Environmental Initiatives

Aiming for Greater Harmony between the Environment and Business

Environmental Initiatives

At TOWA Corporation, we are fully aware that global environmental issues are important for all human beings, because they have the potential to threaten the survival of mankind. To contribute to the achievement of a sustainable, recycling-oriented society, we have established the Environment Management System at each plant and office and make every effort to minimize the environmental impact of our business activities.
We also strive to improve the environmental performance of our products by designing and developing them with a focus on the reduction of the environmental impact as the primary goal.


Environmental Policy  Climate ChangeCO2 ReductionTCFD Disclosures


Environmental Policy

TOWA Corporation recognizes that protection of the global environment is an important issue shared by the entire human race. Through all of our business activities,we provide the market with “new products, new merchandise and services” by means of environmentally friendly technological development and contribute to reducing the global environmental impact.

1.Fully understanding the global environmental aspects of our business activities, products and services, we will make every effort to prevent global environmental pollution and counter global warming.

2.We will comply with environmental laws and regulations related to our business activities, products and services.

3.We engage in the following as the key tasks for our business activities, products, and services:

 (1)Promotion of green design taking into account life cycle, with low environmental impact.

 (2)Promotion of green procurement encouraging the supply chain for low environmental impact.

 (3)Reduction and control in the use of environmentally hazardous chemical substances

 (4)Continuous efforts to save energy and resources in our business activities

4.To achieve this Environmental Policy, we set strategic targets, formulate specific steps for realizing them, set indexes for measuring the results quantitatively, and make efforts to ensure continuous improvements.

April 1, 2017
Hirokazu Okada
President & CEO
TOWA Corporation

ISO14001

All of our plants and offices in Japan have obtained ISO 14001 certification.



 


Climate Change

CO2 Reduction

  We are fully aware that reducing greenhouse gas emissions, which cause climate change, is an important issue. We set CO2 emission reduction targets and will work on Carbon Neutrality throughout the Group.

   CO2 emission reduction targets

              Scope1:Direct greenhouse gas emissions from our group
              Scope2:Indirect emissions from the use of electricity, heat and steam supplied by other companies

  This target is set with reference to the concept(1.5°C level) of SBT(greenhouse gas emission reduction targets that consist with the level required by the Paris Agreement set by companies with a target year of 5 to 15 years ahead).

 




TCFD Disclosures

  Recognizing "climate change" as one of the important management issues, we declared our support for the TCFD※ Recommendations in May 2022. We will strive to disclose information related to climate change in line with the content of the recommendations.
※ The term “TCFD” is an acronym for the Task Force on Climate-related Financial Disclosures. It was established to consider climate-related information disclosure and the response of financial institutions to climate change. The TCFD Recommendations encourage companies to disclose governance, strategies, risk management, metrics and targets related to climate-related risks and opportunities.

 

TCFD Disclosures▽Governance  ▽Strategy  ▽Risk Management  ▽Metrics and Targets )


Governance

Board of Directors Oversight and Management Role

  In the system for promoting environmental management, the Board of Directors deliberates and decides on basic policies regarding climate change at least once a year.
  In FY2022, we deliberated on the risks and opportunities that climate change will pose to us, and the content of scenario analysis based on them.
  We will continue to discuss the impact of climate change on our company as appropriate.

Strategy

  We strive to understand the various risks and opportunities that may arise from climate change. In FY2021, we organized the risks and opportunities that future climate change will bring to our business, and evaluated the impact of those risks and opportunities by conducting qualitative and quantitative scenario analysis including the 1.5°C scenario. The target of this evaluation is the entire supply chain including semiconductor-related products.

Climate-related Risks and Opportunities

◆Possible Risks

  In the TCFD Recommendations, climate change-related risks are classified into two categories: Transition Risks and Physical Risks, and we identified risk items based on the recommendations. Among them, we have identified the major risk items that are expected to be highly related to our business and organized the impacts (Table 1).

    Table 1 Possible Risks

Items(Risks / Opportunities)Time Frames※1Details
Risks Policy and Legal Emissions trading/ carbon taxes Medium
  • Increase of procurement costs (carbon tax, etc.) for materials that emit large amounts of CO2
  • Increase of costs due to carbon tax related to own business activities
Tightening of environment-related regulations such as energy saving Short
  • Increase of costs by introducing renewable energy and updating equipment to save energy
Technology Loss of sales opportunities due to delays in technology development to save energy and reduce CO2 emissions Medium
  • Energy-inefficient products are eliminated, shifting demand for higher performance products.
  • Loss of business opportunities due to failure to meet customers' energy-saving and decarbonization needs
R & D costs for new technologies or risk of research failure Medium
  • Risk of failure to recover technology development costs when inferiority due to competition for technology development (improvement of energy-saving performance, etc.)
Reputation Decline in corporate evaluation due to non-achievement of reduction targets Medium
  • Customer attrition due to reputational risk when environmental initiatives are inadequate
  • It becomes difficult to secure funds from the market.
Changes in consumer preferences Medium
  • As end customer preferences change, customers require low carbon when procuring.
Physical Severe disasters such as typhoons and floods Short
  • Suspension of business activities at our own plants and bases due to damage from typhoons and floods
  • Delays in parts delivery due to damage to suppliers and distribution warehouses
  • Decrease in production efficiency due to increased power outages caused by lightning strikes

    ※1 Short:within 3 years Medium:in 3-5 years Long:more than 5 years ahead

◆Possible Opportunities

  As society as a whole is required to further promote energy conservation activities and energy efficiency, we anticipate expanding demand for equipment that contributes to GHG emissions and waste reduction, and expanding demand for products that accompany demand for semiconductors such as EVs as our business opportunities (Table 2).

    Table 2 Possible Opportunities

Items(Risks / Opportunities)Time Frames※1Details
Opportunities Use of efficient means of transportation (Modal shift) Short
  • EV will account for 60%※2 of new car sales in 2030, and demand for semiconductor manufacturing equipment will increase due to the expansion of autonomous driving.
Use of low emission energy sources Medium
  • Increase of demand for manufacturing equipment because of demand for semiconductors for power conditioners, etc. due to the introduction of new technologies and the conversion to distributed energy
Development and expansion of low-emission products and services Short
  • Expanding demand for semiconductor manufacturing equipment (compression molding equipment) that reduces waste emissions
Acquiring new market opportunities through climate change measures Medium
  • Increase of orders from customers who are members of RE100, etc. due to the realization of decarbonization of our company
Utilization of recycling Short
  • Expanding demand for used machine sales business for semiconductor manufacturing equipment from the perspective of the circular economy

    ※1 Short:within 3 years Medium:in 3-5 years Long:more than 5 years ahead
    ※2 Global EV Outlook 2021(Sustainable Development Scenario)

◆Scenario Analysis

  In order to verify the impact of climate change on our group, we set multiple scenarios including the 1.5°C scenario by referring to the scenarios such as IEA "World Energy Outlook 2021" and IPCC 6th Report, and in each scenario, we analyzed the impact of our business on it (Table 3).
  The following scenarios will be reviewed regularly in light of future changes in the environment.

    Table 3  Overview of the set scenario

Set Scenario1.5°C ScenarioCurrent Scenario
Forecast
business
environment
  • Risks
  • Risks
  • Toward the realization of a world of 1.5°C, the introduction of carbon tax is progressing all over the world, and in 2030, the carbon tax will exceed 130$/t-CO2 in developed countries.
  • Customers' environmental awareness will increase, and energy saving and CO2 saving of manufacturing equipment will be strictly required. However, the development of energy-saving technology will make great progress.
  • As the frequency of severe disasters such as increased typhoon damage and increased flood frequency increases, the risk of damage to our own plants and supply chain bases increases.
  • Opportunities
  • Opportunities
  • Demand for semiconductor manufacturing equipment will expand significantly from the current level due to the growth in EV sales, the spread of renewable energy equipment, and the growing needs of customers to achieve international initiatives (RE100, SBT, etc.).
  • With the spread of the concept of circular economy in addition to economic efficiency, the used market for manufacturing equipment will expand significantly from the current level.
  • With the growth of EV sales, the spread of renewable energy equipment, and the growing needs of customers to achieve international initiatives (RE100, SBT, etc.), the demand for semiconductor manufacturing equipment is increasing, but the growth will be slower than in the 1.5°C scenario.
  • From an economic point of view, the used market for manufacturing equipment is expanding, but the growth will be slower than in the 1.5°C scenario.
Reference
scenario
  • IEA:WEO2021 NZE and SDS
  • IPCC Sixth Assessment Report / Working Group I Report: SSP1-1.9, SSP1-2.6
  • IEA:WEO2021 STEPS
  • IPCC Sixth Assessment Report / Working Group I Report: SSP3-7.0, SSP5-8

Figure 1 Changes in global average temperature based on 1850 - 1900

Figure 2 World view of each scenario drawn by TOWA

  Based on the above view of the world, we evaluate the financial impact of risk items that can be evaluated quantitatively as follows.

◆Transition Risks

  When we estimated the impact of the introduction and rise in carbon prices on our business, we confirmed that the impact was limited, with a cost increase of only about 30 million yen in Japan and overseas. We believe that these are the results of our efforts to convert the power used to renewable energy, and we will continue to carry out business activities that are not affected by the transition risk by further converting to renewable energy.

◆Physical Risks from Natural Disasters

  With reference to the IPCC Sixth Assessment Report, the probability of flood occurrence in the world of the current scenario (up 4 degrees) is assumed to be 2.7 times that of 1850-1900.
  When we estimated the damage in the event of a disaster, we confirmed that the impact was about 30 million yen, and the impact was limited.
  On the other hand, in case of a disaster, we will promote the development of a BCP system such as the construction of an alternative production system at other offices and group companies, aiming for business activities that are not affected by physical risks.

Risk Management

  We have set up a “Risk Management Committee” chaired by the president to regularly identify and evaluate risks that should be dealt with. Under this committee, multiple risk management subcommittees have been set up (Figure 3) to monitor risks in internal control, export control, quality assurance, disaster countermeasures, etc. for each theme every month. The activities of these subcommittees are reported to the Board of Directors every quarter, and the contents are confirmed by outside directors.
  In the future, we will identify and evaluate climate-change related risks as important risks that should be managed.

Figure 3 Our Corporate Governance System
 

Metrics and Targets

  We have set a goal of reducing CO2 emissions and are working to reduce CO2 emissions. In addition, we are measuring and disclosing CO2 emissions related to Scope 1 and 2, and will announce the activity results. At our company, CO2 is the only GHG related to our business.
  Regarding the CO2 emission reduction target for FY2030, we will work to reduce the total amount after incorporating a large sales growth plan.

Figure 4  CO2 Emissions Performance and Targets

Figure 5  Sales and CO2 Emission Targets

◆Initiatives for Reductions in FY2021 (Scope 1,2)

  In FY2021, we started an initiative to make a major shift to renewable energy for fuel and electric power (Scope 1, 2) consumed by our group. The effect of CO2 reduction will gradually appear toward 2022.
  The electricity used at all of TOWA's domestic production bases (Headquarters/ Factory, Kyoto East Plant, Kyushu Work) was switched to the renewable energy plan of the electric power company (July 2021). In addition, we are making efforts such as electrifying gas air-conditioning equipment at Headquarters/ Factory (March 2022). In FY2022, CO2 emissions of the energy used in TOWA itself (Scope 1, 2) are expected to be reduced by nearly 99% compared to FY2020.
  In addition, overseas group companies are introducing solar power generation at TOWAM Sdn. Bhd.(Malaysia) and TOWA (Suzhou) Co.,Ltd., and plan to cover about 30% of the electricity used at each factory in FY2022.
  We will continue to work on reducing CO2 emissions by utilizing renewable energy and saving energy.

    Table4 Initiatives to Reduce CO2 Emissions in FY2021

ItemsCategoriesExpected reductionRemarks
The electricity used at all TOWA's domestic production bases (Headquarters/ Factory, Kyoto East Plant, Kyushu Work) has been switched to the renewable energy plans of the electric power companies. (July) Scope2 Equivalent to 2,889t-CO2 per year based on actual results in FY2020 The electricity used at TOWA's domestic production bases has been switched to 100% renewable energy.
Promotion of replacement of Headquarters/ Factory lighting with LEDs (January) Scope2 Equivalent to 13t-CO2 per year Since it has already been switched to renewable electricity, it is not counted as a CO2 reduction amount, but it saves energy and costs.
Introduction of one electric vehicle at Headquarters/ Factory (March) Scope1 Equivalent to 1.4t-CO2 per year Headquarters/ Factory has already been switched to renewable electricity. As an alternative to gasoline-powered vehicles, CO2 can be reduced by driving with re-energy charging.
Converting gas air conditioning equipment at Headquarters/ Factory to electric power (end of March) Scope1 Equivalent to 144t-CO2 per year
(Effects will appear from FY2022)
Since Headquarters/ Factory has already switched to renewable electricity, all of the electricity will be reduced in CO2.
Introduced solar panels at TOWA (Suzhou) Co.,Ltd., China, and started using them from January 2022. Scope2 Equivalent to 1,020t-CO2 per year The Suzhou plant is expected to reduce CO2 emissions by about 1,020 tons per year, and the Malaysian plant is expected to reduce CO2 emissions by about 1,330 tons per year. Both plants will reduce emissions by about 30% annually.
Introduced solar panels at TOWAM Sdn. Bhd.(Malaysia), and started using them from January 2022. Scope2 Equivalent to 1,330t-CO2 per year
Started the introduction of solar panels at Kyoto East Plant. They have been used sequentially since March 2022. Scope2 Equivalent to 280t-CO2 per year
(Effects will appear from FY2022)
Since it has already been switched to renewable electricity, it is not counted as a CO2 reduction amount, but it saves energy and costs.

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