Hypothetical Cases for
Avoided Emissions Disclosure
May 2024

1

Purpose of this document
This document is positioned as a supplementary document to The Working Group on Disclosureand Evaluation of Climate-related opportunities' “Basic Guidelines for Disclosure and Evaluation of

Climate-related Opportunities” (Basic Guidelines). It explains the type of disclosure expected when

Contents

companies calculate and disclose avoided emissions in accordance with the concept of avoided
emissions and related guidelines set forth in the Basic Guidelines. Accordingly, please refer to the

Structure of this document andhow to read02

Basic Guidelines for the definition and concept of avoided emissions, and basic disclosure guidelines.
Please note that the examples provided in this document are hypothetical cases only to explain key
points of reporting avoided emissions, based on the disclosure of the companies in The Working

01

Key points for disclosure
based on the Basic
Guidelines

03

Group on Disclosure and Evaluation of Climate-related opportunities. Additionally, since they weremade as disclosure examples consistent with the Basic Guidelines, they do not uniformly prescribe
best practices and ideal disclosure. Please also note that some explanations of transition strategies,
products, services, etc., have been simplified to provide information about the critical points in a way

02

Example of disclosure of
avoided emissions

that is easy to understand.

12

This document has been created to be used as reference information by companies disclosing

avoided emissions. Actual disclosure will vary depending on the company’s industry, as well as thecharacteristics of the products and services that create the avoided emissions.

Points to be considered on this document１

Note that this is an example of how to disclose avoided emissions, and thus thedescription is simplified

２

It is not intended to prescribe best practices for disclosure. When disclosing
avoided emissions, companies should refer to other guidance and guidelines aswell as this document.

３

Examples do not determine eligible products or services, and are not intended to
exclude examples that are not provided

４

Note that the eligibility of the calculation method is outside the scope of thisdocument, and that information provided in this document is hypothetical cases
based on various examples

５This document is a living document that will be continually updated to reflect themost recent discussions and guidelines.

2

01

Key points of disclosing Avoided Emissions
in line with the Basic Guidelines
・Structure and Reading Method of This Document
・Overview of the Basic Guidelines
・Key Points of Disclosure in Line with the Basic Guidelines

3

Structure and Reading Method of This Document
The purpose of this document is to supplement the Basic Guideline byThis document targets not only companies whose individual products andservices are subject to calculation as shown in the disclosure examples, but

presenting specific examples of disclosure in response to the basic

also pertains to a wide range of subjects to be considered for calculation ofguideline‘s approach to disclosure and is divided into two chapters.

avoided emissions. For those wishes to understand the key points of disclosure

Chapter 1 organized the disclosure approach suggested in the Basic

may refer to Chapter 1, and those interested in examining various disclosure to

Guidelines, giving detailed context through various examples to the points

meet the Basic Guidelines may first refer to each cases of Chapter 2.

that may be difficult to understand from the description of the Basic

CHAPTER 01 Points of Disclosure in accordance with the Basic Guidelines

Guidelines alone. Chapter 1 explains the points difficult to understand.

Premises for disclosing climate-related opportunities (Chapter 1 of the
Basic Guidelines)

Chapter 2 presents hypothetical disclosure examples based on real-life
products and services that may be eligible for avoided emissions.
Companies that are disclosing or considering to disclose avoided
emissions in the future are recommended to examine both the Basic

Guidelines and the points of disclosure organized in Chapter 1. It is also

⚫Setting a scientific-based targets⚫Scope 3 disclosure⚫Monitoring the progress of transition strategy

Concept and guidelines on avoided emissions (Chapter 2 of the Basic
Guidelines)⚫Setting an attribution factor⚫Assessment of negative impacts on the environment and society

advisable to refer to the potential disclosure examples as set forth in
Chapter 2.
Each case in Chapter 2 consists of two elements: The first is disclosure

CHAPTER 02 Hypothetical cases of Avoided Emissions Disclosure
hypothetical cases using potentially credible products and services of
avoided emissions

examples on corporate emissions reduction plans and eligibility and1.

methodology of avoided emissions. The Basic Guidelines stipulate that

2.
3.
4.

companies disclose their own emission reduction plans to address climaterelated risks as a prerequisite for disclosing climate-related opportunities(e.g., avoided emissions). This is because transitioning to a decarbonizedsociety necessitates reducing GHG emissions across both the company andwider society. The second is the hypothetical disclosure cases
demonstrating how companies might clarify the eligibility of products andservices and disclose their methodology for avoided emissions. Companies
should be transparent about these contents, and the hypothetical cases aredeveloped in line with the recommendations of the Basic Guidelines.

5.

6.

Decarbonization of energy such as
electricity and heat
Electrification
Electrification of transportation
Emission reduction during productuse phase
Energy efficiency throughlightweight material
Energy efficiency during productuse phase

7.

Manufacturing and supply of
products using low-carbon anddecarbonized raw materials
8. Extension of product life
9. Supply of products contributing todecarbonization of buildings
10. Emissions reduction from livestock
11. Emissions reduction in waste
management

01 Own emission reduction
hypothetical cases on how company may disclose their transition
strategy (net-zero targets and specific actions).
02 Avoided emissions eligibility and methodology
A hypothetical cases that are aligned with the concept, guidelines, andrecommended disclosure outlined in the Basic Guidelines.

4Overview of the Basic Guidelines｜Avoided emissions
Avoided emissions refer to the difference between the greenhouse gas(GHG) emissions of existing products and services (baseline) and newAssumptions when disclosing climate-related opportunities

Disclosure of targets, strategies, and initiatives related to companies’ own

products and services, and they quantify the contribution to the mitigation

reductions, which are prerequisite when disclosing climate-relatedof climate change across society as a whole through products and services.

opportunities (avoided emissions)

By utilizing avoided emissions, companies can disclose and promote their⚫ Setting science-based emissions reduction targets

impact on society, which was previously difficult to assess with GHG⚫ Developing a transition strategy to achieve targets and ensuring its viability

inventories. There is a movement to evaluate such corporate efforts, and⚫ Disclosure of targets/strategies and their results

discussions are progressing internationally concerning the concept,

Concept of avoided emissions

calculation, and disclosure of avoided emissions.

Concept and guidelines for target products and services

Avoided emissions, which indicate the positive impact of a company onsociety, show the difference with the GHG emissions (baseline) that would
otherwise have been emitted, and a high level of transparency is required⚫ Contributing to the decarbonization of society⚫ Products and services play a role in contributing to the reduction

Concept and guidelines for disclosurein their calculation and disclosure. Rules related to calculation methods(basic principles and recommendations)and disclosure are not stipulated in the Basic Guidelines or this document⚫ Clear distinction from GHG inventories

since they are under discussion, mainly through the "Guidance on Avoided⚫ Meeting eligibility

Emissions" by the World Business Council for Sustainable Development(WBCSD) and industry associations.

⚫ Consideration of negative impacts other than climatechange due to the supply of such products and services⚫ Transparent disclosure*For more information about avoided emissions, please check this link and watch the video.（https://www.youtube.com/watch?v=0O_5fdOMnI8）

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Overview of the Basic Guidelines｜Basic Guidelines
In order to spread the concept of avoided emissions and increase

In addition to demonstrating that the products and services subject tocalculation are consistent with the achievement of a decarbonized society,transparency in the market, the Basic Guidelines provide three guidelines

it is recommended that the establishment of baselines and calculation

based on the characteristics of avoided emissions. Specifically, it refers tomethods be as clear as possible. Details of these concepts and guidelines

the following three matters.

are summarized in Chapter 2 of the Basic Guidelines.

⚫Disclosure of targets, strategies, and initiatives related to companies’
own reductions, which are prerequisite when disclosing climate-related
opportunities (avoided emissions)⚫Concept and guidelines for target products and services⚫Concept and guidelines for disclosure (basic principles andrecommendations)

As a corporate initiative related to climate change, avoided emissions area means of calculating and disclosing the contribution to thedecarbonization of society as a whole. In order to achieve global
decarbonization, it is important that companies promote initiatives related
to risk to reduce their own emissions as well as such impacts on society.
Accordingly, the Basic Guidelines summarize matters to be disclosed inrelation to companies’ initiatives to reduce their own emissions, as aprecondition for disclosing items for evaluating climate-related
opportunities, such as avoided emissions.
When calculating and disclosing actual avoided emissions, a high level oftransparency is important to ensure reliability.

6Key Points of Disclosure in Line with the Basic Guidelines

Premise for Disclosing Climate-Related Opportunities｜Setting Science Based Targets

Agreement. Furthermore, in Japan, sector-specific technology roadmaps

As a prerequisite for calculating and disclosing avoided emissions,have been established by the Ministry of Economy, Trade, and Industry

companies are required to set science based GHG reduction targets.

(METI) to assist hard-to-abate sectors. These roadmaps, when combined

Science based targets are those consistent with the achievement of thewith NDCs, enable companies to provide a scientifically grounded rationale

Paris Agreement, aiming to hold “the increase in the global averagefor their targets, incorporating both international and domestic

temperature to well below 2℃ above pre-industrial levels and pursuingconsiderations.

efforts to limit the temperature increase to 1.5℃ above pre-industrial
levels“.

One of the most widely recognized frameworks for setting science-based

For example, in Case 3 of Chapter 2 (page.26-32), companies in thechemical industry exemplify obtaining SBTi certification to ensure thescientific basis of their emission reduction targets. Conversely, in Case 8targets is the Science Based Targets Initiative (SBTi) certification. By(page.61-68), companies in the petroleum industry focusing on extending

obtaining SBTi certification, companies can objectively demonstrate that

product lifecycles, and Case 10 (page. 79-85), companies in the chemical

their targets are based on scientific evidence. Indeed, in the researchindustry aiming to reduce emissions from livestock, set Scope 1+2

conducted for hypothetical cases in Chapter 2, several companies have

reduction targets aligned with Japan's NDC levels. Moreover, they explain

obtained SBTi certificate for their GHG reduction targets.

that their efforts towards reduction are in line with sector-specificHowever, it's important to acknowledge that while SBTi offers valuableguidance, it has its limitations. Some industries are still awaiting theroadmaps established by the Ministry of Economy, Trade, and Industry,
thus providing a scientifically grounded rationale for their target setting.

development of sector-specific guidance, making it challenging for allcompanies to tailor targets that fully consider their unique industry andregional characteristics. To address this, companies can draw uponinternationally recognized scenarios, such as those provided by theInternational Energy Agency (IEA), or align their targets with the GHG
reduction targets outlined in each country's Nationally Determined
Contributions (NDCs) under the Paris

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Key Points of Disclosure in Line with the Basic Guidelines

Premise for Disclosing Climate-Related Opportunities｜Scope 3 Disclosure and Target Setting
In the Basic Guidelines, companies are generally required to grasp and

IFRS S2 also acknowledges the potential difficulties in disclosing Scope 3
emissions, requiring companies to provide reasons if disclosure is

set reduction targets based on emissions from Scope 1 to 3. Bychallenging. Thus, while disclosure and goal setting for Scope 3 emissions

understanding supply chain emissions, including Scope 3, companies canare currently not universally mandated for all companies, it is desirable for

efficiently work towards achieving carbon neutrality by identifying activities

companies to explain if they find such requirements challenging.

with higher emissions.
There is a growing demand for disclosure and goal setting regarding

CDP, an NGO that evaluates and facilitates the disclosure of climatechange initiatives by companies and municipalities, advocates for a gradual

Scope 3 emissions. The “IFRS S2 Climate-related Disclosures,” establishedapproach to calculating Scope 3 emissions. Rather than demandingin June 2023 by International Sustainability Standards Board (ISSB),

immediate precision, it suggests to first gain a broad understanding andmandates disclosure of Scope 3 emissions. In terms of target setting of

progressively refining the data to align with actual circumstances. In

scope 3, “SBTi Corporate Near-Term Criteria” by Science Based Targets

practice, some companies face challenges in calculating emissions for all

initiative（SBTi） states that a if a company’s relevant scope 3 Emissions

categories within Scope 3. Consequently, they opt to disclose only theare 40% or more of total scope 1, 2, and 3 emissions, they shall be included

emissions from categories where calculations are feasible. For instance,in near-term science based-targets. Furthermore, in the “Basic Guidelines

Mock -Case 8, which focuses on extending product lifecycles, illustrates

on Climate Transition Finance” by Japanese Government（Financial

this approach by disclosing numerical values for categories where data is

Service Agency, Ministry of Economy, Trade and Industry, and Ministry of

currently available, given the diverse nature of related industries. Moreover,the Environment）, it is recommended that targets covering Scope 3 to be

it restricts target setting to emissions per unit of energy provided by theset when scope 3 could be the significant reduction.

company. Similarly, Case 10, which addresses emissions reduction from

However, it is recognized that there are challenges in calculating Scope 3
emissions. The Task Force on Climate-related Financial Disclosures

livestock sources, outlines collaboration with suppliers in target setting andprovides a detailed timeline leading up to goal establishment.

(TCFD) points out that collecting the necessary data for calculating Scope
3 emissions and ensuring data quality is a significant challenge for somecompanies.

8Key Points of Disclosure in Line with the Basic Guidelines

Premise for Disclosing Climate-Related Opportunities｜Progress Report
In accordance with the fundamental guidelines, companies are required

Additionally, external factors such as policies in other countries orfluctuations in raw material and energy prices can also influence progress.

to disclose not only the establishment of emission reduction targets andHence, it is advisable to provide explanations for any deviations from thethe development of strategies to achieve these objectives but also theplanned progress in emission reduction initiatives, including the underlying

progress and achievements made thus far. In addition to a quantitative

reasons and factors contributing to such deviations. In Case 2: Promotion

assessment of progress, progress updates also include, for example,of Electrification (page. 19-25), the increase in emissions is attributed to a

supplemental explanations regarding the status of projects related torise in production volume. Furthermore, it is indicated that efforts toemission reduction. By disclosing such progress, companies canachieve the targets will continue, taking into account these changes indemonstrate externally that they are actively adhering to their emission

production volume. Moreover, it is useful to disclose events that may affectreduction strategies and plans.

the achievement of targets in advance. In Case 3: Electrification of

In accordance with the Basic Guidelines, companies are required to set
and disclose not only their emission reduction targets and transition

Transportation, the conditions assumed during the formulation of thetransition plan are disclosed alongside the plan itself.

strategies to achieve these targets, but also the progress andachievements made thus far. Progress updates encompass a variety of

aspects and are not limited solely to quantitative measures; they may also
include explanations regarding the status of projects related toemission reduction. By disclosing such progress, companies can externallydemonstrate that they are actively adhering to their emission reduction
targets and strategies.
Strategies and plans related to emission reduction are formulated withcertain assumptions on uncertain future developments, such as technology
advancements. Therefore, it is anticipated that progress may not alwaysalign precisely with the initial plans.

9Key Points of Disclosure in Line with the Basic Guidelines

Concept and Guidelines on Avoided Emissions
The first scenario involves companies establishing their own rules for｜Attribution Factor
The attribution factor refers to the allocation ratio used to assign avoided

attribution factor and disclosing those values. For example, in Case 9:

emissions based on the degree of contribution of companies or industries

Supply of Products Contributing to Decarbonization of Buildings (page69-

involved in the manufacturing and supply of the eligible products or78), attribution factor are temporarily set based on the degree ofservices. As avoided emissions occur due to the involvement of various

contribution, where they distribute the contribution between

companies of the supply chain, it is a method for company to allocate amanufacturing, raw materials, and other factors. In this case, 50% is

portion of the avoided emissions according to the contribution of their

allocated to manufacturing, and companies calculate the final value bycompany or their position in the value chain.

multiplying the calculated emission reduction per product by 0.5.

However, the setting of attribution factor currently lacks establishedCompanies may also decide to temporally attribute 100% of the avoided

principles or calculation methods, making it difficult to determine. On theemissions to their products and services where majority of avoided

other hand, it is advisable to conservatively calculate avoided emissions inemissions were caused due to their business.

response to criticisms of greenwashing, and some companies use self-

The second scenario is where attribution factor are temporarily notdefined attribution factor instead of allocating 100% of the avoided

considered. Due to the lack of clear guidance or rules at present, it isemissions generated through the eligible products or services.

challenging to set values independently, and some companies choose notAsdiscussions on attribution factor are still evolving, the Basic Guidelines,

to consider attribution factor. However, ensuring transparency by disclosing

including this document, do not define the concept of attribution factor.

the non-consideration of attribution factor is essential.

However, it is recommended to disclose the approach to attribution factor

In either methods, it is desirable to clearly define the concept of

to ensure the reliability and transparency of the methodology. In this

attribution factor as part of the calculation method and reconsider the

document, examples of attribution factor are provided based on actual

approach to attribution factor based on future discussions.

methods used by companies as hypothetical scenarios:⚫Calculation based on self-defined attribution factor⚫Calculation without considering attribution factor

10Key Points of Disclosure in Line with the Basic Guidelines

Concept and Guidelines on Avoided Emissions｜Evaluating Broader Environmental and Societal Impact
The concept of avoided emissions serves as a quantitative measure of acompany's commitment to combatting climate change. However, beyond
addressing climate issues, companies are also tasked with evaluating theirbroader impact on the environment and society. This entails scrutinizing
whether their products or services inadvertently contribute to adverse
environmental or societal consequences. Such considerations may
encompass phenomena like the rebound effect such as increase inemissions resulting from an increase in the time of new product andservice usages as they become more widely available, ecologicaldegradation, and human rights violations. To uphold transparency andaccountability, companies must internally assess these potential impacts
and disclose their findings. For instance, in Example 6: Energy Efficiency

during Product Use (page.46-52), it is elucidated that the manufacturing
process of inverter air conditioners bears no significant divergence fromconventional methods, indicating negligible adverse effects. Similarly, inCase 7: Manufacturing and Supply of Products Utilizing Low-Carbon or
Decarbonized Raw Materials (page53-60), emphasis is placed on the
conscientious procurement of eco-friendly materials, coupled with an

ongoing commitment to refine assessments of environmental ramifications,
including biodiversity and water usage.

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02【Examples of Reporting Avoided Emissions】
The examples in this chapter are not real
Please note that the number of avoided emissions are simplified.

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02(1) Decarbonization of electric, thermal, etc., energy

Example of solution (PPA) provider

13

(1) Decarbonization of electric, thermal, etc., energy (renewable energy generation/plant construction, PPA, smart energy system construction, etc.) | Example ofsolution (PPA) provider

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Industrial equipment and information andcommunications
Location: Germany, Japan
Business: Manufacture and sales of electricalequipment, as well as a wide range of IT and solution
systems｜Sustainable growth and climate change
We consider sustainability an essential element of our business. As the COVID-19 pandemic
has driven digitalization and new business models have emerged, it is important to solve
various sustainability issues so that we can promote partnerships across society. Based on the
GRI Standard by Global Reporting Initiative, we identified 15 issues that are particularly
important to our business, both in terms of the impact of the company on society and thePoints

impact of society on the company. In this context, we have positioned responding to climate

Target setting and progress rate by Scopechange and sustainable product design and management as the most important items.

We have set time-bound emission reduction targets
for our own Scope 1+2 emissions, as well as for the
supply chain as a whole, including Scope 3 emissions,and have published progress rates against interim

targets. In addition, we have ensured that thesetargets are scientifically based by obtaining SBT NetZero certification.

Regarding responding to climate change, which we have identified as a key issue, we

conducted a scenario analysis on the future to develop an understanding of trends in socialchange, and identify impacts, risks, and future opportunities (see TCFD disclosure for details).
We set a target of net-zero emissions for our businesses (Scope 1-2) by 2030 to respond to therisks posed by climate change and become a leader in achieving a climate change decarbonizedsociety. We also announced a target of achieving net-zero emissions, including the supply chain
as a whole, by 2050. We have obtained SBT Net-Zero certification for all of these targets. In

addition, we will act as an enabler to support the decarbonization of our customers, taking theInitiatives as an enabler
In the example on the right, the role of an enabler topromote the decarbonization of society as a solution
provider is emphasized, and avoided emissions are
positioned separately from the amount of GHG
emissions as an indicator for promoting thoseinitiatives and measuring progress.

promotion of energy transition by responding to climate change as an opportunity.
GHG emission reduction targets and progress
01 Reduction in own emissions: net-zero in-house emissions (Scope 1+2) by 2030
Baseline
FY2019500 ktCO2e

FY2023 progress rate
90% progress rate

Interim target⚫-50 % by FY2025⚫-90% by FY2030*

02 Reduction in supply chain emissions: net-zero Scope 1-3 emissions by 2050
Baseline
FY20197,000 ktCO2e

FY2023 progress rate
10% progress rate

Interim target⚫-50% by FY2030*Temporary utilization of carbon credits for residual emissions

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(1) Decarbonization of electric, thermal, etc., energy (renewable energy generation/plant construction, PPA, smart energy system construction, etc.) | Example ofsolution (PPA) provider

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Industrial equipment and information andcommunications
Location: Germany, Japan
Business: Manufacture and sales of electricalequipment, as well as a wide range of IT and solution
systems｜Net-zero roadmap
To achieve our net-zero target, we have formulated a net-zero roadmap. In order to reduce
our own emissions, we will conserve energy during operations while also promoting the
procurement of renewable energy. In the supply chain, we will improve transportation
efficiency, reuse resources, and replace SF6 gas, which has high GHG emissions. Based on
the roadmap, we also set KPIs related to these initiatives. In addition, as an enabler, we set

Pointstargets for avoided emissions to contribute to the decarbonization of society as a wholeNet-zero roadmap and KPI setting

through such measures as the expansion of renewable energy. In order to promote theseConcrete initiatives to achieve emission reduction
targets have been established at each stage of the
supply chain. Additionally, monitor initiatives’ progress,

initiatives, 5% of revenues were allocated to related capital investment and research anddevelopment as of FY2023. For example, this investment includes 100 million yen in expenses
for research and development aimed at replacing SF6 gas, which is one of our initiatives.

the related KPIs and the progress rate at the time of

publication are published.

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(1) Decarbonization of electric, thermal, etc., energy (renewable energy generation/plant construction, PPA, smart energy system construction, etc.) | Example ofsolution (PPA) provider

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Industrial equipment and information andcommunications
Location: Germany, Japan
Business: Manufacture and sales of electricalequipment, as well as a wide range of IT and solution
systems

Net-zero roadmap 2030
Process

Initiatives

FY2023 progress rate

Supply chain Scope
3 upstream⚫ Request for compliance with the Supplier
Code of Conduct⚫ 100% abolition of single-use plastics⚫ Achieved⚫ Achieved⚫ RE100: Use of 90% renewable energy⚫ EV100: 100% use of EVs in-house⚫ EP100: 50% improvement in energy efficiency⚫ 85% renewableenergy⚫ Achieved 30%⚫ Improved 39%⚫ 100% replacement of SF6 gas⚫ 45% replaced⚫ Avoided emissions by customers of 80 million
tons through the expansion of renewableenergy, etc.
⚫ 70% of sales from environmentally friendly
products⚫ 40 million tons
⚫ Ratio 65%

Own businesses
Scope1+2

PointsNet-zero roadmap and KPI setting
Concrete initiatives to achieve emission reduction

Supply chain Scope
3 downstream

targets have been established at each stage of the
supply chain. Additionally, monitor initiatives’ progress,

Decarbonization ofsociety

the related KPIs and the progress rate at the time of

publication are published.
We view these efforts as integrated with corporate growth and we have established a
dedicated department for climate change-related strategies. This department is responsible

for scenario analysis, and its role is to report the results of scenario analysis, roadmaps, andoverall strategy reviews to the Sustainability Promotion Council, which is chaired by the
President.

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(1) Decarbonization of electric, thermal, etc., energy (renewable energy generation/plant construction, PPA, smart energy system construction, etc.) | Example ofsolution (PPA) provider

2. Avoided emissions
Target products and services:
PPA business｜Contribution toward decarbonization – avoided emissions

Pointsstakeholders with a company’s Scope 1-3 emissions alone. Therefore, we use avoided

Disclosure of avoided emissions throughout

emissions to show the overall image of our decarbonization initiatives. Calculation methods,

the business and the disclosure of calculation
methods for each product and service
In the example on the right, the numerical data foravoided emissions are not disclosed for each productand service. However, the total avoided emissions
generated throughout the business are disclosed.
Since the total value alone, however, does not provide
reliable calculation results, the list of products andservices subject to calculation (*1; however, theexample disclosure in Appendix 1 has been excluded
from the example on the right), and the calculation
methods established for each product and service
have been disclosed to enhance the transparency of

It is impossible to measure the contributions to the decarbonization of customers andhowever, for avoided emissions are still being developed, so we use our original calculation
method, which is consistent with the GHG Protocol.1
We emphasize our role as an enabler and consider our contribution to the decarbonization ofsociety as an important strategic initiative. The calculation of avoided emissions covers all
products, services, and systems of the Company that do not violate the principles set forth

below. (Refer to Appendix 1*1 for a list of specific products. The calculation method for eachproduct, service, and system is also provided from Appendix 2 onward.)
Calculation of avoided emissions – basic principles
The following basic principles were applied when calculating avoided emissions.
⚫Excluded from the scope of calculation– Military-related technology– If the use of products is found to have adverse effects on the environment⚫Contribution ratio concept– If all of the relevant products are manufactured and sold: 100%the calculation process. In addition, products and– If all of the main components of the relevant products are provided: 100%services are excluded from the scope of calculation,– If some of the main components of the relevant products are provided: Prorated based on the price ofand the concept of the contribution ratio (contribution

the main components provided as a percentage of the overall price of the products or servicesrate) is shown as a basic principle of the calculation.

Avoided emissions
We achieved avoided emissions of 19 million tons in

FY2023. PPA systems and frequency converters playeda significant role in generating avoided emissions.

Avoidedemissions(mtCO2e)

FY2022

FY2023

Avoided emissions

1,500

1,900

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(1) Decarbonization of electric, thermal, etc., energy (renewable energy generation/plant construction, PPA, smart energy system construction, etc.) | Example ofsolution (PPA) provider

2. Avoided emissions
Target products and services:
PPA business
PointsDisclosure of data sources and update
frequency
In addition to specifying the disclosable values andother sources of data used in the calculation, theupdate frequency is set, thus enhancing thetransparency of the calculation.

｜Appendix 1: List of products and services for calculation｜Appendix 2: Calculation method for each product, service, and system*
A power purchase agreement (PPA) is a purchase agreement between a producer and apurchaser of electric power. We are contributing to the spread of renewable energy by providing
long-term PPA solutions. As described below, we use our original calculation method to calculate
the amount of avoided emissions from PPAs. For the baseline, we have set the amount of electric
power in the average contract in the region when there is no PPA by lumping lifetime reductions
into the year of sale (flow-based calculation) For the calculation range, we have only included thedifference in emission intensity when using electric power. Since 90% of our company's PPA
services are provided in Germany, the United States, and Japan, we have referred to the values
provided by each government, based on the sales ratio, for energy consumption rates.
Number of contracts(/year)=Contract period(year)

×Baseline electric power

supply*｛（ (kWh/year/contract)

××

Contracted electric power

Supply（ (kWh/year/contract)ーData* Although it has been excluded from this example,
companies that actually disclose their avoided
emissions are assumed that calculation methods
like the above have been established for eachproduct and service subject to calculation of
avoided emissions. In the above, PPAs are given as
one example.

Source×

Grid electricity
Energy intensity(kgCO2e/kWh)
Renewable energy
intensity(kgCO2e/kWh)

UpdateUtilization rate (Used to
calculate electricity supply)

Our original estimates(Based on historical data)

Every
year

Number of contracts/ period

The Company’s data is used forthe number of contracts,Everyduration, and amount of electric year
power sold

Grid electricity Energy
intensity
Energy and renewable energy
intensity

Data from respective national
governments

Every
three
years

）
）

｛

Avoided emissionsof each country
through PPAs

Value
• Solar power: 15% (Japan),20% (US)• Wind power: 20% (Japan),30% (US)• Operating: 365 days × 24 hours• Not disclosed• Using average values for each country1802(2) Promotion of electrification (heat pumps, etc.)

Example of general electrical machinery manufacturer

19(2) Promotion of electrification (heat pumps, etc.) | Example of general electrical machinery manufacturer

1. Strategies for achieving carbon neutrality
Corporate profile｜Climate change response

Industry: General electric machinery
Location: Japan
Business: Manufacture and sales of industrial
equipment and general home appliances based onfour core businesses: social infrastructure business,
energy business, health tech business, and IT service
business

Our emissions – "responsibility" and "contribution"
In our business (manufacturing and sales of electrical and electronic equipment), there aresome activities that emit GHGs from the use of resources (raw materials, energy, water, etc.).
Specifically, there are Scope 1 emissions from industrial processes during manufacturing,
Scope 2 emissions from the use of purchased energy, and Scope 3 emissions, mainly from theuse of purchased products and services (Category 1) and sold products (Category 11). In

Pointsaddition to targeting carbon neutrality by 2050 as our "responsibility" to address climate

Setting targets based on materialitychange, it is important that we promote our "contribution" to society as a whole by reducing

Given that the majority of emissions are in Scope 3

emissions in Scope 3 Category 11, which accounts for most of the total. As a company

Category 11, the subject aims to achieve carbon

engaged in business activities that use using resources, we have identified climate change

neutrality by setting Scope 3 targets, in addition to

response as our highest-priority materiality. In FY2021, we formulated the Environmental

efforts to reduce Scope 1+2 emissions.

Vision 2050 as a common strategy for the entire Group and set forth our commitment topromote both our “responsibility” and our “contribution.”20

(2) Promotion of electrification (heat pumps, etc.) | Example of general electrical machinery manufacturer

1. Strategies for achieving carbon neutrality
Corporate profile｜Climate change response

Industry: General electric machinery
Location: Japan
Business: Manufacture and sales of industrial
equipment and general home appliances based onfour core businesses: social infrastructure business,
energy business, health tech business, and IT service
business

As our “responsibility,” we have set targets consistent with the Paris Agreement to reduce
Scope 1+2 emissions from our own businesses by 40% as of 2025 and to achieve carbon
neutrality (net-zero emissions from our own offices and plants) by FY2030. In addition, we
have set a target of reducing Scope 3 emissions, which account for 90% or more of the total,
by 40% by FY2030 (compared with FY2020), and we have obtained SBT certification for eachtarget. As our “contribution,” we aim to contribute at least 80 million tons in avoided emissions

Pointscompared to baseline to society by 2030 through such measures as manufacturing and selling

Setting targets based on materiality

products with low emissions. In addition, we aim to contribute at least 100 million tons toGiven that the majority of emissions are in Scope 3

avoided emissions by 2050 by expanding our business domains, etc.

Category 11, the subject aims to achieve carbon

neutrality by setting Scope 3 targets, in addition toefforts to reduce Scope 1+2 emissions.
110

110

100
80

Responsibility (GHG emissions)⚫FY2030 target (compared with FY2020):
Scope 1+2
100% reduction
Scope 3 40% reduction⚫2050 target: Carbon neutrality

60
30

2050

Contribution (avoided emissions)

2030

2022

2020

2050

2030

2022

2020

20

⚫2030 target: 80 million tons
⚫2050 target: 100 million tons

21

(2) Promotion of electrification (heat pumps, etc.) | Example of general electrical machinery manufacturer

1. Strategies for achieving carbon neutrality
Corporate profile

Creation of net-zero emissions from our own offices and plants and generation of avoided

Industry: General electric machinery
Location: Japan
Business: Manufacture and sales of industrial
equipment and general home appliances based onfour core businesses: social infrastructure business,
energy business, health tech business, and IT service
business

emissions
We will take steps toward energy conservation and electrification as we aim to achieve netzero emissions at our own plants and offices by FY2030, while also promoting renewableenergy procurement as well as credits procurement. When “electrifying and conserving energy
at our plants and offices” and “introducing renewable energy power generation facilities,” thecost per unit of CO2 reduced will be high, but this initiative will contribute to mitigating the risk

Report on progress toward achieving targets
Concrete initiatives to achieve emission reduction
targets have been established at each stage of the

supply chain. Additionally, monitor initiatives’ progress,
the related KPIs and the progress rate at the time of
publication are published.

of cost increases due to carbon taxes, etc., in the long term.
Residual CO20%
reduction
CO2 emissions
reduction rate (%)

PointsElectrification and energy
conservation at plants and offices
50%

100%
2018 2023 2024 2025 2026 2027 2028 2029 2030

Introduction of renewable energy
power generation facilities
Procurement of renewableelectricity and non-fossil
certificates
Procurement of credits

As we work to contribute to a social transition, we have classified products and services that
add to our “contribution” into three categories: “those that contribute to the conversion to nonfossil energy,” “those that contribute to energy conservation,” and “those that contribute toelectrification.”22

(2) Promotion of electrification (heat pumps, etc.) | Example of general electrical machinery manufacturer

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: General electric machinery
Location: Japan
Business: Manufacture and sales of industrial
equipment and general home appliances based onfour core businesses: social infrastructure business,
energy business, health tech business, and IT service
business

Actual emissions
We endeavor to reduce emissions yearly as part of our response to climate change. In
FY2022, emissions increased owing to an increase in resources used caused by an increase inproduction. We will continue to promote initiatives to achieve our target of carbon neutrality,
while taking into consideration changes in production volume.
Greenhouse gases (ktCO2e)*1

PointsReport on progress toward achieving targets
Concrete initiatives to achieve emission reduction
targets have been established at each stage of the

supply chain. Additionally, monitor initiatives’ progress,

FY2021

FY2022

Scope 1300

400

Scope 2

2,000

1,800

10,00011,000550

700

11: Use of products sold

90,00093,500

Other*1

105,550

110,800

Scope 3

1: Purchased products and services
2: Capital goods

the related KPIs and the progress rate at the time of
publication are published.

*1 Refer to the Company’s website (www.chem.esgdata) for the amount of emissions in each category
included in Other.
*2 Scope 1+2 and Scope 3 Categories 1 and 11 have received external verification from AB Corporation.

23

(2) Promotion of electrification (heat pumps, etc.) | Example of general electrical machinery manufacturer

2. Avoided emissions
Target products and services:
Heat pump water heaters｜Generation of avoided emissions through heat pump water heaters

Pointsof products that contribute to reducing emissions across society as a whole. Heat pump water

Explanation of consistency with net-zeroheaters are an important product as one of “those that contribute to electrification,”

pathways using the IEA Roadmap
It is explained that heat pump water heaters are a
product consistent with net-zero emissions, according
to the ”Net Zero by 2050 Roadmap for the Global
Energy Sector” presented by the IEA.

As our "contribution" to addressing climate change, we engage in the manufacture and saleaccounting for 15% of our sales.
Mechanism for generation of thermal energy by a heat pump water heater
The heat pump technology used in heat pump water heaters is based on a system thatcollects and transfers heat from the air. This system takes advantage of the fact that thetemperature rises when gas is compressed and falls when it expands. This technology

generates thermal energy from air heat. Therefore, compared with conventional boilers, etc., it

Statement of sales ratio
In line with the guidance provided by the WBCSD, theBasic Guidelines, etc., the subject has disclosed at the
beginning the percentage of its product sales made up
of heat pump water heaters, which are a target

product.

achieves better emission factors and higher energy efficiency through electrification and theutilization of air heat.
Heat pump water heaters are an important product listed as a leading choice for heating
equipment to achieve net-zero emissions in the building sector in the IEA’s ”Net Zero by 2050
Roadmap for the Global Energy Sector”, and they are consistent with the path toward carbon

neutrality.
Electricity

Example disclosure:
Heat pump water heaters are an important product as
one of “those that contribute to electrification,” andHeat iscompressed andbecomes hotter

Compressor

they account for 15% of our sales.
Utilizationof air heat

Air heatexchanger

Water heatexchanger

Expansion
valve

Hot
water
tank
Use of thermalenergy24

(2) Promotion of electrification (heat pumps, etc.) | Example of general electrical machinery manufacturer

2. Avoided emissions
Target products and services:
Heat pump water heaters｜Avoided emissions

Pointsmainstream, but replacement with our products will promote the electrification of hot water

Explanation of consistency with net-zerosystems. Accordingly, we set boilers, which are commonly used in Europe, as the baseline for thepathways using the IEA Roadmap
It is explained that heat pump water heaters are a
product consistent with net-zero emissions, according
to the ”Net Zero by 2050 Roadmap for the Global
Energy Sector” presented by the IEA.

The Company’s products are mainly sold in Europe. In Europe, boilers are currently thecalculation of avoided emissions, and our calculation covers sales of heat pump water heaters
sold to Europe. We referred to the "The Pillar B Guide" of the Net Zero Initiative when considering
calculation methods for avoided emissions. For the calculation, we used a flow-based approach,and the emission factor for electric power was based on the factor for the European region, whichis the main sales target region. We also took into consideration future decarbonization based on

IEA's scenario for achieving global net-zero emissions in 2050 (NZE scenario).

Statement of sales ratio

Calculation method

STEP 01

In line with the guidance provided by the WBCSD, theBasic Guidelines, etc., the subject has disclosed at the

Emissions from target product (heat pump water heaters)

Power consumption per year
×(The Company’s data)

beginning the percentage of its product sales made up
of heat pump water heaters, which are a target

STEP 02

product.
Example disclosure:Gas consumption per year
(European Commission
materials)

Heat pump water heaters are an important product as

STEP 03

one of “those that contribute to electrification,” andthey account for 15% of our sales.

（

Electric power emission factor(Average published by theEuropean Commission)

Useful life× (10 years)+

Emissions other thanduring use(The Company’s data)+

Emissions other thanduring use(External researchreferences)

Baseline (boiler) emissions
Gas emission factor× (European Commission materials) ×

Useful life
(10 years)

Calculation of avoided emissions

STEP 02（258kgCO2e）ー

STEP 01(Not disclosed)

Sales volume）× (The Company’s data)

2023 avoided emissions
As a result of estimation based on the above, we found that avoided emissions from our heatpump water heaters was 600,000 tCO2e in FY2023.
25

02(3) Electrification of transportation

Example of related materials manufacturing company

26

(3) Electrification of transportation (EV batteries, fuel cells, electrolyte solutions, lithium battery materials, etc.) | Example of related materials manufacturing company

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Chemicals
Location: Japan
Business: An integrated chemical manufacturer thatengages in a broad range of businesses, from the
manufacture of basic chemicals and functional
chemicals, to the manufacture and sale of functional
products and pharmaceuticals｜Climate change initiatives
In light of our medium- to long-term direction, we have identified climate change initiatives
as one of our key issues. In particular, based on the concept of scenario analysis, we are awareof transition risks, such as regulations on chemical products and increases in carbon prices. In
order to achieve carbon neutrality by 2050, we will reduce emissions from our own businesses,
while also working to reduce emissions across society as a whole, including the carbon cycle,
through our businesses.

PointsActual emissions and targets

Setting interim targets and disclosing results

In order to achieve carbon neutrality by 2050, we have set a target of reducing Scope 1+2

In "actual emissions and targets," in addition to a 2050

emissions, referring to emissions from our own businesses, by 50% by 2030. In addition, forcarbon neutrality target, a target for 2030 has also

Scope 3 emissions, which account for approximately 40% of the total, we will work to reducebeen set as an intermediate target. In addition, theGHG emissions through engagement with suppliers. We have acquired SBT WB2.0 ℃

subject has disclosed actual GHG emissions andcertification for Scope 1+2.

obtained third-party assurance for this data.

* The Company's figures have received assurance
from Company A. Please refer to the separate URL

Science-based targets

for the assurance report.

The example on the right shows that the targets are

science-based (= consistent with the achievement of

Scope 1+2 SBTi WB2.0 acquired (2021)

Greenhouse gases (ktCO2e)

FY
2021

FY
2022

Greenhouse gas emissions

8,500

8,000

Scope 1+2

5,200

4,800

Scope 3

3,300

3,200

Scope 3the Paris Agreement) through the acquisition of SBT
WB2.0 ℃ certification from the SBTi. In addition, these(10,000 tCO2e)2030 target:
50% reduction

targets have been set such that they cover all of Scope
1-3.

900

2013

400

2050 target:
Net-zeroemissions using
CO2 removal, etc.

2030

2050

800

2022

Scope 3 accounts for a major share of total
emissions. Targets have been set in accordancewith guidelines complied with SBT WB2.0.
Specifically, we are engaging with domestic
suppliers to reduce emissions, etc.

2030 target:14% reduction27

(3) Electrification of transportation (EV batteries, fuel cells, electrolyte solutions, lithium battery materials, etc.) | Example of related materials manufacturing company

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Chemicals
Location: Japan
Business: An integrated chemical manufacturer thatengages in a broad range of businesses, from the
manufacture of basic chemicals and functional
chemicals, to the manufacture and sale of functional
products and pharmaceuticals｜Actions to achieve targets (transition plan)
In order to achieve our interim target for 2030, as well as our net-zero target for 2050, we
aim to improve process efficiency through the utilization of the Best Available Technology(BAT), while also working to reduce emissions through the utilization of LNG in the medium
term. Over the long term, we will convert to CO2-free fuels and raw materials, and conduct
research and development to achieve this goal.

We also contribute to resource recycling through the development, sale, and recycling ofPointsproducts and services that contribute not only to the reduction of our own emissions but also

The setting of specific actions

to the reduction of emissions across society as a whole through their use. We have set KPIs tohas been developed by referring to the report of theInternational Energy Agency (IEA), an internationalorganization, as well as the sector-specific roadmap
established by the Ministry of Economy, Trade andIndustry. In addition, the external environment, which
is an assumption behind the promotion of initiatives, isdescribed.

measure progress in these initiatives and disclosed them in our integrated report.
When formulating these plans, we have referred to technology roadmap for the chemicalindustry presented by the IEA and the Ministry of Economy, Trade and Industry‘s roadmap forthe chemical sector and have ensured that our initiatives are consistent with these.
Reduction of in-house emissions⚫ More efficient manufacturing processes⚫ Fuel conversion (use of LNG and biofuels)⚫ Utilization of electric power from renewable energy⚫ Research and development of CCUS, etc.

Reduction of emissions across society as a whole⚫ Chemical and material recycling initiatives⚫ R&D and sales of environmentally friendly products
Assu
mptio
ns

In order to achieve the targets, a time-phased plan

⚫Conversion to CO2-free fuels⚫Conversion to CO2-free raw
materials⚫Achievement of resource
recycling

Development of various infrastructure (supply of renewable energy, hydrogen, etc.), Lower fuel prices

In order to steadily implement the transition plan, we will invest 100 billion yen towardachieving carbon neutrality by 2030. This includes capital investment to improve the efficiencyof manufacturing processes, as well as R&D expenses for technologies such as CCUS andenvironmentally friendly products aimed at implementing innovative technologies in the future.
Investment toachieve carbon
neutrality (by 2030)

renovation expenses to reduce emissions
100 billion yen ⚫⚫ Facility
Research and development expenses, etc.

28

(3) Electrification of transportation (EV batteries, fuel cells, electrolyte solutions, lithium battery materials, etc.) | Example of related materials manufacturing company

2. Avoided emissions
Target products and services:Electrolyte solutions｜Generation of avoided emissions through electrolyte solutions

Points(EVs), which are essential for EVs, and we calculates avoided emissions from these products.

Calculation with materials related to EV

EVs are an important technology that has been adopted as an initiative by the transportation

lithium-ion batteries
In most cases, avoided emissions are calculated withbatteries. However, electrolyte solutions, key
components of electrical vehicles(EV), can also be
used for calculation. Based on the fact that theWe manufacture and sell electrolyte solutions for lithium-ion batteries for electric vehicles

sector to achieve net-zero emissions under the IEA NZE scenario. Electrolyte solutions play amajor role in the performance of lithium-ion batteries because they are one of the main
components of lithium-ion batteries and are responsible for the transport of lithium ions.
Accordingly, they are a core product in our efforts to contribute to reducing of emissions
across society as a whole through the spread of EVs.

concept of the contribution rate has not been clearly
established at present, avoided emissions whencomparing internal combustion engine vehicles (ICEvehicles) with EVs have been disclosed as the
avoided emissions from electrolyte solutions, and thispoint is clearly stated.
Example disclosure: At present, there is noestablished method for calculating the contribution
rate to allocate avoided emissions from final products
to companies in the supply chain. Therefore, thecontribution rate has not been taken into
consideration in the calculation for this fiscal year.

29

(3) Electrification of transportation (EV batteries, fuel cells, electrolyte solutions, lithium battery materials, etc.) | Example of related materials manufacturing company

2. Avoided emissions
Target products and services:Electrolyte solutions｜Generation of avoided emissions through electrolyte solutions

Pointsdriving, GHG emissions when driving EVs is lower than ICEs. On the other hand, EVs emit

Calculation with materials related to EV

more CO2 than ICEs during manufacturing. Therefore, we calculated the difference between

lithium-ion batteries
In most cases, avoided emissions are calculated withbatteries. However, electrolyte solutions, key
components of electrical vehicles(EV), can also be
used for calculation. Based on the fact that theconcept of the contribution rate has not been clearly
established at present, avoided emissions whencomparing internal combustion engine vehicles (ICEvehicles) with EVs have been disclosed as the
avoided emissions from electrolyte solutions, and thisAs EVs use electricity with lower carbon intensity than ICEs and do not emit CO2 when

the total emissions during manufacturing and driving as avoided emissions. When calculating
avoided emissions, we referred to the Life Cycle Assessment figures provided by the Japan
Automobile Manufacturers Association (JAMA), which cover the period from manufacturing touse. We will elaborate this by including raw materials and disposal figures for more accurate
calculations. Furthermore, at present, there is no established method for calculating thecontribution rate to allocate avoided emissions from final products to companies in the supply
chain. Therefore, the contribution rate has not been taken into consideration in the calculation
for this fiscal year. Accordingly, we have defined the reduction in emissions resulting from the
spread of EVs using our electrolyte solutions as the avoided emissions resulting from the
manufacture and sale of our electrolyte solutions

point is clearly stated.
Example disclosure: At present, there is noestablished method for calculating the contributionEVrate to allocate avoided emissions from final products
to companies in the supply chain. Therefore, thecontribution rate has not been taken into
consideration in the calculation for this fiscal year.

ICE

Raw
materials

Manufacturing

Rawmateria
ls

Ma
nuf
actu
ring

Use

Use

Disposal

Disposal

Avoided Emissions:Difference between electric
power and gasoline of bothmanufacturing and using

We produce
electrolyte solutions,which are a key
material for EV
lithium-ion batteries,
which are needed to
power vehicles withelectric power.

30

(3) Electrification of transportation (EV batteries, fuel cells, electrolyte solutions, lithium battery materials, etc.) | Example of related materials manufacturing company

2. Avoided emissions
Target products and services:Electrolyte solutions｜Calculation of avoided emissions

Pointsmanufacturers. Therefore, we have set ICE vehicles, which are the mainstream for domestic

The basis for setting baseline and assumptions

automobiles, as the baseline.

As a background to the use of emissions during driving
by ICE vehicles as the basis for setting the baseline, it
is clearly stated that it is because electrolyte solutions

Our products are mainly supplied to domestic EV manufacturers and EV lithium-ion battery

The conditions and scope of avoided emissions calculation, are in accordance with the
WBCSD guidance and the Ministry of Economy, Trade and Industry’s guidance for thequantification of GHG avoided emissions.

are sold in the manufacture of EVs to replace ICE
vehicles. In addition, the WBCSD and the Ministry of

Economy, Trade and Industry’s guidelines are
specified as the guidelines that have been referenced.

Scope and prerequisites

Country of sale: Japan⚫Baseline: Average emissions of ICE vehicles sold in Japan⚫Calculation scope: Manufacturing and driving (difference between manufacturing and driving)⚫Period and scope: Electrolyte solution sold per year converted to EV units⚫Contribution rate：not taken into consideration as there is no standardized way of calculation31

(3) Electrification of transportation (EV batteries, fuel cells, electrolyte solutions, lithium battery materials, etc.) | Example of related materials manufacturing company

2. Avoided emissions
Target products and services:Electrolyte solutions｜Calculation of avoided emissions

PointsAvoided emissions

The basis for setting baseline and assumptions= (CO2 emissions from manufacturing per ICE: JAMA estimate (kgCO2e/unit)

As a background to the use of emissions during driving
by ICE vehicles as the basis for setting the baseline, it
is clearly stated that it is because electrolyte solutions
are sold in the manufacture of EVs to replace ICE
vehicles. In addition, the WBCSD and the Ministry of

Economy, Trade and Industry’s guidelines are
specified as the guidelines that have been referenced.

Calculation formula- CO2 emissions from manufacturing per EV: JAMA estimate (kgCO2e/unit)= (ICE CO2 emissions per km : Domestic industry average (kgCO2e/km/unit)– EV CO2 emissions per km)
× Lifetime mileage: The Company’s data (kgCO2e /km/unit): Average length of driving per year × average vehicle lifetime of 10
years (km)× Conversion of electrolyte solution sales volume to EV units: Actual data from the Company and industry figures for conversion(units)Avoided emissions in 2022
As a result of estimation based on the above, we found that avoided emissions from EVs

produced through the sale of our electrolyte solutions were “10 million tCO2e” in FY2022.

32

02(4) Controlling emissions at the time of use of products

Example of manufacturing company for equipment parts

33

(4) Controlling emissions at the time of use of products | Example of manufacturing company for equipment parts

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Industrial equipment and home appliances
Location: Japan
Business: Manufacture and sales of general home
appliances, as well as industrial mechatronics,
electronic devices, and energy infrastructure-related
equipment｜Environmental vision
As environmental problems such as climate change, loss of biodiversity, and the degradationof natural capital have become more serious in recent years, companies must also recognize
the importance of the environment and take countermeasures from a long-term perspective.
As a company, we believe it is important to contribute to achieving a sustainable society toachieve sustainable development. We aim to work together as a group to identify important
issues that affect us from a long-term perspective and contribute to the development of

Pointssociety. Accordingly, we have positioned the achievement of a decarbonized society, a circular

Formulation of environmental vision, including

economy, and the conservation of natural capital as important environmental issues.

the achievement of a decarbonized society

In particular, achieving a decarbonized society is a top management priority. Based on our

Based on materiality analysis, the subject has“Basic Environmental Policy,” we have set medium- to long-term targets for GHG emissions

formulated an environmental vision that includes

consistent with the Paris Agreement, and we have also set targets for avoided emissions toclimate change, resource recycling, the conservation

reduce emissions from customers' use of our products and services as a contribution toof natural capital, etc. In addition, the subject has

carbon neutrality. We obtained SBT Net-Zero certification for our GHG emissions reduction

already set targets for each item or is committed totargets in December 2022. Going forward, we will further accelerate our initiatives to respondsetting targets for the future.

to the circular economy and conserve natural capital.
Long-term target⚫Achievement of 2050 carbon
neutrality across the entire
Achievement of
supply chain (Scope 1-3)
decarbonized society

Response to thecircular economy⚫Promotion of the 3Rs⚫Building of a supply chain withzero environmental impact

Conservation ofnatural capital⚫Reduction of impact on
ecosystems⚫Nature positive initiatives

Interim target⚫50% reduction in Scope 1+2 and Scope 1-3
GHG emissions by FY2030 (compared with
FY2019)⚫Avoided emissions in FY2030 40 million tons

⚫20,000 tons or less in waste from businessactivities in FY2023⚫FY2023 resource conservation: 350,000 tons⚫–
(Set targets in the future for wastewater andchemical substances during production)34

(4) Controlling emissions at the time of use of products | Example of manufacturing company for equipment parts

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Industrial equipment and home appliances
Location: Japan
Business: Manufacture and sales of general home
appliances, as well as industrial mechatronics,
electronic devices, and energy infrastructure-related
equipment｜Information disclosure in line with TCFD recommendations (strategy)
In order to achieve a decarbonized society, based on the TCFD recommendations, we consider
an increase in the cost of responding to frequent extreme weather events as the most significant
risk, and an increase in demand for renewable energy is also expected. Therefore, we haveidentified an increase in demand for our energy and infrastructure business (40% of sales in
FY2023) as an opportunity.
Business*

Points
Implementation of measures for major sourcesof emissions

Energy andinfrastructure

The subject has identified that 90% of Scope 3

emission sources are in Category 11 (emissions from

Main risks

Main opportunities• Loss of sales opportunities owing toregulations on gases with a highgreenhouse effect (including SF6 gas usedin our mainstay products)• Increase in procurement andmanufacturing costs owing to the use of
low-carbon materials• Demand for renewable energyrelated technologies
Expansion• Increasing demand forbatteries, etc.

the use of products) and has set forth research andTaking into consideration the risks and opportunities identified based on the 4°C and 1.5°Cdevelopment on low-carbon designs for products as a

scenarios established with reference to the IEA and Intergovernmental Panel on Climate Change

measure to address this source of emissions.

(IPCC), we will implement the following measures to reduce emissions during production and in

the supply chain. We have also announced that we will invest 10 billion yen by 2030 in the* An example of risks and opportunities by business isdevelopment of low-carbon products in the energy and infrastructure business as a growth area.
Scope 1+2

provided for one business for convenience, but inpractice, it is assumed that this information will be
disclosed for each business70

Scope 3

Increase indemand+10 Effect ofmeasures
-35
60

1,000
35

2019
2023
Results Results

Main measures

2030
Target⚫ Installation of solar power generation facilities⚫ Energy conservation at production facilities, etc., byintroducing the latest equipment⚫ Introduction of internal carbon pricing

Effect ofmeasures-500
800

2019 2023
Results Results

500

2030
TargetMain measures⚫ Power generation plants, semiconductors, etc.
Development of low carbon designs for products
offered(98% of Category 11)35

(4) Controlling emissions at the time of use of products | Example of manufacturing company for equipment parts

2. Avoided emissions
Target products and services:
Special high voltage transformers｜Environmentally conscious products – special high voltage transformers

Pointsof electrification and other factors has led to increased demand for our products in our

Avoided emissions other than CO2 (SF6 gas)

mainstay energy and infrastructure business. Additionally, in light of environmental regulations

Avoided emissions are an indicator for quantifying
initiatives that contribute to the decarbonization ofsociety, and the scope of their calculation is not
limited to CO2. In the example on the right, avoided
emissions have been calculated for SF6 gas, which

has a high greenhouse effect. Carbon dioxide
equivalent values (CO2e) have been used for theactual calculation results.

As awareness of the environment has increased in society in recent years, the accelerationin various countries and the increasing environmental awareness of our customers, there isalso a growing need for a reduction in the environmental impact of our products and services.
In response to these demands, we have calculated avoided emissions from special highvoltage transformers, one of our mainstay products in our energy and infrastructure business.
The greenhouse effect of SF6 gas

Special high voltage transformers are a type of equipment that is necessary when using
special high voltages in large buildings, plants, etc., and some such transformers use SF6 gas,a gas with high insulation and cooling performance. SF6 gas has a high greenhouse effectequivalent to 25.2 tons of CO2 per kilogram and was designated as a gas subject to measures
to reduce GHG emissions at COP 3. Although the amount of SF6 gas used has decreased
somewhat as a result of initiatives to date, it is still commonly used in special high voltage

transformers (insulation equipment), and insulation equipment-related emissions account for
about 50% of total SF6 gas emissions in Japan.
Therefore, we have developed special high-voltage transformers (insulation equipment) that
do not use SF6 gas. By selling these products, we can contribute to the reduction of emissions
during the use and disposal of equipment by our customers.
■ Insulation equipment (use)Ratio of domestic SF6
gas emissions(2019)
Source: Ministry of Economy,
Trade and Industry

42%■ Insulation equipment (manufacture) 8%■ Magnesium production

25%■ Semiconductor manufacturing 25%
The replacement of SF6 gas contributes
to a 40% reduction in emissions

36

(4) Controlling emissions at the time of use of products | Example of manufacturing company for equipment parts

2. Avoided emissions
Target products and services:
Special high voltage transformers

Roadmap of Transition toward SF6 Alternative Technologies

Pointswith the aim of reducing the environmental impact of equipment for the transmission andDisclosure of eligibility using industry roadmap
The example on the right refers to roadmaps
presented by an industry association called JapanJEMA has formulated the "Roadmap of Transition toward SF6 Alternative Technologies,"transformation of electric power. The reduction of SF6 gas consumption is also consistent withdecarbonization policies in the industry. We also considered the sustainability of raw materials
in the development of SF6 gas-free equipment.

Electrical Manufacturers’ Association (JEMA) as thebasis for claims that products and services are
consistent with a decarbonized society. By referring tothese roadmaps, it is possible to show that the
products and services for which avoided emissions arecalculated are consistent with the path to achieving adecarbonized society.

-2025
Domestic
development

-2030

-2035

72/84kV product release120/168/204kV product release
550kV product release

Domestic
demandoutlook
TrendsoutsideJapan

84-204kV demand growth300-550kV demand growth

EU prohibition on introduction of
new SF6 gas equipment
Source: JEMA

37

(4) Controlling emissions at the time of use of products | Example of manufacturing company for equipment parts

2. Avoided emissions
Target products and services:
Special high voltage transformers

Calculation formula

Pointsto the reduction of emissions during product use and disposal. In the calculation of avoided

Consideration for sustainability of raw
materials
It is clearly stated that the subject has confirmed thatthe procurement of alternative raw materials issustainable, not just the greenhouse effect, whendeveloping alternative gases for SF6 gas and using

products. Accordingly, effects other than climatechange have also been taken into consideration.

Our SF6 gas-free special high-voltage transformers do not use SF6 gas, and thus contributeemissions, it is recommended internationally to calculate the value conservatively. Accordingly,
we have calculated avoided emissions only when the use is particularly highly effective in
reducing the environmental impact.
Since using special high voltage transformers using SF6 gas is still common today, we set thebaseline as emissions from products using SF6 gas and referred to industry average(undisclosed) for this data. Since our products are sold mainly in Japan and the United States,
we have used the industry average for each country as the baseline in the calculation andhave aggregated the calculation results ion for each country. Our calculation methods areaccompanied with WBCSD guidelines. However, it has not been subjected to third-party
verification because there are no clear guidelines for individual products. As a result of thecalculation, avoided emissions from these products in FY2023 were found to be 30,000 tCO2e.

SF6 gas-free special high-voltage transformers(gas-insulated switchgear)=(

Emissions from gas-insulated
switchgear that uses SF6 gas(Baseline)–

SF6 gas-free
Emissions from gas-insulated
switchgear(The Company’s products))×Shipments(Japan and theUnited States)3802(5) Energy conversation due to weight reduction

Example of material company

39

(5) Energy conversation due to weight reduction (carbon fiber composite materials, etc.) | Example of material company

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Textile
Location: Japan
Business: Primarily operates a textile business, as well
as a functional chemicals business and healthcare
business｜Strategies for achieving carbon neutrality by 2050
The Group has contributed to developing a sustainable society based on our philosophy ofcontributing to society through business. As a company that uses large amounts of resourcesand energy when operating our businesses, we place great importance on environmental
initiatives. Climate change, in particular, has a major impact on the economy and us, raisingvarious risks, so we have positioned it as an important issue for the Group.
We will also promote the transition of society as a whole by promoting renewable energy,

Pointshydrogen, and electrification materials, and other elements necessary for achieving a carbon-

Promotion of both business and social

neutral society, . This is in anticipation of an increase in demand for environmentally friendly

decarbonization

products due to stricter regulations related to climate change and increased environmental

Based on the subject’s own business areas, theawareness. At the same time, we will also reduce the Group’s GHG emissions (Scope 1+2”) by

subject has identified areas such as the development

utilizing products from these businesses in-house.

and provision of materials related to zero-emission
energy, etc., as growth areas and has announced
proactive expansion as a group strategy. In addition,
the subject has clearly stated that it will use

Promotion of both in-house and social
decarbonization
Reduction of emissions frombusiness activities

Contribution to reduction ofemissions across society as awholetechnology from growth areas to reduce emissions

from its business activities (Scope 1+2) and has
formulated a carbon-neutral strategy that is integrated
with its business strategy.

⚫Increased use of zero-emission energy⚫Transition to highly efficientmanufacturing processes⚫Development of innovativetechnologies⚫Development and provision of CCUSrelated products (e.g., CO2 separation
membrane, etc.)⚫Development and provision of zeroemission energy-related materials (e.g.,
carbon fiber composite materials)

As growth areas, the Company aims to expand the scale of these businesses to 200 billion yen
by FY2025.
600 billion yen investment over three years to achieve this.
(Including 100 billion yen for research and development)40

(5) Energy conversation due to weight reduction (carbon fiber composite materials, etc.) | Example of material company

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Textile
Location: Japan
Business: Primarily operates a textile business, as well
as a functional chemicals business and healthcare
business

Indicators and targets
In order to achieve carbon neutrality, we have set targets both for reducing emissions fromour own business activities and for contributing to emissions across society as a whole.
With regard to the reduction of emissions from our business activities, a target of a 40%
reduction from the level in FY2013, which is higher than the reduction rate for the industrial
sector (total of -38%) has set through Japanese government’s “Global Warming prevention
Plan” in October 2021, and we will achieve carbon neutrality by 2050. We have also obtained

Points

SBT WB2.0℃ certification for our short-term targets for 2030. In addition, as our contribution

Strong governance system integrated withto reducing emissions across society as a whole, we will increase the supply of related

management

products and services by 2.2 times and will also aim to increase avoided emissions by three

In order to steadily implement its carbon-neutral

times (both compared with FY2019). The scope of calculation of avoided emissions includes

strategy, the subject has established a governanceproducts from the zero-emission energy business, services from the recycling business, film

system, including the establishment of a specialized

and the functional materials business (see the ESG Data Book for details of the product list).

organization and the establishment of system forreporting to the Sustainability Committee, which ischaired by the President and Representative Director.

Consideration of various environmental
impacts
A system has been established for organizations thatmanage carbon-neutral strategies to check
environmental impacts outside of the climate.

Scope 1+2 emissions reduction20
2013
Governance

18
2022

12
2030

Avoided emissions

3 times40%
reduction

CN

3,200

6,000

9,600

2050

2019

2025

2030

The GX Promotion Office oversees climate change initiatives and submits reports to the
Sustainability Committee, chaired by the President and Representative Director. In addition tosupervision and guidance at meetings of the Sustainability Committee, the Board of Directors

will also receive regular reports and ensure that initiatives are integrated with corporate
growth strategies. In addition, the Environmental Measures Office will promote measuresagainst climate change, while also examining the environmental impact outside of the climate
from growth areas, and implementing any necessary measures.

41

(5) Energy conversation due to weight reduction (carbon fiber composite materials, etc.) | Example of material company

2. Avoided emissions
Target products and services:
Carbon fiber composite materials for aircraft
Points｜Contribution to reduction from carbon fiber composite materials in thefunctional materials businessIn our energy conservation business, we provide carbon fiber composite materials in areas

Reference to roadmaps and industry

requiring weight reduction, such as automobiles, aircraft, and wind power generators. Using

association studies in explanations of eligibility

carbon fiber composite materials reduces the weight of products and improves energy

The fact that the utilization of carbon fiber composite
material reduces the weight of the airframe andcontributes to the reduction of emissions caused by
jet fuel consumption during flight is explained withreference to the publications of International Civil
Aviation Organization (ICAO) and Japan Chemical

efficiency during use, thereby contributing to a reduction in CO2 emissions. For this reason,
we have included these materials in the scope of our calculation of avoided emissions asmaterials that contribute to reducing emissions across society as a whole. Since the carbon
fiber composite materials that we provide are mainly used in automobiles and aircraft suppliedboth in Japan and overseas, as well as propellers for wind power generation in Japan, we
included these three applications in the scope calculation for carbon fiber composite materials.

Industry Association (JCIA), a general Incorporated
Association. Specific assumed figures are also cited
for the proportion of weight reduction.

42

(5) Energy conversation due to weight reduction (carbon fiber composite materials, etc.) | Example of material company

2. Avoided emissions
Target products and services:
Carbon fiber composite materials for aircraft| Contribution to reduction from carbon fiber composite materials for aircraft

Pointsaircraft while maintaining the strength and safety required for aircraft, thereby improving fuelSetting of boundaries that take life cycles

efficiency and reducing jet fuel emissions. This is also consistent with the technology for

into consideration
Carbon fiber composite materials contribute to
reducing emissions from aircraft operation (in use). On
the other hand, in the raw material-material
procurement stage, emissions are higher than those of
conventional airframes (baseline), so the boundary foravoided emissions includes the raw material-material
procurement stage.

By using carbon fiber composite materials as aircraft materials, we can reduce the weight of

reducing emissions from aircraft presented by the International Civil Aviation Organization(ICAO).
With regard to efforts to make airframes lighter, the Japan Chemical Industry Association(JCIA) has confirmed that the total weight of aircraft is reduced by approximately 20% whencomparing aircraft model that are currently popular (model plane: αβ Company, airframeAAA) with aircraft model that use carbon fiber composite materials for 50% of the total
structural weight of the airframe (model plane: αβ Company, airframe BBB). The calculation
method for avoided emissions was based on the concepts and principles in the WBCSD
guidance and Basic Guidelines. We also referred to the "Life Cycle Assessment of Chemical
Products in Japan and Worldwide (4th Edition) Case Study 14 Aircraft Materials (Carbon Fiber

Calculation of avoided emissions from

Composite Materials)" developed by JCIA.

materials
The company in the example on the right is amanufacturer and seller of materials that contribute todecarbonization when used in final products. In orderto claim avoided emissions, the company, which islocated upstream in the supply chain, has confirmedthat the parts and materials it provides areindispensable for final products, in accordance withthe guidelines of JCIA.
* It has been excluded from this example, but it is assumed that calculation methods like the above have been established for each product and service subject to the calculation ofcompanies disclosing avoided emissions. In the above, carbon fiber composite materials used in aircraft are given as one example.

43

(5) Energy conversation due to weight reduction (carbon fiber composite materials, etc.) | Example of material company

2. Avoided emissions
Target products and services:
Carbon fiber composite materials for aircraft

Assessment conditions

Pointsproduct subject to calculation of avoided emissions. However, they are an indispensable partCalculation of avoided emissions frommaterials
The company in the example on the right is amanufacturer and seller of materials that contribute todecarbonization when used in final products. In orderto claim avoided emissions, the company, which islocated upstream in the supply chain, has confirmedthat the parts and materials it provides are

Carbon fiber composite materials for aircraft are a material that constitutes part of the final

for achieving weight reduction that contributes to reducing emissions. Accordingly, as amaterial manufacturer, we have used the avoided emissions from energy conservation due toweight reduction as our value. (We are reviewing this based on the "Basic Role of the
Chemical Industry in Reducing Greenhouse Gases" by JCIA) Other conditions have beensummarized as follows.
⚫Boundary: Raw material procurement, manufacturing, assembly, flight (during use) * Excluding
disposal⚫Baseline: αβ Company, popular aircraft AAA⚫Product life: 10 years⚫Fuel consumption rate: 2.5 kgCO2e/l

indispensable for final products, in accordance withthe guidelines of JCIA.

* It has been excluded from this example, but it is assumed that calculation methods like the above have been established for each product and service subject to the calculation ofcompanies disclosing avoided emissions. In the above, carbon fiber composite materials used in aircraft are given as one example.

44

(5) Energy conversation due to weight reduction (carbon fiber composite materials, etc.) | Example of material company

2. Avoided emissions
Target products and services:
Carbon fiber composite materials for aircraft

Results of calculation of avoided emissions per aircraft

PointsFurthermore, we referred to the official airframe information of αβ Company for data, andCalculation of avoided emissions frommaterials
The company in the example on the right is amanufacturer and seller of materials that contribute todecarbonization when used in final products. In order

Avoided emissions per aircraft calculated based on various conditions are as follows.

other conditions (lifetime flight distance, etc.), we referred to settings from JCIA.
Avoided emissions per aircraft are 26.6 ktCO2e. When reporting our avoided emissions, wehave converted the amount of carbon fiber composite material sold to the number of aircraft(not disclosed) and multiplied it by of emissions. This data is aggregated with figures for otherproducts and the amount services subject to the calculation of avoided emissions andprovided in the integrated report.

to claim avoided emissions, the company, which islocated upstream in the supply chain, has confirmed

Item

Aircraft subject tocalculation

Baselinethat the parts and materials it provides areindispensable for final products, in accordance withthe guidelines of JCIA.

CO2 emissions at the raw material to material
procurement stages (ktCO2e)

0.7

0.9

CO2 emissions at the assembly stage(ktCO2e)

3.8

3.0

CO2 emissions at 10 years of usage(ktCO2e × 10 years)

390

364

CO2 emissions at the disposal stage(ktCO2e)– (not subject tocalculation)– (not subject tocalculation)

Life cycle CO2 emissions(ktCO2e × 10 years)

394.5

367.9

Avoided emissions per aircraft (ktCO2e × 10
years)-26.6* It has been excluded from this example, but it is assumed that calculation methods like the above have been established for each product and service subject to the calculation ofcompanies disclosing avoided emissions. In the above, carbon fiber composite materials used in aircraft are given as one example.

4502(6) Energy-saving during product use

Example of an electrical appliance manufacturer

46

(6) Energy-saving during product use (energy-saving electrical appliances, equipment, etc.) | Example of an electrical appliance manufacturer

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: General home appliance manufacturing
Location: Japan
Business: Development of health business andsystems business, centered on the
manufacturing and sale of home appliances｜ Environmental vision and environmental targets for 2050
Based on the recognition that global population growth and economic growth in emerging
countries could exacerbate climate change and other global issues, the company established anenvironmental vision, which raises a decarbonized society and a resource-recycling society as
the two social images that we will aim for and formulated environmental targets for 2050 torealize the vision.

PointsThe overall image of the environmental burden
We identified and grasped the environmental burden associated with business activities

Identification of the environmental burden

throughout its overall value chain, from raw material procurement to production, transportation,

Identifying the inputs and outputs associated with its

use and disposal, to establish our environmental targets for 2050. Most of the emissions

own business is important for the efficient reduction

associated with the company’s business activities (manufacturing and sale of home appliances)of the company’s environmental burden, including CO2

are CO2 from energy sources, and other emissions are extremely small. The company works onemissions. In the example on the right, apart from CO2

improving energy efficiency during use, which is the largest source of emissions, and energy

emissions, which is the output, the company hassaving during procurement and production for the efficient reduction of emissions. In addition,

grasped the amounts of inputs, including materials,

since the company procures energy and materials during procurement and production, we strive

water, and energy. In addition, reduction of emissions

to reduce our environmental burden by increasing the recycling efficiency of materials, water,

during product use, which accounts for the majority ofand energy.

emissions and improvement of the recycling efficiencyof specific resources are also identified as key
measures for reducing environmental impact.

INPUT

Materials
1.01 million t

Business
activities

Procurement

OUTPUTCO2
3.87 million

Energy14,362TJ
Water volume
10.13 million m3

Production
CO2
12.1 million tCO2e

tCO2e

Fuel
Gasoline, etc.

Transportation
CO2
0.6 million tCO2e

Power consumption
3.65 million TWh

Use
CO2
176.8 million tCO2e

DisposalCO2
27.16
million tCO2e

Emissions
Recycled material:
160,000 t
Waste: 40,000 t
Drainage:9.13 million m3

47

(6) Energy-saving during product use (energy-saving electrical appliances, equipment, etc.) | Example of an electrical appliance manufacturer

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: General home appliance manufacturing
Location: Japan
Business: Development of health business andsystems business, centered on the
manufacturing and sale of home appliances

Environmental targets for 2050
The company is promoting initiatives for the decarbonization of society as a whole throughits products and services, known as “avoided emissions,” in combination with achieving carbon
neutrality by 2050 through its value chain for the realization of a “decarbonized society.” We
will work on improving the efficiency of using materials and water towards the realization of a
resource-recycling society. The company has also obtained SBT 1.5 ℃ certification for theirshort-term targets.

PointsIdentification of the environmental burden
Identifying the inputs and outputs associated with its
own business is important for the efficient reductionof the company’s environmental burden, including CO2
emissions. In the example on the right, apart from CO2
emissions, which is the output, the company has
grasped the amounts of inputs, including materials,
water, and energy. In addition, reduction of emissions
during product use, which accounts for the majority ofemissions and improvement of the recycling efficiencyof specific resources are also identified as key

Targetedsocial image

FY2022
results

FY2030 targets-30%
1.31 million
tCO2e

60% reduction-14%
20.9 million
tCO2e

30% reduction

Resource use
efficiency

11%
improvement-50%
improvement

Water use efficiency

22%
reduction-

50%
improvement

KPI

Decarbonized Scope 1 + 2
emissionssociety* The baseyear isScope 3 emissions
FY2018Resourcerecycling
society* The baseyear isFY2015

FY2050 targets

Achievement ofCNmeasures for reducing environmental impact.

48

(6) Energy-saving during product use (energy-saving electrical appliances, equipment, etc.) | Example of an electrical appliance manufacturer

1. Strategies for achieving carbon neutrality
Corporate profile

Initiatives towards the achievement of emissions reduction targets

Industry: General home appliance manufacturing
Location: Japan
Business: Development of health business andsystems business, centered on the
manufacturing and sale of home appliances■ Emissions (Scope 1 to 3)■+
BAU■ Avoided emissions

PointsIdentification of the environmental burden
Identifying the inputs and outputs associated with its
own business is important for the efficient reductionof the company’s environmental burden, including CO2

2018

2025

2030

2050

Scope 1 + 2 reductions⚫Efficient use of energy saving andrenewable energy through energy
management⚫Introduction of renewable energy tointernal factories and buildings
Scope 3 reductions⚫R&D on environmentally friendly
refrigerants⚫Heat pump supply⚫Supplier engagement

The company set reduction targets based on the increase in emissions associated with theemissions. In the example on the right, apart from CO2

spread of environmentally-friendly products (BAU), and will implement various initiatives inemissions, which is the output, the company has

line with the goals of the electrical and electronics industries in the "Carbon Neutral Action

grasped the amounts of inputs, including materials,

Plan" by Japan Business Federation to achieve its environmental targets for 2050. In particular,water, and energy. In addition, reduction of emissions

we will invest 100 billion yen in R&D aimed at the reduction of Scope 3 emissions.

during product use, which accounts for the majority ofemissions and improvement of the recycling efficiencyof specific resources are also identified as key
measures for reducing environmental impact.

49

(6) Energy-saving during product use (energy-saving electrical appliances, equipment, etc.) | Example of an electrical appliance manufacturer

2. Avoided emissions
Target products and services:
Energy-saving home appliances (inverter air
conditioners)｜Contributions to reductions through energy saving (inverter air
conditioners)
The inverter air conditioners the company manufactures and sells have better energy-saving

Pointsperformance than the average air conditioner on the market, so these are products that can

Evaluation by life-cycle emissions (productcontribute to the reduction of emissions during use and play a major role in the reduction of its

eligibility)

environmental burden.

The company has explained that the reduction of

Inverters (frequency converters) are technologies that control voltage, current and frequency,

emissions during use by reducing power consumption

enabling detailed control of the speed of the motor that drives an air conditioner’s compressor

through optimization of inverters creates avoided

and fan. Air conditioners equipped with inverters can operate at high power until they reachemissions. In the calculation of those avoided

the set temperature and then switch to low-speed operation after that, reducing power

emissions, the company evaluates over the product’s

consumption significantly compared to non-inverter air conditioners that can only be turned onlife-cycle emissions, which is recommended in various

and off.

guidance.

Furthermore, according to the “The Future of Cooling” by the IEA, global demand for coolingis expected to surge through 2050, with electricity demand associated with this expected to

Confirmation of negative impacts on the

triple. We believe that the spread of use of energy-saving inverter air conditioners will be anenvironment

important initiative in the reduction of global emissions.

The company has disclosed that their products which
create avoided emissions may have a negative impact

on biodiversity and resources in the manufacturing
process, etc. However, the example on the right showsno such negative impacts on environment frominverter development.

50

(6) Energy-saving during product use (energy-saving electrical appliances, equipment, etc.) | Example of an electrical appliance manufacturer

2. Avoided emissions
Target products and services:
Energy-saving home appliances (inverter air
conditioners)｜Contributions to reductions through energy saving (inverter air
conditioners)
In addition to the installation of inverters, the company has improved the performance ofPointsheat pumps and refrigerants. The company also sell products that achieve greater energy

Evaluation by life-cycle emissions (productsavings in many countries, including those with high penetration rates of inverter air

eligibility)

conditioners. Since the average emissions intensity of products varies depending on the

The company has explained that the reduction ofclimate and electricity mix in each region, company has compared the average emissions foremissions during use by reducing power consumption

each sales region with their own products. Further, they have also confirmed that thesethrough optimization of inverters creates avoided

products will create avoided emissions by replacing existing products in the market, and thatemissions. In the calculation of those avoided

they will have no significant negative impact on the environment through material procurement,

emissions, the company evaluates over the product’s

etc., as they are no different to normal products apart from the inverter technology.

life-cycle emissions, which is recommended in various
guidance.

Comparison of temperature control between inverter and non-inverter air
conditioners (image)Confirmation of negative impacts on theenvironment

Set
temperature■Inverter air conditioners■Non-inverter air conditioners

The company has disclosed that their products which
create avoided emissions may have a negative impact

on biodiversity and resources in the manufacturing
process, etc. However, the example on the right shows

Time from start of operationno such negative impacts on environment frominverter development.

51

(6) Energy-saving during product use (energy-saving electrical appliances, equipment, etc.) | Example of an electrical appliance manufacturer

2. Avoided emissions
Target products and services:
Energy-saving home appliances (inverter air
conditioners)｜Calculation of avoided emissions

Pointsdepending on the country or region, the baseline is set by sales region based on the reports by

Setting of baselines based on regional

industry association. The conditions and scope of calculation of avoided emissions are in line withdifferences in each country

the calculation method of the Ministry of Economy, Trade and Industry and WBCSD guidance.

Since the average CO2 emissions intensity of

Lifecycle CO2 emissions by country or region of sale

electricity used by energy-saving products differs
depending on the market in each country, theThe company’s products are sold worldwide for residential and commercial use. Since thepenetration rate and energy-saving performance of inverter air conditioners vary greatlyCountry /regioncompany compared the emissions of their inverter
machines to the average emissions of air conditioners

MarketaverageJapan

performed separately for commercial and residentialuse, which have different life-cycle emissions
compositions.

Raw materials
4,051

Manufacturing
Transportation

Company

in each sales region. In addition, the calculation is also

Commercialuse

Residential use (kgCO2e)

3,774

Use

See
attachment

Disposal

Europe* Withinthe EU

Marketaverage
Company

5,302

See
attachment

3,958

..

India

Marketaverage
Company

8,019

See
attachment

4,182

Lifecycle CO2 emissions by country or region of sale
The results were calculated based on the following formula using the figure above.
Σ {sales by country / region, residential / commercial x (average market emissions - company
emissions)} As a result of calculations, avoided emissions created through sales of thecompany’s inverter air conditioners in 2022 were 1.5 million tCO2e.

5202(7) Manufacturing and supply of products using

Example of Packaging material manufacturing company

53

(7) Manufacturing and supply of products using low carbon and decarbonized raw materials (plant-derived packaging materials, etc.) |Example of packaging material manufacturing company

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Printing and manufacturing(consumer goods)
Location: Japan
Business: Lifestyle infrastructure-related business
manufacturing and supplying consumer
goods, and IT / information-related business｜Initiatives for the environment
As a responsible company, we aim for the realization of a sustainable society for the futureof the earth. In recent years, while required to reduce the environmental burden of its businessactivities, we have been implementing scenario analysis based on the TCFD recommendationsof the magnitude of the impact of climate change on business and using the LIME method tograsp quantitatively the impacts on the company’s business. We have evaluated theenvironmental impacts by business area, and the impacts on a wide range of subjects,

Pointsincluding mineral resources, fossil resources, forest resources, climate change, andEvaluation of environmental burden

photochemical oxidants.

The company uses the LIME, a life-cycle
environmental impact evaluation method to evaluate

quantitatively the impacts of the company’s businesson the environment. In addition to climate change, the■ Environmental impacts---Environmental efficiency(Environmental efficiency = sales / environmental impact)300
100.0

99.6

99.8

95.0

295

subjects of evaluation include mineral, fossil and
285

280

forest resources, enabling the evaluation of a wide
range of impacts concerning the environment not

275

limited to climate change.

265
255
255

250
2019

2020

2021

2022

0

Analysis on major businesses*1*1 Major businesses include lifestyle infrastructure-related businesses and IT andinformation-related businesses54

(7) Manufacturing and supply of products using low carbon and decarbonized raw materials (plant-derived packaging materials, etc.) |Example of packaging material manufacturing company

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Printing and manufacturing(consumer goods)
Location: Japan
Business: Lifestyle infrastructure-related business
manufacturing and supplying consumer
goods, and IT / information-related businessClimate Change
The company positions climate change as its most important issue in sustainability
management. In light of the scenario analysis implemented based on the TCFD
recommendations ｛IEA NZE Scenario and Stated Policies Scenario (STEPS) ｝, the company
has identified that climate change poses financial risks in the medium-term due to soaring raw
material and energy prices, and the introduction of carbon taxes. On the other hand, as themarket changes in association with climate change, the company thinks that resource

Pointsrecycling needs and the expansion of demand for low-carbon and decarbonized products will

Disclosure of emission reduction pathways

be opportunities for it.

The company has illustrated its initiatives for the

Climate-related risks

Climate-related opportunities⚫Increased costs related to carbon taxes andemissions trading⚫Soaring prices of raw materials and lowcarbon and decarbonized energy⚫Increase in resource recycling needs inassociation with the strengthening of regulations⚫Expansion of demand for low-carbon anddecarbonized products⚫Scope1+2 emissions reduction target FY2030
50% reduction (compared to FY2019)⚫Scope 3 emissions reduction target
FY2030 50% reduction (compared to
FY2019)⚫Sales of products that contribute to thedecarbonization of society
FY2030 15% increase (compared to FY2019)

reduction of emissions and the extent to which each

initiative will contribute to reductions, and discloses
the emission reduction pathways for the realization oftargets consistent with the achievement of the Paris
Agreement for all Scopes. The company is also
applying for SBT Net-Zero certification.

Therefore, as part of its risk management process, the company has set reduction targets
for Scope 1 to 3 emissions and is committed to achieving carbon neutrality throughout its
value chain overall by 2050. These targets are above the national levels set for achieving theParis Agreement and were revised upward according to the 1.5 ℃ target level. They are

currently applying their mid-term targets for SBTi certification. In addition, the company has
also set sales targets for products that contribute to the decarbonization of society,anticipating needs for resource recycling and the expansion of demand for low-carbon anddecarbonized products, which are opportunities for the company.

55

(7) Manufacturing and supply of products using low carbon and decarbonized raw materials (plant-derived packaging materials, etc.) |Example of packaging material manufacturing company

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Printing and manufacturing(consumer goods)
Location: Japan
Business: Lifestyle infrastructure-related business
manufacturing and supplying consumer
goods, and IT / information-related businessInitiatives towards the achievement of emissions reduction targets
Energy-derived emissions account for more than 90% of the company’s Scope 1 + 2
emissions. Accordingly, the company will promote further energy saving through theintroduction of energy management systems, etc., and will also convert to decarbonizedenergy and improve energy efficiency in manufacturing processes aimed at the reduction of
Scope 1 + 2 emissions. In addition, we will expand our investments in the low-carbon
materials area and transform our business portfolio to focus on future growth areas. Products

Pointsand services purchased (Category 1) and the disposal of products sold(Category 12)

Disclosure of emission reduction pathways

accounted for more than 80% of Scope 3 emissions. Therefore, apart from striving for the

The company has illustrated its initiatives for the

procurement of low emission factor materials through cooperation with suppliers, the company

reduction of emissions and the extent to which eachwill also maximize the use of these materials and advance initiatives related to theinitiative will contribute to reductions, and discloses

improvement of recycling rates, aiming ultimately for carbon neutrality by 2050. Thesethe emission reduction pathways for the realization of

initiatives are consistent with the decarbonization action plan established by the printing

targets consistent with the achievement of the Parisindustry.

Agreement for all Scopes. The company is also
applying for SBT Net-Zero certification.

Scope 1+2

（ktCO2e）

1,000

Scope 3

（ktCO2e）

6,000
700

5,000
500

2019 2020 2030 2040 2050

3,000

2019 2020 2030 2040 2050

■ Business portfolio ■ Development of■ Business portfolio transformationtransformation
innovative technologies ■ Supplier collaboration■ Energy saving and ■ Introduction of■ Development of innovative technologies
higher efficiency
innovative technologies■ CO2 absorption technology■ Fuel conversion■ CO2 absorption
technology

56

(7) Manufacturing and supply of products using low carbon and decarbonized raw materials (plant-derived packaging materials, etc.) |Example of packaging material manufacturing company

2. Avoided emissions
Target products and services:
Plant-derived packaging materials｜Sustainable packaging materials

Pointsare used as raw materials, there is sustainability risk in the procurement of raw materials, andConsideration of impacts on the environment

large quantities of CO2 are emitted when the raw materials of packaging are procured,

If disclosing positive impacts through avoided
emissions, other than climate, it is recommended toconsider whether the manufacturing and supply of
products and services have impacted the environment
adversely and to state the results. In the case on theright, while there are no adverse impacts at present,
the company is committed to continuous evaluations.

Many of the packaging materials used currently are oil-derived plastics. Since fossil fuels

manufactured, and disposed of. In addition to the handling of climate change, the company,
which a sustainable society, is working on the issue of packaging materials, while theresolution of marine plastic waste pollution and the realization of a circular economy have also
become issues.
Lifestyle infrastructure-related business | Plant-derived packaging materials

One solution that can be raised is environmentally friendly packaging materials made fromplant-derived materials. The company manufactures packaging materials with a uniquemanufacturing method using its printing technology for many years, and by doing so, hasrealized the manufacturing and supply of packaging materials with the same functions asconventional plastics using plant-derived materials.
Plant-derived packaging materials are the main product of the company’s lifestyleinfrastructure-related business, accounting for 10% of sales. Based on the TCFD
recommendations, the company apprehends the expansion of demand for low-carbon anddecarbonized products as a climate-related opportunity and has positioned plant-derived
packaging materials as one of the company’s important products into the future.

■ Lifestyle infrastructure-related
businesses
35%■ IT and information-related
business40%■ Other
25%

Plant-derived
packaging materials
Percentage of sales
by business（2020年）

57

(7) Manufacturing and supply of products using low carbon and decarbonized raw materials (plant-derived packaging materials, etc.) |Example of packaging material manufacturing company

2. Avoided emissions
Target products and services:
Plant-derived packaging materials

Evaluation of environmental impacts

Pointscultivation and procurement of sugarcane, which it uses as a raw material for packaging

Consideration of impacts on the environment
If disclosing positive impacts through avoided
emissions, other than climate, it is recommended toconsider whether the manufacturing and supply of
products and services have impacted the environment
adversely and to state the results. In the case on theright, while there are no adverse impacts at present,
the company is committed to continuous evaluations.

The company is committed to sustainable procurement with a low environmental burden in thematerials. We have evaluated both quantitatively and qualitatively that there are currently nosignificant adverse effects, but we will evaluate more precisely in future the amount of waterused and the impact on biodiversity.
Avoided emissions and baseline
The plant-derived packaging materials (for detergents) used to calculate avoided emissions willcontribute to CO2 emissions reductions during manufacturing and combustion by replacing oilderived plastics, which are generally used as the raw material for packaging materials. The
company discloses these reductions as avoided emissions. To be specific emissions during
manufacturing can be reduced along with CO2 emissions during disposal through the use of bioderived raw materials, since no petroleum-derived raw materials are used. Avoided emissions
are created during manufacturing and disposal, and the lifecycle overall is calculated includingthese based on the WBCSD guidance. The range of emissions

calculation ranges from raw

material procurement to disposal per ton of packaging material.
Raw material
procurement

Plantderived

Oilderived

Manufacturing

Transportation

Disposal⚫ Cultivation of ⚫ Manufacturing ofsugarcane-derived
sugarcane
ethylene⚫ Manufacturing ofenvironmentally-friendly
packaging materials⚫-⚫ Recycling⚫ Simple
combustion
processing⚫ Oil extraction⚫-⚫ Recycling⚫ Simple
combustion
processing⚫ Manufacturing of
ethylene from oil⚫ Manufacturing of
packaging materials

58

(7) Manufacturing and supply of products using low carbon and decarbonized raw materials (plant-derived packaging materials, etc.) |Example of packaging material manufacturing company

2. Avoided emissions
Target products and services:
Plant-derived packaging materials

Scope and prerequisites

Points⚫ Baseline: From the procurement of raw materials for oil-derived packaging materials (forDisclosure of data reference list
Many estimates and assumptions are required for
calculating of avoided emissions. Because of that, it isrecommended to clarify the data reference sources fortransparent disclosure. Even if actual data, such as
sales volumes, are not disclosed, it is recommended todisclose data references and figures as far as possible.

Country of sale: Japan

detergents) to the manufacturing and disposal of the packaging materials⚫ Scope of calculation: From raw material procurement to disposal⚫ Period and range: Amount of packaging material sold in 1 year (t)Data and calculation results
In calculating avoided emissions, reference was made to the values in reports by industry
associations, interviews with experts, government publications, and other sources. Company
data was used for the plant-derived packaging materials they produce.
Process

Oil-derived

Plant-derived

Raw material
procurement• Emissions related to oil extraction, refining
and transportation
required for 1t of packaging material(Oil industry reports)• Emissions related to the production andtransportation of sugarcane required for
1t of packaging material(Interviews with sugarcane producers
and industry experts)

The presence or absence of third-party
verification
Third-party verification of avoided emissions
calculation methods is not mandatory at the present
time. On the other hand, the Basic Guidelines andother guidance recommend including the presence or

Manufacturing

absence of verification for disclosure that is easy-tounderstand, and in the case on the right, it is statedthat no third-party verification has been received.
Disposal• Emissions related to the manufacturing ofbasic chemicals such as ethylene requiredfor 1t of oil-derived packaging materials• Emissions related to processing into oilderived packaging materials(Chemical industry reports)• Emissions related to simple combustion
processing of 1t of oil-derived packaging
materials(Chemical industry reports)• Emissions related to the manufacturing ofbasic chemicals such as bioethylene
required for 1t of plant-derived packaging
materials(Ministry of the Environment data)• Emissions related to processing intoplant-derived packaging materials(Company data)• Emissions related to simple fuelprocessing of 1t of plant-derived
packaging materials(Ministry of the Environment data)59

(7) Manufacturing and supply of products using low carbon and decarbonized raw materials (plant-derived packaging materials, etc.) |Example of packaging material manufacturing company

2. Avoided emissions
Target products and services:
Plant-derived packaging materials
PointsDisclosure of data reference list
Many estimates and assumptions are required for
calculating of avoided emissions. Because of that, it isrecommended to clarify the data reference sources fortransparent disclosure. Even if actual data, such as
sales volumes, are not disclosed, it is recommended to

After calculating based on the data, the result for avoided emissions per ton of packaging
materials was 407 kgCO2e. Avoided emissions were calculated by multiplying this by thecompany’s sales of plant-derived packaging materials in fiscal year 2022. As a result, avoided
emissions related to packaging materials for detergents were calculated at 4,000 tCO2e.
Because the company manufactures its final products from the processing of sugarcane, which
is an important factor in avoided emissions, 100% of avoided emissions are attributed to thecompany. However, we will strive to refine the calculation method while also taking into accountfuture discussions on the contribution ratio.
* Avoided emissions figures are not subject to third-party verification at present.

disclose data references and figures as far as possible.

The presence or absence of third-party
verification
Third-party verification of avoided emissions
calculation methods is not mandatory at the present
time. On the other hand, the Basic Guidelines andother guidance recommend including the presence orabsence of verification for disclosure that is easy-tounderstand, and in the case on the right, it is statedthat no third-party verification has been received.

6002(8) Extension of product life

Example of a manufacturing equipment-related materials
manufacturer

61(8) Extension of product life (durable needle coke, etc.) | Example of a manufacturing equipment-related materials manufacturer

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Oil
Location: Japan
Business: Energy business, high-performancematerials business (lubricants, electronicmaterials, agribio, etc.), resource business｜Business transformation in line with the realization of a sustainable society
The company organized the issues from both social impact and business impact andidentified five areas in fiscal year 2023 towards the identification of its priority ESG issues. In
particular, climate change is the most important issue for the group, which deals with energy
and materials, and with the mission of supplying energy while contributing to the developmentof a sustainable society, we will promote initiatives to realize a decarbonized society. To that
end, we will transform our business portfolio and work on the expansion of growth areas with

Pointsan eye toward carbon neutrality.

Initiatives consistent with the Ministry of
Economy, Trade and Industry’s technology

The company has planned concrete short and medium
to long-term initiatives to achieve carbon neutrality
targets regarding the technology roadmaps for related
fields formulated by the Ministry of Economy, Trade

Business scaleroadmap
Decarbonizationrelated materials
business
Next-generationfuel businessand Industry. In addition, it is also disclosing theguidance it referred to.

Fossil fuel-related business
2020

2030

2040

2050

Recently, the company has been investing earnings
from its profit-making business (fossil fuel-related
business) in growth business to transform its
medium to long-term business portfolio.

62(8) Extension of product life (durable needle coke, etc.) | Example of a manufacturing equipment-related materials manufacturer

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Oil
Location: Japan
Business: Energy business, high-performancematerials business (lubricants, electronicmaterials, agribio, etc.), resource businessTransition strategy for the realization of carbon neutrality
The company group will work on both the contribution and mitigation perspectives while
using existing resources to the full for the realization of carbon neutrality. To transform ourbusiness portfolio and realize a carbon-neutral circular economy, we have set GHG emissions
reduction targets and formulated a transition roadmap for initiatives to be promoted in eachbusiness. In formulating the roadmap, the company referred to roadmaps for related fields
centered on the “Roadmap for “Transition Finance” in the Oil Sector,” published by the

Points

Ministry of Economy, Trade and Industry, for initiatives that contribute to decarbonization

Disclosure of Scope 3 emissions and issues

based on domestic policies. In addition, the company has raised a GHG emissions reduction

Various issues in making calculations have beentarget of -46% for Scope 1 + 2, which is consistent with the targets for achievement of thepointed out regarding to the disclosure of Scope 3

Paris Agreement raised by the state. The company group has disclosed figures for its Scope 3

emissions, but in the case shown on the right, theemissions that it is able to calculate at the present time because they are so wide-ranging.

company has disclosed emissions while noting thatthese are the figures that can be calculated at thepresent time. In addition, the company has stated thereasons for the difficulty in setting targets andclarified the time limit for target setting.

63

(8) Extension of product life (durable needle coke, etc.) | Example of a manufacturing equipment-related materials manufacturer

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Oil
Location: Japan
Business: Energy business, high-performancematerials business (lubricants, electronicmaterials, agribio, etc.), resource businessWith regard to Scope 3 target setting, the company has not yet set a clear target because
the Scope 3 emissions of the group are affected by many industries, but it is planning to set atarget by around 2027. Further, at the present time, we are aiming to reduce the emissions
intensity of the energy the group supplies by 30% by 2050 while continuing to grasp Scope 3
results. When formulating the transition finance framework, a third-party evaluation institution
confirmed the group’s strategy to be consistent with the International Capital Market
Association’s Climate Transition Finance Handbook as an SPO. (Actual emissions are

Pointspublished on the company’s website.)

Science-based targets consistent with state~2030

targets⚫Oil-conversion technology for waste plastics⚫Establishment of exhaust gas conversion technology

The company has set GHG emissions reduction

targets at the same level as the state targets~2040

Decarbonizationrelated materials

consistent with the Paris Agreement and has set⚫Heat resource recovery⚫Waste material
conversion⚫Development of SAF⚫Building of a hydrogen and ammonia supplychain

targets that are science-based. In addition, it has also

⚫ Expansion of SAF business⚫ Hydrogen and ammonia power generation
business

disclosed that it has obtained a third-party evaluation(SPO) of its targets and initiatives.

~2050

Next-generation fuel⚫Improvement of the operation of refineries, etc. (energy
saving, etc.)⚫Fuel conversion of coal boilers, etc.
Fossil fuelInvestment in growth areas (2023 to 2025)

800⚫New capital investment⚫Research and development expenses, etc.
billion yen ⚫60% on decarbonization-related materials business⚫40% on next-generation fuel business64

(8) Extension of product life (durable needle coke, etc.) | Example of a manufacturing equipment-related materials manufacturer

2. Avoided emissions
Target products and services:
Durable needle coke

｜Products that contribute to the decarbonization of the steel industry

Pointsproducts that are essential for industrial infrastructure. In addition to the improvement of

Explanation of consistency with net zero

performance, having seen increased needs for environmental consideration, the group’s high-(product eligibility)
The company explains and discloses that electric
furnaces in which durable needle coke is used areconsistent with the realization of a decarbonizedsociety based on the technology roadmap for the steel

sector formulated by the Ministry of Economy, Tradeand Industry.

The company’s high-performance materials business manufactures and sells materials andperformance materials business is making efforts in R&D for products with low emissions
across their lifecycle that will contribute to the decarbonization of customers.
In high-performance materials business, the durable needle coke that the company
manufactures and sells has a longer product life than ordinary needle coke, so it is possible toextend the life of products that use durable needle coke (graphite electrodes). This enables

the company to contribute to the reduction of emissions related to the procurement of needle
coke raw materials. The reduction of CO2 emissions by society through the use of durable
needle coke with a long product life is calculated as avoided emissions of the group, which
visualizes our positive impact on society through business.

65

(8) Extension of product life (durable needle coke, etc.) | Example of a manufacturing equipment-related materials manufacturer

2. Avoided emissions
Target products and services:
Durable needle coke

Use of durable needle coke

Pointselectrode material for high-efficiency electric furnaces in the steel industry. It is a necessary

Consideration of LCA and clarification of thecalculation method
Because the needle coke required for the productionof 1 ton of iron decreases as durable needle cokeextends the product lifecycle, emissions during use(steel production by electric furnace) and the disposal

stage have the main reductions in emissions. In the

The durable needle coke manufactured and sold by the company group is used as graphite

material for the operation of electric furnaces. Electric furnaces are based on technology that
manufactures steel from scrap steel by arc discharge and are attracting attention in Japan andoverseas as decarbonization technology for the steel industry, which emits a large amount of
CO2 during manufacturing. The use of electric furnaces is consistent with the steel sector
roadmaps formulated by the IEA and the Ministry of Economy, Trade and Industry, and thegroup’s durable needle coke, which is used in electric furnaces, is also thought to be amaterial that was manufactured for the realization of a decarbonized society.

case on the right, the company states that it considers~2030

whether or not there are any differences from the raw
material to the manufacturing stage and excludes
them to calculate conservatively based on the fact that

~2040

~2050

Energy saving, more efficient technology

Electric
furnace

Impurity removal and enlargement technology
in electric furnaces

consideration of the lifecycle is required in thecalculation of avoided emissions.

Energy saving, more efficient technology
Blastfurnace

Ferrocoke

Hydrogen reduction steelmaking (on-sitehydrogen; external hydrogen from 2040 on)
CO2 separation, recovery and use

Source) Partial excerpt from the Ministry of Economy, Trade and Industry’s
sector-specific technology roadmap

66

(8) Extension of product life (durable needle coke, etc.) | Example of a manufacturing equipment-related materials manufacturer

2. Avoided emissions
Target products and services:
Durable needle coke

｜Calculation of avoided emissions

Pointsthird-party verification but received an external review and advice on its consideration of the

Explanation of consistency with net zero

calculation method and the figures.

(product eligibility)
The company explains and discloses that electric
furnaces in which durable needle coke is used areconsistent with the realization of a decarbonizedsociety based on the technology roadmap for the steel

sector formulated by the Ministry of Economy, Tradeand Industry.

In establishing the calculation method for avoided emissions, the company did not receive

The needle coke used on average was the subject of comparison in calculations (baseline)
Because the buyers are mainly steel-related companies in Japan, the reference figures are ofthose domestic companies.
Comparison of lifecycle CO2 emissions per ton of steel manufactured using

electric furnaces
The figures used in the calculation have been organized in the following table. The figures
shown in parentheses in the table are the group’s estimates and are based on the figures of
trading companies that handle these materials and research materials. A difference isgenerated in the amount of emissions related to processes from the procurement of needle
coke raw materials to manufacturing because of the decrease in manufacturing volume, but it

is not included in the calculation of avoided emissions because it is the same as the baseline,
assuming that the manufacturing method will not change and that it will be calculated moreconservatively.

67

(8) Extension of product life (durable needle coke, etc.) | Example of a manufacturing equipment-related materials manufacturer

2. Avoided emissions[Legend] ●: Excluded from subjects of calculation

Target products and services:
Durable needle coke

Item

Subject tocalculation

Baseline

PointsEmissions at the raw material to material procurement stages(ktCO2e/ton-steel)●●Consideration of LCA and clarification of the

Emissions at the manufacturing stage(ktCO2e/ton-steel)●●During use (electrode basic unit)* Amount of electrode consumed to manufacture 1t of iron
(ktCO2e/ton-steel)

(30)

20

of 1 ton of iron decreases as durable needle coke

CO2 emissions at the disposal stage(ktCO2e/ton-steel)

(20)

10

extends the product lifecycle, emissions during use

Avoided emissions per ton of steel(kg/ton-steel)calculation method
Because the needle coke required for the production(steel production by electric furnace) and the disposal

stage have the main reductions in emissions. In thecase on the right, the company states that it considers
whether or not there are any differences from the raw
material to the manufacturing stage and excludes
them to calculate conservatively based on the fact thatconsideration of the lifecycle is required in thecalculation of avoided emissions.

-20*1 Calculated by multiplying by 44/12 (conversion factor) in the conversion of carbon to carbon dioxide

Results for calculation of avoided emissions in 2022
Avoided emissions are calculated by multiplying the production volume per ton of iron by“production volume of steel manufactured with the annual sales volume of the company’s
needle coke” with the result that 100,000 tons of avoided emissions were created in fiscal year
2022.

68

02
(9) Supply of products that contribute to the decarbonization of building

Example of a thermal insulation-related product manufacturer

69(9) Supply of products that contribute to the decarbonization of building (insulation, heat exchange systems, ZEB construction, etc.) |Example of a thermal insulation-related product manufacturer

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Construction materials, materials, furniture(manufacturing)
Location: Japan
Business: Manufacturing of insulation materials,
roofing materials, composite fibers, etc., usedin construction｜ Sustainability and value chain impact
Sustainability is at the core of the company’s business strategy. We apprehend issues torealize a sustainable society as business opportunity. Since 2016, we have been working toquantify the impacts of our initiatives, set targets, and confirm progress based on the
Sustainable Development Goals (SDGs). In particular, we conducted double materiality
analysis with external experts and have identified four areas that are most relevant to ourbusiness: countermeasures against climate change; water conservation; the spread of clean

Pointsenergy penetration; and responsible production and consumption.

Analysis of the impact on the value chain
The company has considered the impact that its
business exerts on the sustainability of society

throughout the value chain overall, and, with thecooperation of university professor, an external

Value chain impacts
We exert a variety of impacts on the value chain through our business activities. We identify
these impacts and work on the improvement of sustainability through business.

Resources

Factories⚫Conservation of thenaturalenvironment⚫Conservation ofwater resources⚫Reduction of Scope
1 + 2 emissions⚫Improvement of
the efficiency ofwater use
⚫Use of renewableenergy⚫Improvement of
resource efficiency

Buildings

experts , identified areas that are easily affected andwhere the impacts exerted by its business are
particularly large (double materiality).
⚫Improvement ofenergy efficiency⚫Provision ofenvironmentallyfriendly housing70

(9) Supply of products that contribute to the decarbonization of building (insulation, heat exchange systems, ZEB construction, etc.) |Example of a thermal insulation-related product manufacturer

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Construction materials, materials, furniture(manufacturing)
Location: Japan
Business: Manufacturing of insulation materials,
roofing materials, composite fibers, etc., usedin construction｜ Countermeasures against climate change
As a manufacturer and seller of building-related products, we place the highest importanceon dealing with climate change and urbanization. CO2 emissions from residential andcommercial buildings account for 10% of overall global emissions, so we think that ourcompany, which handles high energy-saving performance insulation materials, has a large roleto play in the reduction of emissions.
We are striving for the development of products that will contribute to the greater energy

Pointsefficiency of new buildings for the realization of net zero in the global building construction

Science-based targets

sector. In addition, based on the importance of retrofitting existing buildings to achieve energy

The example on the right shows that the targets are

efficiency improvements, we are conducting advocacy activities aimed at various countries’

science-based (= consistent with the achievement ofgovernments for the setting of retrofitting targets and the expansion of subsidy programs.

the Paris Agreement) through the acquisition ofcertification from the SBTi. In addition, these targets
have been set such that they cover all of Scope 1 to 3.

71

(9) Supply of products that contribute to the decarbonization of building (insulation, heat exchange systems, ZEB construction, etc.) |Example of a thermal insulation-related product manufacturer

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Construction materials, materials, furniture(manufacturing)
Location: Japan
Business: Manufacturing of insulation materials,
roofing materials, composite fibers, etc., usedin construction

Reduction of GHG emissions
Scope 1 + 2 emissions account for more than 70% of our GHG emissions so the reduction of
the company’s emissions is important. Accordingly, we announced our commitment to theachievement of carbon neutrality by 2050. As our interim targets, we set the reduction of
Scope 1 + 2 emissions by 35% compared to the base fiscal year (2019) and the reduction of
Scope 3 emissions by 20% compared to the base year. The SBTi has confirmed that ourinterim target for Scope 1 + 2 emissions is consistent with the 1.5°C target and that our

Pointsinterim target for Scope 3 emissions is consistent with the WB2.0 target.

Science-based targets
The example on the right shows that the targets are
science-based (= consistent with the achievement of2030 target: -35%
Base year: 20192030 target: -20%
Base year: 2019

the Paris Agreement) through the acquisition ofcertification from the SBTi. In addition, these targets
have been set such that they cover all of Scope 1 to 3.

Scope 1+2

Scope 3

Percentage
progress toward
goal

Percentage
progress toward
goal

-15%

-11%
2023 result:
2.6 million tCO2e

2023 result:
800,000 tCO2e72

(9) Supply of products that contribute to the decarbonization of building (insulation, heat exchange systems, ZEB construction, etc.) |Example of a thermal insulation-related product manufacturer

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Construction materials, materials, furniture(manufacturing)
Location: Japan
Business: Manufacturing of insulation materials,
roofing materials, composite fibers, etc., usedin construction

We will work on the electrification of fiber melting processes (Scope 1) and the greening ofprocured electricity (Scope 2) while taking the circumstances of each country into account for
the reduction of emissions at our factories, which account for the majority of our emissions,and the achievement of our targets. Regarding Scope 3 emissions, apart from working on
engagement with suppliers, we will strive to reduce upstream emissions by using recycledmaterials, etc.

PointsScience-based targets

SBTi Net Zero standard acquired for Scope 1+2 emissions

Short-term strategy

Medium-term strategy

Long-term strategy⚫Conversion of the raw materials
for insulation materials (XPS)⚫Procurement of renewableenergy through PPA⚫R&D on raw material recycling⚫20% reduction in energy
consumption throughenergy saving⚫R&D for the promotion of
the circular economy⚫R&D for manufacturing
process innovation

The example on the right shows that the targets are
science-based (= consistent with the achievement of

the Paris Agreement) through the acquisition ofcertification from the SBTi. In addition, these targets
have been set such that they cover all of Scope 1 to 3.

SBTi WB2.0 acquired for Scope 3 emissions
Short-term strategy⚫Formulation of procurement
policy⚫Cooperation for the
decarbonization of the supply
chain

Medium-term strategy

Long-term strategy⚫Improvement in the⚫Continuous
renewable energy rates ofengagement with
suppliers
suppliers⚫Greater efficiency oftransportation73

(9) Supply of products that contribute to the decarbonization of building (insulation, heat exchange systems, ZEB construction, etc.) |Example of a thermal insulation-related product manufacturer

2. Avoided emissions
Target products and services:Insulation materials
Points｜Creation of avoided emissions through insulation materials
Reduction effect of insulation materials
The insulation materials for residential and commercial buildings that we manufacture andEstablishment of a calculation method jointly

sell are products that contribute to the reduction of emissions in the building sector becausewith experts

they increase the insulation efficiency of buildings. We have calculated the avoided emissions

Because the method for calculating avoided emissions
requires the setting and investigating of estimates, inthe case on the right, the company asked anenvironment-related research institution to set thecalculation method and estimates and has strived toensure transparency. The method of using external
institutions as appropriate like this is expected.

due to insulation materials sold to visualize this positive impact.
Insulation materials include glass wool and rock wool, both of which realize high insulation
performance by storing air with low thermal conductivity within the material. Building-related
CO2 emissions account for 10% of total global emissions and if calculations are restricted toenergy-related emissions, in particular, 26% of emissions are in the building sector. Therefore,
improving the thermal insulation performance of the walls and roofs of buildings and saving
heating and cooling energy is an important initiative for the reduction of emissions throughout
society.

Conservative calculation

To ensure transparency and reliability in the calculation of avoided emissions, we requested

Since various guidance (e.g., WBCSD) recommends

calculations by Ω (an environment-related research organization), with reference to thethat avoided emissions be calculated conservatively,

WBCSD’s Guidance on Avoided Emissions. The following are the calculation method

the company has set conservative conditions for items

formulated by Ω and the results.

of high uncertainty, such as product life and the scopeof calculation.

74

(9) Supply of products that contribute to the decarbonization of building (insulation, heat exchange systems, ZEB construction, etc.) |Example of a thermal insulation-related product manufacturer

2. Avoided emissions
Target products and services:Insulation materials
Points｜Creation of avoided emissions through insulation materials
Scope and prerequisites
The following conditions were set for calculations. Only the use of insulation materials is

Establishment of a calculation method jointly

subject to calculation. If the upstream portion of the value chain is included, avoided

with experts

emissions are expected to increase by approximately 10%.*1 However, due to the highBecause the method for calculating avoided emissions
requires the setting and investigating of estimates, inthe case on the right, the company asked an

uncertainty of the figures used in the calculation and the set assumptions, the upstream
portion is excluded from the calculation based on the principle of calculating avoided
emissions more conservatively.

environment-related research institution to set thecalculation method and estimates and has strived to⚫Subject of calculation: Reduction in CO2 emissions associated withensure transparency. The method of using external

reductions in energy use

institutions as appropriate like this is expected.

⚫Baseline: Amount of electricity used for air conditioning in average homes
with insulation installed

Conservative calculation⚫Countries of sale: Europe, USA, Japan

Since various guidance (e.g., WBCSD) recommends⚫Scope of calculation: During usethat avoided emissions be calculated conservatively,⚫Period and scope: Quantity of insulation materials sold annually (number

the company has set conservative conditions for itemsof buildings delivered)of high uncertainty, such as product life and the scopeof calculation.

*1 Values are those estimated by Ω based on LCA evaluation75

(9) Supply of products that contribute to the decarbonization of building (insulation, heat exchange systems, ZEB construction, etc.) |Example of a thermal insulation-related product manufacturer

2. Avoided emissions
Target products and services:Insulation materials

Methodology

Pointssaved per year is calculated based on the ΔU value (difference in heat transfer coefficient),

Establishment of a calculation method jointlywith experts
Because the method for calculating avoided emissions
requires the setting and investigating of estimates, inthe case on the right, the company asked an

The logic for calculation of avoided emissions is as shown below. The amount of energy

and avoided emissions per year are calculated by multiplying further by energy intensity.
Moreover, we calculate avoided emissions associated with the use of products by multiplyingthat value by product life. Calculations were performed on a flow basis.
It is generally accepted that product life is about 60 years (●● et al., 2018), but because
there is no clear standard, we have set 50 years as the product life to calculate conservatively.

environment-related research institution to set the[Legend]calculation method and estimates and has strived to■ Estimates based on various documents and the company’s results

ensure transparency. The method of using external■ Values calculated based on estimated and actual values

institutions as appropriate like this is expected.
Avoided emissions

Conservative calculation
Since various guidance (e.g., WBCSD) recommends

Product life
(50 years)

Avoided emissions / yearthat avoided emissions be calculated conservatively,
the company has set conservative conditions for itemsof high uncertainty, such as product life and the scopeof calculation.
Heating degree days
(HDD)

Energy reduction(kWh / year)

Energy intensity(kgCO2e /kWh)

ΔU value

Insulation installation
area
(m2)

Insulation thickness(m)

Quantity of insulationmaterial used
(m3)

76

(9) Supply of products that contribute to the decarbonization of building (insulation, heat exchange systems, ZEB construction, etc.) |Example of a thermal insulation-related product manufacturer

2. Avoided emissions
Target products and services:Insulation materials

Data on use

Pointsthe country of sale, we referred to the values given in the documents of the governments ofDisclosure of estimates

Europe, the United States and Japan. Other values were set as estimates based on the results

The company ensures transparency by disclosing emissions

The data used for calculation are as follows. Since intensity and fuel mix differ depending onof investigations by the technical expert team at Ω.

in a list of tables, including estimates, tentatively set values
and references. The company specifies that sales volumes

Itemand other data that are difficult to disclose, are “Notdisclosed” and clarifies that it uses the company’s uniqueContribution ratio
At present, no clear figure has been determined for the

Air-conditioningrelated emissions

Calculated based on the following

Thermal efficiency (%)

Coal (70%), biomass (80%), oil (90%)
Gas (95%) electricity (100%)

Fuel mix

Reference to each national government’s
materials

Energy intensity (kgCO2e / kWh)IEA data
IPCC National Greenhouse Gas Inventories

Total sales volume (m3)
Quantity of
insulation material Sales ratio (%)
used by productUse (%)

Insulation
thickness

Roof

Intensity by country

contribution ratio, but the company has tentatively set avalue and disclosed its assumptions.

Exterior wall

50 years (industry average 60 years)

Product life

data.

Subject products (insulation materials)

Non-disclosed (company data)
Non-disclosed (company data)

98% (estimated by Ω)Λ value (thermal conductivity)(W/mK)

0.034

0.038

U value before use of thecompany’s insulation material(heat transfer coefficient)

1.50

1.50

U value after use of the company’s
insulation material (W / m2K)

0.15

0.10

1.35

1.40

ΔU value (W / m2K)
Heating degree days (HDD)

460-530777

(9) Supply of products that contribute to the decarbonization of building (insulation, heat exchange systems, ZEB construction, etc.) |Example of a thermal insulation-related product manufacturer

2. Avoided emissions
Target products and services:Insulation materials

Data on use

Points360 MtCO2e. This value is multiplied by the set contribution ratio (50%) to disclose avoided

Disclosure of estimatesemissions of 180 MtCO2e for 2023. Because there are no clear guidelines on the contribution

The company ensures transparency by disclosing emissions
in a list of tables, including estimates, tentatively set values

Avoided emissions due to the use of insulation materials (external structure and roof) wereratio, we set the following contribution ratio tentatively by dividing it into manufacturing, rawmaterials, and others based on exchanges of opinions with experts.

and references. The company specifies that sales volumes
and other data that are difficult to disclose, are “Notdisclosed” and clarifies that it uses the company’s uniqueContribution of insulation equipment to the value chain

data.

Contribution ratio
At present, no clear figure has been determined for thecontribution ratio, but the company has tentatively set avalue and disclosed its assumptions.

Value chain overall
Manufacturing

50%

Raw materials

20%

Other

30%
0%

20%

40%

60%

80%

100%

The calculation method for avoided emissions has not changed since 2018, but we will
update the data and revise the calculation method in future as required.

7802(10) Reduction of livestock-derived emissions

Example of a chemical company

79

(10) Reduction of livestock-derived emissions (feed additives, etc.) | Example of a chemical company

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Chemical
Location: Japan
Business: Information, electronics and chemicals
business centered on manufacturing andsales of basic chemicals and functional
chemicals, healthcare business andagriculture-related business｜ Strategies for achieving carbon neutrality by 2050
Climate change is a major issue common to humanity in the 21st century. It occupies animportant position in both financial materiality and impact materiality and is an issue thatshould be addressed throughout the value chain. The chemical industry is currently using raw
materials derived from fossil fuels and has the responsibility to promote initiatives for theachievement of the Paris Agreement. The company aims for the realization of carbon neutrality
by 2050 through the power and innovation of chemistry.

Points

We will work from two aspects: the reduction of emissions in the value chain andTarget setting based on national goals andcontributions to the decarbonization of society for the realization of carbon neutrality by 2050.

policies

To promote such initiatives, we have established a Management Strategy Subcommittee in theIt may not necessarily be appropriate to apply a

GX Promotion Department, chaired by the CEO, which analyzes scenarios, manages risks, anduniform level to emission reduction targets due toformulates strategies for the achievement of carbon neutrality as an organization under theregional characteristics, etc. In the case study on the

direct control of the Board of Directors. In addition, we have introduced internal carbon pricing

right, the company has set targets with reference to

as a measure to accelerate our initiatives and revised the price last year from 3,000 yen /Japan's NDC and by the Ministry of Economy, Trade

tCO2e to 10,000 yen / tCO2e.

and Industry's technology roadmap, and these

Achievement of CN by 2050 across the entire value chain (Scope 1 to 3)

references are also disclosed as grounds for the

Maximization of avoided emissions for the achievement of CN in society together
with customers

targets.

80

(10) Reduction of livestock-derived emissions (feed additives, etc.) | Example of a chemical company

1. Strategies for achieving carbon neutrality
Corporate profile
Industry: Chemical
Location: Japan
Business: Information, electronics and chemicals
business centered on manufacturing andsales of basic chemicals and functional
chemicals, healthcare business andagriculture-related business

Carbon neutral roadmap
As specific initiatives to achieve carbon neutrality, we formulated a carbon-neutral roadmap
for the company based on the technology roadmap for the chemical sector formulated by the
Ministry of Economy, Trade and Industry. As a company that handles a wide range of basic
chemicals and functional chemicals, we have Scope 3 emissions as well as emissions derived
from the use of heat and processes during manufacturing.
With regard to Scope 1 + 2 emissions, we aim for the achievement of carbon neutrality,

Pointsfocusing on three measures: fuel conversion; raw material conversion, and raw material

Disclosure of targetsetting forecast

recycling. For Scope 3 emissions, we will cooperate with suppliers to request the conversion of

Essentially, the Basic Guidelines call for the setting of

raw materials and the use of renewable energy, and establish a basic policy on procurement.

targets for Scope 1 to 3, but there are cases where

Further, we will also reduce product disposal (category 12) by developing of recycling

target setting is difficult at the present time because

technologies.

reductions require cooperation with the supply chain
and initiatives that extend over a wide range. In lightWith regard to specific emissions reduction targets, the company set targets and plansof this situation, the example on the right presents thecentered on the Management Strategy Subcommittee in the GX Promotion Department. In

reasons why target setting for Scope 3 is difficult andsetting targets, we set a 25% reduction in fiscal year 2030 compared to fiscal year 2018 (Scope

the plan for the timing of target setting.

1 + 2) based on Japan’s reduction targets for achievement of the Paris Agreement, energy
price and technology forecasts in scenario analysis based on Japan’s NDC, the TCFD
recommendations, and initiatives consistent with the roadmap formulated by the Ministry of
Economy, Trade and Industry. In addition, we have currently disclosed figures for Scope 3
tentatively, ; we are cooperating with suppliers to set targets for high-impact categories andwill establish a policy for handling by fiscal year 2024 and set targets by fiscal year 2025.

81

(10) Reduction of livestock-derived emissions (feed additives, etc.) | Example of a chemical company

Corporate profile
Industry: Chemical
Location: Japan
Business: Information, electronics and chemicals
business centered on manufacturing andsales of basic chemicals and functional
chemicals, healthcare business andagriculture-related business

Scope 1+2 emissions（10,000 tCO2e）

1. Strategies for achieving carbon neutrality
FY2030 targets

500
390

25

%
(Compared to FY2018)
FY2050 targets

Achievement of CN
100
2020

2030

Recent2040

Transition

PointsDisclosure of targetsetting forecast
Essentially, the Basic Guidelines call for the setting oftargets for Scope 1 to 3, but there are cases wheretarget setting is difficult at the present time because
reductions require cooperation with the supply chain
and initiatives that extend over a wide range. In light

Fuel
conversion⚫Energy saving and⚫Hydrogen and ammonia
higher efficiency
co-firing⚫Use of renewable energy⚫Use of low-carbon fuels

Raw material ⚫Artificial photosynthesis
conversion(RD&D)⚫Expansion of bio-raw
materials

Raw material ⚫Material recycling
circulation(RD&D)⚫Chemical recycling(RD&D)

2050

Realization of
decarbonization⚫Hydrogen and ammonia
mono-firing⚫Introduction of recycling
technologyof this situation, the example on the right presents theWith regard to specific emissions reduction targets, the company set targets and plans

reasons why target setting for Scope 3 is difficult andcentered on the Management Strategy Subcommittee in the GX Promotion Department. In

the plan for the timing of target setting.

setting targets, we set a 25% reduction in fiscal year 2030 compared to fiscal year 2018 (Scope
1 + 2) based on Japan’s reduction targets for achievement of the Paris Agreement, energy
price and technology forecasts in scenario analysis based on Japan’s NDC, the TCFD
recommendations, and initiatives consistent with the roadmap formulated by the Ministry of
Economy, Trade and Industry. In addition, we have currently disclosed figures for Scope 3
tentatively, ; we are cooperating with suppliers to set targets for high-impact categories andwill establish a policy for handling by fiscal year 2024 and set targets by fiscal year 2025.

82

(10) Reduction of livestock-derived emissions (feed additives, etc.) | Example of a chemical company

2. Avoided emissions
Target products and services:
Feed Additives｜Contribution to decarbonization of the livestock industry

Pointscustomers to support the realization of carbon neutrality in society. We will contribute to the

Reduction of N2O in the livestock industry

reduction of emissions in society by promoting the reduction of emissions by customers throughFeed additives contribute to reducing N2O, a GHG,
and are products that contribute to the reduction of

In addition to reducing emissions throughout the value chain, we are aiming to work withthe products that we manufacture. We have presented this initiative quantitatively using avoided
emissions, which is an indicator that quantifies the positive impacts on climate.

the GHG emissions of society as a whole. The
example on the right explains how the company’s
products are consistent with climate change handlingwhile providing a breakdown of livestock emissions. In
addition, it also discloses that feed additives havebeen raised among the countermeasures of the
Ministry of Agriculture, Forestry, and Fisheries. It
explains that they are consistent with national policy.

Feed additives, which we manufacture and sell as part of our agriculture-related business,account for 0.5% of our sales and are important products that contribute to climate change

mitigation by enabling the reduction of N2O in livestock excrement when mixed with livestock feed.
The livestock industry accounts for 14% of the world’s GHG emissions, and suppressing
gastrointestinal tract-derived emissions, such as the methane contained in cattle burps, andmanagement-derived emissions, such as the nitrogen oxide contained in swine and poultry
excrement, is an important measure for the handling of climate change. By reducing the nitrogencontent in pig excreta, the company’s feed additives can reduce the N2O of excrement while

Disclosure of sales ratio

maintaining productivity amount. The use of feed additives is also raised among the global

The Basic Guidelines and the WBCSD Guidance

warming countermeasures of the Ministry of Agriculture, Forestry and Fisheries.
N2O

recommend or require that the sales ratios of products

CO2

subject to avoided emissions are disclosed for the

36.5%■ Application of lime and urea0.8%

avoidance of greenwashing. In the example on theDomestic
livestockemissionsratio

right, the sales ratio is also disclosed when explaining

the eligibility for dealing with climate change of feed
additives, the products subject to the avoided
emissions.

■ Fuel combustion(2020)

CH4■ Rice cultivation

25%■ Fermentation in livestock digestive tract

15%■ Livestock excrement management 4.7%
■ Soil of agricultural land11.4%■ Livestock excrement management 7.6%
(Source) Ministry of Agriculture, Forestry and Fisheries83(10) Reduction of livestock-derived emissions (feed additives, etc.) | Example of a chemical company

2. Avoided emissions
Target products and services:
Feed Additives

Assumption for calculation

Pointsmanagement of excrement differs by the treatment method for each livestock, so we set

Reduction of N2O in the livestock industry
Feed additives contribute to reducing N2O, a GHG,
and are products that contribute to the reduction of
the GHG emissions of society as a whole. The
example on the right explains how the company’s
products are consistent with climate change handlingwhile providing a breakdown of livestock emissions. In
addition, it also discloses that feed additives havebeen raised among the countermeasures of the

Feed additives are combined with feed for pigs and poultry. Intensity based on the

different values for them in calculations. The avoided emissions of company products havebeen calculated only for pig feed additives and only for domestic sales, which account for 90%
of sales overall.
Avoided emissions due to the use of the company’s products are generated mainly at thedisposal stage (excrement management), but calculations over the lifecycle are required, so allof the feed manufacturing, including the feed additive manufacturing stage, feed
transportation, livestock management, and excrement management, have been included in thesubjects of calculation. In addition, the subject of comparison (baseline) is the case where
feed additives are not used in pig farming in Japan.

Ministry of Agriculture, Forestry, and Fisheries. It
explains that they are consistent with national policy.

Disclosure of sales ratio

No feed additives
in pig farmingin Japan(Baseline)

The Basic Guidelines and the WBCSD Guidance
recommend or require that the sales ratios of products
subject to avoided emissions are disclosed for the
avoidance of greenwashing. In the example on theWith feed additives
in pig farmingin Japan(During use of thecompany’s products)

right, the sales ratio is also disclosed when explaining

the eligibility for dealing with climate change of feed

Feed
manufacturingFeedtransportation

Livestock
management

Excrement
management

additives, the products subject to the avoided
emissions.
84

(10) Reduction of livestock-derived emissions (feed additives, etc.) | Example of a chemical company

2. Avoided emissions
Target products and services:
Feed Additives
PointsReduction of N2O in the livestock industry
Feed additives contribute to reducing N2O, a GHG,
and are products that contribute to the reduction of
the GHG emissions of society as a whole. The
example on the right explains how the company’s

For the specific baseline figures, we referred to the Greenhouse Gas Inventory Report by
Japanese government and the Japan Chemical Industry Association’s research results. For theconcept, we referred to publications of the National Agriculture and Food Research
Organization (NARO). As a result of calculations, avoided emissions from the raising to theshipment of 1 pig were 18.5 kgCO2e. We calculated avoided emissions by multiplying this by
the number of pigs raised using the company’s feed additives sold in fiscal year 2022. We havedisclosed the total figures for avoided emissions combined with the calculation results forother subject products in our ESG data book.

products are consistent with climate change handlingwhile providing a breakdown of livestock emissions. In
addition, it also discloses that feed additives havebeen raised among the countermeasures of the
Ministry of Agriculture, Forestry, and Fisheries. It
explains that they are consistent with national policy.

(

Emissions per pig raised
without feed additives inJapan(Baseline)

Avoided emissions
per head-

Emissions per pig raised by
combining feed with feed
additives in Japan(During use of thecompany’s products))×

Number of pigs
raised with thecompany’s feed
additives

18.5 kgCO2e / head

Disclosure of sales ratio
The Basic Guidelines and the WBCSD Guidance
recommend or require that the sales ratios of products
subject to avoided emissions are disclosed for the
avoidance of greenwashing. In the example on theright, the sales ratio is also disclosed when explaining

the eligibility for dealing with climate change of feed
additives, the products subject to the avoided
emissions.
8502(11) Control of emissions in waste disposal

Example of a waste treatment company

86

(11) Control of emissions in waste disposal | Example of a waste treatment company

1. Strategies for achieving carbon neutrality
Corporate profile｜Environmental contributions

Industry: Waste Treatment
Location: Japan
Business: Collection and treatment of general waste,industrial waste, specially controlled waste,etc. Also, joint development of recycled
products, etc.

Resource recovery and the reduction of environmental burden by the venous industry
As a company in the venous industry, our mission is to contribute to the building of arecycling-oriented society that apprehends waste as a resource. As a waste treatmentcompany, we collect and treat various types of waste, including household waste andindustrial waste nationwide, with industrial waste, including waste reagents, oil and sludge,
medical waste, and waste acids. It is assumed that the waste treatment business will also be

Pointsaffected by cost increases, including carbon pricing, due to increased environmental

Establishment of a governance structureawareness increases and the implementation of policy measures. On the other hand,

We established the Sustainability Committee, chaired

reductions in the use of virgin materials by improving waste recycling technology and moving

by the Representative Director, to promoteaway from simple incineration will be opportunities for our business. We will respond tosustainability, including handling climate change. The

climate change and contribute to the circular economy towards realizing a sustainable society,company has disclosed its governance system based

a common issue for humankind. (INPUT details are available on the website)on the TCFD, described the frequency of reporting to

INPUT

the Board of Directors, etc., and also set KPIs.

initiative that links those KPIs to the remuneration of

executive officers so that the actual implementationand promotion of sustainability management function.

Resource recovery

Moreover, the company has also described an⚫Waste⚫Water⚫Energy

3,000kt

1,000kt 150,000
MWhIncluding liquid waste,sludge, waste oil, etc.

⚫Technologicalcapability
Safe, high-quality
treatment andrecyclingtechnologies

BUSINESS⚫Waste collection and treatment, Recycling, Consulting

OUTPUT⚫Recycled products• Recycled fuel• Useful metal• Cement raw material• Recycled lead
• Fermented compost, etc.

⚫Drainage

680 kt⚫CO2 Emissions

50,000 t
87

(11) Control of emissions in waste disposal | Example of a waste treatment company

1. Strategies for achieving carbon neutrality
Corporate profile｜Governance and strategy

Industry: Waste Treatment
Location: Japan
Business: Collection and treatment of general waste,industrial waste, specially controlled waste,etc. Also, joint development of recycled
products, etc.

Governance
We have established a Sustainability Committee to implement steady environmental
contributions. The Sustainability Committee is responsible for strategies, planning, and risk
management concerning sustainability, reports to the Board of Directors each quarter, andadopts resolutions to promote sustainability in conjunction with management. Further, wehave linked emission reduction targets to the remuneration of executive officers so that the

Pointsimplementation and promotion of sustainable management functions.

Establishment of a governance structure
We established the Sustainability Committee, chairedby the Representative Director, to promotesustainability, including handling climate change. The
company has disclosed its governance system basedon the TCFD, described the frequency of reporting to

Board of Directors
Reports andproposals

Audits andinstructions

Sustainability Committee(Chair: Representative Director)

the Board of Directors, etc., and also set KPIs.
Moreover, the company has also described an
initiative that links those KPIs to the remuneration of

executive officers so that the actual implementation

D&I Promotion
Subcommittee

Climate change
Subcommittee on
Countermeasuresand promotion of sustainability management function.

88

(11) Control of emissions in waste disposal | Example of a waste treatment company

1. Strategies for achieving carbon neutrality
Corporate profile｜Governance and strategy

Industry: Waste Treatment
Location: Japan
Business: Collection and treatment of general waste,industrial waste, specially controlled waste,etc. Also, joint development of recycled
products, etc.

Strategy
In 2022, SBTi certified that our emission reduction targets set for the handling of climatechange were well below the 1.5 °C level. We aim to achieve net zero by fiscal year 2050. In
addition, we have set targets for the handling of climate change and contributing to thecircular economy aside from our emissions reduction targets and have also formulated specificactions for target achievement. Since demand for recycled fuel is expected to decrease along

Pointswith the decline in the use of fossil fuels, we have positioned the promotion of material

Establishment of a governance structure

recycling as an important initiative.

We established the Sustainability Committee, chairedby the Representative Director, to promotesustainability, including handling climate change. The
company has disclosed its governance system based⚫Scope 1 + 2: 35% reduction by FY 2028 (compared to FY2021)⚫Scope 3: 20% reduction by FY2028 (compared to FY2021)⚫Switch to renewable energy: 100% renewable energy by FY2030⚫Efficiency of water use: 20% improvement by FY2028 (compared to
FY2021)on the TCFD, described the frequency of reporting to
the Board of Directors, etc., and also set KPIs.
Moreover, the company has also described an
initiative that links those KPIs to the remuneration of

executive officers so that the actual implementationand promotion of sustainability management function.

⚫Conversion to ZEB and introduction of EVs⚫Energy-saving factories through the introduction ofturbo blowers and use of waste heat
⚫R&D on material recycling technology⚫Supply chain engagement

FY2050Net Zero

Our GHG emissions in the fiscal year 2022 increased by 3% from the fiscal year 2015. Thiswas due increases in energy-derived emissions caused by factors such as difficulties in the

procurement of renewable energy associated with the business withdrawal of electric powercompanies. On the other hand, non-energy-derived emissions have decreased for 5% byincinerating waste plastic and greatly reducing its volume. For the details of emissions, please
see the ESG data book.
89

(11) Control of emissions in waste disposal | Example of a waste treatment company

2. Avoided emissions
Target products and services:
Recycling technology｜Contribution to the reduction of the greenhouse effect through recycling

Pointsat the time of disposal and then goes into landfill as incinerated ash. We are contributing toConsideration of energy use and emissions

the realization of a decarbonized society and a circular economy by reusing resources throughwhen recycling
While the Ministry of the Environment has establishedthat emissions associated with recycling waste oil arezero because CO2 is emitted by using energy inprocesses such as oil-water separation, the company

takes these emissions into account when calculating
avoided emissions. At the same time, emissions other

Currently, some waste is treated by simple combustion, which emits a large amount of CO2

the use of recycling technologies.
The concept of avoided emissions is presented as an indicator of such contributions to thedecarbonization of society. The Basic Guidelines for Disclosure and Evaluation of Climaterelated Opportunities were formulated by the GX League in March 2023, organizing theleague’s way of thinking on avoided emissions. Based on the Basic Guidelines and the WBCSD

guidance, we have calculated the avoided emissions due to our recycling technology tovisualize the impact of our business.

than process-derived CO2 are included in recycling
emissions.

Consideration of the adverse impacts ofrecycling
The scope of calculation in the case on the rightcovers emissions at the time of disposal. However,after stating that there are emissions associated with

Simple combustion treatment and recycling
Waste oil, which is the subject of the company’s avoided emission calculation, accounts forabout 30% of all CO2 emissions from all types of disposal in Japan. About 40% of these aresimply combusted, and the carbon contained in waste oil is emitted into the atmosphere as
CO2 during combustion (according to a survey conducted by the Ministry of the Environment in2019). By reusing this waste oil as biodiesel oil using the company’s recycling technology, it
can be used as a new energy source.

the use of fuel reused after disposal, the company
then explains that these are not included as anadverse impact for the reason that emissions do not
greatly from normal fuel use and considers whether or
not there are adverse effects associated with recycling.
90

(11) Control of emissions in waste disposal | Example of a waste treatment company

2. Avoided emissions
Target products and services:
Recycling technology
PointsConsideration of energy use and emissions
when recycling
While the Ministry of the Environment has establishedthat emissions associated with recycling waste oil are

In the Emission Intensity Database for Calculating Greenhouse Gas Emissions and Other
Emissions of an Organization Through Its Supply Chain (Ver. 3.1) published by the Ministry of
the Environment, the emission intensity in the case where waste oil is recycled is set to zeroso this will lead to the reduction of our customers’ Scope 3 category 5 (Waste) emissions.
When calculating avoided emissions, the baseline is defined as emissions from simple
combustion processing, and the difference with the amount of fuel used when the company
recycles waste oil is calculated as the avoided emissions.

processes such as oil-water separation, the company

takes these emissions into account when calculating

Restaurants,
etc.

Procurement

Transportation

avoided emissions. At the same time, emissions otherthan process-derived CO2 are included in recycling
emissions.

Consideration of the adverse impacts ofrecycling
The scope of calculation in the case on the rightcovers emissions at the time of disposal. However,after stating that there are emissions associated withthe use of fuel reused after disposal, the company
then explains that these are not included as an

Scope 3downstream

Scope 3 upstream

zero because CO2 is emitted by using energy in

Use

Disposal(Simple combustion
processing)

The emissions of simple combustion processing decrease
due to recycling so these can be reduced to only theelectric power emissions related to fuel processing.

If 1 ton of waste oil is processed in JapanThe calculated value of avoided emissions in association with the recycling of waste oil is atheoretical value that compares the company’s processing results in fiscal year 2022 with theemissions generated when customers process waste oil by simple combustion. Emissions in
the case of simple combustion treatment are based on the carbon-derived CO2 contained inwaste oil and are calculated using emission factors from the Manual for the Calculation andReporting of Greenhouse Gas Emissions published by the Ministry of the Environment.

adverse impact for the reason that emissions do not
greatly from normal fuel use and considers whether or
not there are adverse effects associated with recycling.
91

(11) Control of emissions in waste disposal | Example of a waste treatment company

2. Avoided emissions
Target products and services:
Recycling technology
PointsConsideration of energy use and emissions
when recycling
While the Ministry of the Environment has establishedthat emissions associated with recycling waste oil arezero because CO2 is emitted by using energy inprocesses such as oil-water separation, the company

takes these emissions into account when calculating

On the other hand, the emissions due to the company’s recycling fall into two categories:
energy-derived emissions associated with oil-water separation and fuel processing and CH4 andN2O generated by wastewater treatment, calculated to be 30kgCO2e. Energy-derived emissions
are calculated by multiplying the amount of energy used by the energy intensity announced by
the Ministry of the Environment. For emissions associated with wastewater treatment, we use
the figures calculated by converting CH4 and N2O into their CO2 equivalents.
On this basis, avoided emissions per ton of waste oil in Japan were 2,970 kgCO2e / t, so basedon the company’s processing results in fiscal year 2022, avoided emissions associated with therecycling of waste oil were 100,000 t-CO2e.
3,000 kgCO2e

avoided emissions. At the same time, emissions other99%

than process-derived CO2 are included in recycling
emissions.

Consideration of the adverse impacts ofrecycling

30 kgCO2e

reduction（▲2,970kg
CO2e)

The scope of calculation in the case on the rightcovers emissions at the time of disposal. However,after stating that there are emissions associated withthe use of fuel reused after disposal, the company
then explains that these are not included as anadverse impact for the reason that emissions do not
greatly from normal fuel use and considers whether or
not there are adverse effects associated with recycling.

Simplecombustion
processing

Recycling into
biodiesel

Recycling into biodiesel leads to the reduction of emissions at the time of disposal, but
recycled fuel is consumed at the time of its use and CO2 is emitted. However, because theemissions at the time the fuel is used do not increase significantly compared to the use ofother fuels, we have not identified these as an important adverse impact, but we will continue
to evaluate the impacts on the environment from various perspectives.
92