Basic Policy
KYB sets ESG management as the foundation of its policy development. We are not only responding to environmental needs, but also promoting the development of products that contribute to a sustainable society and connecting the resulting business opportunities to an increase in corporate value. Our ESG Promotion Dept. is at the forefront of developing basic environmental, social, and governance policies enacted throughout the Group. In addition, we are building trust through collecting data on all of our in-house ESG initiatives and fulfilling our reporting accountability to our stakeholders.
ESG Promotive Structure
It is necessary to strongly promote ESG initiatives related to creating a sustainable society. Therefore, we reorganized the ESG Promotion Department and CN Promotion Section under the Corporate Planning Div. The ESG Promotion Department acts as the secretariat for the Sustainability Committee, an organization that coordinates the entire Company and which holds discussions on initiatives related to sustainability.
The matters discussed by the Sustainability Committee are submitted/reported to the Board of Directors, and we work on the planning of policies and activities as well as providing support and follow-up for the activities of all departments with the cooperation of all committees and functional divisions shown in the chart below. Also, the Business ESG Working Team identifies risks and opportunities related to climate change as well as countermeasures, and reports to the Sustainability Committee.
Regarding individual sustainability themes, the lead department (each functional department, each business unit/plant) receives deliberation on issues that should be addressed and activity plans from each expert committee, and cooperates with the relevant departments in working on the initiatives.
Efforts Towards Internal ESG Initiatives
The independent efforts of each employee are indispensable to promoting ESG management. We share information related to ESG through the company newsletter and the in-house intranet such as our bulletin board, seeking to raise awareness.
Also, we provided e-learning courses on ESG management for all employees in FY 2023, in which they learned fundamental knowledge about ESG and the SDGs, and also about KYB's initiatives.
| Awareness building activities |
|
|---|---|
| Education for promoting understanding |
|
Response to TCFD
The KAYABA Group, recognizing climate change as an important issue that it must engage with, has endorsed the Task Force on Climate-Related Financial Disclosures (TCFD) in February 2023. We are working to grasp the risks and opportunities presented by climate change based on TCFD recommendations, reflect them in our strategies, actively disclose information, and thereby increase our corporate value.
Governance
The KAYABA Group's goal is to achieve carbon neutrality by 2050. We are conducing initiatives to reduce our greenhouse gas emissions volume, measures to reduce the use of materials with high environmental burdens in products, and develop products with low CO₂ emissions and that save energy. Regarding risks related to climate change and business opportunities found in their impacts, falling into a situation in which orders decline and operations at plants are suspended would have a major financial impact, so we categorized its definition, possibility of occurrence, size of impact, and quantitative effect, and have clarified how serious the impact would be. We have evaluated the degree of impact using the scenario analysis shown in the table below, and are using it to formulate our business strategy and management plans.
| Risk category | Specific Risk | Effort/countermeasure | ||
|---|---|---|---|---|
| Physical | Emergency | Intensification of natural disasters caused by climate change | In July 2010, there were concentrated severe rainfalls in the Tokai region of Japan. The rivers near a KYB plant overflowed, causing water damage. The risk of damage from flooding is growing as global climate change is causing large typhoons, higher tides, and other concerns. In addition, analysis using the WRI Aqueduct tool has revealed that there is a certain level of risk. | We are continuing to conduct annual initiatives aimed at flood prevention on the site and increased ease of draining. Also, we are promoting disaster preparations such as creating a manual on moving procedures in the case of rising river water levels. |
| Transition | Regulation | Tightening of regulations concerning greenhouse gas emission reductions | Amidst the accelerating trend toward electric vehicles in the automobile industry, the required shock absorber specs are diversifying along with the diversification of customers, and low weight is required as vehicles equipped with batteries increase in weight. Also, we forecast that demand for noise-reduced (silent) shock absorber will increase. There is a risk that we will not survive in the market if we do not meet these needs. | We are responding through our technology strategy, which includes compatibility with the next-generation platform, strengthening our core technologies of vibration control and power control. In order to lower weights, we will substitute materials such as high-tension steel, aluminum, and resin, and strive to pursue structural weight reduction and other technologies. |
| Opportunity category | Specific opportunity | Initiative/countermeasure | |
|---|---|---|---|
| Product/ service |
Increased sales caused by growth in demand for products and services | We forecast that the automobile market will have further demand for quiet operation and ride comfort. We have the opportunity to expand our business by strengthening our core technologies of vibration control and power control and achieving compatibility with the next-generation platform. With the enforcement of carbon tax, there is a possibility of an accelerating modal shift (a change from freight transportation by road to freight transportation by rail), and this presents an opportunity for expansion in the railway damper business. | The medium term will be one of a transition from engine vehicles (motive power) to electric vehicles (motive power), and we forecast that offering products suitable for electrification in this period of changeover will create long-term prospects. Also, we are aiming to achieve differentiation by increasing the added value of products using our core technology, achieving a position of superiority, and delivering monozukuri that satisfies consumers. |
Metrics and Targets
The targets and actual results regarding climate change for KYB and its subsidiaries' production bases are as follows.
| Index | Target | FY2023 (Actual Results) | ||
|---|---|---|---|---|
| Fiscal year | Numerical target | Results | Evaluation | |
| CO₂ total emissions volume (Scope 1, 2) | 2022 | 218,951 tCO₂ | 211,731 tCO₂ | Accomplish |
| 2030 | 138,578 tCO₂ | (Initiative ongoing) | ||
| 2050 | 0 tCO₂ Carbon neutral | (Initiative ongoing) | ||
| Renewable energy adoption rate | 2025 | 15% | 12.9% | (Initiative ongoing) |