan Monkey Center

Social Achievements

• Certified as a Health and Productivity Management Organization
• Increased the ratio of male employees taking childcare leave to 42% in FY2023
• Introduced an e-learning system with approximately 380 courses
• Strengthened internship program with experiential programs for technical and sales jobs
• Increased mid-career recruitment by 1.5 times compared to the previous year
• Implemented LGBTQ+ training for employees
• Supported local communities through food drives and NPO support

Governance Achievements

• Established a Sustainability Committee to deliberate on sustainability initiatives
• Implemented Board of Directors effectiveness evaluations
• Established a Risk Management Committee to manage business risks
• Established an IT Management Subcommittee to improve cybersecurity
• Created a Business Continuity Plan (BCP) and conducted disaster prevention drills
• Established a Corporate Ethics Committee to discuss compliance measures
• Implemented a Whistleblowing, Reporting and Consultation Scheme
• Conducted compliance web tests and Code of Conduct comprehension checks for employees

Climate Goals & Targets

Environmental Challenges

• Decrease in demand for automotive engine bearings due to the shift to EVs
• Rising raw material prices
• Climate change risks (extreme weather, supply chain disruptions)
• Risks related to securing human resources
• Risks due to global business activities
• Cybersecurity risks
• Risks related to an unstable raw material supply/demand environment

Mitigation Strategies

• Developing and expanding sales of products for EVs and alternative fuels
• Investing in bearings for medium- to high-speed engines used in ships, large trucks, and data centers
• Implementing disaster countermeasures
• Assessing risks at key supplier sites and revising business continuity plans
• Implementing measures for hot workplaces
• Promoting decarbonization and enhancing disclosure to stakeholders
• Strengthening partnerships with suppliers
• Formulating and implementing a human rights policy
• Conducting regular audits and evaluations to verify target achievement status and enact improvement measures

Supply Chain Management

Supplier Audits: Twice a year

Responsible Procurement

• CSR Procurement Guidelines
• Green Procurement Guidelines
• Declaration on Building Partnership

Climate-Related Risks & Opportunities

Physical Risks

• Heavy rainfall and flooding
• Rise in average temperature
• Increased frequency of heatstroke among employees

Transition Risks

• Sales decline with declining demand for products for internal combustion engines
• Increased procurement costs due to rising raw material prices
• Increased energy-related costs due to carbon taxes and carbon border taxes

Opportunities

• Increased demand for renewable energy
• Increased demand for bearings for vessels
• Increased demand for air conditioning equipment
• Increased demand for products for ZEVs
• Increased demand for sliding bearings for offshore wind power generation

Reporting Standards

Frameworks Used: IIRC, GRI, Ministry of the Environment’s Environmental Reporting Guidelines 2018, ISO26000, TCFD

Certifications: ISO 14001, ISO 45001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• BDI Deionization Equipment
• Bearings for wind turbines
• Low-friction bearings
• Bearings compatible with alternative fuels

Awards & Recognition

• 2023 Certified Health and Productivity Management Outstanding Organization (Large Enterprise Category)