Response to climate change - Prevention of Planet warming -

Planet warming is forcing us to change our socio-economic activities and lifestyles based on mass production, mass consumption, and mass waste, and we recognize this as an urgent issue that companies must address in order to maintain and improve Planet environment. In response to recent notable global warming events and new technological developments, we have held repeated internal discussions and reviewed our climate change response plan set for 2021 in line with the TCFD disclosure framework. The Itoki Group will steadily move forward toward our new goals, including our supply chain.

Policies and strategies related to climate change response are overseen by the Managing Executive Officer and General Manager of the Planning Division. Within this framework, the Sustainability Promotion Division under the Corporate Planning Department sets materiality, formulates medium-term environmental plans, and plans and reports on the progress of individual measures. As appropriate, these are discussed and reported at the Executive Committee via the responsible officer, and are supervised by the Board of Directors.

Climate change risks and opportunities were extracted and identified in accordance with the TCFD recommendations. The mapping was evaluated along two axes: impact and likelihood, and each was scored on a four-level scale: serious, large, medium, and small. The impact assessment was categorized into large, medium, and small.

Those rated as high were automatically identified as risks and opportunities. Among the medium-rated items, those that received a score of 9 were discussed among the relevant parties and judged as risks or opportunities. Below, ① to ⑧ on the risk analysis map and ① to ④ on the opportunity analysis map are the identified items.

Measures to address the identified risks and opportunities were formulated through repeated discussions with external experts in line with the TCFD recommendations, taking into account temperature scenarios, time frames, financial impacts, and likelihood of occurrence.

The risks identified in the risk analysis map were classified into transition risks and physical risks, and countermeasures were considered for the transition risks in a 1.5°C scenario and the physical risks in a 4°C scenario. As a result, countermeasures were formulated for the transition risks, such as "implementing a roadmap for reducing _CO2 emissions" and "continuous energy conservation activities," and for the physical risks, such as "regularly reviewing BCP" and "multiple procurement of important parts."

We considered countermeasures for the opportunities identified in the opportunity analysis map under both the 1.5°C and 4°C scenarios. As a result, we formulated countermeasures such as "strengthening development of environmentally friendly products and work style solutions" and "strengthening product development and solution sales that support diverse work styles."

The five indicators set in the Mid-term Environmental Plan 2026 (target items) are _CO2 emission reduction, total energy input reduction, waste reduction, recycling promotion, and water usage reduction. The main pillar of these is _CO2 emission reduction, which is also a countermeasure for transition risks. We will work on the Mid-term Environmental Plan 2026 to achieve the reduction targets for 2030 for each of Scope 1, 2, and 3.

Our target for reducing _CO2 emissions by 2023 (Scope 1 to 3 combined) was a 12% reduction compared to fiscal 2013, but in fact we achieved a reduction of 8.5%.

For Scope 1 and 2, we achieved our goal of a 33% reduction compared to fiscal 2013, with a reduction of 34.7%. In addition, _CO2 emissions per unit of sales decreased by 0.088 from 0.187t-_CO2 /million yen in 2013 to 0.099t-_CO2 /million yen. Specific efforts to reduce Scope 1 and 2 are introduced below.

Scope ₃ CO2 emissions for fiscal 2023 are 229,458t-_CO2, a 6.4% reduction compared to fiscal 2013. Regarding Scope 3 calculations, we have continued to review the reporting targets from 2022, and have added six new group companies to the calculations. In addition, for Category 1, we have corrected the calculation method between groups and made corrections retroactively to the data for fiscal 2019.

In fiscal 2023, Scope 3 _CO2 emissions by category will be highest for "purchased products and services" in category 1, accounting for 87% of the total. We recognize that collaboration with the supply chain related to category 1 is important to reduce _CO2 emissions. Please refer to the ESG Data Book for detailed figures.

Please see below for details of each achievement.

The Itoki Group is working with everyone involved throughout the value chain to achieve carbon neutrality by 2050. We have broken down our mid-term environmental plan into annual targets and are working to reduce _CO2 emissions in each field. Here we introduce some specific examples of initiatives in our main divisions.

We have provided our suppliers with opportunities to understand Itoki's initiatives through policy briefing sessions held at the beginning of the year. In fiscal 2023, we asked them to provide weight data for each component and material delivered to Itoki, and improved the accuracy of the figures in the calculation of _CO2 emissions Scope 3 Category 1 "Purchased products and services." Going forward, we will increase the number of suppliers for whom information is provided, aiming to further improve accuracy.

Currently, the scope of calculations is based on the "Basic Guidelines for Calculating Greenhouse Gas Emissions Throughout the Supply Chain (ver.2.4)" established by the Ministry of the Environment. Going forward, we will work to deepen communication with our suppliers to provide information for calculating _CO2 emissions during the manufacturing stage in addition to weight data, and work to grasp emissions more precisely.