Addressing Climate Change

The Glory Group considers climate change as an urgent issue to be addressed and promotes environmental management through initiatives including reduction of greenhouse gas emissions to contribute to 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.

Towards carbon neutrality and sustainable society, we aim to reduce environmental burden in our business activities. To ensure sound decision-making and supervision in our sustainability management, we have the following system in place.

The Environmental Management Committee addresses environmental issues concerning the Glory Group. Appointed by the Board of Directors, the committee is chaired by the executive officer responsible for EMS management, and is composed of management members responsible for environmental issues. The committee meets twice a year to discuss material issues and initiatives taken, then reports to the Sustainability Management Committee, which reports to the Board of Directors on a regular basis.

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

We analyze business and financial impacts of each risk based on the IPCC^*1 and IEA^*2 scenarios as shown below and formulate countermeasures to be implemented.

In fiscal 2023 we used the 1.5/2℃ and 4℃ scenarios^*3 in reference to the typical risks and opportunities exemplified 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).

The Glory Group uses CO₂ emissions as key metrics for climate-related risks and opportunities. Casting back from FY2050 Environmental Goals, we have set FY2030 Environmental Goals as a milestone towards achieving net zero CO₂ emissions in Scope 1 and 2 by FY2050. Upon formulation of the Group's 2026 Medium-term Management Plan (April 2024 - March 2027), we have re-set our medium to long-term environmental targets based on the certification criteria of the SBT (Science Based Targets) initiative^*. Specifically, we have included all our domestic and overseas consolidated subsidiaries in the scope of calculation, in addition to our ISO 14001 certified locations in Japan (Himeji Headquarters and our domestic consolidated subsidiaries), and reset the reduction target to 42.4% (vs. FY2022).

As specific measures, we will continue our plan to install energy-saving equipment at production sites, increase the use of renewable energy through solar power generation, purchasing CO₂-free electricity, and introduce environmentally-friendly company cars.

In addition to Scope 1 and 2, we have re-set our Scope 3 reduction targets for FY2030 to aim for net zero CO₂ emission across our value chain.

The Glory Group implements global initiatives towards its 2050 Environmental Goals that target carbon neutrality (net zero CO₂ emissions for Scope 1 and 2) by fiscal 2050. As specific measures, we introduce energy-saving air conditioning systems and LED lighting, expand the use of renewable energy through solar power generation, and make the transition to 100% renewable energy-derived, CO₂-free electricity. Through these initiatives, we expect to achieve net zero CO₂ emissions from our business activities in fiscal 2024 at our major domestic sites (head office, head office factory, and Saitama factory).

Scope 3 accounts for approx. 94% 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. 88% 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.