Climate Change Data

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Environment
• Society

Environmental Achievements

• Improved power consumption rate of auxiliaries by 7% through inverter control of cooling fan motor in rolling plant.
• Reduced electric power consumption by 20,000 kWh/month in Chiba Works by replacing some lights with LED lights.

Social Achievements

• Acquired JIS Product Certification (first in Southeast Asia) and ISO 14001:2015 certification for PT. JATIM TAMAN STEEL MFG. in Indonesia.
• Enhanced employee programs, such as extending childcare leave periods and expanding eligibility for shorter working hours.

Governance Achievements

• Established the Risk Management Committee and formulated Risk Management Regulations.
• Established the Global Control Office for Corporate Administration to improve management of overseas subsidiaries.

Climate Goals & Targets

Environmental Challenges

• Significant decline in profit due to losses in North America (impact of higher tariffs) and Indonesia (JATIM), and increased costs related to coke oven renovation at Muroran Works.
• Inability to respond to changes in the overseas business environment.
• Supply disruptions and drop in productivity in North America due to higher tariffs.

Mitigation Strategies

• Strengthened functions at the head office to support overseas businesses.
• Established the Risk Management Committee in July 2019.
• Applied for and received tariff exemption in the US; working to resolve production disruptions and expand material suppliers at North American subsidiaries.
• Working to improve product quality and secure more customer approvals at JATIM.

Supply Chain Management

Responsible Procurement

• CSR procurement questionnaires
• Verification of no conflict minerals

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• High-strength spring steel, ZDS13

Environmental Metrics

ESG Focus Areas

• Environmental conservation
• Respect for employees
• Compliance
• Globalization
• Contribution to Society

Environmental Achievements

• Reduced power consumption by 50,000 kwh/year (approx. 26 t/year in CO2 emissions) through transformer upgrades at Hirota Works.
• Reduced power required for lighting by 54,000 kwh/year (approx. 28 t/year in CO2 emissions) through LED lighting conversion at Hirota Works.
• Cut water pump power consumption by 3,400 kwh/month (approx. 20 t/year in CO2 emissions) through modifications to the water coolant system at Mitsubishi Steel Muroran rolling plant.

Social Achievements

• Implemented work-from-home program for eligible employees.
• Enhanced childcare leave programs by lengthening leave periods and expanding eligibility for shortened working hours.
• Provided global management training for human resources.

Governance Achievements

• Established the Investment and Credit Committee to enhance risk management.
• Appointed a Chief Compliance Officer.
• Established the Detailed Rules for Mitsubishi Steel Manufacturing Group Corporate Code of Conduct.

Climate Goals & Targets

Environmental Challenges

• Decreased demand for construction machinery and industrial machinery.
• Decreased sales at overseas subsidiaries.
• Impact of COVID-19 pandemic on market conditions, production, and sales.
• Worsening profitability at JATIM (Indonesia) due to mass production problems.
• Unprofitability at MSSC (North America) due to new product launch problems and low utilization rates.

Mitigation Strategies

• Restructuring of special steel bars subsidiary in Indonesia and springs subsidiary in North America.
• Cost improvements and narrowing of steel types produced at JATIM.
• Cost cutting and improved utilization rates at MSSC US plant by shifting production to Canada and Mexico.
• Strategic investments to reduce manufacturing costs and improve production efficiency at Mitsubishi Steel Muroran Inc.
• Establishment of the Risk Management Office to manage conditions Groupwide.

Supply Chain Management

Responsible Procurement

• CSR procurement based on compliance with laws, regulations, and societal norms; concern for the global environment; concern for human rights and worker safety and health; ensuring product safety and QCD.

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Lightweight springs
• Turbocharger components
• Magnetic separators

Environmental Metrics

ESG Focus Areas

• Environmental conservation
• Respect for employees
• Governance

Environmental Achievements

• Reduced electricity intensity in the melting and atomization process of manufacturing metal powders by roughly 12 kWh per ton of product weight YoY, resulting in reductions of approximately 151 tons per year in CO2 emissions in the metal powder manufacturing process.
• Reduced LF electricity consumption by 22,200 kWh/month —roughly equivalent to reductions of 125 tons/year in CO2 emissions by installing equipment to close ladle lids.

Social Achievements

• Implemented training focused on evaluations intended to reaffirm the meaning and importance of evaluations to build trust through the ongoing sharing of goals and issues between superiors and subordinates.
• Enhanced childcare leave programs, including lengthening the periods of childcare leave, expanding the scope of those eligible for shortened working hours for childcare purposes, and providing subsidies for temporary childcare services.

Governance Achievements

• Adopted a new structure in June 2021, reducing the number of directors from nine to six, requiring the presence of independent outside directors (two) accounting for at least one-third of the members of the Board of Directors, and reducing the term of office for directors from two years to one.
• Established the Governance Committee as an organization operating under the umbrella of the Board of Directors, consisting of two independent outside directors to encourage the active participation of independent outside directors.

Climate Goals & Targets

Environmental Challenges

• Industries in which major customers operate faced difficult business conditions due to the effects of COVID-19 on production activity and significant decline in demand.
• Domestic businesses recorded losses due to temporary costs associated with temporary production halts required by the blast furnace renovations undertaken once every 20 years at the Muroran Works.
• Rising cost of iron ore and other raw materials.

Mitigation Strategies

• Met demand by drawing on inventory stockpiled in advance.
• Restructuring of overseas businesses (e.g., improved earnings at JATIM, Indonesian special steel bars subsidiary).
• Established Sales Strategy Office to strengthen product appeal.
• Implemented measures to cut fixed costs, resulting in lowering the break-even point.

Supply Chain Management

Responsible Procurement

• CSR procurement based on compliance with laws, regulations and societal norms; concern for the global environment; concern for human rights and worker safety and health; ensuring product safety and QCD.

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products
• Venturing into renewable energy business (e.g., supplying ring rolling mills for bearings and cast flanges for use in wind power generation).

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 14001

Sustainable Products & Innovation

• ZDS13 high strength spring steel
• High-temperature carburizing steel
• Products for electric vehicles
• Steel materials that reduce heat treatment times

Awards & Recognition

• Silver prize from the Nagasaki Chapter of the Japanese Red Cross Society (Mitsubishi Nagasaki Machinery Mfg. Co., Ltd.)

Environmental Metrics

ESG Focus Areas

• Environment
• Society
• Governance

Environmental Achievements

• Upgraded automatic marking equipment to eliminate use of designated chemical substances (tetrachloroethylene and dichloromethane)
• Achieved success in tests using hydrogen gas instead of LPG to cut cast steel billets, reducing CO2 emissions
• Earned TPG accreditation for tower flange bolts used in offshore wind power generation

Social Achievements

• Implemented training on human rights, including LGBT issues
• Adopted a flextime system with no specified core hours
• Expanded childcare leave programs and provided subsidies for temporary childcare services

Governance Achievements

• Reduced the number of Directors from nine to six
• Achieved a ratio of Outside Directors on the Board of Directors of at least one-third
• Established a new Nomination and Compensation Committee

Climate Goals & Targets

Environmental Challenges

• Declining earnings at the North American subsidiary due to production disruptions and rising steel prices
• Rising costs of fuel, resources, and imported raw materials due to the devalued yen
• Declining demand for turbocharger components due to increasing use of electric vehicles

Mitigation Strategies

• Working to reflect rising costs in selling prices through negotiations with customers
• Pursuing rapid production normalization in North America
• Focusing on growing the metal powder business and developing products for electric vehicles and renewable energy

Supply Chain Management

Responsible Procurement

• Green procurement with low environmental impact
• Management of hazardous chemicals
• Reduction in CO2 emissions
• Respect for human rights
• Prohibition of discrimination, child labor, and forced labor

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Insufficient industrial water supplies

Transition Risks

• Rising business costs due to carbon pricing
• Decreased sales due to lower demand for parts related to internal combustion engines
• Increased costs due to rising raw material and energy prices

Opportunities

• Increased sales due to growth in demand for lightweight special steel bars and springs
• Increased sales due to sales expansion related to fabrication and maintenance of offshore wind power equipment
• Effects on corporate reputation of sales growth in products contributing to a low carbon society

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 14001

UN Sustainable Development Goals

• Goal 7
• Goal 13

Initiatives align with SDGs through new business creation, eco-friendly products, carbon neutrality, and human rights

Sustainable Products & Innovation

• Lighter springs
• Materials to contribute to CO2 emissions reductions at customer plants
• Products for electric vehicles and renewable energy

Awards & Recognition

• Isuzu Motors FY2020 Quality Award
• ASME U3 certification stamp
• 2021 Quality Excellence Award from Canon Business Machines (Philippines)
• Special Appreciation Excellent in Local Material Development award from PT. Toyota Motor Manufacturing Indonesia
• SUBARU Corp. Quality Production Cooperation Award
• Japan Society of Industrial Machinery Manufacturers Chairman’s Award