The Driving Force/Booster of Value Creation — Sustainability Environment

Environmental Management System
We are working to improve our environmental performance by formulating strategies across the company andproactively working to solve problems based on our Environmental Management Policy.

Internal Environmental Audits

Basic Approach
Our environmental management policy declares anactive commitment to environmental issues facing society,including not only preventing environmental pollution but
also building circular economies, delivering carbon neutrality,

reducing environmental impacts, protecting water resources
and conserving biodiversity as key management challenges.
Under this policy we are striving to improve our environmental
performance.

Environmental Management Policy
In January 2006 we formulated our Environmental
Management Policy, reflecting the fact that we consider
an active commitment to the environmental issues facing
society to be key management challenges. In addition
to initiatives emphasizing the six items in all business
operations, we strive to communicate with a wide rangeof stakeholders, from international society to local
communities, and to seek the ideal form for a sustainablecement industry as a member of the GCCA (Global Cement
and Concrete Association) and the UNGC (United Nations
Global Compact).
Formulated in January 2006
Revised in April 2023

1 Pursuing Environmentally Conscious Business Activities
2 Compliance with Environmental Laws and Regulations
3 Contribution to the creation of Circular Economy
4 Efforts to achieve Carbon Neutrality
5 Promoting Global Technology Transfer

During Environment Month each June we deliver a message
from the president and provide educational materials on theenvironment page of our portal site to increase awarenessand encourage learning about the environment, and about

Company-wide EMS Readiness

In June 1997, we initiated ISO 14001 certification of eachof our plants and attained certification of all six of our directly
operated plants by 1999. In April 2009, we established acompany-wide EMS that extends the scope of application not
only to plants but also to the headquarters, branch offices, andcentral research laboratory, and received ISO 14001 certification
registration from the Japan Testing Center for Construction
Materials. The company-wide system underwent a renewal
audit for the fourth time in March 2021, and from April 2021
the certification was renewed with the Tosa Office added to thescope.

60

Secretariat: Environmental Administration Group,
Production Department
Depts. with jurisdiction

PlantsQuarries

Branches

Training to respond to environmental accidents (Kumagaya Plant)

Status of Compliance with Environmental Laws

Company-wide EMS Readiness

Production Dept., Mining Dept., General Affairs
Dept., Cement Business Division Administration
Dept. and Sales Dept., Mineral Resources Business
Dept., Environmental Business Development
Dept., Sustainability Promotion Dept.

environmental preservation activities throughout Taiheiyo
Cement Corporation and group companies. Each workplace also
engages in a number of different activities, such as conducting
training sessions related to accident response, viewing
environment-related videos, holding lectures and taking partin local cleanup activities. In FY2023, more than 340 activities
took place.

Environmental Education

6 Ecosystem Conservation

Structure and Operation
We have established an Environmental Management
Committee chaired by the officer in charge of the Production
Department as one of the specialized committees under
the Sustainability Management Committee, which reports
directly to the Board of Directors, to promote environmental
management and implement the Environmental Management
System (EMS).

We conducted internal environmental audits at all our sites
in FY2023.
As priority items from this year’s audit, confirmation ofcompliance reviews regarding environmental laws and otherrequirements, external communications and corrective actions
for unachieved items were identified. The status of a follow-up,
including corrective and preventive actions for nonconformity
with environmental requirements, and the status of responses
to emergencies were identified as items that plants must deal
with. Verifying the compliance status of service stations was
implemented as an item that must be dealt with by branches.
The audit identified 29 findings, and corrective actions weretaken for all three findings for which improvements wererequested.

CNPT*
Headquarters,
business sites
Central ResearchLaboratory* The Carbon Neutral Technology Development Project TeamAll of our cement plants in Japan, including those ofgroup companies, have obtained ISO 14001 certification.
Furthermore, all of our overseas cement plants in countries
that adopt ISO have obtained ISO 14001 certification and are
actively committed to environmental conservation. Cement
plants in countries where ISO is not adopted as the mainstream
standard operate their own EMS.

Environmental Accidents

In FY2023, we had four minor accidents and have taken
measures to prevent their recurrence. There were no violationsof environmental laws that could result in fines or penalties, norwere there any major accidents that would have an effect on theenvironment or ecosystems.

we quickly travel to the site in question to check the situation,
investigate the cause and provide an explanation. If we findthat our activities are the cause we implement improvements.
In FY2023, we received 109 environmental complaints,
including those from outside sources. We responded to 36 ofthese, which were associated with our operations.

Response to Environmental Accidents

Each plant maintains emergency response plans in
preparation for possible environmental accidents. They also
conduct periodic fire-fighting drills in cooperation with local
fire departments. Other training includes how to reduce
environmental impact when an environmental accident occurs,
and how to report it to a government entity.

Environmental Complaints

As we increasingly utilize ever more diverse forms of waste
and by-products the number of environmental issues we needto consider also increases. Therefore, we are ramping up ourefforts to reduce environmental impact through activities
such as introducing indoor storage and sealed containers for
waste and by-products, and improving our flue gas stacks. On
receiving an environmental complaint, whenever possible

Number of Environmental Complaints Received(Complaints)

50

Air/ﬁne particles
Noise
Water quality
48
Vibrations
Odor
Other

40
30

Non-consolidated

36
29

29

7
25

8

20
11
10
10
0

2019

2020

2021

2022

2023

(FY)

61

The Driving Force/Booster of Value Creation — Sustainability Environment

Mitigating Climate Change
Promoting measures to reduce CO2 emissions from a medium- to long-term perspective to contribute to theprevention of global warming and for sustainable growth.

Total Heat Consumption for Clinker Production GCCA

Basic Approach
specific net CO2 emissions by 10% or more from 2000 levels.
In March 2022, we announced "2030 Interim Targets" towards
carbon neutrality, and set targets of reducing emissions
intensity by 20% or more throughout the supply chain andreducing total (domestic) CO2 emissions by 40% or more (eachcompared to 2000).

A significant amount of CO2 is generated during cement
production. This is because the production process requires
a high temperature of 1,450°C and limestone, used as a raw
material, is decarbonated through a chemical reaction during
the calcination process (CaCO3 → CaO + CO2). In 2015, wetherefore set in the CSR Objectives for 2025 a target for Taiheiyo
Cement Corporation and our group companies of reducing

Biomass fuels
Alternative fuels
Fossil fuels(TJ)
100,000
80,00091,37692,898
1,674
11,433

1,680
10,92889,401
1,770
10,93879,791

76,69374,866

Efforts Related to CO2 Emissions Reduction in the Cement Production Process

2019

2020

2021

2022

Ratio of Alternative Fuels and Biomass Fuels

Progress of the Group's CO2 Emissions Reduction Targets
TargetIndicators(compared to 2000)

CSR Objectives for 2025
Reduction rate of specific net CO2
emissions*¹:

10%
or more2030
Interim
TargetReduction rate of specific
CO2 emissions across the
supply chain*²:
Reduction rate of
total (domestic)* CO2emissions*³:

Performance

FY2022

8.3%

Progress and Evaluation

20

Improved by 1.9% from FY2022 due to increased
ratio of alternative fuels use

10

FY2023
10.2%

15

200
0

9.6%

36.0%

9.2%

42.7%

Decreased by 0.4% from FY2022 due to anincrease in Scope 2 and Scope 3 specificemissions due to clinker purchases, as a result of
the renovation of the production line at Taiheiyo
Cement Philippines, Inc.
Emissions decreased due to an increase in theratio of alternative fuels used and decreased
cement production, resulting in a 6.7%
improvement from FY2022.

Alternative fuels
Biomass fuels
13.8

(FY)

GCCA

19.9

14.1

14.2

15.3
17.6

12.0

12.3

12.2

13.3

1.8
2019

1.8
2020

2.0
2021

2.0
2022

5
0

20%
or more40%
or more(%)

In order to reduce CO2 emissions, we have been working toconserve energy by installing energy-efficient equipment andimproving the stability and efficiency of our kiln operations. We
have also been implementing measures such as expanded useof waste- and biomass-derived energy sources to decrease ourrate of use of fossil fuels. As a result of these efforts, specific net
CO2 emissions in FY 2023 were 661 kg/t-cementitious product,
achieving our FY2026 specific emissions target of 662 kg/
t-cementitious product.

62

Specific Net CO2 Emissions
Speciﬁc emissions (left axis)
Total emissions (right axis)(kg-CO²/t-cementitious)
725
22,624

GCCA

22,827

21,83230,00021,626

700

675(thousand t)

17,997

671

675

675

675

20,00010,000
661

650

2019

2020

2021

2022

2023 (FY)

0

742

731

658

2.3
(FY)
2023

Trend in direct specific CO2 emissions
across the supply chain

55

55

51

65

Benchmark
2000

2021

2022

2023

(FY)

Targets2030

Trend in Total Domestic CO2 Emissions

Total CO2 emissions from cement plants (Scope 1+2, but
excluding alternative fuels) have decreased significantly
compared to 2000 (our benchmark year). This is due todecreased coal use via an increase in alternative fuels and adecrease in cement production.
Regarding the reduction of total domestic CO2 emissions
by 40% or more (compared to 2000), which is one of our2030 Interim Targets, the reduction rate was 42% in FY2023,
exceeding the interim target.

Total Domestic CO2 Emissions 

GCCA(thousand t)
25,000

Scope 3 (category 1) specific emissions increased dueto the renovation of the production line at Taiheiyo Cement
Philippines, Inc. and due to clinker purchases. There wasa steady decline in Scope 1+2 emissions, with an 11.0%
reduction from 2000 levels.

21,64720,00015,00014,17013,8642021

2022

12,403

12,7292023

Targets
2030

10,0005,000
0*1 Scope 1 (excluding alternative fossil energy and CO2 resulting from on-site power generation)*2 Scope 1 (excluding alternative fossil energy) + Scope 2 + Scope 3 (Category 1,3)
*3 Scope 1 (excluding alternative fossil energy) + Scope 2

Trend in CSR Objectives for 2025

743

400

61,111

2023

GCCA

Scope 3600

20,000
0

822

800

1,807
76,291
11,741
1,787
13,39378,768

Scope 1+2

1,000

88,41460,00040,000Specific CO2 emissions in the supply chain

(kg-CO2/t-cementitious)

Benchmark
2000

(FY)

Reducing CO2 Emissions during Transportation
We contract the delivery of our raw materials, fuels andproducts to transportation companies, and are striving to reduce
CO2 emissions as a specified consigner designated under the
Act on Rationalizing Energy Use. In trucking, we encourage
not only the installation of digital tachometers on vehicles, butalso the planning of transporting goods on return trips, ecodriving and energy efficient devices such as digital eco-tires. In
shipping, we operate new ships that are equipped with various
energy-saving features. We are also supporting energy-saving
operations for conventionally powered ships.
Our FY2023 CO2 emissions were roughly 3% lower than in
FY2022.



CO2 Emissions by Mode of Transportation (FY2023)

Non-consolidated

Mode ofTransportation

Tonnagetransported(thousand t)

AverageTransported
CO2
distance
tonneemissions
transported
kilometers(thousandt)(km)(thousand tkm)

Ship

17,726447

7,920,429

105

Truck

14,87956

828,317

47

Railway

4,877

26

127,505

3

Total

37,482252

8,876,251

155

63

The Driving Force/Booster of Value Creation — Sustainability Environment

Improving Resource Efficiency
Promoting the recycling of waste and by-products into alternative raw materials and fuels for cement.
Through this, we are promoting the formation of a circular economy from the perspective of prolonging the life oflandfills and preventing the depletion of natural resources.

Waste and By-products Used in Cement
Manufacturing Processes

Resource Recycling with Industries
Electric power utilities

We accept coal ash produced at coal-fired power plants anduse it as a substitute for clay as a raw material in cement. In
addition, we operate ash centers to use more ash effectively. We
also supply power plants with limestone powder which is used
to scrub the harmful sulfur oxides from the exhaust producedby the burning of coal. The reaction of the limestone powder
with sulfur oxides forms by-product gypsum, which we makeeffective use of as a raw material for cement.

Steelmakers

In the iron and steelmaking process, impurities are removed
from iron ore to make iron. We supply the limestone andquicklime used in the refining process. We also use blast
furnace slag, a by-product that remains after the refining
process, as raw materials for cement and as cement admixtures.

Resource Recycling with Local Communities
In addition to industrial waste, we also use general waste
generated by local governments, municipal waste incineration
residues, water purification sludge and sewage sludge as raw
materials and fuel to manufacture cement. The total amountof waste generated in Japan in FY2022 was 40.95 million
tonnes, of which approximately 77% was incinerated, and 3.62
million tonnes of unused incineration residues were buried in

Examples of Waste and By-products Used
Raw materials

Coal ash, blast furnace slag
Dirt and sludge
Non-ferrous slag
Steelmaking slag
Construction soil
Molding sandlandfill sites.
The Group's systems for recycling municipal waste thatmeet the needs of society include the Incineration Residues
Recycling System, the AK System and the Ecocement System.
We use the set of these three technologies related to systems
for recycling municipal waste and strive to make effective use ofsuch resources and resolve environmental issues.
Limestone

All of our directly operated cement plants in Japan recycle
waste and by-products into alternative raw materials and fuels
for cement. This helps to prolong the life of landfills, preventthe depletion of natural mineral resources, limit greenhousegas emissions and reduce emissions of pollutants into theatmosphere.
In FY2023, the amount of waste and by-products useddecreased by 473 thousand tonnes from the previous fiscal year
due to a decrease in cement production, but the amount of dirt,sludge, waste plastic and municipal waste incineration residues
that was accepted increased.

T rends in Amount and Intensity of Waste and ByNon-consolidated
products Used
8,000

Total amount: left axis (thousand t)
Intensity: right axis (kg/t-cement)

6,478

6,625

6,387

6,000
4,000
2,000
0

64

409.4

6,108

409.5

600
6,244

402.7

5,771

405.2

500

409.6

300

267.3
2001

400

2019

2020

2021

2022

2023

(FY)

200

 mount and Intensity of Main Waste and ByA
Non-consolidated
products Used (FY2023) 
Waste and By-products

Coal ash
Blast furnace slag
By-product gypsum
Unburned ash, dust
Dirt and sludge
Construction waste
Waste oil
Wood chips
Waste plastic
Water treatment plant sewage
sludge and ash
Incineration residues frommunicipal waste
Municipal waste
Other
Total
Raw material-related
Fuel-related
Total

Amount used
Intensity(thousand t) (kg/t-cement)

1,820
991
514
471
367
148
148
19
221

129.2
70.3
36.4
33.4
26.0
10.5
10.5
1.4
15.7

350

24.8

147

10.4

19
557
5,771
5,212
559
5,771

1.3
39.5
409.6
369.9
39.7
409.6

Incineration residues frommunicipal waste
Household water and sewage
treatment sludge

Fuels

Waste oil, waste plastic
Waste tires, wood chips
RDF (municipal waste pellets)
Recycled oil

Raw mill

By-product gypsum

FGD gypsum
Chemically derived gypsum

Admixtures
Slag powder
Fly ashFinish millRotary Kiln

Various otherraw materials

Recycled-Waste-to-Cement System

Raw materials

Raw Material
Preparation Process

Limestone, iron waste, etc.
are mixed together, dried andground in a raw mill.

Burning Process

Finishing Process

After preheating, the materials
are burned in a rotary kiln. The
resultant material is then rapidly
cooled to form an intermediate
product called clinker.

A small amount of gypsum isadded to the clinker and groundin the finish mill to produce
cement.

Truck

Railway

Reference: Resources required to produce one tonne of cement
Iron waste: 30kg
Silica: 70kg
Clay: 225kg

Transportation
The cement is thentransported by ship, truck orrailway.

Limestone: 1,206kg
Clinker

Ship

Gypsum: 37kg

Data source: The Japan Cement Association

65

The Driving Force/Booster of Value Creation — Sustainability Environment

Reducing Environmental Impact
Air pollutants generated from cement production are primarily NOx, SOx and dust in combustion gases emitted from
cement kilns.
To ensure the appropriate management of these substances, we are striving to ensure proper operations throughmeasures such as continuous monitoring of emission concentrations in exhaust gases.

Preventing Environmental Pollution

Reducing Waste

Air Pollution

Air pollutants generated from cement production are
primarily NOx, SOx and dust in combustion gases emitted from
cement kilns. To ensure the appropriate management of thesesubstances we strive to reduce air pollutant emissions throughmeasures such as installing equipment to continuously monitor
emission concentrations, improving NOx reduction systems andinstalling bag filter equipment to capture dust emissions. Our
target is to maintain our FY2011 emissions levels. The details
regarding emissions are provided in ESG Data (p. 118).

Specific Emissions of Clinker for Main Pollutants GCCA
NOx (left axis)(g/t-clinker)

SOx (right axis)
Dust (right axis)

2,000
1,500
1,000

1,300
62
47

30
2020

42
20
2021

41
16
2022

50

41
19
2023

(FY)

0

75

GCCA

96.0 95.0 97.7 100.0 97.7 100.0 97.7 100.0 97.6 100.0 97.5 100.0
96.8
96.4
97.0
96.2
95.7

Separationtank

Oil film detectors,
turbidimeters, pH
metersOn-site power generation

Soil Contamination

2011

2019

2020

2021

2022

P ercentage of clinker volume manufactured in a kiln equippedwith continuous NOx measurement
Percentage of clinker volume manufactured in a kiln equippedwith continuous SOx measurement
Percentage of clinker volume manufactured in a kiln equippedwith continuous dust measurement* Calculation results were reviewed and retroactively revised.

2023

(FY)

Initiatives at Plants

Our cement plants reduce the amount of waste handled bydisposal contractors by reusing waste from operations as raw
material for cement production. We also endeavor to reduce
waste that ultimately ends up in landfill via measures such as
the use of chromium-free kiln bricks.
In FY2023, there was 1.9 tonnes of waste, compared to thetarget of 40 tonnes or less.

Volume of Waste to Landfill at Plants 

Non-consolidated

Initiatives at Service Stations

Service stations (SS) reduce the waste handled by waste
disposal contractors by returning any residual cement thatremains in silos after switching the cement products. Returned
cement is recycled as raw material.
In FY2023, the recycling rate was 73.4%, compared to thetarget of 50%.

Recycling RatioNon-consolidated

(%)

(t)

100

40.0

90

30.0

80

20.0

70

83.5

77.9

80.3

2020

2021

73.4

65.7

60

10.0
0

1.0

0

0.6

1.3

1.9

2019

2020

2021

2022

2023

50
2019

(FY)

2022

2023

(FY)

StreamchannelAppropriate management of chemicals
Ocean

59.0

25

66

Sedimentationtank

Cooling
tower

Water recovery
cistern
Seawater50

0Equipmentcooling

River
water

Monitoring Rate
100

Gutters63* Calculation results were reviewed and retroactively revised.

(%)

Rainwater

Cement kiln

2019

100

Water
sprinklers

2011

1,277

Example of Water Circulation Flow at a Cement Plant

Water cistern

0

27

1,282

1,227

150
1,434

Most of the water discharged from our plants to public
watercourses is cooling water and not polluted as definedin the Water Pollution Control Act. At our cement plants allwater resources are reused as circulation water to minimize
water discharge into public watercourses. Moreover, we aretaking measures to prevent the leakage of contaminants byinstalling bunds around oil tanks and acid/alkali tanks, as wellas installing sedimentation tanks, water-oil separation tanks,
oil film detectors, pH meters and suspended solid sensors on
water discharge routes that connect to public waters.

Ground
water

500

1,187
67

(g/t-clinker)

Water Contamination

Across FY2008 and FY2009, we evaluated the risks associatedwith cement plants that may be sited on contaminated groundby appointing an expert consultant to undertake a soil history
survey, conducted drilling surveys, and verified whether or not
the soil is contaminated. Actions have been taken as necessary
based on the findings, such as the installation of observation
wells to monitor ground water contamination and the removalof contaminated soil.
We are also working to eliminate the possibility of soil
contamination via measures to prevent the leakage of
wastewater from scrapyards or fluid from oil tanks, acid/alkalitanks, pipes and so forth.

Pollutant Release and Transfer Register (PRTR)

FY2022

FY2023

Safety Corporation (JESCO) in 2006 and have prioritizedprocessing.
In FY2023, one capacitor, one transformer and 1,110
electrical ballasts stored at the Kamiiso Plant, Ofunato Plant,
Kumagaya Plant, Saitama Plant, Fujiwara Plant, former Chichibu
Plant, former Kawara Plant, Garo Quarry and branch officeservice stations were processed, as well as three unprocessedcapacitors that were in the Kyushu, Chugoku and Shikoku area.
Pollutants such as electrical ballasts stored at the former
Osaka Plant and former Kawara Plant are planned forprocessing in FY2024, and we are scheduled to complete theprocessing of all high-concentration PCB waste.

198

186

Treatment of High-concentration PCB Waste Non-consolidated

The PRTR Law requires that we report on equipment
installed at our Kumagaya plant for the washing of municipal
waste incineration residues. This washing process uses water,and our total discharge of dioxins and ferric chloride into public
waterways in FY2023 are as shown below.

 eported Levels of Dioxins and Ferric ChlorideR
Non-consolidated
Emissions
Emissions
Dioxins (mg-TEQ)

FY2021Ferric chloride (kg)Management of PCB Waste

Reported Levels

0.0

170

0.0

0.0

We properly store and dispose of high and low
concentrations of PCB waste in accordance with the Amendment
to the Law concerning Special Measures for Promotion of
Proper Treatment of PCB Wastes (hereinafter referred to as the
PCB Special Measures Law).
For high-concentration PCB waste with an early disposal
deadline as stipulated by the PCB Special Measures Law, we
signed a processing contract with the Japan Environmental(Unit: No. of machines)

Waste

Storedin FY2022 New Targets(as of March for FY2023
31, 2022)

FY2022
processing
results

Treatedin FY2023

Treatment
Scheduledfor FY2024

Capacitors

4

0

4

0

0

Transformers

1

0

1

0

0

Electricalballasts

948

168

1,110

6

6

Total

953

168

1,115

6

6

67

The Driving Force/Booster of Value Creation — Sustainability Environment

Conserving and Restoring biodiversity
We recognize that our quarrying activities are most closely related to biodiversity.
We are aiming to achieve nature positive by working with local communities, from the development and operation ofquarries through to the use of old quarry sites.

Environmental Impact of Quarry Operations
Throughout the group we believe that balancing theconservation of ecosystems in local communities anddevelopment of the communities themselves are important inquarry operations. With this belief, we hold discussions with

Activities to Reduce Environmental Impact
Environmental Impact Assessment

local governments, local communities and academics while
operating quarries. This helps to ensure we not only prevent
pollution but also conserve biodiversity and water resources
while minimizing our environmental impact.

Surveying & Development

Operation (Quarrying)

Quarry Closure (end of quarrying)• Environmental Impact Assessment• Development Plan
• Environmental Measures Plan

• Rare animal and plant conservation• Measures to prevent quarry pollution• Quarry site greening• Site use

Reducing Environmental Impact

Cement production starts with quarrying limestone, theprimary raw material for cement. We also quarry many mineral
resource products used as aggregates and industrial raw
materials. Because forests are cleared, topsoil is excavatedand limestone is extracted at a quarry, it inevitably affects theenvironment and ecosystem of the quarry’s area. However,
because the limestone, sand and other materials that we quarry
only require crushing for particle size adjustment and sorting,our operations are unlikely to cause chemical contamination
to surrounding areas. In addition, we minimize the amountof waste stones generated during our limestone quarrying byusing them as construction materials.

The group operates 19 major limestone quarries around theworld, which are located near to our cement plants, with a totalsite area of 5,355 ha.
Based on the GCCA guidelines, and using the Integrated
Biodiversity Assessment Tool (IBAT) provided by BirdLife
International, we checked if any of our group’s limestone
quarries are in any of the protected areas defined by theInternational Union for Conservation of Nature (IUCN) andconducted a biodiversity assessment.
Two quarries in Japan are included in areas of biodiversity
value*, and none overseas. All these quarries have obtained thenecessary licenses from their local governments and conduct
environmentally sound quarrying operations. Greening atformer quarry sites is being implemented in accordance withplans for environmental restoration. They have no pending
litigation concerning biodiversity or other environmental
issues.
GCCA

Quarries

Site area(ha)

Applicable*
quarries

Japan

13

2,835

2

United States

4

1,903

0

Asia-Pacific

2

617

0

Ratio of quarries with rehabilitation plans (%)

95

RegionKanamaru-Maimai (provided by Mie Prefecture Environmental Conservation Agency)
One of the rare species of wild animals and plants designated by Mie Prefecture forwhich conservation activities are being promoted at Fujiwara Quarry.

Participation in the 30by30 Alliance

Limestone Quarries of the Group

Limestone Quarries of the Group* A protected area whose purpose is to conserve habitat mainly through management
activities. Includes IUCN Category IV (habitat or species management area) Protected
Areas.

68

Throughout the group we believe that balancing theconservation of ecosystems in local communities anddevelopment of the communities themselves are important inquarry operations. In developing quarries, we conduct ex-ante
assessments of environmental impact of quarry developmentswith the cooperation of experts, based on environmental
research of the development area such as on biodiversity andwater resources. We then discuss the results of the research withstakeholders before finalizing a development plan. Moreover,
we regularly monitor the surrounding environment during
the development and operations of quarries, and report to ourstakeholders on the environmental impact that the quarries
have in their areas.
We contribute to the realization of Nature Positive as
advocated by TNFD*¹ through biodiversity initiatives, conduct
our business activities based on our management philosophy,
and promote the conservation of rare flora and fauna inlimestone quarries related to biodiversity and the greening ofquarrying areas and former sites.
From FY2024, we will participate in the "30 by 30 Alliancefor Biodiversity" established by the Ministry of the Environment,
aiming to be registered in the OECM*² database.
30by30 refers to the target of preserving at least 30% of
terrestrial and marine areas as healthy ecosystems by 2030.
Achieving this target in each country was promised at the 2021
G7 Summit.

Biodiversity Protection

When environmental impact assessments determine that
protection is required at a limestone quarry that we own, we
protect rare species via measures such as installing protective
equipment, transplanting and restricting development work.
Chichibu Taiheiyo Cement Corporation is actively involvedin the conservation of rare plants. At Kanouyama Quarry locatedin Kanna Town, Tano District, Gunma Prefecture, 38 rare plants
native to the quarry have been transplanted into a botanicalgarden set up in the mine with the cooperation of a local nature
conservation group. At the same company’s Miwa Quarry, whichis conducting quarrying on Mt. Buko, located in Chichibu City
and Yokoze Town in Saitama Prefecture, we are preserving andincreasing the population of 68 native plant species together
with local experts and using the Central Research Laboratory’s
biotechnology.
At the Fujiwara Quarry of Mie Taiheiyo Mining Company(formerly Ishizaki Co., Ltd.), we have been engaged inconservation activities since 2012, including transplantationand post-event surveys, in cooperation with experts, for the
Kanamaru-Maimai, a Mie Prefecture-designated rare animal
species that is found in the limestone area around Mt. Fujiwara.

Iwakinbai(Kanouyama Quarry)*1 Abbreviation for Taskforce on Nature-related Financial Disclosures.
*2 Abbreviation for Other Effective area-based Conservation Measures. It refers to areasthat are being conserved through private and other initiatives, and areas wheremanagement that is not aimed at conservation also results in contributing to theprotection of the natural environment.

Oobiranji(Kanouyama Quarry)

69

The Driving Force/Booster of Value Creation — Sustainability Environment

Appropriate use of water resources

Disclosure Regarding Recommendations of the TCFD

In our use of water resources we are striving to analyze water risks and understand the status of water use as issues
that may emerge in the future, and are working to ensure the proper use of water resources.

We announced our support for the recommendations of the Task Force on ClimateRelated Financial Disclosures (TCFD) in June 2019 and have been performing
scenario analysis since then. Following the Glasgow Agreement at COP26 in
November 2021, we have conducted scenario analysis using 1.5°C and 4°C as the CO2 reduction scenarios applicable to us.

Appropriate use of water resources

Setting Scenarios

Water Risk Analysis

According to the results of the water risk analysis conductedusing the Water Risk Filter*, the average score for the total basinrisk for all our plants (weighted average taking into account thecement production volume) was 2.4. The highest total basin risk
score was 2.8, which was 0.4 lower than that of the previous
year. The volume of cement produced at the plant in question
accounted for about 17.6% of the production volume of all theplants. However, when we analyzed conditions at that plant, nourgent issues were identified.
* A water risk mapping tool developed by the World Wide Fund for Nature (WWF). It is
used to evaluate business impacts related to physical risks such as water scarcity andwater quality. The maximum score is 5.0, and the higher the score, the greater the risk.

Water Consumption

Most of the water used at our cement plants is for thecooling of production equipment, exhaust gas and on-site
power generators. Therefore, the water discharged from theplants is mostly cooling water, which is not polluted as definedin the Water Pollution Control Act. All the fresh water used at
the plants is circulated and reused, except for the household
wastewater, as we strive to reduce our water withdrawal andlessen the impact of wastewater on bodies of water. Seawater
is used to cool on-site power generation facilities at our plants
near the ocean and then released back into the sea after use.
Our total fresh water used in FY2023 was about 11.86
million m³ and our fresh water used to produce one tonneof cement was 0.387 m³. However, most of this water is not
used as a raw material and evaporates after being used to coolequipment or gas.

Water Consumption 
FY2021

FY2022

FY2023Ground water

16,884

18,65618,75918,706

17,673

Industrial water

3,251

3,325

3,078

2,108

1,630

26,656

27,607

27,192

26,341

24,649Total fresh water
withdrawal (I)
Total seawater
withdrawal

0.438

0.4

0.412

0.421

0.409

0.2
0.1
0
2019

2020

2021

2022

(FY)

At present there are no specific concerns regarding water
resources that may be raised by local communities. However,
we are striving to reduce water withdrawal with a view toconserving water resources. In the future, we will maintain close
communication with local communities and contribute to theappropriate use of local water resources.
Taiheiyo Cement Philippines, Inc. supplies clean water tolocal communities from wells drilled by the company for water
to use in its plants. At CalPortland Company’s Rocky Canyon
Aggregate Quarry in California, USA, a system for the sustainable
use of water has been built to improve the collection andstorage of rainwater and spring water at the site. Developing
these water resources has made it possible to secure a supply of
the water it needs in its work, without having to build new wells
or increase the volume of ground water it extracts, and also tokeep the amount of water that drains out of the site, which is
subject to strict regulations, to a bare minimum.

5,626

5,355

Reference Scenarios
Assumed Carbon Price

5,527

1

Scenario Overview
Business Impact
Category

2. Market

2

145,476

System for the sustainable use of water (CalPortland Company)

176,432

174,979

173,424

173,235

170,125

12,167

13,674

13,447

13,246

12,792

Water Resource Conservation

149,781

147,377

146,368

147,062

145,639

Total water discharge

161,948

161,051

159,815160,308

158,431

Total fresh water used (I-O)

14,48913,933

13,745

13,095

11,857

In quarrying we also pay close attention to protecting not only
terrestrial animals and plants but also water resources such as
rivers and natural springs. From the perspective of conserving
water resources, spring water and rainwater is discharged fromquarrying after treatment to minimize impact on the environment
outside of the quarrying area by passing through regulatory
pond. In some quarries we drill wells for domestic water andsupply this water to local communities for everyday use.

Create climate-related scenarios for each key driver,referring to the published climate-related long-term
scenarios that were developed based on scientific grounds

STEP

3

Evaluate the anticipated business impacts in eachscenario

STEP

4

Review responses to the business impacts, which are,in our view, positively or negatively significant in ourevaluation

STEP

5

1.5°C scenario (consistent with the Paris Agreement)

4°C scenario (ineffective response to climate change)

US$130 (approx. 17,550 yen)/tonne-CO2

US$30 (approx. 4,050 yen)/tonne-CO2

IEA net-zero Emissions Scenario (NZE)
Carbon Emissions Pathway: RCP 2.6

IEA Stated Policies Scenario (STEPS)
Carbon Emissions Pathway: RCP 8.5

3. Technologies
4. Reputation
5. Physicalevents4°C Scenario

Government and industry are working together toward
carbon neutrality. Development consistent with the industry’s
transition to carbon neutrality (CO2 capture, utilization andstorage technologies) is progressing. The effects of climatechange are being addressed to a certain extent throughnational resilience policies and other measures.

Drivers• Introduction of regulated carbon pricing
Tighter CO2 emission regulations

There is a mismatch between our efforts towards carbon
neutrality and the regulations applicable to the cement industry,
which would put us at a competitive disadvantage. Profits fromthe development of the innovative technologies that we promote
are limited. In addition, the effects of climate change are
becoming more severe, such as frequent extreme climatic events.

1.5°C Scenario
Negative
Positive

M
S• Increased demand for low-carbon construction materials• Reduced operation of coal-fired thermal power plants

146,894

Determine the causal relationships between climaterelated drivers, interim outcomes and implications.
Then identify key drivers

STEP• Soaring fossil energy prices

5,346

Conduct a benchmark survey to identify climate-relatedrisks and opportunities for the cement industry andidentify relevant drivers

STEP

1.5°C Scenario

1. Policy andRegulatory

146,232

Total seawater discharge

2023

Appropriate Use of Water Resources

147,372

Total fresh water
discharge (O)

0.387

0.3

149,776

Total water withdrawal

70

0.5

We focused our scenarios, evaluation and analysis on thebusiness risks and opportunities that climate change will poseto the Group by the year 2050. We identified events that willmaterially impact climate-related risks and opportunities,
based on climate-related, long-term scenarios founded on
science, such as the World Energy Outlook (WEO) and Energy
Technology Perspectives (ETP) published by the IEA and The
Fifth Assessment Report (AR5) published by the IPCC. Then wecreated two climate-related scenarios, 1.5°C and 4°C, that will
have impact on the business operations of the Group, alongwith appropriate carbon price assumptions for the 2030s using
the IEA World Energy Outlook 2021 as a reference.
To follow up, we analyzed the business impacts in every
scenario by size and time horizon (short, medium and long).

(Unit: thousand m³)

FY20206,521(m³/t-cementitious)

GCCA

FY2019Surface waterA mount of Fresh Water consumption per unit of
GCCA
production Process of Selecting Material Climate-related
Risks and Opportunities and ScenariosM• Progress in the development of CO2 capture andutilization technology

L

4°C Scenario
Negative
Positive

M
M
M
S

L

M

• Improved technologies for resource recycling andadvanced circular economies

M• Increased awareness of delivering carbon neutrality

M

M

S

• Chronic - Higher average temperatures, higher sea levels

S

S

M

S

• Acute - Intensification of climatic events (e.g., flooding,high temperatures)

S

S

L

S

[L](Large): Impact of about 100 billion yen in terms of net sales[M]Medium: Impact of about 1-10 billion yen in terms of net sales[S]Small:
Impact up to about 1 billion yen in terms of net sales

71The Driving Force/Booster of Value Creation — Sustainability Environment

Providing Environmentally Sound Products and Services

External economic benefit (EEB)In response to social needs for environmental conservation, we leverage the advantages of the cement and related
technologies we have cultivated over the years to provide environmentally sound products and services that
contribute to resource conservation and CO2 reduction.

We evaluate the socioeconomic benefits from environmental impact reduction due to increased recycling of waste inmonetary terms.

Low-CO2 emission limestone-blended cement "ADVANCEMENT"

Basic approach

Our U.S. group company, CalPortland Company, haslaunched a new product series called ADVANCEMENT, which
is a blend of Portland cement and limestone. By replacing
up to 15% of clinker with limestone ADVANCEMENT is a lowCO2 emission product that can reduce CO2 emissions byapproximately 10% compared to ordinary Portland cement as
specified by ASTM C150.
ADVANCEMENT TYPE 1L complies with ASTM C595
and AASHTO M240 and is also certified by the California
Department of Transportation, allowing it to be widely used
in infrastructure construction, including highways. Following
test marketing in 2021, CalPortland Company will graduallyswitch from ordinary Portland cement (TYPE II/V) produced at
its Mojave Plant to ADVANCEMENT TYPE 1L. Approximately 1.2
million tonnes of ADVANCEMENT will be produced annually,
reducing CO2 emissions by approximately 95,000 tonnes.
ADVANCEMENT LT is light-colored and aesthetically pleasing
while maintaining the low-CO2 emission performance, andcan be used in applications to meet the aesthetic expressionof architects and designers. In addition, ADVANCEMENT HS issuitable when particularly high sulfate resistance is required. In
this way, ADVANCEMENT is a series of low-CO2 emission cement
products that are tailored to the application and performancerequirements.

ADVANCEMENT delivery trucks

Thermal Insulating Paving Blocks "Thermalbarrier ILB”
At Taiheiyo Precast Concrete Industry, we sell "Thermalbarrier
ILB," which are paving blocks that suppress the absorptionof heat from solar radiation, thereby reducing the rise intemperature and heat retained in the road surface, andmitigating the hot environment in pedestrian and roadsideareas. The surface layer of this block is made of material thatis highly effective in reflecting near-infrared radiation, andthe base layer is made of concrete with cavities to reduce theabsorption and retention of heat from solar radiation. This
contributes to limiting the heat island effect by reducing not
only the daytime hot environment but also heat radiation atnight.
The performance of the Thermalbarrier ILB was confirmed tobe effective in reducing road surface temperature by 11.5°C or
more in a comparison test with asphalt pavement conducted by
the Japan Interlocking Block Pavement Engineering Association,and has been certified as "COOL BLOCK PAVE". In addition to its
excellent thermal insulation performance, the Thermalbarrier
ILB series also includes a product that, depending on thespecifications of the base concrete layer, provides the block
itself with water retention performance and permeability toallow rainwater to permeate into the roadbed. This product also
effectively uses crushed roof tiles, molten slag produced in the72

cooling process after incineration of municipal waste, and glass
cullet made from processed wine bottles, which would normallybe disposed of as industrial waste, as recycled aggregates.
Recently, Thermalbarrier ILB has been widely used inconstruction projects, such as Oi Central Seaside Park Sports
Forest and Kumagaya Sports Culture Park in Saitama Prefecture.

Construction example: Thermalbarrier ILB laid around the rugby field at Kumagaya Sports
Culture Park, Saitama Prefecture

We use the external economic benefit (EEB) evaluation
method with our Recycled-Waste-to-Cement System to express,
in monetary terms, our evaluation of the socioeconomic
benefits from environmental impact reduction due to increased
recycling of waste accepted from outside the company. We
calculate that we created a social benefit of 87.2 billion yen
in FY2023. The reduction in the amount of natural resources,
waste and by-products in FY2023 decreased from the previous
fiscal year, leading to an approximate 4% reduction in economic
benefit on the previous fiscal year.

Crude oil: import price. Natural resources: estimated price.
Waste: controlled landfill costs in the Tokyo area.
• A portion of the EEB is accounted for in our profit and loss
statement.

Climate change
mitigation

CO2

2,039,515

3,000

6.1

Taiheiyo Cement’s External Economic Benefit
Evaluation

Depletion of energy
resources

Crude oil

115,754

18,400

2.1

Depletion of mineral
resources

Naturalresources

4,545,574

1,000

4.5

Shortage of landfills

Waste

4,966,493

15,00074.5• We have developed a unique evaluation method to estimate
the overall environmental benefit to society by utilizing wastematerials from other industries.
• We use information, including data collected for the
GCCA Cement CO2 Protocol, to calculate the reduction in
consumption of fossil energy and natural resources associatedwith the use of waste and by-products.
• Economic benefits are calculated by multiplying reductions in
consumption (effects of environmental conservation) by set
market prices. The market values of the inventory items are
set at FY2001 levels, and are estimated on the basis of thefollowing considerations.
CO2: 3,000 yen/tonne (a hypothetical CO2 emission tax rate).

External Economic Benefits (FY2023)

Non-consolidated

Inventory
Inventory Reduction (t) Market Price(yen/t)ImpactTotal

External
Economic
Benefit(billion yen)

87.2

(billion yen)
120
90

89.2

90.8

87.2

2021

2022

2023

60
30

(FY)

Project Accounting — Ofunato Plant No. 5 kiln high-efficiency clinker cooler introduction
The clinker cooler uses air to cool clinker, an intermediate
product fired inside an ultra-high-temperature rotary kiln. The
high-temperature air obtained through heat exchange duringcooling is effectively used as combustion air for the rotary kiln.
The high-efficiency clinker cooler introduced to the No. 5
kiln at the Ofunato Plant in FY2023 is a new type of cooler thatcan recover high temperature air while cooling clinker witha small amount of air. This cooler significantly improves heatrecovery efficiency compared to conventional types. With thishigh-efficiency clinker cooler, the second we have introduced
in Japan, we will reduce the amount of thermal energy
required for clinker firing, further reducing CO2 emissions andenvironmental impact.

Investment amount: Approx.

9.2 billion yen

Ofunato Plant No. 5 kiln

Reduction in CO2 emissions:7,149 tonnes/year73