Climate Change Data

Environmental Metrics

ESG Focus Areas

• Health and Safety
• Employee Well-being
• Supply Chain Sustainability
• Community Engagement
• Sustainable Manufacturing

Environmental Achievements

• Not disclosed

Social Achievements

• Implemented comprehensive health management program including mental health checks, harassment training, influenza vaccinations, and support for major illnesses.
• Established safety nets for employees with major illnesses, including full coverage of treatment costs and extended leave.

Governance Achievements

• Introduced a new personnel system in 2019 with a fair evaluation system and flexible personnel allocation.
• Strengthened governance through improved internal regulations and the implementation of RPA (Robotic Process Automation).

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• SDGs
• ESG
• Supply Chain Reliability
• EV Shift in Automotive Industry
• Stakeholder Engagement
• Regional Community Growth

Climate Goals & Targets

Environmental Challenges

• Global economic crisis due to COVID-19, Russia-Ukraine conflict, resource price hikes, inflation, semiconductor shortage
• EV shift in the automotive industry requiring adaptation in material sourcing and production

Mitigation Strategies

• Strengthening group management capabilities
• Investing in business companies to enhance their response capabilities
• Enhanced IR activities and timely disclosure of business activities to all stakeholders
• Multi-materialization in procurement to adapt to changes in component composition
• Strengthening the supply chain to support customer production activities

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Not disclosed

Social Achievements

• Launched wellbeing initiatives including upgraded health checkups with full company coverage for employees and their spouses, and full company coverage of major illness insurance for all employees and their dependents. Achieved certification as a Health and Wellbeing Excellent Company by the Ministry of Economy, Trade and Industry.
• Established employment for disabled individuals at "work happiness farm Aichi Komaki" since December 2020.

Governance Achievements

• Established three teams: IR promotion team, SDGs promotion team, and DX promotion team. Board monitors the activities of these teams.
• Established risk management committee and a crisis management headquarters for major risks.

Climate Goals & Targets

Environmental Challenges

• EV shift in the automotive industry leading to a potential decrease in demand for existing steel materials.
• Carbon neutrality and decarbonization.
• Increased operating capital needs due to significant increases in steel prices.
• Improving the liquidity of company stock.

Mitigation Strategies

• Exploring business strategies to remain essential even with the acceleration of the EV shift, including considering the handling of non-steel materials (multi-materialization).
• Expanding the handling of electric furnace steel, which has about 1/5 the CO2 emissions of blast furnace steel during manufacturing.
• Securing borrowing capacity, exploring new financing methods, and maintaining appropriate inventory levels through thorough ordering and inventory management.
• Aiming to increase the free float ratio to over 30% through active IR activities.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Carbon Neutral
• Community Contribution
• Work Style Reform
• Human Resource Development
• DX Promotion
• SDGs
• ESG

Environmental Achievements

• Aiming for a 50% reduction in group-wide CO2 emissions by 2030 (compared to 2020)

Social Achievements

• Strengthening the supply chain
• Focusing on employee well-being and engagement
• Investing in human resource development

Governance Achievements

• Strengthening corporate transparency and governance
• Maintaining a dividend payout ratio benchmark of 50%

Climate Goals & Targets

Environmental Challenges

• Global economic stagnation and recovery from the COVID-19 pandemic
• The prolonged impact of the situation in Ukraine
• Changes in international values (climate change, SDGs, ESG, D&I)
• The expansion of CN (carbon neutrality) in business
• Disruptions to the supply chain due to COVID-19 and natural disasters
• Restructuring of the steel industry
• Increased manufacturing costs for steel manufacturers due to CN measures
• Increased steel prices due to strong demand and high raw material costs
• Transformation of the automotive industry due to "CASE", acceleration of EV shift
• Global semiconductor shortage leading to reduced automobile production

Mitigation Strategies

• Strengthening the supply chain
• Responding to the EV shift (developing EV demand, EV infrastructure, lightweighting, ultra-high-tensile steel, multi-materialization)
• Strengthening distribution functions and supply chains (delivery functions, processing functions, logistics functions, system management, personnel training)
• Promoting SDGs activities
• Responding to carbon neutrality (introduction of renewable energy, greening promotion, shortening transportation processes and distances, expansion of electric arc furnace materials)
• Responding to the EV shift (securing gasoline car demand while incorporating EV car demand through new business transformation)
• Multi-materialization (promoting multi-materialization to strengthen the ability to respond to diversifying customer needs)

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Diversity
• Governance
• Sustainability
• Human Rights
• Employee Wellbeing
• Digital Transformation (DX)

Environmental Achievements

• Acquired ISO 14001 certification
• Company-wide environmental conservation activities

Social Achievements

• Promoting gender equality and diversity in the workplace
• Focus on employee well-being, including health and safety improvements
• Emphasis on employee engagement and development

Governance Achievements

• Established a Nomination and Remuneration Committee with a majority of independent outside directors
• Implemented a system for managing related-party transactions
• Regularly conducts board effectiveness evaluations

Climate Goals & Targets

Environmental Challenges

• Pandemic-related limitations on group company site visits for board members
• Need to enhance information disclosure and engagement with stakeholders

Mitigation Strategies

• Continued efforts to improve information provision and training for board members
• Plans to hold company and financial statement briefings, and utilize internet video streaming for information sharing

Supply Chain Management

Climate-Related Risks & Opportunities