Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Began plans to replace company cars with EVs and switch to renewable energy sources to power company facilities.
• Implemented a model for reusing wooden pallets in material transport, reducing waste.

Social Achievements

• Appointed three female Directors to incorporate diverse values and perspectives into business management.
• Introduced various welfare programs, including GLTD insurance and company housing, to support employees.
• Implemented safety driving training, reducing accidents involving young employees.

Governance Achievements

• Established the Nomination and Compensation Committee to strengthen the transparency and objectivity of the decision-making process for appointment and remuneration of Directors.
• Implemented a whistle-blowing system with internal and external contact points.

Climate Goals & Targets

Environmental Challenges

• Soaring manufacturing and procurement costs impacting sales volume.
• Intensifying price competition in product markets.
• Dependence on imported merchandise and FX fluctuation.
• Impact of market fluctuations for raw materials.
• Impact of communicable diseases on business activities.
• Dependence on public and private investments.
• Decrease in labor force participation due to declining birthrate and aging population.

Mitigation Strategies

• Passing on costs to sales prices.
• Improving productivity to increase price competitiveness.
• Cultivating new suppliers and concluding forward exchange contracts.
• Swiftly passing on cost increases to selling prices, working with multiple suppliers, and cutting production costs.
• Creating a manual for business continuity in case of communicable diseases.
• Cultivating new customers, offering new products, expanding into overseas markets, and implementing M&A strategies.
• Developing and providing high value-added products tailored to user needs.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Cultivating new suppliers
• Concluding OEM production contracts

Climate-Related Risks & Opportunities

Physical Risks

• Acute: normalization of extraordinary climate events causing massive damage
• Chronic: rising average temperature, changes in rainfall patterns, extreme variability in weather patterns

Transition Risks

• Political policy and laws and regulations (carbon tax, tightening of regulations concerning low carbon initiatives)
• Market (promoting the spread of renewable energy)

Opportunities

• Business expansion related to renewable energy
• Reduction of CO2 emissions and transportation costs by developing local suppliers
• Increased demand for low carbon facility development
• Increased opportunity to sell disaster preparation merchandise
• Increased demand for repair and reinforcement work on rivers and banks
• Expansion in our seasonal merchandise lineup

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 14001 (all four factories), ISO 9001 (all factories)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• HI TEN CONBRACE (lightweight, labor-saving)
• Aluminum square-shaped pipes “Alpaca”
• Model without metal grommets for tarpaulins

Awards & Recognition

• AA Website in the All Japanese Listed Companies’ Website Rankings 2023
• Excellent Company Bronze Award in Gomez IR website ranking 2023

Environmental Metrics

ESG Focus Areas

• Environmental burden reduction
• DE&I (Diversity, Equity, and Inclusion)
• Sustainability
• Digitalization
• Governance

Environmental Achievements

• Initiatives to reduce greenhouse gas emissions and waste
• Expand the range of environmentally friendly products and merchandise

Social Achievements

• Improving a diverse work environment through year-round recruitment and experienced hires; developing necessary skills through training programs; improving the workplace environment to increase employee engagement.
• Promoting DE&I

Governance Achievements

• Strengthen risk management system
• Enhance sustainability disclosures

Climate Goals & Targets

Environmental Challenges

• Slump in the domestic market and increasing size of constructions and buildings
• Increase in the importance of overseas markets
• Increase in National Resilience and disaster prevention and mitigation projects
• Decrease in new construction and increase in maintenance/repair work
• Increase in demand related to labor-saving
• Responding to advances in digital technologies
• Decrease in labor force participation
• Responding to climate change
• Transition to a Sound Material-Cycle Society
• Slump in domestic demand due to the declining birth rate and aging population
• Economic growth in overseas markets
• Accelerating digital technologies
• Expanding a range of utilization of AI/robotics technologies
• Merging of real and virtual worlds

Mitigation Strategies

• Promote growth strategies (organic growth, peripheral growth, and M&A)
• Implement a capital policy with consideration of optimal capital structure
• Implement shareholder returns and growth investment with capital costs kept in mind
• Strengthen management base in order to realize sustainable growth
• Enhance sustainability disclosures
• Improve ROE by increasing profitability and capital efficiency
• Improve PER by promoting better understanding of the KONDOTEC group while promoting initiatives aimed at increasing productivity in the medium- to long-term and realizing sustainable growth

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Expand the range of environmentally friendly products and merchandise