Infromation Disclosure Based on TCFD Recommendations
- Under the Group’s philosophy of contributing to society through the development of powder technology, we aim to address the issues around sustainability by accurately responding to the diverse needs and gaining the satisfaction of our customers through economical, superior technology. At the same time, our mission is to contribute to society, work to protect the natural environment through actions based on ethical guidelines, and strive to preserve the environment for future generations.
- Specifically, we are engaged in implementing a variety of sustainability measures both within and outside the Company, including:
Development, application, and sale of products that contribute to achieving the SDGs, including those that reduce greenhouse gas emissions and food waste and loss, and pharmaceuticals
Creation of products and services that contribute to a recycling-oriented economy and improved quality of life (QOL) by leveraging our proprietary powder technology
Offering raw material refinement and high-performance technologies to industries and sectors that are expanding in advance of carbon neutrality, including rechargeable batteries and motors
Introduction of an employee incentive plan (RS Trust) for all employees
- In particular, we believe that as we work toward carbon neutrality by 2050, the key will be for industries such as our Group that use steel to take action not only on their own, but across their entire supply chains. We acknowledge that continuing to steadily do what we can as a Group is essential to our survival and growth as a company. This goes as well for addressing climate change, where we will advance initiatives and the disclosure of information in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
The Group has now newly established the HOSOKAWA Sustainability Management Committee (meets quarterly or otherwise as needed; the “Committee”) to identify issues involving sustainability, engage in efforts to resolve those issues, and work to improve the level of governance. The Committee is chaired by the Director Vice President and consists of members of the General Management Meeting and others, excluding the President & Representative Director. It meets quarterly to discuss important matters related to the Company’s response to climate change. When necessary, it also submits reports to the Board of Directors to request that issues involving sustainability be considered when formulating management strategy, etc., and will receive directions and instructions from the Board.
The HOSOKAWA Sustainability Working Group (the “WG”) has also been established for the purpose of assisting in the operations of the Committee. This WG discusses and advances sustainability measures at the working level, including compiling proposals to be taken up by the Committee and making any necessary internal adjustments based on instructions from the Committee, submits reports to the Committee, and will receive instructions.
Establishment of targets and plans, selection of key priority issues, and progress with those plans are subject to verification as appropriate. Risks, opportunities, and their financial impact will be disclosed to stakeholders.
Organizational structure is as shown in the diagram below.
The Group has conducted scenario analyses for the years 2030 and 2050, assuming the view that global temperatures in the year 2100 will rise 1.5°C, 2°C, and 4°C.
In the first year, scenario analyses were conducted limited to HOSOKAWA MICRON CORPORATION (domestic only), HOSOKAWA MICRON Cosmetics Corporation and HOSOKAWA Powders Corporation. Going forward, they will gradually be expanded to include overseas consolidated subsidiaries.
We are conducting these analyses, including assessments of criticality and financial impact, with reference to scenarios and other information disclosed by the government bodies and research institutions shown below:
IEA World Energy Outlook 2022 (2022), NZE2050/APS/STEPS
Below, we disclose nine areas of risk that are expected to have a particularly significant impact on the Group, and that are considered highly likely to actually occur.
Factors causing risk
Financial impact in 2030
Policy and Legal
Increased pricing of GHG emissions
Increased taxes on fuels, including the introduction of a carbon tax, will increase manufacturing costs (raw material costs) and SG&A expenses, putting pressure on earnings
Strengthened energy conservation policies, low carbon/decarbonization measures, etc.
Increased capital investment and management costs due to own GHG emissions reporting obligations, GHG emissions reductions, presentations to customers, etc.
Environmental regulations limit business activities (opportunity loss) while also putting pressure on earnings
Opportunity loss due to inability to procure from suppliers that cannot comply with regulations and go out of business as a result
Changes in consumer behavior
Entry of businesses with alternative technologies triggers a shift in needs toward products (e.g., high energy efficiency) and services (reuse and maintenance) that contribute to low-carbon or decarbonization efforts; decline in competitiveness of Company’s existing high environmental impact products and delayed development response put pressure on earnings
Criticism of business sector
Increased uncertainty among stakeholders
Loss of stakeholder support and decline in corporate value due to inadequate efforts to address energy conservation and low carbon/decarbonization policies and information disclosure
Increased severity and frequency of extreme weather events, including typhoons and floods
More frequent and severe extreme weather events cause supply chain disruptions due to damage to facilities at Company’s own and partner factories, damage to suppliers and logistics warehouses, etc., resulting in longer delivery times and operational stoppages that cause opportunity losses and bad debt
Change in rainfall patterns
Extreme fluctuations in weather patterns
Rise in average temperatures
Rise in sea levels
Rise in average temperatures puts pressure on earnings due to increased risk of heat stroke, declining operational efficiency and increased investment in air conditioning equipment, the occurrence of serious accidents, etc
Droughts and flooding associated with rising average temperatures and rising sea levels put pressure on earnings and cause opportunity losses due to difficulties in procuring raw materials and parts and soaring prices
Below, we disclose four areas of opportunity that are expected to have a particularly significant impact on the Group, and that are considered highly likely to actually occur.
Factors resulting in opportunity
Financial impact in 2030
Use of more efficient modes of transportation
Use of more efficient production and distribution processes
Reduced management and transport costs due to energy conservation and efficiency resulting from compatibility with energy conservation and low carbon/decarbonization regulations
Products and services
Development and expansion of low carbon products and services
Development of new products and services through R&D and innovation
Increased sales of products contributing to energy conservation and improved manufacturing efficiency (GEN4 RM, XO, PAS, PT-X, VBL-F and other dryers, crushers, and measuring instruments)
Access to growth markets with shift to energy conservation and low carbon/decarbonization
Increased sales of Company’s powder-related equipment linked to increased demand for rechargeable batteries for EVs and food substitutes, etc.
Changes in stakeholder assessments
Contributing to low carbon/decarbonization through products, services, and Company’s business activities, and taking the industry lead in disclosing this information, will gain the support of stakeholders, enhance our value, and lead to increased business results
With regards to our medium to long-term responses to the risks and opportunities identified herein, we will continue to implement and assess the effectiveness of these measures and improve the resilience of our business activities
Promote GHG emissions reductions in business activities
Improve efficiency of own operations and product deliveries
Optimize design (quantity of materials used, reduction in processing times)
Develop sales activities and service offerings utilizing the web
Promote automated capture (GEN4) of factory default data (initial values)
Review product delivery and packaging methods (mixed loading, review of packaging materials, etc.)
Improve efficiency in delivery operations (use of DX)
Reduce energy usage
Shift to energy-saving, more efficient equipment
Upgrade to energy-saving devices (more energy-efficient air conditioning, shift to LED lighting, shift to HEVs for company-owned vehicles, etc.)
Shift to business activities that promote these measures
Formulate business plans (investments, etc.) based on trends in regulatory systems involving carbon pricing
Create and implement a road map for reducing GHG emissions
Build a more resilient supply chain
Develop educational activities, including explaining our policies to partners (in procurement, manufacturing, construction, logistics, etc.)
Encourage shift to in-house manufacturing
Expand products and services based on corporate philosophy of contributing to society through the development of powder technology
Expand energy-saving products
Develop highly energy-efficient, energy-saving products and technologies based on the collective technological strengths of Group companies, and develop and expand systems that contribute to greater energy savings and efficiency
Expand products and services that contribute to improvements in customer energy savings
Support for early development of optimized operations (energy-saving operations) via GEN4
Realization of failure prediction technology and early provision and expansion of services
Develop designs and components with low maintenance costs
Explore new market needs associated with shift to low carbon/decarbonization
Address new market needs, including ethical consumption, etc.
Strengthen human resource development to acquire technical capabilities compatible with market needs
Engage in proactive information disclosure and develop new sustainability initiatives
Strengthen communication with stakeholders through proactive information disclosure
Strengthen offering of information on energy-saving products and products and services to support improved energy savings
Introduce Company low carbon/decarbonization activities
Develop new sustainability initiatives
Partnerships with companies that have decarbonization technology and expertise
Initiatives in areas outside of products and services (environmental preservation)
Advance Company BCM*
Enhance BCM* levels
Ensure employee safety and health
Create employee health friendly workplace environments (facilities/IT investments, etc.)
*BCM : Business Continuity Management
3. Risk Management
The Committee is primarily responsible for formulating policies and measures to avoid, mitigate, and control the identified climate change-related risks, and to formulate policies and responses for quickly initiating work on opportunities. Quarterly, and otherwise as needed, the Committee submits reports to the Board of Directors and will receive directions and instructions from the Board.
Climate change-related risks are regularly subjecting to and managing via the process shown below.
Regarding Group risks in general, the Business Division is responsible for reporting from a Company-wide perspective at meetings of the General Management Meeting held monthly on issues involving management and sales, as well as various issues including the status of overseas operations. Based on these reports, information is collected on various risks the Group may face going forward, and efforts are made to build a risk management system that can review and implement effective countermeasures while allowing for dynamic, optimal responses according to the degree of impact those risks have on management. This also applies to important risks related to climate change, which are reported to the General Management Meeting quarterly or otherwise as needed, in an effort to coordinate risks across the Company as a whole.
4. Indicators and Targets
Since the fiscal year ended September 2022, the Group has been engaged in efforts to understand CO2 emissions from its own business activities (“Scope 1, 2”) and from within its supply chain (“Scope 3”).
In addition, using fiscal 2022 Scope 1, 2 levels as reference values, the Group has established Group Scope 1, 2 reduction targets* aimed at reducing CO2 emissions.
2050 Target: Scope 1, 2 Effectively zero
2030 Target: Scope 1, 2 Reduce 24%* (compared to fiscal 2022)
* Applies to HOSOKAWA MICRON CORPORATION (domestic only),
HOSOKAWA MICRON Cosmetics Corporation and
HOSOKAWA Powders Corporation.
In fiscal 2022, Scope 1, 2 amounted to 2,259t; Scope 3 totaled 2,974,664t (metric tons).
We will contribute to reductions in Scope 3 as well, through energy-saving products and by expanding products and services that contribute to customer energy-saving improvements.
Values calculated based on the "Basic Guidelines for Calculating Greenhouse Gas Emissions Through the Supply Chain", issued by the Ministry of the Environment and the Ministry of Economy, Trade and Industry.
For the first year (fiscal 2022), calculations limited to HOSOKAWA MICRON CORPORATION (domestic only), HOSOKAWA MICRON Cosmetics Corporation and HOSOKAWA Powders Corporation.