ENVIPRO Group ESG Initiatives

E
S
G

Environmental Policy
We have established the following environmental policy and will act accordingly, placing importance on harmony
with the natural environment and coexistence with the local community, with the mission of “Contribute tocreate a sustainable society,” and under the concept of “Lead a circular economy.”nvironment

Target for Ratio of Renewable Energy in Electricity Use

CO2 Reduction Targets
Base Year Target year: 2027

Scope1

2017

Scope2

2017

Scope32022

envipro.jp/en/company/compliance/

Target year: 2050

100

63%

%
Net zero

12.5%—

100% by 2030

Human Rights Policy
The ENVIPRO Group places importance on respecting and promoting human rights, and complies with andpromotes the human rights policy set forth herein in accordance with international human rights frameworks
such as the “United Nations Guiding Principles on Business and Human Rights.”

ocial

envipro.jp/en/company/compliance/

Active Employment of Women
Targeting a ratio of20%of women in management positions by June 2028

Percentage of Female Directors

9.1%

overnance(September 30, 2023)

Outside Directors
We have established and disclosed criteria for the appointment of outside directors. Based on thesecriteria, we appoint individuals who meet the requirements for the determining the independence ofindependent outside directors.

3. ESGENVIPRO Group Sustainability Report 2023

Environment

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Initiatives to Achieve the SDGs

The ENVIPRO Group’s Approach to the SDGs

The ENVIPRO Group has identified SDGs that are consistent with the nature of our business and our mission statement of “Contribute to create asustainable society,” around which we engage in activities to achieve the SDGs.

Contribution to the Economy

Making Every Effort with Every Partner

ECONOMYAs actions aimed at achieving the SDGs, we will advance collaboration within the Group, withcompanies in the supply chain, and with administrative agencies, local communities, and citizens.
Partnerships

Through participation in corporate groups and international initiatives, we are
expanding partnerships aimed at achieving a sustainable society.

Japan Climate Leaders’ Partnership (JCLP)
Clean Ocean Material Alliance (CLOMA)

RE100*1

CDP*2 Scoring Partner

Japan Climate Initiative (JCI)At the laboratories of ENVIPRO HOLDINGS Inc., we are

impact and contributes to the economic developmentof countries in need by distributing high-quality usedworking on the development of technology to collect theminor metals cobalt, nickel, and lithium with high purity

cars and other products to where they are needed infrom waste lithium-ion batteries through hydrometallurgy,

the world.

and the enhancement of analysis accuracy, to contributeto the development of technology that will form the basisof a circular economy and a decarbonized society.

*2 CDP: An international initiative for the disclosure of information on climate change response

SOCIETY

We prevent water and soil pollution and contaminationby properly managing scrap materials at our plants,
which comply with safety and environmental
standards. In addition, to prevent infectious diseases,
the entire Group has established guidelines such asa vaccination assistance system and the provision ofthermometers and sterile alcohol solution.
ASTOCO Inc. provides high-quality educational
opportunities for people with disabilities so that they
can participate in society with confidence and a senseof purpose.
We have introduced systems for telecommuting andshortened working hours for permanent employees,
and provide an environment that lets employees,
including those raising children or performing familycare, choose a working style that fits them best.

Working environment

Health Education Gender
Equality Community development

The ENVIPRO Group offers worthy job opportunities
for people of different backgrounds, such as recruiting
new graduates and providing employment to people
with physically challenges. We thoroughly implement
measures to prevent work accidents at our plants toensure the safety of our employees.
Under programs such as the pre-employment transition
support program and the type B continuous employment
support program, we provide support that enables people
with disabilities to remain engaged in rewarding work.
We contribute to community revitalization and thedevelopment of a sustainable cities and communities
through recycling and the creation of employment,by collecting and recycling waste and discarded
household items and by hiring local people withdisabilities at our plants.

Technological innovation

The ENVIPRO Group helps to reduce environmental*1 RE100: Means “100% Renewable Electricity.” An international initiative for companies that aim to procure 100% of the electricity required fortheir business operations from renewable energy sources.

Contribution to Society

No poverty

Contribution to the Environment
BIOSPHERE

We joined the RE100 initiative in July 2018 and set a
goal of shifting to 100% renewable energy by 2030
for the energy consumed in our business activities.
In addition to switching to renewable energy for theelectricity used in our plants, we are installing solar
panels on plant roofs and otherwise introducing
renewable energy power generation equipment.
The ENVIPRO Group is committed to promoting
a circular economy, aiming to maximize productutilization throughout the value chain and minimize
resource value leakage. Through maintenance, reuse,refurbishment, recycling, and remanufacturing, we
contribute to the circulation of limited resources andthe reduction of waste.

Consumption and production

Climate change

EnergyLife below water

Under the goal we have set of achieving carbon neutrality
by 2050, we will work to reduce GHG emissions from ourbusiness activities. We also contribute to the reductionof emissions across the supply chain through ourcircular economy initiatives. In May 2019, we publicly
endorsed the Recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD). We will
identify and evaluate opportunities and risks placedon our businesses by climate change, integrate these
into our business strategies, and engage in appropriate
information disclosure.
We contribute to the prevention of marine pollution
stemming from plastics by developing technologies
to sort waste plastics for recycling into pellets andby promoting the development of applications forrecycled materials.

3. ESGENVIPRO Group Sustainability Report 2023

Environment

29

E n v ir on m en t

Becoming Carbon Neutral by 2050

Information Disclosure in Line with TCFD Recommendations

director, full-time directors, executive officers, and heads of some related departments. The committee seeks topromote the medium-term management plan that forms our strategy for achieving sustainable development for
both the Group and society. As an organization that assists decision-making by the representative director, it
flexibly and actively discusses and examines the status of strategy promotion and future directions, including
new business and M&A, from a long-term perspective. Matters discussed are further resolved or discussed by
the Management Committee, a decision-making body for business execution, and are then submitted to theBoard of Directors. Under the supervision system of the Board of Directors, we work to maintain governance andpromote sustainability.

Basic Approach

In May 2019, the ENVIPRO Group announced its endorsement of the recommendations of the Task Force on
Climate-related Financial Disclosure (TCFD), established by the Financial Stability Board (FSB). The TCFD
recommends disclosure based on four categories: governance, risk management, strategy, and metrics andtargets. The Group discloses information on climate-related issues according to these four categories.
In December 2020, the Group decided to achieve effectively zero GHG emissions from all its business by 2050,
including the processing and recycling of scrap and waste handled by theGroup. As countries work toward decarbonization, resources and climate
Sustainabilitychange are issues that—far from being separate—are closely interrelated
Promotion System
and global in scope. Unrestricted resource extraction and GHG emissions
Board of Directors
undermine sustainability and must be addressed if we are to preserve theEarth’s resources and natural environment we share into the future. As its
Supervision
Reportresource circulation business is located at the end of the supply chain, theManagement Committee
Group has the characteristics to address both of these important social issues
Supervision
Reportthrough its business. This is precisely the social responsibility we believe theGroup should fulfill.

Role of Conference Bodies to Address Climate
Change within the Sustainability Promotion System

Selection
Supervision
Dismissal

ReportConference Body

Role

Board ofDirectors

Supervises progress on initiatives related toenvironmental issues discussed and approvedby the Management Committee.
Meets monthly.

Management
Committee

Decides on important matters related toindividual, specific instances of businessexecution, and makes decisions on timely
disclosure. Meets monthly.

Sustainability
Committee

Discusses the organization and operation of
the committee and other important mattersconcerning sustainability in order to promote
the medium-term management plan. Meets
monthly.

Representative Director

Instruction

ReportSustainability Committee

Governance

Chairperson : President and representative director

Sustainability Promotion System

Instruction

Secretariat : Corporate Strategy Division

To promote policies and measures related to climate change response andother sustainability matters, the Group’s sustainability promotion system has a
Sustainability Committee that consists of the president and representative

Initiatives to
Date

2018

Joined RE100

ReportMembers : Full-time directors, executive officers, heads of related departments

2019

Announced
endorsement of the
TCFD
recommendations

Instruction

ReportIndividual departments and Group companies

2020

Declared a commitment
to become carbon
neutral by 2050

2021

Incorporated theSustainability Committee
into the governancestructure2023

In the medium-term
management plan,
disclosed CO2 reduction
targets in line with the
Science-Based Targets

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Environment

Risk Management

Strategy

Identifying and Addressing Risks and Opportunities

At the Group, the Internal Control Committee evaluates and reviews business risks, which are integrated into thecompany-wide risk management process. The Sustainability Committee evaluates and reviews climate changerelated risks. Relevant departments identify opportunities, consider specific measures, and makerecommendations as necessary. The Sustainability Committee evaluates the recommendations and promotes
measures to address them. For both risks and opportunities, particularly important matters are reported to or
submitted to the attention of the Board of Directors.

The Group conducts scenario analyses to examine the risks and opportunities posed by climate change and its
impact on the Group.
We analyzed the Group’s business activities using the Representative Concentration Pathways (RCP8.5)
published by the Intergovernmental Panel on Climate Change (IPCC) and the Net Zero Emissions by 2050
Scenario (NZE) published by the International Energy Agency (IEA). We examined the impact on the Group’sbusiness activities based on the assumption of a temperature increase limited to 1.5°C by the end of thiscentury and the assumption of a 4°C increase.

Climate-Related Risks/Opportunities and Potential Financial Impacts and Responses
Type

Category

Hypothetical examples

Taxes on various types of energy, introduction ofcarbon taxes
Policy andRegulations on the use of recycled plastics
regulation
Traceability of CO2 emissions (DX) mandated

Potential Financial Impact
Risks•Increased costs of using renewable energy•Easing of the supply-demand balance and price decline of ferrous scrap due tothe development of new technologies such as hydrogen-reduction steelmaking

PeriodOpportunities•Expansion of existing recycling business
Short toShort to•Increased demand for ferrous scrap due to shift to electric furnaces, price increase
long termlong term •Installation of large shredder to produce electric furnace materials•Reduction in the thermal recycling of waste plastics•Growth in demand for low-carbon raw materials and fuels (RPF)
Long term •Expansion of material and chemical recycling of waste plastics•Development and commercialization of chemical recycling plants•Lost market entry opportunities due to delays in business development

Mediumterm

Transitional

Technology Expansion of the chemical recycling of waste plastics •Lost business entry opportunities due to delays in technology development

Period•Expansion logistics businesses of scrap, waste•Visualization of GHG emissions•Support for the procurement of carbon credits

Medium tolong term
Medium tolong term

Medium to •Creation and expansion of new markets for the chemical recycling of waste
long term plastics

Medium tolong term

Increased adoption of EVs, ESSs

•Increased demand for nonferrous metals and minor metals due toelectrification (depletion)•Expansion of the Lithium-ion Battery Recycling Business
Short to•Expansion of the business of collection gold, silver, and copper sedimentlong termsludgeShort tolong term

Reputation

Social responsibility as an environment-relatedcompany•Failure to consider the environment, damage to credibility among
stakeholders•Scoring by CDP and other international rating agencies
Short to•Disclosure of information in line with the TCFD recommendations
long term•Disclosure of various approaches through the Sustainability Report

Short tolong term

AcuteIncrease in natural disasters due to increasing
severity of extreme weather events•Decrease in earnings due to such factors as shutdowns and production reductions
caused by damage to plants, difficulties in vessel dispatch, or transportation delays•Decrease in revenue due to lost sales and purchasing opportunities•Increase in insurance premiums and repair/restoration costs

Short to•Enhanced response to issue of waste created in disasters
long term

Short tolong term

Chronic

Increased heat stress due to higher averagetemperatures•Decrease in productivity due to restrictions on working hours•Increased cost of investing in environmental improvement

Short to•Personnel savings, unmanned operation, remote control
long term

Short tolong termMarketPhysical3. ESGENVIPRO Group Sustainability Report 2023

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Environment

Metrics and Targets

In fiscal 2022, CO2 emissions (Scope1 and 2) amounted to 6,356 tons, down 50% from fiscal 2017 levels.

The Group has identified GHG emissions and the percentage of electricity generated from renewable energy
sources as indicators to be used in assessing and managing climate change-related risks and opportunities, andhas publicized target values for each.

Percentage of Electricity Generated from Renewable Energy Sources
In July 2018, we became the first company in the global recycling industry to join the RE100 initiative, whichsets the goal of reaching 100% renewable energy for electricity consumed in business activities by 2050. The
target date for RE100 has since moved forward by 20 years, to 2030, to coincide with the government
commitments to go carbon neutral.
In fiscal 2022, renewable sources accounted for approximately 87% of electric power used throughout theGroup.

GHG Emissions
By 2050, the Group aims to achieve effectively zero GHG emissions from all its operations, including theprocessing and recycling of scrap and waste.

Emissions Reduction Targets(t-CO2)(t-CO2)

15,00015,00010,00010,000

5,000

5,000

0

0

2017

Scope1+2■Scope1  ■Scope2

To achieve Net ZeroTo achieve Net Zero

2017
2027

0

2027
2050

0

2050

Reduce Scope 1 and 2 emissions by 63% over 10 years (compared with 2017 levels)
Achieved a 50% reduction by fiscal 2022

(t-CO2)(t-CO2)500,000

500,000

400,000

400,000

300,000

300,000

200,000

200,000

100,000

100,000

0Electricity Consumption and Percentage of Renewable Energy Use, Results and Targets

Scope3

0
2022

（GWh）

2027

60.0

0.0

711,680 t-CO2

The ENVIPRO Group produces recycled materials by shredding and sorting waste. In fiscal 2022, the Group shipped 512,000
tons of ferrous scrap to steel mills and other customers. Steelmaking in an electric arc furnace from steel scrap reduces CO2
emissions by 1.39 t-CO2 per ton compared to manufacturing in a blast furnace converter from natural resources such as ironore (according to materials from the Japan Iron and Steel Recycling Institute). The same amount of iron produced from natural
resources such as iron ore would generate 1,024,000 t-CO2, but the steel production process generated only 312,320 t-CO2,
reducing emissions by 711,680 t-CO2.

40.0

35.0

2027

Expanded calculation categories from fiscal 2022

Note: The reduction standards disclosed in the SBTs are for a 42% reduction in Scope 1 and 2 emissions over 10 years, and for a 12.5% reduction in Scope 3 emissions over five years.

100.0

15.0
10.0

2022

86.5

（%）

80.0

5.0

Initiatives for Reducing CO2 Emissions Impact of Using Ferrous Scrap: Emissions Reduced by

Percentage of renewable energy use (right axis)

100.0

20.0

Reduce Scope 3 emissions by 12.5% over five years (compared with 2022 levels)

Initiatives for Reducing CO2 Emissions

97.3

Electricity consumption (left axis)

25.0

0.0
2017

Production of Low-Carbon Fuel: Emissions Reduced by

2.9
2018

20.0

17.8

0.0
2019

2020

2021

2022

2030

22,040 t-CO2

In fiscal 2022, the ENVIPRO Group sold 29,000 tons of RPF to paper manufacturers and other companies. CO2 emissions perton (calorific value conversion factor) are 2.33 t-CO2 for imported thermal coal and 1.57 t-CO2 for RPF. Comparing the CO2
emissions when the same amount of coal (29,000 tons) and RPF are used, emissions from the use of coal would be 67,570
t-CO2 and emissions from RPF emissions would be 45,530 t-CO2, resulting in an annual reduction in CO2 emissions of
22,040 t-CO2.

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Environment

Participation in Initiatives
ENVIPRO HOLDINGS Inc. was established in 2009 with the understanding that the industrial sector should feela strong sense of urgency and work proactively to realize a decarbonized society. Since its inception, thecompany has been a member of the Japan Climate Leaders’ Partnership (JCLP), an industry alliance thatcurrently has 237 member companies (as of April 2023). We actively engage in communication with
policymakers, industry parties, and stakeholders.
We participate in monthly regular meetings and various working groups related to renewable energy utilization
to express our opinions, exchange ideas with other companies, and collaborate on forming a consensus
regarding the direction and targets for JCLP’s efforts towards a decarbonized society, as well as policy
recommendations and other communication initiatives. The Sustainability Committee collaborates to ensurealignment with the ENVIPRO Group strategy and obtain approval before endorsing important proposals andactions undertaken by JCLP.
JCLP serves as the regional partner for RE100, an initiative led by The Climate Group, an international nonprofit organization. We have also joined RE100 and are working together to promote renewable energy.

Assessment of Environmental Initiatives

Climate Change: B

The Group received a “B” rating, the third highest out of nine, in a 2022 study on
climate change conducted by CDP, an international non-profit organization.
We continued to cooperate with the survey in 2023, and the responses are available
on the CDP website. (Evaluation results are scheduled for release in 2024.)

RE100 Plants*1
RE100 Plants
1 Head office plant

ECONECOL Inc.

Kuroda Recycle Co., Ltd.
SYN ECO Inc.
Toyo Rubber Chip Co., Ltd.
VOLTA Inc.

Fujinomiya, Shizuoka

2 Fuji plantFuji, Shizuoka

3 Wood Recycling Center

Fuji, Shizuoka

4 Hamamatsu plant

Hamamatsu, Shizuoka

5 Shimizu plant

Shimizu, Shizuoka

6 Head office plant

Hakodate, Hokkaido

7 Head office plant
8 Plaza Azumino

Matsumoto, Nagano
Azumino, Nagano

9 Head office plant

Maebashi, Gunma

10 Head office plant
11 Fujinomiya plantFuji, Shizuoka
Fujinomiya, Shizuoka

Head officeFujinomiya, Shizuoka

1 E
 CONECOL Inc.

Head office plant

2 E
 CONECOL Inc.

3 E
 CONECOL Inc.

Fuji plant

Wood Recycling Center

8 SYN ECO Inc.

9 T
 oyo Rubber Chip Co., Ltd.

4 E
 CONECOL Inc.

Hamamatsu plant

5 E
 CONECOL Inc.

Shimizu plant

6 K uroda Recycle Co., Ltd.

Head office plant

RE100 (Except plants)

ENVIPRO HOLDINGS Inc.

7 S
 YN ECO Inc.

Head office plant*1 Plants and facilities that operate on electric power 100% from renewable sources

Plaza Azumino

Head office plant

10 VOLTA Inc.

Head office plant

11 V
 OLTA Inc.

Fujinomiya plant

ENVIPRO HOLDINGS Inc.
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Environment

Material Balance

Inputs

Outputs

Input resources
Amountprocessed
Distributed
resources*3

Reuse

Raw
materials

649,900 tons

Scrap, waste

Scrap, waste

Used vehicles

Raw materials for polymers, etc.

*1 *2

Recycled Raw Materials, Finished Goods,
and Processing Outsourcing

222,300 tons
414,200 tons
Recycled raw
materials(including
distributed
resources)

1,404
13,300 tons

650,600 tons

42,367

EnergyMWh21,937 MWh

FuelRenewable energy

Non-Renewable energy

On-site PPA

17,569 MWh
2,760 MWh

Reuse

512,900 tons

Scope1

22,400 tons

Scope2

Plastic raw materials

40,600 tons

Scope2

Raw materials for
paper

13,200 tons

CO2 Emissions (Scope3)

Wood chip raw
materials, etc.

11,100 tons

Category 1

Purchased products/services

10,667 t-CO

2

Black mass, etc.

1,100 tons

Category 2

Capital goods

11,109 t-CO

2

Other

3,800 tons

Category 3

Fuel and energy activities not included in
Scope 1 and Scope 2

1,946 t-CO2

605,400 tons

Category 4

Transport/delivery (upstream)

30,700 t-CO

2

1,547

Category 5

Waste generated from business

28,673 t-CO

2

13,900 tons

Category 6

Business travel

82 t-CO

2

Used vehicles

5,136 t-CO

2(market-based standards)

1,219 t-CO

2(location-based standards)

8,823 t-CO

2

m3

t-CO2

Material recycling

700 tons

Category 7

Employee commuting

245 t-CO

2

Thermal recycling

12,200 tons

Category 9

Transport/delivery (downstream)

337 t-CO2

Waste disposal(including
circulatedresources)

Simple incineration

1,900 tons

Category 10

Processing of products sold312,320 t-CO

2

16,200 tons

Category 11

Use of products sold

45,530 t-CO

2

Category 15

Investment

2,199 t-CO

2

Landfilling

100 MWh

33,790443,808

Recycling(including
circulatedresources)

Finished goods

Water

t-CO2

Non-ferrous
metalsFinished goods Polymer products

Disposaloutsourcing

6,356

CO2 Emissions (Scope1+2)*1 *2

Ferrous metals

Subtotal

Electricity

33

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Resource recovery

605,400tons

Total output

650.600tons*4

Recycling rate

Disposal outsourcing (recycling)
Disposal outsourcing (waste)

94.3 %*1 Excluding Nitto Kako Co., Ltd. *2 Excluding reuse *3 Amount of resources distributed through trading company functions*4 The recycling rate is calculated from outputs in the Resource Circulation Business and the Lithium-ion Battery Recycling Business: (amount processed + amount processed and distributed + recycling) ÷ (amount processed + amount processed and distributed + recycling + waste disposal) × 100