Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• CO2 emissions declined year on year as a result of lower production. Water use decreased primarily due to lower production.

Social Achievements

• Introduced new initiatives, such as a cross-industrial exchange meeting to build external networks and identify role models for women. Expanded current telecommuting system.
• Reduced overtime work by 14.3% over the previous fiscal year.

Governance Achievements

• Increased the number of outside directors to six members, including three female directors. Introduced its vice president system, thereby assembling a framework that separates management supervision from business execution and enhances management maneuverability.

Climate Goals & Targets

Environmental Challenges

• Sharp drop in sales due to the economic downturn and the resulting lackluster automotive market in China, as well as the monumental impact of the spread of COVID-19.
• Disruption to supply chain due to COVID-19.
• Shutdown of operations at plants in China.

Mitigation Strategies

• Expanded cost reductions to ¥44.0 billion through controlling fixed costs, reviewing wasted resources, and reorganizing global bases.
• Implemented measures to secure adequate capital, including ensuring sufficient liquidity to maintain stable business operation.
• Implemented measures to prevent the spread of COVID-19 by measuring the body temperature of all employees, providing masks, and adhering to the three Cs (closed spaces, crowded places, and close-contact settings).

Supply Chain Management

Supplier Audits: Self-assessments with 271 major domestic suppliers

Responsible Procurement

• Adhering, together with suppliers, to the Guidance for Responsible Business Conduct of the Japan Electronics and Information Technology Industries Association (JEITA).
• Due diligence when procuring high-risk minerals (tin, tantalum, tungsten, gold, and cobalt).

Climate-Related Risks & Opportunities

Physical Risks

• Intensification of abnormal weather (disruption to supply chain, discontinuance of operations)

Transition Risks

• Implementation of carbon pricing

Opportunities

• Market Entry into new markets
• Resource efficiency

Sustainable Products & Innovation

• Digital Cabin products
• Logistics Tracker
• Vehicle-approaching alert system

Awards & Recognition

• 2020 Longseller Award by the Nikkan Jidosha Shimbun for Big X Series

Environmental Metrics

ESG Focus Areas

• Decarbonization
• Circular Economy
• Respect for Human Rights
• Diversity and Inclusion
• Sustainable Supply Chain Management

Environmental Achievements

• Reduced energy use by 1.74% (target: 2%)
• Achieved a 27% renewable energy adoption rate (2.5% in fiscal 2020)
• Reduced total waste emissions per unit of sales by an average of 1% each year leading up to fiscal 2021 from the base year fiscal 2015 (in Japan, a 4.1% year-on-year increase in fiscal 2021, but achieved a recycling rate of 98.5%)
• Reduced greenhouse gas emissions by 10.6% compared with fiscal 2013 (Base year fiscal 2013: 245,504 t-CO2)

Social Achievements

• Raised ratio of women in management positions to 2.4% (target: 3%)
• Conducted human rights due diligence activities targeting 38 bases around the world
• Performed compliance and CSR training
• Introduced a new employee system in April 2022 to reform corporate culture

Governance Achievements

• Established a matrix-type organization based on specific functions and responsible business areas
• Consolidated the operations and management of overseas subsidiaries
• Established the Nomination Advisory Committee and the Compensation Advisory Board as advisory bodies to the Board of Directors

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions and rising material and energy prices caused by the global shortage of semiconductors
• Impacts on profits from semiconductor shortages and lockdowns
• Lack of organizational capability to adapt flexibly to changes in the business environment
• Rising costs due to rapid increases in the price of components and logistics costs
• Geopolitical risks, including the decoupling of the United States and China and the conflict between Russia and Ukraine

Mitigation Strategies

• Optimizing the production map, reviewing transaction conditions, and securing safe inventory to strengthen the supply chain and business continuity plan (BCP)
• Implementing cost structure reforms and capability reforms
• Shifting the focus of the matrix-type organizational structure from function to business to accelerate business operations
• Implementing digital transformation and data-driven management to improve the capabilities of the Company as a whole
• Strengthening supply chain resilience by limiting production loss through appropriate inventory and optimizing logistics lead times and costs

Supply Chain Management

Supplier Audits: 80% coverage by fiscal 2024

Responsible Procurement

• Alps Alpine Responsible Corporate Action Guidelines
• OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas
• Responsible Minerals Initiative (RMI) certifications

Climate-Related Risks & Opportunities

Physical Risks

• Rising severity and frequency of cyclones, floods, and other abnormal weather events
• Higher average temperatures

Transition Risks

• Changing customer behavior
• Carbon pricing mechanisms

Opportunities

• Development and increased sales of low-carbon products and services
• Expansion of share of electric vehicle market

Reporting Standards

Frameworks Used: International Integrated Reporting Framework of the IFRS Foundation, Guidance for Collaborative Value Creation of the Ministry of Economy, Trade and Industry (METI)

Certifications: ISO 14001, ISO 45001

Third-party Assurance: SOCOTEC Certification Japan

Sustainable Products & Innovation

• TACT Switch™ produced using biomass-based plastic
• Products that contribute to conserving energy and resources
• Low-energy power inductors using Liqualloy™
• Coreless GMR current sensors

Awards & Recognition

• Recognition in the Certified Health & Productivity Management Organization Recognition Program

Environmental Metrics

ESG Focus Areas

• Decarbonization
• Circular Economy
• Coexistence with Nature
• Respect for Human Rights
• Diversity and Inclusion
• Supply Chain Management
• Product Quality and Safety

Environmental Achievements

• Energy use decreased by 23.3% (consolidated) due to aggressive energy-saving activities.
• Renewable energy use rate reached 40.4% (consolidated).
• Waste emissions increased by 13.6% in fiscal 2022 due to changes in calculation standards.
• Water discharge decreased by 7.7% (consolidated).

Social Achievements

• Launched the Culture Reform Promotion Project to restore the venture mindset.
• Revised the personnel system to inspire human resources.
• Increased the percentage of men taking paternity leave to 37.0% (non-consolidated).
• Achieved 0% C rank ratio for human rights due diligence in the Group.
• No serious occupational accidents resulting in death or hospital visits for more than one month.

Governance Achievements

• Increased the percentage of independent outside directors to a majority.
• Strengthened the auditing and supervisory functions of the Board of Directors.
• Established the Nomination Advisory Committee and the Compensation Advisory Board.
• Completed the integration of core systems associated with management integration.

Climate Goals & Targets

Environmental Challenges

• Soaring raw material prices and inflation.
• Supply chain disruptions.
• Stagnated growth.
• Intensifying price competition due to product commoditization.
• Software-driven transformation of equipment operation.
• Lack of IT human resources.
• Geopolitical risks.

Mitigation Strategies

• Business and product reforms, including establishing a post-smartphone business and reviewing unprofitable products.
• Labor savings through automation and digitalization.
• Appropriate pricing in response to rising inflationary costs.
• Optimizing the supply chain and transferring production to facilities closer to delivery sites.
• Strengthening alliances in the business and technological fields.
• Expanding model-based development.
• Promoting the T-shaped Strategy.

Supply Chain Management

Supplier Audits: 88 companies (top 80% of purchases in fiscal 2021); 93% response rate in fiscal 2022.

Responsible Procurement

• Alps Alpine Responsible Corporate Action Guidelines
• Due diligence on high-risk minerals (tin, tantalum, tungsten, gold, and cobalt)
• CSR assessments of major suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Rising severity and frequency of cyclones, floods, and other abnormal weather events
• Higher average temperatures

Transition Risks

• Carbon pricing mechanisms
• Regulatory changes

Opportunities

• Development of new products or services for the expanding EV market
• Development of low-emission goods and services
• Use of more efficient production and distribution processes

Reporting Standards

Frameworks Used: Guidance for Collaborative Value Creation 2.0 (METI), International Integrated Reporting Framework (IFRS Foundation)

Certifications: ISO 14001, ISO 45001, TISAX (Trusted Information Security Assessment Exchange)

Third-party Assurance: SOCOTEC Certification Japan (for GHG emissions data fiscal 2020 and 2021)

Sustainable Products & Innovation

• TACT Switch™ made of biomass plastic
• Compact and lightweight power electronics products
• Low-power consumption logistics tracker

Awards & Recognition

• Supplier the Year award from General Motors (11th consecutive time)