SUSTAINABILITY Environmental Initiatives

Responding to climate change and other environmental challenges is a key theme for our Group, which utilizes the earth’s resources, and is a major factor in achieving sustainable growth. Our Group is working to enhance its corporate value over the mid-to-long term through the Air Water Group Environmental Vision 2050 that aims to realize a “decarbonized society,” a “resource-recycling society,” and a “society where people and nature coexist.”

Specifically, we aim for zero environmental impact from our in-house activities by 2050. As a milestone, we have set KPIs for targets to be achieved by 2030, and are further strengthening our efforts in areas such as decarbonization and climate change. At the same time, we are also promoting efforts to contribute to society through our business activities, with a focus on the “Global Environment,” which we have set forth as a growth axis for our diverse business domains in order to realize “terrAWell30.”

Our Group is actively working on carbon neutrality in terms of both our “responsibility” to reduce our own GHG emissions and our “contribution” to reduce GHG emissions in society through our products and business operations.

For direct emissions from our own production activities (Scope 1), we reduce emissions through energy conservation activities, including investment in energy-saving equipment and other decarbonization measures, fuel conversion to reduce and decarbonize energy used in production processes, and the use of biomass fuels.

For indirect emissions from externally purchased energy (Scope 2), as with Scope 1, we aim to reduce indirect emissions through energy conservation activities, including investment in energy-saving equipment and other decarbonization measures, and by expanding the use of green (renewable) energy sources for electricity. Our vision is to reach carbon neutrality by 2050, including the use of next-generation energy sources (hydrogen, ammonia, synthetic fuels, etc.).

Going forward, we will visualize these measures in concrete roadmaps for each of our businesses and accelerate our efforts to implement them. In addition, we will enhance the disclosure of such information.

In August 2021, we expressed our support for the Task Force on Climate-related Financial Disclosures (TCFD) and joined the TCFD Consortium. Starting in March 2022, we are gradually expanding our disclosure information in line with TCFD recommendations (governance, strategy, risk management, and indicators and targets). Information based on the TCFD Framework is available on our website.

Our Group recognizes that addressing climate change is one of its most important management issues. Basic policies and important matters related to climate change are discussed by the Corporate Management Committee, and important matters are reported to the Board of Directors. Climate change matters are managed by the SDGs Business Promotion Group, established in the Corporate Planning Office. The group leads the planning and implementation of various measures to address climate change.

Regarding climate change-related risks, the “Corporate Planning Office SDGs Business Promotion Group” will evaluate and analyze them based on the TCFD’s recommended scenario analysis methodology, working together with the TCFD promotion managers of the business groups. Significant risks are presented and reported to the Corporate Management Committee and the Board of Directors, which are systematically integrated into the company-wide risk management process.

Upon the formulation of our Environmental Vision 2050, we have set a GHG reduction target of 30%* below the FY2020 level for FY2030, which is a milestone of the Vision.

GHG emissions in FY2022 were 266 thousand t-CO2e lower than in FY2021, including an increase in business growth, due to structural changes in the boundary and energy savings in manufacturing processes, fuel conversion, and the introduction of onsite PPAs (power purchase agreements for solar electricity). CO2 emissions from domestic energy use, a target source of emissions, also decreased by 84 thousand t-CO2e compared to FY2021, resulting in a reduction rate of 4.0% compared to FY2020, the base year for the KPI.

The “terrAWell30” initiative is designed to create synergies by integrating diverse businesses in four business groups to turn social issues into business opportunities. In this plan, our products and services that help decarbonization and low-carbon emissions are going to reduce greenhouse gas emissions by approximately 203 thousand t-CO2e per year. They include wood biomass power generation using the FIT system, the compact LNG satellite facility “V-Satellite” that lowers carbon emissions by converting fuel from heavy oil, and industrial equipment with higher production efficiency and lower power consumption than conventional gas-related facilities.

We conducted a scenario analysis to identify risks and opportunities related to the unpredictable and uncertain event of climate change and how those risks and opportunities might affect our business strategy. In FY2022, the analysis was expanded to cover all units and other major operations, using the “4°C scenario” and the “1.5°C scenario.” As a result, we confirmed that our basic strategy is sufficiently resilient to the uncertain and long-term future, as both the “4°C Scenario” and the “1.5°C Scenario” are expected to have sufficient countermeasures and opportunities to be acquired and expanded, although the impact of both risks and opportunities are larger under the “1.5°C Scenario”.

We aim to realize a supply chain that recycles resources by eliminating waste generation, promoting reuse, and recycling waste. Our target is to increase the waste recycling rate from 65% in FY2021 to 80% in FY2030, and further to 100% by 2050.

We have achieved the KPI earlier in FY2022, mainly through structural changes in the boundary by transferring business of the Hofu Biomass and Coal Mixed Combustion Power Plant, the sale of sludge generated at the beverage plant as fertilizer (conversion to a valuable resource), and improved product yield at food plants. Going forward, we aim to further reduce waste based on four basic policies: (1) reduce waste volume by revamping production processes, (2) internalize waste disposal, (3) convert waste into valuable resources, and (4) increase the recycling rate.

In the Air Water Group, when looking at industrial waste by category, we release a large amount of soot and sludge from our biomass power generation business (by Nihonkaisui/Electric Power segment), and a large amount of animal- and plant-based residue from the Agriculture & Foods segment.

Not only do we manage water use and treat wastewater and sewage in accordance with environmental standards, including reducing the use of water resources in our business activities and reusing wastewater, but we also aim to produce clean water by purifying toxic substances in the water. We are working to reduce water consumption intensity* by 10% in FY2030, compared to the FY2021 level (31.8 m3 / million yen).

• Freshwater usage per revenue

To achieve the FY2030 KPI, we will reduce water consumption under the following policies: (1) reduce water consumption, (2) recycle water, and (3) review production processes.

Our Group uses water resources (freshwater) mainly as raw materials to produce soft drinks and as cooling water for production and power generation equipment. We promote recycling of water resources in our production processes and analyze water after use to ensure that there are no environmental problems before discharging it.