TCFD

As part of our commitment to sustainability, we actively assess risks and opportunities while transparently disclosing our climate-related initiatives in line with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

Governance

We recognize that environmental issues, including climate change, are one of the important management issues, and the ESG Countermeasures Committee has been established to ensure continuous oversight of our climate change initiatives.
This committee receives various reports from each plant management department, including sustainability-related risks, monitors risks, and makes recommendations for resolving issues.
The contents of the discussion at this committee are reported to the board of directors as appropriate.

Strategy

Guided by the principle of 'MARUWA of Materials,' we provide essential materials that adapt to evolving business environments, including the challenges that adapt to evolving business environments, including the challenges posed by climate change. We believe that the global shift towards carbon neutrality by 2050 will positively impact our business, as our product line supports decarbonization efforts. Additionally, we are committed to minimizing climate-related risks in our manufacturing processes by improving energy efficiency, utilizing renewable energy, and implementing comprehensive Business Continuity Planning (BCP) measures.

The risks and opportunities we are analyzing are as follows.

Risks:
• Potential production disruptions within our group and supply chain interruptions caused by natural disasters linked to climate change.
• Escalating energy costs driven by climate change.

Opportunities:
• Growth in the xEV (electric vehicle) market increases demand for our xEV-related products.
• In the telecommunications market, demand for reducing power consumption is increasing, expanding business opportunities for our heat-dissipation substrate products.
• The shift towards a decarbonized society expands the telecommunications and semiconductor markets,presenting increased opportunities for our related products.

Risk Management

At the Risk Management Committee, each department of the management headquarters reports on the status of risks.
This committee is responsible for evaluating risks in general, including sustainability-related risks, from a multifaceted perspective. The risk management department within the management headquarters is in charge of risk management for issues that require specific action. The discussions of this committee are reported to the board of directors as appropriate.

※Please refer to the annual securities report for more information

Metrics and Targets

To promote environmentally responsible business activities, we are committed to reducing the environmental impact of our operations and contributing to a decarbonized society through our technology and products. We are also working towards medium and long-term greenhouse gas (GHG) reduction targets

As part of our efforts to reduce GHG emissions, we have promoted the conversion of lighting to LED systems at our manufacturing facilities and implemented Cool Biz initiatives during the summer season. In addition, we have reduced our environmental impact by operating all kilns used in our production processes entirely on electricity. We are also promoting the use of clean renewable energy sources that do not emit CO2 during operation. By installing solar panels, we are expanding the use of electricity generated from renewable energy. We will continue to install additional solar panels as appropriate and strive to increase our renewable energy generation capacity.
As a result of these initiatives, our GHG emissions intensity in fiscal year 2025 decreased by 13.2% compared with fiscal year 2023, reaching 0.59 tCO2 per million yen of revenue. Furthermore, renewable energy generation increased by 2.13 times compared with fiscal year 2023. Looking ahead, we will continue our efforts to achieve a 30% reduction in GHG emissions intensity and a threefold increase in renewable energy generation by fiscal year 2030, compared with fiscal year 2023 levels. In addition, we will continue to actively promote environmental initiatives such as greening activities at our factories and other facilities, recycling waste materials, and the effective utilization of water resources through the reuse of water used in our manufacturing processes.