Environment Environment

The Company's Risk Management Committee, chaired by the President and composed of members of the Board of Directors and others, deliberates and makes decisions on important issues that are considered risks.

In addition, we will work with the Business Progress Confirmation Meeting, which promotes our medium-term management plan to place ESG and SDGs initiatives and climate change initiatives at the core of our management, to ensure that our carbon dioxide (CO₂Under management's leadership and control, we are promoting sustainability initiatives across our businesses, including emission reductions.

By identifying important social issues to be addressed by the Company and linking them to the values of the Group and each strategy in the medium-term management plan, we will steadily implement measures that will contribute to the goals of the SDGs and lead to the development of the Group.

Scope 1 and Scope 2 CO₂ emissions are calculated and monitored every fiscal year.

In addition, we have independently calculated the amount of reduction contribution to be realized by expanding sales of decarbonization-related products in a manner similar to Scope 3 Category 11, and are actively working toward achieving carbon neutrality with the goals of a 20% reduction by 2030, a 58% reduction by 2040, and a 100% or greater reduction by 2050. We are actively working to achieve carbon neutrality.

In accordance with the Japanese government's "Green Growth Strategy Accompanying Carbon Neutrality in 2050," we will promote our green growth strategy, viewing the response to global warming as an opportunity for growth.

The industrial furnace industry as a whole is expected to be affected by declining demand for industrial furnaces that use fossil fuels as their heat source and a decrease in the number of parts used in EVs, but on the other hand, demand for EV-related parts such as motors and batteries for automobiles, hydrogen and ammonia combustion, and electrification is increasing, and regenerative burners, oxygen-enriched combustion equipment, etc. are expected to continue, Capital investment in energy-saving combustion equipment such as regenerative burners and oxygen-enriched combustion equipment, as well as in equipment upgrades, is expected to continue for the time being.

In addition, in the mid- to long-term, we will promote the development of ammonia burners for coal-fired power generation with the aim of going carbon-neutral.

We believe that we can contribute to improving factory efficiency and reducing environmental impact by providing technologies and services that meet customer needs, centered on thermal technology, which is our core competence.

In addition, by providing carbon neutral technologies and services, including hydrogen and ammonia combustion and electrification, which we have developed, we aim to make a significant contribution to reducing our customers' CO₂ emissions.

Since a large portion of our supply chain emissions are from the "use of our products," we have set a decarbonization target for 2050 based on our standards.

Emissions from our products in 2013, the baseline for Japan's reduction target under the Paris Agreement, was approximately 12 million tons, or roughly 1% of Japan's total CO₂ emissions.

We have set a goal of reducing these emissions to virtually zero by 2050. Although it is impossible to achieve zero emissions, we aim to achieve carbon neutrality by 2050, including reductions in CO₂ emissions from products other than our existing products.

Specifically, we have independently calculated the amount of reduction contribution to be realized by expanding sales of decarbonization-related products in a form similar to Scope 3 Category 11, and are actively working toward achieving carbon neutrality with the goals of a 20% reduction by 2030, a 58% reduction by 2040, and a 100% or more reduction by 2050. We are actively working to achieve carbon neutrality.

Scope 1 and Scope 2 CO₂ emissions are also calculated and monitored each period.

The Ministry of Economy, Trade and Industry (METI) of Japan has recognized our efforts in the following projects and selected us as one of the "Zero Emi Challenge Companies" that are boldly taking on the challenge of innovating toward the realization of a decarbonized society. The list of approximately 600 companies, including our company, was compiled as the second round of the "Zero Emi Challenge Companies," and the companies that were made public were selected based on their participation in the projects of the Ministry of Economy, Trade and Industry and the Ministry of Agriculture, Forestry and Fisheries (MAFF), which are linked to the "Innovative Environmental Innovation Strategy," and in 45 projects conducted by the New Energy and Industrial Technology Development Organization (NEDO). The company's contribution to zero emissions through the "Innovative Environmental Innovation Strategy" was highly evaluated and announced at the "TCFD Summit 2021" held on October 6, 2021.

[ CHUGAI RO CO., LTD. Project ] Development of Carbon Recycling and Next Generation Thermal Power Generation Technology / R&D and Demonstration Project for Ammonia Co-firing Thermal Power Generation Technology / Elemental Research / R&D for Expanding Use of CO₂-free Ammonia Fuel in Thermal Power Plants https://www.nedo.go.jp/activities/ZZJP_100115.html

About "Zero-emi Challenge Companies Details of the "Zero-emi Challenge Companies" are available at the following URL and press release from the Ministry of Economy, Trade and Industry. https://www.meti.go.jp/press/2021/10/20211005004/20211005004.html

[ CHUGAI RO CO., LTD. Project ] Development of Carbon Recycling and Next Generation Thermal Power Generation Technology / R&D and Demonstration Project for Ammonia Co-firing Thermal Power Generation Technology / Elemental Research / R&D for Expanding Use of CO₂-free Ammonia Fuel in Thermal Power Plants https://www.nedo.go.jp/news/press/AA5_101478.html