Reporting Based on TCFD Recommendations Analysis of climate change risks and opportunities for the Maxell Group
Since the Paris Agreement came into effect, demand has been growing for companies to reduce their total greenhouse gas emissions, regardless of business expansion. Maxell has long been proactively working toreduce the environmental impact of its manufacturing processes.
We have identified “Creating Economic Value through Environmental Activities” as an important issue (materiality), and are operating our businesses with a total emissions reduction target for greenhouse gases in place.

49Maxell, Ltd. Integrated Report 2022
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Introduction
Maxell Group’s Basic Management Policy
Table of Contents and Editorial Policy
History of Innovation

Basic Approach
Climate change is a threat to both humanity and the health ofthe Earth, affecting our businesses, customers, and supply chain.
As one of the companies addressing climate change, we believethat we have a significant role to play in contributing to global
efforts to prevent climate change. Whereas we understand thatclimate change poses risks, such as increased costs and businessdisruption, we also see it as an opportunity for Maxell to create newvalue by meeting the societal needs that emerge.
Maxell announced its endorsement of the recommendationsof the Task Force on Climate-related Financial Disclosures (TCFD)
in October 2021. In line with the TCFD recommendations, weanalyze the risks and opportunities posed by climate change toour businesses, and work to disclose relevant information relating
to governance, strategy, and other areas. Maxell is implementing
initiatives in accordance with the framework below, which covers
the four core elements of the TCFD recommendations: governance,strategy, risk management, and metrics and targets.

(1) Governance
The Board of Directors is responsible for decisions relating toMaxell’s climate change initiatives.
⿟ The Board of Directors is our highest decision-making bodyand is responsible for all decisions, including those concerning
climate change-related issues.
⿟ The president and representative director is in charge ofclimate change-related issues. The president also serves as thehead of the Environmental Committee, and is responsible forincorporating all environment-related issues into our corporate
strategy and targets.

Board of Directors decisions on climate change-related initiatives(1) Endorsement of TCFD recommendations (October 2021)(2) Setting of medium- to long-term goal of reducing CO2 emissions by 50%
or more by FY2030 (vs FY2013) and a commitment to focus on addressing
environmental issues (November 2021)(3) Introduction of solar power generation for in-house consumption(December 2021)(4) Disclosure of TCFD scenario analyses (July 2022)

⿟ We have established an Internal Control Committee to ensureand strengthen the effectiveness of corporate governance forthe enhancement of the entire Group's corporate value and theachievement of management objectives. With regard to climatechange, the Environmental Committee is working to establish aGroup-wide management system and enhance its functions.
⿟ The Environmental Committee is responsible for drafting Maxell
Group’s overall strategy for climate change and managing
the Group’s progress towards achieving its climate changerelated targets. The committee is composed of environmental
promotion officers and environmental management officers
from business divisions at each business site, as well as thechairs of specialized subcommittees. The committee meets
three times a year.
Governance structure
Board of Directors
Internal Control
Committee
Management
Committee

Representative
director

EnvironmentalCommittee

Executivedirectors•••

Corporate
Sustainability
Department

Business divisions,Group companies(2) Strategy
In July 2023, Maxell established an Environmental Vision to clarify
the ideal features of its environmental management from a longterm perspective, positioning the resolution of environmental issues
as one of the top priorities.

Environmental Vision“Maxell aims to achieve ‘a carbon-free society’ and ‘a recyclingoriented society’ by pursuing innovation, and contribute to therealization of a sustainable society in which everyone can live withpeace of mind.”<Initiatives towards achieving a carbon-free society> Targets
⿟ FY2030: Reduce CO2 emissions by 50% or more (Scope 1 and 2,domestic)
⿟ FY2050: Achieve carbon neutrality (Scope 1 and 2, global)
Climate change risks and opportunities
In 2021, we began conducting a climate change scenario analysis,starting with the Energy Division as a model case. In fiscal 2022,
we extended this analysis to cover Maxell’s three other businessdivisions: the Functional Materials Division, the Optics & Systems
Division, and the Life Solution Division.
The analysis focused on production areas where Maxell is likely
to be most affected by climate change. We conducted analyses
based on 1.5°C and 4°C temperature increase scenarios, to identify
risks and opportunities, and consider relevant measures.
⿟ Scenarios considered: 1.5°C (RCP1.9/SSP1) and4°C (RCP8.5/SSP5)
Although climate change presents risks for all four divisions, it
can also be turned into an opportunity through harnessing theinnovative proprietary technologies that Maxell has developed overmany long years.
For all four divisions, the medium- to long-term risks identified
under the 1.5°C temperature increase scenario include increased
tax burdens due to the introduction of carbon taxes, and significant
impacts on businesses from changes in consumer behavior.
Additionally, it was found that under a 4°C temperature increase
scenario, the exacerbation of extreme weather events such as
storms could have a significant impact on businesses.

At a Glance
Sources of Value Creation
Value Creation Process
Key Maxell products that provide value to society

1 The Path to Realizing Our Vision
Materialities / Action Plans / KPIs
Message from the President
Message from the Financial Director
Financial Highlights
Non-Financial Highlights

2 Value Creation Report	Special Feature: All-solid-state batteries and the impact
they will have on society in the 3 focus areas	Value Creation Process by Business Segment, andStrategy Progress Report		 The Current Status of the Business Portfolio Shift, and the Future		 Energy Segment		 Functional Materials Segment		 Optics & Systems Segment		 Life Solution Segment
Toward the Creation of New Businesses
Consolidation and Enhancement of Sales ForceIntellectual Property that Supports New and Existing Businesses

3 Management Foundation Enhancement
Creating Human Resources and Organizations that Generate Value
Creating Economic Value through Environmental Activities
Reporting Based on TCFD Recommendations
Strengthening Group GovernanceCorporate Governance
Board of Directors
Outside Director Roundtable Discussion

Data Section
Consolidated Financial Information
Maxell Group Network
Corporate Data / Stock Information / External Recognition

50

Reporting Based on Recommendations of TCFD Analysis of climate change risks and opportunities for the Maxell Group

Maxell, Ltd. Integrated Report 2022
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Scenario analysis	Scenario where the goal is to limit temperature increase to 1.5°C: Regarding the transition risks, it is assumed that governmental regulations will be tightened and that net zero CO2 emissions will be achieved by 2050 through theimplementation of countermeasures.	Scenario where temperature rises by 4°C: Regarding physical risks, abnormal weather events would be expected to intensify if additional policies are not implemented and no progress is made with climate change countermeasures.

Introduction
Maxell Group’s Basic Management Policy
Table of Contents and Editorial Policy

Risks and opportunities

Definitions for large, medium, and small business impacts: Large: 1 billion yen or more, Medium: 100 million yen to less than 1 billion yen, Small: less than 100 million yen

History of Innovation
At a Glance

Degree of business impact
Risks

Categories

Major risks
Sub-categories
Carbon tax
increases

Introduction of carbon tax
will have broad impact on
raw materials, containers,and packaging materials, andresult in increased costs

Policies/ CO2 emissionsof eachregulation
Need to switch to highcountry
efficiency manufacturing
equipment due toStrengthening strengthened energy-savingof emissions policiesreduction
policies
Transition
risks
MarketReputation

Chronic

Physical
risks

Acute

Major opportunities

Energy Division

Functional
Materials Division

Optics & Systems
Division

1.5℃

1.5℃

1.5℃

Medium

4℃
Small

Large

4℃
Small

Large

4℃
Small

Value Creation Process

Life Solution Division

1.5℃
MediumSmall

Lessening environmental
impact with low-carbon
alternative materials

Growing demand forrenewable energy insemiconductor and housingrelated businesses

Growing demand for CO2
monitoring leads to increased
sales in semiconductorrelated businesses

Growing recognition ofvalue of environmentallyconscious products,
leading to increased sales———

Small

Small

Small

Small

Small

Small

Small

Small

Small

Small

Small

Small

Small

Small—

Profitability improvement
due to growing market
recognition of environmental
value of carbon-neutral
environmentally compliant
products

Small

Changes toconsumer
behavior

Growth of environmentallyconscious purchasing byconsumers in response toclimate change

MediumChanges toreputation
among
investors

Deterioration of reputation
among investors and difficulty
in procuring funds if climatechange countermeasuresdeemed inadequate

Small

Small

Small

Small

Small

Small

Small

Small

Rise ofaveragetemperaturesIncrease in expenses due
to increase in electricity
consumption

Small

Small

Small

Small

Small

Small

Small

Small

Changes toprecipitation/weatherpatterns

Frequent damage to businesssites due to increased
precipitation and flooding

Large

Rising sealevels

Increasing chronic damage tobusiness sites at low altitudes

Small

Medium

Small

Small

Small
Increased sales with growing recognition of value ofenvironmentally conscious products

Small

Small

Small

Medium

Small

Small

Life Solution Division

Cost reductions through installation of energy-saving equipment and improvements toenergy-saving processes

Small

SmallKey Maxell products that provide value to society

Optics & Systems Division

1 The Path to Realizing Our Vision

SmallMedium

Functional Materials
Division

4℃

Price
increases/decreases
for importantproducts

Intensification Frequent abnormal weatherof abnormal events such as storms cause
weather
repeated damage

Energy Division

CO2 monitoring advancesand batteries integrated
into infrastructural facilities,
leading to increased sales

Small

Sources of Value Creation

Small

Acceleration of CASE andtransition to Smart Cities- Increased salesof semiconductor
manufacturing equipment byexpansion of AI/IoT- Increased sales by growth
in installation number of
automotive sensing cameras

Materialities / Action Plans / KPIs
Message from the President
Message from the Financial Director
Financial Highlights
Non-Financial Highlights

2 Value Creation Report	Special Feature: All-solid-state batteries and the impact
they will have on society in the 3 focus areas	Value Creation Process by Business Segment, andStrategy Progress Report

Increased sales withgrowing recognition ofvalue of environmentallyconscious products		 The Current Status of the Business Portfolio Shift, and the Future		 Energy Segment		 Functional Materials Segment		 Optics & Systems Segment		 Life Solution Segment
Toward the Creation of New Businesses

Large

Large

Small

Large

Large

Small

Large

Large

Small

Large

Large

Small

Large

Large

Small

Large

MediumSmall

MediumMediumSmall

Medium———Increased sales of tapes forconstruction due to growing
demand for airtight houses
as temperatures rise

- Increased market share andsales with environmentallyresistant in-car camera
lens units- Increased sales of systems
such as disaster surveillancesensors, surveillancecameras, disaster monitoring
systems, and others

Increased sales ofsterilization/deodorization
products due to moldgrowth——

Increased sales of batteries
used as disaster/emergency
Increased demand for
power sources
waterproofing tape andincreased waterproofing
technology-related sales——

Increased sales of masking
Increased sales of batteries
tape and glass protectionused as disaster/emergency(anti-shatter) tape for use inpower sources
disasters- Increased market share andsales with environmentallyresistant in-car camera
lens units- Increased sales ofsystems such as disastersurveillance sensors,
surveillance cameras,
disaster monitoring
systems, and others—Consolidation and Enhancement of Sales ForceIntellectual Property that Supports New and Existing Businesses

3 Management Foundation Enhancement
Creating Human Resources and Organizations that Generate Value
Creating Economic Value through Environmental Activities
Reporting Based on TCFD Recommendations
Strengthening Group GovernanceCorporate Governance
Board of Directors
Outside Director Roundtable Discussion

Increased disasterpreparedness-related
demandData Section
Consolidated Financial Information
Maxell Group Network
Corporate Data / Stock Information / External Recognition

51

Reporting Based on Recommendations of TCFD Analysis of climate change risks and opportunities for the Maxell Group
Response to Climate Change-Related Risks Based on Climate
Change Scenarios
We have considered our response to the risks in the 1.5°C
temperature rise scenario from the impact of an increased tax
burden due to the introduction of carbon taxes on businessactivities. To reduce CO2 emissions and mitigate the burden ofcarbon taxes, we will focus on energy-saving activities, solar
power generation for in-house use, and the promotion of non-fossil
certificates.
To mitigate risks associated with the potential impact on ourbusiness by changing consumer behavior, we will continue toprovide products and services that help to resolve societal issues
through the introduction of environmentally conscious products
based on a new set of criteria, which we have set as an action plan.
In the 4°C temperature rise scenario, we anticipate impact
from intensified abnormal weather events such as severe storms.
To address this risk, we will enhance our business continuity
planning to minimize damage and strengthen our resilience against
disruptions in our own operations and in our supply chain.
Response to Climate Change-Related Opportunities Based on
Climate Change Scenarios
Based on the climate change scenarios, we believe that many
opportunities will arise for products developed through harnessing
the Analog Core Technologies of each business unit of Maxell(detailed examples on page 50).
From fiscal 2023, we will be conducting scenario analyses forgroup companies and overseas factories.

Environmental Committee
The Environmental Committee oversees climate change-relatedrisks, opportunities, and strategies, and manages group-wide
progress towards achieving climate change-related targets.

Action Plan
KPI

Maxell has set two KPIs as materialities for its initiatives
contributing to a carbon-free society.

Conserving resources and energy, and promoting the
introduction of renewable energy

KPI

Reduce domestic CO2 emissions: by 50% by FY2030 (vsFY2013)

Introduction
Maxell Group’s Basic Management Policy

Conserving resources and energy, and promoting the
introduction of renewable energy

Table of Contents and Editorial Policy
History of Innovation
At a Glance

Renewable energy ratio: 15% by FY2030 ＮＥＷ

Sources of Value Creation

We surpassed our KPI of achieving a “renewable energy ratio: 10%by FY2030” in FY2022, due to the introduction of solar power for inhouse use, the utilization of non-fossil certificates and the adoptionof green electricity (CO2-free electricity). We therefore set a new KPIof achieving a “renewable energy ratio: 15% by FY2030.”

Scope 1 and 2 (vs FY2013)
Action Plan

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Renewable energy ratio(4) Metrics and targets

Maxell, Ltd. Integrated Report 2022

Value Creation Process
Key Maxell products that provide value to society

1 The Path to Realizing Our Vision
Materialities / Action Plans / KPIs
Message from the President（%）

In FY2022, we achieved a 47% reduction (vs FY2013).
To achieve its medium- to long-term targets, Maxell is
implementing energy-saving measures with a broader and longerterm perspective in its domestic factories (including process
improvements and upgrading to high-efficiency equipment) and has
formulated a plan for reducing CO2 emissions through the use ofrenewable energy (such as solar power and the utilization of nonfossil certificates), and is actively advancing these initiatives.

(Tons)

93,856(3) Risk Management
66,770(29% reduction)49,290(47% reduction)

Financial Highlights

15

Non-Financial Highlights

2 Value Creation Report	Special Feature: All-solid-state batteries and the impact
they will have on society in the 3 focus areas

10.3	Value Creation Process by Business Segment, andStrategy Progress Report

0.3
2021		 The Current Status of the Business Portfolio Shift, and the Future

2022

2030
(target)(FY)

Scope 3CO2 emissions from the “Purchased Goods and Services” category
account for a large portion of overall emissions and, we are
therefore working to ascertain the emissions reduction targets ofour major suppliers and collaborating with them on achieving those
reductions.
The next in line is the “Use of Sold Products” category, which
also accounts for a significant portion of CO2 emissions. We will
therefore continue to design and sell energy-efficient products andwork towards reducing their emissions.
Maxell has been disclosing Scope 3 emissions in its integrated
reports since 2018.
す。

Maxell’s domestic CO2 emissions reduction targets (Scope 1 and 2)

Maxell evaluates and manages the impact assessment ofenvironmental risks and opportunities related to climate change
through its Environmental Committee. When there are risks andopportunities that are considered particularly significant for theentire Maxell Group, the Management Committee deliberates on
the assessment results and makes any necessary decisions. Whennecessary, these matters are further deliberated on by the Boardof Directors.。

Message from the Financial Director

Renewable energy ratio target

46,928(50% reduction)

Integrated Report 2021		 Energy Segment		 Functional Materials Segment		 Optics & Systems Segment		 Life Solution Segment
Toward the Creation of New Businesses
Consolidation and Enhancement of Sales ForceIntellectual Property that Supports New and Existing Businesses

3 Management Foundation Enhancement
Creating Human Resources and Organizations that Generate Value
Creating Economic Value through Environmental Activities
Reporting Based on TCFD Recommendations
Strengthening Group GovernanceCorporate Governance
Board of Directors
Outside Director Roundtable Discussion

https://www2.maxell.co.jp/ir/pdf/MAX_IR21_E_interactive.pdf

2013

2021

2022

2030
(target)(FY)

Integrated Report 2022
https://www2.maxell.co.jp/ir/pdf/MAX_IR22_E_interactive.pdf

Data Section
Consolidated Financial Information
Maxell Group Network
Corporate Data / Stock Information / External Recognition