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 climate-related risks and opportunities most relevant to the Group's business, along with the key drivers and their potential financial impacts over medium-to long-term.

We assess potential business and financial impacts based on climate scenarios developed by the IPCC^*1 and IEA^*2, and formulate and implement appropriate response measures.

Consistent with the previous year, we used two scenarios this year: a 1.5/2℃ scenario, aligned with the goals of the Paris Agreement, and a 4℃ scenario, assuming limited climate action and more severe physical impacts of climate change^*3. The analysis was conducted with reference to the representative climate-related risks and opportunities identified by the TCFD:

1.5/2℃ scenario: A world in which the Paris Agreement temperature goals are achieved
The analysis indicated a moderate to high financial impact due to higher operating costs associated with carbon pricing. Conversely, changes in energy price fluctuations (e.g., electricity, gas, and fuel costs) were assessed to have a moderate positive impact through reduced operating expenses.

4℃ scenario: A world in which CO₂ emissions continue to rise and global warming accelerates
The analysis indicated a low to moderate financial impact from flooding and storm surges, including damage to production and logistics facilities, recovery costs, and reduced profits resulting from business interruptions.

We will continue to enhance the resilience of our business to climate change through appropriate response to both risks and opportunities.

*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.

In April 2024, we expanded Scope 1 and 2 emissions reporting to include Glory and its consolidated subsidiaries in Japan and overseas, strengthening our global efforts to reduce CO₂ emissions. We have established reduction targets in line with the Science Based Targets (SBT) framework and are progressing toward formal validation under the Science Based Targets initiative (SBTi)^*, to which we committed in November 2025.

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 consumption at our major domestic sites (Himeji Head Office/Factory and Saitama Factory) since fiscal 2024.

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. 82% 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.