ESG Initiatives

Environment
To achieve carbon neutrality by 2050,
the ENVIPRO Group has joined the RE100 initiative,
whose goals are to reduce GHG emissions toeffectively zero and to use 100% sustainable energy
for electricity consumed in business operations.
Accordingly, the Group has set goals for 2030.

Environment

Sustainability Strategy

Environment

Business

ESG Initiatives

Sustainability Report 2022

Financial and Company Data

Becoming Carbon Neutral by 2050

Information Disclosure in Line with
TCFD Recommendations

Governance

Basic Approach

To promote policies and measures related to climate change response andother sustainability strategy matters, the Group’s sustainability promotion
system has a Sustainability Committee that consists of the president andrepresentative director, full-time directors, executive officers, and heads ofsome related departments. The committee seeks to promote the mediumterm management plan (Sustainability Strategy) that forms our strategy for

In May 2019, the ENVIPRO Group announced its endorsement of therecommendations of the Task Force on Climate-related Financial Disclosure(TCFD), established by the Financial Stability Board (FSB). The TCFD
recommends disclosure based on four categories: governance, risk
management, strategy, and metrics and targets. The Group discloses
information on climate-related issues according to these four categories.
In December 2020, the Group decided to achieve effectively zero GHG
emissions from all its business by 2050, including the processing andrecycling of scrap and waste handled by the Group. As countries work
toward decarbonization, resources and climate change are issues that–far
from being separate–are closely interrelated and global in scope.
Unrestricted resource extraction and GHG emissions underminesustainability and must be addressed if we are to preserve the Earth’s
resources and natural environment we share into the future. As its resource
circulation business is located at the end of the supply chain, the Group
has the characteristics to address both of these important social issues
through its business. This is precisely the social responsibility we believe
the Group should fulfill.

Sustainability Promotion Systemachieving sustainable development for both the Group and society. As anorganization that assists decision-making by the representative director, it
flexibly and actively discusses and examines the status of strategy
promotion and future directions, including new business and M&A, from along-term perspective. Matters discussed are further resolved or discussed
by the Management Committee, a decision-making body for businessexecution, and are then submitted to the Board of Directors. Under thesupervision system of the Board of Directors, we work to maintain
governance and promote sustainability strategies.

Sustainability Promotion System

Role of Conference Bodies to Address Climate Change
within the Sustainability Promotion System
Board of Directors

Supervision

Conference bodyRole

Board ofDirectors

Supervises progress on initiatives related toenvironmental issues discussed and approvedby the Management Committee. Meets
monthly.

ManagementCommittee

Decides on important matters related toindividual, specific instances of businessexecution, and makes decisions on timely
disclosure. Meets monthly.

Sustainability
Committee

Discusses the organization and operation of
the committee and other important mattersconcerning sustainability in order to promote
the medium-term management plan. Meets
monthly.

ReportSelection
Supervision
Dismissal

Management Committee
Supervision

ReportReportRepresentative DirectorInstruction

ReportSustainability Committee
Chairperson : President and Representative Director

Instruction

ReportMembers : Full-time Directors, Executive Officers, Heads of Related Departments
Secretariat : Corporate Strategy Division
Instruction

ReportIndividual departments and Group companies

Initiatives to Date2050
2018

Joined RE100

2019

Announced endorsement ofthe TCFD recommendations

2020

Declared a commitment tobecome carbon neutral by2050

2021

Incorporated theSustainability Committee into
the governance structure30

Sustainability Strategy

Business

ESG Initiatives

Sustainability Report 2022

Financial and Company Data

Risk Management

Strategy

Assessment of Environmental Initiatives

At the Group, the Internal Control Committee evaluates and reviews
business risks, which are integrated into the company-wide risk
management process. The Sustainability Committee evaluates and reviews
climate change-related risks. Relevant departments identify opportunities,
consider specific measures, and make recommendations to theSustainability Committee as necessary. The Sustainability Committee
evaluates the recommendations and promotes measures to address them.
For both risks and opportunities, particularly important matters are reported
to or submitted to the attention of the Board of Directors.

Identifying and Addressing Risks and Opportunities

Climate Change:

The Group conducts scenario analyses to examine the risks andopportunities posed by climate change and its impact on the Group. We
analyzed the Group’s business activities using the Representative
Concentration Pathways (RCP8.5) published by the Intergovernmental
Panel on Climate Change (IPCC) and the Sustainable Development Scenario(SDS) published by the International Energy Agency (IEA). We examined theimpact on the Group’s business activities based on the assumption of atemperature increase limited to 2°C by the end of this century and theassumption of a 4°C increase.

The Group received a “B” rating, the third
highest out of nine, in a 2022 study on
climate change conducted by CDP, aninternational non-profit organization.

B

Climate-Related Risks/Opportunities and Potential Financial Impacts and Responses
TypeCategory

Hypothetical examples

Potential Financial Impact
Risks

PeriodOpportunities

PeriodTaxes on various types of energy,
introduction of carbon taxes•	Increased costs of using renewable energy•	Easing of the supply-demand balance and price decline of ferrous scrap due to thedevelopment of new technologies such as hydrogen-reduction steelmaking

Short tolong term•	Expansion of existing recycling business•	Increased demand for ferrous scrap due to shift to electric furnaces, price increase•	Installation of large shredder to produce electric furnace materials

Short tolong term

Regulations on the use ofrecycled plastics•	Reduction in the thermal recycling of waste plastics

Long term•	Growth in demand for low-carbon raw materials and fuels (RPF)•	Expansion of material and chemical recycling of waste plastics•	Development and commercialization of chemical recycling plants

Medium tolong termTraceability of CO2emissions (DX) mandated•	Lost market entry opportunities due to delays in business development

Mediumterm•	Expansion logistics businesses of scrap, waste•	Visualization of GHG emissions•	Support for the procurement of carbon credits

Medium tolong term

Expansion of the chemical
recycling of waste plastics•	Lost business entry opportunities due to delays in technology development

Medium tolong term•	Creation and expansion of new markets for the chemical recycling of waste plastics

Medium tolong termMarketIncreased adoption of EVs, ESSs•	Increased demand for nonferrous metals and minor metals due to electrification(depletion)

Short tolong term•	Expansion of the Lithium-ion Battery Recycling Business•	Expansion of the business of collection gold, silver, and copper sediment sludge

Short tolong term

Reputation

Social responsibility as anenvironment-related company•	Failure to consider the environment, damage to credibility among stakeholders

Short tolong term•	Scoring by CDP and other international rating agencies•	Disclosure of information in line with the TCFD recommendations•	Disclosure of various approaches through the Sustainability Report

Short tolong term

AcuteIncrease in natural disasters
due to increasing severity of
extreme weather events•	Decrease in earnings due to such factors as shutdowns and production reductions
caused by damage to plants, difficulties in vessel dispatch, or transportation delays•	Decrease in revenue due to lost sales and purchasing opportunities•	Increase in insurance premiums and repair/restoration costs

Short tolong term•	Enhanced response to issue of waste created in disasters

Short tolong term

Chronic

Increased heat stress due tohigher average temperatures•	Decrease in productivity due to restrictions on working hours•	Increased cost of investing in environmental improvement

Short tolong term•	Personnel savings, unmanned operation, remote control

Short tolong term

Policy andregulation

Transitional
Technology

Physical31

Sustainability Strategy

Business

Metrics and Targets

ESG Initiatives

Sustainability Report 2022

Financial and Company Data

Electricity Consumption and Percentage of Renewable Energy Use,
Results and Targets
(GWh)
100.0
Electricity consumption (left axis)
97.3

Scope 1 + 2 CO2 Emissions and Targets (t)16,000

The Group has identified GHG emissions and the percentage of electricity
generated from renewable energy sources as indicators to be used inassessing and managing climate change-related risks and opportunities,
and has publicized target values for each.

14,00012,72912,671

12,00011,5609,202

10,0008,000

GHG emissions

4,792

4,000

2017

2018

2019

2020

2021

80.0

15.0

60.0

0.0

Percentage of Electricity Generated fromRenewable Energy Sources

40.0

35.0

5.0

2050

2017

20.0

17.8

2.90.0

2018

2019

2020

2021

2030

RE100 Plants*1*1 Plants and facilities that operate entirely on electric power from renewable sources

RE100 Plants
1

Head office plant

Fujinomiya, Shizuoka

2Hamamatsu plant

Hamamatsu, Shizuoka

Kuroda Recycle Co., Ltd.

3

Head office plant

Hakodate, Hokkaido

Toyo Rubber Chip Co., Ltd.

4

Head office plant

Maebashi, Gunma

5

Head office plant

Matsumoto, Nagano

6

Plaza Azumino

Azumino, Nagano

7

Head office plantFuji, Shizuoka

8

Fujinomiya plant

Fujinomiya, Shizuoka

SYN ECO Inc.

VOLTA Inc.

1

ECONECOL Inc. Head office plant2

ECONECOL Inc. Hamamatsu plant3

Kuroda Recycle Co., Ltd.
Head office plant4 Toyo Rubber Chip Co., Ltd.

Head office plant

RE100 (Except plants)

ENVIPRO HOLDINGS Inc.

Head officeFujinomiya, Shizuoka

Laboratory

Fujinomiya, Shizuoka
5SYN ECO Inc. Head office plant

6

SYN ECO Inc. Plaza Azumino

0.0

The target date for RE100 has since moved forward by 20 years, to 2030,
to coincide with the government commitments to go carbon neutral.
In fiscal 2021, renewable sources accounted for 97.3% of electric power
used throughout the Group.

In July 2018, we became the first company in the global recycling industry
to join the RE100 initiative, which sets the goal of reaching 100%
renewable energy for electricity consumed in business activities by 2050.

ECONECOL Inc.

(%)

100.0

20.0

10.0

0

2,0000Percentage of renewable energy use (right axis)

Scope 26,000

By 2050, the Group aims to achieve effectively zero GHG emissions from allits operations, including the processing and recycling of scrap and waste.
In fiscal 2021, CO2 emissions (Scope1 and 2) amounted to 4,792 tons,
down 62% from fiscal 2017 levels.

25.0

Scope 17 VOLTA Inc.

Head office plant

8 VOLTA Inc.

Fujinomiya plant32

Sustainability Strategy

Environment

Business

ESG Initiatives

Sustainability Report 2022

Financial and Company Data

Material Balance

INPUT

OUTPUT

685,000 tons

Scrap, Waste

162,400 tons

Ferrous metals (scrap)

Waste plastic and mixed waste

37,700 tons

Non-ferrous metals

Scrapped cars

9,200 tons

Plastic raw materials

Electronic waste

8,200 tons

Wood waste

7,700 tons

Waste paper

7,600 tons

Scrap/waste

Waste batteries
OtherDistribution
volumeReuse
Raw materials

732,100 tons

Metal scrap

Fuel raw materials

Amountprocessed

Wood chip raw materials
Raw materials for paper
Black mass

2,500 tons
300 tons

Subtotal

236,000 tons

Ferrous scrap

387,200 tons

Non-ferrous metals

13,400 tons

Waste plastics

13,100 tons

Waste paper

7,900 tons

Other
Recycled raw materials

Amountprocessed

Recycled Raw Materials,
Finished Goods, andProcessing Outsourcing

Subtotal
Amountprocessed anddistributed*2

Ferrous metals (scrap)
Non-ferrous metals
Other
Subtotal
Ferrous metals (scrap)

Wood pellets/PKS

9,900 tons

Non-ferrous metals

Other

2,700 tonsPlastic raw materials

Subtotal

434,600 tons

Used cars/trucks

2,048

Raw materials for rubber chips

14,400 tons

Total inputs*1

Fuel raw materials

Distribution
volume*3

Raw materials for paper
Wood pellets/PKS
Other

685,000 tons

Subtotal
Total*1 Sum of scrap, waste, raw materials (excluding reuse)

Used cars/trucks

Reuse

Maintenance parts

Disposal outsourcing

Finished goods

Rubber chip-based products
Material recycling

Recycling

Thermal recycling

Waste disposal

Simple incineration
Landfilling
Total

Total outputs*4

59,800 tons
8,300 tons
800 tons28,200 tons
6,000 tons
7,300 tons
800 tons
4,400 tons
116,000 tons
101,900 tons
3,700 tons
1,200 tons
106,900 tons
427,200 tons
8,400 tons
2,500 tons
8,400 tons
8,400 tons
9,900 tons
1,600 tons
466,700 tons
689,600 tons
1,582
244 containers
12,600 tons
1,000 tons
14,600 tons
3,300 tons
10,700 tons
29,700 tons
732,100 tons

Energy and Water
Fuel

67.0 TJ
18.2 GWh
42,400 m3

Electricity
Water

CO2 Emissions (Scope 1 + 2)

4,700 tons

Scope 1

4,563.3 tons
7,915.7 tons
229.1 tons

Scope 2 (location-based standards)
Scope 2 (market-based standards)

CO2 Emissions (Scope 3)

152,400 tons

Category 1 Purchased products/services

8,951.7 tons
2,154.2 tons

Category 2 Capital goods
Category 3

Fuel and energy activities notincluded in Scope 1 and Scope 2

Category 4 Transport/delivery (upstream)
Category 5 Waste generated from business
Category 6 Business travel
Category 7 Employee commuting

1,819.9 tons
135,728.1 tons
3,534.0 tons
61.5 tons
217.2 tons

* We will continue to assess emissions in other categories and elaborate on data from thenext fiscal year.

Resource
Recovery Rate*

94.4%* The recycling rate is calculated from outputs: (amount processed + amount processedand distributed + recycling) ÷ (amount processed + amount processed and distributed +recycling + waste disposal) × 100

Disposal outsourcing (waste)
Disposal outsourcing (recycling)
Finished goods
689,600 tons

Recycled raw materials
Amountprocessed

Amount processedand distributed

Distribution volume

Total output: 732,100 tons

*2 Amount of processed resources distributed overseas, etc. *3 Amount of resources distributed through trading company functions *4 Sum of recycled raw materials, finished goods, and processing
outsourcing (excluding reuse)33