Our Group recognizes response to climate change as a materiality. The Sustainability Committee, chaired by the President and Representative Director, deliberates on the direction of management, including policies to address risks and opportunities related to climate change, and reports regularly to the Board of Directors for direction and supervision. In addition, in order to respond to climate change, the Board of Directors deliberates on important issues, such as the setting of medium- to long-term targets on a global basis and the adoption of renewable energy, and reflects these in the Group’s management strategy.
The Sustainability Committee is held at least twice a year to deliberate initiatives to resolve issues related to sustainability, including climate change. We will monitor and control the initiatives periodically toward achieving medium- to long-term CO2 emissions reduction targets at each base of the Group in Japan and overseas, set in the Midterm Business Plan, for which FY2025 is the start year.

＞Corporate Governance

In order to understand the impact of climate change on the Group business, we have analyzed risks and opportunities for all businesses in the Group using the following two scenarios:

• The “1.5°C scenario,” in which global temperature rise at the end of the 21st century is kept below 1.5°C and the transition to a decarbonized society is realized
• The “4°C scenario,” in which measures against global warming that surpass the current level are not taken and physical effects are assumed

[Important risks and opportunities]

We identified risks and opportunities for climate change and examined the importance of climate change to the Group and when it might occur.

• Time axis (time of occurrence) – Short term: By around 2025, Medium term: By around 2030, Long term: By around 2050
• Materiality (potential impacts on strategic and financial plans, etc.) – Large: Large impact, Medium: Moderate impact range, Small: Little impact on the Company

*ZEVs (Zero-Emission Vehicle):  Battery electric vehicles (BEV) and fuel cell vehicles (FCV) that do not emit carbon dioxide or other exhaust gases when running

[Policy on climate change risks and opportunities]

The Group will use scenario analysis to identify medium- to long-term risks and opportunities, analyze the impact of its management strategy and financial position, and take measures to respond appropriately to risks, strengthen its competitiveness against opportunities, and acquire new business opportunities. The results will be disclosed and reported to stakeholders through media such as the Company website and integrated reports.

＞New Midterm Business Plan 2025–2030 “Bridge to Daido 2030”

[Future direction of management]

Our Group has positioned the manufacturing and sale of bearings around engines, employed for automobiles and ships, as its core business. Further leveraging the strengths of technology, manufacturing expertise, the quality that generates trust and security and the business foundation, all of which we have long cultivated through the business of bearings around engines, we will push forward with our business, centered on an omnidirectional strategy (a multi-pathway strategy) that can keep fulfilling customer needs, including a wide lineup of engine bearings and the capability to respond to environmental load. On top of this, we will strive to expand and deepen sales of products used in fields other than those around engines and put specific strategies in motion on a rolling basis, thereby raising the weight of each business other than “parts around engines” and “automobiles and ships.” We will expand and reinforce the business foundation while broadening and deepening domains other than plain bearings by offering the value of plain bearings to not only the traditional fields of automobiles and ships but also a wide range of industries in general.
In parallel, our Group will also strive to unearth the new social value of plain bearings in a consistent and scheduled manner to build a foothold for the future. We are making the most of our core technologies cultivated over many years, and as a contribution to green energy, are continuing to actively develop the market for bearings for wind power generation, for which demand is expected to grow in the renewable energy field. We constructed a building to run experiments at Daido Metal Saga Co., Ltd. (in Takeo City, Saga Prefecture), a consolidated subsidiary of the Company, with the aim of enhancing the design reliability of large windmill plain bearings and started operating it in May 2025. Plain bearing bench testing machines have been installed in the experiment building, which is the world’s first installation of plain bearing bench testing machines by a bearing manufacturer on its own. There, we will proceed with the development of windmill plain bearings in cooperation with Saga University and the National Institute of Advanced Industrial Science and Technology.
Through the above measures, we will contribute to the realization of carbon neutrality.

The Group has established policies on the Group-wide risk control and management system, and appropriately manages various risks surrounding its business through the collection of information by the Risk Management Committee that is chaired by the President. The Risk Management Committee is held at least twice a year to set priorities for risks that may have a significant impact on the realization of sustainable management in the Group, taking into account the likelihood that risks will materialize and the degree of impact they will have on our business. We promote measures to mitigate risks based on priority and strengthen risk control. In the current fiscal year, risks related to climate change and natural disasters were identified as priority risks for the Group. There is a possibility that the performance and financial conditions of our Group will be affected by cost increases in R&D, capital investment, etc. and the loss of opportunities, etc. due to a delay in countermeasures against such cost increases. In response, we are making efforts to neutralize this possibility by setting up a dedicated organization for the purpose of boosting the capability of the entire Group to respond to automobile electrification and carbon neutrality, which are accelerating trends in countries around the world. We are endeavoring to precisely grasp policies, laws and regulations, details of social demands, the market environment and customer needs in Japan and overseas related to climate change, and simultaneously, we are trying hard to develop and offer technologies and products at an early stage that can contribute to the global community by leveraging the core technologies that we have developed for decades to the maximum.

＞Risk Management