Carrying Out Environmentally Friendly Business Activities

Information disclosure based on TCFD recommendations

We have endorsed the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Following those recommendations, we have identified climate-related risks and opportunities and are addressing climate change and other environmental issues.

Governance

The Group has established an Environmental Committee, chaired by the corporate officer in charge, to implement and promote environmental measures, including ones addressing climate change, as a structure to consider environmental measures at the Group level.

Led by General Affairs, the committee is primarily composed of directors, corporate auditors, and corporate officers responsible for plants and research centers doing business related to the environment in local communities or involved in management strategies. It considers responses to environmental issues (vision, targets, road maps, etc.), then reviews them.

In coordination with environmental, health, and safety (EHS) activities, the committee identifies and evaluates risks and opportunities related to climate change and comprehensively compiles additional measures that it proposes to the Management Committee, with the resulting decisions reported to the Board of Directors.

Strategy

Regarding environmental issues, we are pursuing the challenge of “carbon neutrality by 2050” as part of our long-term vision. We are considering a gradual transition and new capital investments in energy from renewable sources to reduce CO₂ emissions, with a target of “reducing CO₂ emissions 46% from the fiscal 2015 level by fiscal 2030.”

We are promoting the effective use of the world’s limited resources and have set targets to protect the environment under the important themes of preventing global warming, protecting resources, and living in harmony with the natural environment.

All Group plants have obtained ISO 14001 certification, an international standard for environmental management systems. We will maintain and continue these measures going forward.

Risk management

The effects on the Kyorin Group’s business and management from global warming and climate change themselves, as well as changes to the business environment from long-term policy related to climate change, are broken down as physical risks and earnings opportunities caused by climate change and transition risks to a decarbonized society, and undergo a scenario analysis.

The scenario analysis is carried out by referencing documents and materials including the Intergovernmental Panel on Climate Change’s (the IPCC’s) Sixth Assessment Report’s SSP 1-1.9 (1.5˚C scenario) and SSP 5-8.5 (4˚C scenario).

1.5℃ Scenario

4℃ Scenario

Indicators and targets

Tackling environmental issues is a mission for all humankind. We are voluntarily pursuing the challenge of “carbon neutrality by 2050” as an imperative component for the very existence of corporations.

2030 target: Reduce CO₂ emissions (Scope 1 + Scope 2) 46% in fiscal 2030 vs. fiscal 2015 level

CO₂ emissions and percentage reduction vs. fiscal 2015 (Scope 1 + Scope 2) level

Measures toward achieving targets

Systematic upgrades and proactive capital investment in equipment

To reduce CO₂ 2 emissions, we are systematically upgrading antiquated manufacturing equipment, air conditioning, and other equipment to new models with superior energy conservation functions, while introducing LED lighting and other measures.

In addition, we are currently considering proactive capital investment in heat conversion and highly efficient machinery and making preparations for concrete implementation.

The Takaoka Plant uses equipment systems and machinery much more efficient than ones at previously existing manufacturing centers to reduce energy use.

The WATARASE Research Center has installed ReHP* technology. Operation of this system during fiscal 2024 reduced electric power consumption 68,375 kWh and CO₂ 2 emissions approximately 29.5 tons compared with those from conventional heat pumps for air conditioning and heating, achieving energy savings of approximately 35%.

Introducing renewable energy

We are working to reduce CO₂ 2 emissions by gradually replacing electric power at research centers and plants with power from renewable sources. Of the electricity used during fiscal 2024, the percentages derived from renewable sources were 20% at the WATARASE Research Center, 20% at the Noshiro Plant, 100% at the Takaoka Plant, 0% at the Inami Plant, and 10% at the Shiga Plant.

Reducing number of sales force vehicles and replacing with hybrid vehicles

From the perspective of preventing global warming, we are reducing the number of sales force vehicles and replacing vehicles with ecologically friendly versions including low emission vehicles and hybrid vehicles.

As of March 2025, all 803 sales force vehicles met the standard for low emission, and of these, 316 are hybrid vehicles, which were introduced in 2004. In addition, these vehicles adhere to the Ministry of the Environment’s “Eco-Driving” guidelines regarding their impact on the environment and for traffic safety.

Other initiatives

Water resource management

In addition to monitoring the volumes of water intake and wastewater outflow, we are striving to preserve water resources by using wastewater treatment buildings and primary treatment equipment at research centers and plants for the appropriate management of the quality of water outflow.

Water intake during fiscal 2024 totaled 261 thousand m³ , and wastewater volume amounted to 107 thousand m³ , with wastewater pH, BOD, and SS at all research centers and plants within standard levels.

Air pollution management

We regularly measure and manage soot particles as well as NOx and SOx emissions from boilers and generators.

Reducing waste materials

We are proactively implementing 3R (reduce, reuse, recycle) initiatives for waste materials to effectively use limited resources.

Chemical substance management

We strive to appropriately manage specified chemical substances by following the Japanese government’s Pollutant Release and Transfer Registers (PRTR) system.

Biodiversity

Noshiro Plant participates in a citizen’s volunteer activity to protect the Kaze-no-Matsubara pine forest near the plant, to provide local residents with a place to relax.

In addition, WATARASE Research Center has installed birdhouses in trees adjacent to the WATARASE YUSUICHI wetland and confirmed the location of nests as a way to enhance the environment for wild animals in the Center’s grounds.

Kyorin Group material flow (Fiscal 2024)

CO₂ emissions (Scope 1, 2, and 3)

The Kyorin Group strives to expand the scope of coverage to calculate CO₂ emissions throughout its supply chains.

CO₂ emissions (Scope 1 + Scope 2)

Amount of energy used

Volume of Water Used

Volume of sewer water

Waste volume in relation to sales

Amount of packaging recycled