Addressing Climate Change

Addressing climate change is an important management priority for the Group, and we promote environmental management by taking actions such as reducing greenhouse gas emissions to contribute to the realization of a sustainable society.

Glory's Environmental Policies address global warming and set forth the Group's 2050 environmental goals to achieve carbon neutrality by 2050 (i.e., net zero in Scope 1 and 2). Specifically, we aim to reduce CO₂ emissions in our business activities and environmental impact in our value chain towards a net zero society.

Since November 2021, the Glory group has supported the TCFD^* recommendations, based on which we will enhance our climate-related disclosure as we make progress on the initiatives taken.

Reducing greenhouse gas emissions is one of the most important material issues for the Glory Group, and we aim to reduce environmental impact in all aspects of our business operations towards building a sustainable society.

Climate change-related issues are discussed by the Environmental Management Committee, met twice a year and chaired by the environmental management officer appointed by the Board. The important matters decided upon by the Environmental Management Committee and implementation of initiatives are reported to and approved by the Sustainability Committee which meets twice a year and is chaired by the President. The Sustainability Committee regularly reports to the Board, ensuring appropriate decision-making and monitoring concerning the Group's sustainability management.

Below is a list of material climate-related risks and opportunities for the Glory Group's business, with key drivers and possible financial impacts over medium- to long-term.

As a practice, analyze business and financial impacts of each risk identified based on the IPCC^*1 and IEA^*2 scenarios shown below to formulate and implement countermeasures.

As in the previous year, we used the following two scenarios, with reference to the examples of typical risks and opportunities by the TCFD:

1.5/2℃ scenario: Climate change measures are implemented in line with the goals of the Paris Agreement
Introduction of carbon tax would increase our business costs with a medium to large financial impact. On the other hand, energy price fluctuations (e.g., electricity, gas, and gasoline) may decrease our business costs with a small financial impact.

4℃ scenario: Climate change measures are not implemented and consequences become a reality
River flooding and storm surges can damage production/logistics sites and cause business/operational shutdowns. This would generate recovery costs or/and reduce profits, however, financial impact is expected to be small.

*1 IPCC: Intergovernmental Panel on Climate Change

*2 IEA: International Energy Agency

*3 Adopted Scenarios

*4 Time Horizon

*5 Definition of financial impact

The Risk Management Committee, chaired by the Company’s President, is responsible for risk management concerning the Group's business. Climate-related risks are managed in accordance with the Environmental Management System (EMS).

Using CO₂ emissions as an indicator to manage climate change-related risks and opportunities, we have set the 2050 Environmental Targets to achieve carbon neutrality by fiscal 2050 (net-zero CO₂ emissions for Scope 1 and 2), then casting back, set the 2030 Environmental Targets as a closer milestone. To enhance our efforts to reduce CO₂ emissions, we revised these targets in April 2024, based on the certification standards of the Science Based Targets initiatives (SBTi). In addition, we have extended the scope of analysis to our overseas consolidated subsidiaries to promote the reduction of CO₂ emissions (Scope 1 and 2) in our global business operations.

In practice, we continue to install energy-saving equipment at production sites, increase the use of renewable energy through solar power generation, purchase CO₂-free electricity, and switch to environmentally-friendly company cars.

We have also our FY2030 Scope 3 reduction targets to aim for net zero CO₂ emission across our value chain.

The Glory Group implements global initiatives towards its “2050 Environmental Goals” that aims for target carbon neutrality (net zero CO₂ emissions for Scope 1 and 2) by fiscal 2050. Currently, we are introducing energy-saving air conditioning systems and LED lighting, expanding the use of renewable energy through solar power generation, and switching to 100% renewable energy-derived, CO₂-free electricity.

Through these initiatives, we have achieved net zero CO₂ emissions from electricity at our major domestic locations (Himeji Head Office/Factory and Saitama Factory) in fiscal 2024.

Scope 3 accounts for approx. 93% of the Group's total CO₂ emissions, and Category 1 (CO₂ emissions during the manufacture of purchased goods and services) and Category 11 (CO₂ emissions during use of sold products & services) account for approx. 86% of Scope 3. We therefore focus on Category 1 and 11 to promote CO₂ reduction initiatives to lower the environmental impact across our value chain. For Category 1, we engage our primary first tier suppliers to agree on CO₂ reduction targets, and for Category 11, we aim to improve energy efficiency by thorough product assessments during product development.