C S R RE PORT 2 022

1

Message from the CEO

JFE Group Vision
4
6
12
15

Corporate Vision/Business Conduct
Value of Steel
Progress of the Seventh Medium-term Business Plan
Material Issues of Corporate Management

CSR Management
23
29
43

CSR Structure
JFE Group Value Chain
Supply Chain Management

Special Feature
45

Challenge to the Carbon Neutrality and its Pathway in the Steel Business

Environment
49
50
56
84
96
100
120
125
128
133
138

Executive Summary
Environmental Management
Climate Change
Scenario Analysis in Line with the TCFD Recommendations
Steel Industry Initiatives
Development and Provision of Eco-friendly Processes and Products
Efficient Use of Resources
Water Security
Prevention of Pollution
Biodiversity
Environmental Communication

Social
140
141
148
157
168
175
184

Executive Summary
Responsibility to Customers (Provide Quality Products and Enhance
Customer Satisfaction)
Occupational Health and Safety
Labor Standards (Recruit and Nurture Diverse Human Resources)
Human Rights
Community
Shareholders and Investors

Governance
186
187
198
202
206

Executive Summary
Corporate GovernanceCompliance
Risk Management
Tax Transparency

ESG Data
207
225
231
236

Environmental Data
Social Data
Governance Data
Independent Assurance Statement

External Evaluations and Awards
237
241
245

External ESG Evaluations
External Awards
Third-party Comments

248
251

Editorial Policy
Guideline Content IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices

Message from the CEO

September 2022

Koji Kakigi
Representative Director, President and CEO
JFE Holdings, Inc.

For Earth's Prosperity, Tackling the Biggest Challenge Since Our
Founding and Contributing to Development of Sustainable Society
JFE Group’s Vision
It is becoming increasingly important for companies to address ESG issues as part of their management strategies inorder to achieve sustainable corporate growth and enhance corporate value. The urgency of addressing climate change
in particular is rapidly growing worldwide. The 2021 revision of Japan’s Corporate Governance Code also requires prime
market-listed companies to enhance disclosure based on the TCFD or an equivalent framework, and we expect more ofthese requirements in the future.
In FY2021, the JFE Group announced the Seventh Medium-term Business Plan (hereinafter “medium-term plan”)
and formulated the JFE Group Environmental Vision for 2050, launching a systematic approach to addressing climatechange. Steel, the core business of the JFE Group, will continue to support human life and an indispensable material
for social development. However, carbon dioxide (CO2) emissions are unavoidable in the current steelmaking process
producing high quality products. Therefore, it is our responsibility to solve the problem of CO2 emissions throughtechnological development, provide a stable supply of steel, and thus contribute to the development of a sustainable
society. Through our business activities, we also hope that our corporate values will become widely acknowledged. This
would motivate our employees to create even more values, which in turn would further enhance our corporate value. We
will strive to be an essential part of the sustained development of society and the safe and comfortable lives of people.

JFE GROUP CSR REPORT 2022

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Message fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
IndicesMaterial Issues of Corporate Management, Progress on the First Year of the Medium-term PlanIn FY2021, we combined our economic issues with our material CSR issues under the policies of the medium-term planand disclosed our material issues of corporate management. In addition to CSR initiatives that focus on environmental
and social issues, we have promoted new initiatives by setting key performance indicators (KPIs) to economic issues thatare essential for the Group's sustainable growth. Through the management improvements including those initiatives,
both business profit and net income improved significantly in FY2021, the first year of the plan, compared to the previous
year. In our mainstay steel business, our shift from quantity to quality has been progressing well as a result of DX
promotion for the improved production efficiency and a prompt reflection of the cost fluctuation of raw materials in sales
prices of products, in addition to our measures to increase the mix of high-value-added products and price reviewing tomatch product value. In the engineering business, in addition to our environment-related EPC businesses (engineering,procurement, and construction), we have been expanding the operating businesses that undertake the management andthe operation of facilities after construction, helping to establish a more stable revenue base. In the trading business,
demand for steel products in Japan and abroad has recovered, with business in North America doing particularly well andthereby contributing to significantly increased profit.
That said, earnings in FY2021 include one-time factors such as gains on inventory asset valuation; excluding these,
per-ton-profit of-steel materials has not yet reached the target in the medium-term plan. In order to continuously growcorporate value, we must steadily implement structural reforms and significantly reduce fixed costs. We also need tostrengthen our revenue base by, among other things, increasing our mix of highly value-added products and improving
selling prices to match their value. We intend to make steady progress on the key measures in the medium-term plan
and achieve the targets by appropriately evaluating KPI results for the key management issues and applying the PDCA
cycle. These efforts will help us to increase our profitability and secure a stable source of the necessary funds, which inturn will help us to invest in and tackle medium- to long-term environmental and social issues, including climate change.

Developing New Technologies to Achieve Carbon Neutrality
A sense of urgency on climate change is spreading around the world. Since the steel business constitutes the core of the
JFE Group’s operations, climate change is an extremely important management issue from the perspective of business
continuation. We are implementing measures announced in the JFE Group Environmental Vision for 2050, and as theresult CO2 emissions in the steel business in FY2021 were reduced by 9% compared to the level in FY2013. We aremaking steady progress toward achieving the target of 18% reduction by the end of FY2024.
As in this report’s Special Feature, which offers the details of the vision, we announced strategies and timelines fordemonstrating tests and implementing ultra-innovative technologies to achieve carbon neutrality by 2050, as well as atransition roadmap to a low-carbon iron and steelmaking process by 2030. We recognize this is an important year for
deepening and expanding the roadmap we presented in 2021 and to start taking more concrete steps toward achieving
our medium- and long-term goals on climate change. As of now, we do not yet have a clear solution for achievingcarbon neutrality, and we are therefore leveraging NEDO’s Green Innovation Funds and focusing on the developmentof ultra-innovative technologies such as carbon-recycling (CR) blast furnaces, which is our main focus, direct reduction
ironmaking, and large electric arc furnaces. In particular, the CR blast furnace under development using our proprietary
technology is based on a blast furnace method and is well suited for mass-producing high-quality, high-performancesteel. It is expected to significantly contribute to decarbonization in Asia and other regions where demand for steel
products is expected to increase. On the other hand, we expect more time will be required for these ultra-innovativetechnologies to become fully established, and they would not begin significantly contributing to reducing CO2 emission
until after 2040. Until then, we need to continue to work on other measures to steadily reduce emissions. Based on the
expanded application of existing technologies and the accumulation of new reduction actions, such as the use of electricarc furnaces and increased use of steel scrap in converters, we upwardly revised our CO2 emission reduction target
for the end of FY2030 to 30% or more from FY2013 in February 2022. In order to achieve this goal, we will introduce
transitional technologies such as increased use of scraps in converters and electric arc furnaces and thus promote theshift toward low-carbon iron and steelmaking process.

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Message fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices

Carbon neutrality in the steel business is not an easy challenge. However, we consider this shift toward
decarbonization as an opportunity for the company, not a crisis. The more people demand decarbonization, the more
opportunities for us to apply and utilize our world-class technologies. We repeatedly communicate this to our employees
involved in development, and we will take on the challenge of achieving carbon neutrality with a sense of unity so thatsociety will come to recognize our company and our value. That said, achieving carbon neutrality requires a large amountof money for research and development and capital investment. As well as improving the profitability of our businesses,
the Company is leveraging tools such as GI funds and transition bonds. Overseas, however, governments are providing
huge amounts of federal R&D funding. In Japan, more support from the government and, society in general, is alsoneeded to ensure that the technological capabilities of the Japanese steel industry, including our own, are widely utilized
in society. Therefore, we will also focus on gaining the necessary understanding and support.

Initiatives for Addressing Social Issues and Enhancing Corporate GovernanceWe also need to focus on social issues to continuously expand our corporate value. In particular, since people are the corecomponent of a company, we must actively focus on human capital management, which in turn depends on ensuring
the safety and health of employees. The Group adheres to the philosophy of safety first, and annually invests around10 billion yen in safety for the entire Group. In addition, in order to maintain and improve the well-being of employees
and their families, we have set targets related to strengthening health guidance for employees and helping them quit
smoking, and each operating company has developed its own system to promote health and productivity management.
Furthermore, we are working on a range of measures from teleworking, office improvements such as free-address
seating, and operational reforms including going paperless to eliminating the use of seals to ensure employees areproductive and feel pride and satisfaction in their work. With regard to diversity and inclusion, we started reviewing
the KPIs for females in managerial positions in FY2022. Through this and other activities, we are cultivating employees
from diverse backgrounds to excel in the organization. Also in FY2022, we decided to include employee safety-related
indicators in the decision-making process to determine compensation for the executive officers in addition to financial
indicators. We are considering including indicators related to climate change, which is as material issue of corporate
management. In order to achieve sustainable corporate growth and increase corporate value over medium- to long-term,
we will continue to further enhance our corporate governance.

To Our Stakeholders
The JFE Group realizes corporate responsibility by understanding itself as part of society and considers corporate social
responsibility (CSR) to be the foundation of its business. We will continue to ensure thorough compliance with the law
and regulations, which is the foundation of a trusting relationship with society, and we will further deepen the Group’s
CSR activities in occupational health and safety, climate change, and in areas such as human and natural capital, whichhave become increasingly important in recent years. In order to pass on a prosperous planet to future generations,
we have decided to take on the most significant transformation in our history. We will work to maximize synergies tocontinuously create new value and contribute to the development of a sustainable society by providing products andservices that leverage the Group’s strengths.

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Message fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices

Corporate Vision/Business Conduct
The JFE Group’s corporate values and standards of business conduct
are manifested in the company’s vision of contributing to society withthe world’s most innovative technology. We proactively address criticalissues regarding safety, disaster prevention, product quality, humanrights, compliance, environmental protection and climate change.
The JFE Group considers the perspectives of all stakeholders,
including customers, clients, shareholders, investors, community
residents and employees, guided by a fair, objective and transparent
system of corporate governance. In the spirit of its corporate values of
Challenging Spirit, Flexibility and Sincerity, the JFE Group strives to earnsociety’s trust by undertaking CSR with integrity.

JFE Group Standards of Business Conduct
All JFE Group personnel are required to faithfully adhere to the following Standards of Conduct in all corporate activities.
These standards embody the JFE Group’s Corporate Vision and go hand in hand with its Corporate Values.
Senior managers are responsible for communicating these standards to employees of Group companies and their
supply chain partners, and in creating effective systems and mechanisms to ensure adherence to ethical standards.
Senior managers are also responsible for measures to prevent the recurrence of any violation of these standards.
Additionally, they must report violations promptly and accurately to internal and external stakeholders, determine thepersons of relevant authority and accountability, and resolve matters rigorously.

1 Provide quality products and services
Earn the trust and acclaim of customers by endeavoring to provide safe, high-quality products and services basedon superior technologies, and by fully respecting and protecting the privacy of personal and customer information.
Also, leverage our superior technologies for the sustainable growth of our Group and society.
2 Be open to society
Disclose corporate information actively and engage in constructive dialogues with diverse stakeholders to enhance
our corporate value.
3 Work with communities
Actively contribute to host communities as a good corporate citizen by emphasizing harmony and cooperation.

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Message fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
Policy4 Globalize
Endeavor to achieve understanding with people around the world, working from a global perspective and withrespect to international norms, and also local cultures and customs.
5 Exist harmoniously with the global environment
Actively work to exist harmoniously with the global environment, as well as to raise living standards and advancesocieties.
6 Maintain proper relations with governments and political authorities
Endeavor to build and maintain sound and proper relationships with governments and political authorities.
7 Maintain crisis readiness
Firmly resist all elements and organizations that threaten social order and stability, and refuse all illegal or improper
demands. Also, contribute to order and safety in society by thoroughly and methodically preparing for crises suchas terrorism, cyberattacks, natural disasters and others, including by ensuring the stable availability of products andservices.
8 Respect human rights
Respect all employees and members of the general public as individuals and refrain from any discrimination incorporate activities.
9 Provide challenging work environments
Provide employees with attractive, safe, healthy and challenging work environments.
10 Comply with laws and ordinances
Comply with all applicable laws and ordinances, endeavor to compete fairly and freely, refrain from illegal businessactivities, promote sound business practices, and be faithful and sincere in all activities and dealings.

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Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
IndicesValue of SteelAppealing Qualities of Steel that Create Safe, Comfortable Lives for a Prosperous Global Future
Iron makes up approximately 30% of the Earth’s mass. Because of its rich reserves, steel can be mass produced at very
low cost. Compared to other materials, the environmental impact of its production is extremely low and it has excellent
recyclability. Steel can be recycled repeatedly and reborn as various products (closed-loop recycling) with little or noenvironmental impact, contributing to the sustainable growth of our society.

Life Cycle Assessment of Steel
Steel’s excellent recyclability contributes to the creation of a sophisticated value chain (P.29) encompassing threecomponents: Produce, Use, and Recycle. Steel products can be repeatedly reborn as various products. It is therefore
important that the environmental impact of steel be assessed across its entire life cycle, including at the recycling stage.
JFE Steel participates as a key member in an initiative led by the Japan Iron and Steel Federation (JISF) to quantify
the environmental impact of the entire life cycle of steel products and developed the ISO/JIS standard* calculation
methodology. Corresponding to this standard, materials with higher recyclability are found to have lower environmental
impact such as on global warming.
Fifteen blast furnace and electric arc furnace steel manufacturers operating in Japan, including JFE Steel, havecompiled and published the national average value for life cycle inventory (LCI) data for different types of steel products
for FY2018.
*ISO 20915: Life cycle inventory calculation methodology for steel products (2018.11)
JIS Q 20915: Life cycle inventory calculation methodology for steel products (2019.6)
Contribution to the Development of Calculation in LCA (P.99)

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Message fromthe CEO

JFE Group
VisionSpecialFeatureCSRManagement

Environment

SocialGovernance

1.40
1.22 billion
tonnesbillion tonnes
/year

/year

2015

2050

The long-term vision for climate change
mitigation by JISF

Steelworks

Blast
furnace1.62

0.56 1.55
2015

2050

2015

Pig iron production(blast furnace)billion tonnes/year

Editorial
PolicyWorld Steel Use

Rich Reserves of SteelSupport the Developmentof Society
Naturalresources

External
Evaluations
and Awards

ESG Data

Electric arc
furnacebillion tonnes
/year

2.68

billion tonnes/yearbillion tonnes
/year

2015

2050

2050

Crude steel production

Scrap consumption
Steel Is Repeatedly
Recycled

Converter

Produce
RecycleDisassemble
and collect

Steel Is Repeatedly
Reborn as Various
Products

Processing
and producing
different products
Automobiles andconstruction materials

Use

Steel Is Efficiently Recovered
and Separated Using Magnets

Contributing to the
Sustainable Developmentof Daily Life and theEconomy with the World’s
Top Energy-saving,
Environmental
Technologies

Steel Is Reborn as
Various Products
Cans

Automobiles
Buildings

29.4
＝ 4.0

68.2
＝ 7.0

billiontonnesbilliontonnestonnes/person2015

tonnes/person2050

Society
Final product/use

1.29

billion tonnes
/year
2015

2.13

billion tonnes
/year
2050

Steel demand

Steel stock volume

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Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

ProduceSpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyHigh Economic Efficiency and Low Environmental Impact

The stable mass production of steel serves as the foundation for daily life and society. CO2 generated by the
manufacturing process of steel is extremely low compared to other materials, making it an environmentallysound material. Steel is an essential for society’s sustainable development and to create safe, comfortable lives
for people everywhere.
Earth, a Planet of Iron (Abundant Resources)
As much as 85% of the Earth’s metal resources are iron ore (180 billion tonnes).

Recoverable Reserves of Iron Ore on the Earth

180

about

billiontonnes85%

Source: Mineral Commodity Summaries (2022)
Mass Production at Low Cost
With rich reserves and a long history of technological development, iron is mass produced at reasonable prices
and supplied stably, thereby contributing to the sustainable growth of society.

Global Demand (2020)

Price*

approx.
billiontonnes30–1001.9

approx.
milliontonnes65

Reasonably
priced!

approx.

tonnes
130 thousand

Steel

Carbon fiber

5–8

1
Aluminum

Steel

Research: JFE Holdings

Carbon fiber

Aluminum

Research: JFE Holdings*Cost of producing one unit weight of ironis indexed at 1 for comparison with othermaterials.

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Guideline
IndicesJFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

External
Evaluations
and Awards

ESG Data

Editorial
PolicyExtremely Low Environmental Impact at the Manufacturing Stage when Compared to Other Materials
Greenhouse gas (GHG) emissions of steel at the manufacturing stage is approximately one-fourth to one-fifth ofthat of aluminum and carbon fiber with equivalent functionality.
GHG Emissions at the Manufacturing Stage of Materials (CO2 equivalent)

1,106 kg-CO

2990kg-CO2

Low environmental
impact!

230kg-CO

2

CFRP

Steel
(mild steel)

Aluminum

Carbon Fiber
Reinforced Plastic

GHG emissions per unit weight(CO₂ equivalent) (kg-CO₂/kg)

2.3

16.5

22.0

Functional equivalent weight (kg)

100

67

45

Source: Compiled from data disclosed by WorldAutoSteelJapan’s Steel Industry Boasts the Highest Energy Efficiency in the World
Japan’s steel industry (converter steel) produces steel with the lowest environmental impact compared toother major countries. This is a result of its longstanding efforts toward environmental conservation, including
developing and spreading the use of energy-saving technologies.
World’s Quotient, with Japan as 100 (2019)

128 129No.1！

110 111

115 116

119

U.S.A.

RussiaIndia

France

U.K.

China

100

GermanySouth Korea

140
120

100 102

Japan

Message fromthe CEO

80

Source: Research Institute of Innovative Technology for the Earth (RITE)JFE GROUP CSR REPORT 2022

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Guideline
IndicesJFE Group
VisionCSRManagement

Use

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyFoundation of Daily Life and Society

The use of steel impacts the environment less than other materials. For example, making automobile frameswith high tensile strength steel sheets, which have a reduced thickness but retain their strength, considerably
decreases the weight while maintaining crash performance, thereby helping to reduce CO2 emissions forsociety as a whole.
The Potential to Grow on a Global Scale
Global average of annual consumption of steel is approximately 230 kg per capita. The long-term global demand
for steel is expected to keep growing alongside the economic development of emerging countries.
Trends in Annual Steel Consumption per Capita by Country (kg/person/year)
（kg）

800
600
500
400

China

ThailandIndia

400~500kg
Worldaverage

1950

1960

Vietnam692
approximately

200
0

Japan

Standard in developed
countries

416
240
233
65

230kg

1970

1980

1990

2000

2010

2020 (Year)

Source: World Steel Association
Potential for Evolution
Steel can be elongated two to three times more than aluminum at the same rigidity and is three to five times
stronger at the same extended rate, making it the optimal material for new world-class structures such as
TOKYO SKYTREE. And yet there is still potential for further evolution. The emerging needs of society will
advance the development of steel and contribute to a productive future.
Comparison of Strength and Elongation between Steel, Aluminum, and Carbon Fiber

Elongation (%)

Message fromthe CEO

60
Elongates

40
20

Steel

2 to 3 times3
to 5 times
stronger

Carbonfibers

Aluminum alloy

0

400

800

1,200

1,600

Tensile strength (MPa)

Research: JFE Holdings

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Guideline
IndicesMessage fromthe CEO

JFE Group
VisionRecycleCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyExcellent Recyclability

Steel is a highly recyclable material that can be easily recovered and separated using magnets. It can be
efficiently recovered, separated, and recycled into high-quality, high-functioning products over and over again
through closed-loop recycling.

Closed-loop Recycling of Steel
Steel can be recycled a number of times as a raw material for steel products while retaining its original
properties. Closed-loop recycling is superior to open-loop recycling* in terms of sustainability, because closedloop recycling reduces the consumption of natural resources, as well as the amount of environmentallyhazardous substances and wastes.
*In open-loop recycling, the material recycling process involves two types of finite recycling which are thermal
recycling and cascade recycling. Thermal recycling means that heat generated by incineration is recovered
while cascade recycling indicates recycling the material accompanied by the degradation or alteration of thematerial’s properties.
Closed-loop Recycling

Magnetic separation
New Products

Recycling rate
for steel products*

93.0%

ScrapsNew Steel* Source: The Japan Iron and Steel Federation

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Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices

Progress of the Seventh Medium-term Business PlanIn FY2021, the JFE Group formulated the Seventh Medium-term Business Plan running from FY2021 through FY2024 tosteadily increase corporate value over the medium- to long-term. We continue to transform ourselves, recognizing that thefour years covered by the plan will be the most transformative period in the Company’s history, in which we will rise to a
new level by establishing the foundation for sustained, long-term growth. In FY2021, the first year of the plan, we steadily
implemented the necessary measures for pursuing to ensure environmental and social sustainability and to establish
economic sustainability based on stable earnings power, as outlined in the JFE Group Environmental Vision for 2050.
Seventh Medium-term Business Plan (CSR Report 2021)（https://www.jfe-holdings.co.jp/en/csr/pdf/csr2021e.pdf）

Status of Initiatives for the Seventh Medium-term Business Plan
Ensure Environmental and Social Sustainability
We consider addressing climate change issues as vital management concern and formulated the JFE Group Environmental
Vision for 2050 for achieving the goals set by the Japanese government in compliance with the Paris Agreement. In
FY2021, we reduced CO2 emissions in our steel business by 9% from FY2013 levels and contributed to reducing overallsocietal CO2 emissions by 10.56 million t-CO2 through our engineering business, steadily advancing toward achieving
the FY2024 targets under the medium-term plan. We are pursuing a multi-track approach to achieving carbon neutrality
in the steel business, with initiatives for developing ultra-innovative technologies focused on the combination of carbon
recycling blast furnaces*¹ and CCU*², and hydrogen-based ironmaking (direct-reduction). To accelerate these efforts,
we created a framework for swift and efficient action by establishing the Carbon Neutral Advancement Committee,
which centrally deliberates and decides on key issues related to carbon neutrality, including the development of newsteelmaking processes, procurement of green raw materials, and formulation of medium- and long-term targets.
We are promoting the development and utilization of transition technologies, such as the use of electric arc furnacetechnology and increased use of scrap in converter furnaces. In addition, in February 2022, we revised our CO2
emissions reduction target for FY2030, improving to 30% or more from FY2013 levels, anticipating a further boost
in research and development following the adoption of our project by the NEDO Green Innovation Fund. We also revised
our Roadmap to Carbon Neutrality*³ to include more specific examples and are achieving solid results. We are
addressing climate change by reducing CO2 emissions in our steel business, while our engineering business is further
contributing to reducing overall CO2 emissions in society by expanding our EPC (Engineering, Procurement, Construction)and operational business for renewable energy generation facilities. Furthermore, we are working Group-wide tocommercialize offshore wind power generation and have initiated capital investments in both the steel and engineeringbusinesses, as in our decision to build Japan’s first new plant for seabed-fixed structures.
Attaining sustainable growth will depend on addressing social as well as environmental issues. With regard tostrengthening employee safety and health management, we are particularly focused on eliminating major accidents
by using the latest technologies such as ICT, AI, and data science to make our facilities safer, in addition to reinforcing
activities for preventing similar accidents. As planned, we are prioritizing safety investments of about 10 billion yen peryear for the entire Group. In promoting employee success, we are enhancing initiatives on diversity and inclusion andworkstyle reform to maximize the capabilities of employees with diverse backgrounds. We will particularly focus onpromoting women’s careers, setting a target of at least 10% female managers at the section manager level or above(including 20% in the management and sales divisions) by 2030. We have also bolstered our efforts to respect humanrights in our supply chain and began conducting human rights due diligence in 2021. We will continue to pursue
the realization of a society where human rights are respected and protected. In addition, to further enhance corporate
governance, we are considering the adoption and application of non-financial indicators related to the environmentand society as management targets as indicators for investment decisions, executive compensation, and otherconsiderations. First, we will introduce indicators related to employee safety for the annual executive bonus in FY2022.
We will also examine other indicators, including those related to the environment.
We will continue to forcefully promote efforts to ensure environmental and social sustainability, particularly inresolving climate change issues, and contribute to the realization of a sustainable society.

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VisionCSRManagement

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ESG Data

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Evaluations
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PolicyGuideline
Indices*1 Carbon-recycling blast furnaces (CR blast furnaces): Technology for converting CO2 emitted from a blast furnace intomethane, which is then blown into the blast furnace as a reductant*2 Carbon dioxide Capture and Utilization*3 Roadmap to Carbon Neutrality (P. 68)

Establish Economic Sustainability (Stable Earnings Power)
To establish economic sustainability, we are committed to shifting the focus of our domestic steel business fromquantity to quality while promoting our growth strategy. In FY2021, the first year of the medium-term plan, we
consistently implemented our capital investment plan and blast furnace renovations in the Kurashiki district and executedmajor measures as planned, such as improving the sales price through early reflection of main raw material costs, andcutting annual costs by 30 billion yen. With regard to structural reform, we have been consolidating our facilities
as planned. We will aim to expand our earnings power by reducing fixed costs, substantially reducing costs through suchmeasures as digital transformation (DX), increasing the ratio of high-value-added products, and fundamentally reviewing
the sales price structure. We are also holding advanced discussions for using the former Keihin site in a collaborative
venture to supply hydrogen and ammonia based at the Keihin coastal area. In addition, we are further developing ourstrategy based on localized production by, for example, proceeding with business feasibility studies for the establishmentof a production and sales joint venture with India’s JSW for (grain-oriented) electromagnetic steel sheets. Furthermore,
we have been executing our growth strategy by focusing on winning orders for our solutions business, which
provides technology, operational, and research know-how for manufacturing high-value-added products and reducing
environmental impact, and we received our first contract in maintenance technology licensing. These initiatives will
establish a profit base that can stably secure 10,000 yen in per ton profit of steel materials.
Our medium-term plan positions DX as a key for accomplishing the greatest transformation since our founding.
In FY2021, we pursued initiatives including the deployment of an anomaly detection system using data science technology
for facilities in our steel business and development of an AI-based smoke detection system in our engineering business.
In addition to existing internal optimization efforts such as business reforms and productivity improvement, we will seek
to deliver added value to external parties and create new businesses utilizing DX. We will leverage the rapid and drasticchanges taking place around us as growth opportunities. We have confidently progressed in our plan to invest a total ofaround 120 billion yen in DX over the four-year period, executing about 30% of this investment in FY2021. We will also
take such actions as shifting to a cyber physical system (CPS) in the steel business and business process reform utilizing
digital technology in the engineering business.
Aggressive management for medium- to long-term growth requires the establishment of a stable financial base. To
this end, we must balance effective investment based on a “select and concentrate” approach to ensure sufficientprofitability and financial soundness. The balance of interest-bearing debt at the end of FY2021 was 1,849.4 billion
yen, an increase of 43.3 billion yen from the previous fiscal year, largely due to an increase in working capital caused byhigher prices of main raw materials and other factors. The Debt/EBITDA ratio and D/E ratio, which are the financial targetsof the medium-term plan, were 2.8 times and 80.8%, respectively, representing a considerable improvement from theprevious year. We will continue to secure necessary the funding by reviewing businesses and assets that contribute little toearnings to thoroughly reduce assets and by improving the cash conversion cycle (CCC) to reduce inventories. The JFE Groupwill complete the measures set forth in the medium-term plan to achieve sustainable growth and enhance corporate value overthe medium- to long-term and overcome difficulties by quickly and accurately responding to unpredictable, rapid environmentschanges.

JFE GROUP CSR REPORT 2022

13

Message fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices■ Performance and Profitability Targets, Dividend Policy, and FY2021 Results for the JFE Group
Performance and profitability
targets

Seventh Medium-term Business Plan
(final year: FY2024)

FY2021 Results

Consolidated business profit

320.0 billion yen/year

416.4 billion yen/year

Profit attributable to owners ofparent220.0 billion yen/year

288.0 billion yen/year

10%

15.7%

About 3 times

2.8 times

About 70%

80.8%

ROE
Debt/EBITDA
D/E ratio

Dividend policy

Seventh Medium-term
Business Plan

Payout ratio

FY2021 Results

About 30%28%％(140 yen)

■ Performance and Profitability Targets, FY2021 Results for Operating Companies
Performance and profitability targets for
operating companies

Seventh Medium-term
Business Plan
(final year: FY2024)

Per ton profit

10,000 yen/tonnes

14,000 yen/tonnes(capacity: 6,000 yen/ton*¹)

Segment profit

230.0 billion yen

323.7 billion yen

Segment profit

35.0 billion yen

26.0 billion yen

Sales revenue

650.0 billion yen

508.2 billion yen

Segment profit

40.0 billion yen

55.9 billion yen

Steel businessEngineeringbusiness

Trading business

FY2021 Results■ Investment and Asset Downsizing Plans, FY2021 Results
Seventh Medium-term
Business Plan
(four-year total)

FY2021 Results

GX investment*²

Approx. 340.0 billion yen

Adopted around 40% of plan
(investments related to offshore
wind power-business, expansion in
production facility for grain-oriented
electromagnetic steel sheets, other)

DX investment*³

Approx. 120.0 billion yen

Adopted slightly more than 30% of plan(system upgrades at steelworks)

Around 200.0 billion yen

41.0 billion yen

Content

Investment

Asset Downsizing*1 Income (loss) excluding inventory valuation difference, raw material carryover, and foreign currency translation differences.
*2 GX investment: Investments for green transformation.
*3 DX investment: Investments for digital transformation.

JFE GROUP CSR REPORT 2022

14

Message fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
IndicesMaterial Issues of Corporate Management
Action on Material Issues
The JFE Group’s actions related to management issues are based on identifying materiality and setting KPIs to minimize
negative societal impact and maximize societal value by investing JFE Group’s resources from the standpoint of meetingstakeholder needs. In 2016, we determined our material CSR issues (13 issues in 5 focus areas)by comprehensively
identifying 35 issues that reflect society’s expectations in the context of JFE’s business and then by prioritizing the issues
through the two criteria of stakeholder expectations and relevance to business (societal impact).
In FY2021, we formulated the Seventh Medium-term Business Plan, recognizing that ensuring environmental
and social sustainability (helping to solve critical issues) and establishing economic sustainability (stable earnings
power) are key to the JFE Group’s sustainable development. Accordingly, we reorganized our materiality by adding
economic issues to our existing CSR issues to identify all our material issues of corporate management. We will
demonstrate the Group’s vision of “contributing to society with the world’s most innovative technology” by working inconcert to address these issues.

Process for Identifying Material Issues of Corporate Management
The JFE Group has been promoting actions that address the material CSR issues identified in 2016 (13 issues in 5 focus
areas).
Refer to the following on how we identified material CSR issues up to FY2020.
Material CSR Issues (CSR REPORT 2020) (https://www.jfe-holdings.co.jp/en/csr/pdf/csr2020e.pdf)
In FY2021, the material issues of corporate management were identified through the following process.
STEP 1.

Reassessment of Existing Material CSR Issues

The material CSR issues identified in 2016 were reassessed for their importance in terms of relating to current
operations, stakeholder expectations and achievement of KPIs.
STEP 2.

Setting of Material Economic Issues

Based on discussions at each operating company, major strategies in the Seventh Medium-term Business Plan weregrouped together with the sources of competitive advantages in the JFE Group’s business model, and economic-related
issues were clarified for the economic sustainability of the Group.
•Source of Competitive Advantage
Steel and Trading Businesses: Production; Sales; and Technological Development
Engineering Business: Engineering, Procurement, and Construction; Sales; and Technological Development

JFE GROUP CSR REPORT 2022

15

Message fromthe CEO

JFE Group
VisionSTEP 3.

CSR
Management

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices

Selection of 20 Material Issue Candidates

Economic-related issues were added to the list of reassessed CSR issues, and their appropriateness as issues for the
JFE Group was deliberated by the Group Management Strategy Committee, screening out 20 material issue candidates.

20 Candidates for Material Issues• Achieve carbon neutrality by 2050

• Stable supply of products and services• Provide eco-friendly businesses and products• Ensure quality• Protect the global atmosphere• Increase the added value of products and technologies• Pursue resource recycling• Bolster sales capabilities• Prevent workplace accidents• Meet customer needs• Ensure the health of employees and their families• Develop and expand the base of our growth businesses• Pursue diversity and inclusion• Develop cutting-edge technology• Strengthen human resources development• Ensure financial soundness• Implement workstyle reform• Ensure adherence to corporate ethics and compliance• Increase efficiency and enhance cost

• Respect the human rights of each person involved incompetitiveness in production and EPC

STEP 4.

our business

Identification of the of the most important 13 Material Issues

The Group Management Strategy Committee and Board of Directors deliberated on the 20 candidate issues, and narrow
them down by identifying the most important 13 material issues for the current JFE Group.

• Reduce the JFE Group’s CO2 emissions• Increase efficiency and enhance cost competitiveness in• Contribute to reduction of CO2 emissions across thesocietyproduction and engineering• Raise quality of products and services and ensure reliable• Prevent workplace accidents

supply• Ensure the health of employees and their families• Pursue diversity and inclusion• Expand business by increasing value added in products
and services with advanced technologies• Strengthen human resources development• Sales strategies for realizing sustainable growth• Create workplaces that motivate employees• Ensure adherence to corporate ethics and compliance• Respect human rights throughout the supply chain

JFE GROUP CSR REPORT 2022

16

JFE Group
VisionMessage fromthe CEOCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyContribution to the Sustainable Development Goals (SDGs)
In September 2015, a UN Summit adopted 17 SDGs to be addressed through worldwide efforts to achieve sustainable
development. The JFE Group will respond to global community needs and try to contribute to SDGs by our businessactivities and actions for material issues.

Corporate Vision: Contributing to Society with the World’s Most Innovative Technology

Areas of Focus

Scope of
Influence

Details

Contribute to resolving
climate change issues(initiatives for achievingcarbon neutrality by 2050)•Initiatives for achieving carbon neutrality by 2050
・Reduce the JFE Group’s CO2 emissions
・Contribute to reduction of CO2 emissions in society

JFE Group
Local communities
near manufacturing sites
Customers
Society

Ensure occupationalsafety and health•Prioritize safety first•Maintain the physical and mental health of employees andtheir families

JFE Group
Suppliers
Business partners

Recruit and nurture
diverse human resources•Maintain work environments where all personnel can
maximize their abilities•Accumulate and hand down technologies and skills

JFE Group
Business partners

Reinforce resilience of
production andengineering capabilities(realize world-classearnings power throughDX and other measures)•Pursue world-class earnings power•Promote DX and other measures to improve production
efficiency, yields, and labor productivity
・Shift focus of steel business from quantity to quality(structural reform)・Reduce costs to strengthen cost competitiveness andensure quality competitivenessStrengthen
competitiveness of
products and services(promote the growthstrategy by providing highvalue-added solutions)•Improve margins and ensure stable earnings power
・Increase ratio of high value-added products and services
・Ensure stable earnings power based on the sales strategy,
including technological solutions and expansion of
growth businesses

Material Issues

Contribute to reduction of CO2 emissions
across the society
Prevent workplace accidents
Ensure the health of employees andtheir families
Pursue diversity and inclusion

Activity
Basis of activity

Thoroughly enforce compliance
Respect human rights

Strengthen human resources
development
Create workplaces that motivate
employees

JFE Group
Customers
Society

JFE Group
Customers
Society

JFE Group
Suppliers
Political authorities
Society

Increase efficiency and enhance costcompetitiveness in production andengineering
Raise quality of products and services
and ensure reliable supply
Expand business by increasing value
added in products and services withadvanced technologies
Sales strategies for realizing sustainablegrowthEnsure adherence to corporate ethicalstandards and compliance
Respect human rights across the supply
chain

Corporate Governance (Ensure Fairness, Objectivity and Transparency)
Respect and Maintain Awareness of Human Rights

JFE GROUP CSR REPORT 2022

17

Relevant SDGs

Reduce the JFE Group’s CO2 emissions

Increased
corporate value
and sustainablegrowthGoals

Contribute torealizingsustainable
societies

Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices

KPIs for Material Issues of Corporate Management
Performance Evaluation for FY2021 KPIs and Establishment of FY2022 KPIs
We assessed the performance of KPIs for FY2021 that were established to address material issues of corporate
management identified in FY2021 and established KPIs for FY2022 based on the results of the evaluation and third-party
opinions. FY2021 performance and KPIs for FY2022 were finalized following discussions by the Management Committeeof each operating company and deliberation by the Group Management Strategy Committee and Board of Directors.
Going forward, the Group will continue to work in concert to set KPIs that reflect the characteristics and realities of each
operating company and smoothly implement the PDCA cycle to promote its initiatives.
Material Issues of Corporate Management and KPIs (P.19)

Enhancing ROE by Achieving the KPIs
The KPIs for each material issue are closely tied to the financial targets. Achieving the KPIs for each issue affects various
drivers of improvement, leading to the achievement of the financial target (10% or higher ROE) and results in increasing
corporate value over the medium- to long-term. The connection between these initiatives for material issues and financial
targets is deeply shared at operating companies and on the front lines, increasing the effectiveness of these initiatives.
■ Connection between KPI-related Elements and Financial Targets
KPI-related elements• Expansion of growth business• Expansion of solutions business• Increase in ratio of high value-added
products and profitability• Research and development in new
products and technologies• Improvement of production efficiency and yields• Improvement of labor productivity• Advances in technological development with DX

Improvement drivers
Sales revenue growth rate

Manufacturing cost rate

ROIC

• Improvement of labor productivity• Increase in production andengineering efficiency, improvement ofcost competitiveness

SGA rate• Reduction of inventory based on higher
production efficiency and yields

Working capital turnover rate

• Reduction of fixed costs based on
structural reform• Improvement of production efficiency

Operating profit margin

ROE

10% or higher

Invested capital turnover rate
Fixed asset turnover rate
Optimal capital structure

JFE GROUP CSR REPORT 2022

18

Contribute toresolving climatechange issues
Activity (initiatives forachieving carbon
neutrality by
2050)• FY2021 CO2 emissions of domestic operating companies: reduced by 10.7%
from FY2019 levels• Reduce CO2 emissions through the procurement ofelectricity derived from renewable energy
Reduce domestic CO2 emissions by at least 20% from
FY2019 levels by the end of FY2024 (Reduce by 5% peryear from FY2019 levels from FY2021 to FY2024)

JFE GROUP CSR REPORT 2022

19

T

N

H

E

S

H

S

○

×

1. Despite an expansion in volume in Japan in response to an increase in demandfor blast furnaces, sales volumes for overseas markets declined due to sharp
fluctuations in market conditions and a surge in freight costs
Fell short of target as the volume of scrap transactions was lower than FY2020
overall (–20% from FY2020)

1. Global resource recycling of steel scrap
Promote steel scrap transactions to exceed the volume
for FY2020 (FY2024 target: +5% from FY2020)

2. Increase transaction quantity of fuel for biomass power generation
plants and create framework for reliable supply of fuel• FY2022 biomass fuel (palm kernel shells and wood pellets)
transactions: above the transaction quantity for FY2020 (FY2024
target: +100% from FY2020)• Diversify supply sources to ensure stable supply

1. Global resource recycling of steel scrap
FY2022 scrap transactions: Above the transaction quantity for FY2020(FY2024 target: +5% from FY2020)• Contribute to reduction of CO2 in society by providing renewableenergy power generation facilities and expanding the basis of therecycling business (for plastic, food, etc.)
Contribute to reduction in CO2 emissions (FY2022): 11 million tons
per year

ESG Data

2. Significantly grew transaction quantity of fuel for biomass power generation
plants by communicating strategy suppliers to ensure stable supply(+33% from FY2020)○• Contributed to reduction in CO2 emissions (FY2021): 10.56 million tons per year

• Provide renewable energy power generation facilities• Help reduce CO2 emissions in society by expanding thebases of the recycling business (for plastic, food, etc.)
Contribute to reduction in CO2 emissions (FY2021):
10 million tons per year

• Launch sales and implement eco-friendly products and technologies*:
at least 15 cases in FY2022 (the cumulative total of at least 60 cases
for the period from FY2021 to FY2024)* Products and technologies that contribute to saving energy andresources, reduce waste and environmentally hazardous substances,and do not require hazardous substances for manufacturing or use.

• Reduce CO2 emissions through the procurement of electricity derived
from renewable energy
FY2022 domestic CO2 emissions: reduce by 10% from FY2019 levels(Reduce by 5% per year from FY2019 levels from FY2021 to FY2024)

Governance

2. Increase transaction quantity of fuel for biomass power
generation plants and create framework for reliablesupply of fuel• Expand transactions of biomass fuel (palm kernel shells
and wood pellets) above FY2020 levels (FY2024 target:+100% increase from FY2020)• Diversify supply sources to ensure stable supply○• Launch sales and implement eco-friendly products andtechnologies*: at least 15 cases in FY2021(the cumulative total of at least 60 cases for the period
from FY2021 to FY2024)• FY2021: 16 cases (11 new products, 5 new technologies)* Products and technologies that contribute to saving(FY2021–FY2024 cumulatively: 16 cases)
energy and resources, reduce waste and environmentallyhazardous substances, and do not require hazardous
substances for manufacturing or use.

○

• Reduce CO2 emissions in its own plants and offices
FY2024: 40% reduction from FY2013 levels

SocialS

N

E△• Reduced CO2 emissions by 34% through the installation of zero-emission power
generation, etc. at the Yokohama head office(FY2013: 15,600 tons / FY2021: 10,300 tons)
Steadily proceeded toward achieving the target for FY2024• Reduce CO2 emissions in its own plants and offices
FY2024: 40% reduction from FY2013 levels

S

Environment

Contributeto reductionof CO2
across thesociety

Reducethe JFE
Group’s CO2
emissions△• Formulate an investment plan for CO2 reduction using
new benchmarks for steadily achieving the target of
reducing CO2 emissions by 18% from FY2013 levels by
the end of FY2024• Achieve 35% of its CO2 reduction target by energy
conservation and technological development in FY2021• Create a structure for promoting technologicaldevelopment with a focus on carbon-recycling blast
furnaces toward achieving carbon neutrality by 2050

FY2022 KPIs
• Achieve 50% of the CO2 reduction target from energy conservationand technological development for the target of reducing CO2
emissions by 18% from FY2013 levels by the end of FY2024• Complete the approval of investment plans for reducing CO2
emissions by 90% cumulatively for CO2 reduction targets fromenergy conservation and technological development for the target of
reducing CO2 emissions by 18% from FY2013 levels by the end of
FY2024• Formulate a CO2 reduction plan aimed at realizing the CO2 reduction
target for FY2030 (30% or more) with an eye on achieving carbon
neutrality by 2050

SpecialFeatureT

Assessment

Initiatives and Results for FY2021• Completed formulation of the investment plan for achieving the CO2 reduction
targets for FY2024 by utilizing investment evaluation methods that incorporate
contributions to CO2 reductions in investment decisions for the first time
• Despite operating equipment capable of reducing emissions equivalent to
41% of the CO2 reduction target from energy conservation and technologicaldevelopment, a delay in the realization of the effects of energy conservation andtechnological development meant that the actual result was 25%• Created an efficient structure for promoting technological development by
establishing four dedicated departments; In addition, established the Carbon
Neutral Advancement Committee as a body to discuss and decide on significant
issues in relation to carbon neutrality in a centralized manner

FY2021 KPIs

OperatingCompany

CSR
Management

Material
IssuesPartly accomplished with some results.

Fully accomplished withsignificant results.

Working toward the goal but noresults yet.

Working toward the goal but noresults yet (79% or less withlinear interpolation).

Final target partly accomplishedwith some results (80% or betterwith linear interpolation).

Final target accomplished 100%or betterSet medium- to long-terms(in case of setting a multiyear target)
Qualitative

Accomplished 79% or lessAccomplished 80%-99%

Accomplished 100% or better

Set for each fiscal year

* In Groupwide evaluations, the lowest result among the companies is taken as the overall result.

Quantitative

Target attributes

Evaluation criteria

JFE Group
VisionAreas of Focus

Material Issues of Corporate Management and KPIs

Message fromthe CEO
External
Evaluations
and Awards
Editorial
PolicyGuideline
Indices

Activity

Recruit andnurture diverse
human resources

20

JFE GROUP CSR REPORT 2022

S

T

Groupwide Annual leave acquisition rate of 78%(total for operating companies)• Engagement survey• Engagement survey
Affirmative response to questions about motivation: at least 75%
Affirmative response to questions about motivation: 69%

Groupwide Annual leave acquisition rate of at least 75%(total for operating companies)

Groupwide

ST 37.6 hours per year
EN 19.2 hours per year
SH 19.1 hours per year

・Training hours per person

△

○

△

△

△

• Engagem survey
Groupwide Affirmative response to questions about motivation:
at least 75%
Note: Set as a Groupwide target from FY2022

Groupwide Annual leave acquisition rate of at least 75%(total for operating companies)

ST 40 hours or more per year
EN 20 hours or more per year
SH 20 hours or more per year

・Training hours per person

3. Rate of male employees taking childcare leave or time off related tochild rearing
Aim for all male employees whose spouses have given birth to takesuch leave or time off

2. Female in managerial positions:
10% or more in the position of section manager or above. Of whom,
20% or more to be in management and sales departments (FY2030 target)

External
Evaluations
and Awards

Createworkplacesthatmotivate
employees• Training hours per person
ST 40 hours or more per year
EN 20 hours or more per year
SH 20 hours or more per year

3. Rate of male employees taking childcare leave or time off related to childrearing: 89% (total for operating companies)

2. Female in managerial positions: 4.2 times the 2014 August figure

2. Females in managerial positions: 5 times the 2014 August
figure (FY2025 target)△

1. Rates for female recruits
ST Career-track (white-collar position): degree of gender parity
Career-track (technical position): 10% or more
On-site position: 10% or more
EN Career-track (white-collar position): degree of gender parity
Career-track (technical position): 15% or more
Production/construction position: 10% or more (four-year average)
SH Career-track position: degree of gender parity

2. Reduce rates of smokers (ensure employee health and prevent
exposure to passive smoke)Groupwide 1.5% reduction per year (total for operating companies)

1. Provision rates of healthcare guidanceGroupwide 60% (2023 target)ESG Data

3. Rate of male employees taking childcare leave or time off
related to child rearing: at least 90%

1. Rates for female recruits
ST Career-track (white-collar position): 45%
Career-track (technical position): 3%
On-site position: 10%
EN Career-track (white-collar position): 41%
Career-track (technical position): 15%
Production/construction position: 11%
SH Career-track position: 37%

1. Rates for female recruits
ST Career-track (white-collar position): 35% or more
Career-track (technical position): 10% or more
On-site position: 10% or more
EN Career-track (white-collar position): 35% or more
Career-track (technical position): 10% or more
Production/construction position: 10% or more (four-year
average)
SH Career-track position: 30% or more○

×[Key measures](1) Installation of safety fences, covers, etc. (100% of plan)(2) 100% implementation of crane operation drills (at least once a year
at each company)

GovernanceGroupwideGroupwide

Pursuediversityand inclusion

2. Groupwide 1.5% reduction per year (total for operating companies)

2. Reduce rates of smokers (ensure employee health and prevent
exposure to passive smoke)Groupwide 1.5% reduction per year (total for operating companies)

1. Provision rates of healthcare guidanceGroupwide 60% (2023 target)

1. Provision rates of healthcare guidance (preliminary figures)
ST 54.3% EN 30.6% SH 32.1%[Key measures]
Implemented all key measures according to plan
(1) Installation of safety sensors (January–December): Completed 100% of plan(2) Implementation of crane operation drills (January–December): At least
once a year at each company; Implemented 100% of drills[Key measures](1) Install safety sensors (100% of plan)(2) 100% implementation of crane operation drills (at least once a
year at each company)

×[Key measures](1) Implement 100% of the following key points for eliminating falling
and tumbling, getting wedged between or caught in machinery, andbeing struck by flying or falling objects• Pre-operation checks(curing openings in high locations and edgesof work floor, ensuring on-site understanding of work plans, andcovering and enclosing/turning off of machinery)• Strict adherence during operations (use of safety belts, no entry
measures/allocation of worksite guides)(2) Multifaceted management of occupational safety and health using IT• Complete development of an AI-based system for detecting
intruders (plan)[Key measures](1) Enhance safety
Install electromagnetic locks at the secondary mill entrances:
60% by FY2022, 100% by FY2024(2) Restructure the safety and health management system
ISO 45001 certification in all districts: 100% by FY2022• Lost-work injuries rate
ST below 0.10 EN below 0.25 SH below 0.45

FY2022 KPIs
Groupwide Workplace fatalities: Zero occurrences

SocialStrengthen
human
resourcesdevelopment

Groupwide[Key measures](1) Focused efforts on checking equipment and preventing unsafe behavior
through patrols in order to implement 100% of the measures listed on
the left for eliminating falling accidents(2) Focused efforts on checking work plans and offering guidance in orderto implement 100% of the measures listed on the left for eliminating
accidents involving being caught in heavy machinery or struck by flying/falling objects(3) Multifaceted management of occupational safety and health using IT• Expanded areas covered by remote safety patrols on premises• Continued verification test of an AI-based system for detecting intruders[Key measures](1) Eliminate falling accidents (100% implementation of following
measures)• Pre-operation checks (curing openings in high locations andedges of work floors)• Strict adherence during operations (use of safety belts)(2) Eliminate accidents involving being caught in heavy machineryor struck by flying/falling objects (100% implementation offollowing measures)• Pre-operation checks (ensure on-site understanding of work plans)• Strict adherence during operations (no entry measures,
allocation of worksite guides)(3) Multifaceted management of occupational safety and health using IT• Conduct remote safety patrols on premises by integrating
multiple video images• Introduce an AI-based system for detecting intruders

Assessment

Environment

Ensure thehealth ofemployees
and theirfamilies

H

N

T[Key measures](1) Installed electromagnetic locks at the secondary mill entrances:
FY2021 target of 30% / Achieved 40%(2) ISO 45001 certification in all districts: completed certification in Chita
works and Fukuyama district in FY2021[Key measures](1) Enhance safety
Install electromagnetic locks at the secondary mill entrances:
100% by FY2024(2) Restructure the safety and health management system
ISO 45001 certification in all districts: 100% by FY2022• Lost-work injuries rate
ST below 0.10 EN below 0.25 SH below 0.45

• Lost-work injuries rate
ST 0.10 EN 0.56 SH 0.60

Initiatives and Results for FY2021
Groupwide Workplace fatalities: 2 occurrences

FY2021 KPIs

Groupwide Workplace fatalities: Zero occurrences

SpecialFeatureS

E

SGroupwide

OperatingCompany

CSR
Management

Prevent
workplace
accidents

Material
IssuesJFE Group
VisionEnsureoccupationalsafety and health

Areas of Focus

Message fromthe CEO
Editorial
PolicyGuideline
IndicesRaise quality of
products andservices andensure reliablesupply21

JFE GROUP CSR REPORT 2022

H

S

○

1. Carried out selective investments necessary for this fiscal year toensure stable product supply
Amount of investment (approved amount)• Reinforcement: 4.4 billion yen• Renewal and safety: 3.7 billion yen• System: 3.5 billion yen
Total: 11.6 billion yen
2. Conducted 32 quality audits (audit completed: 100%)
Quality audits at 17 domestic Group companies (including 2 remote
audits) and at 15 overseas Group companies (including 14 remote
audits)1. Make consistent investment in processing and distribution
operations

2. Conduct quality audits at Group companies
Continue conducting quality audits at 32 Group manufacturing
affiliate companies in Japan and overseas (audit completed:100%)

2. Conduct quality audits at Group companies
Continue conducting quality audits at 36 Group manufacturing
affiliate companies in Japan (expand the scope from the FY2021
level) and overseas (audit completed: 100%)

1. Make consistent investment in processing and distribution
operations

2. No major quality problems

1. Secure a stable number of certificated managing engineers

2. Strengthen the manufacturing infrastructures using DX
Achieve CPS* installation rate of 36% or more on a companywide
basis in FY2022 to implement CPS in all production processes by
the end of FY2024.
* CPS: Cyber-Physical System

ESG Data○○○

2. No major quality problems

1. Amid high levels of revenue, secured a stable number of managing
engineers

1. Secure a stable number of certificated managing engineers△

Governance

2. No major quality problems

2. Level of achievement of FY2021 plan
Kurashiki’s new continuous casting DS … 100% (operated J-dscom®
and others)
Hot rolling CPS … 90% (completed installation of warp measuring
devices, warp prediction model under adjustment)
Cold rolling CPS … 100% (completed development of base for
automated operation)
Integrated quality CPS … 100% (operated an integrated quality system)

2. Strengthen the manufacturing infrastructures using DX
Aim to apply to equipment listed below in FY2021 toimplement CPS* in all production processes by the end of
FY2024.
Kurashiki’s new continuous casting DS operations, hot rolling
CPS (temperature model/Kurashiki), cold rolling CPS (automatic
operation/Kurashiki) and integrated quality CPS (galvanizing/
Fukuyama)* CPS: Cyber-Physical System

1. Ensure quality• Continue implementing activities for raising awareness of quality
compliance for the Company and Group companies in accordancewith the Japan Iron and Steel Federation’s guidelines forstrengthening the quality assurance system• Establish automated technology for testing and inspections (impact
test fracture rate, hole expansion, etc.) other than the four priority
items (tensile test, molten steel analysis, thickness measurement for
hot and cold rolled steel sheets, and coating weight measurement) toimprove the level of quality assurance and product testing

Increase the efficiency of engineering operations by introducing DX
technologies
Engineers for big data analysis utilizing Pla’cello*: 1,800* Pla’cello: Proprietary data analysis platform using AI.

SocialN

T○○

EnvironmentE

S

Engineers for big data analysis: About 1,500 (FY2020: about 800)

Increase the efficiency of engineering operations by introducing
DX technologies
Engineers for big data analysis utilizing Pla’cello*: 1,200* Pla’cello: Proprietary data analysis platform using AI.

NE

2. Achieve stable quality and enhance yields through measures
including introduction of quality prediction technology based on
integrated data encompassing the entire process from steelmaking
to final processing using DS*
Improve yields by 1.0% in FY2022 from FY2020 levels to achieve 2.0%
by FY2024 (based on figures after adjustments to the sales mix)
* Data Science

SpecialFeature1. Focused investments in four items (tensile test, molten steel
analysis, thickness measurement for steel sheets for automobiles,
and coating weight measurement) for improving the level of quality
assurance and product testing, thereby achieving 100% automationfrom test measurement to mill sheet data entry for the four items
and 100% automation from test instructions to mill sheet data
entry for automotive products by the end of FY2021.

2. FY2021 Actual yields: 87.8% (+1.7% from FY2020)
After taking into consideration changes in the product mix at theend of FY2024: +0.8%

2. Achieve stable quality and enhance yields through measures
including introduction of quality prediction technology basedon integrated data encompassing the entire process fromsteelmaking to final processing using DS*
Improve yields by 0.5% in FY2021 to achieve 2% by FY2024* Data Science

T

S

Increase
efficiency andenhance costcompetitivenessin productionand engineering

1. Toward improving labor productivity by 20% by the end of FY2024• Steadily implement FY2022 milestones for improving laborproductivity and enhance the accuracy of plans for FY2023 andFY2024• Approve and implement FY2022 investments for improving laborproductivity, such as automation and remote operation• Steadily consolidate the steel sheet manufacturing line for cans in
Chiba

FY2022 KPIs

CSRManagement

1. Make steady progress on capital investments to improve thelevel of quality assurance and product testing, and achieve
100% automation from test measurement to mill sheet data
entry for the four priority items: tensile test, molten steel
analysis, thickness measurement for hot and cold rolled steel
sheets, and coating weight measurement.
In addition, achieve 100% automation from test instructions,sample collation to test measurement and mill sheet data
entry for automotive products.

△

1. Improve labor productivity by 20% by the end of FY2024<FY2021 KPI>
• Establish investment plans for automation, remote operation
and robotics with a focus on DX• Set milestones for investment and number of personnel foreach fiscal year
• Plan and systemize concrete labor policies to smoothly
facilitate structural reform of the Keihin district○

Assessment

Initiatives and Results for FY2021
1. Improve labor productivity• Set milestones and number of personnel for each fiscal year aimed
at improving labor productivity by 20%• Established approximately 250 investment plans for automation,
remote operation, and robotics during the Seventh Medium-term
Business Plan
Plan under revision due to issues with the feasibility of a portion of
the plans in terms of investment efficiency and other variables• Labor and management reached agreement on a special systemdesigned to achieve structural reform of the Keihin district

FY2021 KPIs

OperatingCompany

Material
IssuesJFE Group
VisionReinforce
resilience of
production andengineering
capabilities
Activity(realize worldclassearnings power
through DX
and othermeasures)

Areas of Focus

Message fromthe CEO
External
Evaluations
and Awards
Editorial
PolicyGuideline
Indices22

JFE GROUP CSR REPORT 2022

Basis
of
activity

Respect humanrights across the
supply chain

Respect humanrightsGroupwide

2. Implemented initiatives addressing various issues from the resultsof the previous survey

1. Attendance: 100%

2. Improve employee awareness of ethics reflected in the
Corporate Ethics Awareness Survey(next survey is scheduled for FY2022)

1. 100% attendance from the target audience for human rights
awareness training

2. Implemented human rights due diligence for the Company andmajor Group companies

1. 100% attendance(rank-based compliance training, training on different laws andregulations, etc.)

1. Steady execution of training to foster and maintain a senseof compliance(100% attendance from the target audience)

○

○

—

○

○

2. Implement human rights due diligence

1. 100% attendance from the target audience for human rights
awareness training

2. Improve employee awareness of ethics reflected in the Corporate
Ethics Awareness Survey (100% attendance from the target
audience)

1. Steady execution of training to foster and maintain a sense ofcompliance(100% attendance from the target audience)• Increase competitiveness of products and services by improving
value added in supply chain management through business expansion
Make investments to improve value added in supply chain: at least 5
per year

External
Evaluations
and Awards

2. Implement human rights due diligence• Made 5 investments per year that were necessary to acquire newfunctions and improve functions in existing businesses• Increase competitiveness of products and services byimproving value added in supply chain management throughbusiness expansion
Make investments to improve value added in supply chain: atleast 5 per year

Expand the stable earnings base
Expand the operating businesses• Sales: 255 billion yen• Expand bases: at least 3 bases
Recycling business (food, plastics, electronic appliances, etc.),
regional electricity retail new power business, waste processing
business, and water and sewage operations business• Expand the earnings difference between high-value-added products(A-rank products) and commodity products to 4,000 yen per tons by
FY2024(revise evaluation method eliminating the impact of market
fluctuations and product mix differences)<FY2022 KPI>
Aim for 50% of target

ESG Data

Ensureadherence
to corporate
ethicalstandards
and compliance

H

S• Operating businesses Sales: 250 billion yen• New bases: 3 bases
1 food recycling base, 1 plastics recycling base, and 1 regional
electricity retail new power business base

Expand the stable earnings base
Expand the operating businesses• Sales: 250 billion yen• Expand bases: at least 3 bases
Recycling business (food, plastics, electronic appliances,etc.), regional electricity retail new power business, waste
processing business, and water and sewage operations
business○• Fell slightly short of target, achieving only 20% of target for earnings
difference with commodity products
In FY2021, earnings for A-rank products and commodity products
both improved as prices soared in overseas markets due in part to
the recovery from the COVID-19 pandemic; In particular, althoughearnings improved markedly for commodity products such as millscale steel, the earning difference did not reach milestone• Expand the earnings difference between high-value-added
products (A-rank products) and commodity products to 5,000
yen per tons by FY2024<FY2021 KPI>
Aim for 25% of target• Develop technologies in four priority fields of waste to resources,carbon-neutrality, combined utility service, and DX, and at least 65%
of R&D expenses on these four fields.
• Number of patent applications: at least 80 per year

3. As a step toward triple earnings in the solution business by FY2024
from the FY2020 level• Continuing from FY2021, focus efforts on activities for receiving
orders for the new solutions model; In particular, along withconcluding a contract for the first project providing data scienceutilization technologies via the cloud, build a platform that provides
services on a subscription basis• In the existing solutions business, expand product offerings anddevelop new customers while increasing revenue in FY2022 by 50%
from FY2020 levels by steadily executing projects

2. Sales of high-value-added products*:10.3 million tons (up 2.5 million
tons from FY2020)* Products that offer technological advantages and are recognized bycustomers for their added value while having greater earnings power
than commodity products.

GovernanceThoroughly
enforcecomplianceN△• R&D expenses on these four fields: 64%• Number of patent applications: 67• Develop technologies in four priority fields of waste toresources, carbon neutrality, combined utility service and DX,
and at least 60% of R&D expenses on these four fields.
• Number of patent applications: at least 80 per year

FY2022 KPIs
1. Pursue strategic research and development focusing on priority
development fields*
Develop new products and technologies FY2022: at least 20 cases (atleast 80 cases in total from FY2021 to FY2024)* Automobiles, energy, infrastructure construction materials, DX
technology, and green transformation (GX) technology

SocialE

T△

3. Concluded first contract in the field for provision of maintenancetechnologies as a result of focusing efforts on activities for receiving
orders for the new solutions business model;
Commercialized a solutions model that provides data scienceutilization technologies via the cloud and entered detailed
discussions with a customer for the first project○○

3. As a step toward triple earnings in the solution business by
FY2024 from the FY2020 level, focus efforts on receiving
orders for the new solutions business model (utilization ofDS, provision of maintenance technologies, etc.) and secure
first order. With an eye on receiving continuous orders
thereafter, update external sales platform and maintenanceknow-how.

2. Sold of high-value-added products: 9.74 million tons○

Assessment

Environment

S

N

T

2. Increase the mix of high-value-added products* to 50% in
FY2024 (sell 10.9 million tons, 50% of sales excluding halffinished products, by FY2024)<FY2021 KPIs>
Sales of high-value-added products: 9.3 million tons (up 1.5
million tons from FY2020)* Products that offer technological advantages and arerecognized by customers for their added value while having
greater earnings power than commodity products.

Initiatives and Results for FY2021

1. FY2021: 21 cases (13 new products and 8 new technologies)(total from FY2021 to FY2024: 21 cases)

FY2021 KPIs

1. Pursue strategic research and development focusing onpriority development fields*
Develop new products and technologies FY2021: at least 20
cases (at least 80 cases in total from FY2021 to FY2024)* Automobiles, energy, infrastructure construction materials,
DX technology, and green transformation (GX) technology

SpecialFeatureE

S

OperatingCompany

CSR
Management

Sales strategies
for realizing
sustainablegrowthExpandbusinessby increasing
value added in
products
and services
with advanced
technologies

Material
IssuesJFE Group
VisionStrengthen
competitivenessof products andservices
Activity (promote thegrowth strategy
by providing
high-value-added
solutions)

Areas of Focus

Message fromthe CEO
Editorial
PolicyGuideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
IndicesCSR Structure
JFR Group CSR System
The JFE Group realizes corporate responsibility by understanding itself as part of the society and considers corporatesocial responsibility (CSR) to be the foundation of its business as it contributes to the realization of a better society.

Supervision over CSR Initiatives
The Group established the JFE Group CSR Council, chaired by the president of JFE Holdings and comprised of theexecutive vice president (director), corporate officers, full-time Audit & Supervisory Board members, the presidents ofoperating companies, and other members to oversee and direct the CSR initiatives of the entire organization, including
risk management, from the perspective of preventing damage to the JFE Group’s corporate value and enhancing it.
Independent, cross-Group committees have been established under the council, including the JFE Group Compliance
Committee, JFE Group Environmental Committee, JFE Group Internal Control Committee, JFE Group Information
Security Committee, Public Disclosure Committee, and Corporate Value Enhancement Committee. Overseeing anddirecting the Group’s CSR initiatives, these committees deliberate on Group policies, monitor how they are being instilled
across the Group, and share information on the tasks at hand as well as on issues that have materialized and relevant
responses. Included in the agenda discussed by the JFE Group CSR Council, the Group’s basic policies, action plans,content of key initiatives and response to critical circumstances are reported regularly to the Board of Directors, which
deliberates on the issues and provides the council with direction and supervision.

JFE Group CSR Council Activities
The Group CSR Council meets approximately once every three months to discuss wide-ranging issues such as theantimonopoly act, compliance with laws and regulations to prevent corruption such as bribery involving public servantsand other officials, human resources, labor issues, safety, disaster prevention, the environment, climate change, quality,
financial reports, addressing antisocial forces, risk management including information security and other ESG-relatedrisks, and social contribution. The council deliberates on policies related to Group initiatives, which also include providing
instruction and guidance on material issues, monitors the penetration of the policies, and shares information on andcarries out horizontal communication regarding our responses to issues and problems.

Cooperation with Operating Companies
The operating companies have also set up respective entities, which operate in collaboration with the JFE GroupCSR Council to promote Group-wide CSR initiatives from the perspective of preventing damage to the JFE Group’s
corporate value and enhancing that value. JFE Steel established the CSR Council chaired by the president in July 2005,
following the establishment of the CSR Section in April 2005. Specific committees and sub-committees in areas suchas compliance, global environment, risk management, safety and disaster prevention, customer satisfaction, social
contributions, etc., established under the CSR Council have been actively conducting the activities in each area, while
promoting CSR awareness together with the Group companies. JFE Engineering and JFE Shoji also lead in the promotionof CSR through the establishment of committees in areas such as compliance and the environment.

JFE GROUP CSR REPORT 2022

23

Message fromthe CEO

JFE Group
VisionSpecialFeatureCSRManagement

Environment

SocialGovernance

External
Evaluations
and Awards

ESG Data

Editorial
PolicyGuideline
Indices■ CSR Structure Diagram
Board of Directors

Topics Addressed at the Board Meeting
Direction andsupervision

The Groups’s management
principles, risk management,
responsibility to stakeholders andsociety, and other initiatives related
to the Company’s basic approach—Status of Initiatives and Action Policies Discussed
Initiatives addressing CSR and ESG issues
Setting KPIs for material issues of corporate management; status ofinitiatives addressing the KPIs
Initiatives for climate change
Safety activities at each operating company
Operational status of the whistleblowing system

Report

JFE Group CSR Council
Chairperson: President of JFE Holdings
Members: Executive vice presidents,
corporate officers, full-time Audit& Supervisory Board members,
respective presidents ofoperating companies, etc.

Publishing CSR and integrated reports

JFE Steel CSR Council
CSR Promotion Conference (Chaired by the President)
Environmental Committee

Internal Audits Committee

CSR Awareness Committee

JFE Group Environmental Committee

Personnel/Labor Affairs
Committee

Social Contributions Committee

Compliance Committee

JFE Group Internal Control Committee

Safety & Disaster Prevention
Committee

CS (customer satisfaction)
Committee

Risk Management Committee

JFE Group Information Security Committee

Establishing and Circulating
Rules Committee

Public Disclosure Committee
Corporate Value Enhancement Committee

IssuesCompliance, the environment, climatechange, internal controls, human resources,
labor issues, safety and disaster prevention,social contribution, information security,
ESG-related risk, damage prevention andenhancement of corporate value, etc.
❶ Group-wide deliberation of policies and actionplans concerning CSR (including instructions
and guidance on important issues)❷ Monitoring penetration of policies within
the Group❸ Information sharing and horizontal
communication regarding responses toissues and problems

JFE Engineering CSR System
Compliance Committee

Occupational Safety and HealthCommittee

Environmental Committee

Carbon Neutral Committee

Diversity Committee

Social Coexistence Committee

BCP Committee

Information Security Committee

Business Deliberations
Committee

JFE Shoji Group CSR Council
CSR Promotion Conference (Chaired by the President)
Environmental Management
Committee

Compliance Committee

Internal Controls Committee

Safety and Industrial Safety
Committee

Information Management
Committee

Quality Assurance Committee

Disaster Prevention Committee

Social Contribution Committee

Labor-related Legal andEnvironmental Committee

Affiliates under operating companies or other Group companies

JFE Group Compliance Committee

Social Awareness Survey
Committee

Confirmation and Improvement through the Employee Awareness Survey
The JFE Group conducts a Corporate Ethics Awareness Survey on a regular basis(once every three years) for directors
and employees of the Company as well as the operating companies to confirm the penetration and thorough complianceof the Group’s Corporate Vision, Corporate Values, and Standards of Business Conduct, along with the identification ofpotential risks. The survey conducted in FY2019 confirmed that many employees acknowledged the vision and corporate
policy and are aware of compliance matters when carrying out their work. On the other hand, the survey also brought toour attention issues to address going forward. These are reflected in the specific initiatives of each Group company under
the supervision of the JFE Group CSR Council and Board of Directors.
Moreover, we plan to conduct an awareness survey in FY2022 to determine what improvements have been made in
addressing issues and changes in employee awareness, the results of which we will reflect in future initiatives.

JFE GROUP CSR REPORT 2022

24

Message fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
IndicesCSR Audit
To ensure that CSR activities are conducted properly, the JFE Group systematically audits environmental management,
Antimonopoly Law compliance, expense management, overseas office management, tax law compliance, safety
management, and disaster prevention. If an audit reveals a problem, the internal audit departments of JFE Holdings
and relevant operating companies share information to support the implementation of corrective measures in their CSR
activity.

Initiatives and Relevant SDGs
The JFE Group is taking action to address CSR issues, even in non-material areas.
The following chart summarizes all activities introduced in this report. Through these activities, the JFE Group intends tocontribute to the achievement of the SDGs.
Activities

Related SDGs

CSR Management
Supply Chain
Management(P.43)• Promoting Green Procurement• Procurement Policy and Initiatives for
Each Business

Addressing ESG Issues
Environmental
Management(P.50)

Climate Change(P.56)

Development
and Provisionof Eco-friendly
Processes andProducts (P.100)
Efficient Use of
Resources(P.120)Water Security(P.125)

Prevention of
Pollution(P.128)• Promotion of Environmental
Management System• Environmental Education• Reduction of CO2 in the Steel Business• Greater Contribution to Reducing CO2
in Society as a Whole• Scenario Analysis Based on TCFD
Recommendations• Major Eco-friendly Products andTechnologies in Each Business• Reducing Generation and Emission of
Co-products and Re-using Co-products• Promoting Recycling• Resource Recycling Solution• Addressing Water-related Risks• Efficient Use of Water• Controlling Air Emissions• Preventing Water Pollution• Management of Chemical Substances
and Reduction of Emissions

JFE GROUP CSR REPORT 2022

25

Message fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

Activities

Biodiversity(P.133)

Environmental
Communication(P.138)R esponsibility
to Customers(Provide Quality
Products andEnhance Customer
Satisfaction)(P.148)L abor Standards(Recruit andNurture Diverse
Human Resources)(P.157)

Human Rights(P.168)

Community(P.175)

Shareholders andInvestors• Biodiversity Initiatives• Commitments to External Initiatives• Products and Technologies to Preserve
Biodiversity• Disclosing Environmental Data for
Business Sites• Disclosure and Exchange of Information• Quality Initiatives• Improving Customer Satisfaction• Ensuring Stable Supply• Occupational Health and Safety• Employee Health• Workstyle Reform• Operational Reform• Workforce Diversity Promotion• Developing Dynamic Work
Environments• Respecting Human Rights Initiatives• Conducting Human Rights Due
Diligence• Local activities• Support for External Organizations• Support for Youth Development• JFE 21st Century Foundation• Proactive Information Disclosure(P.184)

Compliance(P.198)

Tax Transparency(P.206)External
Evaluations
and Awards

Related SDGs

(P.141)

Occupational
Health and Safety

ESG Data• Adherence to Ethical Standard; Legal
Compliance• Tax Transparency

JFE GROUP CSR REPORT 2022

26

Editorial
PolicyGuideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyStakeholder Engagement
The JFE Group strives to maintain agreeable and favorable relationships with all stakeholders, including Stakeholder
Engagement shareholders, customers, clients, employees, and local communities, for the sustainable growth andmedium- to long-term increase of corporate value.
■ Engagement with JFE’s Major Stakeholders
Stakeholder

Major Communication Methods, etc.

OthersFrequency (per year)

Scale, etc.

Shareholders and Investors
We work to disclose
information accurately,
fairly and in a timely andappropriate manner aswell as strive for active
communication. We
established the Investor
Relations and Corporate
Communications Department
as an organization responsible
for communication withdomestic and international
shareholders and investors,
and to promote constructive
dialogue as well as provide
management with theinformation acquired, withthe aim of maintaining andimproving the relationship oftrust.

Ordinary general meeting of shareholders(convocation notices, notices of resolution, etc.)1

Approx. 150,000
shareholders

Investors meeting (financial results, medium-termbusinessplan, etc.), ESG briefings

7

Approx. 1,000
persons in total

As needed

Approx. 380
persons in total

Web-based briefings for individual investors

２

Approx. 10,000
playbacks

Plant tours for shareholders(steel, engineering, shipbuilding bases)*¹

23

Approx. 1,800
persons

2 (mid-year
and annual)

Approx. 280,000
copies/issues

Various reports, including integrated reports andCSR reports*²

1

Approx. 24,000
copiesInformation via websites (for shareholders andinvestors), etc.

As needed

Communication through sales activities and sales
support for quality assurance

As needed

Conducted at each
operating company

Interviews and questionnaires, such as thoserelated to customer satisfaction

As needed

Conducted at each
operating company

Information via websites (product information),etc.

As needed

Communication through purchasing activities

As needed

Conducted at each
operating company

Briefings and exchanges of opinion

As needed

Conducted at each
operating company

Information disclosure and other communication
through the website

As needed

Individual meetings with institutional investors
and securities analysts

Publication of shareholder newsletters (JFE
Dayori)

Customers
The Group believes that thestable supply of products
and services and reliable
quality assurance, alongwith advancing research anddevelopment, are necessary
to meet customer needs.
We will work to establish
win-win relationships bycontinuously meetingcustomer needs and thetrust they place in us.
Suppliers
As a key business partner,
we actively promote CSR
initiatives in cooperation
with suppliers. We haveestablished a basicpurchasing (procurement)
policy to promote fairand honest procurement
activities and build soundrelationships with suppliers.

*1 Figures show FY2019 results; plant tours were canceled in FY2020 due to the COVID-19 pandemic; they were held
online in FY2021 (twice a year with approximately 1,400 participants).
*2 Number of issues published is for the integrated report; CSR report is only posted online.

JFE GROUP CSR REPORT 2022

27

Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

Stakeholder

SpecialFeatureEnvironment

SocialGovernance

Major Communication Methods, etc.

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices

OthersFrequency (per year)

Scale, etc.

Employees
Communications through daily operations and in
the workplace

As needed

Internal newsletters and intranet

As needed
2 to 4

Management
and labor unions
at each operatingcompany

As needed

133 consultations
in FY2021

Various training sessions

As needed

Position-specific,
compliance,
human rights,
etc.

Family days*¹ (visits by employee families, lunchat employees’cafeteria), etc.

As needed

Conducted ateach operatingcompany

Corporate Ethics Awareness Survey

1 (every 3
years)At the Company
and operatingcompanies

Engagement Survey (employee satisfaction
survey)*²

1 (per year)

At the Company,
JFE Steel, andJFE ShojiManagement feedback (360 degree analysis)*³

1 (per year)

At the Company
and JFE Steel

Communication through local residents’association, events,etc.

As needed

Events at manufacturing bases (festivals, etc.)

1 (per year,
per region)

Approx. 270,000
persons per year

Plant tours

As needed

More than
100,000 persons
per year

Cleanup activities (vicinity of manufacturingbases, regional cleaning, etc.)

As needed

Sports promotion (baseball or jogging workshops,
various sports competitions, etc.)

As needed

Others (dispatch of lecturers to elementary
schools, craft workshops, workplace experience
events, etc.)

As needed

Information via websites (environmental info, etc.)

As needed

Social contribution through JFE 21st Century
Foundation (http://www.jfe-21st-cf.or.jp/eng/index.html)(various research support, regional activity
support, etc.)

As needed

Various labor-management commitees
CSR initiatives are being
actively pursued together
with our clients, who
are important business
partners. We haveestablished Purchasing andProcurement Policies topromote fair and sincere
procurement activities
and to construct healthy
relationships with clients.

Corporate Ethics Hotline

Local communities

To ensure business
continuity at manufacturingbases where steelworks
are located and elsewhere,
constructing a relationshipof trust with citizens in local
communities and realizing
coexistence and prosperity
are crucial. We will pursue
various activities with theaim of realizing sustainablegrowth and regional
development, including
continued initiatives
toward ensuring safety andreducing our environmental
impact.

*1 Held online in FY2020 and FY2021.
*2 Questionnaire targeting all employees for surveying the level of satisfaction and applying results to initiatives andoperations.
*3 Corporate officers and managers are evaluated by co-workers and subordinates and receive feedback.
*4 FY2019 result (family days events in FY2020 and FY2021 were canceled or took place with a reduced capacity due tothe COVID-19 pandemic)

JFE GROUP CSR REPORT 2022

28

Message fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices

JFE Group Value Chain
The JFE Group’s value chain encompasses upstream and downstream activities across the globe. We seek to addresssocial challenges by identifying the risks and opportunities that the Group must resolve through its business operations
and pursue initiatives that tackle those challenges. We will also continue to strengthen the sustainability of the entire
Group and implement countermeasures throughout our value chain.

Steel Business and Trading Business

Overview of the Value Chain
Manufacturing, Production,and Shipping

Procurement
Raw Material
Iron Ore

Machinery

Coal

Sales and Usage

Collecting Steel Scrap

Recycling
and Reuse of Resources

RecycleProcurement
To ensure stable supply of iron ore and coal used as raw materials in the production of steel products, we purchase fromvarious sources around the world such as Australia, South America, etc, and transport materials to the steelworks on a
special vessel. Equipment and materials used at steelworks plants are also purchased globally.
Manufacturing, Production, and Shipping
The JFE Group is one of the world’s largest steelmakers and has cutting-edge technologies for the efficient production
and stable supply of high-quality steel products, used in products indispensable to daily life such as automobiles,
infrastructure, and home appliances. We also promote resource recycling by recycling steel scrap generated in theprocess of producing steel products while also repurposing iron and steel slag in cement and other construction materials.
Sales and Usage
The JFE Group is committed to developing eco-friendly products such as high tensile strength steel sheets that help
reduce the weight of automobiles as well as electrical steel sheets used in electric vehicles. We support the frontierof production by responding to the diverse needs of different industries through research and development and byimproving production technologies.
Collecting Steel Scrap
Steel products at the end of their product life cycle are collected as steel scrap and recycled as materials for the steel
production cycle.

JFE GROUP CSR REPORT 2022

29

Message fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyEnvironment
Procurement
Challenges in the Value Chain

Raw Material
Iron Ore/Coal

Machinery

Manufacturing,
Production, andShipping

Sales andUsage

Collecting
Steel Scrap

Climate Change
JFE Group views the issue of climate change as a critical managerial concern from the perspective of business
continuity, and it considers achieving carbon neutrality by 2050 a top priority. By designating climate change issue asa material issue of corporate management, we are actively tackling the challenge to solve this issue.
Opportunities- Develop ultra-innovative technologies
and ensure competitiveness- Increased need for renewable energy
solutions- Expand electric arc furnacesteelmaking and electric arc furnaceengineering businesses- Contribute to reduced CO2 emissions
by providing high-performance steel
such as high tensile strength steel
sheets and electrical steel sheets
Risks- Heightened decarbonization needs insteelmaking process (blast furnace)- Increase in investment burden
for introducing ultra-innovativetechnologies- Introduction of a carbon tax- Supply chain disruptions causedby severer natural disasters natural
disasters- Risk of floods associated with rising
sea levels

●

●

●

●

●

●

●

●

Key Initiatives
Climate Change (P.56)
Related Pages
S upply Chain Management (P.43)

Development and Provision of Eco-friendly Processes and Products (P.100)

Scenario Analysis in Line with the TCFD Recommendations (P.84)
Steel Industry Initiatives (P.96)

Environmental Data (P.207)

JFE GROUP CSR REPORT 2022

30

Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

Procurement
Challenges in the Value Chain

Raw Material
Iron Ore/Coal

Machinery

ESG Data

Manufacturing,
Production, andShipping

External
Evaluations
and Awards

Sales and
Usage

Editorial
PolicyCollecting
Steel Scrap

Development and Provision of Eco-friendly Processes and Products
Under our corporate philosophy of contributing to society with the world's most innovative technology, the JFE Group
strives to reduce its environmental impact by developing steel manufacturing processes and providing technologies
and products with due consideration for the environment.
Opportunities- Develop eco-friendly processes andproducts and ensure competitiveness

●

●

Risks
- Tighter environmental regulations- Increased environmental impact
during product use

●

●

●

Key Initiatives
Development and Provision of Eco-friendly Processes and Products (P.100)
Efficient Use of Resources
Given that such issues as resource depletion and environmental pollution are expected to intensify on a global scale,the JFE Group is enhancing resource recycling through recycling co-products generated in the iron and steelmaking
process and promoting the international recycling of steel scrap.
Opportunities- Renewed interest in recyclability ofsteel- Increased use of scrap- Expand the scrap distribution
business
Risks- Shortage of disposal sites for waste
generated- Resource depletion- Declining in the grade, rising price anddifficulty of obtaining obsolete scrap

●

●

●

●

●

●

●

Key Initiatives
Efficient Use of Resources (P.120)
Related Pages
Development and Provision of Eco-friendly Processes and Products (P.100)

JFE GROUP CSR REPORT 2022

31

Environmental Data (P.207)

Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

Procurement
Challenges in the Value Chain

Raw Material
Iron Ore/Coal

Machinery

ESG Data

Manufacturing,
Production, andShipping

External
Evaluations
and Awards

Sales and
Usage

Editorial
PolicyCollecting
Steel Scrap

Water Security
Steel manufacturing requires large quantities of fresh water for cooling and cleansing products and facilities. For thisreason, the efficient use of water resources with due consideration to the source of the water and stakeholders in thearea is a key challenge.
Risks- Increased environmental impact- Tighter environmental regulations- Risk of drought in the water intake
area, risk of pollution in the discharge
area

●

●

●

Key Initiatives
Water Security (P.125)
Related Pages
Development and Provision of Eco-friendly Processes and Products (P.100)

Environmental Data (P.207)

Prevention of Pollution
Controlling air pollutant emissions and aggressively investing in environmental preservation are key for achieving
co-existence and mutual prosperity with local communities, the global environment, and society at large as well as
ensuring business continuity.
Risks- Increased environmental impact- Tighter environmental regulations

●

●

●

●

Key Initiatives
Prevention of Pollution (P.128)
Related Pages
Development and Provision of Eco-friendly Processes and Products (P.100)

JFE GROUP CSR REPORT 2022

32

Environmental Data (P.207)

Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialESG Data

External
Evaluations
and Awards

Manufacturing,
Production, andShipping

Sales and
Usage

Governance

Editorial
PolicySocialProcurement
Challenges in the Value Chain

Raw Material
Iron Ore/Coal

Machinery

Collecting
Steel Scrap

Responsibility to Customers
The JFE Group provides steel products used in diverse areas that are indispensable to daily life, such as automobiles,
infrastructure, and home appliances. One of our key responsibilities is to serve customers by meeting their quality
requirements and providing a stable supply of products.
Opportunities-E xpansion of CSR procurement anddevelopment of structure for stableprocurement- Ensure competitiveness throughstable production and stable quality

●

●

●

●

●

Risks
- Disruptions to the supply chaincaused by climate change-related
disasters, natural disasters such as
earthquakes, and COVID-19- Lose credibility with customers due
to issues related to production andquality- Declining in the grade, rising price anddifficulty of obtaining obsolete scrap

●

●

●

●

●

Key Initiatives
Responsibility to Customers (Provide Quality Products and Enhance Customer Satisfaction) (P.141)
Related Pages
Supply Chain Management (P.43)

Social Data (P.225)

Occupational Health and Safety
Providing for the health and safety of employees is a basic requirement of companies, particularly manufacturers,
and is fundamental to the continued existence of any company. The JFE Group adheres to the philosophy of safety
first, and, together with its Group companies and business associates, works to consistently maintain safe working
environments and secure workplaces for all employees.
Risks- Occurrence of accidents, including
occupational injuries●●

Key Initiatives
Occupational Health and Safety (P.148)
Related Pages
Supply Chain Management (P.43)

Social Data (P.225)

JFE GROUP CSR REPORT 2022

33

●

●

●

Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialProcurement
Challenges in the Value Chain

Raw Material
Iron Ore/CoalESG Data

External
Evaluations
and Awards

Manufacturing,
Production, andShipping

Sales and
Usage

Governance

Machinery

Editorial
PolicyCollecting
Steel Scrap

Labor Standards
The JFE Group creates satisfying workplace environments and systems that incorporate diverse workstyles andenable employees with different backgrounds to fully demonstrate their abilities. We do this not only to comply withlaws and regulations but also to achieve sustainable corporate growth.
Opportunities- Secure excellent human resources
through workstyle reform
Risks- Labor shortage- Labor risks- Culture of passing down technicalskills is dying out

●

●

●

●

●

●

Key Initiatives
L abor Standards (Recruit and Nurture Diverse Human Resources) (P.157)
Related Pages
Social Data (P.225)
Human Rights
The JFE Group views respect for human rights as both a corporate social responsibility and a foundation of its
business. Our determination to not engage in discrimination in our business activities is clearly expressed in ourStandards of Business Conduct, which we have upheld throughout our actions. And we pursue Group-wide initiatives
based on the United Nations Guiding Principles on Business and Human Rights.
Risks- Potential human rights risks●●

Key Initiatives
Human Rights (P.168)
Related Pages
Supply Chain Management (P.43)

Social Data (P.225)

JFE GROUP CSR REPORT 2022

34

●

●

●

Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialESG Data

External
Evaluations
and Awards

Manufacturing,
Production, andShipping

Sales and
Usage

Governance

Editorial
PolicyGovernance
Procurement
Challenges in the Value Chain

Raw Material
Iron Ore/Coal

Machinery

Collecting
Steel Scrap

Compliance
In expanding our businesses in and outside of Japan, it is important that JFE maintains relationships of trust withall stakeholders, including its customers, shareholders, and local communities. Trust can only be built upon a strong
foundation of ensuring thorough compliance. It is therefore extremely important to conduct training on corruption
prevention and other compliance training, so that all members of the organization can deepen their knowledge andawareness of compliance and perform their jobs accordingly.
Risks- Legal risks such as violations ofantitrust law or competition law

●

●

●

Key Initiatives
Compliance (P.198)
Related Pages
Supply Chain Management (P.43)

Governance Data (P.231)

Information Security
The JFE Group formulates various rules on information security management to prevent information leakage andsystem failure due to cyber-attack or improper system use and continually raise the level of its information security
management.
- Information leakage and system
failure due to cyber-attack or improper
system use

●

●

●

●

Key Initiatives
Risk Management (P.202)
Related Pages
Governance Data (P.231)

DX REPORT (https://www.jfe-holdings.co.jp/en/investor/library/dxreport/index.html)

JFE GROUP CSR REPORT 2022

35●

Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
IndicesEngineering Business

Overview of the Value Chain
Engineering (Creating the Foundations for Daily Life) — Business Operation/Operation Support (Bearing the Responsibility of Supporting Daily Life)— Business Continuity (Handing Down the Foundations for Daily Life)
Planning, Development,
and Design

Production
and Construction

Procurement

Maintenanceand Operation

Engineering (Creating the Foundations for Daily Life)
The JFE Group has built many high-functioning, high-quality facilities in fields such as energy, the environment, andbridges while satisfying the needs of our customers every step of the way, from design to delivery. We have combinedand evolved the technologies for processing and assembling in shipbuilding business and technologies relating tomaterials and combustion in the steel business to create next-generation energy and to address environmental issues.
Many of our technologies support society. In addition, we are assembling our resources to develop new business models
and new technologies based on existing technologies. We produce high-quality products at low cost by establishingproduction sites, including one of the largest steel structure production factories in Japan, overseas bases centered on
Asian countries, and global engineering structures.
Business Operation/Operation Support (Bearing the Responsibility of Supporting Daily Life)
The JFE Group engages in many private-public initiatives in the field of public services by applying the operational andmaintenance know-how acquired over many years, primarily with regard to the environment and water and sewage
plants. Furthermore, we build plants, engage in the recycling business and renewable energy business, and take theinitiative to realize a recycling-oriented sustainable society. Going forward, we intend to expand our initiatives evenfurther.
Business Continuity (Handing Down the Foundations for Daily Life)
The JFE Group is committed to the construction, operation, and maintenance of infrastructure facilities such as plants
related to energy and environment, bridges, and coastal structures to hand down safe and secure foundations for the
next generation.

JFE GROUP CSR REPORT 2022

36

Message fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyEnvironment
Planning,
Development,
and Design

Challenges in the Value Chain

Procurement

Production andConstruction

Maintenanceand Operations

Climate Change
The JFE Group strives to reduce CO2 emissions in society through its eco-friendly products and technologies, including
renewable energy technologies and energy-saving products in its engineering business. The Group designates climatechange issue as a material issue of corporate management and is tackling the challenge to solve this issue.
Opportunities- Increased need for renewable energy
solutions- Increased demand for CCU/CCS facilities- More sophisticated needs in the energyenvironment area
- Increased response to climate change related
disasters (disaster prevention and mitigation,
disaster waste processing)- Increased demand for waste to resource
technology (food waste power generation)

●

●

●

●

Risks
- Supply chain disruptions caused by severer
natural disasters- Effects of meteorological disasters- Risk of floods associated with rising sea levels- Tighter environmental regulations

●

●

●

●

Key Initiatives
Climate Change (P.56)
Related Pages
Supply Chain Management (P.43)
Development and Provision of Eco-friendly Processes and Products (P.100)
Scenario Analysis in Line with the TCFD Recommendations (P.84)

Environmental Data (P.207)

Development and Provision of Eco-friendly Processes and Products
Under its corporate philosophy of contributing to society with the world’s most innovative technology, the JFE Groupwill contribute to meeting social challenges related to reducing environmental impact through business operations that
focus on the environment and recycling fields as growth sectors.
Opportunities- Need for improving operational efficiency andreducing environmental impact- Need for cost reduction and energy saving●

Key Initiatives
Development and Provision of Eco-friendly Processes and Products (P.100)

JFE GROUP CSR REPORT 2022

37

●

●

Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialPlanning,
Development,
and Design

Challenges in the Value Chain

Governance

ESG Data

Procurement

External
Evaluations
and Awards

Production andConstruction

Editorial
PolicyMaintenanceand Operations

Efficient Use of Resources
Given that issues such as resource depletion and environmental pollution are expected to intensify on a global scale,our resource recycling solutions include operating our own waste recycling and energy supply businesses, in addition
to constructing and providing plants for waste incineration and sludge digestion to customers.
Opportunities- Increased demand for waste to resource
technology (plastics recycling, food waste
power generation)

●

Risks
- Shortage of disposal sites for waste generated- Prevention of resource depletion

●

●

●

●

●

●

Key Initiatives
Efficient Use of Resources (P.120)
Related Pages
Development and Provision of Eco-friendly Processes and Products (P.100)

Environmental Data (P.207)

Water Security
We provide total management of water and sewage systems, including maintenance and operations, to secure vital
lifelines and are thereby contributing to reducing the negative impact on the water environment.
Opportunities- Need for improving operational efficiency andreducing environmental impact

●

Risks
- Risk of drought in the water intake area, riskof pollution in the discharge area
- Violation of environmental regulations and
laws

●

●

●

Key Initiatives
Water Security (P.125)
Related Pages
Development and Provision of Eco-friendly Processes and Products (P.100)

JFE GROUP CSR REPORT 2022

38

Environmental Data (P.207)

Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialPlanning,
Development,
and Design

Challenges in the Value Chain

Governance

ESG Data

Procurement

External
Evaluations
and Awards

Production andConstruction

Editorial
PolicyMaintenanceand Operations

Prevention of Pollution
Controlling air pollutant emissions and aggressively investing in environmental preservation are key for achieving coexistence and mutual prosperity with local communities, the global environment, and society at large, as well as for
ensuring business continuity.
Opportunities- Need for improving operational efficiency andreducing environmental impact
Risks- Increased environmental impact- Violation of environmental regulations andlaws- Environmental accidents- Pollution of the environment

●

●

●

●

●

Key Initiatives
Prevention of Pollution (P.128)
Related Pages
Development and Provision of Eco-friendly Processes and Products (P.100)

JFE GROUP CSR REPORT 2022

39

Environmental Data (P.207)

Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicySocialPlanning,
Development,
and Design

Challenges in the Value Chain

Procurement

Production andConstruction

Maintenanceand Operations

Responsibility to Customers
The JFE Group has developed a global engineering system encompassing one of the largest steel structure production
factories in Japan, overseas bases centered on Asian countries, and global engineering structures. We intend to
maximize customer satisfaction by complying with the Group-wide quality policy, providing high-quality products andservices, and reinforcing our after-sales service system.
Opportunities- Expansion of CSR procurement anddevelopment of structure for stableprocurement- Implement requested functions- Need for cost reduction and energy saving- Expand the business scale throughprivatization of public services

●

Risks
- Lose credibility with customers due to issues
related to production and quality

●

●

●

●

●

Key Initiatives
Responsibility to Customers (Provide Quality Products and Enhance Customer Satisfaction) (P.141)
Related Pages
Social Data (P.225)
Occupational Health and Safety
Providing for the health and safety of employees is a basic requirement of companies, particularly manufacturers,
and is fundamental to the continued existence of any company. The JFE Group adheres to the philosophy of safety
first, and, together with its Group companies and business associates, works to consistently maintain safe working
environments and secure workplaces for all employees.
Opportunities- Maximize human capital through physical andmental health

●

●

●

●

Risks
- Occurrence of accidents, including occupational
injuries- Disruptions to the supply chain caused by
COVID-19

●

●

●

●

Key Initiatives
Occupational Health and Safety (P.148)
Related Pages
Supply Chain Management (P.43)

Social Data (P.225)

JFE GROUP CSR REPORT 2022

40

Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialPlanning,
Development,
and Design

Challenges in the Value Chain

Governance

ESG Data

Procurement

External
Evaluations
and Awards

Production andConstruction

Editorial
PolicyMaintenanceand Operations

Labor Standards
Providing for the health and safety of employees is a basic requirement of companies, particularly manufacturers,
and is fundamental to the continued existence of any company. The JFE Group adheres to the philosophy of safety
first, and, together with its Group companies and business associates, works to consistently maintain safe working
environments and secure workplaces for all employees.
Opportunities- Saving labor through new technology- Need for remote monitoring and automation
due to a lack of human resources
Risks- Labor shortage- Labor risks- Culture of passing down technical skills isdying out

●

●

●

●

●

●

Key Initiatives
Labor Standards (Recruit and Nurture Diverse Human Resources) (P.157)
Related Pages
Social Data (P.225)
Human Rights
The JFE Group views respect for human rights as both a corporate social responsibility and a foundation of its
business. Our determination to not engage in discrimination in our business activities is clearly expressed in ourStandards of Business Conduct, which we have upheld throughout our actions. And we pursue Group-wide initiatives
based on the United Nations Guiding Principles on Business and Human Rights.
Risks- Potential human rights risks●

Key Initiatives
Human Rights (P.168)
Related Pages
Supply Chain Management (P.43)

Social Data (P.225)

JFE GROUP CSR REPORT 2022

41

●

●

●

Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGovernance
Planning,
Development,
and Design

Challenges in the Value Chain

Procurement

Production andConstruction

Maintenanceand Operations

Compliance
In expanding our businesses in and outside of Japan, it is important that JFE maintains relationships of trust withall stakeholders, including its customers, shareholders, and local communities. Trust can only be built upon a strong
foundation of ensuring thorough compliance. It is therefore extremely important to conduct training on corruption
prevention and other compliance training, so that all members of the organization can deepen their knowledge andawareness of compliance and perform their jobs accordingly.
Risks- Legal risks such as violations of antitrust law
or competition law●●

Key Initiatives
Compliance (P.198)
Related Pages
Supply Chain Management (P.43)

Governance Data (P.231)

Information Security
The JFE Group formulates various rules on information security management to prevent information leakage andsystem failure due to cyber-attack or improper system use and continually raise the level of its information security
management.
Risks- Information leakage and system failure due tocyber-attack or improper system use

●

●

●

Key Initiatives
Risk Management (P.202)
Related Pages
Governance Data (P.231)

DX REPORT (https://www.jfe-holdings.co.jp/en/investor/library/dxreport/index.html)

JFE GROUP CSR REPORT 2022

42●

Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices

Supply Chain Management
Basic Policy
Through the adoption of the Sustainable Development Goals (SDGs) and the Paris Agreement, the international
community has called on companies to actively engage in actions to resolve global issues toward realizing a sustainable
society. Existing harmoniously with the global environment, respecting human rights, and providing challenging work
environments are some of the JFE Group’s commitments in the JFE Standards of Business Conduct and the Group
promotes initiatives under these standards. In order to realize a sustainable society, we believe it is important to addressthese challenges within the Group itself as well as across the entire supply chain. We will continue to push forward with
our initiatives supported by the understanding of our suppliers and other business partners.

Promoting Green Procurement
The JFE Group’s procurement policies help to conserve resources and protect the environment by ensuring adherence
not only to all laws and regulations but also to procurement principles stated in the Charter of Corporate Behavior
developed by the Japan Business Federation. Going forward, the JFE Group expects to accelerate such efforts in its
supply chains.

Procurement Policy and Initiatives by Each BusinessS

T JFE SteelBasic Procurement Policy, and Requests to Suppliers to Promote CSR
JFE Steel has established the Raw Material Purchasing Policy to guide its procurement of raw materials, and it intends todevelop and operate a sustainable procurement system for sourcing raw materials by paying due consideration to humanrights, including the prohibition of child labor and forced labor, as well as legal compliance and environmental protection.
In addition, the company purchases raw materials after investigating and confirming that suppliers are not handlingconflict minerals.
With regard to the procurement of materials and machinery, the company upholds the following Materials &Machinery Purchasing Policy to conduct purchasing activities with fairness and sincerity and thereby continue earning
supplier trust as a good business partner. JFE Steel believes that its social responsibility is to raise stakeholder
satisfaction and enhance its corporate value. To that end, the company prioritizes efforts in areas such as environmental
protection, safety, disaster prevention, and compliance, which are fundamental to its survival, and requests its suppliers
to pursue their own CSR initiatives.
For JFE Steel’s Basic Procurement Policy and CSR Procurement Guidelines, please refer to the following.
Raw Material Purchasing Policy (https://www.jfe-steel.co.jp/en/company/purchase_policy.html)
Materials & Machinery Purchasing Policy (https://www.jfe-steel.co.jp/en/company/purchase_policy.html)
CSR Procurement Guidelines (https://www.jfe-steel.co.jp/en/company/purchase_policy.html)

JFE GROUP CSR REPORT 2022

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JFE Group
VisionMessage fromthe CEOCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices

Win-Win Relationships with Suppliers
JFE Steel establishes win-win relationships with our suppliers by leveraging their ideas for improving materials, designs,
shapes, specifications and production methods. The company’s value-analysis activities allow them to propose how to
reduce costs, improve materials functions, and upgrade quality, safety and work efficiency. The company then strives toimplement the ideas wherever possible.

E

N JFE Engineering

Fair and Sincere Procurement
JFE Engineering, viewing its suppliers as key partners in achieving mutual growth, strives to nurture mutual trust andreinforce partnership relationships. The company seeks to engage in procurement activities with integrity by complying
with guidelines on fair procurement and codes of conduct for building sound and equitable relationships with suppliers
and providing training for staff who are responsible for contracts.
The company collaborates with suppliers on CSR initiatives and upholds its Purchasing and Procurement Policies asa standard for fair and transparent procurement activities.
JFE Engineering’s Purchasing and Procurement Policies are summarized below.
JFE Engineering Group Procurement Policy (https://www.jfe-eng.co.jp/en/information/procurement_policy.html)
JFE Engineering requests that suppliers implement the following measures.
Requests to Suppliers Regarding CSR Initiatives(1)Comply with laws, regulations and social norms(2)Implement thorough information management(3)Provide safe and competitive products and services(4)Observe human rights, work environments and occupational health and safety(5)Respect the global environment(6)Develop an organization for promoting CSRSH JFE Shoji

Ensuring a Safe, Fair Supply Chain
The JFE Shoji Group engages in activities toward becoming a company with a strong presence that can achievesustainable development and growth together with its customers, the JFE Group, and all other stakeholders. JFE
Shoji believes that ensuring sustainability across the supply chain is a key issue for achieving this goal and establishedthe Basic Policy on Sustainability in the Supply Chain to guide its efforts on human rights, labor issues, the global
environment, and other matters. The JFE Shoji Group seeks the understanding and cooperation of its suppliers and otherbusiness partners in complying with the policy and will work with them to establish a more sustainable supply chain.
For JFE Shoji’s Basic Policy on Sustainability in the Supply Chain, please refer to the following.
Basic Policy on Sustainability in the Supply Chain (https://www.jfe-shoji.co.jp/en/sustainability/promote/)

JFE GROUP CSR REPORT 2022

44

Message fromthe CEO

JFE Group
VisionSpecialFeatureCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices

Challenge to the Carbon Neutrality and its Pathway in the
Steel Business—Specific Initiatives for Reducing CO2 in the Steelmaking Process

Publication of the Special Feature
Addressing climate change issues is a top management priority for
the JFE Group, whose core business is steel. In 2021, we formulated
the JFE Group Environmental Vision for 2050 and announced aroadmap for achieving carbon neutrality in our steel business. In 2022,
we updated the roadmap to indicate the timing for demonstration
tests and implementation of ultra-innovative technologies and to
specify the details and effects of the transition to low-carbon iron andsteelmaking processes that should take place by 2030, when thesetechnologies will still be under development. We have positioned
the timeframe up to 2030 as the transition period for shifting to a
low-carbon manufacturing process and up to 2050 as the innovation
period in which to establish and implement our ultra-innovativetechnologies and achieve carbon neutrality. We believe 2022 will be a
key year for developing a more concrete CO2 reduction plan and taking
a major step toward achieving it.
In this special feature, I would like to explain the challenges weare taking on and the pathway for achieving process transition anddeveloping ultra-innovative technologies, so we can accelerate ourefforts by broadly sharing information on our technology development
and its challenges at hand with the general public and stakeholders.

President and CEO
JFE Steel Corporation

Yoshihisa Kitano

Initiatives for Reducing CO2 Emissions in the Steel Industry
Steel is a material subject to stable mass production, featuring superior qualities suitable for diverse applications, andexcellent recyclability. It will continue to support our social infrastructure as an indispensable resource for daily life.
However, since high-quality steel is currently produced by removing or reducing oxygen from iron ore in a blast furnace
using coke, which is baked and hardened coal, CO2 emissions are unavoidable. At present, CO2 emissions from the steel
industry account for 14% of Japan’s total CO2 emissions and 40% of the industrial sector’s CO2 emissions, and we areaware that addressing climate change is an extremely important management issue from the perspective of business
continuation. Ahead of other domestic steelmakers, the JFE Group announced a CO2 emissions reduction target for
FY2030 in 2020 and formulated the JFE Group Environmental Vision for 2050 in 2021 to declare its goal of achievingcarbon neutrality by 2050. Furthermore, in February 2022, we revised upward our CO2 emissions reduction target for
FY2030 to 30% or more from FY2013, based on the expanded application of existing technologies and the accumulationof new reduction actions.
On the other hand, there is no clear answer for how to drastically reduce CO2 during steel production, and at thispoint we are unable to reduce CO2 emissions in a linear manner toward achieving carbon neutrality by 2050. We must
therefore reduce emissions by saving energy and improving the efficiency of existing blast furnace processes andby increasing the use of electric arc furnaces until around 2030. In the meantime, we will continue to develop ultrainnovative technologies for realizing carbon neutrality by 2050. We believe that the establishment and implementation ofthese technologies starting in the 2040s will lead to significant reductions in CO2 emissions and emission intensity. Thisis also indicated in Japan’s Technology Roadmap in Iron and Steel Sector , and we will proceed with development basedon a plan consistent with the government’s goals. Now, let me explain the details of our specific initiatives for achieving
each goal for the transition period up to 2030 and innovation period toward carbon neutrality by 2050.

JFE GROUP CSR REPORT 2022

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Message fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices

Transition to Low-carbon Steelmaking Processes to Achieve the 2030 Target
We have a long road ahead of us to realizing carbon neutrality by 2050, and the challenge of developing ultra-innovativetechnologies has only just begun. To achieve our target of reducing CO2 emissions by 30% or more by 2030, we must
steadily reduce emissions without relying on these technologies since they will still be under development around that time.
To do so, we will promote the transition to low-carbon steelmaking processes by upgrading to high-efficiency coke furnaces
and thoroughly improving energy conservation and the efficiency of existing processes by utilizing AI and data science aswell as low-carbon fuels and introducing low-carbon processes.
Expanding the use of steel scrap is one immediate way to lower
the carbon footprint of the steelmaking process. JFE Steel has been
expanding the use of scrap in converter furnaces by introducing the ecofriendly Double-slag Refining Process (DRP®), which can maximize theuse of silicon in the molten metal as a heat source. Capital investment
was completed for all districts in FY2021, and we have been sequentiallyrolling out the process. As of FY2021, we have confirmed CO2 reductionsof approximately 170,000 tonnes per year and will continue to make
improvements. To further expand the use of scrap, we will promote thedevelopment of technologies such as burner lances to increase the heatmargin of molten metal and invest in facility enhancements for reducing
CO2 emissions by approximately 2 million tonnes per year in FY2030.
We will also expand the use of scrap in electric arc furnaces. We
have already announced that we will reinforce the electric arc furnace at
the Sendai Works, and we plan to increase the manufacturing capacityof electric arc furnaces by about 140,000 tonnes per year by boosting
capacity and enhancing cargo handling facilities through DX and othermeans, thereby reducing CO2 emissions by about 100,000 tonnes per
year by FY2024. In addition, we are considering suspending the operationof one blast furnace in the Kurashiki district, which is due for renovation between 2027 and 2030, and introducing large,
high-efficiency electric arc furnaces. By developing technology using a small test electric arc furnace (10 tonnes) to beinstalled in the Chiba district under a project adopted by the NEDO Green Innovation Fund (GI Fund) at the end of last year,
and by introducing our proprietary electric arc furnace technology, we hope to achieve both high-efficiency manufacturingand high-quality steel production while reducing CO2 emissions by approximately 3 million tonnes per year.
The commercialization of ferro coke, which is currently undergoing experimental runs at a midsize facility in the
Fukuyama district, and the expanded application of high-grade direct-reduced iron (HBI: hot briquetted iron), which isunderway in all districts, are technological initiatives that will also play an important role in reducing CO2 emissions during
the transition period. In particular, the use of direct-reduced iron is effective for manufacturing high-quality steel products inelectric arc furnaces and reducing CO2 emissions from blast furnaces. We have agreed with Emirates Steel Arkan (UAE) andITOCHU Corporation to conduct a detailed feasibility study for the establishment of a low-carbon reduced-iron supply chain
for the green transition to produce direct-reduced iron under a jointly established venture company.
We will promote CO2 reduction by transitioning to low-carbon steel processes up to 2030, which is expected to costaround 1 trillion yen in capital investment for establishing these processes. To obtain the monetary resources to develop
and implement decarbonization technologies, we believe that it is necessary to create a market for green steel products bystimulating initial demand based on an appropriate assessment of their environmental value.

Challenge of Developing Ultra-Innovative Technologies toward Carbon Neutrality by 2050
In order to realize carbon neutrality by 2050, it is necessary to accelerate the research and development of ultrainnovative technologies to prepare for the transition to the innovation period. We are currently using the GI Fund projectto simultaneously promote R&D on carbon recycling blast furnace (CR blast furnace), direct reduction, and large, highefficiency electric arc furnace technologies. The CR blast furnace is intended to reduce CO2 emissions by more than 50%
from the current blast furnace process by recovering CO2 generated in the furnace, converting it into methane throughJFE GROUP CSR REPORT 2022

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Indicesmethanation, and repeatedly using the methane as a reduction agent to replace part of the coke in the furnace. We havehigh expectations for this process as a means to take advantage of the blast furnace process to significantly reduce CO2
emissions by utilizing existing facilities and produce high-quality steel in mass volume. We are currently constructing
a 150 m3 small test blast furnace for carbon recycling demonstrations in the Chiba district and will conduct test runs
to confirm the principles of the process by FY2026. Furthermore, we plan to conduct demonstrations using a 700 m3
midsize blast furnace in the Kurashiki district by 2030 and then verify and implement actual furnaces as soon as possible.
With regard to direct reduction technology, we are developing carbon-recycling direct reduction (CR direct reduction)technology under the GI Fund project. This process uses carbon recycling technology to convert CO2 contained inexhaust gas into methane by methanation in a reduction furnace where iron ore and pellets are reduced to produce
direct-reduced iron, and the methane is used repeatedly in the reduction furnace.
In FY2024, we will begin experimenting with a small bench-test furnace to be constructed in the Chiba district, where
we will seek to resolve issues such as heat absorption in hydrogen reduction, which will lead to technological validation ata larger plant and to demonstration tests or actual implementation using a full-scale furnace at an early stage. In addition,
we are considering the introduction of large, high-efficiency electric arc furnaces by 2030. Using the small test electricarc furnace to be installed under the GI Fund project, we will combine preheating of reduced-iron, heating-burner andagitation technologies of molten-steel to develop a process for reducing the melting power consumption of the electricarc furnace and enabling high-speed melting of cold iron sources. We plan to incorporate these technologies into theconstruction of our own electric arc furnaces.
Meanwhile, building a carbon-recycling society that includes CR blast furnaces and direct reduction technology
will require major infrastructure construction and enhancement to supply huge amounts of hydrogen and carbonfree electricity. We have recently established a CCUS and Green Infrastructure Study Team within the Carbon neutral
advancement project team. In addition to the development of effective CO2 utilization technologies such as methanol
synthesis from CO2, CO2 fixation in steel slags, and reuse as roadbed materials, the new team has begun studying
CO2 capture, utilization, and storage (CCUS) technologies and the procurement of carbon-free hydrogen and electricity,
including related collaboration with industrial complexes and other private companies. We will take on the challenge ofdeveloping ultra-innovative technologies while actively addressing peripheral issues that are prerequisites for realizing
carbon neutrality.

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IndicesOur Mission in Steel Production
The sense of crisis over climate change is intensifying year by year, and efforts to solve the problem are accelerating aroundthe world. As a company supplying steel, an industrial material that supports society, JFE Steel must unwaveringly contributeto realizing carbon neutrality. Although radically changing the iron and steelmaking process is no easy task, we see this as asignificant opportunity for growth and will continue to take on the challenge of developing ultra-innovative technologies theworld has not yet seen.
On the other hand, the development of low-carbon and ultra-innovative technologies requires huge capital investment
and implementation costs, and certain increases in cost are unavoidable for creating environmental value for our products.
If we adopt the mass balance approach when we achieve our CO2 reduction target for FY2030, we will be able to supply
up to 5 million tonnes of green steel per year. However, green steel products do not directly benefit consumers in terms ofbetter quality, performance, or other aspects. Therefore, incentives are needed to encourage the purchase of these products
to stimulate demand and create a market for green steel. JFE Steel has recently established a Green Steel Strategic Study
Team to address this issue. In order to resolve this issue, there is a limit to the initiatives and efforts that individual companies
can undertake, and it is necessary to create a system in which society as a whole will bear the cost commensurate with theenvironmental value and to create a market for green steel. To this end, in addition to support for research, development, andimplementation of ultra-innovative technologies, we would like to ask the government for policy support for encouraging public
understanding, changing the behavior of steel consumers, and raising awareness among general consumers.
The JFE Group bears responsibility as a participant in steel production, which is an indispensable material for society, andour mission is to hand down steelmaking for generations to come. With unwavering conviction, we will boldly take on thechallenge of transitioning to low-carbon iron and steelmaking processes and developing ultra-innovative technologies, and wewill work together with our stakeholders to achieve carbon neutrality to establish a prosperous future for the Earth.

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Environment: Executive Summary
The JFE Group strives to maintain its businesses in harmony with the environment for the prosperity ofsociety. We have positioned climate change as a key management concern and formulated the JFE Group
Environmental Vision for 2050 toward achieving carbon neutrality by 2050. To this end, we are exploring
ways to reduce CO2 emissions in steelmaking processes and expand our contribution to reducing CO2
emissions in society as a whole. The entire Group is working in concert to establish a framework forenvironmental management and address climate change and other environmental issues such asenvironmental protection and the effective use of resources.
Having reflected the TCFD’s philosophy in its management strategies, the JFE Group is systematicallyaddressing climate change. In the steel business, we created a roadmap for achieving carbon neutrality by 2050
and are working on CO2 emission reduction initiatives toward short-, medium- and long-term reduction targets.
Our overall goals are to reduce CO2 emissions by 18% by the end of FY2024 compared to FY2013 and by morethan 30% by the end of FY2030. Until 2030, we will continue to shift to low-carbon steelmaking processes andat the same time develop ultra-innovative technologies, mainly the carbon-recycling blast furnace, to achievecarbon neutrality by 2050. The JFE Group’s efforts are consistent with Japan’s technology roadmap for the ironand steel sector as well as the Paris agreement.
In the engineering business, we plan to contribute 25 million tonnes of CO2 reduction to society as a wholein FY2030 by provisioning renewable energy power generation facilities. We intend to further expand ourrenewable energy power generation by leveraging the Group’s collective strength and accelerating the offshore
wind power generation business.
As part of our contribution to the environment through our businesses, including the reduction of ourenvironmental impact as stated in our environmental policy, we are developing and providing environmentallysound processes and products. In addition, we have set aggressive targets to manage initiatives such as
effectively using resources in the mainstay steelmaking processes, preventing air and water pollution, andefficiently using water resources, and we are actively addressing these concerns. Furthermore, we are striving
to minimize the impact on the ecosystem surrounding our business sites and analyzing the impact on diversityof using our steel slag products.

Targets and Results for Environment-related Material Issues of Corporate Management
Material Issues of Corporate Management and KPIs (P.19)
Key Initiatives◦ Promoting the acquisition of Environment Management System certification, conducting internal and external
environmental audits◦ Formulation of the JFE Group Environmental Vision for 2050 and roadmap (P.56) for achieving carbon neutrality◦ Development of ultra-innovative technologies (P.56) , mainly the carbon-recycling blast furnace◦ Group-wide effort to accelerate the commercialization of the offshore wind-power generation business (P.72)◦ Development and provision of environmentally sound products and processes◦ Development of products that take advantage of steel’s excellent recyclability, contribution to reducing plastic waste◦ Effective use of water resources (P.125) in steelmaking processes (high recirculation rate)◦ Improvement and assessment of the environment at and around business sites, contribution to biodiversity (P.133)
from using steel slag products

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Environmental Management
Environmental Philosophy and Strategies
The JFE Group’s environmental philosophy and strategies target the development of innovative technologies andinternational cooperation aimed at protecting the global environment by having the intention to achieve “Accordance with
Global Environment” and “Improvement of Global Environment” within the corporate activity.

Environmental Philosophy
The JFE Group puts top priority on protecting and enhancing the global environment to maintain its business inharmony with the environment, ultimately for the prosperity of society as a whole.

Environmental Strategies
1. Reduce the environmental impact of all businesses
2. Contribute through technologies and products
3. Contribute through businesses for resource conservation and energy efficiency
4. Communicate with society
5. Facilitate international cooperation

Framework for Environmental Management
The JFE Group Environmental Committee, chaired by the president of JFE Holdings and operating under the JFE GroupCSR Council, sets goals for environmental protection, monitors the progress of such initiatives and works to improve theGroup’s overall environmental performance.
Key issues for corporate management such as climate change are deliberated at the Group Management Strategy
Committee as well and reported to the Board of Directors. The board oversees environmental challenges by discussing
the reported material. Additionally, specialized committees set up by JFE Group operating companies and affiliates
implement specific activities.
In our Seventh Medium-term Business Plan, we positioned climate change as a top-priority business issue andformulated the JFE Group Environmental Vision for 2050. To this end, we are aggressively pushing forward to achieving
our CO₂ reduction targets and achieving carbon neutrality by 2050.
For further details, refer to:
JFE Group CSR System (P.23)
Seventh Medium-term Business Plan (P.12)
JFE Group Environmental Vision for 2050 (P.56)

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Indices■ Environmental Management System
JFE Group Environmental Committee

JFE Steel Environmental Committee

Environmental Committee of Affiliate

JFE Engineering Environmental Committee

Environmental Committee of Affiliate

JFE Shoji CSR Promotion Council(Environmental Management Meeting)Group Company Environmental
Management MeetingGroup Environmental Liaison Committee

Group Company Environmental
Liaison Committee

Members
Environmental managers at JFE Holdings and each
operating company

Members
Environmental managers
at each operating company and Group company

Environmental Management System
Acquisition of ISO 14001 certification is an important part of every JFE Group company’s environmental program. All
global production sites of JFE Steel and JFE Engineering and major offices of JFE Shoji have received the certification,encompassing 68% of 44,461 employees at 84 companies covered in this report and 54% covered for total sites. In
FY2021, the number of major violations of environmental law or regulation by Group companies that resulted in a fine
was 0, and the total amount of fines and penalties was 0 yen.

S

T JFE SteelJFE Steel has an Environment Management Department at its head office and in each business office, and theEnvironmental Committee chaired by its president and the Environment Management Committee in each local office.
Environmental Management System (Environmental Strategies) (Japanese only)(https://www.jfe-steel.co.jp/research/environment.html）

E

N JFE Engineering

JFE Engineering maintains an Environment Management Department at each of its major locations, including production
sites and branch offices as well as at each of the divisions in charge of products. The Environmental Committee, chairedby the president, oversees environmental management for the entire company. Under its Environmental Management
System, JFE Engineering works to minimize environmental impact at production sites, branch offices and construction
sites and contribute to environmental protection through all products and services.
The major strategies for FY2022 are (1) promote environmental contribution through products for mitigating global
warming and climate change, (2) promote effective energy conservation and resource recycling, and (3) prevent
violations of the Waste Management and Public Cleansing Law and comply with the Act on Promotion of Resource
Circulation for Plastics.

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H JFE Shoji

JFE Shoji obtained ISO 14001 certification for its head office, Osaka branch, and Nagoya branch in 2000 and later
expanded the scope of certification to all domestic offices. JFE Shoji also applies the same environmental management
system to domestic Group companies, promoting the same environment management activities and striving for thesame certification. Overseas coil centers are also planning to acquire ISO 14001 certification.
For quantitative data related to ISO 14001 for each business, please refer to the following information.
List of ISO 14001-certified companies (https://www.jfe-holdings.co.jp/en/csr/environment/env_manage/pdf/iso14001.pdf)

Environmental Audit
In addition to the regular internal and external audits at ISO 14001-certified sites, the audit and environment departments
at each operating company’s head office conduct independent environmental audits at their production sites.

S

T JFE SteelOnce a year, JFE Steel’s Audit Department and the Environment, Disaster Prevention and Recycling Department conduct
an environmental audit at each operational site. JFE Steel categorizes Group companies based on the result of risk
assessment considering owned equipment and conducts detailed audits every one to five years using checklists.

Document audit at a domestic Group company

E

On-site audit at a domestic Group company

N JFE Engineering

JFE Engineering places a top priority on complying with environmental laws and regulations.
The Safety and Environment Department conducts annual audits at about 50 locations selected from the
manufacturing sites, construction sites in Japan, and Group companies to confirm compliance with environmental
laws and regulations. JFE Engineering also conducts internal audits on its own environmental management system
to evaluate and enhance the effectiveness of various environment-related initiatives. Furthermore, environmental
inspections are conducted at all construction sites by the department responsible for construction to verify compliancewith the laws and regulations, and annual self-checks are conducted at the Tsurumi and Tsu manufacturing sites toconfirm legal compliance.

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H JFE Shoji

At JFE Shoji, the ISO Environmental Audit Department annually confirms that processing centers and warehouses of
ISO 14001-certified Group companies comply with relevant environmental laws and regulations. For non-certified Group
companies, the department conducts an environmental audit every three years.
For quantitative data related to environmental audits, please refer to the following information.
Environmental Data (P.207)

Environmental Education
The JFE Group actively provides education to foster a corporate culture of environmental protection. Education
at operating companies includes training for new recruits and newly promoted employees as well as specificenvironmental-protection training organized by position and job.
At the Group level, we hold an annual Group-wide Review Session on Environment-Related Laws and Regulations, towhich we invite lawyers specialized in environment-related laws and regulations to give lectures on the latest informationon the enactment and revision of these laws, as well as associated violations and court decisions. Employees from wideranging departments, including the Safety and Environment, legal affairs, general affairs, and manufacturing departmentsof the operating companies and their group companies, who are involved in environment-related activities, attend theseannual sessions and use it as the basis for planning their environment-related activities, such as educating employees
and raising awareness about the Group’s policies and initiatives.

S

T JFE SteelJFE Steel encourages employees to obtain qualifications as pollution-control managers. A training program forenvironmental managers at group companies was launched in FY2011. In addition, JFE Steel provides employeeswith training to ensure compliance with environmental laws, disseminates information about regulatory revisions at its
Environmental Liaison Committee meetings for Group companies, and organizes brush-up training in waste management
skills for onsite personnel.

E

N JFE Engineering

JFE Engineering educates all employees about environmental issues to increase their understanding of the company’s
related policies and initiatives. To ensure proper environmental management at its production sites and construction
sites, training is often tailored to the specific operations of employees, helping them to enhance their capabilities.
In FY2021, JFE Engineering worked on expanding its remote training opportunities and also on making training morepractical and grounded in actual business operations.

S

H JFE Shoji

JFE Shoji provides all employees with general environmental training in compliance with ISO 14001 and specialized
training for internal audit staff.
All employees within the scope of certification receive a pocket-size ISO Employee Card to carry with them so they
can check the details of ISO 14001 activities at any time. In addition, each company performs a self-check using its
own extensive checklist to ensure understanding and rigorous compliance with environmental laws. Also, JFE Shojiprovides environmental training to new executives and information about revised laws and regulations to environmental
management personnel.
For quantitative data related to environmental education, please refer to the following information.
Environmental Data (P.207)

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Environmental Accounting
Basic Policy
The JFE Group is saving energy and reducing its environmental impacts by making its production facilities increasingly
efficient and introducing more environmentally friendly equipment. Any equipment or facilities related to energy
conservation and environmental protection are categorized as environmental investment, while all activities related toenvironmental protection and impact reduction are categorized as environmental expenses.

Environmental Investment and Expenses
Environmental capital investment totaled 48.5 billion yen and expenses amounted to 105.6 billion yen in FY2021. Capital
investment included 18.9 billion yen for measures to prevent global warming (measures to address climate change),
12.4 billion yen for air pollution countermeasures, and 7.2 billion yen for water pollution prevention. Environmental capital
investment as a percentage of overall capital investment was roughly 23%.
Environmental expenses for environmental activities included 31.4 billion yen for air pollution countermeasures, 27.0
billion yen for global warming countermeasures (measures to address climate change) and 17.4 billion yen for industrial
water recycling. Environmental R&D expenses came to 9.3 billion yen.

Capital Investment
To save energy and reduce environmental impacts stemming from production, the JFE Group invests in environmental
technologies for plants and equipment. Cumulative investment in energy savings, totaling 556.4 billion yen since 1990,
has enabled the company to achieve energy efficiencies that are among the highest in the world. In total, the Group has
invested 770.9 billion yen in environmental protection since 1973.

Results of Environmental Activities
Through these environmental investments and expenses, we are working to lower unit-based CO2 emission toprevent global warming and to reduce final-disposal waste by maintaining a high recycling rate to effectively use
natural resources. We are also striving to reduce emissions of pollutants into the water and air, which contributes toenvironmental protection and ensures thorough compliance with statutory regulations concerning exhaust gas emissions
and discharged water.
The monetary value of energy savings realized through environmental capital investments and expenses in FY2022
is about 1.3 billion yen.

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Indices■ Breakdown of Environmental Costs
FY2021Main Items

Investment(billion yen)

Cost(billion yen)Management

Impact monitoring and measurement, and EMS expenses
and education

1.4

2.5

Global warming
countermeasures

Saving and efficiently using energy

18.9

27.0

Recycling industrial water

6.6

17.4

Recycling and waste management of internally generated
materials, etc.

1.2

5.9

Air pollution countermeasures

12.4

31.4

Water pollution countermeasures

7.2

9.6

Prevention of soil contamination, noise, vibration, and subsidence

0

0.5

Other

Charges, etc.

—

1.4

R&D

Technologies for protecting the environment, saving energy,
and preventing global warming

0.8

9.3

Societal activities

Support for nature preservation and forestation, information
disclosure, exhibitions, and public relations

—

0.6

48.5

105.6

Conservation ofnatural resources

Environmental
protection

Total

Note: Data cover all investment activities of JFE Steel Corporation and R&D activities of JFE Engineering Corporation.
For quantitative data related to environmental accounting, please refer to the following information.
Environmental Data (P.207)

Related Links
Material Flow (P.207)
JFE Steel: Environmental Initiatives (Japanese only) (https://www.jfe-steel.co.jp/research/environment.html)
JFE Engineering: 360° JFE Engineering “Protecting Natural Environments” (https://www.jfe-eng.co.jp/en/360_jfe_engineering/#env)
JFE Shoji: Environment Management (https://www.jfe-shoji.co.jp/en/csr/environment/)

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Climate Change
Basic Policy
Climate change is an extremely important business concern for the JFE Group from the perspective of business
continuity. Our steel business, which emits 99.9% of the Group’s total CO2 emissions, has been developing various
technologies for saving energy and reducing these emissions. Applying these technologies to steel manufacturing has
successfully reduced CO2 emission intensity to the lowest level worldwide.
Furthermore, we have developed and maintained a variety of eco-friendly products and technologies, including highperformance steel materials that help save energy when customers use them, as well as renewable energy power
generation.
We will continue to develop and promote the widespread use of these processes and products. We consider
it an opportunity to apply the technologies we have fostered across the globe and at the same time contribute totackling climate change. JFE announced its endorsement for the TCFD recommendations in May 2019 and has
identified climate change-related issues based on the scenario analysis advocated in the TCFD to formulate strategies
for sustainable growth. In September 2020, JFE disclosed its target of reducing CO2 emissions in FY2030 in the steelbusiness, which accounts for most of the Group’s CO2 emissions. It also announced its intention to achieve carbon
neutrality by 2050, ahead of the Japanese government’s announcement of the same goal.
In February 2022, the target of reducing CO2 emissions in FY2030 was revised upward to 30% or morecompared to FY2013 considering advances in measures for carbon neutrality and improvement of external surroundingsin the steel sector.

JFE Group Environmental Vision for 2050
The JFE Group intends to increase sustainability through solutions that address global climate change issues while
restructuring its business to respond to the changes in the environment surrounding the steel business. We regard 2020
to be the landmark year to further reinforce our efforts to tackle climate change, and we are actively promoting initiatives
for reducing CO2 emissions.
In 2021, having positioned climate change as a top-priority issue in the Seventh Medium-term Business Plan, we
formulated the JFE Group Environmental Vision for 2050 toward achieving carbon neutrality by that year.
We will systematically address climate change by reflecting the TCFD’s principles in our business strategies
in the JFE Group Environmental Vision for 2050. In the steel business, we will reduce CO2 emissions by 18% from
FY2013 levels by the end of FY2024. In addition, we announced that the target of reducing CO2 emissions in FY2030
is 30% or more compared to FY2013 in steel business. To explore all possibilities for realizing carbon neutrality in
2050, we will take on the challenge of developing ultra-innovative technologies such as carbon-recycling blast furnaces
developed with our unique techonology while also adopting a multitrack approach for pursuing other technologies.
In our engineering business, we will widen our contribution to the reduction of CO2 in society as a whole by expanding
and advancing renewable power generation and carbon-recycling technologies, by supplying high-performance steel
products, and through other initiatives. Furthermore, we will accelerate commercialization of our offshore wind-powerbusiness by applying the strengths of the Group.

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PolicyJFE Group Environmental Vision for 2050
• Climate change is an extremely important business concern for JFE, and we are aiming to achieve carbon
neutral by 2050.
• We will accelerate our research and development of new technologies and pursue ultra-innovativetechnologies.
• We will seek business opportunities that allow us to enhance our corporate value by contributing to CO2emissions reduction across society.
• The principles of TCFD will be reflected in our business strategies and deployed in a systematic manner.
The Target of Reducing CO2 Emissions in FY2024 (Seventh Medium-term Business Plan Initiatives)▶Reduce steel-business CO2 emissions in FY2024 by 18% compared to FY2013 (steel business)
The Target of Reducing CO2 Emissions in FY2030▶Reduce steel-business CO2 emissions in FY2030 by 30% or more compared to FY2013 (steel business)
Initiatives for Carbon Neutrality by 2050
(1) Reduce steel-business CO2 emissions▶ Pursue ultra-innovative technology for carbon-recycling blast furnaces and CCU.
▶ Develop hydrogen-based ironmaking (direct reduction) technology.
▶ Leverage top-in-class electric arc furnace technology for high-grade steel manufacturing, high efficiency, etc.
▶ Develop transitional technologies for carbon neutrality, including ferro coke, increased use of steel scrap inconverters, energy savings, and low-carbon energy transformations.
(2) Expand contributions to CO2 emissions reduction in society▶ JFE Engineering: Expand and develop renewable energy power generation and carbon-recycling technologies.
(Reduce CO2 emissions by 12 million tonnes in FY2024 and 25 million tonnes in FY2030)▶ JFE Steel: Develop and market eco-products and eco-solutions.
▶ JFE Shoji: Increase trading in biomass fuels, steel scrap, etc., and strengthen business in supply chain management(SCM) for eco products.
(3) Offshore wind-power generation business (Group-wide effort to accelerate commercialization of theoffshore wind-power business)J▶ FE Engineering: Manufacture monopiles and other seabed-fixed structures for offshore wind-power generation.
▶ JFE Steel: Produce large and heavy plates by using new continuous casting machine in Kurashiki.
▶ JFE Shoji: Carry out SCM for steel materials and processed products.
▶ Japan Marine United Corporation: Manufacture offshore wind-power generation floating structures and construct
work vessels.
▶ Group-wide: Operation and maintenance (O&M) making maximum use of Group resources.

Notes.
1. Carbon-recycling blast furnace: A technology that converts CO2 from the blast furnace into methane and repeatedly
uses it as reducing material in the blast furnace
2. CCU: Carbon dioxide capture and utilization
3. Transitional technologies: Technologies that advance the transition to carbon neutrality
4. Ferro coke: Innovative blast furnace raw material that improves the reduction efficiency of iron ore and reduces CO2
generation from the blast furnace
Seventh Medium-term Business Plan (P.12)
JFE Group Environmental Vision for 2050, Presentation Material(https://www.jfe-holdings.co.jp/en/investor/zaimu/g-data/2020/May2021-210525-release01.pdf)

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Guideline
IndicesMessage fromthe CEO

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IndicesDeveloping processes to mass produce high-performance steel with zero CO2 emissions is essential for a sustainable
world. Huge R&D and equipment replacement costs will be inevitable as JFE executes strategies targeting carbon
neutrality. Society must decide how these costs should be shouldered, including government support.
Working toward the lofty goal of carbon neutrality by 2050, JFE aims to establish the necessary decarbonization
technologies as soon as possible, ahead of global competitors, assuming that we have the decarbonization infrastructure
in place and ability to compete on an equal footing globally.
■ JFE Group's Activities for Carbon Neutrality

JFE Steel’s Management Structure to Promote Carbon Neutrality
In October 2020, JFE Steel established a company-wide project team that directly reports to the president to promote
the development and commercialization of ultra-innovative technologies for achieving carbon neutrality by 2050. In July
2021, the company further enhanced its management structure for promoting carbon neutrality by introducing new
specialized departments. This management structure will help the company accelerate its efforts to achieve carbon
neutrality.
■ JFE Steel’s Management Structure to Promote Carbon Neutrality
Board of Directors

Management Committee

Carbon Neutral Advancement Committee: Members of the management committee and project teamCarbon neutral advancement project teamProject Leader: Executive Vice President Responsible for the Corporate Planning Department(Head office)Carbon Recycling
Development Department(Est. Jul. 1, 2021)
Advanced Melting Process
Development Department(Est. Oct. 1, 2021)

Raw Materials Department:
Green Raw Materials Section(Est. Jul. 1, 2021)
Advanced Reduction Process
Development Department(Est. Jan. 1, 2022)

Corporate Planning
Department

Facilities Planning
Department

Each Technology Department

CCUS & Green Infrastructure Study Team (Est. Aug. 1, 2022)

Technology Planning
Sales Coordination &Department
Operation Planning Department

Green Steel Strategy Study Team (Est. Sep. 1, 2022)

Sectors & Centers

Steel Production Sites and Steelworks

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(Steel ResearchLaboratory) Specialized
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Information Disclosure Based on TCFD Recommendations
On May 27, 2019, JFE Holdings announced its endorsement for
the final report of the Task Force on Climate-related Financial
Disclosures (TCFD)*.
*The TCFD was established by the Financial Stability Board (FSB) at the request of G20 finance ministers andcentral bank governors.
Climate-related risks and opportunities will significantly impact medium- to long-term corporate finance. To reduce therisk of instability in the financial market, the G20 called on the FSB to establish the TCFD. The TCFD considers disclosure
methodologies that can be used to appropriately assess climate-related risks and opportunities and releases its findings
as a final recommendations report.
It is important for investors to accurately understand the financial impact of climate-related risks and the opportunities
of investee companies when they make financial decisions. In this context, the task force recommends disclosures tobe made in four core elements of organizational management: governance, strategy, risk management, and metrics andtargets.
For the TCFD content index, click on the following link.
Guideline Content Indices (P.251)

Governance
Under the JFE Group Standards of Business Conduct, the JFE Group actively strives to exist in harmony with the global
environment and create a society that is comfortable and convenient. We are aware that efforts to protect the global
environment, such as reinforcing our environmental protection activities and addressing climate change issues, areextremely important for creating a sustainable society.
In FY2016, we identified the mitigation of global warming as a material CSR issue to facilitate the PDCA cycle andpromote appropriate management of ongoing initiatives, such as reducing CO2 in the iron and steelmaking processes anddeveloping and providing eco-friendly products. In 2021, we relaunched the initiative as a top priority by adding economic
perspectives to the material issues and by selecting other vital matters of importance. As part of this effort, we set
our goal for helping to address climate change (initiatives to achieve carbon neutrality by 2050) as an area of focus andidentified reducing the JFE Group’s CO2 emissions and contribution to CO2 emissions reduction in society as two material
issues.
The JFE Group Environmental Committee, chaired by the president of JFE Holdings and operating under the JFEGroup CSR Council, supervises and guides these initiatives by deliberating goals, monitoring progress, and improving
the Group’s overall environmental performance.
Key managerial issues such as climate change and other environmental challenges are deliberated at the GroupManagement Strategy Committee as well and reported to the Board of Directors. The board discusses and makes
decisions on the matters reported.
■ Examples of Climate Change-Related Agenda Items Involving Board of Directors Decisions and Reports◦Declaration of endorsement for the final TCFD recommendation report◦Information disclosure consistent with TCFD recommendations (scenario analysis and other information)◦Formulation of the Seventh Medium-term Business Plan, JFE Group Environmental Vision for 2050
◦Review reduction targets for CO2 emissions by the end of FY2030
Corporate Governance System (P.188)
Framework for Environmental Management (P.50)
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PolicyAddressing Climate Change Issues
Having formulated and presented an actionable roadmap for achieving carbon neutrality by
2050, this is the year for taking concrete steps toward developing ultra-innovative technologies.
The JFE Group considers climate change as a top-priority business issue to overcome for business continuity.
In 2020, we became the first steel company in Japan to disclose individual company-level CO2 emission reduction
targets for our steel business. In 2021, we formulated and presented the JFE Group Environmental Vision for 2050,
which is our roadmap for achieving carbon neutrality by 2050. This marked the beginning of a new stage for us.
Our CO2 emission reduction targets are in line with the Paris Agreement. We will work toward achieving thesetargets while at the same time developing ultra-innovative technologies, mainly focusing on three key areas:
technology combining carbon-recycling blast furnace and CCU*, hydrogen-based ironmaking (direct reduction), andhigh-efficiency, large electric arc furnaces.
The year 2022 is important for us to start making concrete steps toward developing ultra-innovativetechnologies. In the steel business, in February 2022 we upwardly revised our CO2 emission reduction target
for the end of FY2030 to 30% or more of FY2013, based on the progress made so far in transition technology
development initiatives, such as the use of an electric arc furnace and increased use of scrap in converters, as wellas progress in improving external surroundings. Then in May, we formulated and presented an actionable roadmap
for achieving carbon neutrality together with details of the demonstration tests. The roadmap includes plans to build
demonstration test facilities in the East Japan Works’ Chiba District, including a small carbon-recycling test blast
furnace (150 m3), a small bench-test direct hydrogen reduction furnace, a small electric arc furnace (10 tons). We
have concentrated these facilities in the same area for greater efficiency and are accelerating the development ofthese ultra-innovative technologies.
Another area of focus is to expand our contribution to reducing CO2 emissions in society as a whole. We
consider this as a new business opportunity for applying our advanced technologies to create a sustainable society.
This will enable us to grow our businesses and enhance our corporate value. In the engineering business, we havestarted construction work for a Woody Biomass Combustion Power Plant in Tahara City, Aichi prefecture. The
plant is to be one of the largest of its kind in Japan. We are also working to develop a fully automated operationof incinerators to increase the level of waste-derived power generation. By expanding our renewable power
generation plant businesses that do not emit carbon, we will contribute to achieving carbon neutrality in society as
a whole. In the steel and trading businesses as well, we are expanding our supply system for electrical steel sheets
and other products, where demand is expected to rise for electric vehicles and other products. By establishinga secure global distribution infrastructure, we will capture demand across the Group, spread the use of our highperformance steel materials and, in turn, contribute to reducing CO2 emissions in society as a whole.
Furthermore, we accelerate the commercialization of the offshore windpower business by applying the strengths of the Group. With JFE Engineeringas the main driver, we will engage manufacturing and marketing monopiles
and other seabed-fixed structures. We have started constructing Japan’s firstmonopile-foundation manufacturing plant and plan to start production in 2024.
Offshore wind-power generation business can take full advantage of thecapabilities of all our operating companies. We will make a Group-wide effort
to accelerate this business.
In order for the JFE Group to survive amid global competition, we will
work hard to stay ahead of it and be an early implementer of ultra-innovativetechnologies toward achieving carbon neutrality by 2050. We believe webear responsibility for achieving carbon neutrality and providing a sustainablesupply of steel, an indispensable material for society. We also consider it our
responsibility to provide the Group’s advanced technologies and services
Seiya Kitajima
to society and, in turn, contribute to reducing overall CO2 emissions. We
Senior Executive Officer,
will continue to promote initiatives to address climate change issues andJFE Holdings, Inc.
contribute to creating a sustainable society.
* Carbon dioxide Capture and Utilization
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JFE Group’s Climate Change Strategy
Various risks and opportunities related to climate change are integrated into the JFE Group’s business strategy. The
Group formulated the Seventh Medium-term Business Plan as the main guide for business operations from fiscal 2021
to fiscal 2024, and we positioned efforts to address climate change as the key to achieving sustainable growth andincreased value over the medium- to long-term. Under the plan, the Group defined ensuring environmental and social
stability as a core strategy and formulated the JFE Group Environmental Vision for 2050 for achieving carbon
neutrality by 2050. Then we concentrated our efforts on our business strategy and reflected the principles of the
TCFD recommendations in our management strategy, enabling us to systematically address climate change.
Furthermore, we are disclosing information based on the TCFD recommendations, including the scenario analysis,leveraging them to identify and evaluate risks and opportunities, and reflecting them in our management strategy.
For further details on the Results of Scenario Analysis and the JFE Group Environmental Vision for 2050, refer to thefollowing source material.
Scenario Analysis in Line with the TCFD Recommendations (P.84)
JFE Group Environmental Vision for 2050, Presentation Material(https://www.jfe-holdings.co.jp/en/investor/zaimu/g-data/2020/May2021-210525-release01.pdf)

In the JFE Group Environmental Vision for 2050, our efforts to achieve carbon neutrality are based on the following three
key strategies: reduce CO2 emissions at JFE Steel, expand contributions to the reduction for society as a whole, andaccelerate Group-wide commercialization of the offshore wind-power business. In the steelmaking process, which has
a particularly significant environmental impact, we will focus on reducing CO2 emissions. In addition, we will emphasize
the reuse of water resources and energy as well as the development and provision of environmentally sound products,
process technologies, and resource recycling solutions.

Reduce CO2 Emissions at JFE SteelThe JFE Group has adopted a multipronged approach, including the development of ultra-innovative technologies, toachieve carbon neutrality by 2050. In the steel business, we have set a target for reducing CO2 emissions by 18% as ofthe end of FY2024 and by 30% or more by the end of FY2030, compared with FY2013. We have defined the period up
to 2030 as a transition phase and the period after that as an innovation phase. In the transition phase, we will focus moreon initiatives to reduce emissions. We will expand the use of low-carbon technologies to make steady progress towardachieving the CO2 reduction target in FY2030. In this phase, we will also accelerate the research and development of
ultra-innovative technologies to prepare for the innovation phase. In the innovation phase, we will focus on initiatives
for the wise use of resources, including the commercialization of carbon-recycling blast furnaces that leverage ourproprietary carbon-recycling technology and direct-reduction steelmaking, as well as the expansion of CCU applications.
We will also work on CO2 sequestration through CCS to create a carbon-neutral society together with local communities
and industrial complexes. We will achieve carbon neutrality through initiatives under these three themes.
Increased Use of Scrap Iron in Steelmaking
JFE Steel completed introducing the Double-slag Refining Process (DRP®), an eco-friendly converter-type molten-ironpretreatment process, in all of its sites in 2021. This increased the amount of scrap iron to be used in converters, leading
to reduced CO2 emissions.
DRP makes full use of silicon in molten iron as a heat source, thereby increasing the amount of scrap iron to be usedin converters. It allows reducing the molten-iron blending ratio (molten iron vs. scrap charged into the converter) to 82%,
down from 90% through conventional methods. The Company introduced this process in all of its steelmaking facilities,
and the increased use of scrap iron in converters enabled us to reduce CO2 emissions by approximately 0.17 million tons
per year in FY2021. In the future, we will develop technologies to increase heating margins to further boost the use of
scrap and invest in facility expansion to reduce CO2 emissions by about 2 million tons per year by FY2030.

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Indices■ Eco-friendly converter-type molten iron pretreatment process
DRP®：Double-slag Refining Process

Demonstration Tests for NEDO’s “Hydrogen Utilization in Iron and Steelmaking Processes” Project
JFE Steel is actively working on initiatives to achieve carbon neutrality by 2050. To this end, the company formed aconsortium with Nippon Steel Corporation, Kobe Steel, Ltd., and the Japan Research and Development Center for Metals
and jointly commissioned the New Energy and Industrial Technology Development Organization’s (NEDO’s) Green
Innovation Fund Project “Hydrogen Utilization in Iron and Steelmaking Processes”.
In order to further advance the development of ultra-innovative technologies to achieve carbon neutrality by 2050,
JFE Steel has decided to construct facilities in the East Japan Works (Chiba district) to conduct demonstration tests
related to the project. Centralizing these facilities in the same area increases the efficiency of the development effort. We
will work together with consortium members to accelerate the development of ultra-innovative technologies.
Details of the Planned Demonstration Tests•C arbon-recycling pilot blast furnace (150 m3)
Start construction in 2023, start demonstration tests in April 2025, complete demonstration tests by 2026
•D
 irect reduction compact bench pilot furnace
Start construction in 2023, start demonstration tests in 2024, complete demonstration tests by 2026
•P
 ilot electric arc furnace (10 t pilot furnace)
Start construction in 2023, start demonstration tests in 2024, complete demonstration tests by 2025
Details for each are as follows.

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Carbon-Recycling Blast Furnaces (CR Blast Furnace)
We will work on developing carbon-recycling blast furnaces (CR blast furnaces), hydrogen steelmaking, and electric arc
furnaces, and we will also strive to achieve carbon neutrality by 2050, as announced in the JFE Group Environmental
Vision for 2050. We are particularly focused on a technology that combines a CR blast furnace and CCU*, which allows us
to efficiently mass produce high-grade steel and reuse the CO2 in the blast furnace. This technology aims for virtually zero
emissions by using the remaining CO2, which cannot be fully reused to manufacture basic chemicals such as methanol.
* Carbon dioxide capture and utilization
Technical Features of a CR Blast Furnace
The CR blast furnace is ultra-innovative in terms of its technology that converts CO2 in the furnace exhaust gas into
carbon-neutral methane through methanation, which is then used repeatedly as reducing material in the furnace.
The technology is expected to reduce CO2 by 50% in the blast furnace process and to ultimately help achieve carbon
neutrality by leveraging CCU/CCUS*. The thermal efficiency of the process can be further increased by replacing the air
blown into the blast furnace with pure oxygen, as the energy used to heat the nitrogen in the air can then be used to heatmethane. In addition, the lack of nitrogen facilitates the separation of CO2, so the equipment necessary to separate CO2
for methanation can be more compact and efficient while facilitating more effective gas utilization at CCUS.
* Carbon dioxide capture, utilization, and storage
Overview of the Demonstration Tests
We are planning to develop a process that converts the CO2 produced in the blast furnace into methane using hydrogen,allowing the carbon to be repeatedly used in the furnace as a reducing agent and thus reducing CO2 emissions. We willverify the following during demonstration tests.
◦Methods for blowing a large volume of methane along with oxygen into the furnace◦Applications for the heating burner that uses the circulation gas◦Methods for linking the operations of the furnace and the methanation facility that converts CO2 from the blast furnace
gases to methane■ Overview of Carbon-recycling Directs Furnaces

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IndicesDevelopment of Direct Hydrogen Reduction Technology (Carbon-Recycling Direct Reduction Process)Hydrogen reduction ironmaking technology is another steelmaking process that the JFE Group is working on to achievecarbon neutrality. With this technology, the natural gas currently used in direct reduction ironmaking is replaced by 100%hydrogen to eliminate CO2 emissions when iron ore is reduced.
Technology for Processing Raw Materials
Currently, the only raw material that can be used for direct reduction ironmaking is high-grade iron ore. Its production
volume, however, is limited, and we expect it will become even more difficult to obtain in the future if direct reduction
ironmaking were to expand worldwide.
To address this, JFE and one of its iron ore suppliers, BHP, are collaborating in the development of a new raw material
processing technology for low- and medium-grade ores, which are currently used as raw materials for blast furnaces
due to their large production volume. We are hoping that this new technology will allow us to use low- and mediumgrade ores as raw materials for direct reduction ironmaking, thus expanding the raw material sourcing for direct reduction
ironmaking.
Technology for Pre-Heating Raw Materials, Technology for Heating Hydrogen Gas
One challenge of hydrogen reduction is that the reduction of iron ore by hydrogen is an endothermic reaction, whichmeans that heat must be applied externally for the reaction to proceed. A sufficient reduction reaction may not take place
if there is not enough heat. Thus, technologies for heating raw materials and hydrogen gas must be developed.
Overview of the Demonstration Tests
We are developing a process to convert the CO2 produced in the direct-reduction furnace into methane using hydrogen,allowing the carbon to be repeatedly used in the furnace as the reducing agent and thus reducing CO2 emissions. We willverify the following during demonstration tests.
◦Optimal methods for separating the exhaust gas into various components and for recycling the CO2 throughmethanation◦Methods for using low-grade ores
■ Carbon-Recycling Direct Reduction Process

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IndicesDevelopment of Electric Arc Furnace Process Technology
One of the JFE Group’s development efforts in steelmaking technologies for carbon neutrality is electric arc furnace
process technology. With the technology, steel products are manufactured by melting steel scrap and direct-reducediron in an electric arc furnace. So far, we have managed to reduce CO2 emissions from this steelmaking process down
to one-quarter of that of the blast furnace-converter method. We are working to eliminate CO2 emissions generated by
the electric arc furnace process in the future by using the aforementioned hydrogen-reduced iron as the raw material andgreen electricity.
Although the electric arc furnace process has this advantage of reducing CO2 emissions, there are two major
problems with it compared to the blast furnace-converter method: the productivity of the electric arc furnace process ingeneral is about 30% lower than that of the blast furnace-converter method, and the use of scrap as the raw material
inevitably increases the concentration of impurities, which limits the production of high-grade steel. We are working toaddress these issues and striving to establish technologies that will enable the production of high-quality, high-gradesteel with high productivity in the electric arc furnace process.
Use Electric Arc Furnaces to Increase the Use of Scraps
JFE Steel is planning to increase the production capacity of the electric arc furnaces in the Sendai Works byapproximately 0.14 million tonnes per year by FY2024 through reinforcing the electric arc furnaces in the Sendai Works,
implementing capacity-boosting DX measures, and improving the load handling equipment. This is expected to result ina reduction of approximately 0.10 million tons of CO2 emissions per year.
In the Kurashiki district, we are considering replacing one of the blast furnaces, which needs to undergo preventive
maintenance within the period of 2027–2030, with a large, high-efficiency electric arc furnace.
Feasibility Study on New Venture Business to Secure Reduced Iron Supply
In the transition phase up to 2030, we expect a shortage in domestic scrap supply. The use of direct-reduced iron isconsidered an effective way to supplement this in the production of high-quality steel using electric arc furnaces and in
the reduction of CO2 emissions from blast furnaces.
JFE Steel has agreed with Itochu Corporation and Emirates Steel Arkan (UAE) to jointly conduct detailed feasibility
studies on the establishment of a supply chain of reduced iron with low-carbon emission. Under a joint venture to beestablished in the UAE, we are focusing on producing direct-reduced iron (about 2.5 million tons per year) from thesecond half of FY2025.
Improve productivity of the electric arc furnace process
To improve productivity of the electric arc furnace process, the JFE Group have developed ECOARC™, our proprietary,
eco-friendly, high-efficiency electric arc furnace, and installed it at our operating companies. With this technology, a shaft
is attached to the upper part of the electric arc furnace and is used to continuously feed scrap materials into the furnace.
It uses the high-temperature exhaust gas from the furnace to preheat the scrap material, allowing for subsequent highefficiency and high-speed melting. As well as improving the productivity of the electric arc furnaces, the technology also
reduces the energy (electricity) required for the melting process.
The Group already has achieved industry-leading productivity and energy (electricity) efficiency with thesetechnologies, but we are working to raise productivity even further.
Overview of the Demonstration Tests
We are developing a process that reduces the electric arc furnace’s melting power consumption and also enables highspeed melting of cold iron sources (scrap and reduced iron). We will verify the following during demonstration tests.
◦Optimal methods for preheating and feeding reduced iron◦Methods for using heating burners◦Optimal methods for molten steel stirring

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Indices■ Research and Development for Electric Arc Furnaces

Manufacturing Higher-Grade Steels Using the Electric Arc Furnace Process
The electric arc furnace process uses scrap and reduced iron as raw materials. The higher concentration of impurities inthese materials, such as copper, causes material degradation, including surface defects and reduced workability in steel
sheets and deterioration of properties in electrical steel sheets. We are working on two technologies to address theissue, one to remove impurities and another to detoxify impurities, so that we can use the electric arc furnace process
to produce high-grade steel products such as steel sheets for automobiles and electrical steel sheets.
Testing CO2 Utilization Technologies for Practical Use
JFE Steel is working on “Optimum System for Methanol Synthesis Using CO2,” an R&D project, in collaboration with the
Research Institute of Innovative Technology for the Earth. On-site construction of a test facility will commence in FY2022
in the Fukuyama district of the West Japan Works, with operations scheduled to start in FY2023 and integrated practicalapplication tests to be completed by the end of FY2025. The project focuses on establishing an optimal overall methanol
synthetic system, mainly through the development of technologies for low-cost CO2 separation and for high-efficiency
methanol synthesis. The ultimate goal is to combine this newly established system with carbon-recycling blast furnaces
and other ironmaking processes to achieve large-scale CCU process.
JFE Steel is also working on an R&D project, “Innovative CO2 Sequestration Technology through Quick, Largequantity Carbonation of Steel Slag,” in collaboration with Ehime University. Construction for a practical application test
facility is scheduled to commence in FY2023 in the Chiba district of the East Japan Works. The process principles will
be verified by FY2022, and tests will be conducted within the period of FY2024–FY2025. The project will develop a newtechnology to sequestrate the CO2 generated from ironmaking processes such as carbon-recycling blast furnaces andfrom nearby thermal power plants in slag, and at the same time verify technologies for recovering heat from the hot steelslag and for converting the steel slag to roadbed materials and other products.
Development and Provision of Eco-friendly Processes and Products (P.100)

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Reduce CO2 emissions at JFE SteelManagement Structure

Carbon neutrality

JFE Steel Carbon Neutrality Strategy Briefing “NewTeams Overseeing Carbon Neutrality Promotion”(https://www.jfe-steel.co.jp/en/company/pdf/carbon-neutralstrategy_220901_1.pdf)

JFE Steel Challenge to Achieve Carbon Neutrality
through Green Transformation

Key Initiatives（https://www.jfe-steel.co.jp/en/movie/index.html）

Demonstration Tests for NEDO’s “Hydrogen Utilization in
Iron and Steelmaking Processes” project (Japanese only)

Demonstration tests（https://www.jfe-steel.co.jp/release/2022/06/220615-2.html)

JFE Steel Carbon Neutrality Strategy Briefing “Reducing
CO2 via CR Blast Furnaces”

Carbon-recycling
blast furnace

Carbon-recycling blast furnacetechnology(https://www.jfe-steel.co.jp/en/company/pdf/carbon-neutralstrategy_220901_1.pdf)

Challenge Zero “Challenge for development ofsuperinnovative technologies focusing on ‘Carbonrecycling Blast Furnace+CCU’”（https://www.challenge-zero.jp/en/casestudy/812）

Challenge Zero “Technology of CO2 utilization”

CCU/CCUS

New technology
to process
raw materials
for hydrogen
reductionironmaking

Expanded useof scrap andreduced iron（https://www.challenge-zero.jp/en/casestudy/391）

Development of technology fordirect hydrogen reduction

Collaboration with a material
supplier

JFE Steel Carbon Neutrality Strategy Briefing “Direct
Hydrogen Reduction”（https://www.jfe-steel.co.jp/en/company/pdf/carbon-neutralstrategy_220901_1.pdf)

JFE Steels and BHP to address decarbonization insteelmaking process（https://www.jfe-steel.co.jp/en/release/2021/210210.html）

Eco-friendly converter-type
molten iron pretreatment
process “DRP®”

Increased Use of Scrap Iron in Steelmaking Process to
Reduce CO2 Emissions

Feasibility study on new
venture business to secure
reduced iron supply

Feasibility Study on Building a Supply Chain of Reduced
Iron with Low-Carbon Emission

Development of electric arc
furnace process technology

CO2 utilization technology(https://www.jfe-steel.co.jp/en/release/2022/220621.html)(https://www.jfe-steel.co.jp/en/release/2022/220901.html)

JFE Steel Carbon Neutrality Strategy Briefing “Large,
High-efficiency EAFs”(https://www.jfe-steel.co.jp/en/company/pdf/carbon-neutralstrategy_220901_1.pdf)

Novel Processes for Manufacturing Valuable Materials
Using Coal-Derived CO2 Selected for NEDO Projects(https://www.jfe-steel.co.jp/en/release/2021/211015.html)

CO2 utilization
Testing for practical use

JFE Steel Moves Ahead with Testing CO2-utilization
Technologies Aimed at Achieving Carbon Neutrality（https://www.jfe-steel.co.jp/en/release/2022/220620-2.html)

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Indices■ Roadmap to Carbon Neutrality in 2050

Source: Material for the JFE Group’s investors’ meeting held on May 6
Seventh Medium-term Business Plan (P.12)
JFE Group Environmental Vision for 2050, Presentation Material(https://www.jfe-holdings.co.jp/en/investor/zaimu/g-data/2020/May2021-210525-release01.pdf)

JFE Group Initiatives Aligned with the Paris Agreement
Under the JFE Group Environmental Vision for 2050, the JFE Group designed a roadmap for achieving carbon neutrality,
which included our short-, medium-, and long-term CO2 emission reduction targets. Until 2030, the Group will focus
on fully using existing technologies to promote decarbonization while at the same time developing the ultra-innovativetechnologies needed to achieve carbon neutrality. The Group will then focus on commercializing the ultra-innovativetechnologies in the 2030s and 2040s, when we expect the required social infrastructure to be in place, to accelerate
decarbonization toward achieving carbon neutrality by 2050.
The technology roadmap for Transition Finance toward decarbonization in the iron and steel sector, published by theJapanese Ministry of Economy, Trade, and Industry (METI), outlines a path for accelerating decarbonization and achievingcarbon neutrality by introducing innovative technologies, with the same assumption that social infrastructure such ashydrogen supply and CCUS will be in place by the 2040s. This technology roadmap is aligned with Japan's Nationally
Determined Contribution (NDC) based on the Paris Agreement, and is therefore aligned with the Paris Agreement.
In 2022, the JFE Group issued transition bonds through a public offering, which was selected as the first model
example in the iron and steel sector for METI’s Transition Finance Model Projects in FY2021. During the evaluation
process for this issuance, the Group’s initiatives were certified by a third party as being aligned with METI’s roadmap. We
can therefore deduce that they are also aligned with the Paris Agreement.
METI: Technology Roadmap for “Transition Finance” in the Iron and Steel Sector(https://www.meti.go.jp/policy/energy_environment/global_warming/transition/transition_finance_technology_roadmap_iron_and_steel_eng.pdf)

METI: Transition Finance Case Study(https://www.meti.go.jp/policy/energy_environment/global_warming/transition/transition_finance_case_study_jfehd_eng.pdf)

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Expand Contributions to CO2 Emissions Reduction in Society
Contribution to CO2 Reduction through our Engineering Business
Demand is expected to rise for power generation plants using renewable energy sources that do not emit carbon is
expected to increase. Through JFE Engineering, the JFE Group is handling the design, procurement, construction,and operation of various renewable energy generation plants including biomass, geothermal, solar, and onshore wind
power. We are also working to increase the amount of power generated at waste treatment facilities in order to promote
recycling and the effective use of resources.
Furthermore, we are actively engaged in the retailing of electricity, which uses these renewable energies as the main
power source, as well as in supporting the establishment and operation of new regional electricity companies that focus
on local production and consumption of energy using renewable sources.
As new initiatives toward carbon neutrality, we are developing a technology to safety and efficiently transport large
amounts of hydrogen, ammonia, and CO2, and working on demonstrating a process that separates and collects CO2 forreuse from the exhaust gas of waste treatment facilities.
Through these efforts, we will contribute to reducing CO2 emissions in society by 12 million tonnes by FY2024 and25 million tonnes by FY2030.
Electrical Steel Sheets
Electrical steel sheets are widely used as core materials for electrical equipment such as motors and transformers andtherefore play an important role in determining the performance of such electrical equipment. JFE Steel is contributing
to reducing CO2 emissions on a global scale by supplying high-performance electrical steel sheets.
Non-Oriented Electrical Steel Sheets
In order to achieve carbon neutrality in society, a major shift is required in the social structure, from a society that relies
on fossil fuels for energy to one that primarily uses carbon-free energy sources. Transitioning to a future society in whichelectric vehicles (EVs) are the main mobility platform and where zero-emission electricity is the main energy source will
depend on highly efficient motors, for which the key materials are high-performance non-oriented electrical steel sheets.
Our high-grade non-oriented electrical steel sheets improve the performance of EV motors. Their excellent low
iron loss property contributes to higher efficiency, while their high magnetic flux density supports downsizing. These
characteristics are highly regarded, and many automobile manufacturers use them in products. Demand for such highgrade non-oriented electrical steel sheets is expected to grow rapidly, and we have decided to invest approximately 49
billion yen to double the production capacity at the West Japan Works (Kurashiki district) in the first half of FY2024 tomeet this demand.
■ Demand for Non-Oriented Electrical Steel Sheets(Calculated by JFE; 2020 results = 1.0)

6.0
5.0
4.0
3.0
2.0
1.0
0

2020

2021

2022

2023

2024

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PolicyGuideline
IndicesGrain-Oriented Electrical Steel Sheets
The global demand for grain-oriented electrical steel sheets in transformers is expected to increase due to continuous
growing demand for electric power and the expanding adoption of renewable energy. Demand in India for grain-oriented
electrical steel sheets is expected to increase by 1.8 times in 2030 compared to 2019. Moreover, we have agreed with
our strategic-alliance-partner JSW to study the feasibility of establishing a joint, grain-oriented steel (G/O) manufacturing
and sales company in India.
■ Demand for Grain-Oriented Electrical Steel Sheets in India(Calculated by JFE; 2019 results = 1.0)
2.0

1.5

1.0

0.5

0

2019

2025

2030

(FY)

Super Core
Motors are becoming increasingly smaller and faster for EVs, home appliances, drones, and other applications, whichconsequently requires higher output and efficiency. At the same time, demand is growing to reduce high-frequency ironloss*1 and increase magnetic flux density*2 for the electrical steel sheets used as iron core materials for these products.
Since silicon boosts the electrical resistance of steel, increasing the amount of silicon helps to realize these properties.
Using the proprietary technology for CVD continuous siliconizing*3, we worked on controlling silicon concentration
distribution by optimizing the siliconizing amount and diffusion conditions and controlling crystal orientation. These
efforts have resulted in the development of a JNRF™ silicon-gradient steel sheet for high-speed motors, and JNRF™
helps to significantly increase motor efficiency to conserve energy while maintaining magnetic flux density (torque)equivalent to that of conventional non-oriented electrical steel sheets (3% silicon steel sheets).
*1 Iron loss refers to energy, mainly heat, lost when an iron core is excited by an alternating current. The energy loss
that occurs when the iron core is excited at high frequency is called a high-frequency iron loss. The efficiency of highspeed motors increases as high-frequency iron loss is reduced.
*2 Magnetic flux density, which indicates a material’s ease of magnetization, raises electromagnetic strength as density
increases. In motors, larger torque (power) can be achieved with materials that offer high magnetic flux density.
*3 The chemical vapor deposition (CVD) process technology increases silicon concentration in steel. CVD, performed in asteel strip annealing line, causes a reaction between steel strips and silicon tetrachloride (SiCl4) gas in a furnace while
continuously passing the steel strips through the furnace.
■ Super Core Manufacturing Process

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PolicyGuideline
IndicesHigh Tensile Strength Steel Sheets (HITEN) for Automobiles
Higher strength steel sheets are needed for automobile bodies in order to improve fuel efficiency, vehicle safety
and, more recently, the cruising range of EVs. Generally, increasing the strength of steel sheets decreases theirformability and, in some cases, limits how they can be applied. JFE Steel offers the JEFORMA® series, a lineup of coldrolled and galvannealed steel sheets in strength grades 590, 780, 980, and 1,180 MPa, each with distinct formability
characteristics. The series facilitates selection of the optimal steel sheet based on body part shape and forming method.
More recently, the Company has also worked on the following development initiatives for high tensile strength steel
sheets for automobiles.
Joint Development with thyssenkrupp Steel Europe
JFE Steel and thyssenkrupp Steel Europe jointly launched new 980-1,180 MPa-class cold-forming, high-tensile steel
sheets by designing a new steel composition and microstructure with an emphasis on local ductility, and by establishinga new heat treatment method. Compared to conventional high-tensile steel sheets, these achieve higher yield strengthand ductility, especially excellent local ductility, characteristics that will contribute to lighter-weight automobile body
frames and better crash safety performance. In addition, they can be formed into parts with complicated shapes, using
conventional cold forming, rather than hot stamping, and thereby helping to improve productivity, lower manufacturingcost, and save energy during parts manufacturing.
1.5 GPa-Grade High Tensile Strength Cold-Rolled Steel Sheets
In 2020, JFE Steel’s 1.5 GPa-grade high tensile strength cold-rolled steel sheets were adopted for the first time in theworld* for cold press forming applications in vehicle body structural parts. This represents the highest strength vehicle
body structural parts obtained through cold press forming.
Until then, the adoption of high tensile strength cold-rolled steel sheets for vehicle body structural parts with complex
shapes had been limited to the 1.3 GPa grade because increasing the strength of sheets can result in decreased coldpress formability and delayed fracture resistance. To overcome these issues, the adoption of 1.5 GPa-grade hightensile strength steel sheets through a hot press forming process was more common. JFE Steel achieved both highyield strength and delayed fracture resistance even with the 1.5 GPa-grade high tensile strength steel sheets while
maintaining cold press formability equivalent to that of 1.3 GPa-grade sheets, by using the proprietary WQ (waterquenching) method-based continuous annealing process to control the steel sheet’s microstructure. This enabled theadoption of 1.5 GPa-grade high tensile strength steel sheets for vehicle body structural parts through a cold forming
method, thus reducing environmental impact and cost.
* According to our research
JFE Steel develops and manufactures steel sheet products that are easy to use, with full consideration for environmental
impact and their contribution to reducing energy and resources. The company will contribute to reducing CO2 emissions
in society in general through the use of its products for automobile parts.

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Indices■ Related Products and Technologies
Expand contributions to CO2 emissions reduction in society

Contribution to CO2
Reduction through theEngineering BusinessNew regional
electricity“Regional Electricity Retail Businesses in Partnership with
the Local Municipal Governments Establishing New Regional
Electricity Businesses” (P.116)

Food waste
recycling“Food Waste Recycling Business” (P.115)

Carbon-neutral
world“Contribution to creating a carbon-neutral world
through the transport of hydrogen and CO2 ” (P.114)“JFE Steel develops JNRF™ silicon-gradient steel sheet
for high-speed motors—minimizes high-frequency ironloss and improves high magnetic flux density”

JNRF™

(https://www.jfe-steel.co.jp/en/release/2020/201203.html)

Facility expansion“JFE Steel to expand electrical steel sheet production
capacity at Kurashiki facility”(https://www.jfe-steel.co.jp/en/release/2021/210401.html)

Electrical Steel Sheets“JFE Steel & JSW Steel Proposes Grain Oriented Steel
Sheet Manufacturing JV in India”
Supply chain forelectrical steel
sheets(https://www.jfe-steel.co.jp/en/release/2021/210507.html)“Further expanding the global supply chain in electricalsteel sheets business” (P. 118)

High Tensile Strength
Steel Sheets (HITEN) for
Automobiles

Developmentof high tensile
strength steel
sheets forautomobiles“JFE Steel and thyssenkrupp Steel Europe Launch Hightensile Steel Sheets Capable of Cold Forming for Use in
Automobile Frames”(https://www.jfe-steel.co.jp/en/release/2022/220404.html)“JFE Steel 1.5 GPa-Grade High-Tensile Strength ColdRolled Steel Sheets Adopted for First Time in Vehicle
Body Structural Parts”(https://www.jfe-steel.co.jp/en/release/2020/201223.html)

Accelerate Group-wide Commercialization of the Offshore Wind-Power Business
Offshore wind power generation is a key initiative of the Japanese government’s Green Growth Strategy to achievecarbon neutrality by 2050. We will participate in this effort by leveraging the Group’s collective strength with ourengineering business acting as the main driver. Specifically, the Group will work on commercializing the manufacturingand O&M* of foundation structures (monopiles, jackets) in addition to establishing a supply chain encompassing material
procurement, manufacturing, and O&M. We anticipate this will significantly contribute to the JFE Group’s efforts toachieve carbon neutrality as well as the government’s strategy to achieve carbon neutrality.
* Operation and Maintenance

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Large and Heavy Steel Plates for Offshore Wind-Power Generation
JFE Steel is preparing to start manufacturing large and heavy steel plates using the No. 7 Continuous Casting Machine(7CCM) in the Kurashiki district, which was recently put into operation. In recent years, offshore wind turbines havegrown in size, requiring larger foundation structures to support them. These large-scale structures in turn call for larger
steel plates—to reduce the amount of welding work, for example—and to increase manufacturing efficiency. The stateof-the-art 7CCM can manufacture extra-large slabs that can then be used to produce large and heavy steel plates of up
to 37 tonnes each (previously limited to around 20 to 28 tonnes per plate in general), which will be one of the largest in
Asia. We will invest in this state-of-the-art equipment at our plate mills and other facilities to supply large quantities ofhigh-quality large and heavy steel plates capable of supporting wind turbines in harsh offshore environments for many
years to come.
■ Manufacturing Process of Large and Heavy Steel Plates for Offshore Wind Power Generation■ Commercialization of Offshore Wind-Power Business• By commercializing our manufacturing of foundation structures (monopiles), we will become the forerunner inthe business of offshore wind-power generation and establish a supply chain across the entire Group,
including foundation manufacturing and O&M.*1• We will aim to expand business in the field of renewable energy by leveraging the JFE Group’s collective
strengths (synergies), with JFE Engineering as the main player.

JFE Engineering

JFE Steel

Manufacture seabed-fixed foundation
structures*2 for offshore wind power
generation(Started factory operation in April 2024)

Increased production capacity and stablemass production of large and heavy plates
for offshore wind power generation
Steel supply

SCM support
Steel supply

Utilization of Kurashiki No. 7 Continuous Casting Machinein Kurashiki district (started operation in June 2021)

Steel supply
SCM support

JFE Shoji

Each company under the GroupSCM construction for steel products andprocessed products for offshore wind
power generation contributes toGroup collaboration

JMU*3: fabrication of offshore wind turbine
floats and construction of work vessels
Group-wide: O&M with maximum use ofresource*1 Operation and maintenance. Apply expertise of maintenance and analysis technologies.
*2 Seabed-fixed foundation structures: monopiles, jackets, etc.
*3 Japan Marin United Corporation (equity method affiliate)

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Policy■ Technologies of Group Companies
Category

Company

Details

Ocean research

JFE Advantech

Ocean monitoring equipment

Analysis/Evaluation

JFE Techno-ResearchStrength and durability testing and evaluation technologies
for large structures

JFE Engineering

Seabed foundations (monopiles, jackets, etc.)

Japan Marine United

Floating foundations (semi-submersible)

JFE SteelHigh-quality, large, and heavy steel plates

Japan Marine United

SEP vessels (self-elevating platform)

Foundation
structures

JFE-RAPID (cable laying method)
JFE Engineering
Construction

Battery systems for power storage

GECOSS

Stands for large steel structures

JFE SteelNatural stone substitute materials (use of steel slags)

JFE Engineering

Technologies for remote monitoring and operation

JFE Advantech

Vibration measurement equipment and systems

Japan Marine United

Offshore support vessels (work vessels)

JFE Plant Engineering

Technologies and expertise in onshore turbine maintenance

JFE Technos

Technologies and expertise in onshore turbine maintenance

JFE Techno-Research

Equipment evaluation and analysis for corrosion, fatigue,
vibration, etc., and diagnosis of remaining service life

JFE Shoji

Contribution to optimizing offshore wind power generation
project execution

O&M

Supply chain

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Indices

Initiatives for Achieving Carbon Neutrality in the Keihin Waterfront Areas
The JFE Group is partnering with Kawasaki city to devise options for repurposing land in the Keihin district of the Japan
East Works after the operation of blast furnaces and other facilities are suspended. One key vision for land use is to playa leading role in achieving carbon neutrality. Government-private sector joint initiatives are also underway to accelerate
the government’s plan to create a carbon-neutral port in the Keihin waterfront area, including the land belonging to theJapan East Works.
JFE Holdings, ENEOS Corporation, and JERA Co., Inc. have begun a joint study on establishing a hydrogen andammonia receiving and supply base, and as part of this effort, we are considering utilizing the deep-water wharves andadjacent land areas of Ogishima island in the Keihin district. The JFE Group intends to play a role in building a stable andeconomical supply chain for hydrogen and other decarbonized fuels and to contribute to realizing carbon neutrality forsociety as a whole.

Aerial view of the Keihin waterfront area (courtesy of Kawasaki city)

Adapting to Climate Change (Contribution to Achieving Societal Resilience)Contributions to Disaster Prevention and Mitigation and Increased National Resilience
The JFE Group is not only focused on reducing CO2 emissions (climate change mitigation); we also intend to contribute to
the resilience of society in general by adapting to climate change. With infrastructures such as hybrid tide embankments
and permeable steel slit dams, the Group will contribute to preventing and mitigating disaster-related damage toinfrastructure critical to daily life and economic activities, and to strengthening their resilience.
Hybrid Tide Embankments
Hybrid tide embankments are made of steel and concrete. Because of their hybrid structure, they require shorter
construction time and less space.
Concrete blocks for hybrid tide embankments are precast at a JFE Group factory, while steel pipe piles forfoundations are installed at the construction site, thereby reducing the time required for on-site construction by about
60%. This arrangement does not require large amounts of materials, equipment, or workers on site, so it does notinterfere with other construction work. Furthermore, compared to a conventional embankment structure, the land area
occupied by the embankment can be reduced by about 80%, saving considerable space. We will continue to apply andadvance our technology to further contribute to disaster prevention in the region.

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Concrete block
Break-water
platesDeck

Steel pipe
pile

Hybrid tide embankments

Cross section*1 The JFE Engineering Corporation’s Steel infrastructure (Japanese only)(https://www.jfe-eng.co.jp/products/bridge/co01.html)

Permeable Steel Slit Dams
A permeable steel slit dam is a steel pipe structure installed in a river to trap debris flows.
Made of strong steel pipes to withstand the impact of driftwood and huge debris, it has large openings to let waterand sediment to pass through, which prevents the water level from rising upstream during floods and also ensuring thatdebris does not flow downstream. Since it does not block the flow of water, unlike a dam, it can be shaped to the slopeof a riverbed to protect the ecosystem. The JFE Group is working to expand the use of permeable steel slit dams by
reducing installation costs and shortening the construction period through structural innovations.

Permeable steel slit dam
Terre Armée FS to Prevent Landslides, Mudslides, and Falling Rocks
Terre Armée, or reinforced earth, is a method for constructing strong vertical walls that involves placing layers of wide
steel reinforcements in the embankments. The friction between the steel strips and the earth makes the structure verystrong, and this is the most widely adopted method around the world for constructing reinforced walls. In Japan as well,
the method has been used for various infrastructure developments such as highway and riverbank walls.
JFE Shoji Terre One Corporation, a subsidiary of JFE Shoji Corporation, has developed a new Terre Armee method,with a new fail-safe (FS) system. The feature helps to visually confirm the health of structures after they have been
subject to unforeseen forces, such as massive earthquakes. Making the internal anomalies easily detectable helps toenhance structural safety, as it makes it possible to schedule necessary maintenance work in a timelier manner. We will
promote the adoption of the new Terre Armée FS method to contribute to building disaster-resilient roads and towns.

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SocialApplication in highway walls for National Route No. 3(Kumamoto Prefecture)

Governance

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Indices

Fail-Sensor indicator (red indicating internal anomalies)

Risk Management (Climate Change)
JFE Holdings is responsible for comprehensive risk management in accordance with its Basic Policy for Building Internal
Control Systems. The JFE Group CSR Council chaired by the president of JFE Holdings, consolidates information andstrengthen management across the Group to reduce the frequency and impact of risks.
The executive officer responsible for risk works to identify potential ESG risks such as those associated with climatechange. As necessary, the JFE Group CSR Council confirms and evaluates risks and discusses and makes decisions on
countermeasures. Key managerial issue are deliberated by the Group Management Strategy Committee.
The Board of Directors supervises initiatives on ESG risks such as those related to climate change and CSR by
discussing and making decisions on, and by receiving reports on, these matters.
Climate-related risks are identified and evaluated based on a scenario analysis conducted under the framework
recommended by the TCFD in 2017. Important factors that may affect management are selected for further analysis andused in formulating business strategies, such as the Seventh Medium-term Business Plan.

Monitoring Method for Core Issues Related to Climate Change
Issues that may affect management are being monitored by the JFE Group CSR Council, Group Management Strategy
Committee and the Management Committee. As for the method, measures are implemented based on a quarterly
report on climate change-related issues deliberated by the specialized committees of each Group company (e.g.,
the Environmental Committee). The JFE Group Environmental Committee consolidates information and strengthens
management to reduce the frequency and impact of risks and to maximize opportunities.
Countermeasures Based on Monitoring
1. Group-wide deliberations
2. Monitoring penetration of policies within the Group
3. Monitoring deployment of policies throughout the GroupFor further details, refer to the following links.
CSR Structure (P.23)
Risk Management (P.202)
Environmental Management (P.50)

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Metrics and Targets (Medium- and Long-term Targets and Results in FY2021)
The JFE Group’s steel business is led by its operating company, JFE Steel, which is a member of the Japan Iron and SteelFederation (JISF). The JFE Group is promoting the JISF’s Commitment to a Low Carbon Society, which focuses on the Three
Ecos initiatives and the development of innovative new iron and steelmaking processes. Under the initiative, the JISF’s target
for FY2030 had originally been to reduce emissions by 9 million t-CO2. However, with the end of phase I of this initiative in
2020, it was rebranded as the JISF’s Carbon Neutrality Action Plan, and the phase II target (FY2030 target) was revised toa 30% reduction in energy-derived CO2 emissions in FY2030, compared to FY2013. JFE Steel is aggressively pursuing theachievement of this goal.
In addition, JISF has formulated and announced the Long-term Vision for Climate Change Mitigation in 2030 and beyond,which is intended to realize zero-carbon steel. JFE Steel played a key role in formulating this vision. Furthermore, in 2021, theJISF announced the “Basic Policy of the Japan steel industry on 2050 Carbon Neutrality sought by the Japanese government,”
declaring that the Japanese iron and steel industry will boldly take on the challenge of realizing zero-carbon steel.
The JFE Group intends to increase sustainability through solutions that address global climate change while restructuring
its business to respond to developments in the environment facing the steel business. We considered 2020 to be thelandmark year for further reinforcing our efforts to tackle climate change, and we declared our target to reduce the CO2
emissions in FY2030 by 20% or more compared to FY2013 and to achieve carbon neutrality by 2050.
In May 2021, the JFE Group positioned its initiatives on climate change as a top priority and, as part of the Seventh
Medium-term Business Plan, formulated the JFE Group Environmental Vision for 2050, under which we will aim to achievecarbon neutrality by 2050. The Group also disclosed new CO2 emissions reduction targets, and in February 2022, the FY2030
target was revised upward to 30% or more compared to FY2013. Major Group companies of JFE Steel have formulated CO2
reduction targets on the same level as JFE Steel’s. The Group companies in Japan and overseas work together to incorporate
efforts to address climate change issues into the business strategy. By reflecting the TCFD’s principles in their management
strategies, the Group will systematically promote to reduce CO2 emissions.

JFE Group’s Initiatives to Reduce CO2 (JFE Group Environmental Vision for 2050)
Seventh Medium-term Business Plan Initiatives■ Reduce steel-business CO2 emissions in FY2024 by 18% compared to FY2013 (JFE Steel).
Furthermore, JFE Steel’s major group companies have also set their own CO2 reduction targets for FY2024 toensure that these targets are achieved. With this, more than 99% of the total CO2 emissions of the entire JFE
Steel Group is accounted for.
■ The target of reducing CO2 in FY 2030 : 30% or more compared to FY2013 (JFE Steel)Initiatives for Carbon Neutrality by 2050
■ Reduce CO2 emissions at JFE Steel・Pursue ultra-innovative technologies mainly for carbon-recycling blast furnaces and CCU.
・Develop hydrogen-based ironmaking (direct-reduction) technology.
・Develop electric arc furnace process technology■ Expand engineering business contributions to CO2 emissions reduction in society
・Reduce CO2 emissions by 12 million tonnes in FY2024 and 25 million tonnes in FY2030.
■ Offshore wind-power generation business・Accelerate commercialization of our offshore wind-power business by applying the strengths of the Group.
JFE Group Environmental Vision for 2050, Presentation Material(https://www.jfe-holdings.co.jp/en/investor/zaimu/g-data/2020/May2021-210525-release01.pdf)

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ESG Data

Editorial
PolicyCO2 Emissions of the JFE Group■ CO2 Emissions of the JFE Group■ Scope1 ■ Scope2(Million t-CO2)
80

64.3

62.2
7.4

60

40

54.9

60.4

59.9
7.6

7.6 53.1

52.3

52.9

59.0
7.1

6.4
46.6

51.9

20

0

2013

2017

2018

2019

2020

2021

(FY)

Notes:- Data cover 79 companies
JFE Steel and 29 major domestic and overseas subsidiaries
JFE Engineering and 12 major domestic and overseas subsidiaries
JFE Shoji and 35 major domestic and overseas subsidiaries- Data for JFE Steel include CO2 emissions from non-energy sources.
-Starting with FY2018, data for JFE Steel’s subsidiaries and JFE Engineering’s subsidiary include CO2 emissions from
non-energy sources.
- FY2013 figure includes data for the Sendai Works of JFE Bars & Shapes Corporation.
- FY2021 figure includes data for an expanded list of JFE Steel, JFE Engineering, and JFE Shoji major subsidiaries.
■ Scope 3 Emissions of the JFE Group (FY2021)

Category 15:
Investments 1,022
Category 2:
Capital goods 1,221

Categories 3, 4, 5, 6, 7:
Other 1,292

Category 1:
Purchased goods andservices 17,244

Total

20,778thousand t-CO2e

Coverage:(Categories 1, 2, 3, 4, 5) JFE Steel, 23 JFE Steel major domestic subsidiaries, JFE Engineering, and JFE Shoji(Category 6, 7) JFE Steel, 23 JFE Steel major domestic subsidiaries, JFE Engineering, 12 JFE Engineering majordomestic and overseas subsidiaries, and JFE Shoji(Category 15) Japan Marine United, and 9 JFE Steel equity-method affiliates (7 domestic and 2 overseas)
Sources: Green Value Chain Platform (Ministry of the Environment) and others
For more on quantitative data related to CO2 emissions, refer to the following information.
Environmental Data (P.207)

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PolicyGuideline
IndicesT JFE Steel

Initiatives to Save Energy and Reduce CO2
JFE Steel has always aggressively pursued CO2 reduction and energy savings, including the introduction of energy-saving
equipment.

Energy Consumption and CO2 Emissions in FY2021■ Production of Crude Steel of JFE Steel(Million t-steel/year)

29.39
28.46

30

26.31
25

26.73

23.55

25.88
10％

22.76

20

0

1990

2013

2017

2018

2019

2020

2021

(FY)

Note: FY2013 figure includes data for the Sendai Works of JFE
Bars & Shapes Corporation.
■ Energy Consumption and Unit Energy Consumption of
JFE Steel■ Energy consumption ● Unit energy consumption(GJ/t-s)

(PJ)
800

600

670

32

662

644

620

613

602

545

29

28.5
-18％

400

26

200

0

22.3
1990

2013

23.3

22.6
2017

2018

23.2
2019

24.0

2020

23.3

23

2021 (FY)0

Note: FY2013 figure includes data for the Sendai Works of JFE
Bars & Shapes Corporation.

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Indices■ CO2 Emissions from Energy Sources and Unit CO2
Emissions of JFE Steel(Million t-CO₂)
100

2.48

■ Scope1■ Scope2 ● Unit CO₂ emissions from energy sources (t-CO₂/t-steel)

1.98

2.03

1.99

-18％

2.08

2.03

2.03

80

58.3
60

58.1
56.6
54.2
53.5
5.6
6.1
6.3 47.3
6.2

40

52.5

50.5

47.3

47.9

52.6
5.8

5.4
41.9

46.8

2.0
1.5
1.0
0.5

20
0

2.5

1990

2013

2017

2018

2019

2020

2021 (FY)0

Notes:- The CO2 emissions and emission intensity in FY2021 are calculated using theCO2 emission factor for electricity purchased in FY2020, adopted by the Japan
Iron and Steel Federation’s Commitment to a Low Carbon Society.
-FY2020 data was revised by applying the CO2 emission factor for electricity
purchased in FY2020, as adopted by the Japan Iron and Steel Federation’s
Commitment to a Low Carbon Society.
-FY2013 figure includes data for JFE Bars & Shapes Corporation’s Sendai Works.

E

N JFE Engineering

JFE Engineering contributes to CO2 emissions reductions in society as a whole through its business activities, such as
expanding renewable energy generation and constructing and operating plastics and food recycling plants. In FY2021,
the Company contributed to reducing 10.56 million tonnes of CO2 emissions (a 14% increase in contribution comparedto FY2020) in society as a whole. We intend to further expand our business and contribute to CO2 emissions reductionsof 12 million tonnes in FY2024 and 25 million tonnes in FY2030.
In addition, we have established an environmental management program and have been working on reducing
waste and implementing energy-saving activities in our offices and manufacturing divisions. In FY2021, the Company
also implemented such initiatives as the zero-emission electricity plan at its Yokohama head office, achieving a 34%
reduction in its CO2 emissions compared to FY2013. We will continue to conduct our business activities in ways that saveresources and are environmentally sound, including expanding the use of renewable energy.
■ JFE Engineering’s Contribution to CO2 Emissions Reductions (FY2021)■Domestic plants*1■Overseas plants*2

Fluorocarbon recovery 0.352■Recycling*3

0.735

Recycling 0.383
Biomass (domestic) 2.02

Waste (overseas) 2.26

4.59
5.24

Total
10.56 million t-CO2

Waste (domestic)
1.141

Fuel conversion 1.08
Geothermal 1.103
Waste heat recovery 1.06
Other (solar, wind,digestion gas, waste heat) 0.328

Biomass (overseas) 0.845*1 Data cover JFE Engineering.
*2 Data cover JFE Engineering and Standardkessel Baumgarte GmbH (SBG),a German subsidiary of JFE Engineering Corporation.
*3 Data cover J&T Recycling Corporation and JFE Urban Recycle Corporation.

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Indices■ JFE Engineering Group’s CO2 Emissions from Energy Sources(Thousand t-CO2)
100

72.3

66.7

75

67.5

56.5

62.5

61.4
Other

8.9

J&T
Recycling

42.2

JFE
Engineering

10.3

50

25

0

2013

2017

2018

2019

2020

2021

(FY)

Notes: - Data cover JFE Engineering and 12 major domestic and overseas subsidiaries.
- FY2021 figure includes data for an expanded list of JFE Engineering major subsidiaries.

S

H JFE Shoji

Under the environmental strategies formulated in 2001, JFE Shoji offices in Japan have consistently worked to reduce the useof electricity and paper and strictly manage waste separation.
Efforts to cut electricity consumption such as leave-on-time days, prohibition of night work, and pinpoint lighting are now firmly
rooted. Ongoing efforts are also made to improve the working environment through 5S activities and to raise operational efficiencies
through robotic process automation (RPA). These efforts are contributing to reducing JFE Shoji’s environmental impact.
Electricity consumption in the offices had previously decreased due to the COVID-19 pandemic and employees working
from home. However, it has increased slightly in FY2021 as more employees have returned to our offices. We have establisheda new goal in the domestic operating companies to reduce CO2 emissions by installing solar panels and purchasing electricity
derived from renewable energy sources and are working to achieve it. In FY2021, CO2 emissions in the domestic operatingcompanies were reduced by 10.7%, compared to FY2019, by purchasing electricity derived from renewable energy sources.
■ Electric Power Consumption by JFE Shoji(Thousand kWh)
2,500

2,031
2,000

-55％

1,500

1,060

1,000

899

918

919

909

843
Branch offices
Nagoya office5000Osaka office
Head office(Tokyo)

2001

2013

2017

2018

2019

2020

309
36
235

329
2021

(FY)

■ CO2 Emissions of the JFE Shoji Group (FY2021)
North and Central
America:
5.5 thousandAsia:
5.2 thousand

China: 11.3 thousand

Total:
31.9 thousand
t-CO2

Japan:
9.9 thousand

Notes:- Data cover JFE Shoji and 35 major domestic and overseas subsidiaries.
- FY2021 figure includes data for an expanded list of JFE Shoji subsidiaries.

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IndicesEndorsing and Participating in External Initiatives
The JFE Group expresses its views and opinions on various public policies and external initiatives related to climatechange and environmental conservation through Keidanren (Japan Business Federation) and the Japan Iron andSteel Federation (JISF), and it proactively participates in these activities. The Group also endorses the Challenge Zerodeclaration and will rise to the challenge in pursuit of innovation. Challenge Zero (Innovation Challenges Towards a Net
Zero Carbon Society) is a new joint initiative by Keidanren and the Japanese government for proactively publicizing andsupporting companies and organizations that pursue innovative actions to realize a decarbonized society, which is thelong-term goal of the Paris Agreement.
The Japan Iron and Steel Federation (JISF) is actively working toward achieving its Carbon Neutrality Action Plan
(formerly the Commitment to a Low Carbon Society), with the target year of FY2030. In November 2018, the JISF also
formulated and published the Long-term Vision for Climate Change Mitigation for 2030 and beyond, which represents theindustry’s challenge for realizing zero-carbon steel. In February 2021, the JISF announced the “Basic Policy of the Japan
steel industry on 2050 Carbon Neutrality aimed by the Japanese government,” declaring that the Japanese iron and steel
industry will boldly take on the challenge of realizing zero-carbon steel. As a member of the JISF, JFE Steel will be an
active participant in these medium- and long-term climate change initiatives.
In addition, the Ministry of Economy, Trade, and Industry (METI) has announced its intention to establish the GX
League, a forum that invites companies to work on GX; take up the challenge of GX in cooperation with the government,
academic, and economic sectors; discuss how to transform the overall economic and social system; and drive thecreation of new markets. The Group has endorsed the GX League Basic Concept since its goal is aligned with the
JFE Group’s overall objective for climate change initiatives. JFE Steel is also participating in activities outside of Japansuch as the Japan India Public and Private Collaborative Meeting, Japan-ASEAN Steel Initiative, and Japan-China Steel
Industries Exchange. Furthermore, it is a member of the World Steel Association (WSA)’s Climate Action data collection
programme, which uses ISO 14404 as the standard for measurement and calculation.
JFE Engineering is a member of the Japan Climate Leaders’ Partnership (JCLP). Established in 2009, the JCLP isa coalition of Japanese corporations that encourage the industrial community to fully recognize the urgency of climatechange and take more decisive action to create a sustainable, decarbonized society. Companies fulfill their corporate
responsibility by demonstrating leadership in the transition to a decarbonized society. The Company is participating in the
Decarbonization Consortium, JCLP’s platform for encouraging information sharing and collaboration between companies
and is actively engaged in creating opportunities to learn from companies at the frontline of decarbonization efforts, andcollaborating with other companies to create new solutions.
In April 2021, JFE Shoji became a signatory to the United Nations Global Compact, affirming its support for theseprinciples. JFE Shoji will comply with the Ten Principles of the Global Compact and endeavor to achieve the SDGs.
For more details, refer to the following.
Steel Industry Initiatives (P.96)
Initiatives by industry groups
The Japan Iron and Steel Federation: Climate Change Policy (https://www.jisf.or.jp/en/activity/climate/index.html)
The Japan Iron and Steel Federation: Challenges towards Carbon Neutrality(https://www.carbon-neutral-steel.com/en/)

Keidanren (Japan Business Federation): Challenge Zero (https://www.challenge-zero.jp/en/)
The Ministry of Economy, Trade, and Industry: GX League Basic Concept (https://www.meti.go.jp/english/press/2022/0201_001.html)
WSA: Climate Action data collection programme（https://worldsteel.org/steel-topics/environment-and-climate-change/climate-action/climate-action-data-collection/data-providers/）

Japan Climate Leaders’ Partnership (JCLP) (https://japan-clp.jp/en)
United Nations Global Compact (https://www.unglobalcompact.org/)

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Scenario Analysis in Line with the TCFD Recommendations
The JFE Group intends to achieve carbon neutrality by 2050. The Group leverages the scenario analysis in line with the
TCFD recommendations to identify and assess climate change-related risks and opportunities and to strengthen
the resilience of its organizational strategy. Please refer to the “Climate Change” page for governance, strategy, risk
management, metrics and targets for climate change-related issues in line with the TCFD recommendations.
Climate Change (P.56)

Milestones Related to Climate Change around JFE’s Business and JFE’s Initiatives
1997
2008
2013
2015
2017
2018
2019

Kyoto Protocol adopted at COP3 in Kyoto
JISF’s Voluntary Action Plan launched
JISF’s Commitment to a Low Carbon Society launched
Paris Agreement adopted at COP21
TCFD published the final report of its recommendations
JISF announced the Long-term Vision for Climate Change Mitigation, Zero Carbon SteelJFE Group announced its endorsement for the final report of the TCFD recommendations
JFE Group published a scenario analysis in line with the TCFD recommendations
2020
Keidanren launched the Challenge Zero initiative	Ministry of Economy, Trade and Industry published a list entitled Companies Taking on the Zero-Emission Challenge
JFE Group published its targets in its medium- to long-term vision (target for 2030 and achieving carbon
neutrality by 2050)
Prime Minister Suga declared Japan will achieve carbon neutrality by 2050
2021	JISF announced the Basic Policy of the Japan steel industry on 2050 Carbon Neutrality aimed by the Japanese
government
JFE Group published its roadmap for achieving carbon neutrality in 2050 in the JFE Group
Environmental Vision for 2050
Japanese government formulated the Green Growth Strategy Through Achieving Carbon Neutrality in 2050
2022	
JFE Group announced that the CO2 emissions reduction target for FY2030 for JFE Steel has been revised
upward to 30% or more compared to FY2013
	JIFS published the report of Carbon Neutrality Action Plan phase I and revised the phase II (FY2030) target to a
30% reduction compared to FY2013
The Challenge Zero (Innovation Challenges Toward a Net Zero Carbon Society) is a new joint initiative by Keidanren(Japan Business Federation) and the Japanese government for proactively publicizing and supporting companies andorganizations that pursue innovative actions toward realizing a decarbonized society, which is the long-term goal of theParis Agreement. The JFE Group endorses the Challenge Zero declaration and will rise to the challenge in pursuit ofinnovation.
The Ministry of Economy, Trade and Industry (METI), in collaboration with Keidanren and the New Energy and Industrial
Technology Development Organization (NEDO), has been tackling a project called the Zero-Emission Challenge. This is
to prepare a list of companies generating innovation toward realizing a decarbonized society and to provide investors andother stakeholders with useful information on these companies. On October 9, 2020, on the occasion of TCFD Summit
2020, Mr. Kajiyama Hiroshi, Minister of Economy, Trade and Industry, published a list entitled Companies Taking on the
Zero-Emission Challenge, which includes a total of about 300 named and unnamed companies. The JFE Group wasselected for the category “Companies Taking on the Zero-Emission Challenge.” These are organization who are boldly
accepting the challenge of innovation to realize a decarbonized society.
The JFE Group publishes information on specific initiatives through the following website.
Challenge Zero (https://www.challenge-zero.jp/en/member/34)
Zero-Emission Challenge (https://www.meti.go.jp/english/press/2021/1005_002.html)

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Scenario Analysis
Tools and Methods
Scenario analysis is used to portray an accurate understanding of climate-related risks and opportunities and assess
implications to the current business strategy, thereby enabling an organization to establish business strategies that reflect
this assessment. We selected the following scenarios in consideration of the potentially high exposure our business has tothe impacts of climate change. Moreover, we expanded the scope to also include the 1.5℃ scenario in FY2022.
Both scenarios are based on those developed by the International Energy Agency (IEA). Analysis is conducted under theassumption that a uniform carbon price is implemented by major emitting countries toward the realization of the 2°C target.
Under the long-term scenario analysis, our goal is to achieve carbon neutrality by 2050. We conducted risk
assessments that take into account the prospect of achieving the 2°C scenario and the necessity of ultra-innovativetechnology for the 1.5°C scenario (IPCC 1.5°C Special Report) in steelmaking for carbon neutrality by 2050.

Selected Scenario

1.5/2°C Scenario

4°C Scenario

Transition
Risks

Transition scenarios developed by the
IEA ustainable Development Scenario·S(SDS)*1· 2°C Scenario (2DS)*2· IPCC Special Report on Global
Warming of 1.5°C· NZE2050*3

Transition scenarios developed by the
IEA· New Policies Scenario (NPS)*1· Reference Technology Scenario(RTS)*2

Physical
Risk

Climate change projection scenario developed by the Intergovernmental Panelon Climate Change (IPCC)· Representative Concentration Pathways (RCP) Scenario*4

Reference
Scenario

How Society will Look

Dynamic policies will be adopted andtechnical innovations will progress
to limit the average temperature riseby the end of this century to 2°C andrealize sustainable development.
Assume a society in which ourbusiness is affected by socialchanges accompanying transition to a
decarbonized society.
· World-wide/industry-wide uniform
carbon pricing*5· Increase in the ratio of sales ofelectric vehicles to overall vehicle
sales

Despite new policies implemented ineach country based on approaches
under the Paris Agreement, averagetemperature rises about 4°C by theend of this century.
Assume a society in which ourbusiness is affected by temperaturerise and other climate change.
· Increase in the occurrence offlooding· Sea level rise

*1 Source: IEA “World Energy Outlook 2018”*2 Source: IEA “Energy Technology Perspectives 2017”*3 Source: IEA “Net Zero by 2050 – A Roadmap for the Global Energy Sector”*4 Source: IPCC Fifth Assessment Report*5 If prices of carbon differ from country to country, there will be a gap in international competitiveness between
countries that impose strict CO2 emissions regulations and less strict regulations. This will result in carbon leakage
where CO2 emissions of a strict climate policy country are reduced due to decreased production and investment,
while production at and investment to other countries with laxer emission constraints increase, thereby increasing
the CO2 emissions in those countries. One reference scenario, SDS, assumes that carbon pricing is implemented indeveloped countries and some developing countries. We took this into account in formulating the 2°C scenario basedon the assumption that a uniform carbon pricing is introduced to major emitting countries to push toward achieving
the target of two degrees.

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Scope of Business and Period for Analysis
This analysis covers the following businesses: the steel business by JFE Steel, the engineering business by JFE
Engineering, the trading business by JFE Shoji, and businesses carried out by some of the other Group companies. The
period covered is up to 2050.

Relevance with the JISF’s Long-term Vision for Climate Change Mitigation
The Japan Iron and Steel Federation (JISF) has been working toward its Commitment to a Low Carbon Society, and phase Iof this initiative ended in FY2020. From FY2021, the effort was rebranded as the Carbon Neutrality Action Plan, and thephase II target (FY2030 target) was revised. In November 2018, the JISF also formulated and published the Long-term
Vision for Climate Change Mitigation for 2030 and beyond. JFE Steel played a central role in the formulation of this longterm vision. The vision represents the industry’s challenge toward realizing zero-carbon steel and lays out the prospect ofachieving the 2°C scenario for steelmaking and necessity of ultra-innovative technologies to achieve the 1.5°C scenario.
Furthermore, on February 15, 2021, the JISF announced the “Basic Policy of the Japan steel industry on 2050 Carbon
Neutrality aimed by the Japanese government,” which declares that the Japanese iron and steel industry will boldly
accept the challenge of realizing zero-carbon steel.
The JFE Group’s scenario analysis is intended to ensure resiliency in our Group’s business strategy during theintermediate stages of these long-term challenges.
■ Efforts to Achieve Zero Carbon Steel
2020
Development of Technologies Specific to
the Iron and Steel Sector

COURSE50

Raising ratio of H2 reduction in blast furnace
using internal H2 (COG). Capturing CO₂ from blast
furnace gas for storage.

Super COURSE50

Further H2 reduction in blast furnaces by adding H2from outside (assuming massive carbon-free H2 supply
becomes available)

H2 reduction
ironmaking

H2 reduction in iron making, which does not use coal

CCU

Carbon recycling from byproduct gases

CCS

Recovery of CO₂ from byproduct gases

2030

R&D

2040

2050

2100

Implementation

Implementation

R&D

R&D

R&D

R&D

Implementation

Implementation

Implementation

Development of Common
Fundamental Technologies
for Society

Carbon-free Power

Carbon-free power sources (nuclear, renewables,
fossil + CCS) Advanced transmission, power
storage, etc.

Carbon-free H2Technical development of low-cost, high-volume
hydrogen production, transportation, andstorage

R&D

Implementation

Technical development of CO₂ Capture,
Utilization and Storage

R&D

Implementation

CCS／CCU

R&D

JIFS: Challenges towards Carbon Neutrality (https://www.carbon-neutral-steel.com/en/)

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Process to Identify Key Factors that Impact the Business
STEP 1: Examine the entire value chain from a holistic perspective and sort out factors that impact the businesses underanalysis (for more information on risks and opportunities in the value chain, refer to:
JFE Group Value Chain (P.29))
STEP 2: Examine all factors at an overview level and identify key factors by taking into account the level of impact andstakeholder expectations and concerns
1.5/2°C Scenario

4°C Scenario

5. Unstable raw materials
procurement due to increased
occurrence of climatic hazards

Impact on Procurement

Impact on Direct Operation

1. D ecarbonization of iron andsteelmaking process
2. Increased needs for effective
utilization of steel scrap

6. Damage to production bases andoffices caused by climatic hazards

Impact on Product andService Demand

3. C hange in demand for automotive
steel, etc.
4. Increase in demand for solutions toenhance decarbonization

7. National resilience

Level of Impact

Expectations and concerns of stakeholders

Axis for identifying key factors

Axis for identifying key factors: • Level of impact (possibility of risks and opportunities arising × Level of impact if it
manifests)• Expectations and concerns of stakeholders

Results of Scenario Analysis
The issue of climate change is a critical concern from the perspective of business continuity for JFE Group management.
Our steel business, which emits 99.9% of the Group’s total CO2 emissions, has been developing technologies forsaving energy and reducing CO2 emissions. We have actively addressed the risks by applying these technologies tosteel manufacturing and have also successfully reduced CO2 emission intensity to the lowest level worldwide. We
will continue to develop processes to further reduce environmental impact while at the same time seeking to turn thischallenge into an opportunity for addressing climate change issues by deploying the technologies we have fosteredacross the globe.
The JFE Group has developed and maintained a variety of eco-friendly products and technologies, including highperformance steel materials that help save energy when customers use them, as well as renewable energy power
generation. We view the current challenges as an opportunity and are contributing to addressing climate change. As
automobiles in general become lighter in weight along with the broader adoption of electric vehicles, we will support thetransition by improving the functions of the JFE Group’s high tensile strength steel sheets and electrical steel sheets. In
addition, we will help reduce CO2 emissions in society by further disseminating renewable energies and implementing
recycling initiatives as well as energy conservation.
To achieve the long-term goal of the Paris Agreement of keeping the global average temperature increase well below
2°C compared to pre-industrial levels and to strive to limit it more strictly to 1.5°C, the Group will continue to develop anddisseminate innovative technologies and contribute to the prevention of global warming. We will also support national
resilience by providing steel for social infrastructure and construction to address the emerging risks associated with thegrowing severity of meteorological disasters.

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Stakeholder Expectations
and Concerns for
the JFE Group

Changes in Society and Response

Results of Assessment➡

Opportunity

Introduce carbon priceRisk

will be maintained by implementingof a uniform carbon price acrossall countries➡

Increasing interestfor electric arc furnace
method for its lower
CO2 emissions

Increasing volumeof scraps generated

Opportunity

Key Factor 3

Decreasing demandfor internal-combustion
engines
Cars are lighter inweight and use multimaterials

Change in Demandfor Automotive Steel

Demand for
decarbonization and highrecyclability

Increase in Demandfor Solutions
to Enhance
Decarbonization

Risk➡ Effect of trend to use multimaterials is limited• Renewable energy power
generation plant• Promote low-carbon
business, or eco
solutions, in developing
countries using best
available technologies(BAT) developed and put
into practical use in Japan

Transition to
decarbonized society
Overseas expansionof energy-saving
technologies

Increase in demand for hightensile strength automotive
steel sheets

Increase in demand for
low-CO₂ steel products

Opportunity➡

Key Factor 4

Increase in demand
for special steel due tohigher car sales

Entire construction andoperation of renewableenergy plants (biomass,
geothermal, and solar
power generation)
Entire construction andoperation of incineratorsand plastic recycling plants➡

1.5/2°C Scenario

Increase in demand for electricalsteel sheets due to rising
popularity of electric vehicles

Entire construction of
CCU/CCS facilities➡

Increasing demand
for solutions topromote thetransition

Expansion in electric arc
furnace steelmaking andelectric arc furnace engineering
Expansion in scrap
logistics business

Recyclability of steel
regains attention➡

Increasing demand for
eco-friendly materials➡

Shift in demand forautomobiles

Opportunity

Converter furnace steelmaking
is increasing due to constraint
on the supply of scrap➡

1.5/2°C Scenario• Increase in demand forelectrical steel sheets for
EV motors• Decrease in demand
for special steel due
to decreased demandfor internal-combustion
engines• Alternative steel material
for automobiles to meet
the trend of using multimaterials• Demand to improve
decarbonization andrecyclability of steel

Operating cost increases(if carbon pricing is notproperly introduced)➡

Increasing demandfor EV motors➡

➡

Increased Needs for
Effective Utilizationof Steel Scrap• Electric arc furnace as analternative to converter
furnace• Expanding electric arc
furnace steelmaking
within the JFE Group➡

Key Factor 2

Increasing
expectations forelectric arc furnace steel➡

1.5/2°C Scenario

Investment into implementing
innovative technologies is feasible
Need to accelerate R&D
and implementation under
1.5℃ scenario➡ The Group’s cost competitiveness➡

Decarbonizationof Iron andSteelmaking Process• Significantly contribute
through innovativetechnologies• Increase in investment
to implement innovativetechnologies• Increase in operating
costs due to introductionof carbon pricing➡

Key Factor 1

Increasing social
demand for
decarbonized iron andsteelmaking process

Implement innovativetechnology to realize
decarbonation at alarge scale➡

1.5/2°C Scenario

Develop and put into
practical use innovativetechnologies in addition
to existing ones

Overseas expansion of
low-carbon business

4°C Scenario

Unstable Raw
Materials
Procurement due toIncreased Occurrenceof Climatic Hazards

Increasingly
devastating climate
hazards caused bytemperature rise

Risk

Raw materials
procurement
becomes unstable

4°C Scenario

Key Factor 6
Damage to
Production Bases andOffices Caused by
Climatic Hazards
4°C Scenario

Key Factor 7
National Resilience• Increase in damage
caused by typhoons andheavy rain
• Increase in damage
caused by drought• Flooding caused by sea
level rise

Increasingly devastating climate hazards causedby temperature rise

Increasingly
devastating climate
hazards caused bytemperature rise

➡ Ongoing specific measures:
Diversify supply sources,
strengthen capabilities offacilities• Raw material procurement
becomes unstable

Increasing theimportance of enhancing
infrastructure
Increasing demandfor disastermitigation products• Contribute to reinforcing
infrastructure withsteel and other relevant
products

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➡ Measures against floodand drought are already inprogress

Risk➡ Impact of flooding causedby sea level rise can beaddressed with current
countermeasures

Opportunity➡

Key Factor 5

Reinforce infrastructurewith steel and otherrelevant products

Guideline
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Overview of a Scenario Analysis Assessment
Timeframe:

Mid-term⇒until 2024,

2030⇒until 2030,

2050⇒until 2050 (final)

FOCUS Key Factor (1) Decarbonization of Iron and Steelmaking Process
We are developing innovative technologies to emerge as the pioneer in realizing a decarbonized society.
With a strong financial base to meet investments for implementing innovative technologies, we are
significantly contributing to the transition to a decarbonized society.
Mid-term, 2030
JFE Steel has been committed to developing energy-saving technologies toward increasing the efficiency of the ironand steelmaking process and decarbonization. These initiatives have helped JFE Steel acquire technologies that realize
the world’s top energy efficiency in iron and steelmaking. To further push ahead with decarbonization, the Company will
enhance the development of innovative ironmaking processes such as COURSE50 and ferro coke, which are expected
to reduce the carbon footprint through hydrogen reduction and CCS.
Mid-term, 2030, 2050
COURSE50 applies hydrogen reduction technology and CCS to reduce CO2 emissions by about 10% and 20%,
respectively, through each technology, for a total reduction of about 30%. The first facility is expected to come online
by 2030, followed by the implementation of other plants by 2050, corresponding with the timing for upgrading blast
furnace facilities. Ferro coke is a technology for significantly reducing CO2 emissions by improving the reduction rate ofiron ore put into blast furnaces. In addition to these technologies, we will push forward to establish a hydrogen reduction
ironmaking technology which we will aim to put it into practice after 2030 in order to realize the ultimate goal of creating
zero-carbon steel.
We consider implementing innovative technologies as critical and will advance with this strategy together with thegovernment. Furthermore, we have a sufficient financial base to meet necessary investments.
A medium-scale pilot plant with the capacity to produce 300 tonnes of ferro coke per day was constructed in the
Fukuyama district of the JFE Steel West Japan Works, and we are also promoting experimental runs from October 2020.
■ Example of Developing an Innovative Technology:
Ferro Coke Production Process
Low-gradeiron ore

Low-gradecoal

Expandingthe use of
low-gradematerials

Dry distillation
furnace
Crusher

Mixer

Up to 10%energy savings

Reduction ofcarbon materials
Conventional
furnace coke

Briquetting
Dryer

Briquette

Ferro-cokeproduction 300
tons daily

2050
In the long term, we will develop carbon-recycling blast furnaces (CR blast furnaces), hydrogen steelmaking, and electricarc furnaces while striving to achieve carbon neutrality by 2050, as stated in the JFE Group Environmental Vision for2050. In particular, we have been focusing on a technology that combines a CR blast furnace with CCU. This is a ultrainnovative technology that targets net zero CO2 emissions by drastically reducing CO2 emissions from the blast furnace
process, maximizing its ability to efficiently produce high-grade steel in mass volume, and enabling CO2 reuse in the blast
furnace. The remaining CO2 that cannot be fully reused in the furnace will be further reduced by manufacturing basic
chemicals such as methanol.

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2050
International expectations have been rising for organizations to seek pathways for achieving the 1.5°C scenario. We
believe the necessary actions are not significantly different from the 2°C scenario. In the 1.5°C scenario, however, thedevelopment and implementation of decarbonizing technologies would need to further accelerate, requiring significantly
more R&D costs and capital investment. A social infrastructure capable of supplying cheap and ample green hydrogenand electricity would also need to be in place. We believe that addressing these issues will require more support fromthe government and collaboration across society, including a mechanism for broadly sharing the financial burden acrosssociety and a long-term strategy by the government for supplying green hydrogen and electricity. The JFE Group has
been actively advancing decarbonization initiatives, including commissioning NEDO’s Green Innovation Fund project*1,
issuing transition bonds*2, and endorsing the GX League Basic Concept*3.
*1 NEDO’s Green Innovation Fund project (Japanese only) （https://www.jfe-steel.co.jp/release/2022/01/220107.html）*2 Issue Transition Bonds (https://www.jfe-holdings.co.jp/en/release/2022/01/220120.html)*3 The GX League Basic Concept (https://www.jfe-steel.co.jp/en/release/2022/220325.html)

Cost competitiveness will be maintained in case uniform carbon pricing is introduced across all countries.
Mid-term, 2030
Various approaches to carbon pricing have been introduced around the world, and in Japan as well the analysis for carbon
pricing such as carbon taxes and emissions trading has started toward achieving carbon neutrality by 2050. In Europe, aborder adjustment tax is also being discussed.
If uniform carbon pricing is introduced to major emitting countries, the increase in operating cost will bereflected reasonably on the price of steel products both in Japan and overseas, thus maintaining the Company’s costcompetitiveness. In addition, since CO2 emissions per unit of steel production is the lowest of all competing materials,
steel retains its superior position in cost competitiveness.
On the other hand, the introduction of carbon pricing in a manner that is biased toward certain regions, industries,
or countries such as Japan would have a major impact on the JFE Group and particularly on its steel business as thiswould further increase the current price of electricity, which is already high in Japan compared to other countries. It may
cause the Company to lose its cost competitiveness and may even inhibit innovation and hinder the realization of carbon
neutrality. As carbon pricing is introduced, we will need to monitor emerging trends closely in order to see whether it will
truly contribute to growth.

FOCUS Key Factor (2) Increased Need for Effective Utilization of Steel Scrap
To achieve carbon neutrality, we are focusing on high-grade steel manufacturing and raising efficiency byapplying our industry-leading electric arc furnace technology. Furthermore, we will open up opportunities
for the entire JFE Group by expanding the use of our electric arc furnaces, increasing the use of ourelectric arc furnace construction technology, and expanding scrap logistics.
Mid-term, 2030, 2050
The JISF predicts that the demand for crude steel will continue rise along with growth of the global population and economic
development and that both the blast furnace and electric arc furnace methods will emerge as major, indispensable
steelmaking processes (JISF's Long-term Vision for Climate Change Mitigation). To achieve carbon neutrality, we need to
expand the production of steel products using the electric arc furnace method, which emits less CO2. For this to happen, we
need to explore technologies that improve the productivity of electric arc furnaces and address the constraints in producing
high-grade steel products. Additional technologies are required for increasing the volume of scrap used in converter furnaces.
The JFE Group is viewing increased demand for electric arc furnace steel as well as the world-wide increase in theamount of scrap generated as an opportunity, and it will enhance its electric arc furnace steel production while applying its
engineering technology for constructing an entirely cutting-edge, energy-saving electric arc furnace facility with the ultimate
goal of opening up additional business opportunities. Moreover, the Group will advance the development of technologies toutilize scrap and boost industry-wide use of this material.
Meanwhile, securing a stable supply of scrap needed for steel production using electric arc furnaces is another vital issue
we must address. Expanding the use of scrap will also generate greater demand for distribution options, which will in turnprovide an opportunity for JFE Shoji to expand its logistics business.
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Indices■ Estimated Supply and Demand for Steel
Production and Scrap Use

Crude steel production
Pig iron production
Scrap consumption(Billion tonnes)

2.68

3.0

2.0

1.62

1.0

1.22

1.55
1.40

0.56
2015

0

2050

(Year)

FOCUS Key Factor (3) Change in Demand for Automotive SteelThe shift to EVs is accelerating as new and stricter environmental regulations are being introduced
globally at a faster pace. Demand for electrical steel sheets for EV motors as well as special steel isincreasing as global car sales rise. The increase in the intensity of high tensile strength automotive steel
sheets contributes to further weight reductions.
Mid-term, 2030, 2050
The trend of increasing electric vehicles has given rise to rapidly expanding demand for electrical steel sheets used in EV
motors. JFE Steel has already marketed the JNE series of non-oriented electrical steel sheets, used in building motors,
as part of its eco-product lineup. It also commands a strong share of the market.
On the other hand, it has been pointed out that an increase in EVs may lead to a decline in the amount of special
steel used in engine components. The amount of this type of steel, used in hybrid vehicles and electric vehicles, is 80%
and 60% of gasoline cars, respectively. We believe that the risk level for this matter, however, is low since car sales are
expected to increase even under the 2°C scenario and total demand for special steel for cars is increasing.
Nonetheless, the situation for EV remains the same in terms of strong demand for weight reduction of bodystructure. JFE Steel has developed a cold-rolled steel sheet boasting 1.5 GPa-grade tensile strength as an eco-productand has put it into practical use as an automotive steel sheet. With its high strength, the product can significantly reduce
the weight of a car frame. In response to customer needs for more environmentally sound options, we intend to expand
its application and further increase its strength, thus dramatically reducing CO2 emissions from cars in motion.
■ Estimated World Demand for Automotive
Special Steel■ Estimated World Demand for Automotive
Electrical Steel Sheets

1.5

10

1.17
1.00

1.11

1.13

7.38

1.0

4.44

5

2.67

0.5

1.00
0

2020

2030

2040

2050

(Year)

0

2020

2030

2040

2050

(Year)

Vertical axis: Steel demand (comparison by year with the year 2020 as 1.00)
Source: Estimated by JFE Holdings based on reports by Strategic Commission for the New Era of Automobiles (METI)JFE GROUP CSR REPORT 2022

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Steel demand will increase due to renewed interest in its highly recyclable quality, essential for
decarbonization.
Mid-term, 2030, 2050
Steel is a highly recyclable material that can be reborn as many different products over and over again with no loss in
its intrinsic quality. In the future, public resource recycling is expected to increase toward establishing a decarbonizedsociety. We believe that the high recyclability of steel will gain attention once again in light of this transition.

Managing emissions throughout the supply chain (Scope 3) has attracted increasing attention, and this will
increase demand for low-CO2 emission steel products.
Mid-term, 2030, 2050
The rising worldwide support for decarbonization is expected to drive greater demand for low-CO2 emission steel
products, such as in the automobile industry, where CO2 emissions must be managed throughout the supply chain. In the
IEA’s Net Zero Emissions by 2050 Scenario (NZE), the share of steel production using electric arc furnaces is expected toincrease to 37% by 2030 and 53% by 2050. Since steel production using electric arc furnaces emits less CO2 than using
blast furnaces, customer demand may shift to products manufactured using the former.
The JFE Group considers the growing demand for low-CO2 emission steel products as an opportunity. We will
therefore actively advance the development of ultra-innovative technologies and, during the transition, will explore othermeans for supplying products with low environmental impact. We plan to increase the annual production capacity of theelectric arc furnaces in the Sendai Works by approx. 0.14 million tonnes by FY2024, reducing emissions by approx. 0.10
million tonnes. In addition, we are establishing technologies to improve the quality of high-grade steel products in theelectric arc furnace process. This will enable the use of electric arc furnaces to manufacture parts that currently dependon the availability of blast furnaces, such as steel bars and wire rods for automobiles, and consequently meet the demand
for low-CO2 emission steel products.

Effect of trend to use multi-materials is limited.
Mid-term, 2030, 2050
Aluminum and carbon fiber reinforced plastic are potential alternative materials for reducing the weight of cars. It has
been pointed out, however, that the production cost of these materials and the amount of CO2 emitted throughout theirlife cycles is higher than those of steel. Therefore, under the 2°C scenario, which assumes the introduction of a carbon
price, the price differential between steel and alternative materials will be larger. Under this scenario, while the trend ofusing multi-materials may show some progress for luxury cars, their use would be limited for economy cars. Moreover,considering a situation in which all panels used for doors and other parts of a luxury car were changed to aluminum,
the effect on weight reduction could be expected to be 5% of all materials used in luxury and economy cars together.
Multiplied by the number of cars produced, the impact over the total demand for automotive steel can be assumed to belimited.
In the meantime, JFE Steel has developed a multi-material structure that uses a small amount of fiber resin to
maximize steel quality. In this new structure, a highly ductile, strong adhesive resin is sandwiched between a bodypart made of an ultra-high strength steel plate and a part made of a thin steel plate. This structure is capable of further
reducing the weight of automobile frame parts and also improving collision safety performance.
We will continue developing and proposing various products and technologies that meet customer needs.

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FOCUS Key Factor (4) Increase in Demand for Solutions to Enhance Decarbonization
Providing solutions: renewable energy power generation, Multisite Energy Total Service, recycling
business, carbon-recycling technologies, and energy-saving steel technologies
Renewable Energy Power Generation

Mid-term, 2030, 2050

Demand for power generation plants using non-carbon emitting renewable energies is expected to increase. The JFE Group
engages in designing, procuring, constructing, and operating biomass*1, geothermal*2, solar*3, 4, and onshore wind power
generation plants in its engineering domain.
We will also focus on offshore wind power generation, which the Japanese government has positioned as one pillar of its
Green Growth Strategy to achieve carbon neutrality by 2050. Specifically, we plan to manufacture and market monopiles andother seabed-fixed structures with JFE Engineering as the main driver. JFE Engineering has started constructing Japan’s firstmonopile-foundation manufacturing plant (production is scheduled to start in 2024)*5. JFE Steel will contribute by increasing
the supply of large and heavy steel plates, and JFE Shoji will assist by establishing SCM, which includes information sharing
with Taiwan, a leader in offshore wind power generation, and East and Southeast Asian countries, where demand is
expected to expand. We will also focus on O&M*6 to fully deploy Group resources.
Furthermore, from the perspectives of resource recycling and the effective use of resources, we are taking action toincrease power output at waste processing facilities. JFE Engineering is developing a fully automated operation*7 to facilitate
higher power output at incinerators (ten facilities in 2021, and an additional two facilities in 2022, with more to follow).
Moreover, we are utilizing renewable energy as the main power source for our retail electricity business*8 and in helping
to establish and operate regional electricity retail companies*9, 10 focused on local production and consumption of electricity
based on renewable energy (2020: 8 locations → FY2024: targeting around 10 locations → 2030: targeting around 20
locations).
(Contribution to CO2 reduction resulting from renewable energy power generation: FY2020: 9.65 million tonnes per year
→ FY2024: 12 million tonnes per year → FY2030: 20 million tonnes per year)

Biomass power generation plant

Waste-to-energy power generation plant*1 The JFE Engineering Corporation’s Biomass (https://www.jfe-eng.co.jp/en/produwcts/power/s02.html)*2 The JFE Engineering Corporation’s Power generation plant (https://www.jfe-eng.co.jp/en/products/power/gene01.html)*3 The JFE Engineering’s Solar power generation (Japanese only) (https://www.jfe-eng.co.jp/products/power/ele05.html)*4 The JFE Technos Corporation’s Solar power generation (Japanese only) (https://www.jfe-technos.co.jp/products/solar/)*5 JFE Engineering invests in constructing a new monopile foundation factory (https://www.jfe-eng.co.jp/en/news/2021/20210720.html)*6 Operation and maintenance*7 JFE Engineering’s BRA-ING Pre-release (Japanese only) (https://www.jfe-eng.co.jp/news/2020/20200727.html)*8 Urban Energy Corporation’s Electricity retail business (Japanese only) (https://u-energy.jp/service/retail.html)*9 Urban Energy Corporation’s Regional electric power support business, targeting local governments (Japanese only)( https://u-energy.jp/service/municipality.html)*10 Establishing regional electricity retail companies in partnership with local municipal governments (P. 116)

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Multisite Energy Total Service

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Mid-term, 2030, 2050

In addition to the conventional service of optimizing energy use for single sites, JFE Engineering offers the Multisite
Energy Total Service (JFE-METS)*, which optimizes energy use for multiple sites through centralized management.
We realize overall energy savings and CO2 reduction by analyzing energy consumption at multiple sites and achieving
total optimization by installing and operating energy-related equipment at each site to circulate energy throughout the
network, including remote locations.
* The JFE Engineering Corporation’s JFE-METS (Japanese only) (https://www.jfe-eng.co.jp/news/2019/PDF/20200130.pdf)
Recycling Business

Mid-term, 2030, 2050

We are striving to reduce the use of new fossil fuel-derived materials by recycling waste plastics and food wastes. In
waste plastic recycling, in addition to the conventional recycling of plastic containers and packaging, we are actively
engaged in the so-called bottle-to-bottle business, in which finished PET bottles are recycled into new PET bottles,
demonstrating a complete resource recycling model for reducing CO2 emissions. In food recycling, we generate methanegas from disposed food wastes to create renewable energy (fuel gas and electricity). JFE Engineering manages theengineering, procurement, and construction of recycling plants, while J&T Recycling Corporation manages the operation
and business development of the plants*.
Industry-wide decarbonization cannot be achieved through technical developments in manufacturing alone.
Therefore, we believe that demand for CCU and CCS facilities will increase as they facilitate the efficient use and storageof CO2. JFE Engineering is able to undertake the entire process of building CCU and CCS facilities from design andprocurement to construction.
*JFE Engineering and J&T Recycling Corporation's Recycling (Japanese only)(https://www.jfe-eng.co.jp/products/recycle/)

Energy-saving Steel Technologies

Mid-term, 2030

From the perspective of the steel industry, there is space for disseminating eco solutions (energy-saving steel technologies)
in nations such as China, where close to 50% of the world’s crude steel is produced, and India and ASEAN countries,
where further growth in production is expected. The potential CO2 reduction achieved by internationally transferring anddisseminating advanced energy-saving technologies widely used in Japan will exceed 400 million t-CO2 world-wide. Japan isestimated to contribute to the reduction of approximately 80 million t-CO2 in FY2030 through these technologies.

FOCUS Key Factor (5) Unstable Raw Material Procurement due to Increased Occurrence of Climatic Hazards
Ongoing initiatives to address the issue, such as alternative procurement and dispersed supplier bases,
and increasing plant capacity.
Mid-term, 2030
In Australia, our major source country for raw materials, the occurrence of typhoons is predicted to double. We may bevulnerable in terms of continuous production and suffer a loss if production and shipping are interrupted for too long.
To address this issue, we are promoting alternative procurement and dispersed supplier bases.
Alternative procurement and dispersed supplier bases:
Respond to disaster by carrying out spot procurement from China’s port stocks, increasing procurement from closer
source countries such as Russia and Indonesia and front-loading the purchase and/or increasing the purchase contract
of different brands from outposts in unaffected regions of Australia. Also, use the stock and external yard of the Group
company Philippine Sinter Corporation.
The decarbonization in the steelmaking process is expected to lead to a diversification of the required raw materials.
We will take into account the risk of climate change for these materials also and work to establish diversified
procurement sources.

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FOCUS Key Factor (6) Damage to Production Bases and Offices Caused by Climatic Hazards
Measures against flood and drought in progress; impact of flooding caused by rising sea levels can beaddressed with current countermeasures.
Mid-term, 2030
We are taking action to minimize damage under the assumption that typhoons and heavy rains will become stronger andthat the occurrence of disasters comparable to the torrential rain in western Japan in 2018 will rise. We have currently
invested approximately 6.5 billion yen for disaster prevention at steelworks and strengthened drainage facilities and otherassets. About 3.5 billion yen of separate investment has already been made to prepare for water shortages at steelworks
by installing desalination facilities at some of the steelworks. Although no severe drought disaster has struck since the1994 disaster, we are preparing to minimize any damage even if the frequency of occurrence should increase.
All steelworks are exposed to the risk of floods associated with rising sea levels because of their location in coastal
areas. The estimated sea level rise by 2050 is 20 to 30 cm (70 cm by 2100 if the impact of climate change manifests
itself at the highest level.) We believe that current measures against storm surge, which generates more sea level rise,are sufficient to address the risk. However, we will continue analyzing climatic hazards going forward so as to prepare forthe changing circumstances.

FOCUS Key Factor (7) National Resilience
Contribute to infrastructure enhancement with products such as high-strength H-shaped steel and steel
pipe piles, hybrid tide embankments, and permeable steel slit dams.
Mid-term, 2030
The JFE Group takes seriously the increased frequency and severity of recent climatic hazards in Japan. Also, thedaily life of the Japanese citizenry is being exposed to a heightened risk of danger. The JFE Group defines its mission
as promoting disaster prevention and mitigation as well as national resilience to maintain vital infrastructure that are
essential to daily life and economic activities.
The JFE Group will gather its collective energy to protect key structures from earthquakes using structural steel
such as high-strength H-shaped steel and steel pipe piles as well as steel sheet piles. It will also help to reinforce
embankments that are prone to bursting and provide disaster prevention products such as hybrid tide embankments andpermeable steel slit dams, in addition to reconstructing infrastructure.
Hybrid Tide Embankments (P. 75)
Permeable Steel Slit Dams (P. 76)
Terre Armée FS (P. 76)
Links to information about the JFE Group Environmental Vision for 2050 and Climate Change Scenario Analysis
Commitment to a Low Carbon Society:
Steel Industry Initiatives (P.96)
Targets and Results Related to Climate Change:
Material Issues of Corporate Management and KPIs (P.19)
Initiatives on Climate Change:
Climate Change (P.56)
Technologies and Products Related to CO2 Emissions:
Development and Provision of Eco-friendly Processes and Products (P.100)

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Steel Industry Initiatives
The Japan Iron and Steel Federation (JISF) Initiatives
Long-term Vision for Climate Change Mitigation
JISF has been focusing on achieving the goals for 2020 under its Commitment to a Low Carbon Society (renamed Carbon
Neutrality Action Plan in FY2021). In addition, JISF also formulated and published in November 2018 its Long-term
Vision for Climate Change Mitigation for 2030 and beyond, with JFE Steel playing a central role in its development. This
document lays out the industry‘s challenge for realizing zero-carbon steel and explains the pathway for achieving the 2°C
scenario for steelmaking and the necessity of ultra-innovative technologies to achieve the 1.5°C scenario. Furthermore,on February 15, 2021, the JISF announced the Basic Policy of the Japan steel industry on 2050 Carbon Neutrality soughtby the Japanese government, declaring that the Japanese iron and steel industry will boldly accept the challenge ofrealizing zero-carbon steel.
Relevance with JISF's Long-term Vision for Climate Change Mitigation (P.86)

JISF’s Carbon Neutrality Action Plan
During the first commitment period of the Kyoto Protocol, the JISF engaged in the Voluntary Action Program andsubsequently in the Commitment to a Low Carbon Society (Phase I) until the end of FY2020. From FY2021, the JISF
renamed the initiative as the “Carbon Neutrality Action Plan” and started Phase II with the target year of FY2030. Under
this plan, the JISF is voluntarily promoting initiatives based on the Three Ecos and the development of ultra-innovativetechnologies in iron and steelmaking processes.
■ Japan Iron and Steel Federation’s Medium- to Long-term CO2 Reduction Targets, “Carbon Neutrality Action Plan”
Three Ecos

Eco Processes

Eco Solutions

Goal

Further improve energy
efficiency by taking fulladvantage of cutting-edge
technologies

Provide high-performancesteel materials that result inhigh performing end-products
and thus reducing CO2
emissions

Reduce CO2 in developing
countries through the transfer
and application of worldleading, energy-saving Eco
Process technologies

FY2020(phase-I)

Reduce CO2 emissions by 5
million t-CO2 compared to the
BAU benchmark• Energy-saving: 3 million
t-CO2• Efficient use of waste
plastics, etc.: 2 million t-CO2

The use of major highperformance steel materials
to contribute to a CO2
reduction of approximately
34.0 million t-CO2

Estimated CO2 reduction
impact of 70 million t-CO2

FY2030(phase-II)

Reduce energy-derived CO2
emission by 30% in FY2030
compared to FY2013*

The use of major highperformance steel materials
to contribute to a CO2
reduction of approximately
42.0 million t-CO2

Estimated CO2 reduction
impact of 80 million t-CO2

Phase I Result(results at the endof FY2020)

Reduced CO2 emissions by
6.48 million t-CO2 comparedto the BAU benchmark(exceeding the target by 3.48
million t-CO2)

Contributed to CO2 reductions
Estimated reduction of 72.64
of approximately 32.26 million
million t-CO2
t-CO2 in Japan and overseas

Targets

Eco Products* Premised on macro assumptions in the government’s Strategic Energy Plan and prerequisites for implementing thevarious measures are met.
Source: The JISF’s publicly available materials

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Performance Assessment of Commitment to a Low Carbon Society (Phase I) (JISF)
In FY2020, emissions by the Japanese steel industry decreased by 6.48 million t-CO2 compared to the BAU emissions*benchmark, exceeding the Phase I target. Various self-improvement efforts, such as raising the efficiency of coke ovens
and generation facilities, have steadily contributed. As a JISF member, JFE Steel has also played its part in achieving thetarget. As well as working on self-improvement efforts, the Company has been investing in research and developmentfor new energy-saving technologies.
* Business As Usual emissions: Estimated level of emissions in the absence of any special measure.

Revolutionary Iron and Steelmaking Process Development
COURSE50
About 30% of CO2 emissions can be reduced through hydrogen reduction along with separation and capture of CO2 fromblast furnace gases. The first facility is expected to come online by 2030, followed by other plants by 2050.
Ferro Coke
The Japanese steel industry intends to develop ferro coke that accelerates and lowers the temperatures of the reduction
reaction in a blast furnace as well as its operational processes to conserve energy further and expand the use of lowrank materials. A medium-scale plant capable of producing 300 tonnes of ferro coke per day has been constructed in JFE
Steel’s West Japan Works (Fukuyama district) and experimental testing for practice use implemented from FY2020.

Reduced CO2 Emissions through High-Performance Steel Materials (Effects of Eco Products)
The Japan Iron and Steel Federation (JISF) believes the use of high-performance steel materials will reduce CO2
emissions. It is estimated that the use of five major high-performance steel materials for cars, transformers, ships,
power generator boilers, and trains in Japan and overseas* (FY2020 production: 6.06 million tonnes, 7.3% of crude steel
production) helped to reduce CO2 emissions by 32.26 million tonnes (10.07 million tonnes in Japan, 22.19 million tonnes
overseas) in FY2020.
*Estimates created by the Institute of Energy Economics, Japan*Materials included are steel sheets for automobiles, directional electrical steel sheets, thick steel sheets forshipbuilding, steel tubes for boilers, stainless steel sheets.
*For the domestic figures, the calculation includes data from FY1990 onward. For the export figures, the calculation
includes data from FY2003 onward for automobile and shipbuilding, from FY1998 onward for steel pipes for boilers andfrom FY1996 onward for electrical steel sheets.
■ CO2 Reduction Resulting from the Use of Five High-performance Steel Materials in Japan and Abroad (FY2020)■ Ships■ Power-generator boilers■ Cars■ Trains ■ Transformers

0.73
1.98

2.26

0.29

Domestic
reduction of
10.07 million
t-CO2

6.87
0.96

Exportreduction of
22.19million
t-CO2

4.82

9.77
4.57

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IndicesGlobal Scale Initiatives
Addressing Global Warming
ISO 14404 is an international standard proposed by the Japan Iron and Steel Federation (JISF) to the International
Organization for Standardization (ISO) as a methodology for the globally unified calculation of CO2 intensity from iron andsteel production, ultimately to assess the energy efficiency of steelworks. The Japanese steel industry is addressing
global warming through international public-private collaborations, including ISO 14404-based assessment of steelworks
in developing countries and recommending specific technologies best suited to India and ASEAN countries. It is
continuing this effort together with the Ministry of Economy, Trade and Industry (METI) in order to enhance ISO 14404
so it can be applied to steel manufacturing facilities with more complex structures.
JFE Steel is also addressing global warming by participating in international activities, such as the Japan India Publicand Private Collaborative Meeting, the Japan-ASEAN Steel Initiative and the Japan-China Steel Industries Exchange.
In addition, JFE Steel is involved as a member of World Steel Association (WSA)’s Climate Action data collection
programme, which uses ISO 14404 as the standard for measurement and calculation.
WSA: Climate Action data collection programme（https://worldsteel.org/steel-topics/environment-and-climate-change/climate-action/climate-action-data-collection/data-providers/）■ WSA Climate Action data collection programme certification

JFE SteelCorporation

Climate Action
DATA PROVIDER

2021

10-yearrecognition

In recognition of yourparticipation in theworldsteel Climate Action
data collection programme.

Edwin BASSON
Director General

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YU Yong
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IndicesT JFE SteelContribution to the Development of Calculation in LCA
Accurately evaluating the environmental impact of products requires assessment and quantification is required over their
entire life cycles, from raw resource mining to material production, product manufacture, use and final disposal. Life
Cycle Assessment (LCA) is one evaluation methods.
After final products such as automobiles and buildings finish their mission in society, all of their steel components canbe recycled and reused. This closed loop recycling ability is an excellent characteristic of steel materials. Taking this into
account through LCA reveals that steel can be viewed as having extremely low environmental impact compared to othermaterials.
JFE Steel played a major role in the development of ISO 20915 (Life Cycle Inventory Calculation Methodology for
Steel Products) and JIS Q 20915 (Life Cycle Inventory Calculation Methodology for Steel Products), initiatives led by theJapan Iron and Steel Federation (JISF), which takes into account the impact of recycling and provides life cycle inventory(LCI) calculation methods specific to steel products.
In addition, 15 Japanese manufactures of blast furnaces and electric arc furnaces joined forces to calculate theJapanese average for LCI of different steel products. Calculations results based on their FY2018 operational data werealso published.
JFE Steel acquired EcoLeaf labels, the Japan Environmental Product Declaration program run by the Sustainable
Management Promotion Organization (SuMPO), for three steel sheet products for cans (tinplate, laminated steel sheet
JFE Universal Brite, and tin-free steel) and five building material products (H-beams, Super High Slend® H beams, extrathick H beams, construction steel plates, and construction steel columns). We will continue to leverage EcoLeaf labels
to help our customers promote environmental protection and to strengthen communications with them.
Value of Steel (P.6)■ Life Cycle of Steel Materials

Iron ore
Coal

Scrap
Scrap

Industrial
goods

Iron
products
Steelworks

Daily use

Mine

Disposal
End ofproduct
lifetime

Industrial goods
process

Substitution
for othermaterial(s)Heatconversion

Closed-loop recycling
Scope of the international standard under development

Related Links
The Japan Iron and Steel Federation (JISF): Climate Change Policy page (https://www.jisf.or.jp/en/activity/climate/index.html)
The Japan Iron and Steel Federation (JISF): LCA of Steel Products page (https://www.jisf.or.jp/en/activity/lca/index.html)
The Japan Iron and Steel Federation (JISF): Publication of ISO 20915 (https://www.jisf.or.jp/en/activity/lca/iso/index.html)
The Japan Iron and Steel Federation (JISF): Publication of JIS Q 20915 (https://www.jisf.or.jp/en/activity/lca/iso/index.html)
Japan EPD Program by SuMPO (https://ecoleaf-label.jp/english/)

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IndicesDevelopment and Provision of Eco-friendly Processes and Products
Basic Policy
Based on its corporate philosophy of contributing to society with the world’s most innovative technology, the JFE Groupdevelops and provides processes and products for addressing climate change and reducing environmental impact. In the
JFE Group Environmental Vision for 2050, we announced our initiatives for reducing the CO2 emissions of the Group andexpanding our contribution to reducing CO2 emissions in society as a whole. Apart from these initiatives, we also strive toenhance our corporate value and play our part in realizing a sustainable society through the development and provisionof various processes and products related to preserving the global environment.
In the steel business, the Steel Research Laboratory is engaged in research and development under the Environmental
Management System (environmental strategies) to create a recycling-oriented society capable of sustainable
development by providing the world’s best technologies and sparking innovation. In the engineering business, theResearch Center of Engineering Innovation conducts research and development of new technologies to support thesociety of the future, including the creation of next-generation energy and solutions to environmental problems.
JFE Steel: Research and Technological Development (https://www.jfe-steel.co.jp/en/research/index.html)
JFE Engineering: Technological Development (https://www.jfe-eng.co.jp/en/rd/)

Primary Eco-friendly Products and Technologies by Business Segments
Each operating company of the JFE Group leverages its respective strengths to develop and provide a variety of ecofriendly products and technologies.
■ Primary Eco-friendly Products and Technologies
Product/Technology

Environmental Benefit

OperatingCompany

StatusFerro-coke (P.102)

Save energy and reduce CO2
emissions

Experimental
operationR esource saving silicon gradient steel
sheet (P.104)

Save energy and reduce CO2
emissions

CommercializedLarge and Heavy Steel Plates for Offshore
Wind Power Generation (P.73)

Expand renewable energy

Business
expansion®
HBL Series steel sheets with low yieldratio and high toughness for building
structures (P.105)

Save resources, reduce
CO2 emissions, and prevent
natural disasters

CommercializedDenjiro™ insulation-coated pure-iron
powder for soft magnetic composites (P.106)

Recycle resources andreduce CO2 emissionsB attery-protected vehicle body structure
based on JFE’s topology optimization
technology (P.107)

Recycle resources andreduce CO2 emissions

Underdevelopment

Optimal system for CO2-based methanol
synthesis (P.108)

Recycle resources andreduce CO2 emissions

Underdevelopment

Recycle resources andreduce CO2 emissions

Underdevelopment

Recycle resources andpreserve biodiversity

CommercializedInnovative CO2 fixing technology throughquick, large-quantity carbonation of steel slag
(P.108)

Calcia improvement material (P.109)

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OperatingCompany

Editorial
PolicyStatusSteel slag hydrated matrix (P.110)

Recycle resources andreduce CO2 emissions

CommercializedPrecast concrete products mixed withfinely ground blast furnace slag (P.110)

Recycle resources andreduce CO2 emissions

Commercialized

Granulated blast furnace slag (P.111)

Recycle resources, preserve
biodiversity, and reduce CO2
emissions

CommercializedMarine Stone™ (P.111)

Recycle resources andpreserve biodiversity

CommercializedFrontier Rock™ (P.111)

Recycle resources, preserve
biodiversity, and reduce CO2
emissions

Commercialized

Marine Block™ (P.111)

Recycle resources, preserve
biodiversity, and reduce CO2
emissions

Commercialized

Contribution to the realization of acircular economy (P.112)

Recycle resources and saveenergyBusiness
expansion

 FE CCU-Ready process for waste-toJ
energy facilities (P.113)

Reduce CO2 emissionsC ontribution to realizing carbon neutrality
through hydrogen and CO2 transportation(P.114)

JFE SteelJFE
Engineering

Business
expansionUnderdevelopment,
business
expansion

Supply hydrogen and reduce
CO2 emissions

Food waste recycling business (P.115)

Recycle resources andexpand renewable energy

J&T
Recycling

Business
expansion

Establishing new regional electricity
businesses (P.116)

Recycle resources andexpand renewable energy

Infrastructure construction forstrengthening the resilience of national
land (P.117)

Prevent natural disasters

 urther expansion of global supply chainF
for the Steel Sheets Business (P.118)

Save energy and reduce CO2
emissions

Sales expansion

Building a supply chain for steel materials
and processed products for offshore wind
power generation (P.118)

Expand renewable energy

Business
expansionE xpanding business in biomass fuels (P.119)

Expand renewable energy
and reduce CO2 emissions

Sales expansion

 xpansion of scrap trading to help developE
a recycling-oriented society (P.119)

Recycle resources andreduce CO2 emissions

Sales expansion

Business
expansion
JFE
Engineering

Business
expansion

JFE Shoji

For further details on the JFE Group Environmental Vision for 2050, refer to the following resources.
The JFE Group Environmental Vision for 2050 (P.56)
The JFE Group Environmental Vision for 2050, presentation material on May 25, 2021
(https://www.jfe-holdings.co.jp/en/investor/climate/presentation/index.html)

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IndicesMessage fromthe CEOS

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PolicyGuideline
IndicesT JFE Steel

Certification by SuMPO’s EcoLeaf Environmental Labeling Program
JFE Steel has acquired certification for EcoLeaf, a Japanese environmental productdeclaration (EPD) program managed by the Sustainable Management Promotion
Organization (SuMPO) in Japan for three types of steel sheets for cans: tinplate,
JFE Universal Brite (laminated steel sheet) and tin-free steel; five types of building
materials: H-beams, SUPER-HISLEND-H® (SHH), extra heavy H-beams, heavy plates,
and columns.
EcoLeaf is a Type III EPD program managed by SuMPO for quantitatively disclosing
the environmental impact of products and services throughout their life cycle, from raw
material procurement to disposal and recycling in accordance with ISO 14025:2006(environmental labels and declarations, “Type III Environmental Declarations, Principles
and Procedures”). The environmental impact of our products is visualized as graphic
representations of data to increase transparency. The disclosure of environmental impact
data with fairness and reliability assured by third-party review and verification enables
customers to evaluate the environmental impact of the products that they use in both aquantitative and objective way.
JFE Steel will continue to actively obtain and disclose EcoLeaf certifications for its
products.
SuMPO Environmental Labeling Program (https://ecoleaf-label.jp/english/)Ferro-CokeFerro-coke is an innovative raw material for blast furnaces made by mixing low-grade coke and iron ore. A composite
mass of metallic iron and coke is produced by pre-milling, mixing, and molding coal and iron ore and then heating the
mixture in a dry distillation furnace. In this energy-saving technology, ultra-fine metallic iron inside acts as a catalyst andaccelerates the reduction reaction rate in the blast furnace, reducing the amount of coke required and thus significantly
reducing CO2 emissions in the iron making process.
Since FY2017, JFE Steel has been promoting the New Energy and Industrial Technology Development Organization(NEDO) project to develop environmental technology for the steelmaking process, and technological development of the ironmaking process using Ferro-coke. As part of the project, a medium-scale facility with the capacity to produce 300 tonnes offerro-coke per day was constructed in the Fukuyama district of the JFE Steel West Japan Works, covering 12,600 square
meters of ground. Experimental operations began in October 2020. This facility is one-fifth the scale of the projected 1,500
tonnes per day of commercial production capacity and is capable of handling the entire process from crushing and drying
raw materials to molding and dry distillation (applying heat to bake the material). It is also capable of recycling ferro-tar, a
byproduct of ferro-coke production, as a binding agent for briquetting.
In FY2021, we conducted a short-term test on using ferro-coke in blast furnaces by making and storing ferro cokein a temporary storage area. In FY2022, we will conduct tests on the long-term use of the blast furnace and quantify
the effect of reducing the reduction material ratio to establish the technology for reducing CO2 emissions and energy
consumption in the iron making process by about 10% by around 2023.

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VisionSpecialFeatureCSRManagement

Environment

SocialGovernance

ESG Data

External
Evaluations
and Awards■ Process Flow of the Medium-scale Ferro-Coke Production Facility
Mixing andBriquetting

Crashing and Drying

Dry
Distillation

Blast Furnace

Up to 10%energy savings
Low-gradeiron ore

Mixer

Dry distillation
furnace

Crusher

Reduction ofcarbon materials
Conventional
furnace coke

Low-grade
coal
Dryer

Briquetting

Expandingthe use of
low-gradematerials

Briquette

Briquette

10mm

Ferro-cokeproduction 300
tons daily

Ferro-coke

10mm

Cross section of Ferro-coke

0.2mm
Coke Metallic ironMedium-scale Ferro-Coke Production Facility

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IndicesResource Saving Silicon-gradient Steel Sheet
In recent years, the driving frequency has been increasing due to the downsizing of electrical equipment, driving the needto reduce iron loss*¹ in the high-frequency range for electrical steel sheets*², used widely as an iron core material forelectrical equipment such as motors and transformers. This depends upon increasing the concentration of silicon (Si), an
element that strengthens electrical resistance. However, it also causes a decrease in magnetic flux density at the sametime.
To overcome this problem, JFE Steel developed JNHF®, in which Si concentration is only increased in the surface
layer by using its proprietary chemical vapor deposition (CVD) continuous siliconizing process technology. We also
developed JNSF®, in which Si is localized in the surface layer of the steel sheet by making the steel composition
an austenite phase (γ phase) in which the diffusion rate of Si is slow during the silicon carburizing process, and we
succeeded in further reducing high-frequency iron loss. Furthermore, we developed JNRF® with higher magnetic flux
density by controlling the collective structure and Si distribution in the sheet thickness direction. JNRF® has low ironloss at high frequencies and high magnetic flux density, significantly contributing to greater efficiency while downsizing
the electrical equipment, and it is used as an iron core material for reactors for solar power generation and high-speed
motors. In recognition of the positive impact of this development on society, we received the 2022 Award for Scienceand Technology from the Minister of Education, Culture, Sports, Science and Technology under the development
category of the science and technology field. JFE Steel will continue to contribute to improving electrical equipment byraising efficiency, reducing size, and saving energy by providing high-performance, high-grade electrical steel sheets.
*1 The loss of energy, primarily as heat, that occurs when the iron core is excited by an alternating current. The less iron
lost, the higher the efficiency of electrical equipment.
*2 E
 lectrical steel sheets are material obtained by adding silicon to iron and are widely used as iron core materials inequipment such as motors and transformers.
■ CVD Continuous Siliconizing Process and Si Concentration Distribution Control

Received the 2022 Award for Science and Technology from the Minister of Education, Culture, Sports,
Science and Technology under the science and technology field (development category). (Japanese only)（https://www.jfe-steel.co.jp/release/2022/04/220408.html）

External Awards (P. 241)

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Indices

HBL®*¹ Series Steel Plates with Low Yield Ratio and High Toughness for Building Structures
Steel plates used for steel columns and beams of building structures are required to have high strength as componentsof super high-rise buildings and wide spaces, as well as excellent deformation performance to withstand major
earthquakes. In addition, another key issue is toughening the welds to enable highly efficient ultra-large heat input
welding (maximum heat input: about 100 kJ/mm) when manufacturing steel columns (box columns).
JFE Steel developed the HBL® series of steel sheets for building structures featuring low yield ratio and hightoughness by establishing advanced microstructure control technology to achieve extremely fine multiphasemicrostructure and microalloying technology to increase the toughness of ultra-large heat input welds. In the past,
we developed the HBL® series of steel plates for building structures with a maximum thickness of 100 mm, including
HBL®325, HBL®385, and HBL®440, which have been applied to numerous building structures. All of these are capable ofultra-large heat input welding, exhibit high toughness and low yield ratio*², and contribute to higher building structures,
earthquake resistance, and labor saving in welding work. The application of highly tough steel plates also results insignificant resource savings and CO2 reduction by reducing steel plate weight. The steel plates contribute to raising theresilience of Japan’s national land and will greatly benefit the future development of cities and society as well as improve
the safety of daily life. JFE Steel was awarded the 68th Okochi Memorial Technology Prize for 2021 in recognition of its
service to society.
*1 Abbreviation of HITEN-BuiLding. Also signifies High Performance Steel Plates for BuiLding. The numbers that appear
after the product name, as in HBL®385 and HBL®440, indicate the lower limit of yield point or 0.2% proof stress.
*2 T he ratio of yield stress to tensile strength. Applying steel sheets with a low yield ratio to steel columns absorbs
seismic energy and prevents building structures from collapsing.
■ Steel column (box column) in building structures■ Example of super high-rise buildings using HBL 385®

Toranomon Hills Area Project(photo courtesy of Mori Building Co., Ltd.)Awarded the 68th Okochi Memorial Technology Prize for 2021 (Japanese only)(https://www.jfe-steel.co.jp/release/2022/03/220323.html)

External Awards (P. 241)

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IndicesDenjiro™ Insulation-Coated Pure-Iron Powder for Soft Magnetic Composites
Demands for extra-compact high-torque motors is growing in parallel with the popularization of EV. JFE Steel developed
Denjiro™, an insulation-coated pure iron powder for soft magnetic composites as an important material for axial gap
motors, which can be smaller than conventional radial gap motors and are expected to be suitable for expanded
applications, especially automotive applications. A soft magnetic composite is an iron core made by applying an insulation
coating to a soft magnetic* iron powder and then compression-molding the powder. Compared to electrical steel sheets,
which are widely used for iron cores, soft magnetic composites achieve low loss at high operating frequencies andpossess magnetic characteristics highly suited to complex-shape iron cores. The manufacturing yield of soft magnetic
composites is favorable, allowing high-rpm motors to be produced at reduced cost. Furthermore, copper wire can beeasily recovered when these motors are disposed, making it a highly recyclable product.
For example, a soft magnetic composite developed with Denjiro™ achieves less iron loss than both a 0.5 mm-thickelectrical steel sheet (50A400) in a frequency range exceeding 400 Hz and 0.35 mm-thick electrical steel sheet (35A300)
in a frequency range exceeding 800 Hz, demonstrating the suitability of soft magnetic composites for high-rpm motors.
With the commercialization of Denjiro™, the JFE Group has established a system for providing a broad lineup of soft
magnetic materials suited to nearly all currently applicable frequency ranges, from electrical steel sheets to soft ferrite
cores, and has become the world’s only comprehensive supplier capable of providing optimal one-stop solutions for all
power supply equipment, including motors.
Furthermore, Group company JFE Chemical Corporation manufactures and sells a soft ferrite core suited to the highfrequency ranges (several tens of kHz and higher) of inductors and electronic-device transformers through its subsidiary
JFE Ferrite Corporation.
* Soft magnetism is a property in which the magnetic force changes flexibly in response to changes in electric current.
Such materials are suited for use in the iron cores of motors and transformers.
■ Types of Motors

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Indices■ JFE Group’s Soft Magnetic Materials

Development of the Denjiro™ Insulation-coated Pure-iron Powder for Soft Magnetic Composites(https://www.jfe-steel.co.jp/en/release/2022/220127.html)

Battery-Protected Vehicle Body Structure Based on JFE’s Topology Optimization Technology
JFE Steel Corporation and Suzuki Motor Corporation are jointly developing lighter-weight electric vehicles (EVs) utilizing JFE’s
Topology Optimization Technology and high tensile strength steel sheets. EVs require a battery pack and body structure toprotect the battery cells in the event of a collision. While aluminum is generally used for the structural parts, sheet thickness
must be increased to ensure strength, posing a challenge to reducing the weight of battery protection components.
Therefore, JFE and Suzuki Motor started developing a battery-protected body structure consisting solely of steel
sheets to reduce weight by optimizing the body structure. JFE’s Topology Optimization Technology was used to design
the battery protection parts to evaluate crash performance in the event of a pole side-impact, where the load on thebattery is particularly high. The optimal use of various types of ultra-high strength steel sheets in the structural parts
enabled a significant weight reduction for the battery-protection parts while satisfying crash performance without usingaluminum.
JFE’s Topology Optimization Technology incorporates the design space (space where the parts are placed) as a partof the vehicle body for analysis and can accurately reflect the load transfer to each part of the vehicle body structure. This
makes it possible to effectively improve crash performance with less weight compared to the usual practice of optimizing
each individual part. This is the first time the technology has been applied to the optimization of a battery-protectedvehicle body structure made with steel sheets.
To provide solutions that help customers save process labor and improve product performance, we havesystematized our automotive steel sheet utilization technology as JESOLVA® and are actively engaged in EVI* activities
to engage in technical collaboration with our customers from the automotive design stage.
■ Image of pole-side impact

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Indices* Early Vendor Involvement: Participating in the manufacturer’s development of a new automobile model from the early
design stage, and proposing and developing steel materials, parts processing methods, performance evaluation, and otheraspects tailored to the concept of the new model.
Collaboration with Suzuki Motor on Reducing the Weight of EVs (Japanese only)(https://www.jfe-steel.co.jp/release/2021/11/211111.html)

Novel Processes for Manufacturing Valuable Materials Using Coal-Derived CO2 (NEDO Commissioned Project)
Two of JFE Steel’s R&D projects for the research and development of novel processes to manufacture utilizable
materials using CO2 emitted from coal-using industries have been selected by the New Energy and Industrial Technology
Development Organization (NEDO) of Japan for its publicly solicited project “Development of Technologies for Carbon
Recycling and Next-Generation Thermal Power Generation/Development of Technologies for CO2 Reduction andUtilization.” The objective of the R&D is the massive reduction of CO2 emissions through measures such as effectively
utilizing by-products such as combustible gas from blast furnace gas and slag produced in the manufacturing of iron. In
the steelmaking process, by-products such as combustible gas including blast furnace gas and slag are generated. In thisR&D project, we intend to effectively use these byproducts to significantly reduce CO2 emissions in collaboration with
the Research Institute of Innovative Technology for the Earth (RITE) and Ehime University.
R&D (1) Development of Optimum System for Methanol Synthesis Using CO2
Collaborator: RITE
We are developing an effective process for using CO2 contained in the exhaust gas of steel mills and other facilities
to synthesize methanol, a basic chemical. Blast furnace gas from ironworks has a relatively high concentration of CO2
and contains CO and H2 as secondary components. We will fully leverage these characteristics to lower cost and raise
the efficiency of ethanol synthesis. In this project, we will advance the development of technology for low-cost CO2
separation by pressure swing adsorption (PSA)* and technology for an H2O membrane separation reactor that enables
high-efficiency methanol synthesis from CO2. At the same time, we will strive to construct an entire optimal system
including pretreatment equipment and the recycling of water produced in the reaction when methanol is synthesized.
■Schematic Diagram of an Optimal System for Methanol Synthesis Using CO2

R&D (2) Research and Development of Innovative CO2 Fixing Technology through Quick, Large-quantity Carbonation of Steel Slag
Collaborator: Ehime University
With the aim of fixing large amount of CO2 in a short amount of time, we will develop an innovative technology to convert
calcium oxide in steelmaking slag, which is a by-product of steel production, into carbonates by blowing CO2 emitted fromcoal-using industries into high-temperature steelmaking slag. At the same time, by recovering the heat of the gas after
CO2 fixation, energy efficiency will be improved and the amount of CO2 fixation and reduction is maximized throughout theprocess. We aim to use the steel slag converted to carbonates for roadbed material, which is in high demand.
*A method of gas separation using a phenomenon in which the amount of gas adsorbed to a suitable material such aszeolite and activated carbon, changes depending on gas pressure.
Novel Processes for Manufacturing Valuable Materials Using Coal-Derived CO2 Selected for NEDO Projects(https://www.jfe-steel.co.jp/en/release/2021/211015.html)

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Indices■ Schematic Diagram of the Quick, Large-Quantity Carbonation Process for Steel Slag

Calcia Improvement Material
Calcia improvement material is a slag product that uses converter type steelmaking slag as raw material and is
manufactured by controlling the composition and adjusting particle size. Dredged soil mixed with calcia improvement
material is called calcia improvement soil, which is stronger than the original weak dredged soil, and therefore is able toprevent dredged soil from dissipating into the surrounding area and having a negative environmental impact placed in water.
This enables the effective use of weak dredged soil in land reclamation, shoal and tideland construction and refilling
former dredging sites.
Calcia improvement soil has been used to construct a mid-section submerged breakwater* (Shin Honmoku Pier, Portof Yokohama), the main embankment material for creating a shallow area (incidental facilities at the sediment disposal site,
Tokuyama-Kudamatsu Port), and backfilling material for an earthquake-resistant quay wall (quay-wall in the Mino offshorearea, Fukuyama Port).
* An embankment built under the water surface on the inside of a perimeter wall to divide the land into sections forreclamation.
■ Calcia Improvement Material and Calcia Improvement Soil

Dredged soil

Calcia improvement material

Calcia improvement soil

Example of calcia improvement soil application (shoal and tidelandconstruction material)
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Steel Slag Hydrated Matrix
Steel slag hydrated matrix is a steel slag product that can be used as a substitute for concrete but uses ground granulated
blast furnace slag instead of cement and steel slag instead of natural gravel and sand aggregate as its ingredients. It
effectively uses steel slag and does not rely on natural aggregate, thereby reducing environmental impact, uses lesscement and in turn reduces CO2 emissions.
There are many examples of blocks and artificial stones made from steel slag hydrated matrix being used as a
substitute for concrete blocks and natural stones in harbor works, including the runway D construction project at Haneda
Airport by the Ministry of Land, Infrastructure, Transport and the coastal reconstruction project after the Great East Japan
Earthquake. In addition, we are conducting onsite monitoring in the Katsunan Central Zone in Chiba port with the help ofa local fishing association to assess the impact of these blocks on marine biodiversity.

Artificial stones made from steel slag hydrated matrix

Wave-dissipating and foot protection block

Precast Concrete Products Mixed with Finely Ground Blast Furnace Slag
Finely ground blast furnace slag can be used as a cementing material in concrete. This type of concrete exhibits
significantly higher durability under harsh conditions such as applications in sewers and exposure to anti-freeze agents.
Its effectiveness in reducing environmental impact has been widely understood, although there has recently been
growing interest in its practical applications for concrete constructions that require higher durability.
As one of the deliverables for the Japanese government’s Strategic Innovation Promotion Program (SIP), the Japan
Society of Civil Engineers published a (draft) guideline in March 2019 on the application of finely ground blast furnace slag
to precast concrete product and its application now includes precast concrete slabs installed in highways and piers. With
the application of finely ground blast furnace slag in concrete, the durability of precast products is expected to be greaterand more consistent, allowing them to contribute to building national resilience.

Precastconcrete slabs

Precast concrete slabs mixed with finely ground blast
furnace slag installed in piers

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IndicesUse of Granulated Blast Furnace Slag to Reduce CO2 Emission
Granulated blast furnace slag in crushed and powdered form can be mixed with cement and used as a substitute forcement for making concrete. This leads to reducing the production of cement hence lower CO2 emissions. For example,
producing one tonne of blast furnace slag cement with 45% of its content substituted with granulated blast furnace
slag emits 42% less CO2 than conventional cement. In FY2021, JFE Steel supplied approximately 6.6 million tonnes of
granulated blast furnace slag to cement production, equivalent to a reduction of approximately 4.74 million tonnes of CO 2
emissions.
■ CO2 Emission for Producing 1 Tonne of Cement (Unit: kg-CO2 / ton)
Regular Cement

Blast Furnace Slag
CementLimestone

479

271

Electricity/energy

284

169

Total

763

440

CO2 Emissions Source

Restoring Marine Ecosystems Using Steel Slag Products and Tackling Blue Carbon
Marine Stone™ is a grain-size-adjusted steel slag with the function of controlling the generation of hydrogen sulfide fromthe silty sediment in enclosed coastal seas and improving the environment where organisms can live. Its effectiveness in
improving marine environments has been widely recognized, and the joint project with Hiroshima University has received
external commendations.
Frontier Rock™ is another steel slag product that consists of artificial stones made from steel slag hydrated matrix,
and provides an excellent base for seaweed bed and fishing reef. A submerged bank built on the seabed off the coastof Minami-Izu Town, Shizuoka Prefecture, has become a gathering place for large perennial seaweeds, as well as useful
fishery resources such as lobsters, turban shells, and a wide variety of fish.
In addition, we are focusing on blue carbon (carbon absorbed and fixed by marine organisms), which is an actively
researched field in recent years. We are involved in creating seaweed beds using steel slag products, measuring theamount of carbon absorbed by the seaweed beds and testing Marine Block™ as beds for corals.

Marine Block™

Frontier Rock™

School of fish attracted to the submerged bankmade of Frontier Rock™

Coral growing on Marine Block™

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JFE Steel and Tohoku University’s Collaborative Research Laboratory for Green SteelIn February 2022, JFE Steel and Tohoku University jointly established the Collaborative Research Laboratory for Green Steelwithin the university’s Graduate School of Engineering to research eco-friendly steel materials and production methods for the
carbon-neutral era. The Collaborative Research Laboratory will provide a system for encouraging collaborations in such areas
as planning and promotion of joint research, human resource development, and university-launched ventures by establishinga center for collaboration with companies within the university and providing cross-departmental access to university faculty,
knowledge, and facilities.
Under a collaborative agreement signed in 2017, JFE Steel and Tohoku University have been working together to resolve
issues concerning themes such as the reduction of CO2 emissions. In 2020, we established a collaborative research division to
study advanced analytical technologies for steelmaking processes. The Collaborative Research Laboratory is managed undera cross-divisional system and develops collaborations across a wide range of fields, including the development of steelmaking
processes and materials. This will facilitate a multifaceted approach to resolving issues related to low-carbon steelmaking
processes and to discover innovative development themes from new perspectives. Furthermore, we will dispatch young
researchers to nurture highly specialized human resources who will lead the next generation of the steelmaking industry.

Collaborative Research Wing, Materials Development,
Graduate School of Engineering, Tohoku University
JFE Steel and Tohoku Univ. Establish Collaborative Research Lab for Green Steel(https://www.jfe-steel.co.jp/en/release/2022/220203.html)

E

N JFE Engineering

JFE Engineering’s Commitment to the Circular Economy through its Businesses
JFE Engineering offers a wide range of products and services to support infrastructure, including waste and renewable energy
power generation plants, environmental plants that recycle food and plastics, water supply and sewage systems, and bridges. It
is engaged in all parts of their lifecycles, from design and construction to operation, maintenance, and reconstruction.
Leveraging these complex businesses will support initiatives for the circular economy and carbon neutrality to realize asustainable society.
In the area of developing a circular economy, JFE Engineering seeks to thoroughly use waste through its business ofconstructing and operating waste-fueled power generation and various recycling plants. In addition to these plants, it also
focuses on maximizing the use of social infrastructure facilities including water supply and sewage systems and bridges
through integrated implementation of resource saving, long-life design, energy and labor-saving construction, efficient facility
operations, effective maintenance, and renovation.
Furthermore, we are working to realize a carbon-neutral society through the construction and operation of renewableenergy power plants such as wind, biomass, and geothermal power plants, and through the development of CCU and otherCO2 capture and utilization technologies.
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as

te

ze

w

■ JFE Engineering’s Approach to a Circular Economy

Resource
recycling
Energy- andlabor-saving
construction

Maintenanceand renovation

tu

re

use

Thoroug

hly

ut

ili

Resource-saving
and long-life design

Maxi

mi

tr

uc

Efficient operation
ze

f
in

ra

s

Realizing Carbon-Negative Processes through CO2 Capture and Utilization Technologies(JFE CCU-Ready) for Waste-to-Energy Facilities
JFE Engineering launched verification tests in 2021 to assess the viability of the CCU process, which recovers andutilizes CO2 from the flue gas emitted from wase-to-energy (WtE) facilities, to contribute to the establishment ofDecarbonization Leading Areas advocated and promoted by the Ministry of the Environment of Japan. At present, wehave achieved a CO2 recovery rate of over 90%, and in February 2022, we succeeded for the first time in Japan inconverting CO2 recovered from the flue gas of a WtE into methanol in a joint demonstration project with Mitsubishi
Gas Chemical Company, Inc. Waste materials such as household garbage and wood incinerated at the WtE are used togenerate electricity and other energy, contributing to the formation of a recycling-oriented society. In particular, materialsof biological origin, such as wood, absorb CO2 from the atmosphere as they grow, a carbon-neutral property that reduces
CO2 emissions to zero. So, introducing this carbon capture technology makes it possible to achieve carbon negativity,
where more CO2 is absorbed and recovered than emitted. In the future, in addition to methanol, which is the basis forchemical products, we will propose the latest technologies for effectively using CO2, such as the generation of methanegas for fuel and its use in the photosynthesis of agricultural crops.
■ Overall flow diagram of CO2 utilization system

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Contribution to Realizing Carbon Neutrality through Hydrogen and CO2 Transportation
As a pioneer in pipeline construction, JFE Engineering has an extensive track record in the design and construction oftransportation facilities for diverse fluids such as gas, oil, water, and steam. We are utilizing this wealth of experience andachievements to accelerate new initiatives in various fields related to the infrastructure for producing, transporting, andsupplying energy toward the realization of carbon neutrality.
As part of this effort, we have joined the Chubu Region Hydrogen Utilization Council, which is studying the largescale utilization of hydrogen for establishing a supply chain to handle increased demand and ensure stable utilization ofhydrogen in the Chubu region. The council was established in March 2020 by leading companies from various industries,
including oil, gas, electricity, and other energy sources, as well as petrochemicals, automobiles, and finance, to support
the public implementation of hydrogen use in the Chubu region in 2025 and commercialization in 2030. This is the firstinitiative of its kind in Japan involving cross-industry initiatives. Within the council, JFE Engineering will play the role ofclarifying technical conditions and issues and formulating plans for the establishment of a hydrogen delivery supply chain,including pipelines that connect large receiving terminals with industrial sectors and regions.
Along with Hokkaido Electric Power Co., Inc. and IHI Corporation, JFE Engineering was also commissioned by
the New Energy and Industrial Technology Development Organization (NEDO) to take part in a project for the social
implementation of CCUS, titled “CCUS Research and Development / Demonstration Project / Research related to CCUS
Technology / Feasibility Study related to Separation, Capture, Concentration and Use of CO2 from a High-Volume Source.”
The purpose of this project is to study and clarify issues related to CO2 separation and capture technologies from largecommercial coal-fired power plants and aggregation technologies to make the recovered CO2 available for use. In thiscontext, JFE Engineering will work toward establishing safe and efficient CO2 mass transportation technologies.
In this way, we will contribute to the realization of a decarbonized society by providing hydrogen and CO2 transporttechnologies using pipelines.

Gas transportation pipelines■ Technical Research Project for the Separation, Collection, and Aggregation of CO2

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Food Waste Recycling Business
J&T Recycling Co., a subsidiary of JFE Engineering, is engaged in the food waste recycling business, in which food waste
is collected and fermented to produce methane gas which is then used as fuel to generate power.
The company will promote its food waste recycling business and contribute to the expansion of renewable energy
supply through J Bio Food Recycle Co., Ltd., which was established in 2016, Sapporo Bio Food Recycle Corporation(located in Sapporo-city, Hokkaido, acquired in 2019), Tohoku Bio Food Recycle Corporation (located in Sendaicity, Miyagi, established in 2019 jointly with East Japan Railway Company, Tokyo Gas Co. Ltd., and Tohoku Railway
Transportation Co. Ltd.), and Bios Komaki Co. Ltd. (located in Komaki-city, Aichi, acquired in 2020).

Company Name

Volume of Food Waste
Processed

Estimated Amount ofElectricity Generated(Annual)Notes

J Bio Food Recycle Co., Ltd.

80 tonnes per day

11,000 MWh

Sapporo Bio Food Recycle
Corporation

68 tonnes per day

1,600 MWh(2021 actual data)

Tohoku Bio Food Recycle
Corporation

40 tonnes per day

6,500 MWh

Scheduled to start
operation in FY2022

Bios Komaki Co. Ltd.

120 tonnes per day

9,200 MWh

Scheduled to start
operation in FY2022■ Biogas (methane gas) power generation facility
Pre-treatment plant

Gas engine

Methane fermentation tankGas holder

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In operation
In operation, also
engaged in feed andfertilizer production fromfood waste

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Regional Electricity Retail Businesses in Partnership with the Local Municipal Governments
through Developing New Regional Electricity Businesses
JFE Engineering has established several regional electricity retail companies in partnership with local municipal
governments. It is actively involved in the regional electricity business, with a particular focus on the distribution ofrenewable energy.
JFE Engineering is establishing frameworks for effectively using renewable energies such as hydropowerand geothermal energy in regions and for supplying electricity from renewable energy plants constructed by JFE
Engineering, such as waste-fueled, to regional public facilities. Through these efforts, JFE Engineering is supporting
local production and consumption of electricity. These regional electricity businesses promote the use of renewableenergy and decarbonization of the region while also reducing administrative costs and enhancing the region’s industrial
infrastructure.
■ JFE Engineering’s Support of Local
Production for Local Consumption

Niigata City
Niigata Swan Energy:
Sales of locally produced electricity
from waste power generation

Hachimantai City
Fukuyama City

Sales of local electricity from
Matsuo-Hachimantai Geothermal
Power Plant

Fukuyama Mirai Energy:
Sales of locally produced electricity
from waste power generation

Kumamoto City

Tokorozawa City

Smart Energy Kumamoto:Sales of locally produced electricity
from waste power generation

Tokorozawa Mirai Denryoku:
Sales of locally produced electricity
from waste power generation

Iwata City
Izumo City
Minamata City

Izumo Enmusubi Denryoku:
Sales of locally produced
duced electricity
from waste power generation

Smart Energy Iwata:
Sales of electricity from local
wind power generation plant, etc.

Toyohashi City
Honokuni Toyohashi Electric Power
Sales of locally produced electricity
from biogas power generation

Sales of electricity fromlocal hydroelectric power generation plant

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Infrastructure Construction for Strengthening the Resilience of National Land
JFE Engineering is pursuing initiatives to prevent global warming by promoting carbon neutrality through a variety of
projects and measures, as well as contributing to strengthening the resilience of Japan’s national land.
In the past, we addressed the social challenge of improving national land infrastructure through the construction ofbridges and coastal structures. In recent years, the emphasis has been placed on efforts to realize a sustainable society
and respond to the need to extend the service life of existing structures. In addition to repair and reinforcement toaddress structural damage and aging, significant reconstruction and remodeling are required in response to changing
public needs to ensure lasting use of the existing national infrastructure stock. Construction work for extending theservice life of a structure depends upon considering the different conditions that apply to each project, such as planningand design that take into account the existing structure and surroundings, on-site construction work, and maintenanceafter completion.
JFE Engineering has carried out many such works to extend the service life of structures. In addition, by utilizing
the technology cultivated through these achievements, we have contributed to addressing climate change as well.
For example, we have minimized the impact of typhoon damage by quickly removing and restoring roofs, signboards,
and other components of neighboring buildings that had been blown onto a highway closed during a typhoon. We arepromoting these contributions to strengthen the resilience of national land and support daily life.

Emergency repair of damage caused by Typhoon No. 19 on the Metropolitan Expressway Yokohane Route in 2019
(Left: Damage situation Right: Restoration work)
Adapting to Climate Change (P. 75)
Climate Change Scenario Analysis (P. 84)

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H JFE Shoji

Further Expansion of the Global Supply Chain for the Steel Sheets Business
The key factor in initiatives for countering climate change, including those aimed at reducing CO2 emissions, is minimizing
electricity loss and using generated electricity without loss. Motors found in places such as power plants, factories
and homes are responsible for 40–50% of all electricity consumed globally. In Japan, the ratio is approximately 60%.
Improving the efficiency of motors by 1% in Japan that would contribute to the equivalent of a 500,000 kW-class power
generation plant in energy savings. Technological advances are expected in electrical vehicle’s engine motors, for which
demand is expected to rise as we transition to a decarbonized society, and in various types of motors for cars, which
could be as many as 50 to 100 motors per vehicle. We also expect improvements in efficiency and further reductions insize and weight. In addition, in order to minimize energy loss while distributing electricity from source to factories andhomes, continuous improvement is required in transformers, where the most loss of electricity occurs, to make themmore efficient.
JFE Shoji has established a stable global supply chain that sources high-quality electrical steel sheets which
are essential for improving the efficiency of motors and transformers from JFE Steel and other manufacturers andprocesses the products for meeting customer needs. Customers who require high-quality electrical steel sheets, suchas manufacturers of motors and transformers, typically operate manufacturing facilities across the globe. To alignitself to this trend, the company has been expanding its electrical steel sheets supply chain based in a global quadpolar organization that includes Japan, America, China, and ASEAN. The Seventh Medium-term Business Plan calls forestablishing the world’s number one global distribution and processing system for high-quality electrical steel sheets,
and in fiscal 2021, the first year of the plan, we took actions such as strengthening the capabilities of regional processing
centers and investing in an EV motor development company in North America. By further expanding its supply chain andprocessing capabilities and collaborations with alliance companies, JFE Shoji is striving for significant improvements inthe distribution and processing of electrical steel sheets.

Building a Supply Chain for Steel Materials and Processed Products for Offshore Wind
Power Generation
Many countries are expanding their efforts to achieve carbon neutrality, and the use of renewable energy including wind
power is seen as a key factor. In Japan, Act on Promoting the Utilization of Sea Areas for the Development of Marine
Renewable Energy Power Generation Facilities was enacted in 2019, and an environment for commercializing offshore
wind power generation is being established. The Japanese government has announced plans to increase the share ofoffshore wind power in its power supply mix from 0.7% in FY2019 to 1.7% in FY2030, and the number of offshore wind
power construction projects is expected to increase. Other Asian countries are also announcing offshore wind power
projects.
The JFE Group will be a forerunner in the field of offshore wind power generation and will establish a supply chainthat leverages the Group’s collective strengths in the business of constructing foundation structures for wind towers andin their O&M.
JFE Shoji focuses on building a supply chain for various components used in offshore wind power both in Japan andoverseas. In Taiwan, which is leading in the offshore wind power generation market, we have been collaborating witha local enterprise that manufactures equipment and accumulating experience in the supply chain of steel materials foroffshore wind power. Looking ahead, we will contribute to the spread of renewable energy by establishing a supply chainthat contributes to the local economy and meets customer demand in the offshore wind power generation business inJapan.

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Expanding Business in Biomass Fuels
In response to growing demand for biomass fuels by biomass power generation companies, JFE Shoji imports palm
kernel shells to Japan from Malaysia and Indonesia. Furthermore, amid the growing need for decarbonization, demand
for renewable energy is rising, especially for biomass power generation which is not affected by weather conditions. We
will respond to this demand by exploring other types of biomass fuels, such as wood pellets, to ensure a stable supplyof biomass fuels. Wood pellets are a woody biomass fuel that effectively uses waste wood such as thinned and pruned
timber generated in the process of growing forests and scrap wood from lumber mills.
We will continue to supply fuel to biomass power generation companies, including JFE Engineering, and do our partin the JFE Group’s overall contribution toward realizing an eco-friendly society.

PKS

Wood pellets

Expansion of Scrap Trading Helps in the Development of a Recycling-oriented Society
JFE Shoji’s recycling business for steel and aluminum scrap includes the export of steel scrap to Asian countries, where
it is sold for both offshore and domestic trading. Although steel scrap exported from Japan is mainly transported by bulk
carriers in general, timely shipments of small lots is now also possible due to the container loading system introduced by
JFE Shoji, contributing to the development of recycling-oriented societies in Asia.

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Efficient Use of Resources
Basic Policy
Economic growth in emerging countries is intensifying the need to conserve non renewable resources and prevent
pollution. Iron can easily be separated and is thus highly recyclable. It can be recycled and reused to make other steel
products infinite times (closed-loop recycling). The JFE Group is leveraging each Group company’s strengths to enhanceresource recycling through recycling co-products from iron and steelmaking, reducing waste at construction sites, andpromoting the global recycling of steel scrap.
We continue to pursue efficient uses of resources in both the production and product/service phases of its
businesses, through steel scrap recycling, biomass fuel production and waste-to-energy power generation.

Targets and Results
Each JFE Group operating company carries out resource recycling suited to its particular business. We identified
KPIs for material CSR issues and consistently met them every year up to FY2020. This effort enabled us to establish
our environmental practices. We acknowledge that the efficient use of resources is a key environmental issue for
manufacturers and therefore continue to set the following high-level targets and manage our achievements.
■ Targets and Results for FY2021 and Targets for FY2022
OperatingCompany
JFE Steel

FY2021 Targets

FY2021 Results andInitiatives

FY2022 Targets

Recycling rate of co-products:
99% or higher

Recycling rate of co-products:
99.7%

Recycling rate of co-products:
99% or higher

Recycling rate at construction
sites

Recycling rate

Recycling rate at construction
sites・Recycling rate of rubble:
99.5% or higher
JFE Engineering

・Recycling rate of sludge:
95.0% or higher
・Recycling rate of industrial
waste: 85.0% or higher
Recycling rate of officerecyclable waste (Yokohama
head office): 98.0% or higher・R ecycling rate of rubble:
99.4%
・Recycling rate of sludge:
96.9%
・Recycling rate of industrial
waste: 81.6%

98.8%

JFE Shoji・Recycling rate of sludge:
95.0% or higher
・Recycling rate of industrial
waste: 85.0% or higher
Recycling rate of officerecyclable waste (Yokohama
head office): 98.0% or higher
Global recycling of steel scrap

Global recycling of steel scrap xceed FY2020 scrap trade
・E
volume (FY2024 target: +5%
from FY2020)

・Recycling rate of rubble:
99.5% or higher

Scrap trade volume: −20%from FY2020

JFE GROUP CSR REPORT 2022

120・E xceed FY2020 scrap tradevolume (FY2024 target: +5%
from FY2020)

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Reducing Generation and Emission of Co-products and Reusing Co-products
S

T JFE SteelJFE Steel carefully controls the generation and emission of iron and steelmaking slag (co-product), iron dust from blast furnaces
and converters, sludge from water treatment facilities, and other co-products by setting targets to improve recycling rates.
Dust and sludge with high iron content are recycled as raw materials for steelmaking. Iron and steelmaking slag iseffectively recycled for reuse in cement and other construction materials. We are also promoting their use as environment
recovery material such as Marine Stone™, which works effectively as a base for the adhesion of organisms and for improving
the marine environment.
As a result of such efforts, the company accomplished a 99.7% recycling rate for slag, dust, and sludge in FY2021.
Furthermore, it has consistently maintained the target of 99% or higher and will continue to achieve the target going forward.
■ Landfill of Co-products and Recycling Rates■ Landfill amount (non-consolidated) ● Recycling rate (non-consolidated)(Million tonnes)
（％）

0.48

0.5

99.7

99.7

99.7

99.7

99.7

0.4
0.3

100
Target:99% orhigher 98
96

95.6

0.2

94

0.047

0.052

0.043

0.037

0.042

92

1990

2017

2018

2019

2020

2021 (FY)0

Amountreleased

̶

0.539

0.792

0.546

0.513

0.504

Amounttransferred

̶

0.034

0.029

0.031

0.023

0.054

0.1
0

Group
companies*(Million
tonnes)(Million
tonnes)*23 JFE Steel consolidated subsidiaries in Japan.
For more on quantitative data related to co-products, please refer to the following information.
Environmental Data (P.207)

Promoting RecyclingE

N JFE Engineering

Most of JFE Engineering’s waste is either rubble and sludge discharged from construction sites or industrial waste
discharged by the Tsurumi and Tsu works.
We are promoting reduction of industrial waste as well as resource recycling through various measures, which
include setting environmental goals for recycling rates and properly separating the waste onsite before sending it todisposal companies known for achieving high recycling rates. We also address the Plastics Resource Circulation Act,
enforced in Japan in April 2022, by including initiatives for plastics recycling in our environmental target.
The Yokohama head office sets target recycling rates for office recyclable waste and has been certified as a“Workplace with Excellent 3R Activities” by the City of Yokohama every year since FY2012 for its efforts to reduce waste(encouraging double-sided copying), reuse (setting up collection boxes for plastic folders and plastic business card cases
and recovering label printer cartridges), and recycle (thoroughly separating waste).
The JFE Engineering Group is also working to realize a recycling-oriented society through its PET bottle and foodwaste recycling initiatives.

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ESG Data■ JFE Engineering Group Waste Disposal for FY2021
Other: 1.5
JFE Engineering:
191.3

Asuka Soken:
49.4

Total:
249 thousand
tonnes

JFE Pipeline
Engineering:
5.6

JFE Environmental
Service: 1.4

Data cover JFE Engineering and 12 consolidated subsidiareisin Japan.
■ Waste Generated at Construction Sites■ Total ■ Final disposal(Thousand tonnes)
250

98.4

98.4

97.1

98.3

200

● Recycling rate (%)

98.6
190.2

100
90

145.4
150
100

97.4

88.1

70

50
0

80

109.0

1.4

1.8

4.2

1.7

2017

2018

2019

2020

2.7
2021 (FY)For more on waste generated at the steelworks, please refer to the following information.
Environmental Data (P.207)

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IndicesResource Recycling Solutions
The JFE Group is involved in establishing a recycling-oriented society through a variety of initiatives. Steelworks
promotes the efficient use of raw materials, water, and other resources in the process of iron and steelmaking in
addition to encouraging the application of recycled resources such as used plastics for blast furnaces. Moreover, we are
striving to more efficiently use co-products generated in the iron and steelmaking process through initiatives such as theinternational recycling of steel scrap. By leveraging the highly recyclable quality of steel, we are also developing productsthat contribute to addressing the issue of plastic waste.
In the engineering field, we produce biomass fuel from food waste and sewage sludge, constructing plants, andother infrastructures for waste power generation and offer resource recycling solutions by operating these facilities
directly or under contract. In addition, we are pursuing a circular economy by developing PET bottles and a plastics
recycling business as well as an energy supplying business.
For JFE Steel and JFE Engineering’s recycling businesses, please refer to the following information.
List of JFE Group’s recycling businesses（https://www.jfe-holdings.co.jp/en/csr/environment/resource/pdf/resource01.pdf)
For more on this, please refer to the following information.
Development and Provision of Eco-friendly Processes and Products (P. 100)
Environmental Communication (P.138)

Social challenges for resource recycling• Exhaustion of resources• Shortage of waste treatment facilities
and disposal sites• Labor shortage• Using renewable energy

Society
Customer/User(Product→Use→Dispose)

Solution 6

Waste
Scrap

Initiative 2
Initiative 4

Solution 4
Initiative 1

Steelworks

Recycling BusinessInitiative 3

Steelproducts

Efficient use ofco-products

ByproductenergyRecycledresources

Recycled
products

Renewableenergies

Solution 3

Solution 5

Solution 1

Solution 2

Initiatives for Resource Recycling Solutions
Accumulated amountrecovered at JFE Bars
& Shapes: 92
thousand tonnes!

Plastic used in ironResource Recycling Solutions andsteelmaking: 50
thousand tonnes!

Solution 1

Promoting the use of recycled resources

Solution 2• Technology to inject plastic in blast
furnaces

Blast furnace gas(fuel gas) used as
in-house energy

Solution 3

Offering recycled products

Recycling resources• Recycling used batteries through an electric arc furnace
to separate metals such as iron, manganese, and zinc

• Recycled plastic products such as palettes and NF boards
Recycling
fluorescent lights
14 million tubes!
Recycling home
Recycling
electronic appliances• Recycling fluorescent lights, batteries, home electronic appliances, 0.8 million units!
Solution 4

Used plastic

Iron ore
Fe+O

Pig ironFe

Plastic
C+H

Reduction
gas
CO+H2

Electrode

Recoveringzinc

etc. (treating hazardous materials for recycling)• Recycling PET bottles to produce resins
Waste
batteries

Scrap

Arc
Pig iron
Pulverized plastic

Blast furnace facility

Molten steel
Recovering iron and manganese

Water
recycling rate:
93.0%!
Rate ofefficient use ofco-products:
Initiative 3
99.7%!

Solution 5

Solution 6

Using renewable energy sources

Efficient use of co-products• Waste power generation, biomass
power generation• Recycling food waste, biogas
generation from sludge• For cement material, etc.

Initiatives for Realizing a Recycling-oriented Society
Initiative 1

Initiative 2

Improving the iron andsteelmaking process

Recycling/power
generation business

Improving the iron andsteelmaking process

In the iron and steelmaking process,promote the efficient use of raw materials
and water resources, reduced generationand emission of co-products and reuse ofco-products, and use of recycledresources and recycling of resources.

Engaging in a power
generation businessusing heat and gas
produced whentreating wastes.

In the iron and steelmaking process,promote the efficient use of raw materials
and water resources, reduced generationand emission of co-products and reuse ofco-products, and use of recycledresources and recycling of resources.

Initiative 4

Global circulation of scrap
Contributing to the expansion of arecycling-oriented society at a
global scale by efficiently
recovering and transporting ironscrap.

On-site recycling
rate of industrial
waste: 98.6%!

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Shared Initiatives

Develop resource recycling
technologies and products

Collaboration withadministrative entities

Develop technologies andproducts that efficiently use
co-products generated in theGroup’s production process aswell as wastes generated duringsocial activities.

Established a new local-based
power company in collaboration
with an administration to promotelocal generation and local
consumption of electricity throughwaste power generation, etc.

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BETTER RECYCLE Shonan— Containers developed to help address plastic waste, leveraging the highly recyclable quality of iron
JFE Steel promotes the BETTER RECYCLE Shonan project, launched to tackle plastic pollution by developing newuses for steel sheets for can-making. This new approach for solving the problem focuses on the single use of plastic
containers together with consumers by developing new products and proposing new lifestyles. A project team wascreated with members from IBLC Co., Ltd. and Shonan Style magazine (published by EDITORS Inc.). Carrying out
activities around the Shonan area, the project team received the cooperation of local governments and take-out
container suppliers as it formulated the concept of a BETTER RECYCLE CUP prototype, an environmentally sound,steel drinking container. Discarded plastic containers used to take out food and beverages are difficult to recover as raw
materials and recycle into plastic products. Steel containers, however, can be recycled as ironware owing to iron’s highrecyclable quality, which supports an environmentally sound lifestyle. Furthermore, taking advantage of iron as a material,
containers have required strength as well as the cooling effect of iron’s high thermal conductivity, and a posh design.
Since the end of October 2021, we have been test-marketing BETTER RECYCLE CUP and holding exhibitions to
introduce iron’s high recyclability and the project’s work. These events are helping us understand the needs of users
in developing new products coming out in the next three to five years, as we try to meet the needs of society andcustomers through the use of iron and contribute to achieving the SDGs.
BETTER RECYCLE Shonan (Japanese only) (https://www.jfe-steel.co.jp/products/can/pr/better_recycle_shonan.html)

Prototype of steel containers, BETTER RECYCLE CUP

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Water Security
Basic Policy
The JFE Group uses large quantities of fresh water for cooling and cleansing products and facilities in its core businessof steel manufacturing. For this reason, the efficient use of water resources with due consideration to the source of thewater and stakeholders in the area is a key challenge. In response, we have established a system for reducing water
intake by maximizing the use of recycled water at our steelworks. We will continue our efforts to reduce environmental
impact by reducing water consumption through more efficient use.
And while we have always taken measures against meteorological disasters such as droughts and floods at our
manufacturing sites in Japan, we are further reinforcing them in anticipation of the increased frequency and severity of
weather events associated with climate change by securing alternative means and raising the height of embankments.
We also seek to identify water-related risks throughout our business sites and supply chain in Japan and overseas, suchas the risk of drought at the source of water intake and pollution at the point of discharge. In areas under water stress,
we will respond appropriately through dialogue with stakeholders.

Targets and Results
Because the JFE Group uses large quantities of water in its core business of steel manufacturing, the Group sets highgoals for water resource recycling. We defined KPIs for material CSR issues and consistently met them every year up to
FY2020. This effort helped us to establish environmental practices. We acknowledge the use of water resources as a key
environmental issue for manufacturers and will therefore continue to set the following high-level targets and manage ourachievements.
■ Target and Result for FY2021 and Target for FY2022
Operating Company

JFE Steel

FY2021 Target

FY2021 Result and Initiative

FY2022 Target

Maintain efficient use ofwater
Recirculated water usage
rate: at least 90%

Recirculated water usage
rate: 93%

Maintain efficient use ofwater
Recirculated water usage
rate: at least 90%

Risk Management System
The JFE Group recognizes the issue of water resources as a risk that may significantly impact operations, and we havetaken action against meteorological disasters such as droughts and floods. In recent years, we have been seeking toadequately identify and manage water risks based on the assumption that disasters due to climate change will increasein frequency and severity. With regard to Group risk management, the JFE Group Environmental Committee, under
the leadership of the CEO, who heads the JFE Group CSR Council, discusses, supervises, and guides Group-wide
environmental initiatives, including the proper use of water resources.

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Analyzing and Responding to Water Risks
As part of overall risk management, we identify, analyze and evaluate water risks based on past incidents of droughts
and floods in the JFE Group’s businesses, forecast data from the Meteorological Agency and results of our scenario
analysis. In particular, we consider as key risks the damages to business sites and disruption of the supply chain causedby restrictions on water intake due to droughts or increasing severity of meteorological disasters. In response, we arefurther reinforcing measures such as using recycled water, securing alternative means, and strengthening drainage
facilities.
Furthermore, to ensure the stability of our steel business’s procurement throughout its supply chain, we are taking
initiatives to reduce risks by evaluating them based on past data concerning water-related disasters and results of
scenario analysis for materials such as coal and iron ore, securing alternative routes of procurement and diversifying
suppliers.

S

T JFE SteelJFE Steel identifies and evaluates water-related risks based on past incidents of damage caused by droughts and floods,
forecast data from the Meteorological Agency and results of scenario analysis. We conduct a further evaluation of water
risks around each manufacturing site from different perspectives by also using the World Resource Institute (WRI)’s
Aqueduct, a mapping tool for evaluating overall water risks from droughts and floods in each region around the world.
According to the WRI’s assessment in August 2022, water risks for all of Japan are not designated at a high level orabove, but there will be risks of water shortages and flooding due to weather conditions in the future (2030s and 2040s).
JFE Steel identifies steelworks under such weather risks and takes measures such as business continuity planning.

Efficient Use of Water Resources
S

T JFE SteelA large amount of water is used in the iron and steelmaking process to cool facilities and process products. The target
water recycling rate at JFE Steel is 90% or more, which is extremely high considering the amount evaporated whenwater is used. We are striving to improve the recycling rate by adopting purification processes such as biological andchemical wastewater treatments, and we have been successfully achieving the target. Our recycling rate of industrial
water in FY2021 maintained a high level of 93.0%.

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Evaluations
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ESG Data■ Industrial Water Accepted/Circulated■ Industrial water accepted by JFE Steel (non-consolidated)● Industrial water circulated*¹ by JFE Steel (non-consolidated)(Million tonnes)
400

93.5

93.5

93.4

93.0

(%)

93.0

100
Target:90% orhigher

300

220

218

221

226

215

75

200

50

100

25

0

2017

2018

2019

2020

2021 (FY)

Total amount

3,410

3,376

3,323

3,066

3,207

Industrial water
accepted

220

218

221

215

226

0

JFE Steel(Million
tonnes)(Million
tonnes)Group companies*2
Total amount

280

289

293

265

235

Industrial water
accepted

21

20

20

21

19

(Million
tonnes)(Million
tonnes)*1 Industrial water circulated (%) = (Total amount used −industrial water accepted)/total amount used ×100
*2 23 JFE Steel consolidated subsidiaries in Japan.

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N JFE Engineering

JFE Engineering and each Group company strive to use water efficiently at their business sites.
■ JFE Engineering Group’s Water Consumption for FY2021
Other: 0.1

J Farm:24

J&T Recycling: 1,024

JFE Engineering:63

JFE Environmental
Service:31

Total:
1,141 thousand
tonnesData cover JFE Engineering and 7 consolidated subsidiaries inJapan.
For more on quantitative data related to water, please refer to the following information.
Environmental Data (P.207)

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IndicesPrevention of Pollution
Basic Policy
The JFE Group regards co-existence and mutual prosperity with local communities, the global environment, andsociety at large as a critical managerial challenge in terms of business continuity. It strives to control air and waterpollutant emissions and aggressively invests in environmental protection. Related internal controls and education are
steadily being strengthened as well. Also, the transfer and widespread application of proprietary technologies, mainly indeveloping countries, contribute to pollution prevention on a global scale.

Targets and Results
The JFE Group has developed KPIs for material CSR issues relating to air pollutants generated from the steelmaking
process based on the action plan formulated by the Japan Iron and Steel Federation and we consistently met them every
year. This effort enabled us to establish environmental practices. Acknowledging the prevention of pollution as a key
environmental issue for manufacturers, we will continue to set the following high-level targets to maintain the emissionof pollutants at low levels and prevent environmental pollution.
■ Targets and Results for FY2021 and Targets for FY2022
OperatingCompany

JFE SteelJFE
Engineering

FY2021 Targets

FY2021 Results and Initiatives

FY2022 Targets

Continue efforts to keep NOx
Continuously maintained NOx
and SOx emissions at low levels and SOx emissions at low
levelsContinue efforts to keep NOx
and SOx emissions at low levels

VOC emissions: −30% from
FY2000 (1,078 t or less)

VOC emissions: −30% from
FY2000 (1,078 t or less)

VOC emissions: −65% from
FY2000 (542 t)

Benzene emissions: −80% from Benzene emissions: −93%
FY1999 (46 t or less)from FY1999 (16 t)

Benzene emissions: −80% fromFY1999 (46 t or less)Dichloromethane emissions:−40% from FY1999 (46 t or less)Dichloromethane emissions:−40% from FY1999 (46 t or less)Dichloromethane emissions:−61% from FY1999 (30 t)

Continue efforts to keep NOx
Maintained low emissions as
and SOx emissions at low levels results were significantly lessthan the amount equivalent
to the total annual volume
restriction
・NOx: 127.8 Nm³ (18,000 Nm³)
・SOx: 34.3 Nm³ (100 Nm³)

Continue efforts to keep NOx
and SOx emissions at low levels

Management System
The JFE Group works to reduce environmentally hazardous substances generated from its business activities,
takes actions to keep air, water, and other resources clean, and manages these matters Group-wide. In addition to
management and supervision carried out by specialized committees set up at each operating company, operatingcompanies’ environmental management activities, including compliance with pollution prevention regulations, risk
management, and implementing measures are reported to the JFE Group Environmental Committee, formed under the
JFE Group CSR Council and chaired by the CEO of JFE Holdings, for Group-wide discussion, supervision, and guidance.

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Controlling Air Emissions
S

T JFE SteelJFE Steel is installing low-nitrogen oxides (NOx) burners in reheat furnaces, switching to low-sulfur fuels and deploying
desulfurization and denitration devices in sintering plants, all major sources of sulfur oxides (SOx) and NOx emissions.
It has concluded agreements with local administrations that stipulate conditions that are stricter than the total volume
restrictions required by the Air Pollution Control Law. The company is continuing to further control emissions at a levelthat is less than the amount set forth in the agreement. In addition, the company suppresses dust dispersion throughmeasures that include enhancing on-site cleaning, installing sprinklers and windbreak fences in raw material yards, andimproving the performance of dust collectors.
■ SOx Emissions(Million Nm3)
40

■ Emissions by JFE Steel (non-consolidated)

36.8

30

20

6.0

4.6

4.1

4.3

3.3

3.5

1973

1990

2017

2018

2019

2020

2021

(FY)

̶

̶

0.05

0.04

0.04

0.03

0.03

(Million
Nm3)

10

0
Group
companies** 11 JFE Steel consolidated subsidiaries in Japan.
■ NOx Emissions■ Emissions by JFE Steel (non-consolidated)(Million Nm3)
40

34.6

30

20

13.7

11.5

10.5

11.1

10.3

11.2

10

0
Group
companies*

1973

1990

2017

2018

2019

2020

2021

(FY)

̶

̶

0.20

0.19

0.17

0.14

0.18

(Million
Nm3)* 11 JFE Steel consolidated subsidiaries in Japan.

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N JFE Engineering

To ensure compliance with the Air Pollution Control Law and relevant local regulations, JFE Engineering properly
manages facilities that emit soot and smoke at its Yokohama head office, Tsurumi works, and Tsu works, so NOx and Sox
emissions from those facilities are maintained at a level sufficiently lower than the total annual volume restriction (NOx:18,000 Nm³, Sox: 100 Nm³). In addition, efforts are being made at construction sites to protect the environment throughJFE GROUP CSR REPORT 2022

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Indicesthe use of construction machinery and on-site vehicles in compliance with the Automotive NOx and PM Law and Act on
Regulation, Etc. of Emissions From Non-road Special Motor Vehicles (Off-Road Vehicle Law).

Preventing Water PollutionS

T JFE SteelJFE Steel strives to reduce its environmental impact on waterways by thoroughly purifying water used in iron andsteelmaking processes before releasing it into public waterways or sewers. The company has concluded agreementswith the administrative entity in each area that set out more rigorous effluent standards, compared to those stipulated
under the Water Pollution Prevention Act. It also established a strict voluntary control standard to improve water quality.
For FY2021, chemical oxygen demand (COD), the water-quality index for wastewater, was 2.9 tonnes per day.
■ Chemical Oxygen Demand (COD)■ Emissions by JFE Steel (non-consolidated)(Tonnes/day)
4.0

3.0

3.3

3.2

2.9

2.9

3.0

2.0

1.0

0

2017

2018

2019

2020

2021

Group
companies*

0.14

0.17

0.15

0.17

0.23 (Tonnes/day)(FY)* 11 JFE Steel consolidated subsidiaries in Japan.

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N JFE Engineering

Wastewater from the JFE Engineering Yokohama head office, Tsurumi works, and Tsu works, is released into public
waterways or sewer systems. Nitric oxide, phosphorus, and COD in the wastewater are measured on a regular basis andeffectively managed in accordance with the Water Pollution Prevention Act and Sewerage Act.
■ Chemical Oxygen Demand (COD) in Wastewater Released
Publicly■ Tsu Works(kg/day)30

23.1
Regulation (Tsu)
20

10

0

5.6

2017

6.8

2018

8.4

8.7

8.4

2019

2020

2021

This report uses the maximum value of each year.

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IndicesManagement of Chemical Substances and Emission Control
S

T JFE SteelJFE Steel lowers its environmental impact by voluntarily reducing the chemical substances it releases. Release andtransfer amounts of substances subject to Japan’s Law concerning Pollutant Release and Transfer Register (PRTR Law)
are reported in accordance with the law. In FY2021, chemical substances released into the atmosphere and public
waterways totaled 380 tonnes.
■ Release and Transfer Amounts of PRTR-registered
Substances at JFE Steel■ Amount released into atmosphere and public waterways by JFE Steel (non-consolidated)■ Amount transferred by JFE Steel (non-consolidated)(Tonnes)

4,000

3,000

2,726

2,533
1,865

2,000

1,000

0

516

545

481

1,694

1,378
380

341

Group
companies*

2017

2018

2019

2020

2021

(FY)

381

269

285

255

292

(tonnes)Amounttransferred 6,208

6,643

5,967

4,216

8,433

(tonnes)Amountreleased* 16 JFE Steel consolidated subsidiaries in Japan.
The Japan Iron and Steel Federation formulated a voluntary action plan to reduce VOC emissions by 30% from FY2000
levels by FY2010. As part of this action plan, JFE Steel set a target for reducing emissions to 1,078 tonnes or less. As aresult of our initiatives, we achieved a significant reduction that exceeded the 30% reduction target in FY2010 and havebeen consistently cutting VOC emissions, by more than 50%. Going forward, we will continue to maintain the emissions
below 1,078 tonnes and take the necessary steps to prevent any increase.
Emissions of benzene and dichloromethane are kept at low levels. We will continue to set targets for the two
substances and maintain low emissions levels.
■ VOC Emissions(Tonnes)
2,000

1,541
1,500

-65%

Target: 1,078 tonnes or less
1,000

718

761

751
529

542

2020

2021

500

0

2000

2017

2018

2019

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Major chemical substances subject to the PRTR Law for the JFE Engineering works in Tsurumi and Tsu include organic
solvents such as xylene used for painting products, manganese and its compounds generated during welding. We report
the release and transfer amounts of these substances in accordance with the law.
■ Release and Transfer Amounts of PRTR-registered Substances at JFE Engineering(Tonnes)■ Amount released into atmosphere and public waterways (non-consolidated)■ Amount transferred (non-consolidated)

147

150

121

116

107
85

100

50

28

28

29

26

30

2017

2018

2019

2020

2021

(FY)

Amountreleased

̶

58.4

45.4

36.7

39.3

(tonnes)Amounttransferred

̶

5.7

5.4

12.5

4.4

(tonnes)0Groupcompanies** 4 JFE Engineering consolidated subsidiaries in Japan.
For more on quantitative data related to PRTR, please refer to the following information.
Environmental Data (P.207)

PCB Waste Management at JFE
Polychlorinated biphenyl (PCB) waste is properly stored and managed at the JFE Group’s facilities. High concentration
PCB waste is treated in accordance with guidelines set by the Japan Environmental Storage & Safety Corporation(JESCO). The Yokohama Eco Clean Plant and Mizushima Eco-Works of J&T Recycling Corporation treat insulating oil
contaminated with slight amounts of PCB, helping to reduce pollutants both in and outside the JFE Group.

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Biodiversity
Basic Policy
The JFE Group recognizes biodiversity preservation as a key challenge and conducts assessments to minimize theecological impact from business activities. Our initiatives include cooperating with the community to monitor biodiversity
and carry out preservation activities around the steelworks, the key facilities for our business, and in surrounding
areas. The Group is also involved in developing iron and steelmaking slag products that can help restore the marine
environment. Furthermore, outside of our business operations, we launched a joint research program with the local
government and are conducting environment-related education for local communities.

Initiatives to Preserve Biodiversity
S

T JFE Steel

Environmental Impact Assessment
To minimize the ecological impact of our business activities on surrounding areas, we are monitoring biodiversity around
all of our business sites and planting trees while also preserving rare species in the compound. An environmental impact
assessment is conducted in accordance with laws and regulations before launching construction of a new manufacturingsite or business. We assess the biodiversity of the surrounding areas as well as our premises to fully understand thesituation and to implement the necessary measures for preserving the ecosystem.

Replanted a Rare Species of Orchid Found at a Planned Construction Site
Plant No. 1 in the JFE Ohgishima Thermal Power Plant, an aging facility, was renovated and resumed operations in 2019.
Before this construction, we conducted an environmental prediction and evaluation for the renovation, in accordancewith the Environmental Impact Assessment Act and Electricity Business Act. As a result, the Kugenuma orchid, a plantlisted in Japan’s Ministry of Environment’s fourth version of the Red List as an endangered species (Threatened IIVulnerable, VU), was discovered at the planned construction site for power generation facilities. To preserve the orchids,
we replanted them in a different location of the site that had a similar environment.

A Kugenuma orchid discovered at the planned construction
site for the JFE Ohgishima Thermal Power Plant

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Contributing to Biodiversity and the Creation of an Attractive Seaside Town by Utilizing SteelSlag Products (Partnership Agreement with Yokohama City)
While the seaside frontage of Yamashita Park in Yokohama City, Kanagawa Prefecture, maintains a healthy environment
in shallow areas, silty sediment (sludge that contains large amounts of organic matter) piles up at the ocean bed,causing water quality to significantly deteriorate in summer. As a result, the ocean’s function as a spawning ground or
environment for nurturing organisms has been lost.
In a joint research project with Yokohama City, JFE Steel is trying to restore the intrinsic ability of the waters, whichis to purify seawater with the help of marine organisms, by using steel slag products such as Marine Block™ that has
absorbed CO2 gas. We used these products to form shorelines as a base for the adhesion of organisms and contribute toimproving the marine environment. Immediately after the start of the experiment, we confirmed the increasing presenceof marine organisms such as starfish and sea cucumbers around the area over time. We estimated that filter-feeding
marine creatures such as bivalves and sea squirts filter about 8,400 kL of sea water daily, an amount that can fill a 25 m
swimming pool 17 times. We also calculated its effectiveness in reducing environmental impact compared to chemical
oxygen demand (COD)*¹ and sewage treatment plants, based on the amount of CO2 reduced.
We introduced these successful approaches a number of times through environmental education offered to theneighborhood residents and contributed to raising public awareness. This initiative to improve the marine environment
was named “A public-private partnership: joint research project in developing a rich ocean—demonstrating the use ofsteel slag products to improve marine environment and providing environmental education” and jointly awarded the2021 Environmental Award (Group-2) by the Japan Society of Civil Engineering*². In September 2022, the company was
selected as the winner of the Minister of Land, Infrastructure, Transport and Tourism Award for the 5th Eco Pro Awardhosted by Sustainable Management Promotion Organization.
*1 An indicator of the level of pollution of ocean areas as well as lakes and marshes, which shows the amount of oxygen(mg/l) consumed when pollutants present in water, such as organic matter, are oxidized.
*2 T he Japan Society of Civil Engineering Award is a prestigious award with a history of over 90 years. Environmental
Award (Group-2) is given to an innovative project that has contributed to any combination of environmental
preservation, improvement, and creation activities by developing or operating civil engineering technology orsystems.
The 5th Eco Pro Award (Japanese only) (https://sumpo.or.jp/seminar/awards/5th_eco-pro_award_results.html)

Colony of sea squirts on Frontier Rock™

The dotted line indicates the area in which slag
products are being used at Yokohama Bay(photo taken by Yokohama City)

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IndicesMarine Block™ covered by marine bivalves(Yokohama Bay area)

Advancing Biodiversity Verification of Steel Slag Products in Collaboration with Venture Businesses
JFE Steel has started exhibiting a water tank containing the coral-covered steel slag product Marine Block™. The tankis placed at the exhibition area at the reception of the head office as a permanent installation, offering visitors theopportunity to enjoy watching coral and tropical fish while learning about our initiative to preserve the ecosystem using
steel slag products. We also intend to conduct experiments inside the tank. Innoqua Inc.* is providing technical support
for the exhibition, which has been introduced through various media, including newspapers and television, as an exampleof business collaboration in the field of the environment.
*A venture company engaged in developing systems to manage and nurture organisms such as coral, microorganisms,
and fish using the technologies of IoT and AI combined with the know-how of aquarists.

Coral growing well on Marine Block™ inside the water tank

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Firefly Festival
JFE Steel has opened its Environment Pond at the Chita Works to the community for a firefly viewing festival every year
since 2014. Children at the event have the opportunity to release fireflies. The Company is nurturing an environment that
preserves the ecosystem together with the local community, through maintaining the watering holes and its surrounding
environment within the steelworks site and these firefly viewing events.

Releasing firefly larvae

Stream within the Chita Works site where fireflies are released

Firefly viewing party

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IndicesN JFE Engineering

Initiatives in Relation to Construction Works
For large-scale construction or construction work carried out near watersheds or mountainsides, customers and/or the
relevant authorities may conduct preliminary investigations depending on the importance of preserving the surrounding
environment. Various preservation conditions may then be required, including the protection of living creatures.
JFE Engineering respect the proposed conditions and thoughtfully consider biodiversity preservation by keeping
the impact of construction works at a minimum. For example, the company may propose a construction method thatminimizes the impact of noise or drainage pollution. For its steelworks, the status of biodiversity on its premises and insurrounding areas are checked, and necessary measures are taken to ensure preservation.

Biotope for the Children’s Learning Experience
JFE Engineering has conducted some renovation work at the JFE Dragonfly Path in the Tsurumi Works, and since 2009it has been inviting children in the community to learn about the ecosystem at a biotope, Dragonfly Pond, located along
this path.
In 2021, the JFE Dragonfly Path Fan Club, a group mainly composed of neighborhood residents, organized a research
event that involved capturing dragonflies in order to learn about their ecology and the local environment.
Furthermore, JFE Engineering has been a co-sponsor of the ”How Far Do Dragonflies Fly” since FY2020, with theaim of improving the quality of green spaces in the Keihin coastal areas and contributing to biodiversity. The forum brings
together companies, residents, governments, and experts and conducts research activities such as capturing dragonflies
that fly in 15 green spaces and biotopes scattered throughout the Keihin Coastal Area and inland areas, tagging them,releasing them, and tracking their movements. The JFE Dragonfly Path also serves as one of the research sites.

Endorsing and Participating in External Initiatives
As a member of the Keidanren Committee on Nature Conservation, the JFE Group endorses the Declaration of
Biodiversity by Keidanren and Action Policy, and actively engages in the conservation of nature and biodiversity.
After the Japan Business and Biodiversity Partnership, which the Group had taken part in, ended in December 2021,
the Group decided to participate in the Business for GBF Project, launched by the Ministry of the Environment and
Keidanren Committee on Nature Conservation. JFE Steel’s steel slag product was selected by the Ministry and Keidanren
and introduced as an example of an initiative that contributes to the conservation of biodiversity. Going forward, we will
deepen our understanding of and contribute to the Post-2020 Global Biodiversity Framework and other global initiatives
committed to preserving nature and biodiversity.
For further details on external initiatives, please refer to:
The Keidanren Biodiversity Conservation Initiative (http://www.keidanren-biodiversity.jp/logo_en.php)
Business for GBF Project, Ministry of the Environment (https://www.biodic.go.jp/biodiversity/private_participation/business/en/)

Products and Technologies (Preserving Biodiversity)
The JFE Group endorses and participates in the Challenge Zero initiative that is being jointly sponsored by Keidanren and
the Japanese government. And we are collaborating with Yokohama City on a project that uses steel slag to improve themarine environment while also developing various products aimed at conserving biodiversity.
For more on products and technologies related to environmental protection, please refer to the following information.
Development and Provision of Eco-friendly Processes and Products (P.100)
Challenge Zero (https://www.challenge-zero.jp/en/member/34)

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Environmental Communication
Basic Policy
The JFE Group gives utmost priority to communicating with all stakeholders, including in matters relating to
the environment. In addition to disclosing environmental information, the Group carries out extensive two-way
communication between the public and the business community by supporting and participating in environment-related
activities outside the Group.

Disclosing Environmental Data
The East Japan Works of JFE Steel discloses real time environmental data on local air and water quality. Visitors canreview this information in the first-floor lobby of the Visitor Center in the Chiba District and in the Amenity Hall and thefirst-floor lobby of the Keihin Building in the Keihin District.

Environmental data display in the Keihin District

Disclosure and Exchange of Information“ecobeing” Environmental Website
The JFE Group provides support to “ecobeing,” a web magazine operated by KLEE INC., which disseminates informationon the environment under the slogan “Let’s talk more with the Earth!” The website series “ecopeople” has featured
people from a variety of fields and also introduced JFE Group employees and initiatives.
The summer 2022 issue featured the JFE Steel-led “BETTER RECYCLE Shonan” project, which contributes toaddressing plastic pollution by developing new uses for steel sheets for can-making, as an example of the JFE Group’s
environmental and social contribution. The article introduced the initiative and the people involved, including employees
and participating parties. The site also notes a variety of other initiatives focused on environmental themes. Please takea look at it to find out more.
Please see the following for further details.
“ecobeing” (Japanese only) (https://www.ecobeing.net/)
BETTER RECYCLE Shonan (Japanese only) (https://www.ecobeing.net/ecopeople/2022_summer/04.html)

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IndicesSponsoring “Midori no Komichi” Environmental Diary
The JFE Group sponsors the “Midori no Komichi (Green Trail)” environmental diary project hosted by Green Cross Japan
with the hope that children will become more aware of environmental issues by keeping diaries of their activities andthoughts about ecology.
Please see the following for further details.
“Midori no Komichi” Environmental Diary (Japanese only) (https://www.midorinokomichi.net/)

Participating in Environmental Exhibitions: EcoPro2021 and Online Tokyo Bay Festival 2021
In December 2021, the JFE Group participated in one of the largest environmental exhibitions in Japan, EcoPro2021,
held at Tokyo Big Sight. Under the theme “For a Prosperous Global Future—the JFE Group collective efforts to address
climate change,” we displayed our initiatives for reducing CO2 emissions in the steel business as well as technologies,
mainly in engineering, that contribute to reducing CO2 emissions across society as a whole. Many people, predominantly
elementary and junior high school students, visited our booth to observe the Group’s climate change initiatives by
watching videos and using models to gain hands-on experience.
We also participated in the Online Tokyo Bay Festival 2021 in October, an event for expressing gratitude for themarine blessings of Tokyo Bay. We introduced our environmental contribution in the restoration of marine environmentand biodiversity through the use of steel slag products.

Many people came to the first on-site event after two years

Showing a video of steelmaking in the future that reduces CO2

Crowds of children around the JFE Group’s booth

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IndicesSociety: Executive Summary
The mission of the JFE Group is to establish its position as a company essential to society’s sustainable
development and to create safe, comfortable lives for people everywhere. Through our efforts to addresssocial issues, such as by promoting diversity and respect for human rights across the supply chain, we
intend to achieve the sustainable growth of the Group and become an entity that continues to develop
and provide safe, high-quality products and services based on our leading technologies.
The key measures of our Seventh Medium-term Business Plan include safety and health management, theactive participation of human resources, respect for human rights throughout the supply chain, and contribution
to local communities.
Ensuring the well-being and safety of our employees is the foundation of our continued existence as acompany, and we are committed to creating a safe work environment by adhering to the philosophy of safety
first. To achieve our top-priority goal of zero accidents, we are bolstering our capital investments and safety
education programs while also utilizing multifaceted occupational employee health and safety, including
monitoring and detection, that incorporates advanced IT solutions.
To promote diversity, we are committed to empowering women in the workplace. To this end, we haveset goals for increasing the ratio of female recruits as well as the number of female managers, and we areformulating Company-wide policies through discussions with management while implementing measures tocreate better workplace environments and systems for women.
We believe that respecting human rights is fundamental to our business activities and have been seeking
cooperation from all our stakeholders to respect and protect human rights in accordance with the JFE Group
Human Rights Basic Policy. In accordance with the United Nations Guiding Principles on Business and Human
Rights, we began conducting human rights due diligence in FY2021 and are promoting efforts to ensure respectfor human rights across our supply chain.
As we carry out our corporate activities globally, it is important for us to cooperate and collaborate withsociety, and by actively contributing to local communities, we hope to achieve sustainable growth for both ourbusinesses and society at large.

Targets and Results for Material Issues of Corporate Management Concerning Society (Materiality)
Material Issues of Corporate Management and KPIs (P.19)
Key Initiatives◦ To achieve our goal of zero workplace fatalities, particularly prioritize safety investments (P.148) (around 10 billion
yen per year Group-wide) to reduce risks by making workplaces inherently safe and also promote multifaceted
occupational employee health and safety, including monitoring and detection, by harnessing advanced IT
solutions (P.148).
◦ Proactively promote mental healthcare (P.152) in addition to maintaining and improving the mental and physicalhealth of employees and their families (P.150), such as by creating an environment that supports employee physicalhealth and medical checkups for their spouses.
◦ Promote a new workstyle (P.158) by introducing teleworking and a flexible working hour program.
◦ Implement a broad range of initiatives to support female employees, such as increased hiring(P.162), enhanced
childcare-support programs that significantly exceed statutory requirements, and training and education.
◦ Roll out human rights due diligence (P.168) and consider initiatives to identify and address human rights risks for
the JFE Holdings and major Group companies during FY2021. Starting in FY2022, the scope will expand to include
a human rights risk management system for suppliers and gradually introduce human rights due diligence to otherGroup companies.
◦ Actively promote DX(P.141), including the active introduction of IoT, AI, data science, etc., and the application of data
assets .
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and Awards

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PolicyGuideline
Indices

Responsibility to Customers (Provide Quality Products and Enhance
Customer Satisfaction)
Basic Policy
Based on its corporate philosophy of “contributing to society with the world’s most innovative technology,” the JFEGroup will continue to be a company that provides world-class products and services for a prosperous global future.

JFE Group Standards of Business Conduct
1 Provide quality products and services
Earn the trust and regard of customers by endeavoring to provide safe, high-quality products and services based onsuperior technology, and by fully respecting and protecting the privacy of personal and customer information. Also,
leverage our superior technologies for the sustainable growth of the Group and society.

Targets and Results
Under its Standards of Business Conduct to “provide quality products and services,” the JFE Group has identified“increasing efficiency and enhancing cost competitiveness in production and engineering” and “raising quality of
products and services and ensuring reliable supply” as two key management concerns and sets KPIs to manage
progress and promote relevant initiatives.
Material Issues of Corporate Management and KPIs (P.19)

JFE Group’s Quality Initiatives
The JFE Group manages quality by ensuring compliance with quality standards set by each operating company. All
manufacturing sites that require ISO 9001 certification for their quality management have been duly certified.

Strengthening Quality Assurance System

S

T JFE SteelTo serve customers by meeting their quality requirements and delivering products that boast the world’s highest quality,
JFE Steel has established a quality assurance system with advanced sensors for process monitoring, in addition to its
ongoing efforts to develop new products and advanced manufacturing technologies.
The company’s quality assurance system is being continually improved based on the Guidelines for Enhancing Quality
Assurance Systems, issued by the Japan Iron and Steel Foundation (JISF). In an effort to enhance reliability in its producttesting, the company has introduced high-precision equipment and is working to thoroughly eliminate human error anddata tampering by automating each process, from conducting tests that include providing instructions on testing andcollating specimens to the delivery of test results.
Moreover, JFE Steel responds to customer demand by operating its quality management system based on ISO
9001 and by holding assurance certifications required for steel products, including the JIS mark and approvals from shipclassification bodies as well as certification under the national standards of relevant foreign countries.

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IndicesN JFE Engineering

Products and services that JFE Engineering designs, procures, manufactures or constructs must comply with all required
rules and regulations, and quality must satisfy the needs of our customers. Under this corporate policy, the company
continually strives to improve the quality of its products and services.
For example, certified inspectors conduct inspections at each phase of a plant construction project, including thedesign, construction, and test-run phases. Immediately prior to final delivery to the customer, a witness inspection isconducted either in person or remotely so that the customer can be directly assured of its quality with their own eyes.
In addition, JFE Engineering has published quality-management manuals based on the specific characteristics of eachproduct and obtained ISO 9001 certification for each product category.
To further strengthen its quality assurance system, JFE Engineering uses an electronic document processing system
in its quality inspections to prevent omissions in inspection data and data tampering, and it electronically stores all
inspection data to reinforce traceability.

S

H JFE Shoji

Guided by its quality philosophy of maintaining customer trust by consistently delivering products that satisfy quality
requirements, JFE Shoji is constantly striving to enhance the level of its quality assurance for customer confidence
and satisfaction. Its processing centers in Japan and abroad are systematizing and automating operations to eliminate
human errors. Raising employee awareness is essential for preventing human error at every stage, from receiving
orders to processing, inspecting and shipping. The company continues to strengthen quality education for employees byintroducing case studies of non-conformance at other companies as well as at Group companies in Japan and abroad.
JFE Shoji also conducts a quality audit at all relevant Group companies in and outside of Japan to confirm the qualityof each processing center and to provide advice. Moreover, it follows up as necessary by continuously monitoring the
progress of improvements to maintain and enhance the level of quality assurance.

Ensuring Stable Supply
S

T JFE SteelJFE Steel is working to improve its manufacturing capabilities by actively utilizing digital technologies in its manufacturing
processes.
While strengthening its manufacturing base by introducing a cyber-physical system (CPS) for all manufacturing
processes, JFE Steel is also striving to improve quality and yield through the full-scale introduction of quality prediction
technology that uses integrated data from steelmaking to final processing, and to enhance reliability by increasing therate of automated testing and inspections.
Through these activities, it will stabilize facility operations as well as production and quality to continue providing highquality products to customers.

E

N JFE Engineering

JFE Engineering, designated as a special construction business operator under the Construction Business Act that
undertakes mechanical, civil engineering, and building construction work, assigns dedicated managing engineers
at construction sites to oversee the technical aspects of construction work. The smooth implementation of plant
construction projects depends on licensed specialists. The company is always striving to secure the necessary humanresources by encouraging employees to acquire qualifications by granting expenses and through mid-career hiring oflicensed personnel.

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H JFE Shoji

JFE Shoji is strengthening its entire supply chain from materials procurement to processing and distribution toconsistently meet customer demands. The company purchases iron ore and other main raw materials for steel fromaround the world and dispatches employees to such countries of origin as Australia, India, and Brazil to ensure a stablesupply to customers. In its steel distribution operations, JFE Shoji is making capital investments for the Group and raising
efficiency to realize an optimal system for sales and processing to meet customer demand while strengthening its quality
assurance system by periodically conducting quality audits at Group companies.

Responsible Export Practices
Each JFE operating company promotes international peace and security by working against the spread of weaponsof mass destruction and excess accumulation of conventional weapons. Specifically, the company carries out internal
inspections to confirm the final destinations, customers and applications of its exported products, and then ensuresthat export procedures are carried out properly. In addition, the Legal Affairs Department conducts internal briefings todisseminate knowledge of export-related laws and regulations, such as the Foreign Exchange and Foreign Trade Act.
Also, education on export security controls and related measures is implemented for the employees of Group companies
involved in trading.

Improving Customer SatisfactionS

T JFE Steel

Aggressive Advancement of DX
JFE Steel’s Digital Transformation (DX) strategy revolves around technological innovation based on the active introductionof IoT, AI and data science (DS) and the application of data assets. Compared to mills in other countries, we possess anenormous amount of know-how and data accumulated through many years of production operations. Our abundant data
assets are the source of our value creation.
We will harness the latest DS and AI technologies to make versatile use of such data in achieving innovative
improvements in productivity, enhancing quality and ensuring stable operations to raise our competitiveness.
■ Advancement of Digital Transformation (DX)JFE Steel’s
VisionBe a global steel supplier that always creates new value
and grows with customers

The 3 Pillars for Advancing DX

Achieve a competitive advantage through data-driven operations
Group-wide
PolicyJFE has a long history of production activity that has generated a treasure trove of data.
Our accumulated expertise in manufacturing high-grade steel, measures for aging
facilities and data on predictive management are sources of our competitive strength.
Advanced use of data is a strategic focus for JFE.

Maximize Value

1

Execute IT structural reforms
Upgrade systems at steelworks
Realize a flexible,change-tolerant IT structure

3

Synergistic
effects2

Promote business reforms andthe latest advancements in IT

Proactive use of data science and AI

Reinforce our IT risk management
Enhance security and standardized controls
Enhance the security environment for IT

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PolicyGuideline
IndicesPlease see the DX REPORT.
DX REPORT (https://www.jfe-holdings.co.jp/en/investor/library/dxreport/index.html)

Testing and Research Centers for Collaboration with Customers on Product Development
JFE Steel collaborates with customers in research and development. The Customers’ Solutions Lab (CSL) for auto
industry customers, the Steel Structural Materials Solutions Center (THiNK SMART) for infrastructure-related customers
and the JFE Welding Institute -Center for Integrity against Fatigue and Fracture (JWI-CIF2) are located in eastern Japan,
while the Customer Center Fukuyama (CCF), which develops materials and conducts applied technology research, isin western Japan. Using these facilities to strengthen early vendor involvement (EVI)*enables the company to quickly
identify customer needs and develop products based on cutting-edge evaluation techniques and innovative production
processes.
*C ustomer participation in product development is from an early stage to facilitate innovative new methods, functions,processes and evaluations for new steel materials.

Customers’ Solutions Lab (CSL)

Enhancing Our Response to Customer Needs
In an effort to strengthen the company’s total capabilities for better responding to customer needs, its sales departmentemphasizes sales education for sales personnel, from the headquarters and branch offices according to position, andfor regional employees of overseas offices. Specifically, it develops abilities in areas such as engaging in technicalconversations, picking up clues from customer relations and using them in product development, offering suggestions toimprove logistics and distribution, and analyzing financial indicators and costs. We also constantly strive to improve ourordering system to ensure that customer product specifications are accurately reflected in manufacturing.

Unified Customer Care
JFE Steel regularly conducts customer questionnaires and interviews to draft strategies for greater customer
satisfaction. Business strategies are shared among the sales divisions, the business planning functions and steelworks
to facilitate unified customer care and proposals that leverage the collective strengths of the JFE Group.

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Create and Continue to care for the Foundation of Life by Maximizing DX
JFE Engineering plans, designs, builds and operates the infrastructure that supports people’s lives and industry. Digitaltransformation (DX) is crucial for accelerating the pace of its work and for maintaining its position at the forefront of theengineering industry.
JFE Engineering will aggressively pursue DX beyond simply raising operational efficiency to fundamentally reform
its operational processes, add new functions to its products and services, and take on the challenge of developing new
businesses that utilize data, to realize a green society and enhance corporate value.
■ JFE Engineering’s DX strategy

Please see the DX REPORT.
DX REPORT (https://www.jfe-holdings.co.jp/en/investor/library/dxreport/index.html)

Engineering Company Assessments Based on Customer Evaluations
JFE Engineering uses customer surveys, interviews, and contractor performance evaluation forms to collect and assess
data on the company’s construction management, quality, advanced technologies and innovation. Each division analyzes
and applies the data for quality improvement, new product development and the overall strengthening of aftersales
service, to ultimately enhance customer satisfaction.

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H JFE Shoji

Meeting Customer Needs
To meet the needs of diversifying markets and the increasingly sophisticated requests from customers, JFE Shoji isplanning to introduce DX solutions that leverage the strengths of the JFE Shoji Group.
JFE Shoji Electronics Corporation, a subsidiary of JFE Shoji, and Osaka University have successfully conducteda demonstration experiment using a drone-mounted ultra-wideband radar system to measure the thickness of fireretardant coating material inside a chimney without requiring physical contact. The company will accelerate its
development for a wide range of applications across diverse fields, including industrial plants, construction, andinfrastructure, while focusing on aging buildings and facilities that have been difficult to inspect and maintain by humanoperators due to their elevated locations.
JFE Shoji is also exploring ways to provide innovative value to customers in the steel supply chain through the use of DX.

For more details related to customers, please refer to the following information.
Data on Training Related to Customer Care (P.225)

Promotion of Research and Development
S

T JFE Steel

Under the Seventh Medium-term Business Plan, JFE Steel is promoting research and development of innovativetechnologies for the steel manufacturing process, such as CO2 reduction technology, carbon-recycling blast furnaces and
CCU, and hydrogen-based ironmaking (direct reduction) . These technological developments leverage data science androbotics to closely align with the needs of customers and society at large.
In addition, JFE Steel is accelerating the introduction of new products and solutions for each field, with automobiles
including EVs and new energy as key areas of R&D.

E

N JFE Engineering

JFE Engineering is promoting research and development with a focus on five key areas: waste to resource, carbon
neutrality, composite utility services, core infrastructure, and DX as the technological foundation that supports these fourbusiness areas. The company is particularly focused on carbon neutrality, which includes manufacturing technology formonopile foundations for offshore wind turbines, CO2 capturing technology from the exhaust gas of waste incineration
plants, and methanol production technology from the captured CO2.

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Environment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyInternal Awards
The following technical and product developments were awarded in FY2021.
■ Internal Awards (FY2021)
Prize/Award

JFE Steel

JFE Engineering

Grand Prize/ExcellenceAward, JFE Steel
President’s Awards

Grand Prize, JFE
Engineering President’sAwards

Project

Recipient

Establishment of the world’s first
technology to improve output elasticity oflarge-scale blast furnaces through DX

Ironmaking
Department,
West Japan Works(Fukuyama Area), etc.

Initiatives to improve competitiveness iniron ore procurement

Raw Materials
Department I, etc.

Initiatives to expand sales of highstrength construction plates

Construction
Materials Engineering
Department, etc.

Improvement of manufacturing capability
for hot-rolled pickled steel through quality
improvement and significantly increase
capacity by utilizing CPS

Hot Rolling Department,
East Japan Works(Chiba Area), etc.

Sales expansion and quality improvementof automotive GI steel sheets

Cold Rolling Department,
West Japan Works(Kurashiki Area), etc.

Improvement of customer satisfaction
through the establishment of a QC/QA
system for automotive steel sheets

Products Design &Quality Control for Sheet& Strip Department,
West Japan Works(Fukuyama Area), etc.

Realization of a digital twin technology,
a key technology for supporting daily
life (an industry first) (optimization ofoperations and increase in profitability ofmethane fermentation plants)

Technology
Headquarters/
J Bio Food Recycle
Corporation

For more on external awards, please refer to the following information.
External Awards (P.241)

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Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

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ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
IndicesOccupational Health and Safety
Basic Policy
Ensuring for the well-being and safety of employees is a basic requirement of companies, particularly manufacturers, andis fundamental to the continued existence of any company. The JFE Group adheres to the philosophy of safety first, and,
together with its group companies and partner companies, works to consistently maintain safe working environments
and secure workplaces for all employees.
Furthermore, the JFE Group seeks to create safe, attractive environments where everyone can enjoy working
and aggressively promotes the establishment of environments in which personnel with diverse backgrounds candemonstrate their full potential. To that end, it has developed the JFE Group Health Declaration and collaborates with its
health insurance union and industrial health staff to strengthen employee health so that everyone can work with vigor.

JFE Group's Occupational Health and Safety
To achieve our goal of zero workplace fatalities under the Seventh Medium-term Business Plan, the JFE Groupwill particularly prioritize safety investments (around 10 billion yen per year Group-wide) to reduce risks by making
workplaces inherently safe. We will also promote multifaceted occupational employee health and safety, including
monitoring and detection, by harnessing advanced IT solutions.
These efforts to ensure safety at the operating companies are regularly reported to the Board of Directors, which
provides direction and supervision, and discussions on health and safety are held with the labor union through the
Occupational Health and Safety Committee.
Data related to Lost-Work Injuries, see:
Data related to Lost-Work Injuries and Accidents (P.225)

Occupational Health and Safety Targets and Results
As part of our commitment to safety first, the JFE Group promotes the development of a safety working environment.
To achieve our top-priority goal of zero accidents, as set forth in the Seventh Medium-term Business Plan, we will bolster
safety education and require stringent compliance with related rules while also focusing our efforts on eliminating
accidents at our facilities.
Identifying the prevention of workplace accidents as a key management issue, we have also set KPIs to manage
progress and promote relevant initiatives.
Material Issues of Corporate Management and KPIs (P.19)

JFE Group Initiatives
Training Programs for Occupational Health and Safety
The JFE Group organizes seminars for newly appointed managers and supervisors to provide information on the
Industrial Safety and Health Act and risk assessment regulations and on formulating work plans and policies for healthand safety management. In the construction operations department, we offer programs for local superintendents incharge of construction work (Overall Safety and Health Controller ) centered on the Industrial Safety and Health Act aswell as related regulations for subcontractors and the Construction Business Act (450 participants in 2021). We also
conduct new employee training and position-specific training on mental health (1,241 participants in 2021).

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Promotion System and Initiatives by Business Segment

S

T JFE SteelIn 2021, we are following two basic strategies: practicing autonomous safety activities while developing communication
between employees and business associates and taking action based on the Group’s Health Declaration. In accordancewith our goal of attaining the highest level of competence in the industry, management supervisors make a point to visit
work sites every day, while workers are striving to handle their tasks with discipline. We are also proactively applying IT,
such as by introducing safety monitoring systems* for safety management.
To date, we have implemented safety activities based on the advice from Du Pont. We are going to develop these
activities into an occupational health and safety management system in accordance with the ISO 45001 international
standard as we seek to establish a corporate culture of safety that is voluntary and independent. We are working toward
our goal of obtaining certification for all our construction and operating sites during FY2022.
<Certified Sites>
・Second half of FY2021: Chita Works, West Japan Works (Fukuyama Area)
・First half of FY2022: West Japan Works (Kurashiki Area), East Japan Works (Chiba Area)* A system that provides managers with information about, for example, carbon monoxideconcentration and oxygen
concentration in real time along with the location information of workers.
To mitigate or prevent disaster risks, JFE Steel conducts risk assessments at the planning stage for new facilities aswell as prior to their regular and non-regular repairs. We also constantly strive to make each facility safer so as to lower
the risk level for our workers.
We respond to industrial accidents by setting up a disaster investigation committee to determine the cause and offer
recommendations for improvement to the department in charge of implementing countermeasures. At the same time,
we inform the relevant departments and labor union through the Occupational Safety and Health Committee, while thedepartment in charge implements and reports on countermeasures, which is a mechanism designated by companywide rules. In the event of severe accidents, a response is deployed across the company, and a standard progress report
is submitted to Corporate Officer Council until countermeasures have been completed. This practice has also beenstandardized across the entire company.
In addition, we immediately report accidents to the Japan Iron and Steel Federation (JISF) under the guidelines forreporting industrial accidents. We file an update once we have determined the cause and decide on countermeasures.
We also promptly submit a report on safety, disaster prevention and environmental issues to the Ministry of Economy,
Trade and Industry, the Ministry of Health, Labor and Welfare, and the JISF.
■ Management Structure for Health and Safety
Executive officer meeting(report and deliberate)
Companywide safety meeting
Vice President in charge
Chiefs and vice chiefs
Information sharing and support

Safety and health office leader meeting(actions, information sharing)(examine horizontal application ofcountermeasures)
Steel works/
plant management structure
Chiefs and vice chiefs
Safety and health divisions
Manufacturing divisions
Partner companies

Safety and health section(headquarters)

Internal audit

Collaboration

ISO45001

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Group companies

Japan Iron and Steel Federation
External investigation organizations

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PolicyGuideline
IndicesN JFE Engineering

In addition to setting up governance organizations for health and safety at each operating site to comply with theIndustrial Safety and Health Act and in line with the type of work and number of employees, JFE Engineering has
established a governance structure for health and safety at each operational headquarters to facilitate and effectively
implement company-wide management at its construction and operating sites and manufacturing plants. JFE
Engineering strives to eliminate disasters at all suppliers and Group companies by establishing priority items to be sharedacross the company and to which all employees and all staff at suppliers adhere. It also endeavors to identify sources ofdanger as well as safety measures through risk assessments aligned with the particular characteristics of each individual
operational headquarters. Meanwhile, it promotes physical and mental health and the creation of comfortable working
environments as a means of ensuring the health of employees and bringing occupational health to an overall higher level.
In the event that an industrial accident occurs, occupational health and safety managers will meet to determine thecause and consider countermeasures that will be deployed across the company. Since 2016, the company has been
operating an occupational health and safety management system (ISO 45001 certified) for its construction activities
in Japan and overseas as well as its manufacturing operations at the Tsurumi and Tsu Works. As a new initiative, JFE
Engineering applies IT solutions promoting occupational health and safety, including monitoring and detection by multiple
approaches.

S

H JFE Shoji

JFE Shoji is implementing the following activities to eliminate unsafe operations that could lead to severe accidents forachieving zero severe accidents at its coil centers and other processing sites.
(1) Risk assessment involving on-site patrols by management supervisors for identifying unsafe operations or hazard
prediction by staff responsible for each operation(2) Comparative study of similar disaster cases and hazard experience training for improving the ability to recognize andavoid unsafe operations(3) Facility improvement for reducing risks, including installation of safety sensors(4) Operation training (slinging for cranes and other skills) and review of operational standards
Furthermore, for each of its Group companies, JFE Shoji assigns a safety manager to spearhead these efforts to raise
the level of health and safety activities. To ensure that all JFE Shoji Group companies operate under the same values,
safety managers meet every other month to share knowledge and information on occupational health and safety.
All lost-work injuries must be reported to the top management from the president of each Group company as part of
the JFE Shoji Group-wide effort to address safety management. Annual safety awards are also presented to encourage
employees to actively engage in health and safety activities. Through these initiatives, the company will raise the level ofsafety management within the JFE Shoji Group and continue to maintain safe working environments.

JFE Group’s Health and Productivity Management
JFE Group Health Declaration
1 J FE, recognizing that safety and health are fundamental for fulfilling its mission, creates workplaces in which
every employee can work with vigor.
2 J FE and its health insurance union work together to advance initiatives for maintaining and upgrading thephysical and mental health of employees and their families.
3 J FE gives top priority to safety and health and to creating a health culture in which each employee takes personal
responsibility.

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Health and Productivity Management Targets and Results
Identifying the health of employees and their families as an important management concern, the JFE Group has set KPIs to
manage progress and promote relevant initiatives. We are also working on health and productivity management by setting
company-wide goals for each of our operating companies to promote the health of our employees and their families.
■ Company-wide Targets for Each Operating Company
Items

FY2021 Results

FY2022 Targets

77.4%

Rate of complete exams: 100%

51.3%*

Rate of complete exams for dependents: 60%

54.3%*

Rate of providing specific health guidance:at least 60%

29.8%

Rate of obesity (BMI: 25 or higher): 25% or lessPromotion of non-smoking

27.3%

Smoking rate: 28% (1.5% annual reduction)

Measures related to sleep

35.6%

Sleep-related risk (based on responses in healthcheckup questionnaire): 35% or lower

Measures related topassive smoking

22.9%

Smoking rate: 21.9% or lower (1% annual
reduction)

Measures related toobesity

40.8%

Obesity rate (BMI: at least 25 or abdominal
circumference ≧85/≧90 for male/female): 38.3%
or lower

30.6%*

Rate of providing specific health guidance:at least 50.0%

54.1%*

Rate of complete exams for dependents: 60%

Preventive health measures

32.1%*

Rate of providing specific health guidance:at least 50%

Family health promotion

56.8%*

Rate of complete exams for dependents: 60%

Measures for non-smoking
and passive smoking

21.5%

Smoking rate: 23.9% (1% annual reduction)

Thorough implementationof physical examinations

JFE SteelPreventive health measures

JFE
Engineering

Collaborated healthpromotion

JFE Shoji* Preliminary figures* JFE Steel manages the rate of complete exams, obesity rate, and smoking rate on a calendar year basis.
Material Issues of Corporate Management and KPIs (P.19)

JFE Group Initiatives
Physical Health Initiatives• Ensure the implementation of regular physical examinations and strengthen cancer screenings.
• Prevent aggravation of lifestyle diseases by conducting metabolic syndrome checkups and offering health guidance.
• Utilize the health insurance union’s health promotion app, PepUp, to educate employees on physical exercise andother healthy habits.
• Promote non-smoking areas and maintain separate areas for smokers and non-smokers in buildings. Provide
guidance to help employees quit smoking through industrial physicians and public health nurses.
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ESG Data

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PolicyGuideline
Indices■ Changes in Smoking Rates (All Operating Companies)
（％）
40
35

30.7
27.7

30
25

26.2

20
0

2019

2020

2021

(FY)

Maintaining and Promoting the Health of Employees’ Families
The JFE Group works with the health insurance union to maintain and improve the health of employees and their families
by, for example, encouraging spouses to undergo health examinations. The rate of health examinations for dependents(age 40 or older) has been steadily increasing to 50.2% in FY2021, up 12.6 points from 37.6% in FY2014.
For employee health data, please refer to the following information.
Employee Health Data (P.227)
Mental Healthcare
The JFE Group conducts four basic initiatives to maintain the mental health of employees: “self-care” for workers who
strive to remain aware of stress and take preventive measures; “care by management supervisors” who provide advice
to subordinates; “care by industrial health staff” who support employees, managers and supervisors; and “care byhuman resources outside workplaces,” including specialist clinics and individuals.
JFE’s health insurance union also provides mental health counseling, including a 24-hour hotline for employees andtheir families (spouse and dependents).
Initiatives on Health Issues
We operate a health management system for effectively managing the health of all employees, including those on
overseas assignments and business trips and those studying abroad.
We particularly seek to ensure that employees working abroad can maintain a healthy lifestyle, along with theiraccompanying family members, by conducting health checkups and vaccinations before they move overseas. In aproactive effort to prevent infections, we also provide information on global health issues such as COVID-19, HIV,tuberculosis and malaria during assignment briefings. We will continue to monitor and appropriately respond to global
health issues.

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ESG Data

External
Evaluations
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PolicyGuideline
Indices

Promotion System and Initiatives by Business Segment

S

T JFE Steel

Establishment of the Health and Productivity Planning Management Promotion System
To drive initiatives regarding maintaining and improving the health of employees and their families, JFE Steel launchedthe Health and Productivity Management Promotion WG upon the establishment of its Group Health Declaration in 2016,
and it is monitoring the achievement of medium- to long-term goals.
■ Health and Productivity Planning Management Promotion System
JFE Holdings

JFE Steel

Health and Productivity PlanningManagement Promotion Committee(Chaired by an Executive Officer)

Health and Productivity Management
Promotion Subcommittee

Company-wide Industrial
Physicians Subcommittee•Health and Productivity
Management Promotion WG•Company-wide Industrial
Physicians Meeting

Industrial Health Staff
Subcommittee

Health Insurance Union

Health Staff
Subcommittee•Industrial Health Staff Meeting •Health Managers Meeting•Health Audit■ Health and Productivity Management Promotion WG

Members• Industrial physicians and public health nurses•M anager of Labor Management Office, Labor Management
HR Department, Organizational HR Department•O ffice of Safety and Health (health staff), Safety and Health
Department• Each region, works,
main office• Health Insurance Union• Directing Manager, Manager of Health Development Office• Evaluation of Health and Productivity Management (physical, mental and work environment)
Discussion
topics

Evaluation of indices and activities:• Company-wide activities• Reporting to the management teamFrequency

February, May, August, November (once a quarter)

Active Exercise
JFE Steel business sites offer the Active Exercise program, which the West Japan Works designed to help people
increase their physical strength and prevent injuries due to falling. The program’s effectiveness in preventing
occupational accidents and improving health has even attracted attention outside the company, so it is being actively
shared not only among Group companies but also with on-site suppliers and companies in a broad range of industries.

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IndicesN JFE Engineering

Engineering Activities for Boosting Health Based on Health Checkup Data
JFE Engineering is pursuing initiatives for improving health focused on five domains, including sleep, smoking andobesity issues extracted from past health checkup data, along with cancer and mental health.
In FY2020, we appointed a supervising industrial physician and reorganized the company-wide health and productivity
management promotion system while also providing support to Group companies.
■ Health and Productivity Management Promotion System
President
Management Strategy Committee
Management Committee

JFE Holdings
Health and Productivity Promotion Leader(director in charge of human resources)

JFE Health Insurance Union
Collaboration
Labor union

Human Resources Department
Health Management Center

Group companies
Supervising industrial physician
Industrial physicians

Public health nurses

Company-wide Industrial
Health Staff Meeting
Central Occupational Health and Safety Committee
Offices and branch offices Occupational Health Committee■ Initiatives Based on Past Health Checkup Data
Fiscal Year
Launched

Purpose

Initiatives

2018

Measures against cancer

Stomach endoscopy during regular health checkups

2019

Measures for improving
sleep habitsCompany-wide self-care seminars to practice napping and breathing
exercises

2020

Measures against obesity

Labor and management co-sponsored RIZAP seminars and workplace
exercises at home

Measures against
passive smoking

Complete ban on indoor smoking

Measures for improving
sleep habitsCompany-wide self-care seminars to practice sleeping and breathing
exercises

Providing moreindividualized guidance

Provision of more individualized guidance on sleep, obesity, smoking,
etc.

2021

2022

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Detecting Illnesses at an Early Stage, Maintaining and Promoting Health for Employees and their Families
Based on the belief that the health of employees and their families holds the key to the further development for thecompany, JFE Shoji is working to create workplace environments in which employees can work with vigor.
■ Health and Productivity Management Promotion System
President
Management Committee
CSR Promoting Conference
Health and Productivity Leader(director in charge of the Human Resource Department)

JFE Holdings
Branch Health Committees

Industrial physician
Labor union
representatives

Company-wide Occupational
Health Committee

Collaboration

Collaboration

Group companies

Supervising Industrial Physician

Exchangemeeting ofindustrial
physicians

JFE Health Insurance Union

NursesLabor union representatives

Staff in charge ofhealth management(human resources,
general administration)

Staff in charge of health management(human resources, general administration)■ Past Initiatives
Fiscal Year
Launched

Purpose

Initiatives

Helicobacter pylori tests conducted during regular
health checkups
Prevent cancer
New program for subsidizing examination fees forbreast cancer and uterine cancer

2018

Raise employee health awarenesse-learning program conducted on the importance ofregular health check-ups and heart and brain disease

2019

Prevent lung cancer and stroke
Measures related to passive
smoke (reduction in smoking rate)

New program for subsidizing smoking cessation clinic
fees

2020

Encouraging employees toexercise as a habit

Encouragement for participation in the Powering Up
Health Care program

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Response to the COVID-19 Pandemic
The JFE Group is addressing the COVID-19 pandemic through a variety of measures against infections from theperspectives of securing the health and safety of employees as well as avoiding business continuity risks. Each company
practices thorough health management, including the wearing of masks, washing and disinfecting hands and monitoring
body temperature. We also encourage teleworking as much as possible and promote off-peak commuting based on
flexible workstyles without setting core work hours. We have installed partitions in offices and conference rooms toensure physical distance, have been limiting the number of persons entering each room, and are also promoting online
meetings in addition to other measures for avoiding crowded conditions.
Nonetheless, the steelworks and waste incineration facilities of JFE Steel, JFE Engineering, and JFE Shoji must
continue their operations even under a state of emergency and are taking all possible measures to prevent infection.
We minimize the number of participants attending meetings required for safety and operational management bydividing them into groups while also taking care to avoid gaps in communication with regard to necessary information.
During these meetings, we seek to avoid crowding while providing adequate ventilation, limiting attendance to theabsolutely necessary number of personnel and maintaining sufficient physical distance between participants. We alsoadhere to industry guidelines and conduct thorough daily checks of employees’ physical conditions.
In the lounge areas, we place vinyl sheet partitions at the center of the table to avoid that people do face each otherwhile sitting. We also limit the number of employees coming to work by dividing them into three groups to stagger
commuting.
Furthermore, JFE Steel has prepared and thoroughly communicated to all employees a response guideline for each
workplace in the event of any suspected or confirmed case of COVID-19. To prevent the spread of infection in theworkplace, the company was also quick to establish and implement a company-paid voluntary PCR testing system forthose specified in accordance with the company’s standards as individuals who, during working hours, were in close
contact with other individuals who were infected.
To control infections and help reduce the local government’s burden of conducting vaccinations, we have been
actively cooperating with the workplace vaccination program. Approximately 47,000 employees were vaccinated at JFE
Holdings’ operating companies by the third round of inoculation at their workplaces.

On-site meetingGroup meeting

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IndicesLabor Standards (Recruit and Nurture Diverse Human Resources)
Basic Policy
The JFE Group recognizes the importance of bringing out the full potential and vitality of its employees by investing inhuman capital, to both ensure legal and regulatory compliance and safeguard the sustainable growth of the Group.
To address social issues, as set forth in our Seventh Medium-term Business Plan, and to achieve our growth strategies
by enhancing competitiveness, we are working to secure diverse human resources, foster human resources who serveas the backbone of our business, create workplace environments and systems for employees to fully demonstrate theirabilities with a sense of fulfillment, and realize new workstyles that are not restricted by time or location.

JFE Group’s Basic Policy on Human Resource Management
1 Respect Human Rights and Facilitate Fair Management of Human Resources
The Group manages human resources fairly by respecting the human rights of all employees and nurturing
employees who embrace the Group’s corporate values and standards of business conduct.
2 Foster a Corporate Culture that Nurtures People and Promotes Satisfying Workplaces
The Group facilitates interactive communication among employees to cultivate a corporate culture that nurtures
human resources and creates safe, attractive environments where everyone can enjoy working.
3 Diversify Human Resources
The Group ensures that diverse all people, including women, non-Japanese, the elderly and the disabled, candemonstrate their full potential.
4 Recruit and Steadily Nurture Excellent Human Resources
To survive in an increasingly complicated and diversified business environment, the Group steadily recruits diverse,
high-quality skilled human resources, ensures that they receive the skills and knowledge necessary to continue
strengthening the Group’s technological capabilities, and nurtures their global capabilities.

Posters displayed at each workplace

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Workstyle Reform
To ensure the sustainable development of the JFE Group, it is essential to fundamentally review past customs anddevelop workstyles that enable each employee to be highly productive in creating new value with pride and satisfactionin their work. Under the Seventh Medium-term Business Plan, we intend to continue building workplace environments
and internal systems that enable employees to fully demonstrate their abilities with a sense of security and safety.

Workstyle Reform Targets and Results
As defined in the JFE Group’s Basic Policy on Human Resource Management, the JFE Group is committed to creating
satisfying workplaces for employees and identifying the realization of satisfying workplaces as a key management issue.
We have set KPIs to manage progress and promote relevant initiatives.
Material Issues of Corporate Management and KPIs (P.19)

Promoting Satisfying Work Environments
The JFE Group complies with laws and regulations related to salary payments and sets salaries above the minimum
wage designated by country, region and industry sector to meet living wage requirements. In addition to meeting legal
requirements on the upper limits for overtime and other mandates, the Group establishes challenging and satisfying work
environments by providing employees with one of the top levels of employment conditions in the industry as well as
performance-based bonuses linked to company profits.
Furthermore, the Group offers generous welfare benefits, including dormitories and company housing in order toprovide a stable environment for our employees and encourage them to remain with the company for many years.

S

T JFE Steel

Promoting a New Workstyle
As JFE Steel embarks on the challenge of achieving the biggest transformations since its founding under the Seventh
Medium-term Business Plan, including a shift from quantity to quality, the company is accelerating its efforts to create anenvironment that offers employees the flexibility to choose the workstyle most productive for them and that brings out
the best of their abilities.
As society responded to the state of emergency declared under the COVID-19 pandemic, new lifestyles andworkstyles became widespread. This was also true at JFE Steel, where employment styles that combine working at
the office and at home have become applied, mainly at the head office and branches. Employee values on workstyles
have also significantly changed. Seizing this as an opportunity to move beyond its response to COVID-19, JFE Steel ispromoting its new workstyle to maximize employee productivity and output and to enhance engagement. In concreteterms, the company will promote teleworking by expanding its work-at-home systems; introduce a coreless flexible
working hour program; adopt a shared-desk policy at the head office; introduce chat and web conferencing tools androbotic process automation (RPA), a software program that facilitates the automation of work done on terminal devices;
promote paperless offices; eliminate the use of seals by applying workflow automation software. Through these efforts,
it will also promote a shift to a workstyle with higher added value and a transformation of its corporate culture.
In addition, JFE Steel introduced a cafeteria plan as an employee benefit program in FY2022 to meet the diversifying
needs of employees following a rise in the number of mid-career hires and other changes. The company seeks toenhance the work-life balance by encouraging employees to take paid leave by designating annual planned leave days
and offering a work-life-balance vacation program to support employees in taking vacations for childcare, nursing care,self-enlightenment, or participation in volunteer activities. In FY2022, it revised the work-life-balance vacation program tomake it available for infertility treatment as well.

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IndicesN JFE Engineering

Enhancing Productivity with New Workstyles
JFE Engineering is promoting “vacation-style reform” across the company. Employees are encouraged to take Fridays
off during the summer and consecutive days of paid leave following the completion of construction work. Out of 22 paid
leaves granted, 18 paid leave days on average (over 81% of the total) were taken by employees in FY2021. The company
intends to raise this number to 20 in FY2022.
As part of its workstyle reform, JFE Engineering has introduced a flexible working hour program for offices, in which
employees determine their own core work hours. Under the program, the company designates “no overtime days”
on which employees must leave the office on time and in principle prohibits overtime work after 8 pm to encourage
employees to more efficiently use time. Teleworking, which was introduced as a preventive measure against COVID-19
infections, was adopted as a permanent system from FY2021. Employees can work at home or at any of the roughly 400
shared offices nationwide, thereby supporting flexible workstyles.
In the area of construction, JFE Engineering is making greater use of IT at construction sites and expanding
operational support provided by the back office to fully adopt a five-day workweek.

S

H JFE Shoji

Initiatives to Support Various Workstyles to Realize a Work-life-balance
As a measure to realize a work-life balance, initiatives have been implemented to reduce work hours, such as designating
Wednesdays as the day to encourage everyone to leave on time, prohibit all work after 10 pm, and also designating days
when employees are encouraged to take paid leave.
To support more diverse workstyles, JFE Shoji changed its flexible working hour program in April 2016 by setting thecore worktime between 11 am to 2 pm, and by introducing work-at-home systems for employees pressed for time due
to childrearing or nursing duties.
The company also periodically designates “challenge days” to help all employees become aware of and practice a
healthier work-life balance, and it implements various initiatives to reform workstyles, such as requiring employees toleave work on time on designated days and having them declare the time they will leave the office on certain days while
also making sure they keep to it.
During the COVID-19 pandemic, JFE Shoji has been flexibly applying its system, which includes expanding eligibility
for working at home to all employees and temporarily adopting a flexible working hour program without core hours.
Looking beyond COVID-19, the company set up a project team to explore new workstyles that are even more efficientand flexible, and it will consider promoting paperless offices based on digitization and developing offices that meet theneeds of the new normal.

Operational Reforms
S

T JFE Steel

Promoting Operational Reforms that Leverage the Newest ICT
To reduce employee time spent on simple for repetitive tasks and free up more time for creative work, JFE Steel
implemented RPA, a software to facilitate the automation of human work done on terminal devices. As of FY2021, RPA
was deployed in over 450 types of operation, releasing over 60 thousand hours to be spent on other productive work.
JFE Steel is also expanding its RPA in-house development program, which began in the latter half of FY2020, acrossthe company, with more than 120 people having completed the academy for development tools. In addition to low-code
development tools, the company is promoting in-house development using workflow systems, to improve operational
efficiency as well as promote workstyle reforms, such as eliminating the use of stamps and shifting to a paperlesssystem. The time saved from these operational reforms will be used toward enhancing customer service.
To promote data-driven operational reform, the company will also rollout a new BI tool company-wide to speed up
decision-making by visualizing and sharing data, thereby enhancing corporate competitiveness.
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Smart-Work Project
JFE Engineering has been steadfastly developing workstyle reform, spearheaded by the Office of Smart-Work Promotion
set up in FY2018.
Prior to turning remote work into a permanent system starting in April 2021, the company introduced an electronic
seal system for all employees to eliminate the need to come into the office to apply the seal. As a result, more than
10,000 documents were digitized each month, reducing paper use by 50%. In addition, RPA, used to automate 242 tasks
as of FY2021, automatic note-taking tools for remote meetings, and automatic translation tools increasingly being usedby overseas divisions, have also contributed to raising operational efficiency.
By introducing various systems, measures and tools to boost efficiency, JFE Engineering aims to achieve both worklife-balance and improved productivity while maximizing overall output.

S

H JFE Shoji

J-SLIM Activities
JFE Shoji will continue to drive its J-SLIM activities, which is an operational reform aimed at increasing work efficiency
and performance. At the 2021 J-SLIM presentation, 24 teams from JFE Shoji and domestic and overseas groupcompanies presented their J-SLIM activities online, which was viewed by a total of 3,200 people across the group.
These activities included reviewing meeting operations and document management, reducing work hours by introducing
the latest IT tools including RPA, and improving the accuracy and efficiency of office work by utilizing data and EXCEL
functions. JFE Shoji is promoting the sharing and horizontal deployment of these activities that lead to improved
productivity. The company will continue to foster a corporate culture that can flexibly adapt to the changing times andconstantly evolve free of preconceived notions.

Invigorating Workplaces through Small Group ActivitiesS

T JFE SteelJFE Steel has approximately 1,500 small groups that carry out J1 Activities* that have yielded various results in the
key areas of quality and work improvement. In addition, the JFE Family Result Reporting Conference, which includes
participation from Group companies, is held twice a year, and groups that excelled in the competition are dispatched to
QC Conventions and affiliated companies in Japan and overseas to strengthen the J1 Activities.
*Designed to turn JFE into an excellent company and propel it to the number one position in its industry (called JE1
Activities at JFE Engineering and J1 Activities at JFE Steel and JFE Shoji).

E

N JFE Engineering

JFE Engineering has about 220 teams and 1,900 employees, including those of group companies worldwide, involved in
JE1 Activities. The results of these activities are showcased at a company-wide competition held at the end of the fiscal
year. Activities focused on topics such as quality, efficiency, safety or costs contribute significantly to workplace vitality
and corporate performance.

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H JFE Shoji

JFE Shoji has been conducting J1 Activities in production divisions of its group companies in Japan as a means ofimproving their problem-solving skills in areas such as safety, quality, cost, operations and delivery target. The company
holds annual competitions in which about 20 teams report their activity results and awards are given to the highest
achieving teams. The company will continue to promote J1 Activities to improve workplace vitality and improve problemsolving skills.

Diversity and Inclusion
Diversity and Inclusion Targets and Results
As defined in the JFE Group’s Basic Policy on Human Resource Management, the JFE Group is committed to diversifying
human resources, recruiting and steadily nurturing excellent human resources, and identifying diversity and inclusion as a
key management issue, we have set KPIs for the ratio of female employees, ratio of female managers, and ratio of male
employees taking childcare leave to manage progress and promote relevant initiatives. In FY2022, we have set a new KPI
for the ratio of female managers, which is to increase the percentage of women in managerial positions to at least 10%
by 2030 (reaching at least 20% in administrative and sales divisions), and we are actively promoting the appointment of
women to these positions.
Material Issues of Corporate Management and KPIs (P.19)

Structure for Promoting Diversity
To ensure the consistent promotion of diversity, each operating company has a Diversity Promotion Section to organize
educational activities, such as rank-based training and women’s exchange meetings, and to share and implement bestpractices across the Group.

Workforce Diversity
By designating workforce diversity as a key business objective and to address the ever-evolving business environment,
the JFE Group is promoting efforts under the Seventh Medium-term Business Plan to maximize the potential of
employees regardless of gender, nationality, creed or lifestyle.
Given the growing need in recent years to ensure diversity among managerial personnel, it is becoming increasingly
important to secure diverse and excellent human resources, including women, foreign nationals, and mid-career recruits.

Key Diversity Initiatives at Each Operating Company

S

T JFE SteelJFE Steel is working to cultivate a culture in which diverse human resources can demonstrate their full potential byproviding diversity training for management and managers and actively conducting public relations. Since FY2021, thecompany has been deepening discussions on diversity issues mainly at the management level and setting targets forthe entire company and each division to achieve. To promote the advancement of women, the company provides career
support and management seminars for female employees and their supervisors toward increasing the number of female
employees appointed to management positions. For female employees working in workplaces that operate in shifts, it
has also established a program for helping them maintain their work-life balance by discussing their career development
through interviews with their supervisor and the personnel division. Through the program, JFE Steel is providing thebest possible support for female employees so they can continue working after pregnancy, childbirth, or other major
life events. As part of efforts to encourage male employees to be engaged in parenting, the company held briefings for
department heads to ensure that all of those whose spouses have given birth take childcare leave or childcare-related
leave.

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JFE Engineering engages in activities for reforming its corporate mindset, including diversity seminars for managers,
e-learning programs for all employees and the annual Diversity Month. In FY2022, as part of the CSR promotion
system, the Diversity Committee, comprising the management team, was established to deploy company-wide
policies and formulate and implement plans for each organization. For female employees, the company organizes
leadership seminars and opportunities for exchange. It also accepts around 80 locally-hired employees of overseas
Group companies at any given time to provide on-the-job training. The company also strives to create an environment inwhich workers can spend their time in Japan with a sense of security, by launching a helpdesk on daily matters for nonJapanese nationals, offering information through a portal site and providing Japanese language classes. Every year inJapan, JFE Engineering actively hires around 70 mid-career recruits possessing diverse characteristics and values, suchas those with experience in other industries.
* In FY2021, only about 30 employees were accepted due to the impact of COVID-19, but this number is expected togradually increase.

S

H JFE Shoji

As part of its efforts to raise awareness within the company, JFE Shoji regularly holds diversity seminars for the
management team, diversity management seminars targeting managers, including managers at Group companies, ande-learning for all employees. In FY2022, the Diversity Promotion Committee, comprising the management team, wasestablished to share the diversity promotion policies and ensure the implementation of company-wide targets, thereby
strengthening top-down initiatives. The company is also strengthening its efforts to support the career developmentof female employees by providing a new career training program for mid-career female employees together with theirsupervisors starting this fiscal year while also actively dispatching female employees to external training programs.
To ensure that women can continue working after childbirth or periods of childcare or nursing care, the company organizes
information exchange meetings for employees on maternity leave and follow-up seminars after they return to work.
It also fosters global human resources and promotes exchange through measures such as management seminars inJapan for national staff at overseas bases for promoting them to leadership posts, creating an environment in which
diverse human resources can pursue their careers with vigor.

Supporting Women in Professional Development
Formulation of an Action plan for Promoting Women’s Professional Development
The Act on Promotion of Women’s Participation and Advancement in the Workplace went into effect on April 1, 2016.
The JFE Group has designated the promotion of workforce diversity as a key management strategy for maximizing
the potential of every employee and has been actively hiring and supporting the advancement of female employees.
In our latest move, we formulated the following action plan in accordance with the Act to establish a work environmentthat encourages female employees to demonstrate their abilities and create satisfying workplaces for all employees.
Action Plan Period
Period of five years starting on April 1, 2021 and ending on March 31, 2026
Target of the Action Plan
We have set a common goal for the JFE Group to increase the ratio of women in managerial positions above the section
manager level to at least 10% by 2030 (of which at least 20% are in administration and the sales divisions). Under thisgoal, we will actively promote the appointment of women to managerial positions.

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Action Plan for Each Operation Company
JFE Steel (Japanese Only) (https://www.jfe-holdings.co.jp/csr/pdf/female_plan_st.pdf)
JFE Engineering (Japanese Only) (https://www.jfe-holdings.co.jp/csr/pdf/female_plan_eng.pdf)
JFE Shoji (Japanese Only) (https://www.jfe-holdings.co.jp/csr/pdf/female_plan_shoji.pdf)
Initiatives for Supporting Women in Professional Development
The JFE Group is implementing a broad range of initiatives to support female employees, such as increased hiring,enhanced childcare-support programs that significantly exceed statutory requirements, and training and education.
Furthermore, the initiatives and issues faced by each company are shared among operating companies. They are also
discussed at such meetings as the Board of Directors in an ongoing effort to promote the initiatives.
In recognition of its efforts to encourage the empowerment of women, JFE Holdings was selected three times as aNadeshiko Brand* since FY2013.
*The Nadeshiko Brand represents a joint initiative by the Ministry of Economy, Trade and Industry and the Tokyo Stock
Exchange. It recognizes exemplary efforts by companies to encourage women to play active roles and continue working
long-term. A single company is selected for each business sector represented in the TSE first section.
Company Policy Explained by the President
The president of JFE Holdings has endorsed the Declaration on Action that was introduced by a group of male leaders inJapan who intend to create “A Society in which Women Shine” with the support of the government’s Gender Equality
Bureau Cabinet Office. He also announced additional measures to support the professional development of female
personnel, thereby communicating both inside and outside the company that women can play active roles at JFE.
For more information, see:
Declaration on Action by a Group of Male Leaders Who Will Create a Society in Which Women Shine(https://www.gender.go.jp/policy/sokushin/male_leaders/pdf/declaration_body_en.pdf)

Employment of People with Disabilities
The JFE Group has three special subsidiaries, JFE Apple East Corporation, JFE Apple West Corporation and Mie Data
Craft Co., Ltd., to employ people with disabilities and create enjoyable workplace environments for them.
For more on the employment of people with disabilities, see:
Data on Employment of People with Disabilities (P.229)

Programs for Employees Over 60 Years Old
To ensure that the skills and experience of veteran employees are handed down, JFE Group companies have either raised
the mandatory retirement age to 65 or introduced a system that enables all employees to work until the age of 65.
As of April 2022, 673 elderly employees (about 3.5% of the total) are working at JFE Steel, JFE Engineering, and JFE
Shoji.

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IndicesT JFE SteelJFE Steel raised its mandatory retirement age to 65 in April 2021 to increase the motivation of veteran employees in theirwork, pass on their techniques and skills, and steadily promote human resource development. While we used to rehire
anyone who wished to continue working after reaching the age of 60, we recently established a personnel and wage
system to cover all employees up to the age of 65.

E

N JFE Engineering

JFE Engineering created the Skilled Partner Program to rehire employees who want to continue working after mandatory
retirement at age 60. The company will extend its mandatory retirement age to 65 in FY2023 to encourage veteranemployees to make an even greater contribution.

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H JFE Shoji

JFE Shoji is mindful of creating an environment that allows veteran employees over 60 to continue working with highmotivation, while also seeking to realize flexible workstyles and develop a healthy working environment. Employees may
choose from a variety of working arrangements, including full-time employment, shortened workweeks, and shortened
daily work hours in accordance with their lifestyles.

Respect for Sexual Minorities (LGBTQ)The JFE Group is creating a workplace that does not discriminate on the basis of gender, sexual orientation or gender
identity by conducting internal human rights seminars and position-specific curriculums. LGBTQ concerns have also
been incorporated into the Group’s compliance guidebook, which is distributed to all employees and used as a common
textbook during the annual Compliance Month of October toward nurturing greater understanding. JFE Steel has revised
its benefit program to extend coverage to same-sex or de facto partners from FY2022. At JFE Engineering, e-learning
programs are offered to all employees, and seminars are held mainly for personnel in human resources.

Securing Diverse Human Resources

Recruitment Results for University Graduates (FY2022) and Mid-career Recruits (FY2021)
526 people (three operating companies, excluding their subsidiaries)◦ Women in positions with prospects for promotion: 19% (63 out of 333)
Of the above, those in white-collar positions: 35% (45 out of 127)
◦ Mid-career and year-round recruits: 23% (119 out of 526)
Of the above, recruits in positions with prospects for promotion: 32% (105 out of 333)
Of the above, recruits in on-site positions at steelworks: 7% (14 out of 193)

To ensure sustainable growth, the JFE Group steadfastly recruits from a diverse pool of applicants and actively hires
women, foreign nationals and mid-career personnel, and recruits year-round.
The Group also operates overseas businesses across a broad range, and its overseas sites hire employees locally,
thereby contributing to communities with employment opportunities.

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Indices■ Recruitment Results (Three Operating Companies, Excluding their Subsidiaries) for University Graduates(FY2022) and Mid-career Recruits (FY2021)
Career-track Positions
On-site and Clerical Positions

Category
White-collar

Technical

Total

Total

Male

82

188

270

165

435

Female

45

18

63

28

91

Total

127

206

333

193

526

Ratio of women (%)

35

9

19

15

17

For more on employees, refer to the following data.
Social Data (P.228)

Human Resource Development
The JFE Group collectively carries out human resource development with an emphasis on nurturing the capacities ofeach employee and cultivating global human resources to support the expansion of our overseas business. We intend tocontinue making a Group-wide effort under the Seventh Medium-term Business Plan.

Human Resources Development Targets and Results
As defined in the JFE Group’s Basic Policy on Human Resource Management, the JFE Group is committed to fosteringa corporate culture that nurtures people and acknowledging the promotion of human resources development as a key
management issue, and we have set KPIs to manage progress and promote relevant initiatives.
Material Issues of Corporate Management and KPIs (P.19)

S

T JFE Steel

Utilizing Skill Data for Training Programs
The generational replacement of employees has peaked, raising the importance of boosting the skills of younger
employees. Accordingly, the company applies an evaluation system at manufacturing sites to quantitatively analyze theskill level of each employee and then uses the results in its training system. It also promotes the use of IT such as amixed reality technology-based training simulator for enhancing the quality of training.
Furthermore, the Group is pursuing initiatives to respond to DX technologies, which are rapidly being introduced andapplied in industry, including improving internal training programs for data scientist personnel.

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Engineering Training Programs to Support Independent Learning
To enhance the knowledge of underlying technologies that represent a technological foundation for an engineering
enterprise, the company’s leading expert lectures over 30 different courses on basic technology for younger employees
and mid-career hires.
A web-based learning curriculum launched in FY2018 offers employees opportunities to acquire business skills thatcater to each job responsibility, including accounting and marketing.
Through these training programs, JFE Engineering provides younger employees with opportunities to grow throughindependent and continuous learning and strengthens the leadership capabilities of managers to transform corporate
management.

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H JFE Shoji

Training and Measures to Maximize Employee Potential
To expand the trading business in Japan and overseas, JFE Shoji organizes a training program that enables personnel withdiverse backgrounds to achieve growth in their respective work sites and business situations. The program includes acourse aimed at developing the basic skills required of trading company personnel, such as those for negotiation, financeand strategic thinking, trading business, and another course for newly hired mid-career employees. In addition, it also
provides an overseas trainee program that enables employees to experience business operations at overseas Group
companies and invites regional employees hired at overseas offices that require a high level of competency to Japanfor training in order to increase their skills and motivation. JFE Shoji intends to raise the level of competence across theentire Group through these programs targeting a broad range of employees.

Developing Global Personnel
In addition to hiring and developing non-Japanese for career-track positions in Japan and local personnel overseas, theJFE Group is enhancing programs for Japanese employees to gain overseas study and training. The Company is also
developing younger employees through practical experience by dispatching them on overseas assignments.
■ Global Personnel Development Programs
JFE Steel

JFE Engineering

JFE Shoji

Study abroad

〇

〇

〇

Short-term overseas language training

〇

—

〇

Overseas assignments for younger employees

〇

〇

〇

Dispatching engineers to international conferences

〇

—

—

Training for local personnel at overseas sites

〇

〇

〇

Practical training in Japan for non-Japanese personnel
at overseas sites

—

〇

〇

Internship for international students

〇

〇

—

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IndicesDeveloping Dynamic Working Environments
The JFE Group is developing dynamic working environments through sincere discussions with labor unions andconducting employee satisfaction surveys.
We also seek to reflect the results of the corporate ethics survey, conducted every three years, to create employeefriendly working environments.

S

T JFE Steel

Recognizing that labor-management cooperation is essential for the company to fully tackle its business challenges, JFE
Steel has established a strong relationship with its labor union based on understanding and trust. The company convenes
its Labor-Management Business Discussion Committee four times a year to bring the president and other executives
together with labor representatives for the purpose of exchanging ideas on business challenges. The two sides also
share views on working conditions and workplaces and hold joint consultations whenever the labor system is revised.

E

N JFE Engineering

JFE Engineering strives to ensure sound labor-management relations. In addition to Central Labor-management Committees,
which are regularly convened for the company’s president and other executives to share views with representatives of its
labor union, a labor-management committee on work-life-balance helps to maintain friendly working environments.

S

H JFE Shoji

JFE Shoji management and labor have jointly declared they will achieve continuous growth for the company, enhancing
the lives of employees and realizing an affluent society based on mutual trust and understanding. The company maintains
a sound relationship between management and labor. Semiannual Management Committee meetings are held asopportunities for the company president and other executives to regularly exchange opinions and share management
information with representatives of the labor union.

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Human Rights
Basic Policy
The JFE Group endorses and abides by the Universal Declaration of Human Rights, the International Covenant on Human
Rights and other international conventions as well as the International Labour Organization’s Declaration on Fundamental
Principles and Rights at Work.
The JFE Group views respect for human rights as both a corporate social responsibility and a foundation of its
business. Our determination to not engage in discrimination in our business activities is clearly expressed in ourStandards of Business Conduct, which we have upheld throughout our actions. In FY2018, the JFE Group Human Rights
Basic Policy was established to further clarify the approach to our initiatives. While we require Group companies and theirofficers and employees to adhere to the policy, we also seek cooperation from all stakeholders including our supply chain
to respect and protect human rights.
In addition to organizing seminars by external experts on business and human rights, starting in FY2021 we havebeen conducting human rights due diligence in accordance with the United Nations Guiding Principles on
Business and Human Rights. We will continue to promote initiatives Group-wide for realizing a society in which humanrights are respected and protected.

Human Rights Basic Policy
1 Respect for basic human rights
We recognize the diverse values of individuals in all aspects of corporate activities and respect and defend all humanrights in accordance with international norms.
2 Abolition of discrimination
We respect each person as an individual in corporate activities and shall not discriminate in any way with regard torace, nationality, ethnicity, creed, religion, social status, family origin, age, gender, sexual orientation, gender identity,or presence or absence of any disability.
3 Prohibition of harassment
We shall not engage in harassment with respect to gender, position or in any other way, or by any behavior thatdemeans degrades the dignity of others or causes mental discomfort.
4 Respect for fundamental labor rights
We value healthy labor-management relations and work to solve problems through constant dialogue between
management and employees in good faith and in accordance with international norms, taking into account the laws
and labor practices of each country. In addition, we always strive to upgrade worker safety and work environmentsthat are rewarding for all employees.
5 Prohibition of child labor and forced labor
We shall not engage in any way in child labor or forced labor in any country or region.
6 Seek the cooperation to all stakeholders
Respecting and defending human rights is not only mandatory of all officers and employees of the JFE Group, we
also seek the cooperation of our supply chain members and all other stakeholders to observe these principles andpractices.

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Recognizing that contributing to the realization of a society in which the human rights of each and every individual arerespected and protected is not only a corporate social responsibility but also a foundational principle of management, theJFE Group upholds respect for human rights across the supply chain as a key management issue and promotes its efforts
by setting KPIs.
Material Issues of Corporate Management and KPIs (P.19)

Promoting Human Rights
In order to steadily work on human rights initiatives, we established the JFE Group Human Rights Promotion Council,
chaired by the corporate officer of JFE Holdings under the JFE Group Compliance Committee, chaired by the presidentof JFE Holdings. This framework allows us to define Group-wide policies and share information with departments
responsible for human rights issues that have been set up at each operating company.
In addressing all human rights risks, we emphasize communicating with stakeholders through such initiatives assetting up a Corporate Ethics Hotline at each operating company and dedicated consultation desks on harassment issues
at major offices, all of which accept anonymous reporting and consultation. Furthermore, we receive inquiries, including
anonymous requests concerning human rights issues and compliance from external stakeholders via the contact formon our corporate website. The operational status of these help desks and cases of harassment as well as other humanrights violations are regularly reported to the JFE Group CSR Council and Board of Directors, which provide direction andsupervision.
■ Governance Structure for Human Rights Awareness Promotion
Board of Directors
Direction and supervision
Report regularly

JFE Group CSR Council Chairperson: president of JFE Holdings
Report on cases of harassment as well as other human rights violations
JFE Group Compliance Committee(chairperson: president of JFE Holdings)

JFE Group Human Rights Promotion Committee(chairperson: executive officer in charge ofGeneral Administration, JFE Holdings)

JFE Holdings
JFE Steel
JFE Engineering
JFE Shoji(departments responsible for human rights
management at each operating company)

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Human Rights Due Diligence
The JFE Group is committed to human rights due diligence based on the United Nations Guiding Principles on Businessand Human Rights.
In FY2021, the year when human rights due diligence was initiated, we identified human rights risks and examinedcorrective measures to be taken at the JFE Holdings and other major Group companies, including JFE Steel, JFE
Engineering, and JFE Shoji.
From FY2022 onward, we will continue striving to realize respect for human rights throughout the supply chain bypromoting corrective measures to reduce identified risks while improving the management system for human rights risks
at suppliers and gradually introducing the human rights due diligence process to Group companies.
■ Human Rights Due Diligence Process
Board of Directors
Report on the status ofinitiatives on human rights risk

Direction and supervision

JFE Group CSR Council
Implement human rights due diligence①Identify target of management②Identify risks and determine
the current status of the system⑤Disclose to stakeholders
Disclosure

Evaluate risks
Human
RightsMitigation
measures

Identify
impacts④Formulate and implement
countermeasures and plans③Identify and determine impacts

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FY2021 Initiatives❶ Identify human rights risks

We created a long list of human rights referring to international norms and guidelines. Then, taking into account humanrights risks specific to the industry, regional characteristics, and other relevant factors, we identified human rights risks
related to the Group’s supply chain by stakeholder, such as employees and suppliers, including women, children, andlocal residents.
International norms and guidelines referenced:
United Nations Guiding Principles on Business and Human Rights, International Bill of Human Rights, ILO’s Core Labor
Standards, OECD Guidelines for Multinational Enterprises, Ten Principles of the UN Global Compact, GRI Standards, FLA
Workplace Code of Conduct, and CHRB Key Industry Risks
15 human rights issues to consider:
Compliance with standards andguidelines for respect for human rights
demanded by international norms

Avoiding complicity in human rights
abuses, compliance, social security, andfair competition

Prohibition of discriminationand equality before the law

Access to remedy

Thorough supplier management

Harassment and abuse

Women’s rights

Child labor

Forced labor

Occupational health and safety

Working hours

Appropriate working
environment

Wages that guarantee a decent
standard of living

Freedom of association and the right tocollective bargaining

Rights of indigenous andlocal people❷ Investigate current status

We ascertained the current status of the risk management system and activities by examining our disclosure of policies
on child labor, forced labor and various other human rights risks, such as the JFE Group Human Rights Basic Policy andthe Basic Procurement Policy of each company, our whistleblowing system for ensuring access to remedial action, ourinitiatives on compliance including prevention of corruption, and other initiatives, systems and rules concerning internaland external human rights issues.

❸ Assess risks and determine impacts

We assessed the risks of the identified human rights issues to be considered, based on the severity of impact andlikelihood of occurrence, and determined the status of our initiatives on respecting human rights through written surveys
and interviews in order to better identify that status in our future endeavors. During the risk assessment, we also
determined the adverse impacts of human rights risks on the JFE Group and its stakeholders.
Human rights risks identified as particularly high risk and requiring action:◦ Occupational health and safety◦ Harassment and abuse◦ Thorough supplier management (establishment of a human rights risk management system for the entire supply chain)

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RightsRisks■ Map of Key HumanMapof KeyHuman Rights Risks
Large

Occupational health and safety

Harassment and abuse
Severity of impact

Thorough suppliermanagement

Rights of indigenous
and local people

Working hours

Avoiding complicity in human rights abuses,
compliance, social security, and fair competition
Freedom of association and the rightto collective bargaining

Small
Low

Likelihood of occurrenceHigh❹ Consider mitigation measures for identified human rights risks

We examined mitigation measures for the identified human rights risks, including response and preventive and corrective
measures, and promotion systems. For occupational health and safety and harassment, we will continue to strengthen
our existing efforts to eliminate accidents and harassment using KPIs. As for the human rights risk management system
for suppliers as a whole, we are considering establishing a human rights risk management system for suppliers startingin FY2022 for the creation of a sustainable and resilient supply chain.

Future Initiatives
We will continue to implement initiatives to correct and mitigate identified human rights risks and take the following
actions to expand our human rights due diligence.

❶ Inspect and revise the JFE Group Human Rights Basic Policy

The JFE Group Human Rights Basic Policy was established in FY2018 to clearly express the Group’s stance on respectfor human rights. We will inspect and as necessary revise the policy based on the new human rights issues identified in
FY2021 that the Group should take into consideration.

❷ Establish human rights risk management system for suppliers

Based on the revised JFE Group Human Rights Basic Policy, JFE Steel, JFE Engineering, and JFE Shoji will inspect andrevise their respective basic policies and guidelines for procurement. In addition, we will request suppliers to comply withthe revised basic policies and guidelines, and we will promote initiatives to build a human rights risk management system
for them.

❸ Introduce a human rights due diligence process for major domestic and overseas Group companies

After determining the implementation targets, priorities, and methods of conducting investigations, we will introduce
a human rights due diligence process in stages, conduct fact-finding surveys in writing, and take necessary corrective
actions.
Continuing these initiatives will build a system to reduce human rights risks throughout the entire supply chain. We
will also assess and improve our initiatives for respect for human rights under the supervision of the JFE Group CSR
Council and Board of Directors to increase their effectiveness.

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Human Rights Promoting Activities
To steadily promote our activities to respect human rights and raise employee awareness, we conduct human rights training
courses, offer guaranteed employment opportunities, promote fair human-resource management, and work to prevent
workplace harassment. Our training courses encourage employees to develop a thorough understanding of the JFE Group’s
Human Rights Basic Policy and the respect for human rights expected of a company in the international community. To thisend, we continuously monitor and following up on seminars by designating the attendance rate as a KPI.
We seek to prevent sexual harassment, the abuse of power, and other forms of harassment by addressing theseissues in company regulations, displaying posters in workplaces, and organizing training for each position (including
managerial positions), individual offices, and executives. In addition, we invited an outside attorney to hold a seminarfor corporate ethics hotlines and harassment consultation desk staff (those who receive reports, including management
staff) within the JFE Group. We regularly organize these training sessions for hotline and consultation desk personnel(approx. 200 in FY2020 and approx. 300 in FY2022).
Furthermore, we actively support and take part in initiatives undertaken by public organizations and groups promoting
human rights as well as groups in which private enterprises participate, such as the Industrial Federation for Human
Rights, Tokyo and the Corporate Federation for Dowa and Human Rights Issue, Osaka. By attending seminars andworkshops of such organizations and groups, we have become increasingly aware of human rights trends and challenges
as well as issues specific to Japanese business. In turn we apply this knowledge in JFE human-rights awareness training
programs and related initiatives.

Respecting the Rights of Workers
The JFE Group adheres to the laws and regulations of various countries as well as collective agreements. It also respects
the rights to freedom of association as well as their right to collective bargaining.
Upper management, including the president and the representative of the union, meets regularly to discuss matterssuch as management issues, work life-balance, working environments, and working conditions. By conducting earnest
labor-management consultations, we strive to create a vigorous workplace while working to maintain healthy and soundlabor-management relations.
The JFE Group complies with laws and regulations related to salary payments and sets salaries above the minimum
wage designated by country, region and industry sector. In addition to meeting legal requirements concerning the upper
limits for overtime and other mandates, the JFE Group establishes challenging and satisfying work environments byproviding our employees with one of the top levels of employment conditions in the industry as well as performance-based
bonuses linked to company profits.
We regularly review the wage situation in each region and business sector and engage in honest discussions with the labor
union to ensure a fair return to our employees while also paying due consideration to management and business performance.

Respect for Freedom of Expression
The JFE Group upholds basic human rights in its Human Rights Basic Policy and is committed to respecting andprotecting the human rights of each individual throughout its corporate activities. We pay due care to prevent violationsof the freedom of expression, as recognized by the International Covenant on Human Rights and other international
conventions, and to fully protect the right to privacy.

Respect for Children’s Rights
The JFE Group supports the Convention on the Rights of the Child and Children’s Rights and Business Principles and willseek to eliminate child labor and respect every child’s right to survival, right to development, right to protection and theright to participation, the four pillars of the Convention on the Rights of the Child.
The JFE Group Human Rights Basic Policy upholds recognizing the diverse values held by each individual in all
aspects of corporate activity as well as respecting and protecting the human rights of each person in compliance withinternational conventions. It also explicitly prohibits child labor and forced labor. To promote concrete initiatives, the JFEGroup has focused on nurturing the next generation as a key area of its public service and is engaged in activities that
support the sound development of younger generations.
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IndicesT JFE SteelRespecting Human Rights across the Supply Chain
JFE Steel recognizes that human rights violations and environmental issues pose actual business risks in procuring
raw materials as well as materials and machinery. It therefore established the Raw Material Purchasing Policy and theMaterials & Machinery Purchasing Policy to develop and maintain a sustainable procurement system with due respectfor human rights, regulatory compliance, and environmental protection. JFE Steel also established the Business Conduct
Guidelines and CSR Procurement Guidelines, asking suppliers to comply with these and seeking to publicize theguidelines across the supply chain via its website.
In terms of raw material procurement in particular, tantalum, tin, tungsten and gold produced in certain regions,such as the Democratic Republic of the Congo, are defined as conflict minerals under the U.S. Wall Street Reform andConsumer Protection Act. There is concern that such minerals provide a funding source for militias causing humanrights violations and environmental destruction. Therefore, JFE Steel clearly prohibits the purchase of conflict minerals
in its Business Conduct Guidelines. The company also complies with Japanese and overseas regulations governing the
responsible procurement of minerals as well as international rules and investigates and confirms with suppliers that they
are not selling conflict minerals.
For more information on the procurement of raw material and materials and machinery, refer to the following sources.
Business Conduct Guidelines of the Raw Materials Purchasing Policy(https://www.jfe-steel.co.jp/en/company/purchase_policy.html)

CSR Procurement Guidelines(https://www.jfe-steel.co.jp/en/company/purchase_policy.html#to-our-business-partners)

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N JFE Engineering

Respect for Human Rights in Procurement Activities
JFE Engineering is promoting CSR procurement in accordance with its Purchasing and Procurement Policies to promote
initiatives related to respect for human rights in cooperation with suppliers. In addition, JFE Engineering asks suppliers
to respect basic human rights, eliminate all forms of discrimination, and strive to create a safe and comfortable work
environment while observing laws, regulations, and social norms in their business activities, and it ensures that thesepolicies are clearly communicated both internally and externally by publicizing them on the company’s website.
For JFE Engineering’s Purchasing and Procurement Policies, please refer to the following.
JFE Engineering Group Procurement Policy (https://www.jfe-eng.co.jp/en/information/procurement_policy.html)

S

H JFE Shoji

Respecting Human Rights across the Supply Chain
The JFE Shoji Group upholds respect for human rights, prohibition of discrimination, and prohibition of forced labor andchild labor in its Basic Policy on Sustainability in the Supply Chain, and it requests the understanding and cooperation of
suppliers in complying with this policy.
For JFE Shoji’s Basic Policy on Sustainability in the Supply Chain, please refer to the following.
Basic Policy on Sustainability in the Supply Chain (https://www.jfe-shoji.co.jp/en/sustainability/promote/)

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Community
Basic Policy
We are engaged in corporate activities across the globe. Continuing to do business requires that we forge relationships oftrust with local communities and realize sustainable growth together by contributing to the development of each region inwhich we operate as well as by pursuing development at manufacturing sites where our steelworks are located. To thisend, the JFE Group is committed to working with communities as stated in the JFE Standards of Business Conduct andis promoting activities that contribute to local communities.
The operation of our steelworks involves massive production facilities and significantly impact the region’s
employment and economy as well as environmental air and water quality. Our steel business seeks to revitalize local
communities as an important means for deepening understanding of the JFE Group among local residents and mutuallypromoting regional development.

JFE Group Standards of Business Conduct
3 Work with communities
Actively contribute to host communities as a good corporate citizen by emphasizing harmony and cooperation.

Local Activities
In addition to consistently taking action to ensure safety and reduce the environmental impact of our corporate
operations, we also conduct initiatives that serve the public with a focus on protecting the environment, nurturing thenext generation, promoting sports and culture, and revitalizing regional communities.
Furthermore, we provide paid leave programs that can be used to promote volunteer work to encourage the active
participation of employees.

Opening Manufacturing Sites to the Public
Every year, the JFE Group opens its manufacturing facilities to residents in local host communities for demonstrations,tours and other events.

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Attendance

Guideline
Indices■ On-site Events in FY2019*
Location

JFE Steel

JFE Engineering

Event

East Japan Works,
KeihinKeihin Community Festival

East Japan Works,
Chiba

JFE Chiba Festival

West Japan Works,
Fukuyama

JFE West Japan Festival in
Fukuyama

West Japan Works,
Kurashiki

May 2646,000

October 27

30,000

May 1285,000JFE West Japan Festival in Kurashiki

November 3

80,000Chita Works

Handa Community Industrial
Festival

November 9

20,000Tsu Works

Autumn Festival 2019

October 19

4,000* The list shows results for FY2019 as the events in FY2020 and FY2021 were canceled to prevent the spread of
COVID-19.

JFE West Japan Festival in Fukuyama
In addition, on-site recreational facilities are made available for community sports such as soccer, baseball, volleyball andbasketball as well as other events sponsored by Group companies. Coaching sessions are offered by company baseballand track teams, which compete in Japan’s top-level corporate leagues. Such activities promote sports and health as well
as stronger relationships with host communities.

S

T JFE SteelTour of Steelworks
Every year, JFE Steel invites over 100,000 guests*, mostly elementary and junior high school students from hostcommunities, to tour steel production sites at each steelwork, in conjunction with festivals and other events.
*In FY2021, we received visitors (about 40,000) after reducing the size of the tours and implementing adequate
measures for preventing the spread of COVID-19.

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Education at Elementary Schools
JFE Steel conducts plant tours for students at nearby elementary schools. In addition, company employees visit schools
to give lectures on iron and steelmaking processes, the features of steelworks, environmental initiatives and othertopics to deepen understanding of the steel industry and career opportunities. These lectures have been given to over
270 classes since its start in FY2012. In FY2017, the company conducted the first class at a school for hearing impaired
children. In FY2017, the company conducted the first class at a school for hearing impaired children.

Visiting lecturer at Samugawa Elementary School in Chiba City

Support for External Organizations
Contributing to the realization of a sustainable society is a key management concern for the JFE Group, which actively
seeks to address issues in collaboration with external groups and NGOs in pursuing solutions for the 17 SDGs.

UN World Food Programme
The JFE Group seeks to resolve the global hunger issue by supporting the cause and activities of the Japan Association
for the World Food Programme*.
*An NPO-accredited supporter of the UN World Food Programme (WFP), which works to eliminate hunger and poverty.

Supporting Training for Foreign Medical Professionals
The JFE Group supports the Japanese Council for Medical Training, spearheaded by the Toranomon Hospital in Tokyo.
The council offers a training program in which doctors from developing countries, primarily in Southeast Asia, are invited
to study in Japan. The program aims to make an international contribution by training participants in Japan’s advanced
medical practices so trainees can apply their results to raise the medical standards of their home countries and to foster
stronger relationships between those nations and Japan. The program also contributes to resolving health issues in local
communities by enhancing the medical standards of those countries.
For more information, please refer to the following.
JCMT (http://www.jcmt.jp/english/)

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Japanese Foundation for Cancer Research
Since its establishment in 1908, the Japanese Foundation for Cancer Research has upheld its basic philosophy ofaiming to improve the well-being of people everywhere by achieving better cancer control. The JFE Group supports thisfoundation, which has played a leading role in research and treatment as well as human resource development in Japan.

Fund to Support Children’s Future
The JFE Group endorses the Japanese government’s national campaign for creating a society in which every child cangrow with dreams and hopes. The Group supports the Fund to Support Children’s Future, which provides assistance toNPOs and other groups engaged in activities to eliminate poverty throughout Japan.

Support for Youth Development
Japanese Language Speech Contest
The JFE Group supports the All-China Japanese Speech Contest for university students in China as a way to promotestronger international exchange. The contest has been held since 2006 to further Japan-China relations through language
and communication, and JFE has provided support from its launch. Through this activity, the JFE Group contributes to thedevelopment of Japanese language education in China and the promotion of friendly exchanges between the two countries.

Contents to help build the friendship between Japan and
China (awards ceremony in FY2021)

Presentation by a student (held online in FY2021)

Career Education for Students
JFE Steel and JFE Engineering provide plant tours for female junior high school, high school and university students toencourage them to pursue careers in science and technology.
Since 2006, JFE Steel has participated in the Keizai Koho Center’s “Business Training for Japanese School Teachers.”
Teachers from primary, junior high and high schools learn about business operations, human resource development,
safety and environment-protection-related initiatives, among other topics, with the intention of sharing that knowledge
with their students and leveraging it for better school management. In addition, some facilities invite local junior highstudents and host work-experience sessions.
As part of career education for high school and junior high school students, Kawasho Foods Corporation, a memberof the JFE Shoji group, cooperates with the School Support Center, a specified Nonprofit Corporation, to invite students
for training. The participants learn how society is supported by specific kinds of work as well as the products and services
related to such work.

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Business training for schoolteachers

FY2021 Internships
The JFE Group annually hosts many trainees and interns from overseas to help them gain practical experience at plants
as well as design and construction sites. They also participate in group work.
■ Number of Interns Accepted by Each Operating Company (FY2021)

S

JFE Steel

JFE Engineering

JFE Shoji

296(desk work: 170, technical: 126)

666
(desk work: 117, technical: 549)

Approx. 285

T JFE SteelHigh School Science and Engineering Contest
The Japan Science & Engineering Challenge is a national science-paper contest for high school and technical college
students. Under the sponsorship of the Asahi Shimbun Company and TV Asahi Corporation, the contest has been
supported by JFE Steel since 2006 to nurture future scientists and engineers.

In FY2021, the contest was held online so as not to spread
COVID-19.

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H JFE Shoji

Supporting Elementary Schools in Ghana and Nigeria
Since 2011, the JFE Shoji Group has continuously supported elementary schools in the West African countries of Ghana
and Nigeria as part of its CSR activities. To address deficiencies in the local educational environment, it has also focusedon donating goods related to education and food, which are essential for the sound development of children and greatly
appreciated by the schools and governments in the countries. While the donation ceremony was canceled in FY2021
due to the COVID-19 pandemic, the Group donated 700 sets of desks and chairs, 17,000 notebooks, 12,500 cans offood, and 12,500 children’s masks in an effort to prevent infection to elementary schools in Ogun State, Nigeria, and nearAccra, Ghana.
The JFE Shoji Group is committed to continuing this project into the future that symbolizes the Group’s commitment.

Students at an elementary school in Ghana

Supporting Off-Campus Training by Special-Needs Schools
The JFE Shoji Group has been providing off-campus training opportunities for students at schools for special needs
since FY2017. Training mainly consists of gaining work experience by serving coffee and cleaning and learning about
distribution by introducing and selling sweets and coffee shop goods produced at their schools.

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JFE 21st Century Foundation
The JFE 21st Century Foundation was founded in 1990 through a donation from the JFE Group (the former Kawasaki
Steel) to operate as a public-service corporation that contributes to society. It engages in various public services, such assupporting research at universities and cultural development.
For more on the JFE 21st Century Foundation, refer to the following information.
JFE 21st Century Foundation (http://www.jfe-21st-cf.or.jp/eng/)
Data related to the JFE 21st Century Foundation (P.230)

Support for Technology Research
The foundation has been highly acclaimed by many universities for its support of technology research since FY1991.
In FY2021, it fielded 144 grant requests and provided a total of 56 million yen in the form of grants valued at 2 million
yen each for 11 projects involving iron and steel technologies and 17 projects related to environmental technologies,
including those designed to prevent global warming.

Support for Asian History Studies
The foundation began awarding grants in support of Asian history studies at Japanese universities in FY2005. In FY2021,
50 applications were received and 12 grants worth 1.5 million yen each were awarded, bringing the total to 18 million
yen.

Support Activities in Communities Hosting Steel Facilities
The foundation financially sponsors community cultural activities including music, art, traditional events, community
revitalization, community activities and the conservation of cultural property.
In FY2021, it sponsored nine events in regions across Japan where the Group operates its steel business, including
Chiba, Kawasaki and Fukuyama cities.

Supporting the Japan Overseas Educational Services Writing Contest and Anthology Donation
The Japan Overseas Educational Services organizes contests in the areas of essays, poems, tanka and haiku forJapanese students attending elementary and middle schools overseas. The JFE Group has been cosponsoring thecontest by offering JFE 21st Century Foundation prizes since FY1991. The foundation also donated 2,400 copies of“Chikyu ni Manabu” (Learn from the Earth), a collection of the winning entries, again in FY2021, to 700 organizations,
including elementary and middle schools and public libraries located in the regions where the Group operates its steelbusiness.

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List of Social-contribution Activities
Local Communities and Society

Gave plant tours*

Donated emergency food supplies to a food bank
Organized on-premise blood donation campaigns
Sponsored children’s eco activities under World Food Programme(https://www.jfe-steel.co.jp/en/company/csr.html#anc01-01)

Supported local festivals

Held festivals and events*(https://www.jfe-steel.co.jp/en/company/csr.html#anc01-02)

Organized public viewing of “Dragonfly Street” andStation Square

Donated to Japan National Council of Social Welfare

Joined Where Do Dragonflies Fly Forum(https://www.jfe-steel.co.jp/en/company/csr.html#anc01-03)

Supported Tsurumi Line stamp rally

Lectured at elementary schools

Volunteered for Kasumigaura Marathon(https://www.jfe-steel.co.jp/en/company/csr.html#anc01-04)

Volunteered for disaster reconstruction

Joined local cleanup activities*

Organized in-house fairs for supporting post-disasterreconstruction (providing meals at a cafeteria using
ingredients from the disaster area)

Supported World Food Programme
Supported Japanese Foundation for Cancer Research(https://www.jfe-steel.co.jp/en/company/csr.html#anc01-05)

Conducted disaster response and prevention
activities with local governments

Participated in cleanup and tree planting activities
in the Kumozu River basin in Mie Prefecture(https://www.jfe-steel.co.jp/en/company/csr.html#anc01-06)

Participated in tree planting to invigorate a rainforest in thePhilippines*

Implemented and promoted Active Exercise®
(https://www.jfe-steel.co.jp/en/company/csr.html#anc01-07)

Donated emergency food to Kurashiki City Social Welfare Council

Launched on-site daycare centers for local residents

Supported the holding and operation of the Okadama
Aozora Market in Sapporo(https://www.jfe-steel.co.jp/en/company/csr.html#anc01-08)

Cooperated with traditional events

Organized environmental events at a contracted
incineration plant(https://www.jfe-steel.co.jp/en/company/csr.html#anc01-09)

Joined Nishinomiya tourism event

Opened up the contracted incineration plant as anevacuation site in the event of a disaster and provided
emergency supplies(https://www.jfe-steel.co.jp/en/company/csr.html#anc01-10)

Held Manufacturing Class for children(https://www.jfe-steel.co.jp/en/company/csr.html#anc01-11)*Postponed or canceled in FY2020 and FY2021 inresponse to the COVID-19 pandemic.

Nurturing the Next Generation
Supported Chinese students’ Japanese speech contest
Supported Japanese Council for Medical Training
Supported Welfare and Medical Service Agency’s Children’s
Future Support Fund

Accepted teachers for private-sector training

Supported technician education in Southeast Asia

Supported Females in choosing Science or Engineering careers(https://www.jfe-steel.co.jp/en/company/csr.html#anc03-06)

Cooperated with NPO School Support Center(https://www.jfe-steel.co.jp/en/company/csr.html#anc03-08)(https://www.jfe-steel.co.jp/en/company/csr.html#anc03-01)(https://www.jfe-steel.co.jp/en/company/csr.html#anc03-07)

Organized internships

Certified as company supporting child rearing(Kanagawa Prefecture and Nagoya City)
Certified as Work-Life Balance Business (Kanagawa Prefecture)
Accepted foreign technical interns (welding training)
Supported elementary schools in Ghana and Nigeria
Supported off-campus training by special-needs schools
Supported robotics competitions for high schools in Mie Prefecture
Provided welding training for technical high school teachers(https://www.jfe-steel.co.jp/en/company/csr.html#anc03-02)

Supported Japan Science & Engineering Challenge(https://www.jfe-steel.co.jp/en/company/csr.html#anc03-03)

Provided work experience(https://www.jfe-steel.co.jp/en/company/csr.html#anc03-04)

Supported career education(https://www.jfe-steel.co.jp/en/company/csr.html#anc03-05)

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Environmental Protection
Organized firefly larvae release and viewing party(https://www.jfe-steel.co.jp/en/company/csr.html#anc04-01)

Obtained outstanding 3R-activities certification from
Yokohama City (9th straight year)

Held environmental exhibitions

Donated PET bottle caps

(https://www.jfe-steel.co.jp/en/company/csr.html#anc04-02)

Cooperated with nonprofit Green Bird in volunteer
garbage collection

Eco-purposed steel slag
(https://www.jfe-steel.co.jp/en/company/csr.html#anc04-04)

Volunteered to fertilized cherry trees

Sports and Cultural Promotion
Held local sporting events

Promoted parasports(https://www.jfe-steel.co.jp/en/company/csr.html#anc02-01)(https://www.jfe-steel.co.jp/en/company/csr.html#anc02-04)

Baseball and racing clubs held instructional classes

Keihin Symphonic Band gave performances(https://www.jfe-steel.co.jp/en/company/csr.html#anc02-02)(https://www.jfe-steel.co.jp/en/company/csr.html#anc02-05)

Sponsored Cho Chikun Go Cup(https://www.jfe-steel.co.jp/en/company/csr.html#anc02-03)

Contribution to Local Communities through the Engineering BusinessWe contribute to realizing a circular economy in local communities by providing utility services, such as electricity, gas,
and water, as well as combining our businesses in food recycling, renewable energy power generation, and waste-toenergy power generation.
Development and Provision of Eco-friendly Processes and Products (P.100)

JFE 21st Century Foundation
The JFE 21st Century Foundation was established in 1990 with the support of JFE, including the former Kawasaki Steel.
As a public-interest foundation it undertakes various civic-minded services, including providing financial aid for university
research and promoting local culture.
JFE 21st Century Foundation (http://www.jfe-21st-cf.or.jp/eng/)
Issued technical research grants (steel-related technology, global environment, technology for preventing global warming)
Issued grants for Asian historical research
Created and donated textbooks for universities and publications related to steel
Sponsored cultural activities in communities hosting steel facilities
Held Overseas Literary Contest and donated literary works

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Shareholders and Investors
Shareholder and Investor Relations Policies
JFE Group Standards of Business Conduct
2 Be open to society
Disclose corporate information actively and engage in constructive dialogues with diverse stakeholders to enhance
our corporate value.

Returns to Shareholders
The JFE Group positions returns on shareholder investment as one of its top priorities. Profits are basically returned in theform of dividends. The Group’s basic policy under the Seventh Medium-term Business Plan is to achieve a payout ratio
of about 30%.

Proactive Information Disclosure
The JFE Group strives for fair disclosure based on established internal policy. The Group actively communicates withinvestors by holding meetings when announcing financial results, medium-term business plans or other important
information. The executive directors explain the announced results and answers questions at investor meetings, andthey also hold small-group briefing sessions and conducts individual interviews with institutional investors and securities
analysts. In addition, they regularly visit investors in Japan and overseas, including institutional investors in North America
and Europe.
For individual investors, briefings are held at the branch offices of securities firms around Japan.
The Group also distributes e-mails regarding IR information. Important press releases and Notices of the Ordinary
General Meeting of Shareholders are provided in English for overseas investors.
In addition, JFE Holdings is committed to fair disclosure of information under its disclosure policy.
■ Major IR Activities (FY2021)
Activity

Participants

Investor meetings, ESG briefings

Approx. 1,000 persons in total

Individual interviews with institutional investors and securities analysts
Briefings for private investors (web-based)

Approx. 380 persons in total
Approx. 10,000 playbacks in 2 briefings

For more on this, please refer to the following information.
Disclosure policy (https://www.jfe-holdings.co.jp/en/investor/management/disclosure-policy/index.html)
Investor information: Japanese version (https://www.jfe-holdings.co.jp/investor)
Investor information: English version (https://www.jfe-holdings.co.jp/en/investor)

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IndicesEnhancing Communication with Shareholders
JFE Holdings created its Investor Relations and Corporate Communications Department in April 2015 to facilitate moreinteractive communication with diverse stakeholders. The collection and dissemination of integrated information is beingenhanced to provide management with more useful information for constructive dialogues with shareholders, including
individual investors as well as domestic and foreign institutional investors.
General meetings of shareholders are opportunities for dialogue with shareholders, so JFE sends invitations at theearliest possible date to maximize attendance and avoid overlapping with the shareholder meetings of other companies.
The company has been posting an invitation on its website at the earliest possible date while allowing online voting forshareholders who are unable to attend.
We offer plant tours of our steel works, recycling plants, shipyards, and other facilities as a special benefit forshareholders, with many of them applying for and participating in them every year. (These tours were cancelled in FY2020
and FY2021 to prevent the spread of COVID-19.)
In FY2021, we held online plant tours for the first time (two tours attended by approximately 1,400 people in total).
For data related to plant tours and company briefing sessions for shareholders, please refer to the following information.
Plant tours for shareholders (Japanese only) (https://www.jfe-holdings.co.jp/investor/stock/factory_tour/index.html)
Major IR Activities (P.230)

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Governance: Executive Summary
With its many companies and partners, the JFE Group is engaged in a broad and diverse range ofbusinesses, centered on the steel, engineering, and trading businesses.
Establishing a proper governance system is essential for increasing the autonomy and efficiencyof each operating company and for appropriately managing various business risks, including thoserelated to the environment, safety, and disaster prevention. It is also important for ensuring the Group’s
sustainable growth and improving corporate value over the medium- to long-term.
We have been implementing various initiatives aimed at enhancing corporate governance, such as formulating
the Basic Policy on Corporate Governance, establishing the Nomination Committee and Remuneration
Committee, introducing a performance-linked remuneration system for directors, and evaluating directors’
effectiveness.
In FY2022, we also introduced indicators for employee safety in an effort to use non-financial metrics related
to the environment, society, and other aspects as indicators for performance-linked remuneration for directors.
We plan to introduce indicators related to climate change during the Seventh Medium-term Business Plan andwill continue to consider other indicators.
Thorough compliance is the foundation of our relationship of trust with stakeholders and the basis of ourbusiness activities. While we strive to ensure adherence to corporate ethics and compliance as a material
issue of management, the JFE Group CSR Council, chaired by the president of JFE Holdings, supervises andprovides guidance on compliance efforts, and important measures are reported to and deliberated by the Boardof Directors for direction and supervision.
With regard to risk management, JFE Holdings as the holding company is responsible for thecomprehensive risk management of the Group and has established a system under which its Board of Directors
supervises risk management and confirms its effectiveness. JFE Holdings is continuously improving risk
management for the entire Group based on discussions by its Board of Directors.

Objectives and results related to material issues of corporate management concerning governanceMaterial Issues of Corporate Management and KPIs (P.19)
Key Initiatives◦ Introduction of non-financial metrics for employee safety as indicators of performance-based remuneration
for directors (P. 193)
◦ Analysis and evaluation of board of directors’ effectiveness by a third-party organization (P. 191)
◦ Disclosure of skills matrix for directors and Audit & Supervisory Board members (P. 190)
◦ Corporate Ethics Awareness Survey implemented periodically (once every three years) for officers and employeesof JFE Holdings and operating companies (P. 201)
◦ Continuous oversight and confirmation of effectiveness of Group-wide risk management by the Board of
Directors (P. 202)

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Corporate Governance
Basic Policy
With the steel business, engineering business and trading business at its core, the JFE Group develops a broad range ofbusinesses in a wide range of areas together with many group companies and partners. Establishing a proper governancesystem is essential toward improving independence and raising efficiency in each operating company, along with the
optimal management of risks, which include those related to the environment, safety, and disaster prevention in theGroup. It is also necessary for the sustainable growth of the Group and the medium- to long-term improvement of its
corporate value.
We have also established the JFE Holdings, Inc. Basic Policy on Corporate Governance to express concretely the JFEGroup’s Corporate Vision of pursuing best practices in corporate governance and achieving further development in thisarea.
JFE Holdings, Inc. Basic Policy on Corporate Governance (https://www.jfe-holdings.co.jp/en/company/info/pdf/basic-policy.pdf)
Corporate Governance Report (https://www.jfe-holdings.co.jp/en/company/info/pdf/corporate-governance.pdf)
Arrows indicate lines of authority and reporting
Shaded areas indicate executive organizations

General Meeting of Shareholders

JFE Holdings, Inc.
Nomination Committee

Board of Directors

Remuneration Committee(8 Directors, including 3 from outside)Group Management Strategy Committee
Management Committee

Internal Auditing

JFE Group CSR Council

CEO (President)

Corporate Officers

Accounting Auditor

Audit & Supervisory Board(5 Audit & Supervisory Board
Members, including 3 from outside)

Chair: CEO (President)

JFE Group Compliance
Committee

JFE Group Environmental
Committee

JFE Group Internal Control
Committee

JFE Group Information
Security Committee

Public Disclosure
Committee

Corporate Value
Enhancement Committee

Operating Companies
Board of Directors

Audit & Supervisory Board Members

Accounting Auditor

Management Committee

CEO (President)

CSR and Compliance System

Audit Department

Corporate Officers

Headed by the PresidentGroup Companies

Part of the governance data can be accessed from the following link.
Governance Data (P.231)

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Corporate Governance System
Group Governance System
The JFE Group comprises a holding company and three operating companies, JFE Steel, JFE Engineering, and JFE Shoji.
JFE Holdings, a pure holding company at the core of the Group’s integrated governance system, guides Group-wide
strategy, risk management, and public accountability.
Each operating company has developed its own system suited to its respective industry, ensuring the best course ofaction for competitiveness and profitability.
Corporate Governance System (P.231)
Major Topics Discussed at the FY2021 Board of Directors Meeting• Seventh Medium-term Business Plan
• Large-scale capital expenditures (e.g., upgrade systems at steelworks (Kurashiki), construction of the factory for theoffshore wind-power monopile foundation structures• Policy on the JFE Group’s initiatives for offshore wind-power business• ESG initiatives (e.g., efforts to achieve carbon neutrality, assessment and review of KPIs for material issues of corporate
management)

Governance System
JFE Holdings and each operating company have their respective Audit & Supervisory Board Members. The companies
are crosschecked by the Directors, who supervise operational execution, and the Audit & Supervisory Board members,
who conduct audits. Also, a Corporate Officer system separates decision-making and execution to clarify authority andresponsibility as well as to accelerate execution. JFE Holdings’ Board of Directors is responsible for maintaining andenhancing management efficiency and passing resolutions as legally required, laying down key management policies andstrategies and supervising operational execution. The Audit & Supervisory Board oversees management for the purposeof strengthening its soundness.

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Indices■ Major Initiatives to Strengthen the Governance System
September
2002

June
2007

Established JFE Holdings

Added two Outside Directors and shortened the term of
Directors from two years to one year

October
2015

Established JFE Holdings, Inc. Basic Stance on
Corporate Governance, Nomination Committee, andRemuneration Committee

FY2015Initiated analysis and evaluation of board of directors’
effectiveness

June
2017

Reorganized the Board of Directors and the Audit &Supervisory Board based on results of theireffectiveness analysis and evaluation• Added the presidents of JFE Engineering and JFE Shoji tothe Board of Directors, along with an increase of two outside
members (Director and Audit & Supervisory Board Member)

Independent Outside Directors
Independent Outside Directors comprise one-third or more of the total number of Directors. Independent Outside Directors
will be elected from persons who are appropriate to bear the responsibility of strengthening governance such as those who
possess abundant experience as management in global enterprises or experts who possess profound knowledge and satisfy
our independence standards. Currently, of the eight Directors, three are Independent Outside Directors.

Independent Outside Audit & Supervisory Board Members
More than half of the Audit & Supervisory Board Members are from outside. Independent Outside Audit & Supervisory
Board Members will be elected from persons who are appropriate to bear the role of enhancing the auditing function
such as those who possess abundant experience as management in global enterprises or experts who possess profoundknowledge and satisfy our independence standards. Currently, of the five Audit & Supervisory Board members, three are
Independent Outside Audit & Supervisory Board Members.
Standards for Independence of Outside Directors/Audit & Supervisory Board Members of JFE Holdings, Inc.
(https://www.jfe-holdings.co.jp/en/company/info/pdf/independence.pdf)

Directors and Audit & Supervisory Board Members (P.232)

Approach to Diversity in the Board of Directors
With regard to the composition of the Board of Directors, the Company elects officers following deliberations by the
Nomination Committee by focusing on the enhancement of diversity of the Board members, such as their expertise,knowledge and experience in various fields, while balancing with the appropriate size of the Board. One female Audit& Supervisory Board Member was appointed in June 2019, and one female Director was appointed in June 2020. The
Company also elects Directors and Audit & Supervisory Board Members who possess a wealth of knowledge andexperience as management in global enterprises. In this way, the Company is working to enhance gender and global
diversity. The company will continue to systematically engage in initiatives to foster such human resources suitable forcandidates for Directors and Audit & Supervisory Board Members by setting specific targets.
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Skill Matrix of Directors and Audit & Supervisory Board Members
We have established the JFE Holdings, Inc. Basic Policy on Corporate Governance for promoting sustainable growthof JFE Holdings, Inc. and the JFE Group, the medium- to long-term improvement of corporate value, and expressing
concretely the JFE Group’s Corporate Vision of pursuing best practices in corporate governance and achieving further
development in this area. With regard to the composition of the Board of Directors, we strive to enhance the diversityof the Board members, such as their expertise, knowledge, and experience in various fields, and identify necessary
skills of corporate management in light of our business and corporate management issues. The Company elects officers
following deliberations by the Nomination Committee while balancing with the appropriate size of the Board.
The skill matrix of each Director and Auditor against identified skills in light of their knowledge, experience, andexpertise are summarized below.
Corporate
Management, Sustainability, Technology,
Management Environment
DX
Strategy
Representative
Director

Koji Kakigi

Representative
Director

Yoshihisa
KitanoRepresentative
Director

MasashiTerahata
Director

Hajime Oshita
Director

Toshinori
Kobayashi
Outside Director

Masami
Yamamoto

Outside Director

Nobumasa
Kemori

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

Outside Director

Nobuya Hara

Human Affairs,
Internal
Legal
Sales,
Labor, HumanControl,Affairs,
Resource
MarketingGovernance Compliance
Development

●

●

●

●

Engineering

●

●

●

Steel, Trading

●

●

●

―

●

●

●

―

●

●

●

●

●

●

●

●

Steel, Trading

●

―

●

Isao Saiki

TakuyaShimamura

Steel

●

Outside Audit &Supervisory Board
MemberOutside Audit &Supervisory Board
MemberSteel●

NakabaAkimotoTsuyoshiNumagami●

Businessthat Requires
Knowledge●

Audit &
Supervisory Board
MemberOutside Audit &Supervisory Board
Member●●●Yoshiko Ando
Audit &
Supervisory Board
MemberFinance andAccounting

●

●

Steel

●

●

●

●

●

―

●

●

―

●

●

―

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Nomination Committee and Remuneration Committee
In October 2015, JFE Holdings set up the Nomination Committee and the Remuneration Committee as advisory bodies
to the Board of Directors to secure fairness, objectivity, and transparency in the appointment of and remuneration for
Directors and Audit & Supervisory Board Members. For both committees, the majority of committee members are
Outside Directors/Audit & Supervisory Board Members and the chairs are chosen from among these people.
The Nomination Committee deliberates and reports to the Board of Directors on matters pertaining to the basic policyon the election and dismissal of the President of the Company, proposals for the election of candidates for the Presidentof the company, succession plans of the President of the Company, and the nomination of candidates for Outside
Directors and Outside Audit & Supervisory Board Members. Five meetings were held in FY2021, with 100% attendance
rates for all of them. The Remuneration Committee deliberates matters pertaining to the basic policy on the remunerationof directors, etc., of the Company and each operating company and reports to the Board of Directors. Seven meetings
were held in FY2021, with 100% attendance rates for all of them.
Nomination Committee and Remuneration Committee (P.233)

Support for Directors and Audit & Supervisory Board Members
Directors and Audit & Supervisory Board Members are provided with opportunities and funding to receive training in legal
matters, corporate governance, risk management, and other subjects that help them fulfill their roles and duties.
In addition, a briefing is held for Outside Directors and Outside Audit & Supervisory Board Members prior to Board of
Directors meetings.
Furthermore, Outside Directors and Outside Audit & Supervisory Board Members are provided with relevant
information and opportunities to exchange opinions with the president and other top managers, attend key hearings on theoperational status of individual departments, and inspect business sites and Group companies inside and outside Japan.

Analysis and Evaluation of the Board’s EffectivenessSince FY2015, JFE Holdings has been evaluating the overall effectiveness of its Board of Directors based on its Basic
Policy on Corporate Governance. Since FY2018, a third party has been conducting the analysis and evaluation to ensure
an objective viewpoint. In FY2021, questionnaires were sent to all Directors and Audit & Supervisory Board Members
after adding and revising their content based on the revision of the Corporate Governance Code.
Furthermore, we examined the results of our efforts in FY2021 to reflect the opinions and recommendations of the
FY2020 evaluation.
Based on the discussions by the Board of Directors in light of the survey results and evaluation by the thirdparty organization, it was determined that the overall effectiveness of the Board has been ensured through vigorous
discussions among members supported by sufficient preliminary briefings at the meeting for Outside Directors/Audit &Supervisory Board Members as well as by appropriate management and leadership by the chairperson.
The FY2021 initiatives reflecting the results of the effectiveness of evaluations up to FY2020 include the following.
• Enriched discussions on specific initiatives regarding sustainability issues, including reports to the Board of Directors
on topics such as Group-wide initiatives for achieving carbon neutral, as well as diversity and inclusion, and a review ofmaterial issues and KPIs of corporate management.
• Outside Officers meetings as preliminary reports have been held to stimulate discussion in the Board of Directors
meetings, and we decided to regularly hold exclusive meetings for Outside Officers to provide more opportunities forexchanging opinions.
• Established a Group governance system, in which the Board of Directors receives reports from the Group CSR Council
on achievements of and plans for its activities to discuss, and supervises Group-wide risk management. Specificinitiatives in FY2021 include reports to the Board of Directors of information security, anti-corruption, and survey resultson compliance efforts in Group companies. Going forward, we will continue to improve Group-wide risk managementin accordance with discussions at Board of Directors meetings.

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In addition to accurate and fair audits performed by the Audit & Supervisory Board Members, the members also
express opinions and actively ask questions at Board of Directors meetings on management decisions and reports tofurther invigorate deliberations. Such outcomes supported the conclusion that JFE functions efficiently as a company
with an Audit & Supervisory Board.
Furthermore, the following main issues were extracted from this survey for further improvement of effectiveness.

• Further strengthen the Board of Director’s supervisory function by improving reporting content in regard to responses to risk
management of the Group and sustainability issues• Appropriately supervise the measures and their implementation as the Board of Directors to sharpen focus on and awarenessof compliance
In FY2022, the Board of Directors will continue to consider holding Board meetings at domestic operating companies andconducting inspection visits of domestic and overseas operating companies, taking into consideration COVID-19, to increase
opportunities for exchanging opinions with top executives of the operating companies.
Following up on these points, we will continue to proactively implement initiatives to increase the effectiveness of the Boardof Directors and enhance the Group’s corporate value.

Operating System
Key Decision-Making
JFE companies are responsible for business decisions in accordance with their respective rules and procedures, whereas
JFE Holdings makes decisions about Group-wide matters. Each operating company determines key matters through adeliberative process by its own Management Committee and Board of Directors. In April 2017, JFE Holdings changed
the operating structure of key committees. Management strategies involving the entire group are now deliberated by theGroup Management Strategy Committee and core issues of JFE holdings, the operating companies and the Group aredeliberated by the Management Committee before they are submitted to the Board of Directors for resolution.
Operating System (P.233)

Executive Remuneration
Executive remuneration is based on the Basic Policy on Remuneration for Directors and Corporate Officers and the
Policy for Deciding the Individual Remuneration for Directors and Corporate Officers founded on discussions and reportsby the Remuneration Committee, and it is decided through either a resolution of the Board of Directors or deliberations
by the Audit & Supervisory Board Members, for an amount within the total limit approved at the General Meeting of
Shareholders.

Basic Policy on Remuneration for Directors and Corporate Officers• The Board of Directors shall determine remuneration system for Directors and Corporate Officers based on
deliberations regarding its appropriateness by the Remuneration Committee to ensure fairness, objectiveness,and transparency.
• The remuneration level for Directors and Corporate Officers shall be determined to secure excellent humanresources who are able to put the Group’s corporate vision into practice, taking into consideration the businessenvironment of the Group and remuneration levels at other companies in the same industry or of the same scale.
• The ratio between basic remuneration and performance-linked remuneration (annual bonus and stock
remuneration) shall be properly established according to the roles and responsibilities, etc., of each Director andCorporate Officer so as to function as sound incentives toward the sustainable growth of the Group.

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Outline of Policy for Deciding the Individual Remuneration for Directors and Corporate Officers• Remuneration for Directors and Corporate Officers shall be determined by a resolution of the Board of Directors
in accordance with the Basic Policy and the Decision Policy, based on reports from the Remuneration Committee.
• Remuneration for the company’s Directors and Corporate Officers is comprised of basic remuneration andperformance-linked remuneration (annual bonus and stock remuneration).
• Basic remuneration is paid as a fixed amount, in cash, each month according to position.
• An annual bonus is linked to the company’s single-year performance (calculated based on financial and nonfinancial indicators) and is paid in cash once a year.
• Stock remuneration is granted as the Company’s shares and cash equivalent to the amount of the Company’s
shares converted to market value through the trust upon retirement.
• The ratios of remuneration by type are structured so that the higher the position, the greater the weight ofperformance-linked remuneration, and the ratio for the company’s President when performance target goals havebeen attained is set so that the ratio of basic remuneration, annual bonus and stock remuneration stands at 6:2:2.

The company pays only basic remuneration to Outside Directors and Audit & Supervisory Board Members, given theirroles of supervising and auditing management from an independent and objective standpoint. Directors who concurrently
serve as Executive Directors of operating companies shall not be paid the Stock Remuneration from the company.
Performance-linked remuneration is calculated as follows.
• Annual bonus
Annual bonuses are calculated by taking the total segment profit for a single fiscal year and indicators related to employee
safety (zero workplace fatalities and lost-work injuries rate) as the performance-linked indicators and multiplying the levelof achievement of these indicators by a certain coefficient for each position.
• Stock remuneration
Under the stock remuneration plan, a payment level is determined based on performance targets set in the Seventh
Medium-term Business Plan of the Group. From FY2021 to FY2024, the payment level is determined according to thelevel of achievement of the target profit attributable to owners of the parent company of 220 billion yen per year, set
under the Seventh Medium-term Business Plan. Furthermore, 5% or more return on equity attributable to owners ofparent (ROE) is the minimal requirement for the payment.
Directors who have been dismissed and Directors who have committed any misconduct may lose the right to receive
benefits for Directors based on a resolution of the Board of Directors. Directors who have already received benefits may
be asked to return the economic value equivalent to the Company’s Shares already received, based on a resolution of theBoard of Directors if they engage in any misconduct.
Starting in FY2022, non-financial indicators will be used in addition to the existing financial indicators for performancelinked remuneration. We plan to design remuneration for Directors and Corporate Officers using non-financial indicatorsthat will eventually combine multiple indicators related to the environment, society, etc., and in FY2022, we first
introduce an indicator related to employee safety in annual bonuses. Furthermore, indicators related to climate change,
which is positioned as a top priority management issue, will be introduced in the remuneration plan for Directors andCorporate Officers during the Seventh Medium-term Business Plan period. We will continue to study the introduction ofother indicators into the remuneration plan for Directors and Corporate Officers.

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Indices■ Composition of Remuneration for the Company’s Directors

Stock remuneration
Basic remuneration

Annual bonus
Service Performance-length-linkedShort-term
performance-linked
Remuneration limit for the company’s Directors (all Directors):
within 700 million yen per year

Medium- to long-term
performance-linked
Remuneration limit
for the company’s
Directors (excluding
Outside Directors):
within 800 million yen
over 4 years

Executive Remuneration (P.234)

Internal Control
The JFE Group’s internal control system, in accordance with the Basic Policy for Building an Internal Control System,
is maintained through various committee regulations including the Rules of the Board of Directors, Regulations forGroup Management Strategy Committee, Regulations for Management Committee, Regulations for the JFE GroupCSR Council, Regulations for Organization and Operations, Regulations for Document Management, Regulations for
Addressing Violence Directed at Companies, and the installation of Corporate Ethics Hotline. In April 2021, we revised
the Basic Policy and established the group governance system, in which the JEF Group Council chaired by the JFE
Holdings’ CEO (President), centrally carries out Group-wide risk management and reports critical matters to the Boardof Directors for direction and supervision to increase effectiveness of the Board of Directors and strengthen its auditing
function over risk management. The Basic Policy will be revised and improved from time to time to boost sustainablecorporate value.
Basic Policy for Building an Internal Control System (Japanese only)(https://www.jfe-holdings.co.jp/company/info/pdf/naibutousei.pdf)

Strengthening Internal Control
Internal Audits
JFE Holdings, its operating companies and key Group companies has internal audit organizations comprising 169 people
as of April 1, 2022. These organizations share information to enhance overall auditing within the Group.

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Audits by Audit & Supervisory Board Members
Audit & Supervisory Board Members attend meetings of the Board of Directors, Group Management Strategy
Committee, and Management Committee as well as the Group CSR Council and other important meetings. To audit how
Directors execute their responsibilities, they conduct hearings with Directors and corporate officers regarding operational
status and receive operational reports from subsidiaries. In addition to undergoing statutory audits, JFE companies takethe following initiatives to strengthen coordination among the Members through information sharing and ensure theeffectiveness of internal auditing by the Audit & Supervisory Board Members.
A total of 34 full-time Audit & Supervisory Board Members have been appointed to 29 companies, including JFE
Holdings. Operating company personnel are dispatched to Group companies as part-time Outside Audit & Supervisory
Board Members. Each dispatched Audit & Supervisory Board Member serves one to five subsidiaries to perform audit
and enhance Group governance. Eight Audit & Supervisory Board Members served 25 companies in total.
The JFE Group Board of Auditors includes both full-time Audit & Supervisory Board Members of each Group company
and part-time Audit & Supervisory Board Members. Subcommittees and working groups created to address specificissues meet autonomously to share information, investigate issues and enhance understanding. The findings of theyear’s activities are presented at the general meeting of JFE Group Auditors and used for audits.
Operating System (P.233)■ Structure of JFE Group Board of Auditors

General Meeting of
JFE Group Auditors(hosted by JFE Holdings and attended
by 42 auditors from 53 companies)

New Audit &Supervisory Board Member
training courses andother seminars

Subcommittees andworking groups(by topic)

JFE Steel andits group companies

JFE Engineering andits group companies

Part-time Audit &Supervisory Board Members

Part-time Audit &Supervisory Board Members(4 auditors overseeing
17 group companies)(4 auditors overseeing
8 group companies)

JFE Shoji andits group companies

Cooperation between Audit & Supervisory Board Members and Accounting Auditor
In FY2021, the Audit & Supervisory Board Members held eight scheduled or unscheduled meetings with Ernst & Young
ShinNihon, JFE’s outside accounting auditor, in which the latter presented its audit plan, completed work and detailed
results. The firm also presented a detailed explanation of its quality management system to confirm its validity. In turn,
the Audit & Supervisory Board Members explained their own audit plans and other matters to the firm. The two sides
also shared opinions on related matters.
Cooperation between Audit & Supervisory Board Members and Internal Auditing Department
In FY2021, the Audit & Supervisory Board Members held six scheduled or unscheduled meetings with the internal
auditing department, in which the latter presented its internal audit plan, work status and detailed results. During themeetings, the Audit & Supervisory Board Members also shared opinions with the department.

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Operating Company GovernanceSome Directors, Corporate Officers and Audit & Supervisory Board Members of JFE Holdings serve concurrently as the
Directors or Audit & Supervisory Board Members of operating companies to strengthen governance and information
sharing across the Group. To strengthen governance, JFE Holdings’ managers attend each operating company’s
General Meeting of Shareholders and Management Planning Briefing, receive reports on their activities, and discuss the
managerial policies of subsidiaries.

Policy on Listed Subsidiaries
To put into practice the Group’s corporate vision of contributing to society with the world’s most innovative technology, andalso to realize sustainable growth and enhancement of medium- to long-term corporate value, the JFE Group forms a corporategroup comprising companies with high expertise, divides business functions within the Group and conducts businesses
development outside of the Group. Of these subsidiaries, the following two are the listed companies that we hold.
GECOSS CORPORATION (Tokyo Stock Exchange, Prime Market)
The main business of GECOSS includes leasing and sales of temporary construction materials and designing andconstruction of temporary works. Its products and services are mainly provided to civil engineering and construction
businesses. GECOSS offers products and services that match the needs of its customers in cooperation with JFE Steeland the Group companies. We believe that carrying out business with GECOSS as our subsidiary will lead to maximizing
the value of the company and of the Group through personnel exchanges, R&D, and other collaborative initiatives
with JFE Steel. Furthermore, GECOSS maintains its listed status as a means to enhance its competitiveness from theperspective to secure market recognition and credibility in funding, sales and marketing, and hiring.
JFE Systems, Inc. (Tokyo Stock Exchange, Standard Market)
The main business of JFE Sytems includes system integration consisting of planning, designing, development,
operation, and maintenance of information system, system construction utilizing solutions and the company’s own
products, and IT infrastructure solutions that support the business system. Computer systems are an important
foundation in the steel business that support overall business activities, including order acceptance, production,
shipment, and quality management, and in using a variety of data. Guaranteeing the accumulation of know-how and thecontinuation of personnel exchanges by holding JFE Systems as a subsidiary will also be indispensable for maintaing
the competitiveness of JFE Steel in pressing ahead with digital transformation. Furthermore, JFE Systems maintains its
listed status as a means to enhance its competitiveness from the perspective to secure market recognition and credibility
in funding, sales and marketing, and hiring.
The aforementioned companies are subject to rules different from those applicable to other consolidated subsidiaries
based on the guidelines of the Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange regarding listed
subsidiaries, and other measures are also taken so as to ensure that each of the companies conducts autonomous
corporate activities exercising autonomy and flexibility, secure management independence as listed companies, andmake sure that the interest of the said subsidiary’s shareholders other than the said subsidiary and the Company will not
be unfairly impaired. In addition, with respect to matters necessary for the Group’s risk management, prior consultation
and reporting are required from each company while securing their independent decision-making, so as to implement risk
management as a member of the Group companies.
JFE Container was delisted from the Standard Market of the Tokyo Stock Exchange on July 28, 2022 and became awholly owned subsidiary of JFE Steel Corporation through a share exchange on August 1, 2022. JFE Container is mainly
engaged in the manufacture and sale of steel drums and high-pressure gas containers. By making JFE Container a wholly
owned subsidiary, the Company expects the development of new fields through further group collaboration such as in
the high-pressure gas container business and the expansion of opportunities for business creation, toward the realizationof a decarbonized and hydrogen society. This will also enable business management and prompt decision-making froma medium- to long-term perspective. Accordingly, the Company has come to the conclusion that making JFE Container awholly owned subsidiary will contribute to enhancing the corporate value of the JFE Group as a whole.

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Furthermore, we shall regularly verify the significance of maintaining the listing of the listed subsidiaries and takenecessary measures upon confirmation at its Board of Directors. The above details were verified and discussed at a
Board of Directors meeting held in May 2022.

Basic Policies for Strategic Shareholdings and Exercise of Related Voting Rights
All shares held by the Company are the shares of subsidiaries or affiliates. In principle, the Company’s wholly owned
subsidiaries and operating companies, JFE Steel Corporation, JFE Engineering Corporation and JFE Shoji Corporation(hereinafter “Operating Companies”), do not hold domestic listed stocks as strategic shareholdings. Strategic
shareholdings, however, are allowed as an exception when holding the stocks of the Company is determined to benecessary for maintaining and achieving growth for the Group.
The Board of Directors meetings regularly confirm the significance of the strategic shareholdings and whether the
benefits and risks of such holdings are commensurate with their capital cost, and sell strategic shareholdings if there isno significance of such shareholdings or there is a risk of damage to shareholders’ interest. In FY2019, the Company, as
described above, decided on a policy not to hold domestic listed stocks as strategic shareholdings in principle, and sold allor part of 143 stocks for 145.9 billion yen (on a market value basis) from FY2019 to FY2020. In FY2021, the Company soldall or part of 61 stocks for 41.9 billion yen (on a market value basis). Furthermore, the Board of Directors, at a meeting
held in August 2021, examined the significance of its strategic holdings and the return on investment from the above
perspective.
The exercise of voting rights of strategic shareholdings is decided upon reviews by operating companies on thecontent of the proposal and is appropriately implemented in a way that will maximize shareholder interest. To be specific,
the content of the proposal is to be checked by the investment application department and the investment control
department, and approval will be given to proposals which are considered not to pose any threat to the maximization ofinterest of these Operating Companies as shareholders.
Of the shares for investment purposes held by JFE Steel, which has the largest balance sheet amount for investment
purposes posted in the consolidated financial statements of the company, those shares of the company held for
purposes other than pure investments are shown below.
■ Number of Issues and Amount Reported in the Balance SheetFY2019 year-end

FY2020 year-end

FY2021 year-end

219

171

146

166.1

96

71.2

Number of issues
Total balance sheet amount (billion yen)

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Basic Policy
In expanding our businesses in Japan and abroad, it is important that JFE maintains relationships of trust with all
stakeholders, including its customers, shareholders and local communities. Trust can only be built upon a strong
foundation of ensuring thorough compliance. Misconduct and scandals resulting from compliance violations can instantly
shatter the trust that has taken many years to establish. Therefore, JFE believes it is extremely important that all
members of the organization deepen their knowledge and awareness of compliance and perform their jobs accordingly.
It conducts training on various topics such as the Antimonopoly Act, the Subcontract Act and anti-corruption, including
prevention of bribery of public officials, using e-learning and compliance guidebooks and through guidebook reading
sessions as well as by other means.

Targets and Results
The JFE Group Standards of Business Conduct guide employees to conduct their business activities based on the
Corporate Vision and Corporate Values. They also help to strengthen awareness among all JFE Group executives andemployees and ensure adherence to corporate ethics. We promote the initiatives by upholding the Ensure Adherence
to Corporate Ethical Standards and Compliance as material issues of corporate management and setting KPIs to achieve
those targets.
Material Issues of Corporate Management and KPIs (P.19)

Compliance System
The Compliance Committee chaired by the President of JFE Holdings generally convenes every quarter to deliberatebasic policies and issues and then supervise their implementation. Each operating company has a similar in-housesystem for promoting and supervising compliance. In addition, the JFE Group has introduced a Corporate Ethics Hotline
to ensure that crucial information regarding compliance can be communicated directly from the front lines to top
management.
For more on the JFE Group Standards of Business Conduct, please refer to the following information.
JFE Group Standards of Business Conduct (https://www.jfe-holdings.co.jp/en/company/philosophy/guideline.html)

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Ensure Adherence to Corporate Ethical Standards and Compliance
Compliance Education
As part of its initiative to raise awareness of compliance, the JFE Group compiled a Compliance Guidebook that was
distributed to employees and executives (domestic and overseas) to be used in activities such as collation and to ensurethat the rules are fully communicated and informed. The guidebook provides a simple explanation of concrete standards
for complying with laws and internal rules and for acting in line with social mores with over a hundred case studies.
Questions that come up in the course of daily operations as well as situations and cases that test our judgment havebeen compiled in the guidebook with explanations by the relevant department. The content has been reviewed by legal
counsel. The guidebook has been reviewed according to the revisions of relevant laws and rules, and some of the cases
described have been added, revised, or omitted since the first edition in 2006 to improve its overall content.
The JFE Group also conducts training on compliance with the Antimonopoly Act, insider trading restrictions, security
export controls, the Construction Business Act, anticorruption laws including laws against bribery of public officials,
and more.

Whistleblowing System
The JFE Group has established a Corporate Ethics Hotline, a contact point accessible to all officers and employees(including contract workers, part-time workers, and temporary staff, either active or retired) of the JFE Group as well as
those of suppliers and other business partners. The purpose of the hotline is to ensure adherence to corporate ethics
and compliance and to prevent corruption and human rights abuses. Reports and consultations are accepted via e-mail,a dedicated phone line and postal mail, anonymously if preferred, and an external hotline to an independent law firm isalso provided.
To encourage the active sharing of information, the Corporate Ethics Hotline is operated under rules and regulations
that ensure strict confidentiality and protect people who report information or seek advice against acts of retaliation.
We investigate the facts of any incident that has been reported on and consulted about only after consulting with thewhistleblower to protect their privacy, and feedback the investigation results to the whistleblower if requested.
We strive to prevent incidents of misconduct and ensure the early detection and correction of wrongdoing by
accepting consultations and reports, ranging from compliance issues such as violation of the Antimonopoly Act,
corruption, and bribery, to human rights abuses including misconduct and harassment in the workplace. In the eventthat violations of laws are confirmed, corrective and remedial measures are taken in the organization involved. Detailsof the reports and consultation received at the Corporate Ethics Hotline are regularly communicated to full-time Audit& Supervisory Board Members while the operational status of the system is reported to the Board of Directors for theirsupervision.
We also accept inquiries, anonymously if preferred, on compliance and other issues from outside stakeholders via aform on the corporate website. The content is handled as confidential and appropriately addressed.
Procedures for handling illegal acts or other violations:• Departments responsible for compliance at JFE Holdings and each operating company carry out necessary responses,
such as implementing the initial response, confirming facts, investigating the cause, and developing measures toprevent recurrence.
• Departments responsible for compliance at each company report on the facts, cause, and recurrence prevention
measures to the Compliance Committee at each company to confirm the cause and assess the effectiveness ofrecurrence prevention measures and the responsibility of related parties.
• Matters such as major violations are reported to the Compliance Committee to be shared across the entire Group andto facilitate horizontal implementation of recurrence prevention measures to make sure that no similar violations occur
anywhere in the Group.

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Indices■ Whistleblowing System
Those who raise or report concerns
Officers and employees of the JFE Group Officers and employeesof customers, suppliers, and other business partners* Including former officers and employees

Email / Telephone / Personally
written letter sent by ordinary mail

Reports

Requests aninvestigation

Board of Directors

Compliance Committee

Internal hotline

Reports aninvestigation

Reports aninvestigation
Requests aninvestigation

Feedback

Feedback

Concerns raised or reported(The nature of the concern and personal
information are kept strictly confidential.)

External hotline(at a law firm)* On a non-retainer basis

Responsible department /Relevant department(s)Reports the operational status of the system

Preventing Corruption and Bribery
Under its Standards of Business Conduct, the JFE Group endeavors to comply with laws and ordinances, compete
fairly and freely, refrain from illegal business activities, and build and maintain sound and proper relationships withgovernments and political authorities.
We explicitly prohibit bribery, such as the offering and receiving of illegal payoffs, excessive entertaining or favors, aswell as corruption such as embezzlement from a position of advantage and promotion of conflicting interests. The Group
strives to thoroughly prevent corruption by stating in its company rules that these offenses will be penalized.
In addition, under its Standards of Business Conduct, the JFE Group endeavors to build and maintain sound andproper relationships with governments and political authorities. The bribing of public officials has become a major
business risk in recent years due to growing global awareness of corruption and a stronger drive by authorities toexpose such wrongdoing. The JFE Group does not tolerate any kind of illegal activity in Japan or any other country,
including bribery, such as offering money or other benefits to public officials, and never resorts to these illegal activities
to gain profit or resolve problems. Considering this, the Group issued JFE Group’s Basic Policy on Preventing Bribery of
Public Officials and disseminate it throughout the Group including operating companies. The JFE Group also maintains
various systems to prevent the bribery of public officials, such as by stipulating that efforts be made to use third-party
appointment checklists or have an anti-bribery confirmation letter signed when using external parties including agents or
consultants who may have connections with overseas public officials.
For our stance on preventing bribery, refer to the following information.
JFE Group’s Basic Policy on Preventing Bribery of Public Officials(https://www.jfe-holdings.co.jp/en/company/philosophy/anti-bribery.html)

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Resisting Organized Crime
The JFE Group declares in its standards of business conduct that it will firmly resist all antisocial forces and has
established the JFE Group Policies for Addressing Antisocial Forces and Regulations for Addressing Violence Directed at
Companies to clarify the measures to be taken against antisocial forces, including an initial response manual.
The JFE Group Policies for Addressing Antisocial Forces has been approved by the Board of Directors, and we willseek to establish sound corporate management based on an organized and unified response to the issue within theframework of our system of compliance. We have specifically set up a section responsible for handling antisocial forcesin the General Administration and Legal Affairs departments of each Group company to completely discontinue any
dealings with antisocial forces. We will also set up rules for reporting and responding to any related incidents and will
resolutely stand against antisocial forces by cooperating with law enforcement.
In addition, we will seek to establish thorough awareness of the JFE Group Policies for Addressing Antisocial Forces
and specific rules governing our response among all executives and employees by providing e-learning and distributing
the Compliance Guide Book.

Compliance with the Antimonopoly Act
The JFE Group views past violations of the Antimonopoly Act seriously and continues to implement thoroughmeasures to eliminate the possibility of future infringements. The internal audit departments of JFE Steel and JFE
Engineering are auditing transactions with other companies to ensure compliance with the Antimonopoly Act byconfirming that no activities are suspected of violating the law. The audits are being conducted regularly at each office,including branches and branch offices. Each Group company is implementing similar measures to prevent violations of
the Antimonopoly Act.
We are increasing the effectiveness of these recurrence prevention measures by regularly reporting relevant
activities to the Compliance Committee.

Confirmation and Improvement through the Employee Awareness Survey
The JFE Group regularly conducts a Corporate Ethics Awareness Survey once every three years for directors andemployees of the Company as well as the operating companies to confirm the penetration and thorough complianceof the Group’s Corporate Vision, Corporate Values, and Standards of Business Conduct, along with the identification ofpotential risks. The survey conducted in FY2019 confirmed that many employees acknowledged the vision and corporate
policy and are aware of compliance matters when carrying out their work. On the other hand, the survey also brought toour attention issues to address going forward. Issues identified are reflected in the specific initiatives of each company
for improvement under the supervision of the JFE Group CSR Council and the Board of Directors. The next Awareness
Survey will be conducted in FY2022 to confirm the status of improvement and changes in employee awareness, and theresults will be reflected in future initiatives.

Indictment of JFE Group Company Employees
Employees of JFE Engineering Corporation were indicted in March 2022 for alleged involvement in obstructing bids
concerning the construction contracted with Taketomi Town, Okinawa Prefecture.
We deeply regret this situation and sincerely apologize for the inconvenience and concern caused to many of therelated parties. We are determined to ensure compliance and pursuing Group-wide initiatives to restore trust as soon as
possible.

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Risk Management
Risk Management System
JFE Holdings is responsible for comprehensive risk management of the Group in accordance with its Basic Stancefor Building an Internal Control System by establishing a system whereby the Board of Directors oversees risk
management and confirms its effectiveness.
In April 2021, we established a system whereby all risks in the Group are centrally managed by the Council and all
critical matters are reported to the Board of Directors for direction and supervision.
Specifically, corporate oficers are responsible for recognizing risks, and those deemed material are then confirmed
and assessed by the JFE Group CSR Council, chaired by the CEO (president) of JFE Holdings. Next, the CSR Council
deliberates and decides on countermeasure policy and action plans for risk management. Such risks include businessactivities; compliance-related matters such as compliance with the Antimonopoly Act and laws related to anti-corruption
including bribery of public officials, observance of company policy and regulations such as the Corporate Vision and JFEGroup Standards of Business Conduct; and ESG risks such as those related to the environment, climate change, humanaffairs, labor, safety and disaster prevention; human rights abuses such as sexual harassment and power harassment,
quality management, financial reporting, and information security. The Board of Directors oversees risk management
and confirms its effectiveness by regularly receiving reports on Group policy and action plans on risk management, andthrough deliberation and decision-making on important matters regarding risk mangement.
We will continue improving Group-wide risk management in accordance with the discussion by the Board of
Directors.
For our risk management policies and systems, refer to the following information.
Basic Policy for Building Internal Control Systems (Japanese only)(https://www.jfe-holdings.co.jp/company/info/pdf/naibutousei.pdf)

JFE Group CSR System (P.23)
Development of the Whistleblowing System (P.199)

Response to Specific Risks
Response to Climate Change Risks
The JFE Group places initiatives on climate change as top-priority business concerns, and it formulated the JFE Group
Environmental Vision for 2050 to achieve carbon neutrality by 2050. In the Seventh Medium-term Business Plan, theGroup established managerial targets to reduce CO2 emissions from the steel business by 18% from FY2013 levels by
the end of FY2024 and by over 30% from FY2013 levels by the end of FY2030, and further achieve carbon neutrality by
2050 in multiple ways.
Risks are identified and evaluated based on a scenario analysis conducted under the framework recommended by
the TCFD, and important factors that may affect management are selected for further analysis and used in formulating
business strategies, including the Seventh Medium-term Business Plan.
For climate change risks and opportunities, refer to the following information.
TCFD Recommended Scenario Analysis (P.84)

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IndicesIntellectual Property Management
The JFE Group meticulously manages intellectual property across its diverse business activities. To prevent infringementon third-party intellectual property, it constantly monitors the latest information on intellectual property and implements
all necessary measures.

Privacy Protection
JFE has established the JFE Group Privacy Statement for managing information including “My Numbers,” which arepersonally identifiable numbers under Japan’s social security and tax number systems.
To maintain the appropriate protection of personal information, employee trainings on the rules, which have been set
in place in accordance with the privacy statement, have been conducted as stipulated in applicable laws of each country
related to businesses and guidelines.
To reduce information security risks, including cyber-attacks and improper system use such as leaks of personal
information, and to promote safe business activities, the JFE-Security Integration and Response Team (JFE-SIRT),
comprising the IT division managers of each operating company, participates in the Nippon CSIRT Association,
established by private sector volunteers and corporate Computer Security Incident Response Teams (CSIRTs) active inJapan. We seek to enhance the level of our initiatives by exchanging information and coordinating on security incidents.
For privacy protection policies, please refer to the following information.
JFE Group Privacy Statement (https://www.jfe-holdings.co.jp/en/privacy.html)

Information Security
The JFE Group formulates various rules on information security management to prevent information leakage and system
failures due to cyber-attacks and improper system use. Efforts are made to enhance information-security knowledge andawareness of rules among employees through training and education. Additionally, shared IT measures are applied ineach Group company and regular information security audits are conducted to reinforce the overall information security
management level in the Group.
Key issues related to IT, particularly information security, are deliberated by the JFE Group Information Security
Committee to determine Group policy.
Applying the policies set by the committee, the JFE-SIRT formulates and implements information-security measures,
performs information security audits, offers guidance on responding to incidents and generally enhances the levelof Group-wide information security management. JFE-SIRT reports on its activities to the Group CSR Council asappropriate.
For more details on JFE’s information security, refer to the information in the management section of the DX REPORT.
DX REPORT (https://www.jfe-holdings.co.jp/en/investor/library/dxreport/index.html)

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Indices■ Conceptual Diagram of Information Security

Board of Directors
Direction and supervision
Report on policy, activity plan, etc.
Group CSR Council

Chairperson: CEO (President)

Report and deliberate regularly (share risk information)
JFE Group Information Security Committee
Chairperson: General Manager of JFE Group
Information Security (Corporate Officer)
Decision

Planning and proposals
JFE-SIRT
Supervising and monitoring
ReportingExecution

Group companies

Responding to Human Rights Risks within the Supply Chain
The JFE Group procures raw materials, construction materials, and machinery from all over the world. In response tohuman rights risks associated with the supply chain, the Group established the JFE Group Human Rights Basic Policy
in 2018 to take action in accordance with the United Nations Guiding Principles on Business and Human Rights. Each
operating company has established raw material purchasing policies, purchasing and procurement policies, and a basic
policy on sustainability in the supply chain, and they carry out purchasing in a way that respects human rights, legal
compliance, and environmental preservation.
In addition, starting in FY2021, the Group has been conducting human rights due diligence. We are moving toward
establishing the management cycle to enhance our ability to respond to human risks across the supply chain fromFY2022 to support the creation of sustainable supply chains.
For more details on our human rights due diligence initiatives, refer to Human Rights.
Human Rights (P.168)

JFE Group’s Business Continuity Plan
Anticipating the possibility of natural disasters caused by typhoons and major earthquakes as well as a rapid expansionof infectious diseases such as a new strain of influenza, the JFE Group has formulated a business continuity plan (BCP)
to address contingencies. We conduct regular training based on the BCP while also pursuing other countermeasures.
In the event of a major earthquake, the Group CSR Council will promptly discuss and determine the policy on how todeal with the matter, based on predetermined response processes to minimize loss and other damages.

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Response to Major Natural Disasters
We are preparing to respond in the event of a major earthquake through measures such as establishing tsunami shelters,
maintaining a Company-wide line of command under restricted communications and power outages, and securing data
backup. We have also strengthened drainage at our steelworks to address the impact of typhoons and torrential rains thatare occurring in Japan with increasing severity.

Response to the COVID-19 Pandemic
We have addressed the COVID-19 pandemic by quickly setting up a response team and implementing measures basedon the policies for an assumed outbreak of a new strain of influenza. We have sought to reduce commuting by relaxing
internal requirements to recommend various styles of working at home. For employees who must work at the office, wehave adopted staggered commuting, installed office partitions and are using teleconferencing and other means to reduce
the risk of infection insofar as possible. We have also established an environment in which employees can carry out theirwork even at home without any problems through such measures as promoting paperless workflows and introducing
electronic approval and seal systems. Through these initiatives, we seek to explore more flexible workstyles and improve
the productivity of our workforce. Through these initiatives, we seek to explore more flexible workstyles and improve theproductivity of our workforce.
In particular, JFE Steel has reviewed its BCP for the novel influenza epidemic and conducted a simulation to gauge
the effects on operations in case an increase in the number of infections leads to a rise in the absence rate. The company
is preparing responses to diverse situations to maintain key businesses including operations at our steelworks while
improving its workplace environment by practicing thorough hygiene management and implementing a remote working
infrastructure. We have also been actively promoting workplace COVID-19 vaccinations. We will continue to place top
priority on the safety and wellness of employees and others involved in the company.

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IndicesTax Transparency
Basic Policy
The JFE Group upholds the JFE Standards of Business Conduct and complies with both the letter and spirit of the
tax laws of each country as well as international rules, including the taxation guidelines issued by the Organization for
Economic Co-operation and Development and other international institutions. We will pay taxes in every country where
we do business in a timely, appropriate, and fair manner.
Moreover, we seek to forge relationships of trust with the tax authorities in each country by raising transparency andwithout resorting to tax planning or the use of tax havens to evade taxation.

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Indices

Environmental Data
Material Flow
JFE Steel works to reduce the environmental impact of its iron and steelmaking processes, including through theeffective use of resources. The company recycles 93.0% of the water it uses for production and uses 99.7% of its coproducts, such as iron and steelmaking slag. In addition, 100% of co-product gas generated during production is reused
as fuel for reheating slabs, generating power for internal use and supplying power to the public.

S

T JFE Steel
SupplyEmissions

Input

CO2
•Scope 1

48.8

Raw materials for steel
production

Industrial water

Purchased energy

226 million
tonnes116.7PJ

59.3 million tonnes•Petroleum-based fuels: 20.2 PJ•Electric power:
96.4 PJ•Iron ore: 33.5 million tonnes•Coal: 19.9 million tonnes•Lime:
5.9 million tonnes

Recycled materials•Steel scrap•Steel scrap (basic oxygen
milliontonnesfurnace, or BOF)

1.2

• Waste plastics• Waste PET bottles• Used consumer appliances• Food waste• Used batteries• Dust, sludge, etc.

JFE Group
Recycling Processes
milliontonnes CO2

Total CO2 emissions fromenergy and non-energy sources•Scope 2
milliontonnes CO2

Coke oven and sintering plant

5.8

Coke oven gas

Flue gas•SOx

3.5 million Nm

3

Blast furnace•NOx

11.2 million Nm

3

BF gasWater recycled•Soot and dust
Greenhouse gases emitted
during transportation

93.0(domestic distribution)%

BOF and CC

2,981 million tonnes•CO2

0.38 million
tonnes CO

BOF gas2

Chemical substances (PRTR)•Released

1,378 tonnes

128
4.0 %

98
3.0 %

62.3

Recycled

Landfill%

Output7.0

Supplied tosociety

37.7• Byproduct gas• Waste heat recovery
steam• Power generation byblast furnace (BF) top
gas-pressure recovery
turbine (TRT)

3.3 million tonnes

Rolling%%

Recovered energy
for recycling%

24.0 0.3

million tonnes

Evaporation loss
milliontonnesConsumedby JFE Steel

0.042 million
tonnesReheat furnace

3,207•Transferred

Wastewater
milliontonnesLandfill

Total water
consumption

380 tonnes

Co-products

Shipments

13.9

milliontonnes•Slag: 11.3 million tonnes•Dust: 1.8 million tonnes•Sludge: 0.6 million tonnes•Other: 0.2 million tonnes

Effective use ofrecovered energy

100%

Effective use of
Co-products

99.7%

%

Supplied to Society

75.7

%

OutputEnergy supply

37.7 %• Power• Fuel gas• Steam

Other products• Chemicals• Oxygen• Nitrogen• Hydrogen• ArgonSteel products

25.9 million
tonnes(crude steel base)Community, Environment and Society

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Marine and land civilengineering materials

tonnes10.5 million• Materials for cement• Roadbed materials• Port and harbor
construction materials• Fertilizer

Recycled products• NF Board®
• PET flakes• Palettes• Recycled resin

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IndicesN JFE Engineering (Head Office and Works)
Input

JFE Engineering
38,600 tonnes

Steel

Output and Emissions• Tsurumi Works• Tsu Works

Energy8,100 tonnes CO2
1,700 tonnes CO2•Scope 26,400 tonnes CO2
999 tonnes
Waste generated
803 tonnes•Industrial wastes
196 tonnes•General wastes
Wastewater (ocean only) 132,000 tonnes•Electric power purchased 25.0 GWh•Class A heavy oil•Kerosene•Light oil•Gasoline•City gas
•LPG
Water

37,400 tonnes

Products
CO2•Scope 1

53.7 kl
4.8 kl220 kl13.6 kl
294,000 Nm³
85.2 tonnes
62,900 tonnes

146 tonnes

Others (PRTR)

Abbreviations indicated under "scope" represent the following group or company:
JFE Group [All]; JFE Steel Group [ST Gr]; JFE Steel [ST]; JFE Engineering Group [EN Gr];JFE Engineering [EN]; JFE Shoji Group [SH Gr]; JFE Shoji [SH]

Environmental Management■ Data Regarding Environmental Management
Items

Scope

Unit

FY2017FY2018FY2019FY2020

FY2021

%

54

54

58

58

54

ST Gr

%

20

20

21

21

18

EN Gr

%

5

5

9

9

8

SH Gr

%

29

29

28

28

27

%

70

72

74

70

68

ST Gr

%

—

72

75

74

72

EN Gr

%

—

60

60

51

50

SH Gr

%

—

88

92

89

83

ST Gr

sites

31

31

32

24

29

EN Gr

sites

48

50

48

28

52

EN Gr

people

996

1,059

1,063

731

1,131

All
Base
% covered by ISO
14001 certification

All
Employee

Environmental audit(number of sites)
Environmental education
conducted (total participants)

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Indices■ Environmental Accounting Data (1)FY2020
Breakdown of environmental protection cost

FY2021

Investment(billion yen)

Cost(billion yen)

Investment(billion yen)

Cost(billion yen)

Impact monitoring and measurement,
and EMS expenses and education

1.4

2.6

1.4

2.5

Saving and efficiently using energy

14.4

25.2

18.9

27.0

Recycling industrial water

2.4

16.9

6.6

17.4

Recycling and waste management ofinternally generated materials, etc.

0.6

4.8

1.2

5.9

Air pollution countermeasures

5.3

32.9

12.4

31.4

Water pollution countermeasures

4.7

10.6

7.2

9.6

Prevention of soil contamination, noise,
vibration, and subsidence

0

0.6

0

0.5

Other

Charges, etc.

—

1.6

—

1.4

R&D

Technologies for protecting theenvironment, saving energy, andpreventing global warming

0.8

8.3

0.8

9.3

Societal
activities

Support for nature preservation andforestation, information disclosure,exhibitions, and public relations

—

0.6

—

0.6

29.7

104.0

48.5

105.6

Management
Global warming
countermeasures
Conservationof natural
resources

Environmental
protection

Total

Note: Data cover all investment activities of JFE Steel Corporation and R&D activities of JFE Engineering Corporation.
■ Environmental Accounting Data (2)
Items

Scope

Unit

FY2017FY2018Energy-saving investment(accumulated)Allbillion
yen

492.9

505.4

532.1

546.5

565.4

Environmental protection
investment (accumulated)Allbillion
yen

692.4

708.5

727.6

742.1

770.9

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FY2019FY2020

FY2021

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Environment

SocialGovernanceUnit

FY2017FY2018FY2019FY2020

FY2021

million
t-CO2

62.2

59.9

60.4

53.1

59.0

ST Gr

million
t-CO2

62.1

59.7

60.0

52.6

58.6

ST

million
t-CO2

58.5

55.4

56.0

49.1

54.7

ST
subsidiaries

million
t-CO2

3.6

4.3

3.9

3.5

3.9

EN Gr

thousand
t-CO2

56.5

212

403

484

387

EN

thousand
t-CO2

17.3

17.5

16.8

14.1

10.3

EN
subsidiaries

thousand
t-CO2

39.3

195

386

470

377

SH Gr

thousand
t-CO2

35.7

36.2

35.3

29.6

31.9

SH

thousand
t-CO2

0.5

0.5

0.5

0.4

0.4

SH
subsidiaries

thousand
t-CO2

35.2

35.8

34.8

29.2

31.5

million
t-CO2

54.9

52.3

52.9

46.6

51.9

ST Gr

million
t-CO2

—

52.1

52.5

46.2

51.5

ST

million
t-CO2

52.5

49.2

49.8

43.8

48.8

ST
subsidiaries

million
t-CO2

—

3.0

2.7

2.4

2.7

EN Gr

thousand
t-CO2

—

171

361

442

345

EN

thousand
t-CO2

—

7.8

3.8

2.4

2.4

EN
subsidiaries

thousand
t-CO2

—

163

357

439

343

Climate Change■ CO2 Emissions by Scope
Items

Scope
All

Scopes 1 and 2
total*1*2

All

Scope1*3*4

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SocialGovernanceUnit

FY2017FY2018FY2019FY2020

FY2021

million
t-CO2

7.4

7.6

7.6

6.4

7.1

ST Gr

million
t-CO2

—

7.5

7.5

6.4

7.0

ST

million
t-CO2

6.0

6.2

6.3

5.3

5.8

ST
subsidiaries

million
t-CO2

—

1.3

1.2

1.1

1.2

EN Gr

thousand
t-CO2

—

41.6

42.2

42.4

41.8

EN

thousand
t-CO2

—

9.7

12.9

11.6

7.9

EN
subsidiaries

thousand
t-CO2

—

31.9

29.3

30.8

33.9

SH Gr

thousand
t-CO2

35.7

36.2

35.3

29.6

31.9

SH

thousand
t-CO2

0.5

0.5

0.5

0.4

0.4

SH
subsidiaries

thousand
t-CO2

35.2

35.8

34.8

29.2

31.5

Items

Scope
All

Scope2*

5

ESG Data

Editorial
PolicyEnvironment

Unit CO2 emissions(numerator:
Scopes 1 and 2
total; denominator:
sales)*6

All

t-CO2/
billion yen

16,89815,463

16,193

16,442

13,515

Scope3*7*8All

thousandt-CO2e16,272

16,751

16,382

14,36920,778Category 1
Purchased goods
and services

All

thousandt-CO2e13,04813,371

12,557

11,026

17,244

Category 2
Capital goods

Allthousandt-CO2e

921

1,180

1,401

1,226

1,221

Category 3
Fuel and energy
related activities
not included in
Scopes 1 or 2

All

thousandt-CO2e

386

370

728

671

717

Category 4
Upstreamtransportationand deliveryAllthousandt-CO2e

650

491

489

419

454

Category 5
Waste generated
in operations

All

thousandt-CO2e

87

100

57

45

58

Category 6
Business travelAll

thousandt-CO2e

4

4

4

4

5

Category 7
EmployeecommutingAll

thousandt-CO2e

54

49

49

51

59

Category 15
InvestmentsAllthousandt-CO2e

1,122

1,186

1,097

927

1,022

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Indices*1 Data cover 79 companies- JFE Steel and 29 major domestic and overseas subsidiaries- JFE Engineering and 12 major domestic and overseas subsidiaries- JFE Shoji and 35 major domestic and overseas subsidiaries.
*2 FY2021 figure includes data for an expanded list of JFE Steel, JFE Engineering, and JFE Shoji subsidiaries.
*3 Data for JFE Steel include CO2 emissions from non-energy sources.
*4 S tarting with FY2018, data for 2 JFE Steel major domestic subsidiaries and a JFE Engineering major domestic
subsidiary include CO2 emissions from non-energy sources.
*5 CO2 Emission Factor for Purchased Electricity in FY2021:- JFE Steel uses the emission factor of the Commitment to a Low Carbon Society of the Japan Iron and SteelFederation for energy purchased in FY2020.
- JFE Steel’s domestic consolidated subsidiaries, the JFE Engineering Group, and the JFE Shoji Group apply the
adjusted emission factors of each electric power company for each fiscal year.
- Over seas: the latest IEA emission factors*6 The JFE Group changed its accounting standards from JGAAP to IFRS in FY2018.
*7 Coverage:(Categories 1, 2, 3, 4, 5) JFE Steel, 23 JFE Steel major domestic subsidiaries, JFE Engineering, and JFE Shoji	(Category 6, 7) JFE Steel, 23 JFE Steel major domestic subsidiaries, JFE Engineering, 12 JFE Engineering majordomestic and overseas subsidiaries, and JFE Shoji(Category 15) Japan Marine United, and 9 JFE Steel equity-method affiliates (7 domestic and 2 overseas)*8 Sources: Green Value Chain Platform (Ministry of the Environment) and others■ Other Greenhouse Gas
Items

Scope

FY
2017

Unit

FY
2018

FY
2019

FY
2020

FY
2021

ST Gr

million
t-CO2

60.8

57.0

57.4

50.2

55.8

ST

million
t-CO2

56.6

53.5

54.2

47.3

52.6

ST
subsidiaries

million
t-CO2

4.3

3.5

3.2

2.9

3.2

EN Gr*1*2

thousand
t-CO2

56.5

66.7

67.5

62.5

61.4

Scope1ST

million
t-CO2

50.5

47.3

47.9

41.9

46.8

Unit: CO2
emissions(denominator:
crude steel
production)ST

t-CO₂/
t-steel

1.99

2.03

2.03

2.08

2.03

ST Gr*3

million
t-CO2

—

2.61

2.65

2.40

2.74

ST

million
t-CO2

1.91

1.87

1.89

1.82

2.05

ST
subsidiaries

million
t-CO2

—

0.74

0.76

0.58

0.69

EN
subsidiaries*4

million
t-CO2

—

0.15

0.34

0.42

0.33

CO2
emissions(Scopes 1 and
2 total)CO2emissionsfromenergysources

CO2 emissions from
non-energy sources

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Unit

FY
2017

FY
2018

FY
2019

FY
2020

FY
2021

All

thousandt-CO2e

94.8

88.7

103.3

96.1

103.0

All
(ST only)

thousandt-CO2e

76.2

72.2

72.9

68.3

74.6

All

thousandt-CO2e

18.6

16.5

30.4

27.9

28.5

ST

thousandt-CO2e

18.6

16.5

20.0

15.5

17.7

EN
subsidiaries*4

thousandt-CO2e

—

—

10.4

12.4

10.8

ST Gr

million
t-CO2

0.65

0.66

0.65

0.57

0.63

ST

million
t-CO2

0.37

0.40

0.40

0.34

0.38

ST
subsidiaries

million
t-CO2

0.28

0.26

0.25

0.23

0.25

EN Gr

milliont-CO2/year

4.06

4.12

4.13

9.65

10.57

Biomass power
generation

EN Gr

milliont-CO2/year

1.97

2.12

2.12

2.74

2.86

Waste power
generation

EN Gr

milliont-CO2/year

1.64

1.53

1.53

3.37

3.40

Others (digestion gas,
geothermal, solar
power, wind, waste
heat recovery, fuelconversion, etc.)

EN Gr

milliont-CO2/year

0.46

0.47

0.48

3.54

3.57

Recycling

EN Gr

milliont-CO2/
year

—

—

—

—

0.74

Items

Methane (CH4)
GHG
emissionsother thanCO2
N2O

GHG emitted during transportation*5

Contribution to CO2 emission
reductions*6

Scope*1 Data cover JFE Engineering and 12 major domestic and overseas subsidiaries.
*2 Expanded coverage of major subsidiaries for JFE Engineering for FY2021.
*3 Data cover JFE Steel and a major domestic subsidiary.
*4 J&T Recycling Co. is a domestic subsidiary of JFE Engneering.
*5 Data cover JFE Steel and 10 major domestic subsidiaries, which are specified consigners designated under theJapanese Energy Saving Act.
*6 Coverage:- Up to FY2019, only JFE Engineering’s domestic business is covered- From FY2020, JFE Engineering’s domestic and overseas businesses and its German subsidiary Standardkessel
Baumgarte GmbH (SBG) are covered- FY2021 data cover JFE Engineering’s domestic and overseas businesses, J&T Recycling Corporation, JFE Urban
Recycle Corporation, and German subsidiary Standardkessel Baumgarte GmbH (SBG)

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Indices■ Energy
Items

Scope

Unit

FY2017FY2018FY2019FY2020

FY2021

All

PJ

—

—

670

592

654

ST Gr

PJ

—

—

669

591

652

ST

PJ

644

613

620

545

602

ST
subsidiaries

PJ

ー

—

48.8

45.2

49.6

EN Gr

PJ

—

—

1.3

1.2

1.3

SH Gr

PJ

—

—

0.6

0.6

0.7

Energyconsumption

Energyconsumption
and unit
energyconsumption

Recoveredenergy forrecycling

Unit energy
consumption(crude steel
production)

ST

GJ/
t-steel

22.6

23.3

23.2

24.0

23.3

Energyconsumption(Crude petroleum
equivalent)EN

kl

10,96010,886

8,788

8,000

7,636

YOY ratio of unit
energyconsumption

EN

%

97.4

95.4

80.7

91.0

95.5

Supplied tosociety

ST

%

37

39

39

38

38

Consumedinternally

ST

%

63

61

61

62

62

Scope

Unit

FY2017FY2018FY2019FY2020

FY2021

Ship and rail

ST

%

66.1

60.2

59.6

58.4

58.3

Truck

ST

%

33.9

39.8

40.4

41.6

41.7

Ship and rail

ST

%

92.7

91.6

90.9

91.6

90.0

Truck

ST

%

7.3

8.4

9.1

8.4

10.0

■ Modal Shift Rate
Items
All transportation
Transportation of a
distance of 500 km or
more

Scope of calculation: All products and half-finished products transported in JapanJFE GROUP CSR REPORT 2022

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Climate Change (Supplementary Data)■ CO2 Emissions and Energy Consumption of JFE Steel Group Subsidiaries (FY2021)
Company name

CO2 emissions(unit: thousand t-CO2)

Energy consumption(unit: PJ)

JFE Mineral & Alloy Company, Ltd.

758.0

10.79

JFE Bars & Shapes Corporation

482.3

9.77

JFE Chemical Corp.

221.4

4.50

JFE LOGISTICS CORPORATION

172.2

2.42

JFE Galvanizing & Coating Co., Ltd.

62.1

1.36

JFE Pipe Fitting Mfg. Co., Ltd.

14.6

0.36

JFE Plastic Resource Corporation

20.3

0.39

MIZUSHIMA RIVERMENT CORP.

10.3

0.16

JFE Container Co., Ltd.

10.8

0.22

J-Logitec Co., Ltd.

8.2

0.12

Galvatex Corporation

4.6

0.09

JFE Metal Products & Engineering Inc.

8.6

0.19

JFE Welded Pipe Manufacturing Co., Ltd.

5.9

0.16

JFE Techno-wire Corporation

5.3

0.12

JFE PRECISION CORPORATION

3.8

0.08

K-PLASHEET CORPORATION

5.1

0.08

JFE LIFE CORPORATION

6.2

0.12

CHIBA RIVERMENT AND CEMENT CORP.

8.1

0.16

JFE KENZAI FENCE CO., LTD.

2.1

0.06

JFE Steel Pipe Co., Ltd.

3.0

0.07

GECOSS CORPORATION

2.7

0.06

JFE Kozai Corporation

3.5

0.07

JFE Ferrite Corporation

4.0

0.07

6 overseas companies

1,401.6

18.17

Total

3,224.5

49.57* Due to the merger of Mizushima Ferroalloy Co., Ltd. and JFE Material Co., Ltd. into JFE MINERAL COMPANY, LTD.
(JFE Mineral & Alloy Company, Ltd.) in April 2022, the FY2021 CO2 emissions of the two companies are combined with
Mineral & Alloy Company, Ltd.

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Indices■ CO2 Emissions from Energy Sources and Energy Consumption of JFE Engineering Group Subsidiaries (FY2021)
CO2 emissions(unit: thousand t-CO2)

Company nameEnergy consumption (unit: PJ)

J&T Recycling Corporation

42.2

0.785

J Farm Corporation

2.8

0.015

Fujikako, Inc.

1.5

0.010

NORTHERN JAPAN MACHINERY Corporation

1.0

0.005

TOHOKU DOCK TEKKO CO., LTD.

0.8

0.005

JFE Environmental Service Corporation

0.6

0.003

Asuka Soken Co., Ltd.

0.7

0.014

JFE Pipeline Engineering Corporation

0.5

0.002

JFE Technos Corporation

0.2

0.001

JFE Aqua Machine and Service Corporation

0.0

0.000

JFE Project One Co., Ltd.

0.1

0.000

J&M Steel Solutions Company Limited

0.8

0.005

Total

50.3

0.839

Prevention of Pollution■ Air Emissions
Items

SOx emissions*NOxemissions*

Scope

Unit

FY2017FY2018FY2019FY2020

FY2021ST Gr

million Nm3

4.7

4.1

4.3

3.3

3.5

ST

million Nm3

4.6

4.1

4.3

3.3

3.5

ST
subsidiaries

million Nm3

0.05

0.04

0.04

0.03

0.03

ST Gr

million Nm3

11.7

10.7

11.3

10.4

11.4

ST

million Nm3

11.5

10.5

11.1

10.3

11.2

ST
subsidiaries

million Nm3

0.20

0.19

0.17

0.14

0.18

* 11 JFE Steel consolidated subsidiaries in Japan.

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Indices■ Release to Waterways
Items

Scope

COD (chemical
oxygen demand)

Unit

FY2017FY2018FY2019FY2020

FY2021

All*1

t/day

3.1

3.5

3.4

3.1

3.1

ST

t/day

3.0

3.3

3.2

2.9

2.9

ST
subsidiaries

t/day

0.14

0.17

0.15

0.17

0.23

EN*2

kg/day

5.6

6.8

8.4

8.7

8.4

FY2017FY2018FY2019FY2020

FY2021*1 Coverage:- JFE Steel and 11 consolidated subsidiaries in Japan.
- JFE Engineering*2 This report uses the maximum value of each year.
■ Chemical Substances Management
Items

Scope

Amountreleased

PRTR-registeredsubstances*1*2

Amounttransferred

Unit

All*3

t

—

1,019

918

754

827

ST Gr

t

897

814

766

596

672

ST

t

516

545

481

341

380

ST
subsidiaries

t

381

269

285

255

292

EN Gr

t

—

205

152

158

155

EN

t

85

147

107

121

116

EN
subsidiaries

t

—

58.4

45.4

36.7

39.3

All*3

t

—

9,210

7,866

5,949

9,845

ST Gr

t

8,934

9,176

7,832

5,910

9,811

ST

t

2,726

2,533

1,865

1,694

1,378

ST
subsidiaries

t

6,208

6,643

5,967

4,216

8,433

EN Gr

t

—

34

34

39

34

EN

t

28

28

29

26

30

EN
subsidiaries

t

—

5.7

5.4

12.5

4.4

*1 Coverage:- JFE Steel and 16 consolidated subsidiaries in Japan.
- JFE Engneering and 4 consolidated subsidiaries in Japan.
*2 Excluding dioxins*3 JFE Shoji is not included in the scope of the report as the company is not subject to PRTR registration.

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and Awards

Editorial
PolicyGuideline
IndicesPrevention of Pollution (Supplementary Data)■ SOx and NOx Emissions of JFE Steel Group Subsidiaries (FY2021)
Company name

SOx emissions(unit: Nm3)

JFE Mineral & Alloy Company, Ltd.

NOx emissions(unit: Nm3)

17,466

98,781197

1,396

MIZUSHIMA RIVERMENT CORP.

0

1,459

JFE PRECISION CORPORATION

1,975

709

JFE Plastic Resource Corporation

164

313

JFE Bars & Shapes Corporation

2,417

11,695

JFE Metal Products & Engineering Inc.

53

546

JFE KENZAI FENCE CO., LTD.

0

0

1,662

12,645

JFE Container Co., Ltd.

85

0JFE Welded Pipe Manufacturing Co., Ltd.

00

JFE Steel Pipe Co., Ltd.

00

Galvatex Corporation

0

1,008

JFE Pipe Fitting Mfg. Co., Ltd.

21

440

JFE Techno-wire Corporation

00

JFE Kozai Corporation

0

0

GECOSS CORPORATION

00JFE LOGISTICS CORPORATION

00

J-Logitec Co., Ltd.

00

JFE Chemical Corp.

8,433

46,131

169

0

0

0

32,641

175,121

CHIBA RIVERMENT AND CEMENT CORP.

JFE Galvanizing & Coating Co., Ltd.

K-PLASHEET CORPORATIONJFE LIFE CORPORATION
Total

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Indices

Efficient Use of Natural Resources■ Natural Resources
Items

Scope

Unit

FY2017FY2018FY2019FY2020

FY2021ST

million t

71.3

66.0

67.0

58.7

59.3

Iron oreSTmillion t

43.5

40.1

41.4

35.4

33.5

Coal

ST

million t

22.0

20.6

20.3

18.1

19.9

Lime

ST

million t

5.8

5.3

5.3

5.2

5.9

Recycled materials(steel scrap)STmillion t

1.2

1.3

1.1

0.8

1.2

Raw materials

EN

thousand t

41.8

47.3

39.4

36.9

38.6

Steel productsST

million t

28.5

26.3

26.7

22.8

25.9

Engineering
products

EN

thousand t

39.7

44.5

36.6

34.7

37.4

Scope

Unit

FY2017FY2018FY2019FY2020

FY2021

Raw materials forsteel production

Input

Products
supplied■ Co-products and Wastes
Items

ST Gr

million t

16.2

16.1

15.6

13.9

14.4

ST

million t

15.7

15.3

15.1

13.4

13.9

ST
subsidiaries

million t

0.5

0.8

0.5

0.5

0.5

Amountrecycled
internallySTmillion t

4.2

6.0

5.0

3.3

3.3

Internal
recycle rate

ST

%

27.5

39.3

32.9

24.9

24.0

ST Gr

million t

0.081

0.081

0.074

0.060

0.094

ST

million t

0.047

0.052

0.043

0.037

0.042

ST
subsidiaries

million t

0.034

0.029

0.031

0.023

0.052

Amountgenerated*1

Co-products

Landfillamount*1

Marine,land,
and civil
engineering
material(using coproducts)

Recycling rate

ST

%

99.7

99.7

99.7

99.7

99.7

Co-products
generatedST

million t

15.4

15.3

15.1

13.4

13.9

Used by local
communities

ST

million t

11.2

9.2

10.1

10.0

10.5

Rate of local
communities
use

ST

%

72.2

60.4

66.8

74.8

75.7

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SpecialFeatureItems
Amountgenerated*2*3

Environment

Scope

SocialUnit

Governance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices

FY2017FY2018FY2019FY2020

FY2021EN Gr

thousand t

158.0

131.7

211.0

159.1

249.2

EN

t

429.8

386.4

367.1

329.2

235.3

Yokohama
HO

t

357.1

299.9

299.0

256.9

156.7

Tsu works

t

72.7

86.5

68.2

72.3

78.6

EN

t

773.0

1,039.3

1,340.5

1,072.3

803.0

Tsurumi
works

t

302.3

506.6

653.8

519.8

364.7

Tsu works

t

470.7

532.7

686.7

552.5

438.3

ConstructionsENt88,140.4

109,045.2

145,397.7

97,387.9

190,242.3

Subsidiaries

EN
subsidiariest

69,835.7

22,634.4

63,876.7

60,296.7

57,960.3

Landfill

ENt

1,666.5

2,125.1

4,489.3

2,011.6

3,035.6

EN

t

9.0

10.7

8.5

9.1

7.4

Yokohama
HO

t

4.3

4.1

3.3

2.1

2.2

Tsuworks

t

4.7

6.6

5.2

7.0

5.2

EN

t

289.0

353.3

312.6

351.2

322.6

Tsurumi
works

t

70.6

83.2

77.3

75.2

89.4

Tsuworks

t

218.4

270.1

235.3

276.0

233.2

ConstructionsENt

1,368.5

1,761.1

4,168.2

1,651.3

2,705.6

Recycling rate

EN

%

96.7

97.0

95.8

95.9

96.5

EN

%

97.6

96.7

97.3

96.8

96.1

Yokohama
HO

%

98.7

98.5

98.8

99.1

98.5

Tsuworks

%

89.0

85.2

85.2

87.2

88.4

%

45.3

46.8

68.0

48.8

46.8

Tsurumi
works

%

61.0

68.7

79.4

72.0

68.3

Tsuworks

%

37.0

32.1

60.9

33.8

28.0

%

98.4

98.4

97.1

98.3

98.6

Offices

Productions

OfficesWastes

Productions

Recycling rate
(offices)

EN
Recycling rate
(production)

Recycling rate(construction)EN*1 Data cover JFE Steel and 23 consolidated subsidiaries in Japan.
*2 Data cover JFE Engineering and 10 consolidated subsidiaries in Japan.
*3 Data from FY2019 includes wastes generated at offices and productions of JFE Engneering.

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Indices■ Wastes at JFE Engineering Construction Sites
Items

RubbleSludgeIndustrial waste
excluding rubble
and sludge

Scope

Unit

FY2017FY2018FY2019FY2020

FY2021

Amount generated

ENt58,82478,410113,637

78,100159,309

Landfill amount

EN

t

94

297

1,533

484

940

Recycle rate

EN

%

99.8

99.6

98.6

99.4

99.4

Amount generated

ENt

23,463

16,142

17,225

12,39924,350Landfill amount

EN

t

849

199

205

135

683

Recycle rate

EN

%

96.3

98.8

98.8

98.9

96.9

Amount generated

EN

t

5,853

14,494

13,788

6,678

6,583

Landfill amount

EN

t

425

1,265

1,923

868

1,083

Recycle rate

EN

%

92.2

91.0

85.0

85.4

81.6

Scope

Unit

FY2017FY2018FY2019FY2020

FY2021

SH*

boxes

5,100

4,832

4,675

3,021

3,261

Tokyo

boxes

2,674

2,661

2,516

1,333

1,471

Osaka*

boxes

527

372

399

310

337

Nagoya

boxes

308

217

293

157

220

Branch

boxes

1,591

1,582

1,467

1,221

1,233

■ Paper Consumption at JFE Shoji
Items

Consumption of copier papers* Revised the prior year data to increase accuracy.

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Indices

Water Security■ Water
Items

Scope

FY2017FY2018FY2019FY2020

FY2021

million t

241

240

242

237

246

ST Gr

million t

241

238

241

236

245

ST

million t

220

218

221

215

226

ST subsidiaries

million t

20.6

20.5

19.8

20.9

19.0

EN Gr

thousand t

832

918

1,410

1,296

1,141

EN

thousand t

97

102

106

72

63

EN subsidiaries

thousand t

735

816

1,304

1,223

1,078

SH Gr

thousand t

166

165

149

160

154

SH

thousand t

—

—

—

—

—

SH subsidiaries

thousand t

166

165

149

160

154

ST Gr

million t

146

144

143

141

144

ST

million t

128

126

126

123

128

ST subsidiaries

million t

17.8

18.0

17.0

18.3

15.6

EN

thousand t

140

146

126

157

132

ST Gr

million t

3,690

3,665

3,616

3,331

3,442

ST

million t

3,410

3,376

3,323

3,066

3,207

ST subsidiaries

million t

280

289

293

265

235

All

Amount of water
accepted*1

Amount of water
released*2

Amount of water
consumption*2

Unit

Amount evaporated

ST

million t

92

92

95

92

98

Ratio of amountreleased andevaporated

ST

%

6.5

6.5

6.6

7.0

7.0

ST Gr

million t

3,449

3,427

3,375

3,096

3,423

ST

million t

3,190

3,158

3,102

2,851

3,207

ST subsidiaries

million t

259

269

273

245

216

ST

%

93.5

93.5

93.4

93.0

93.0

ST subsidiaries

%

93

93

93

92

92

Amount recycled*2

Recycling rate*2*3*1 Coverage:- JFE Steel and 23 consolidated subsidiaries in Japan.
- JFE Engineering and 7 consolidated subsidiaries in Japan.
- 31 JFE Shoji domestic and overseas consolidated subsidiaries.
*2 Data cover JFE Steel and 23 JFE Steel consolidated subsidiaries in Japan.
*3 Industrial water circulated (%) = (Total amount − industrial water accepted)/total amount used × 100

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ESG Data

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Indices■ Water Related Data by Water Intake Source and Discharge Source
Items

Scope

FY2017*1

FY2018*1

FY2019*1

million t

219.7

218.4

221.0

214.8

226.1

River/lake

million t

0

0

0

0

0

Groundwater

million t

0

0

0

0

0

million t

219.7

218.4

221.0

214.8

226.1

Ocean

million t

0

0

0

0

0

Rainwater

million t

0

0

0

0

0

Other intake source

million t

0

0

0

0

0

Total amount released

million t

128.9

126.1

126.8

123.6

128.8

million t

128.5

125.7

126.3

123.1

128.3

million t

0

0

0

0

0

million t

0

0

0

0

0

Off-site water processing

million t

0.43550.44310.45020.47960.4709Beneficial use/other use

million t

0

0

0

0

0

Other discharge source

million t

0

0

0

0

0

Total amount acceptedIndustrial water/waterworks

All*2

Ocean
Surface water
Underground/well

All*

2

Unit

FY2020

FY2021*1 Data for past fiscal years were retroactively revised for increased accuracy.
*2 Data cover JFE Steel and JFE Engineering.

Water Security (Supplementary Data)■ Amount of Water Accepted and Released at JFE Steel Group Subsidiaries (FY2021)
Company nameAmount accepted(unit: tonnes)

JFE Mineral & Alloy Company, Ltd.

Amount released(unit: tonnes)

6,502,592

6,045,806

CHIBA RIVERMENT AND CEMENT CORP.

10,49910,499MIZUSHIMA RIVERMENT CORP.

15,26015,260

JFE PRECISION CORPORATION

225,642

225,642

JFE Plastic Resource Corporation

16,926

13,094JFE Bars & Shapes Corporation

4,904,692

2,769,528

JFE Metal Products & Engineering Inc.

80,655

100,845

JFE KENZAI FENCE CO., LTD.

70,02270,022

JFE Galvanizing & Coating Co., Ltd.

670,524

537,716

JFE Container Co., Ltd.

250,560

250,560

JFE Welded Pipe Manufacturing Co., Ltd.

24,66824,668JFE Steel Pipe Co., Ltd.

1,682

1,682

Galvatex Corporation

738,191

738,191

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Amount accepted(unit: tonnes)

Company name

External
Evaluations
and Awards

Editorial
PolicyGuideline
IndicesAmount released(unit: tonnes)

JFE Pipe Fitting Mfg. Co., Ltd.

41,47428,742

JFE Techno-wire Corporation

93,19393,193

JFE Kozai Corporation

14,13814,138GECOSS CORPORATION

71,434

71,631

JFE LOGISTICS CORPORATION

105,623

105,623

J-Logitec Co., Ltd.

2,960

2,960

JFE Chemical Corp.

4,303,904

3,960,483

K-PLASHEET CORPORATION

30,32526,930

JFE LIFE CORPORATION

518,912509,039

18,693,876

15,616,252

Total■ Amount of Water Accepted at JFE Engineering Group Subsidiaries (FY2021)
Company nameAmount accepted (unit: thousand tonnes)

J&T Recycling Corporation

1,024

JFE Environmental Service Corporation

30.5

NORTHERN JAPAN MACHINERY Corporation

0.002

TOHOKU DOCK TEKKO CO., LTD.

0.04

JFE Aqua Machine and Service Corporation

0.001

Fujikako, Inc.

0.05

J Farm Corporation

23.5

Total

1,078

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Social Data
Responsibility to Customers■ Customer Training (FY2019*1)
Name of training

Scope

Unit

Participants

Technical presentation by overseas Group companies(number of participating companies*2)

JFE Shoji

People(companies)

Training for overseas employees

JFE Shoji

People33（15）
24*1 T
 he table shows FY2019 results since FY2020 and FY2021 customer training sessions were canceled due to the
COVID-19 pandemic.
*2 Data covers 9 countries for the number of participating companies.

Occupational Health and Safety■ Lost-work Injuries and Accidents
Items
Lost-work injuries*2
Severity*3
Lost-work injuries*2
Lost-work
Injuries andSeverity(Rates)Severity*3
Lost-work injuries*2
Severity*3
Lost-work injuries*2
Severity*3
Lost-work injuries
Fatal injuries
Lost-work injuries

Number of
lost-work
injuries

Fatal injuries
Lost-work injuries
Fatal injuries
Lost-work injuries
Fatal injuries

Scope*1

Unit

2017

2018

2019

2020

2021

—

0.17

0.17

0.28

0.23

0.10

—

0.15

0.15

0.30

0.08

0.08

JFE
Engineering

—

0.71

0.82

0.45

0.35

0.56

—

0.02

0.02

0.62

0.01

0.40

JFE Shoji
Group

—

1.22

0.60

1.00

0.76

0.60

—

0.97

0.04

0.02

0.04

0.05

Manufacturingindustry
average

—

1.02

1.20

1.20

1.21

1.31

—

0.08

0.10

0.10

0.07

0.06

Cases

42

41

49

36

26

Cases

3

2

6

1

2

Cases

18

18

30

23

10

Cases

2

2

4

1

1

Cases

14

18

11

7

11

Cases

0

0

2

0

1

Cases

10

5

8

6

5

Cases

1

0

0

0

0

JFE SteelJFE Group

JFE SteelJFE
Engineering
JFE ShojiGroup

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SpecialFeatureItems
Lost-work injuries
Fatal injuries
Lost-work injuries
Lost-work
Injuries Involving
Employees

Fatal injuries
Lost-work injuries
Fatal injuries
Lost-work injuries
Fatal injuries
Lost-work injuries
Fatal injuries
Lost-work injuries

Lost-work
injuries involving
employees ofcontractors

Fatal injuries
Lost-work injuries
Fatal injuries
Lost-work injuries
Fatal injuries

Environment

SocialScope*1
JFE Group

JFE SteelJFE
Engineering
JFE ShojiGroup

JFE Group

JFE SteelJFE
Engineering
JFE ShojiGroup

Governance

External
Evaluations
and Awards

ESG Data

Editorial
Policy

Unit

2017

2018

2019

2020

2021

Cases

13

13

18

15

10

Cases

2

1

1

0

0

Cases

4

7

10

9

5

Cases

1

1

1

0

0

Cases

0

1

2

2

1

Cases

0

0

0

0

0

Cases

9

5

6

4

4

Cases

1

0

0

0

0

Cases

29

28

31

21

16

Cases

1

1

5

1

2

Cases

14

11

20

14

5

Cases

1

1

3

1

1

Cases

14

17

9

5

10

Cases

0

0

2

0

1

Cases

1

0

2

2

1

Cases

0

0

0

0

0

*1 Scope of data:• JFE Steel and JFE Engineering: parent company, business associates and contractors in Japan• JFE Shoji : parent and consolidated subsidiaries, business associates and contractors in Japan*2 Lost-work injuries (rate) = number of employees with lost-work injuries/total working hours × 1,000,000*3 Severity = number of lost working days/total working hours × 1,000

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IndicesMessage fromthe CEO

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SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices■ Health and Safety Training (2021)
Items

Unit

Participants*

Training for managers and supervisors

People450

Mental healthcare education for new hires and at rank-based training

People1,241* Total of 3 operating companies.
■ Employee Health Data
Items

Scope

Unit

2017

2018

2019

2020

2021

Metabolic syndrome rates

Insured by the JFEGroup’s health insurance
union (age 40 and above)

%

35.9

36.0

35.6

36.5

36.2

Rate of health examination
for dependents

Age 40 and above

%

43.7

48.2

51.5

46.3

50.2

* Rate of health examination for dependents for FY2021 is a preliminary figure.

■ Health Data for Employees and Their Family
Items

Provision rate of health guidance

Smoking rates

Scope

Unit

2017

2018

2019

2020

2021

JFE Steel

%

36.8

56.9

64.2

53.0

54.3

JFE Engineering

%

22.7

22.1

39.6

39.1

30.6

JFE Shoji

%

25.0

45.2

36.0

41.6

32.1

JFE Steel

%

35.2

32.4

31.8

29.0

27.3

JFE Engineering

%

27.5

26.7

26.4

23.3

22.9

JFE Shoji

%

25.8

24.8

24.9

24.9

21.5

* Provision rate of health guidance for FY2021 is a preliminary figure.
* Smoking rate for JFE Steel is managed based on calendar year.
* Smoking rates for JFE Shoji for FY2017 and FY2018 represent results for those age 40 and above.

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ESG Data

External
Evaluations
and Awards

Unit

JFE SteelJFE
Engineering

JFE Shoji

Employees

people44,999

11,205

8,040

Male

people39,241

9,698

5,731

Femalepeople

5,758

1,507

2,309

people11,569

3,673

1,595

Male

people10,802

3,465

1,387

Femalepeople

767

208

208

%

6.6

5.7

13.0

Message fromthe CEO

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SpecialFeatureEnvironment

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Editorial
PolicyGuideline
IndicesLabor Practice■ Employee Data (2021)
Category

Management positions*3

Consolitaded/
non-consolitaded

Conslidated*1

Ratio of women in management
positions
Employees

people15,600

3,875

1,016

Male

people14,294

3,327

611

Femalepeople

1,306

548

405

people

1,722

1,590

629

Male

people

1,697

1,550

591

Femalepeople

25

40

38

%

1.5

2.5

6.0

people

276

169

81

Male

people

248

138

49

Femalepeople283132people

256

89

62

people

20

80

19

year

15.1

14.9

14.2

Male

year

14.8

14.9

14.7

Female

year

17.8

15.2

13.2

%

3.5

1.8

5.2

people

598

43

30

Ratio of elderly employees*5

%

3.8

1.1

3.0

Average annual leave taken

day/year

15.9

17.9

12.1

Average overtime

hours/
month

22.2

26.1

32.8

Employees working shorter hours forchildcare (aggregated)people

101

60

63

Temporary staffs

people

164

686

17

Management positions (manager or higher)

Ratio of women in management
positions
Recruits

New graduates
Mid-career

Non-consloitaded*2

Years of continuous employment (average)

Job turnover rate*4 (total3.3％)
Elderly employees*5

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Editorial
PolicyGuideline
Indices*1 Scope of data: Consolidated subsidiaries JFE Steel: 146, JFE Engineering: 80 JFE Shoji: 87*2 As of April 1, 2022. Other figures are as of FY2021.
*3 Management positions at JFE Shoji include employees on loan.
*4 Percentage of employees who voluntarily choose to resign from the organization.
*5 Figures for JFE Steel include active employees who are age 60 and above (the company’s mandatory retirement age
has been raised to 65).

■ Recruiting (Three Operating Companies, Excluding their Subsidiaries) for New Graduates (FY2022) and Midcareer Recruits (FY2021)
Items

Unit

Career-track Positions
White-collar

Technical

On-siteand Clerical
Positions

Total

Total

Male

people

82

188

270

165

435

Femalepeople

45

18

63

28

91

Total

people

127

206

333

193

526

%

35.4

8.7

18.9

14.5

17.3

Ratio of women■ Employment of People with Disabilities (as of June 1 of each year)
Items

Employment of People with Disabilities

Scope

Unit

2017

2018

2019

2020

2021

JFE Steel

%

2.33

2.41

2.48

2.51

2.51

JFE
Engineering

%

2.14

2.39

2.23

2.37

2.53

JFE Shoji

%

2.20

2.62

2.50

2.39

2.39

Community■ Social Contributions (FY2021)
Activities

Scope

Unit

Achievements

People

1,247

JFE SteelPeople296

JFE Engineering

People666

JFE Shoji

People

285

Sets

700

Books

17,000Cans

12,500JFE Group
Internships

Supporting elementary
schools in Ghana andNigeria

Desks and chairs
Notebooks

JFE Shoji

Canned foods

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Evaluations
and Awards

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Editorial
PolicyGuideline
Indices■ JFE 21st Century Foundation (FY2021)
Grants

Projects

Technology research (accumulated)

Value (million yen)682

1,371.8

Iron and steel technology research

11

22

Global environment and global warming
prevention technology research

17

34

Asian history studies (accumulated)

150

225

Asian history studies for FY2021

12

18

Technology research
for FY2021

Activities

Sets donatedSupporting the Japan Overseas Educational Services Writing Contest andanthology donation (to elementary and middle schools and also public libraries in
the regions related to steel*)

2,400* Donated to approximately 700 institutions, including elementary schools, middle schools, and libraries.

Shareholders and Investors■ Major IR Activities (FY2021)
Major communication methods, etc.

Number of sessions

Investors meeting, ESG briefings

participation (people)
7

Approx. 1,000 persons in total

Individual interviews with institutional investors
and securities analysts

As needed

Approx. 380 persons in total

Briefings for Individual investor (at the branch
offices of securities firms, etc.)

2 (online)

Approx. 10,000 playbacks

Number of sessions

Participants■ Plant Tours and Company Briefing Sessions (FY2019*)
Activities
Plant tours and company briefing
sessions

Scope
JFE Steel
JFE Engineering
Japan Marine United

23

1,800

* This table shows FY2019 results since plant tours and company briefing sessions were canceled in FY2020 and FY2021
due to the COVID-19 pandemic.

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ESG Data

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Evaluations
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Indices

Governance Data
Corporate Governance■ Corporate Governance System
As of July 1, 2022
Items

Overview of the system

Organizational design typeCompany with an Audit & Supervisory Board

Number of Directors (members)

8

The number of Independent Outside Directors (members)

3

The number of female Directors (member)

1

Number of Audit & Supervisory Board Members (members)

5

The number of Independent Outside Audit & Supervisory
Board Members (members)

3

The number of femal Audit & Supervisory Board Members(members)

1

Term for Directors (years)

1

Term for Outside Directors (years)

1

Corporate Officer System

AdoptedNomination Committee and Remuneration
Committee

Voluntary advisory committees of the Board of Directors■ Directors and Audit & Supervisory Board members

Position

Director

Name

InsideAs of July 1, 2022

Significant
concurrent post

Number of
Number of meetings ofmeetings of the Audit&
Independent the Board of
executive
Directors Supervisory
Board
attendedattendedin FY2021
in FY2021

Koji Kakigi

Chairman of the Board of
Directors of JFE 21st Century
Foundation (Public Interest
Incorporated Foundation)

ー

15/15
(100%)

ー

Yoshihisa Kitano

Representative Director,
President and CEO of JFE
Steel Corporation

ー

15/15
(100%)ー

Masashi Terahata

Director of JFE SteelCorporation,
Representative Director of JFE
21st Century Foundation(Public Interest Incorporated
Foundation)

ー

15/15
(100%)ーJFE GROUP CSR REPORT 2022

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Position

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ESG Data

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Evaluations
and Awards

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PolicyGuideline
IndicesNumber of
Number of meetings ofmeetings of the Audit&
Independent the Board of
executive
Directors Supervisory
Board
attendedattendedin FY2021
in FY2021

Significant
concurrent post

Hajime Oshita

Representative Director, President
and CEO of JFE
Engineering Corporation

ー

15/15
(100%)

ーToshinori
Kobayashi

Representative Director, President
and CEO of JFE Shoji Corporation

ー

12/12
(100%)ーMasami
Yamamoto

Director and Senior Advisor of
Fujitsu Limited,
Outside Director of Mizuho
Financial Group, Inc.

〇

15/15
(100%)

ー

Nobumasa
Kemori

Honorary Advisor of Sumitomo
Metal Mining Co., Ltd.,
Outside Director of Sumitomo
Realty & Development Co., Ltd.

〇

15/15
(100%)

ー

Yoshiko Ando

Audit & Supervisory Board
Member of Kirin Holding Company,
Limited, Outside Director of Sansei
Technologies, Inc.

〇

15/15
(100%)

ー

Nobuya Hara

Audit & Supervisory Board
Member of JFE Steel Corporation

ー

15/15
(100%)

20/20(100%)

Nakaba Akimoto

Audit & Supervisory Board
Member of JFE Engineering
Corporation, Audit & Supervisory
Board Member of JFE Shoji
Corporation

ー

ー

ー

Isao Saiki

Partner Lawyer of Abe, Ikubo &Katayama Law Firm

〇

15/15
(100%)

20/20(100%)

TsuyoshiNumagami

Professor, Graduate schoolof Business Administration,
Department of Business
Administration of HITOTSUBASHI
UNIVERSITY
External Director of Tokyo Century
Corporation

〇

15/15
(100%)

20/20(100%)

TakuyaShimamura

Director and Chairman of AGC Inc.
Independent Director of EBARACORPORATION

〇

ー

ー

InsideAudit &
Supervisory
Board
MemberSocialName

InsideDirector

Environment* The number of meetings of the Board of Directors held during FY2021 differs for Mr. Toshinori Kobayashi, as he waselected for the first time as a director at the previous year’s Ordinary General Meeting of Shareholders (held on June25, 2021).
* Ms. Nakaba Akimoto and Mr. Takuya Shimamura were elected as Audit & Supervisory Board Members for the first timeat the current year’s Ordinary General Meeting of Shareholders (held on June 24, 2022).

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External
Evaluations
and Awards

ESG Data

Editorial
PolicyGuideline
Indices■ Nomination Committee and Remuneration Committee
As of July 1, 2022
Items

Members

Nomination Committee

Number of meetings
held during FY2021

Chairperson
6

Inside Director

2

Outside Director

2

Outside Audit & Supervisory Board Member

2

Remuneration Committee

6

Inside Director

2

Outside Director

2

Outside Audit & Supervisory Board Member

2

Masami Yamamoto(Outside Director)

5

Nobumasa Kemori(Outside Director)

7■ Operating System
Committee

Company

Chairperson

Attendees

Group Management
Strategy Committee

JFE Holdings

President

Inside Directors (including 3 operating company
Presidents), Corporate Officers and full-time
Audit & Supervisory Board Members

JFE Holdings

President

Inside Directors (excluding 3 operating company
Presidents), Corporate Officers and full-time
Audit & Supervisory Board Members

Each operatingcompany

President

Directors, major Corporate Officers and Audit &Supervisory Board Members

Management Committee

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Indices■ Executive Remuneration
FY2021
Executive remuneration
Total amount by remuneration type (million yen)Total
remuneration,
Basicetc. (million yen) remuneration

Position Type

Stock remuneration
Bonus

Linked to
Linked to
performance service length

Number of
Executives(members)

Directors (excluding Outside
Directors)

351.377203.765

89.54044.40813.664

6

Audit & Supervisory Board
Members (excluding Outside
Audit & Supervisory Board
Members)

78.33578.335ーーー

2Outside Directors/ Audit &Supervisory Board Members

91.84791.847ーーー

6Notes:
1. The number of directors (excluding outside directors) in the above table includes one director who retired during thecurrent fiscal year.
2. Directors’ (excluding outside directors) performance-linked remuneration is composed of bonus and stock
remuneration. Total amount of performance-linked remuneration for the current fiscal year is 133.948 million yen.
3. Only directors (excluding outside directors) are included in the scope of the above-mentioned stock remuneration, andthe entire amount is non-monetary remuneration. Total amount of stock remuneration expensed for the current fiscal
year as non-monetary remuneration is 58.072 million yen.
Officers whose consolidated remuneration exceeded 100 million yen
Total amount by remuneration type(million yen)
Name

Position

Company

Koji Kakigi Director

JFE
Holdings

Director

JFE
Holdings

Yoshihisa
KitanoMasashiTerahata

HajimeOshitaToshinori
Kobayashi

Director

JFE SteelDirector

JFE
Holdings

Director

JFE
Holdings

Director

JFE
Engineering

Director

JFE
Holdings

Director

JFE Shoji

Total
Per company(consolidated (consolidated
basis)
basis)(million yen) (million yen)

208.357

Stock remuneration
Basic
remuneration

Bonus

Linked to
performance

Linked toservicelength208.357

110.20756.67031.7209.760

12.00012.000ーーー

197.957

98.20758.27031.7209.760

114.21964.75732.87012.688

3.904

8.400

8.400

ー

ー

ー

102.30860.76820.80015.860

4.880

6.300

6.300

ー

ー

ー

106.590

57.90027.95015.8604.880

209.957

114.219110.708112.890

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Indices

Ratio of remuneration for each
Basic remuneration:
fixed (%)

Annual bonus:
linked to short-term performance(%)

Stock remuneration:linked to medium- tolong-term performance (%)

60

20

20

Note: The ratios above are applicable only when the company’s president has attained the performance target goals.
■ Internal Control System
As of April 1, 2022
Internal control system
Number ofcompanies(companies)

Items
Internal audit

Audit & Supervisory
Board

Number of people
assigned(members)

Internal audit organizationー

169

Full-time Audit &Supervisory Board Members

29

34

Dispatched Audit & Supervisory Board Members(part-time Audit & Supervisory Board member)25

8

Cooperation of Audit & Supervisory Board members
Items

Number of meeting held during FY2021

Accounting auditor

8

Internal Audit Department

6Compliance (including Anti-corruption)■ Whistleblowing
Items
Cases handled by the
Corporate Ethics Hotline

Scope
JFE Holdings and operatingcompanies

Unit

FY2019FY2020

FY2021

Cases

101

87

133

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VisionCSRManagement

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SocialGovernanceIndependent Assurance Statement

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ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices

External ESG Evaluations
JFE Holdings is a constituent of all the Japanese equity ESG indexes selected by the Government Pension Investment
Fund (GPIF), the world’s largest pension fund. We are the only steel manufacturer selected as a constituent of all theseindexes (as of July 2022).

FTSE Blossom Japan Index (invested in by GPIF)
JFE Holdings has been selected for three consecutive years as a constituent of
the FTSE Blossom Japan Index, an investment index provided by FTSE Russell.
The index selects companies that demonstrate strong environmental, social,and governance (ESG) practices and is used in the creation or assessment ofsustainable investment funds or other financial products.

FTSE Blossom Japan Sector Relative Index (invested in by GPIF)
JFE Holdings has been selected as a constituent of the FTSE Blossom Japan
Sector Relative Index, an investment index provided by FTSE Russell. This ESG
index was adopted by GPIF in March 2022. It refers to the ESG assessment madeby FTSE Russell as a base and reflects management practices toward climatechange risks and opportunities for some constituents that have high carbon
intensity (GHG emissions per unit of revenue).

MSCI Japan ESG Select Leaders Index (invested in by GPIF)
JFE Holdings has been selected as a constituent of the MSCI Japan ESG
Select Leaders Index, an investment index provided by MSCI Inc. The index
is based on MSCI’s ESG research, which is used by over 1,000 companies
around the world. This comprehensive ESG index reflects ESG risks to themarket portfolio and is comprised of constituents with relatively high ESG
evaluation within the industry.

* THE INCLUSION OF JFE HOLDINGS, INC. IN ANY MSCI INDEX, AND
THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR
INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP,
ENDORSEMENT OR PROMOTION OF JFE HOLDINGS, INC. BY MSCIOR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVEPROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOSARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

MSCI Japan Empowering Women Index (WIN) (invested in by GPIF)
JFE Holdings has been selected for two consecutive years as a constituentof the MSCI Japan Empowering Women Index (WIN), an investment index
provided by MSCI Inc. The index is constructed by multidimensionallycalculating a gender diversity score of a constituent of MSCI Japan IMI top
700 index and selecting companies from each industry that achieved highscores.

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* THE INCLUSION OF JFE HOLDINGS, INC. IN ANY MSCIINDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS,SERVICE MARKS OR INDEX NAMES HEREIN, DO NOTCONSTITUTE A SPONSORSHIP, ENDORSEMENT ORPROMOTION OF JFE HOLDINGS, INC. BY MSCI OR ANY OF
ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVEPROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMESAND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF
MSCI OR ITS AFFILIATES.

Message fromthe CEO

JFE Group
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SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices

S&P/JPX Carbon Efficient Index (invested in by GPIF)
JFE Holdings has been selected as a constituent of the S&P/JPX Carbon EfficientIndex, jointly developed by S&P Dow Jones Indices and the Japan ExchangeGroup. The weighting of constituents in the index is determined by the statusof corporate disclosure for environmental information and the level of carbon
efficiency, or carbon emissions per unit of revenue.

FTSE4Good Index Series
JFE Holdings has been selected for three consecutive years as a constituent of
the FTSE4Good Index Series, an investment index provided by FTSE Russell. This
comprehensive ESG index in general applies the same ESG assessment schemeas that used for the FTSE Blossom Japan Index. Constituents have high absolute
ESG ratings and are screened from major stocks around the world.

MSCI ESG Leaders Indexes
JFE Holdings has been selected as a constituent of the MSCI ESG Leaders
Indexes, an investment index provided by MSCI Inc., since 2018. The index
is formed of major stocks around the world with high ESG evaluations
within their industry, selected based on MSCI’s ESG research.
* THE INCLUSION OF JFE HOLDINGS, INC. IN ANY MSCI INDEX,AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICEMARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTEA SPONSORSHIP, ENDORSEMENT OR PROMOTION OF JFEHOLDINGS, INC. BY MSCI OR ANY OF ITS AFFILIATES. THE MSCIINDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND
THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS ORSERVICE MARKS OF MSCI OR ITS AFFILIATES.

Evaluation Based on CDP 2021
Established in Britain in 2000, the Carbon Disclosure Project (CDP) is a nongovernmental organization that conducts
ESG evaluations. It calls on companies to disclose ESG-related information by responding to CDP questionnaires tofacilitate the ESG investment decisions of institutional investors. Currently, the CDP covers three environmental areas:climate change, water security, and forests, and companies are rated on an eight-point scale (from A to D-) for each area.
The volume of information collected by the CDP has become one of the largest in the world, with currently over 350
companies responding to the questionnaires in Japan, which are widely used in various indexes by institutional investors
and for socially responsible investment.
The JFE Group actively participates in CDP initiatives as a member of the CDP Reporter Service and responds toclimate change and water security questionnaires every year. We made sure to disclose appropriate information for the
CDP 2021 questionnaire, and as a result we received a high rating.
CDP 2021 score: climate change: A-, water security: A-, supplier engagement: A-

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Evaluations
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Editorial
Policy2022 Health and Productivity Stock Selection and 2022 “White 500” Organization under the 2022
Certified Health and Productivity Management Outstanding Organizations Recognition Program
JFE Holdings has been jointly selected by the Ministry of Economy, Trade and Industry (METI)
and Tokyo Stock Exchange (TSE) as 2022 Health and Productivity Stock Selection. Health andProductivity Stock selects outstanding TSE listed enterprises engaged in strategic health andproductivity management programs that focus on employee health from the management
perspective. It is intended to introduce attractive companies to investors who prioritize theimprovement of corporate value from a long-term perspective.
In addition, the Company, JFE Steel Corporation, and JFE Engineering Corporation wererecognized as White 500 organizations under the 2022 Certified Health and Productivity
Management Outstanding Organizations Recognition Program highlighting enterprises thatpractice excellent health management in cooperation with insurers. This will be is the second
time in four years that the Company has been recognized as a Health and Productivity Stock
Selection and a White 500 organization under the aforementioned program.

SOMPO Sustainability Index
JFE Holdings has been selected for 11 consecutive years as a constituent of the
SOMPO Sustainability Index (former: SNAM Sustainability Index), which waslaunched by Sompo Asset Management Co., Ltd. The index, which encompasses
companies with highly evaluated ESG ratings, contributes to investor asset
formation by evaluating corporate value from a long-term perspective.

DBJ Employees’ Health Management Rated Loan Program
The DBJ Employees’ Health Management Rated Loan Program is the world’s first
financing menu that bases loan conditions on DBJ’s proprietary system for rating
health management for the purpose of selecting and evaluating companies basedon their performance in this area.
JFE Holdings’ efforts in pursuing employee health management has beenhighly regarded, and it is rated as a top-ranking company under the program.

DBJ Environmentally Rated Loan Program
The Development Bank of Japan (DBJ) Environmentally Rated Loan Program
uses a screening (rating) system developed by DBJ to evaluate environmental
management and then assign a corresponding interest rate from three levels.
This was the world’s first loan program to incorporate environmental ratings in
its financing menus. In March 2016, JFE Holdings was rated as a top-ranking
company that pursues excellent and advanced environmental initiatives resulting
in outstanding environmental-management performance, based on which thecompany secured a loan under the program.

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Guideline
IndicesMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
IndicesCaterpillar Quality Assurance Certification
In FY2022, JFE Steel West Japan Work (Kurashiki District) and JFE Shojicompleted an online audit under COVID-19, successfully upgrading its
certification for the sixth consecutive year as Gold Level SQEP suppliers in
the Supplier Quality Excellence Process, a quality certification of Caterpillar
Inc., a U.S.- based construction equipment manufacturer. The program
ranks suppliers for compliance with ISO 9001 standards and Caterpillar’s
own specifications and certifies the top firms as Platinum, Gold, Silver,or Bronze. Only a few companies in Japan have received Gold Levelcertification, and JFE Steel is the first blast furnace manufacturer in theworld to be certified.

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Receiving the Gold certification plaqueMessage fromthe CEO

JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyGuideline
Indices

External Awards
Environmentally Sustainable Company, the 3rd ESG Finance Awards Japan
JFE Holdings was selected as an Environmentally Sustainable Company in the 3rd ESG
Finance Awards Japan’s Environmentally Sustainable Companies Category, presented
by the Japanese Ministry of Environment.
ESG Finance Awards Japan was founded for the purpose of spreading andexpanding ESG finance by commending institutional investors, financial institutions,intermediaries, and companies that have made an outstanding impact on theenvironment and society by proactively engaging in ESG finance as well as
environmental and social projects. An Environmentally Sustainable Company isselected based on assessing the relative richness of disclosures regarding risks,business opportunities, and strategies, as well as governance associated with key
environmental issues. The selected company must also be tackling issues throughmedium- to long-term strategies and have in place appropriate governance andmanagement processes. The richness of our ESG-related information disclosure andour approach toward dialogue with stakeholders were recognized in our selection as an
Environmentally Sustainable Company.
Please see the following for further details.
JFE Group selected as Environmentally Sustainable Company in the 3rd ESG Finance Awards Japan (Japanese only)(https://www.jfe-holdings.co.jp/release/2022/03/220301.html)

Silver Award, 2022 Sustainability Site Awards
JFE Holdings won a Silver Award (excellence) at the 2022 Sustainability Site Awards selected by the Association for
Sustainability Communication (formerly the Association of CSR Communication).
The award has been announced every year since 2017 as a comprehensive website research and rating carried out
to survey the actual conditions of sustainability information disclosure issued through websites for listed companies
in Japan. The survey is conducted by analysts with expert knowledge examining only the information disclosed on
websites, and evaluated based on eight themes (over 280 criteria) for such sites. Criteria are mainly based on GRI
Standards 2016 and reviewed annually in view of changes in society to maintain alignment with global trends insustainability assessment. This recognition speaks to our efforts in enhancing the richness of our information disclosure
through our website. We intend to continue to proactively engage in ESG initiatives and information disclosure.

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World Steel Association 2022 Steel Sustainability Champions
JFE Steel was awarded the 2022 Steel Sustainability Champions, selected by theWorld Steel Association. Once a year, the association commends member companies
for demonstrating leadership in developing a sustainable steel industry and society andachieving outstanding results in enhancing sustainability.
JFE Steel formulated the JFE Group Environmental Vision for 2050 in 2021 and isdeveloping ultra-innovative technology for reducing environmental impact. In addition,it has formulated basic policies and discloses measurement data on sustainability inareas such as the environment and occupational health and safety. The company has
also identified its material issues of corporate management, set KPIs, and periodicallyreviewed the appropriateness of the issues and KPIs as it continued its efforts.
These endeavors were recognized with the Steel Sustainability Champions award
for the second consecutive year. Going forward, we will further strengthen CSR
management, address environmental and social issues through our business activities,
and contribute to the development of a sustainable society.

Please see the following for further details.
JFE Steel Recognized as 2022 Steel Sustainability Champion(https://www.jfe-steel.co.jp/en/release/2022/220413.html)

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External
Evaluations
and Awards

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External
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PolicyExternal Awards for Research and Development■ Awards for Technologies and Product Developments (FY2021)
Prize/Award

Project

FY2022 The Commendation for Scienceand Technology by the Minister of
Education, Culture, Sports, Science andTechnology, Awards for Science andTechnology (Development Category)

Development of resourceMinistry of Education,conserving Si gradient steel
Culture, Sports, Science
sheet that contributes to energy
and Technology
conservation of electrical equipment

68th (FY2021) Okochi Memorial
Foundation Technology Award

Development of environmentallyfriendly high-strength steel plate withstrong anti-seismic properties that
help improve resilience of Japan

56th Machinery Promotion Award,
Japan Society for the Promotion of
Machine Industry Chairman’s PrizeJapan Society for theDevelopment of high-efficiency,
Promotion of Machine
ultra-narrow-groove welding system
Industry

FY2021 National Invention Award:
Chairman of Japan Business
Federation’s Award

Invention of structural arrest for
welded structures that improvessafety of ships

Japan Institute ofInvention and Innovation

FY2021 Japan Society of Civil
Engineers Environmental Award(Group II)

Joint research project to create
abundant oceans throughpublic-private collaboration:
demonstration of improvement inmarine environments with steelslag products and initiatives inenvironmental training

Japan Society of Civil
Engineers

JFE SteelJFE
Engineering

SponsorOkochi Memorial
Foundation

FY2021 Resource Recirculation
Technologies and Systems Award
Establishment of closed-loop
recycling technology for used
Director-General Award for Industrial
Technology and Environment, Ministry refractories
of Economy, Trade and Industry

Japan Environmental
management
Association for Industry

FY2021 The Japan Society forTechnology of Plasticity ConferenceAward

Development of intelligent control
technology to achieve world's
fastest temper rolling

The Japan Society forTechnology of Plasticity

22nd Logistics Environment Award:
Special Award

Modal shift of steel transportationfrom Hiroshima Prefecture to Chiba
Prefecture

Japan Association for
Logistics and Transport

IT Japan Award 2021 Semi-Grand Prix

Development of digital twin blast
furnace that avoided problems that
could have led to losses of several
hundred million yen

Nikkei Computer

Keidanren Endorsed Internal
Newsletter Recommendation Award

Company Newsletter, JFE Steel
Magazine

Company Newsletter
Center, KEIDANREN
Business Services

FY2021 New Energy Award
Director-General’s Prize, the Agency
for Natural Resources and Energy(Products and Services)

BRA-ING® AI system forautonomous operations ofincinerators at waste processing
facilities

New Energy Foundation

FY2021 New Technology Promotion
Engineer Award

Initiative to use image recognition
AI to increase sophistication of bar
arrangement inspection

Kanto Regional
Development Bureau,
Ministry of Land,
Infrastructure, Transport
and Tourism

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Policy68th (FY2021) Okochi Memorial Technology Prize

56th Japan Society for the Promotion of Machine
Industry President’s Award (Machine Promotion Award)

FY2021 National Invention Award (Chairman of Japan
Business Federation’s Award)

FY2021 Japan Society of Civil Engineers
Environmental Award (Group II)

FY2022 The Commendation for Science and Technology by the Minister of Education, Culture,
Sports, Science and Technology, Awards for Science and Technology (Development Category)

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PolicyGuideline
IndicesThird-party Comments

Yoshinao Kozuma
Emeritus Professor
Sophia University

1. Transition Plan for Achieving Carbon Neutrality by 2050
Noteworthy efforts this fiscal year can be seen in updated information related
to the TCFD. Scenario analysis is one, and this year the Company added a
1.5°C scenario, which is indispensable for ensuring consistency with the Paris
Agreement. Although most of the analysis results are the same as those of the
2.0°C scenario, the new one more clearly describes the risks and opportunities
involved in achieving carbon neutrality by 2050 and provides extremely useful
information for assessing the resilience of the Company’s strategies.
In terms of the disclosure of a transition plan in line with the 2021 editionof TCFD’s Guidance, compared to the previous year, a more concrete roadmap
to 2050 was presented with details of the initiatives and their target periods forachievement. In particular, the FY2030 target, which is the medium-term target
for reducing CO2 emissions in the steel business, was revised significantly
upward to a reduction of 30% or more from FY2013. This will be achievedby expanding the application of existing technology and pursuing a method of transitioning to low-carbon steelmaking
processes through the accumulation of new reduction approaches, making it a realistic and ambitious milestone.

2. Strengthening Initiatives for ESG Issues
The JFE Group’s initiatives on ESG issues continue to evolve. In the environmental area, JFE Steel obtained certification
for the Eco Leaf label for products including steel sheets for cans and construction materials, which improved thetransparency of information on the environmental impact of products. In the social area, the JFE Group as a whole has
decided to invest 10 billion yen per year in safety measures to eliminate serious accidents, and I hope this will leadto reinforcing future measures for human rights issues in the workplace. In terms of diversity, a new KPI has been
established for the ratio of women in management positions above the level of section manager. It is also commendable
that the employment ratio for women in career-track positions was raised to around the same number as men, startingwith the KPIs for FY2022. These efforts have resulted in JFE Holdings becoming the first steelmaker to be included in all
ESG investment indices for domestic equities used by the Government Pension Investment Fund of Japan.

3. Enhancing the Governance System
In the area of governance, I was impressed by the Company’s inclusion of an indicator for employee safety inperformance-linked remuneration for executives, as well as the planned introduction of a climate change indicator during
the Seventh Medium-term Business Plan. I believe these reforms will contribute to achieving further growth for the JFEGroup in a sustainable society.

4. Future Challenges
Because it is undesirable for the scope of financial and ESG information to differ when investors are increasinglyinterested in the financial impact of ESG risks, the Company should also consider disclosing social data on a consolidated
basis. In addition, import bans on products made through forced labor are in progress in the U.S., Canada, and the EU,
making the early establishment of a human rights risk management system in the supply chain an urgent issue.

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IndicesMariko Kawaguchi
Specially appointed professor of Graduate School of Social
Design Studies, Rikkyo University

The past six years, during which I have offered third-party comments, havecoincided with a period of dramatic change in the public recognition ofsustainability issues. Particularly noteworthy is the major shift in the business
community’s understanding of climate change as a vital issue, from a longterm issue to be addressed through low-carbon initiatives as long as they do
not negatively affect the core business to a crisis close to home that should be
addressed by pursuing decarbonization as a management priority for the corebusiness. In the course of reading this report, I was reminded that JFE Holdings
has been leading this transformation for the past six years.
The steel industry has supported modern civilization from a material
standpoint. However, from the mining of iron ore and coal as raw materials to
manufacturing, distribution, and disposal, the industry has placed a tremendous
burden on the global environment as well as human health and safety. With
regard to this negative impact, and especially the climate crisis, President Kakigi
has expressed his commitment to management by describing decarbonization as “an opportunity that will expand thefields in which JFE can take advantage of its world-class technological capabilities.” It is evident from this report that hiswords are leading to action.
Three years ago, in FY2019, JFE became one of the first companies in Japan to formulate a TCFD scenario. Two years
ago, it also formulated a CO2 reduction roadmap toward achieving carbon neutrality. In FY2021, the Company declaredits commitment to achieving carbon neutrality by 2050 under the JFE Group Environmental Vision for 2050, and it set thetarget of reducing CO2 emissions by 18% from FY2013 levels in FY2024 in the Seventh Medium-term Business Plan. In
this report, JFE Steel’s President Kitano has personally stated that the Company had achieved a 9% reduction in FY2021
and that the FY2030 target had been revised upward to 30% or more in February of this year. I initially had doubts as towhether the steel industry, which uses coal as a raw material, was capable of taking bold low-carbon initiatives. However,I have been persuaded by JFE’s strategy of realizing a low-carbon society by promoting thorough energy conservationand low-carbon technologies in its steel business while simultaneously focusing on innovative decarbonization
technologies such as carbon-recycling blast furnaces and pursuing renewable energy and waste processing operationsin its engineering business. This suggests that the steel industry itself has entered a new chapter in its history.
As international concern deepens over public safety and well-being due to the COVID-19 pandemic and global conflicts,
business management is also reevaluating the value of people. People develop next-generation technologies while
maintaining safe and clean operations at huge facilities, such as blast furnaces that operate at approximately 2,000°C, togenerate profit. People are not only the source of corporate value but also important stakeholders for whom companies
should provide job satisfaction and a sense of fulfillment. I believe that the JFE Group owes its success in carbon
reduction initiatives to the high morale and awareness of its people. The Group’s focus on human capital management
has also been clearly stated in the Message from the CEO, and its management policy of addressing social issues
through technology and respect for people should serve as the backbone for sustainably enhancing corporate value.
I hope you will accelerate and reinforce these efforts in the future, and I ask you to further strengthen yoursustainability agenda.

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First of all, I would like the JFE Group to contribute to the circular economy. In addition to bolstering the existing steel
recycling business, I would like to see the Company establish the infrastructure for a circular economy by also utilizing
its engineering business. Furthermore, I would like to see a comprehensive strategy for sustainability issues in mining
operations for iron ore and coal. In this context, environmental issues such as conserving water resources at mining sites
and biodiversity are also important. In September 2022, the Japanese government released its Guidelines on Respecting
Human Rights in Responsible Supply Chains, and ensuring respect for human rights at various levels along the extensive
supply chains of the steel and engineering businesses, including mining operations, will also be a key management
concern.
With regard to climate change, in addition to mitigation, adaptation to cope with ongoing extreme weather events
has become increasingly urgent and important. In developing resilient infrastructures, I expect there will be a heightened
need for comprehensive initiatives by the JFE Group.
While this report contains a vast amount of information, editorial consideration has been given to the role ofcommunicating an executive summary for each section and messages from the CEO and other executives in charge. I
commend and support the JFE Group’s decarbonization efforts and look forward to its future strategies and actions as aleader of sustainability beyond decarbonization.

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Editorial Policy
Basic ApproachThis report provides stakeholders with a comprehensive account of the JFE Group’s CSR-related initiatives and data andelicits feedback toward enhancing the Company’s activities and information disclosure. The 2022 report was compiled
with a focus on the following.
・ Progress of the Seventh Medium-term Business Plan and FY2021 KPI Results and FY2022 KPIs
・ Development of a concrete roadmap for achieving carbon neutrality by 2050, transition pathway・ Results of initiatives aimed at addressing global change (reduction of CO2 emissions, contribution to reducing CO2 insociety as a whole)・ Upgraded information on the development and provision of eco-friendly processes and products
・ Results of human rights due diligence and future initiatives
・ New KPIs for diversity and inclusion, and initiatives at operating companies
・ Introduction of non-financial metrics to executive remuneration

Scope of Report
Reporting Period
FY2021 (April 1, 2021 to March 31, 2022)
Reports on some activities undertaken before or after this period are included.

Organization Covered
The report mainly covers the activities of JFE Holdings, Inc. and its three operating companies: JFE Steel Corporation,
JFE Engineering Corporation, and JFE Shoji Corporation, but also includes reports on activities of other companies in the
JFE Group (412 companies, of which 330 are consolidated subsidiaries and 82 are equity-method affiliates). Quantitative
information on the environment includes data from the following JFE Group operating companies.

S

JFE Steel Group: JFE Steel Corporation and 29 domestic and overseas consolidated

T subsidiaries (total: 30 companies)

23 domestic companies:
JFE Mineral & Alloy Company, Ltd., CHIBA RIVERMENT AND CEMENT CORP., MIZUSHIMA RIVERMENT CORP.,
JFE Precision Corporation, JFE Plastic Resource Corporation, JFE Bars & Shapes Corporation, JFE Metal Products &Engineering Inc., JFE Galvanizing & Coating Co., Ltd., JFE Container Co., Ltd., JFE Welded Pipe Manufacturing Co.,
Ltd., JFE Steel Pipe Co., Ltd., Galvatex Corporation, JFE Pipe Fitting Mfg. Co., Ltd., JFE Techno-wire Corporation, JFE
Kozai Corporation, JFE LOGISTICS CORPORATION, JFE Chemical Corporation, JFE LIFE CORPORATION, GECOSSCORPORATION, JFE KENZAI FENCE CO., LTD., J-Logitec Co., Ltd., K-plasheet Corporation, JFE Ferrite Corporation
6 overseas companies:
Nova Era Silicon S.A., JFE Steel Galvanizing (Thailand) Ltd., Thai Coated Steel Sheet Co., Ltd., Philippine SinterCorporation, PT. JFE STEEL GALVANIZING INDONESIA, Nucor-JFE Steel México, S. de R.L. de C.V.

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JFE Engineering Group: JFE Engineering Corporation and 13 domestic and overseas

N consolidated subsidiaries (total: 14 companies)

12 domestic companies:
J&T Recycling Corporation, JFE Environmental Service Corporation, NORTHERN JAPAN MACHINERY Corporation,
TOHOKU DOCK TEKKO CO., LTD., JFE Aqua Machine and Service Corporation, Fujikako, Inc., Asuka Soken Co., Ltd., JFE
Pipeline Engineering Corporation, JFE Technos Co., Ltd., J Farm Corporation, JFE Business Support
YOKOHAMA Corporationn, JFE Project One Co., Ltd.
1 overseas subsidiary:J&M Steel Solutions Co., Ltd.

SJFE Shoji Group: JFE Shoji Corporation and 35 domestic and overseas consolidated

H subsidiaries (steel-processing companies) (total: 36 companies)

19 domestic subsidiaries:
JFE Shoji Electrical Steel Co., LTD., JFE Shoji Coil Center Corporation, JFE Shoji Kohnan Steel Center Co., Ltd., JFE
Shoji Tinplate Center Corporation, Aichi Kanzai Kogyo Corporation, Kyushu-Tech Corporation, JFE Shoji Kohnan SteelCenter Co., Ltd., Shinnihon-kogyo Corporation, Taisei Kogyo Corporation, Toyo Kinzoku Corporation, Tochigi Shearing
Corporation, Naigai Steel Corporation, Nagano Can Corporation, Niigata Steel Corporation, NIHON JISEIZAI KOGYO CO.,LTD., Hokuriku Kogyo Corporation, Hokuriku Steel Co., Ltd., Mizushima Steel Corporation, Mizushima Metal Products
Corporation
16 overseas subsidiaries:
Dongguan JFE Shoji Steel Products Co., Ltd., Guangzhou JFE Shoji Steel Products Co., Ltd., Zhejiang JFE Shoji Steel
Products Co., Ltd., Jiangsu JFE Shoji Steel Products Co., Ltd., JFE Shoji Steel Philippines, Inc., Central Metals (Thailand)Ltd., Steel Alliance Service Center Co., Ltd., JFE Shoji Steel Vietnam Co., Ltd., JFE Shoji Steel Hai Phong Co., Ltd., JFE
Shoji Steel Malaysia Sdn. Bhd., PT. JFE Shoji Steel Indonesia, JFE Shoji Steel India Private Limited, VEST Inc., JFE Shoji
Steel de Mexico, S.A. de C.V., JFE Shoji Steel Service Center Bajio, S.A.P.I. de C.V., JFE Shoji Power Canada Inc.

Reference Guidelines
GRI Sustainability Reporting Standards 2016, 2018, 2019, and 2020
Ministry of the Environment (Japan): Environmental Reporting Guidelines 2018
Ministry of the Environment (Japan): Environmental Accounting Guidelines 2005
Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)

Publication Date
Website: September 2022, PDF file: September 2022
(previous report: October 2021, next report: scheduled for September 2023)

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PolicyRelated Reports
The following information is available at:https://www.jfe-holdings.co.jp/en/
Company Information
Outline of the JFE Group, corporate governance, etc.
Shareholder and Investor Information
JFE Group business information, financial data, stock and rating information, etc.
JFE Group Report (Integrated Report)
Financial information including the JFE Group’s mid- to long-term business strategies, business performance,
management strategies and non-financial information, including CSR activities, corporate governance, etc.

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GRI Standard Content Index
This report is prepared with reference to the GRI Sustainability Reporting Standards 2016/2018/2019/2020
Note: We refer to JFE GROUP REPORT 2022 (Integrated Report), Securities Report from April 1, 2021 to March 31,2022) and Corporate Governance Report as of June 24, 2022.
■ GRI 102: General Disclosures 2016
Pages

Disclosure

ReportOther(https://www.jfe-holdings.co.jp/en/company/info/index.html)

1. Organizational profile
Overview of JFE Holdings

102-1

Name of the organization

—

102-2

Activities, brands, products, andservices—

102-3

Location of headquarters—(https://www.jfe-holdings.co.jp/en/company/info/index.html)

102-4

Location of operations—(https://www.jfe-holdings.co.jp/en/company/g-about/index.html)

102-5

Ownership and legal form—

(https://www.jfe-holdings.co.jp/en/company/g-about/index.html)

JFE GROUP REPORT(Integrated Report): pp.29-32
Overview of JFE HoldingsA bout JFE GroupOverview of JFE Holdings
Overview of JFE Holdings

102-6Markets served—(https://www.jfe-holdings.co.jp/en/company/info/index.html)

About JFE Group(https://www.jfe-holdings.co.jp/en/company/g-about/index.html)

102-7

Scale of the organization

Social Data (P.225)

JFE GROUP REPORT(Integrated Report): pp.27-28,
pp.35-36, pp.42-43, pp.97-98,
p.102

102-8

Information on employees andother workers

Social Data (P.225)

JFE GROUP REPORT(Integrated Report): p.103

102-9

Supply chain

JFE Group Value Chain (P.29)

102-10Significant changes to theorganization and its supply chain

102-11

Precautionary Principle or approach

Not applicableChallenge to the Carbon
Neutrality and its Pathway in
the Steel Business (P.45)
Environmental Management(P.50)

Scenario Analysis in Line with
the TCFD Recommendations(P.84)

Risk Management (P.202)

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—
—

—

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Editorial
PolicyPages

Disclosure

ReportOther—

102-12External initiatives

Steel Industry Initiatives (P.96)
Biodiversity (P.133)
Human Rights (P.168)
Community (P.175)

102-13

Membership of associations

Steel Industry Initiatives (P.96)—

M essage from the CEO (P.1)
C hallenge to the Carbon
Neutrality and its Pathway in
the Steel Business (P.45)—

2. Strategy

102-14102-15

Statement from senior decisionmakerMessage from the CEO (P.1)
JFE Group Value Chain (P.29)
Material Issues of Corporate
Management (P.15)
Challenge to the Carbon
Neutrality and its Pathway in
the Steel Business (P.45)
Scenario Analysis in Line with
the TCFD Recommendations

Key impacts, risks, andopportunities—(P.84)

3. Ethics and integrity
102-16

Values, principles, standards, andnorms of behaviorC orporate Vision/BusinessConduct (P.4)

102-17

Mechanisms for advice andconcerns about ethics

Compliance (P.198)—
JFE GROUP REPORT(Integrated Report): p.80

4. Governance102-18Governance structureCorporate Governance (P.187)—

102-19Delegating authority

CSR Structure (P.23)—

102-20Executive-level responsibility foreconomic, environmental, andsocial topics

CSR Structure (P.23)—

102-21

Consulting stakeholders on
economic, environmental, andsocial topics

CSR Structure (P.23)
C ompliance (P.198)—

102-22Composition of the highest
governance body and its
committees

Corporate Governance (P.187)

JFE GROUP REPORT(Integrated Report): pp.67-68,
pp.75-77, pp.83-84

102-23Chair of the highest governancebody—

Corporate Governance Report:
p.8

102-24

Nominating and selecting thehighest governance bodyCorporate Governance (P.187)

JFE GROUP REPORT(Integrated Report): pp.75-77

102-25

Conflicts of interest

Corporate Governance (P.187)

Corporate Governance Report:
p.2

102-26

Role of highest governance bodyin setting purpose, values, andstrategy——102-27

Collective knowledge of highest
governance body——JFE GROUP CSR REPORT 2022

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Disclosure

ReportOther

102-28

Evaluating the highest governancebody’s performanceCorporate Governance (P.187)—

102-29Identifying and managing
economic, environmental, andsocial impacts

C SR Structure (P.23)
E nvironmental Management—102-30Effectiveness of risk management
processes

Risk Management (P.202)—

102-31

Review of economic,
environmental, and social topics

C SR Structure (P.23)—

102-32Highest governance body’s role insustainability reportingCSR Structure (P.23)—

102-33

Communicating critical concerns

Compliance (P.198)—

102-34Nature and total number of criticalconcerns

Compliance (P.198)—

102-35

Remuneration policies

Corporate Governance (P.187)

JFE GROUP REPORT(Integrated Report): pp.78-79

102-36

Process for determining
remuneration

Corporate Governance (P.187)

JFE GROUP REPORT(Integrated Report): pp.78-79

102-37

Stakeholders’ involvement inremuneration——

102-38Annual total compensation ratio——

102-39Percentage increase in annual totalcompensation ratio——(P.50)

5. Stakeholder engagement
CSR Structure (P.23)

102-40

List of stakeholder groups

102-41

Collective bargaining agreements——

102-42

Identifying and selecting
stakeholders——

102-43

Approach to stakeholder
engagement

CSR Structure (P.23)—

102-44

Key topics and concerns raised

Third-part Comments (P.245)——

6. Reporting practice102-45

Entities included in the
consolidated financial statements

Editorial Policy (P.248)—

102-46

Defining report content and topic
Boundaries

Editorial Policy (P.248)—

102-47

List of material topics

Material Issues of Corporate
Management (P.15)—

102-48

Restatements of information

E nvironmental Data (P.207)—

102-49Changes in reportingEditorial Policy (P.248)—

102-50

Reporting period

Editorial Policy (P.248)—

102-51

Date of most recent reportEditorial Policy (P.248)—

102-52

Reporting cycleE ditorial Policy (P.248)—

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SocialESG Data

External
Evaluations
and Awards

ReportOtherSubmit Comments on the JFEGroup CSR Report (Japanese
Only)

Contact point for questions
regarding the reportContact Us(https://www.jfe-holdings.co.jp/csr/pdf/
form_er2022j.html)(https://www.jfe-holdings.co.jp/en/
contact.html)

102-54Claims of reporting in accordancewith the GRI Standards

Reference—

102-55

GRI content index

This table—

102-56External assuranceIndependent AssuranceStatement (P.236)—■ GRI103：Management Approach 2016
Pages

Disclosure

ReportOther—

GRI-103: Management Approach
103-1

Explanation of the material topic
and its BoundaryMaterial Issues of Corporate
Management (P.15)

103-2

The management approach and its
components

Material Issues of Corporate
Management (P.15)
CSR Structure (P.23)
Supply Chain Management(P.43)

Environmental Management(P.50)

Climate Change (P.56)
Scenario Analysis in Line with
the TCFD Recommendations(P.84)

103-3

Evaluation of the management
approach

Editorial
PolicyPages

Disclosure102-53GovernancePrevention of Pollution (P.128)
Efficient Use of Resources(P.120)Water Security (P.125)
Biodiversity (P.133)
Responsibility to Customers(Provide Quality Products andEnhance Customer Satisfaction)(P.141)

Occupational Health and Safety(P.148)

Labor Standards (Recruitand Nurture Diverse Human
Resources) (P.157)

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JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
Policy■ GRI200: Economic topics
Pages

Disclosure

ReportOther

GRI-201: Economic Performance 2016
Environmental Management

Securities Report: pp.2-3 (Transitionof Key Management Indicators,etc.), p.14 (Status of Employees),
p.53 (Dividend Policy), p.88
(Consolidated Income Statement)

201-1

Direct economic value generated
and distributed

201-2

Financial implications and otherrisks and opportunities due toclimate change

201-3

Defined benefit plan obligations
and other retirement plans

—

201-4

Financial assistance received fromgovernment——(P.50)

Community (P.175)
Scenario Analysis inLine with the TCFD
Recommendations(P.84)
E nvironmental Management (P.50)—
Securities Report:
p.100 (Postemployment
benefits)

GRI-202: Market Presence 2016
202-1

Ratios of standard entry level wage by
gender compared to local minimum wage

—

—

202-2

Proportion of senior management
hired from the local community——

GRI-203: Indirect Economic Impacts 2016
203-1

203-2

Environmental Management

Infrastructure investments andservices supported(P.50)—

Message from the CEO (P.1)
JFE Group Value Chain (P.29)
M aterial Issues of Corporate
Management (P.15)
C hallenge to the Carbon
Neutrality and its Pathway in
the Steel Business (P.45)
Climate Change (P.56)

—

—

—

—

—

Community (P.175)

Significant indirect economic
impacts

GRI-204: Procurement Practices 2016
204-1

Proportion of spending on local
suppliers

GRI-205: Anti-corruption 2016
205-1

Operations assessed for risks
related to corruption

205-2

Communication and training aboutanti-corruption policies and procedures

205-3

Confirmed incidents of corruption
and actions taken

Compliance (P.198)

—

—

—

—

—

GRI-206: Anti-competitive Behavior 2016
206-1

Legal actions for anti-competitive behavior,anti-trust, and monopoly practices

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SocialGovernance

ESG Data

External
Evaluations
and Awards

Pages

Disclosure

ReportOther

Tax Trancparency (P.206)—

GRI-207: Tax 2019
207-1

Approach to tax

207-2

Tax governance, control, and risk
management

—

—

207-3

Stakeholder engagement andmanagement of concerns related to tax

—

—

207-4

Country-by-country reporting——■ GRI300: Environmental topics
Pages

Disclosure

ReportOther—

GRI-301: Materials 2016
301-1

Materials used by weight orvolumeEnvironmental Data (P.207)

301-2

Recycled input materials(P.120)301-3

Reclaimed products and theirpackaging(P.120)—Climate Change (P.56)
Environmental Data (P.207)

—

—

—

Efficient Use of Resources
Environmental Data (P.207)
Efficient Use of Resources
Environmental Data (P.207)—

GRI-302: Energy 2016
302-1

Energy consumption within

302-2

Energy consumption outside of theorganization

302-3

Energy intensity

Climate Change (P.56)
Environmental Data (P.207)

—

302-4

Reduction of energy consumption

Climate Change (P.56)
Environmental Data (P.207)

—

302-5

Reductions in energy requirements
of products and services

Steel Industry Initiatives (P.96)—

GRI-303: Water and Effluents 2018
303-1

Interactions with water as a sharedresources

Water Security (P.125)

—

303-2

Management of water dischargerelated impacts

Prevention of Pollution (P.128)
Environmental Data (P.207)

—

303-3

Water withdrawal

Water Security (P.125)
Environmental Data (P.207)

—

303-4

Water discharge

Environmental Data (P.207)

—

303-5

Water consumptionWater Security (P.125)
Environmental Data (P.207)—

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SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Pages

Disclosure

Report

Other

—

—

GRI-304: Biodiversity 2016

304-1

Operational sites owned, leased,managed in, or adjacent to,protected areas and areas of highbiodiversity value outside
protected areas

304-2

Significant impacts ofactivities, products, andservices on biodiversity

304-3

Habitats protected or restored

—

—

304-4

IUCN Red List species andnational conservation list species
with habitats in areas affected byoperations——

Biodiversity (P.133)—

GRI-305: Emissions 2016
305-1

Direct (Scope 1) GHG emissions

Climate Change (P.56)
Environmental Data (P.207)

—

305-2

Energy indirect (Scope 2) GHG
emissionsClimate Change (P.56)
Environmental Data (P.207)

—

305-3

Other indirect (Scope 3) GHG
emissionsClimate Change (P.56)
Environmental Data (P.207)

—

305-4

GHG emissions intensityC limate Change (P.56)
E nvironmental Data (P.207)

—

305-5

Reduction of GHG emissions

Climate Change (P.56)
Environmental Data (P.207)

—

305-6

Emissions of ozone-depleting
substances (ODS)

—

—

305-7

Nitrogen oxides (NOx), sulfur
oxides (SOx), and other significant
air emissions

Prevention of Pollution (P.128)
Environmental Data (P.207)—

Environmental Data (P.207)—

GRI 306: Waste 2020
306-1

Waste generation and significant
waste-related impacts

306-2Management of significant wasterelated impacts

306-3

Waste generated

306-4

Waste diverted from disposal

306-5

Waste directed to disposalE fficient Use of Resources(P.120)E nvironmental Data (P.207)
Efficient Use of Resources(P.120)Environmental Data (P.207)
Efficient Use of Resources(P.120)Environmental Data (P.207)
Efficient Use of Resources(P.120)Environmental Data (P.207)

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—

—

—

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PolicyGuideline
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JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Pages

Disclosure

ReportOther

E nvironmental Management—

GRI-307: Environmental Compliance 2016
307-1

Non-compliance withenvironmental laws and regulations(P.50)

GRI-308: Supplier Environmental Assessment 2016308-1

New suppliers that were screenedusing environmental criteria

—

—

308-2

Negative environmental impacts inthe supply chain and actions taken——■ GRI400: Social topics
Pages

Disclosure

ReportOther

Labor Standards (Recruitand Nurture Diverse Human
Resources) (P.157)
Social Data (P.225)

—

—

—

GRI-401: Employment 2016

401-1

New employee hires andemployee turnover

401-2

Benefits provided to full-time
employees that are not provided totemporary or part-time employees

401-3

Parental leave

Social Data (P.225)—

GRI-402: Labor/Management Relations 2016
402-1

Minimum notice periods regarding
operational changes

—

—

—

GRI-403: Occupational Health and Safety 2018403-1

Occupational health and safety
management system

Occupational Health and Safety

403-2

Hazard identification, risk assessment,
and incident investigation

Occupational Health and Safety403-3

Occupational health services

403-4

Worker participation, consultation,and communication on occupational
health and safetyOccupational Health and Safety

403-5

Worker training on occupational
health and safetyO ccupational Health and Safety

403-6

Promotion of worker health403-7

Prevention and mitigation ofoccupational health and safety
impacts directly linked by business
relationships

403-8

Workers covered by an
occupational health and safety
management system(P.148)(P.148)

Occupational Health and Safety(P.148)(P.148)(P.148)O ccupational Health and Safety(P.148)

Occupational Health and Safety(P.148)—JFE GROUP CSR REPORT 2022

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—
—
—
—
—

—

—

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External
Evaluations
and Awards

Pages

Disclosure

Report

Other

403-9

Work-related injuries

Social Data (P.225)—

403-10Work-related ill healthOccupational Health and Safety—(P.148)

GRI-404: Training and Education 2016
404-1

Average hours of training per year
per employee

—

—

404-2

Programs for upgrading employee
skills and transition assistanceprograms

L abor Standards (Recruitand Nurture Diverse Human
Resources) (P.157)

—

404-3

Percentage of employees receiving
regular performance and careerdevelopment reviews

—

—

405-1

Diversity of governance bodies andemployees

Labor Standards (Recruitand Nurture Diverse Human
Resources) (P.157)
Social Data (P.225)

—

405-2

Ratio of basic salary andremuneration of women to men

—

—

—

—

GRI-405: Diversity and Equal Opportunity 2016

GRI-406: Non-discrimination 2016406-1

Incidents of discrimination andcorrective actions taken

GRI-407: Freedom of Association and Collective Bargaining 2016
407-1

Operations and suppliers in which theright to freedom of association andcollective bargaining may be at risk

—

—

—

—

—

—

—

—

—

—

GRI-408: Child Labor 2016
408-1

Operations and suppliers at significant
risk for incidents of child labor

GRI-409: Forced or Compulsory Labor 2016409-1

Operations and suppliers at
significant risk for incidents of forced
or compulsory labor

GRI-410: Security Practices 2016
410-1

Security personnel trainedin human rights policies orprocedures

GRI-411: Rights of Indigenous Peoples 2016
411-1

Incidents of violations involving
rights of indigenous peoples

GRI-412: Human Rights Assessment 2016
412-1

Operations that have been subject
to human rights reviews or impact
assessmentsH uman Rights (P.168)

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JFE Group
VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Pages

Disclosure

Report412-2

Employee training on human rights
policies or procedures

412-3

Significant investment agreements
and contracts that include humanrights clauses or that underwent
human rights screening

Human Rights (P.168)

—

Other
—

—

GRI-413: Local Communities 2016413-1

Operations with local community
engagement, impact assessments,
and development programs

413-2

Operations with significant actualand potential negative impacts on
local communities ommunity (P.175)
C

Not applicable——

GRI-414: Supplier Social Assessment 2016414-1

New suppliers that were screenedusing social criteria

414-2

Negative social impacts in the
supply chain and actions taken——

JFE Group Value Chain (P.29)

—

—

—

GRI-415: Public Policy 2016
415-1

Political contributions

GRI-416: Customer Health and Safety 2016

416-1

416-2

R
 esponsibility to Customers(Provide Quality Products andEnhance Customer Satisfaction)

Assessment of the health andsafety impacts of product andservice categories—(P.141)

Incidents of non-complianceconcerning the health and safety
impacts of products and services

—

—

—

—

GRI-417: Marketing and Labeling 2016
417-1

Requirements for product andservice information and labeling

417-2

Incidents of non-complianceconcerning product and service
information and labeling

417-3

Incidents of non-complianceconcerning marketing
communications

Not applicable

—

—

—

—

—

—

—

GRI-418: Customer Privacy 2016
418-1

Substantiated complaints
concerning breaches of customer
privacy and losses of customer
data

GRI-419: Socioeconomic Compliance 2016
419-1

Non-compliance with laws andregulations in the social andeconomic area

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VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

External
Evaluations
and Awards

ESG Data

Editorial
PolicyComparison with Environmental Reporting Guidelines 2018 (Ministry of the Environment, Japan)
Chapter 1: Basic Information of Environmental Reporting
Items

Contents

1. Basic requirements for environmental reporting(1) BoundaryE ditorial Policy (P.248)(2) Reporting period

Editorial Policy (P.248)(3) Reporting standards and guidelinesEditorial Policy (P.248)
Guideline Content Indices (P.251)(4) Overview of the environmental reportEditorial Policy (P.248)

2. Trends in key performance indicators
Material Issues of Corporate Management (P.15)(1) Trends in major performance indicators
Chapter 2: Items to Be Included in Environmental Reporting
Items

Contents

1. Top Management Commitments(1) Top management commitments to
the JFE Group’s response to material environmental issues

Message from the CEO (P.1)
Challenge to the Carbon Neutrality and its
Pathway in the Steel Business (P.45)

2. Governance(1) JFE Group governance structure

CSR Structure (P.23)(2) Manager responsible for material environmental issues

E nvironmental Management (P.50)
S cenario Analysis in Line with the TCFD
Recommendations (P.84)(3) Roles of the board of directors and board of executive officers
in the management of material environmental issues

Environmental Management (P.50)
Scenario Analysis in Line with the TCFD
Recommendations (P.84)

3. Stakeholder Engagement(1) Corporate policies to stakeholders

Environmental Management (P.50)(2) Overview of stakeholder engagement activities conducted in
the reporting periodJ FE Group Value Chain (P.29)
C SR Structure (P.23)
Environmental Communication (P.138)

4. Risk Management(1) Environment-related risk identification, assessment, andmanagement processes

CSR Structure (P.23)
Scenario Analysis in Line with the TCFD
Recommendations (P.84)
Human Rights (P.168)
Risk Management (P.202)(2) Positioning of the above processes in the JFE Group’s overallrisk management

CSR Structure (P.23)
Risk Management (P.202)

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SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyChapter 2: Items to Be Included in Environmental Reporting
Items

Contents

5. Business ModelJ FE Group Value Chain (P.29)
JFE GROUP REPORT(Integrated Report): pp.29-32(1) JFE Group business model
6. Value Chain Management(1) Value chain overview

J FE Group Value Chain (P.29)(2) Green procurement policy, objectives, and results

Supply Chain Management (P.43)(3) Status of eco-friendly products and services

Development and Provision of Eco-friendly
Processes and Products (P.100)

7. Long-term Vision(1) Long-term visionM essage from the CEO (P.1)
C hallenge to the Carbon Neutrality and its
Pathway in the Steel Business (P.45)
C limate Change (P.56)
S cenario Analysis in Line with the TCFD
Recommendations (P.84)(2) Time period covered by the long-term visionMessage from the CEO (P.1)
Challenge to the Carbon Neutrality and its
Pathway in the Steel Business (P.45)
Climate Change (P.56)
Scenario Analysis in Line with the TCFD
Recommendations (P.84)(3) Reasons why that time period was selected

Challenge to the Carbon Neutrality and its
Pathway in the Steel Business (P.45)
Climate Change (P.56)
Scenario Analysis in Line with the TCFD
Recommendations (P.84)

8. StrategyM essage from the CEO (P.1)
M aterial Issues of Corporate Management (P.15)
C hallenge to the Carbon Neutrality and its
Pathway in the Steel Business (P.45)
S cenario Analysis in Line with the TCFD
Recommendations (P.84)
S teel Industry Initiatives (P.96)(1) JFE Group business strategy for contributing to theachievement of a sustainable society

9. Methodology for Identifying Material Environmental Issues(1) Procedure by which the JFE Group identified its material
environmental issues

Material Issues of Corporate Management (P.15)
Scenario Analysis in Line with the TCFD
Recommendations (P.84)(2) List of identified material environmental issues

Material Issues of Corporate Management (P.15)
Scenario Analysis in Line with the TCFD
Recommendations (P.84)(3) Reasons that the identified environmental issues were judged
materialM aterial Issues of Corporate Management (P.15)
S cenario Analysis in Line with the TCFD
Recommendations (P.84)

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VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyChapter 2: Items to Be Included in Environmental Reporting
Items

Contents
JFE Group Value Chain (P.29)
Material Issues of Corporate Management (P.15)
Scenario Analysis in Line with the TCFD
Recommendations (P.84)(4) Boundaries of the material environmental issues

10. JFE Group Material Environmental Issues(1) Policies and/or action plansCorporate Vision/Business Conduct (P.4)
JFE Group Value Chain (P.29)
Material Issues of Corporate Management (P.16)
Challenge to the Carbon Neutrality and its
Pathway in the Steel Business (P.45)
Climate Change (P.56)
Scenario Analysis in Line with the TCFD
Recommendations (P.84)(2) Targets and results of policies/action plans based on
performance indicators

Material Issues of Corporate Management (P.16)
CSR Structure (P.26)(3) Methodologies used for calculating each performance indicatorM aterial Issues of Corporate Management (P.16)(4) Aggregation scope of data for each performance indicator

Material Issues of Corporate Management (P.16)
Editorial Policy (P.243)(5) Financial impact of risks and opportunities, and calculation
methodologies if the financial impact is significant

Environmental Management (P.49)
Scenario Analysis in Line with the TCFD
Recommendations (P.77)
Environmental Data (P.198)

6) Assurance report by an independent third partyIndependent Assurance Statement (P.231)

Reference: Major Environmental Issues and Their Performance Indicators
Items

Contents

1. Climate Change
Greenhouse Gas Emissions(1) Scope 1 emissions

Climate Change (P.56)
Environmental Data (P.207)(2) Scope 2 emissions

Climate Change (P.56)
Environmental Data (P.207)(3) Scope 3 emissions

Climate Change (P.56)
Environmental Data (P.207)

Emission Intensity
Climate Change (P.56)
Environmental Data (P.207)(1) Greenhouse gas emission intensity
Energy Usage(1) Breakdown of energy usage and overall energy usage

Climate Change (P.56)
Environmental Data (P.207)(2) Renewable energy usage as a percentage of overall energy
usage

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VisionCSRManagement

SpecialFeatureEnvironment

SocialGovernance

External
Evaluations
and Awards

ESG Data

Reference: Major Environmental Issues and Their Performance Indicators
Items

Contents

2. Water Resources
Water Security (P.125)
Environmental Data (P.207)(1) Water resource inputs(2) Water intensity—(3) Water discharge

Environmental Data (P.207)(4) Status of water stress, if the entity has sites or supply chainslocated in areas with water stressWater Security (P.125)

3. Biodiversity(1) Impact of business activities on biodiversityB iodiversity (P.133)(2) Status and extent of the dependency of the JFE Group’sbusiness activities on biodiversityB iodiversity (P.133)(3) Business activities that contribute to biodiversity conservationB iodiversity (P.133)(4) Status of cooperation with external stakeholders

Biodiversity (P.133)

4. Resource Circulation
Resource Inputs(1) Volume of nonrenewable resource inputs

E nvironmental Data (P.207)(2) Volume of renewable resource inputs

Environmental Data (P.207)(3) Volume of recycled materials used

Environmental Data (P.207)(4) Rate of recycled and reused resources (= volume of recycledmaterials used/volume of resource inputs)

Efficient Use of Resources (P.120)
Environmental Data (P.207)

Resource Waste(1) Total production of waste

Efficient Use of Resources (P.120)
Environmental Data (P.207)(2) Total final disposal volume of waste

Efficient Use of Resources (P.120)
Environmental Data (P.207)

5. Chemical Substances(1) Volume of chemical substances in storage—(2) Volume of chemical substance emissions

Prevention of Pollution (P.128)
Environmental Data (P.207)(3) Volume of chemical substances transferredPrevention of Pollution (P.128)
Environmental Data (P.207)(4) Volume of chemical substances handled (volume used)—

6. Pollution prevention
GeneralEnvironmental Management (P.50)(1) Status of legal complianceAir quality conservation(1) Air-pollutant emissions volume, emission concentration in air
pollution regulations

 revention of Pollution (P.128)
PEnvironmental Data (P.207)

Water pollution(1) Water pollution load, emission concentration in emissions
regulations

 revention of Pollution (P.128)
PEnvironmental Data (P.207)

Soil pollution
Environmental Management (P.50)(1) Status of soil pollution

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VisionSpecialFeatureCSRManagement

Environment

SocialGovernance

ESG Data

External
Evaluations
and Awards

Editorial
PolicyTCFD Content Index
Recommended
Disclosures【Governance】
Disclose theorganization’s
governance aroundclimaterelated risks andopportunities.

【Strategy】
Disclose the actual andpotential impacts ofclimate-related risks
and opportunities on
the organization’s
businesses, strategy andfinancial planning wheresuch information ismaterial.

【Risk Management】
Disclose how theorganization identifies,
assesses, and manages
climate-related risks.

【Metrics and Targets】
Disclose the metrics andtargets used to assess
and manage relevant
climate-related risks andopportunities.

Overview of TCFD Recommendationsa. D
 escribe the board’s oversight ofclimate-related risks and opportunitiesb. Describe management’s role inassessing and managing climate-relatedrisks and opportunities
a. D
 escribe the climate-related risks andopportunities the organization has
identified over the short, medium, andlong termb. Describe the impact of climaterelated risks and opportunities on theorganization’s businesses, strategy, andfinancial planningc. D
 escribe the resilience of theorganization’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower
scenarioContents

Corporate Governance (P.187)
Risk Management (P.202)
Climate Change (Governance) (P.59)

Progress of the Seventh Medium-term
Business Plan (P.12)
JFE Group Value Chain (P.29)
Challenge to the Carbon Neutrality and its
Pathway in the Steel Business (P.45)
Climate Change (JFE Group Environmental
Vision for 2050) (P.56)
Climate Change (JFE Group’s Climate
Change Strategy) (P.61)
Scenario Analysis in Line with the TCFD
Recommendations (P.84)

a. D
 escribe the organization’s processes
for identifying and assessing climaterelated risksb. Describe the organization’s processes
for managing climate-related risksc. D
 escribe how processes for identifying,assessing and managing climaterelated risks are integrated into theorganization’s overall risk managementa. D
 isclose the metrics used by theorganization to assess climate-relatedrisks and opportunities in line with its
strategy and risk management processb. Disclose Scopes 1 and 2 and, if
appropriate, Scope 3 greenhouse gas(GHG) emissions and related risksc. D
 escribe the targets used by theorganization to manage climate-relatedrisks and opportunities and performanceagainst targets

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Risk Management (P.202)
Environmental Management (P.50)
Climate Change (Risk Management) (P.77)

Progress of the Seventh Medium-term
Business Plan (P.12)
Material Issues of Corporate Management(P.15)

Challenge to the Carbon Neutrality and its
Pathway in the Steel Business (P.45)
Climate Change (Metrics and Targets) (P.78)
Climate Change (Metrics and Targets) (P.78)
Environmental Data (P.207)
Material Issues of Corporate Management(P.15)

Climate Change (JFE Group Environmental
Vision for 2050) (P.56)
Climate Change (Metrics and Targets) (P.78)

Guideline
Indices