Environment and Safety Management

The Central Glass Group has established the Guidelines for Environment, Safety, and Health based on the Corporate Philosophy and Code of Conduct. While not only appropriately complying with the law, we also promote management considering the environment and safety with the aim of carrying out corporate activities at a higher standard, meeting social demands, and creating a safe and comfortable working environment.

Environment and Safety Management Promotion System

The Central Glass Group has established the Environment Safety Promotion Committee, and the Environment and Safety Department acting as its secretariat is promoting Group-wide environment and safety efforts. The head office, research centers, plants and affiliate companies incorporate items unique to each business site into a specific activity plan and engage in environment and safety initiatives.

Promotion of Environmental Protection

Material Balance of the Central Glass Group

The Central Glass Group continues its efforts to reduce the environmental impact of production activities by carefully monitoring the amount of energy and resources used in our production activities as well as the environmental impact they generate. These efforts primarily focus on reducing emissions of greenhouse gases (hereinafter referred to as GHG) and discharge of environmentally hazardous substances into the air and water, as well as on recycling waste and reducing the final disposed amount. We will continue to monitor our resource consumption and amount of waste to further control generation, emissions and discharge of GHG, environmentally hazardous substances, and waste, as well as promote cyclic use to build a recycling-oriented society.

Reduction of GHG Emissions

Medium- and Long-Term Targets

Reduce total Scope 1 and 2 GHG emissions for the entire Group by 60% from the FY2013 level by FY2030
Challenge to realize net-zero GHG emissions in 2050

Carbon Neutrality Initiatives

Production was temporarily halted in FY2022 due to the suspension of our glass kiln in Japan and large-scale maintenance, resulting in Scope 1 and 2 emissions totaling 332,000 t-CO₂. Total Scope 1 and 2 emissions in FY2023 amounted to 356,000 t-CO₂, an increase from the previous year. This increase was due to the completion of the flat glass kiln repair work and the return to normal production operations. Emissions totaled 748,000 t-CO₂ after structural adjustment, which excludes emissions from transferred European and U.S. Automotive Glass business, etc. from the FY2013 emissions results. We achieved a 52.3% reduction in GHG emissions in FY2023 compared to FY2013, achieving our previous FY2030 target of a 40% reduction compared to FY2013 ahead of schedule. To this end, we revised our medium-term target to a 60% reduction in GHG emissions by FY2030, compared to FY2013 levels.

Reduction of Water Use

We implemented measures in FY2023 to achieve our target of 61.1 m³/million yen, equivalent to the water intake intensity per sales unit from the previous year. These efforts resulted in a lower Group-wide absolute water intake volume from the previous year. However, the water intake intensity per sales unit increased slightly to 62.4 m³/million yen, falling short of the target. This increase was due to flat glass production lines resuming operations after periodic repairs conducted in the previous fiscal year, as well as changes in sales composition. We will continue to work to lower our water intake intensity per sales unit over the medium to long term by making active efforts to use water effectively.

Air Pollutant Emissions

Our Group monitors the concentration and amount of sulfur oxides (SOx), nitrogen oxides (NOx), soot and dust, and other air pollutants emitted, in accordance with the Air Pollution Control Act, the laws and regulations of each country, and the emission standards of the regions where our facilities are located. Some plants have installed environmental protection equipment such as desulfurization equipment for SOx, catalytic adsorption equipment for NOx, and electrostatic precipitators for soot and dust to recover air pollutants before they can be discharged into the atmosphere. Our air pollutant discharge increased slightly in FY2023 from the previous year due to the reactivation of manufacturing lines. We will continue to carry out appropriate management reliably.

Water Pollutant Emissions

Our Group monitors the concentration and amount of water pollutant emissions, such as COD, total phosphorous discharge, and total nitrogen discharge, in accordance with the Water Pollution Control Act, the laws and regulations of each country, and the emission standards of the regions where our facilities are located. At each plant, the wastewater treatment facilities necessary for environmental conservation have been installed to remove pollutants and recollect active components in wastewater before discharge. Our water pollutant discharge decreased slightly in FY2023 from the previous year due to a decrease in production. We will continue to manage water pollutant discharge going forward.

Reducing Waste

The Group engages in Responsible Care activities to implement the 3Rs (Reduce, Reuse, Recycle) further, striving to reduce industrial waste discharge while ensuring proper waste disposal management. Group industrial waste discharge decreased in FY2023 compared to FY2022. Amounts of waste recycled also decreased compared to FY2022. We also achieved our FY2023 with the final disposal amount totaling 8.3 thousand tons.
The Group began aggregating industrial waste from products using plastic in FY2021 per the enforcement of the Plastic Resource Circulation Act (April 1, 2022). The amount of industrial waste from products using plastic in FY2023 remained similar to FY2022 levels. Waste recycled at destination processors decreased from FY2022 and recycling rates declined. We will continue to implement initiatives to reduce and recycle industrial waste from products using plastic.

Promotion of Industrial Health and Safety, and Security and Disaster Prevention

Promotion of Industrial Health and Safety

The Central Glass Group strives to ensure safe workplaces and formulates an annual Health and Safety Management Policy. To this end, we engage in occupational health and safety activities, as well as safety and disaster prevention activities at each of our business locations in Japan and overseas. We strive to eliminate potential hazards in our work environments and engage in activities to take responsibility for protecting our own lives, bodies, and health. In FY2023, the number of occupational accidents at our company, domestic subsidiaries and affiliates, and subcontractors totaled 21, 8 of which required leave (up 2) and 13 that did not require leave (down 8).

Promotion of Security and Disaster Prevention

The Group works to improve our safety and disaster preparedness systems, striving to reach our goal of zero accidents, including fires, explosions, and chemical substance spills. We pay particular attention to the large number of accidents in recent years involving damage to property caused by forklifts.
In FY2023, we strived to prevent accidents with partner companies by continuing to discuss accident causes and countermeasures, based on prior accident cases, and offering forklift training taught by external instructors.

Addressing Climate Change Issues

1. Basic Approach

Climate change is one of the key issues to be addressed on a global scale in order to realize a sustainable society. Central Glass is working to contribute to the environment by providing environmentally friendly products and to reduce greenhouse gas (GHG) emissions through energy conservation and fuel conversion, as well as promoting research and development for the recovery and utilization of GHG.
In response to the recommendations of the TCFD (Task Force on Climate-related Financial Disclosures), as an enterprise, we seriously address the issue of climate change, promote efforts to address it, and strive to proactively disclose such information.

2. GHG Emissions Trends

GHG Emissions Data

(10,000 t-CO₂)

• GHG emissions minus GHG emissions in the base year of the transferred European and U.S. automotive glass operations, etc.

3. Disclosure based on TCFD recommendations

Governance

The Management Committee serves as the decision-making body for business execution, discussing and approving initiatives to address climate change and other environmental and social issues in the Group. We also established the Sustainability Committee to analyze and evaluate our efforts to address each issue across the organization. This committee also discusses individual policies and measures as necessary, reporting and proposing the discussion results to the Board of Directors as appropriate. The Board of Directors discusses and supervises Group responses to environmental issues, our progress, and other areas in response to discussions and recommendations made by the Management and Sustainability Committees.

Strategy

The Group takes the following initiatives to understand the impact of climate-related risks and opportunities on our business.

• Identify climate-related risks and opportunities
• Assess impact, period, and likelihood of occurrence for each risk and opportunity (simplified scenario analysis)

Transition risks are risks that arise during the process of social and economic decarbonization. We categorize these items from the perspectives of regulations, technologies, markets, and reputation. We present factors relevant to our business in an organized manner according to these classifications.
Physical risks consist of acute risks (arising from the increasing frequency and intensity of typhoons, floods, droughts, heat waves, and other weather-related events) and chronic risks (arising from increases in average surface temperatures and other long-term changes in climate patterns). We organize these risks in the same manner.
Climate-related opportunities are based on what Group businesses could gain from social and economic decarbonization or changes in weather and climate patterns due to climate change.
The table on the following summarizes climate-related risks, opportunities, and their impact based on the above perspectives.

Main Reference Scenarios
Below 2°C Scenario: International Energy Agency (IEA), World Energy Outlook 2023 (WEO 2023), Announcement Pledge Scenario (APS), Network for Greening the Financial System (NGFS) Version 4, Below 2°C Scenario
4°C Scenario: Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report (AR6)

Impacts of Climate-Related Risks and Opportunities

	Areas	Major Factors	Business Impacts	Period	Likelihood of Occurrence	Financial Impacts	Degree of Impact
Transition Risks	Regulations	Stricter carbon pricing and other GHG emission regulations	(Own emissions) Increase in operating costs due to higher carbon prices	Medium term		Increase in manufacturing costs
			(Upstream supply chain emissions) Rising raw material and fuel prices due to rising carbon prices	Medium term		Increase in manufacturing costs
		Stricter energy conservation laws and regulations	Increase in procurement of renewable energy (wind, solar, etc.) due to Scope 2 reduction requirements	Medium to long term		Increase in manufacturing costs
			Increase in equipment renewals, investments, etc.	Medium to long term		Increase in manufacturing costs
	Technologies	Changing customer expectations	Shift in demand to products with higher environmental performance from other companies	Medium to long term		Decrease in sales
		Progress toward a low-carbon economy	Increase in R&D expenses and capital expenditures to develop products with higher environmental performance	Medium to long term		Increase in R&D expenses and capital expenditures
	Reputation	Changes in investor evaluations	Increase in financing costs resulting from our declining ESG reputation	Medium term		Increase in financing costs
Physical Risks	Acute	Increasing and intensifying storms, floods, and other weather disasters	Damage to work sites and operation suspensions Operational suspension due to damage to logistics networks, substitute product procurement, loss of sales opportunities due to damage to sales partner companies	Short to medium term		Occurrence of recovery costs, decrease in sales
	Chronic	Heat waves and chronic rising temperatures	Heat stress, reduced operating capacity due to increased infection risk, lost sales opportunities	Short to medium term		Decrease in sales
			Increase in electricity consumption for air conditioning, increased maintenance due to equipment breakdowns, etc.	Short to medium term		Increase in manufacturing costs
		Increased drought due to low rainfall	Decrease in operating capacity due to increased water stress (shortages and deteriorating quality), lost sales opportunities	Short to medium term		Decrease in sales
Climate-Related Opportunities	Products and Services	Stricter refrigerant regulations	Increase in demand for refrigerant application products (HFO) with low GWP	Medium to long term		Increase in sales
		Growing demand for products with high energy-saving performance	Increase in demand for insulation foam products (HFO)	Medium to long term		Increase in sales
			Increase in demand for heat-insulating and heat-shielding glass	Medium to long term		Increase in sales
		Growing demand for energy efficiency using IoT	Increase in demand for process and cleaning gases for semiconductor equipment due to rising demand for semiconductor products	Medium term		Increase in sales
		EV market expansion	Increase in demand for electrolytes due to rising demand for lithium-ion batteries	Medium to long term		Increase in sales

Introducing an Internal Carbon Pricing System

The Central Glass Group introduced an Internal Carbon Pricing (ICP) system in June 2023 as part of our efforts to achieve our GHG emissions (Scope 1 and Scope 2) reduction targets. This system uses an internal carbon price to visualize carbon costs for use in capital investment decision-making.
We are committed to investing in reducing emissions to meet the growing demand for GHG reductions.
Reference: Internal carbon price (at introduction) of 10,000 yen/t-CO₂

Risk management

Each business unit identifies and assesses operational risks and impacts, reporting them to management as needed. The Sustainability Committee also shares, analyzes, and evaluates business risks, opportunities, and countermeasures related to climate change and other factors across the organization. The committee then reports and makes proposals to the Board of Directors as necessary.
We launched the target management framework for medium- to long-term GHG emission reduction in FY2023. This framework addresses Scope 1 and 2 emissions, striving to achieve our 2030 target and 2050 net zero GHG emissions target. We consider this framework important to our activities to reduce GHG emissions. The main initiatives of the framework include estimating future emissions, evaluating the possibility of achieving targets, formulating action plans to reduce emissions, and revising such plans as necessary.

Indicators and Targets

• Aim to reduce group-wide GHG emissions (Scope 1 and 2), including overseas companies, by 60% by FY2030 compared to FY2013 levels
• Aim for net zero GHG emissions by 2050