Environmental Initiatives
Efforts to Reduce Our Environmental Footprint

PolicyIn the interest of protecting the global environment, the TS TECH Group will work to reduce the environmental impact of all aspectsof its corporate activities, especially the production of interior components for automobiles, and help create a sustainable society,aiming to be “A company sincerely appreciated by all,” which is one of the beliefs enshrined in the Group’s philosophy.

Environmental Action Plan

DomainEnvironmental Impact
Global warming

Reduce global environmental impact
associated with business operations

Basic Environmental Policy

Resource depletion
Ozone depletion
Air pollution(1) Compliance with Legal and Other Requirements	Strive to prevent environmental pollution and protect biodiversity and ecosystems primarily through compliance with requirements, such as environmental laws and regulations and environmental standards, and proper chemical management.

(2) Reduction of Environmental Impact	Aim to mitigate the impacts of climate change and realize a sustainable recycling-based society by striving to save energy andresources through collaboration across the supply chain, based on life cycle assessments that cover all stages in the productlife cycle, from development through sourcing, production, logistics, marketing, disposal, and reuse.

Water pollution
Soil pollution
Waste materials

Environmental protection efforts

Productdevelopment
technology• Design products with a lighter weight and improved recyclability• Develop technology for replacing materials with sustainable
alternatives• Do not use materials containing regulated chemicals• Employ energy- and resource-saving equipment and process design

Manufacturing
management• Employ energy- and resource-saving manufacturing• Control and reduce the amount of volatile organic compound(VOC) emissions into the atmosphere• Promote proper disposal and recycling of industrial waste• Improve distribution efficiency• Promote CO₂ emissions reduction in collaboration with business partners• Establish a sustainable supply chainPurchasing
distribution(3) Continuous Improvement of Environmental Management	Endeavor to continuously improve environmental and energy performance by setting environmental targets based on environmental and energy management systems, and regularly reviewing them. Provide the information and management resources
needed for such improvement and also work toward the utilization of products and equipment that will improve energy efficiency.
October 2018, Resolution of the Board of Directors (Revised)

Initiatives to Strengthen Environmental
Management

The Group is promoting environmental management system ISO 14001 certification at all of its facilities around theworld. We are united in our efforts to continuously reducethe burden on the environment. Seeking additional measures to efficiently reduce CO₂ emissions, TS TECH adopted
the ISO 50001 energy management system at all of its sites
in Japan in fiscal 2019 and obtained certification. Going forward, we will continue with efforts to bolster our environmental and energy management not only to reduce theburden on the environment but also to decrease costs byusing resources more efficiently.

Internal Environmental Audits

TS TECH has established an environmental and energy audit
program that consists of annual audits of each site. The audits take into account the environmental and energy impactof the sites and the results of past audits. These internal audits examine measures to reduce environmental impact andenergy consumption, the effect of these measures, compliance with related laws and regulations, and the status of theadministration of ISO international standards, among otheritems. We promote swift, proper correction of deficiencies
and non-compliance items detected in audits, aiming to improve our environmental management.

Compliance with Environment-Related Lawsand Regulations

Under our environmental and energy management systems, TS TECH has prepared a list of legal and other requirements at each site and reviews the laws and requirementsthat we must comply with at the beginning of each fiscal
year. We also evaluate the status of compliance every sixmonths. Over the period from fiscal 2020 to fiscal 2023,42

TS TECH Integrated Report 2023

there were no violations of environmental laws and regulations.

Environmental and Energy Management
Education

TS TECH provides employees with various educational programs related to environmental and energy management
under its ISO management system. Under the ISO 14001
standard, we conduct environmental education with the objectives of reducing environmental impact and preventing
pollution. Under ISO 50001, in addition to offering energy
conservation training tailored to each production facility
provided by the Energy Conservation Center, Japan, we havealso introduced our own energy-saving diagnostics focusedon improving equipment operation.
Since 2022, we have been acquiring knowledge on effective energy-saving techniques with the benefit of expert insight and input. We have focused on energy conservation
using inverters for motors and equipment, seeking tostrengthen the development of human resources specialized
in this area. We have been rolling this knowledge out horizontally across the entire Group, including sites outside Japan.
To catalyze even more effective measures, these specialists not only learn the basics of energy management but alsodelve deeply into specific management methods for particularfacilities. Going forward, we will continue to develop humanresources who can takethe lead in promoting
energy conservation ateach of our sites, Meanwhile, we will keep providing general education,
as well, seeking to improve employees’ environmental awarenessand skills.
Environmental education for facility management

Development-focused measures
We understand that reducing the weight of our products is one of the mosteffective ways in which we can reduce our impact on the environment. For
example, our seat frames account for a large portion of the weight of ourproducts, so we strive to apply a variety of weight-reducing technologies
wherever possible, while further improving safety and comfort in line withevolving needs. The seat frame installed in the 2020 Honda Fit is about 28%
lighter than our previous core frame. We accomplished this by using more
ultra-high tensile strength steel and thin-plate welding technology. It is
now being used in many automobile models worldwide.
In addition to weight-reducing technologies, we are focusing on re-Evolution of parts using ultra-high tensile strength steel (shown in blue)

ducing CO₂ contained in our products through technologies utilizing cellulose nanofiber (CNF) and other plant-derived biomass materials. Compared to conventional door trims made from petroleum-derived materials, we have succeeded in reducing the amount of
CO₂ contained in these products by 60% by using plant-derived biomass materials (for resin/synthetic leather coverings), and we arecontinuing our research with the goal of applying this technology to mass-produced products.
Looking ahead to the future shift to EVs, we are also pursuing technology development that contributes to carbon neutrality fromvarious perspectives, including developing seat heaters that efficiently heat at low power to help increase electric mileage (cruisingrange) and climate-control seats that help reduce electricity consumption.
Production-focused measures

Installing environmentally friendly equipment

Under the policy of “Evolving toward sustainable manufacturing

Initiatives to reduce CO₂ emissions include installing environ-and building a globally efficient production system,” our Manu-

mentally friendly equipment such as solar power generation

facturing Division works hard to ensure our manufacturing issystems and rainwater reuse systems when replacing buildings

both competitive and environmentally friendly. The main initia-

at each site, which helps to reduce CO₂ emissions and ground-

tives include accelerating automation of production lines andwater usage. We are also actively working to reduce logistics

reducing

energy-losses by taking steps such as realigning production with con-saving technologies, introducing next-generation energy-saving

solidated external warehouse functions. In fiscal 2023, we newly

technologies, and utilizing regenerative energy*1.

installed solar power systems at the Hamamatsu Plant andelectricity

usagebystandardizing

An example of electricity reduction utilizes karakuri *2 means

Suzuka Plant, and expanded the system at the Saitama Plant.

to achieve work automation without consuming energy. In No-At the expanded facilities of TS TECH INDIANA, LLC, we in-vember 2022, we exhibited a karakuri mechanism that uses

stalled a solar power system with storage capabilities in June

equipment exhaust air, at the Karakuri Kaizen Exhibition hosted

2022. By combining this solar power generation with green pow-

by the Japan Institute of Plant Maintenance, winning the silver

er certificates, we haveaward in the parts feeder contest category. We are currently

reduced CO₂ emissions

working to further reduce environmental impact by developingfrom electricity to zero. Inequipment that utilizes regenerative energy, such as a method ofthese ways, we are accel-

generating electricity from a karakuri mechanism.

erating efforts around the*1 Converting surplus energy generated from equipment into electricity for reuse*2 Karakuri refers to equipment or mechanisms that improve processes withminimal energy or cost through the use of gravity, gears, the principle ofleverage, etc.

world to reduce our environmental impact.

TS TECH INDIANA, LLC

TS TECH Integrated Report 2023

43

Environmental Initiatives

Environmental Targets and Results
Main environmental targets and results in fiscal 2023*1
Item

Targets

Measures

CO₂ emissions reduction
2,805 t-CO₂ lower than FY2020

FY2020 performance:
8.3 t-CO₂/thousand vehicles
WasteWater

Recycling rate
4.1% lower than FY2020

Maintain water intake level comparedto FY2020• Conserve water at all worksites• Inspect water supply equipment
for leakage

Water intake
12% lower than FY2020

JapanThe Americas

8,382

65,1997,930

13,46077,208Asia and Europe

FY20208,103

58,875

6,324

FY2021

13,373
FY2022(t)
20,000(m3)18,423

10,00015,120

1,388
1,257

12,835

15,25916,203

1,028
1,435

1,668
1,569

10,031

10,3879,262

FY2020

FY2021

2. Capital goods

32,466

1.3%

3. Fuel- and energy-related activities not included in Scope 1 or Scope 2

11,8640.5%

4. Transportation and distribution (upstream)

87,021

3.4%

5. Waste generated in operations

3,562

0.1%

6. Business travel

3,145

0.1%

7. Employee commuting

5,494

0.2%

10. Processing of sold products

75,1172.9%

12. End-of-life treatment of sold products

34,2601.3%

2,583,409

100%

Total

3,354

2,760
FY2022

FY20230105,278
139,330
FY2020418,421

Scope 1 and 2 (CO₂ emissions from energy use)and energy consumption

6 sites of the Organization, 5 domesticcompanies, 27 overseas companies

Scope 3, Category 1(CO₂ emissions from purchased goods andservices)

Products and services extracted from TS
production control system

Water intake

FY2021

422,134

80,406

79,773

126,175

141,325

138,168

85,49682,16584,214

101,954

114,526

119,979

88,810119,747

200,000

Verification range

Results

Scope 1:Scope 2:7,083 t-CO₂
49,937 t-CO₂

2,330,480 t-CO₂
16,203 t

6 sites of the Organization, 5 domesticcompanies, 26 overseas companies

422,134 m³

Long-term environmental targets

FY2022* Scope of data: Consolidated sites excluding certain subsidiaries(Fiscal 2023)		 • CO₂ emissions: 33 out of 38 consolidated subsidiaries are included in the data scope (5 companies are excluded)		 • Waste generated and water intake: 32 out of 38 consolidated subsidiaries are included in the data scope (6 companies are excluded)
The revenue of the companies within the data scope accounts for 95% or more of the Group’s consolidated revenue for each period concerned.

TS TECH Integrated Report 2023

90.2%

Waste generated (including valuable waste)

7,083
FY2023

116,461 402,436

400,000

100,000

2,445

9,877

500,000 480,815

300,000

5,000

2,399

Ratio (%)

2,330,480

Verification target

57,02049,937

6,267

Water intake

1,841
1,348

Emissions (t-CO₂)

Scope 2

24,693

Waste generated

15,00044

Scope 1

13,34755,93526,993

13,8197,089

62,202

13,90629,537
18,7382,583,409

In order to ensure the reliability environmental data disclosure, the Group has obtained third-party verification from SGS JapanInc. Verification results for fiscal 2023 are as follows.

14,6020

2,658,732

Implementing third-party verification

12,5990

China

84,29738,3582,381,086

CategoryTrends in environmental results

30,0002,749,174

Scope 3 emissions by category breakdown for fiscal 2023

*1 Consolidated subsidiaries are included in the scope of aggregation, but some subsidiaries are excluded on the same standard as “Trends in environmental results.”*2 “Per unit” figures are calculations performed according to TS TECH’s standards and indicate CO₂ emissions relative to production volume during business activities*3 Emission coefficients for the base year are used to maintain consistency in target management. The difference in CO₂ emissions using the coefficients for FY2023 is -27,277 t-CO₂.

60,000FY2023

1. Purchased goods and services• Promote recycling• Reduce product defect rate
• Reduce packaging materials(t-CO₂)90,000

FY2022

FY2023 performance:
8.4 t-CO₂/thousand vehicles

Recycling rate
1.5% higher than FY2020

CO₂ emissions

FY2021CO₂ emissions reduction
14,844 t-CO₂ lower than FY2020*3
Basic unit per vehicle
1% higher than FY2020(Unit: t-CO₂)

FY2020Results• Shift to energy-saving production
equipment• Switch to LEDs
• Shift to energy-saving air conditioning• Introduction of renewable energy

Basic unit per vehicle*23% lower than FY2020

CO₂Scope 3 emissions (Consolidated)

FY2023In the interest of protecting the global environment, the Group will work to reduce the environmental impact of all aspects ofits corporate activities. Our efforts to build a sustainable world are guided by our vision statement of being “A company dedicated to realizing people’s potential” and “A company sincerely appreciated by all.” We aim to strike a balance between achieving
further business growth and contributing to the resolution of social issues, including the creation of a recycling-oriented society and conservation of water resources, in addition to responding to climate change, which is becoming more serious by theyear. Accordingly, we have set long-term targets for such environmental issues. The whole Group will work to achieve thesegoals by promoting environmental conservation activities.
ItemKPI

Term for comparison

CO₂

CO₂ emissions reduction rate*1

Comparison with FY2020

-50%

-100%

Waste

Waste reduction rate*2

Comparison with FY2020

-50%

-100%

Water intake and wastewater
reduction rates*3

Comparison with FY2020

Water intake reduction rate-50%

Wastewater reduction rate-100%―

Zero

Zero

Water

Environmental impact fromwastewater*42030 target

2050 target*1 CO₂ emissions reduction rate (Scope 1 and 2) resulting from the Group’s business activities*2 Reduction rate for waste resulting from the Group’s manufacturing activities (excluding residue, sludge, etc.)*3 Reduction rate of water intake (amount used) at the Group’s production facilities and reduction of wastewater resulting from manufacturing activities*4 Environmental impact of wastewater resulting from the Group’s manufacturing activities

TS TECH Integrated Report 202345