Climate Change Data

Infronia Group

Climate Impact & Sustainability Data (2022, 2023)

Reporting Period: 2022

Environmental Metrics

Renewable Energy Share:55.4%

ESG Focus Areas

  • Creating a safe, secure, and more comfortable society
  • Building a society that is proactively conscious of the environment
  • Strengthening value chain
  • Building a society that is conscious of protecting our environment
  • Value-creating human capital and mutual respect
  • Strengthening governance

Environmental Achievements

  • Reduced greenhouse gas emissions (Scopes 1 and 2) by -15.7% compared to FY2018
  • 55.4% renewable energy utilization rate (electrical power)
  • Reduced greenhouse gas emissions (Scope 3) by -47.6% compared to FY2018
  • Amount of carbon fixed by adopting wooden structures and buildings 600 t-CO2/year
  • ZEB adoption rate for non-residential design and construction projects 20%

Social Achievements

  • Organized national conference of female employees in the construction sector with 158 attendees
  • Improved employment rate of female employees
  • Zero major accidents
  • Frequency rate below 0.6 (MK)
  • 100% participation in required training

Governance Achievements

  • Outside director ratio: 55.5%
  • Appointed independent outside directors as chairpersons of the Board of Directors and of the Nomination, Compensation, and Audit Committees
  • Implemented PDCA under a Sustainability Committee led by the president

Climate Goals & Targets

Long-term Goals:
  • Substantially zero emissions by FY2050
  • RE100 in FY2050
Medium-term Goals:
  • Reduce greenhouse gas emissions (Scopes 1 and 2) by 40% by FY2030
  • Reduce greenhouse gas emissions (Scope 3) by 40% by FY2030
  • Develop facilities generating cumulative total of 1 million MWh/year (1,000 GWh/year) of power
  • Design and construction ratio (building construction) 70%
  • Amount of carbon fixed by adopting wooden structures and buildings 2,000 t-CO2/year
  • ZEB adoption rate for non-residential design and construction projects 40%
  • Net sales of completed construction contracts per person ¥137 million/person (civil engineering) ¥153 million/person (building construction)
  • ROIC 5.3%
  • Rate of local employment in SPC employees hired for concession projects operated by MK 56.5%
  • Improve employee engagement by building a corporate culture and system in which diverse personnel play an active role
  • Reduce frequency rate to below 0.6 (MK)

Environmental Challenges

  • Resource efficiency constraints when tackling social challenges individually (before holding company structure)
  • Securing a sound financial base for ongoing investment activities while managing D/E ratio and equity ratio
Mitigation Strategies
  • Shifted to a holding company structure to improve team synergy and capital allocation
  • Managing financial indicators and conducting appropriate financing activities based on relationships with financial institutions and investors

Supply Chain Management

Responsible Procurement
  • Preferential in-region procurement
  • Strengthening collaboration with partner companies

Climate-Related Risks & Opportunities

Opportunities
  • Grow businesses involved in renewable energy
  • Strengthen efforts for design and construction facilities that contribute to realizing carbon neutrality

Sustainable Products & Innovation

  • ZEB
  • Wooden construction

Reporting Period: 2023

Environmental Metrics

Total Carbon Emissions:2,740,000 tCO2e/year (2023)

ESG Focus Areas

  • Environment
  • Social
  • Governance

Environmental Achievements

  • Reduced CO2 emissions by 280,000 t-CO2 compared to the previous year, reaching approximately 2.74 million t-CO2. Scope 1+2 emissions reduced by 29% compared to 2018, and Scope 3 (Category 1+11) emissions reduced by 47% compared to 2018.
  • Joined the Circular Partners, the Association for Circular Economy, and the Blue Plastics Salon.
  • Zero large-scale water leaks in Osaka City's industrial water supply.
  • 100% achievement of stricter-than-required water quality standards in the Miura City public sewer system.

Social Achievements

  • Established a Group Health Management Policy.
  • Implemented a flexible two-day weekend system.
  • Developed a water treatment device to remove PFOS/PFOA.
  • Established Infronia Group Sustainability Procurement Policy and Guidelines.
  • Developed Infronia Group Human Rights Risk Map.
  • Implemented various initiatives to improve employee wellbeing, including a back pain improvement program and a sleep seminar.

Governance Achievements

  • Established an anti-corruption policy.
  • Incorporated sustainability indicators into executive compensation.
  • Implemented a talent management framework to optimize personnel allocation.
  • Conducted an effectiveness evaluation of the Board of Directors.

Climate Goals & Targets

Long-term Goals:
  • Achieve net-zero CO2 emissions by 2050.
Medium-term Goals:
  • Reduce GHG emissions by 40% compared to 2018 by 2030.
Short-term Goals:
  • Setting and publishing circular economy targets in 2024.

Environmental Challenges

  • Climate change (physical and transition risks)
  • M&A risks (potential negative impact on financial status and performance)
  • Supply chain disruptions
  • Shortage of skilled labor
  • Overtime work restrictions in the construction industry
Mitigation Strategies
  • Implementing CO2 emission reduction measures, including the use of ecole (low-carbon asphalt mixture) and renewable energy.
  • Careful investigation and consideration of growth strategy alignment, synergy effects, and investment target business plans for M&A.
  • Implementing PMI (Post Merger Integration) and appropriate governance after acquisitions.
  • Developing alternative sourcing strategies and BCP (Business Continuity Plan).
  • Expanding the support for partner companies, including human resource development, securing construction systems, and supporting the development of productivity improvement technologies.
  • Promoting flexible work arrangements and optimizing work processes to reduce overtime.

Supply Chain Management

Responsible Procurement
  • Infronia Group Sustainability Procurement Policy and Guidelines (implemented July 2024)

Climate-Related Risks & Opportunities

Physical Risks
  • Natural disasters (flooding, typhoons)
  • Extreme weather events
Transition Risks
  • Carbon tax introduction/increase
  • Regulatory changes
Opportunities
  • Growth in ZEB/ZEH, energy-saving renovations, wooden construction, and innovative construction machinery markets.

Reporting Standards

Frameworks Used: TCFD

Sustainable Products & Innovation

  • ecole (low-carbon asphalt mixture)
  • Water treatment device for PFOS/PFOA removal