Our Group’s 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 meets at least four times a year to deliberate initiatives to resolve issues related to sustainability, including climate change. We will regularly manage progress 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.

[HP Link]→ Corporate Governance

Led by our Sustainability Committee, our Group has established processes for identifying, assessing, and managing sustainability-related risks and opportunities. Specifically, we are identifying risks and opportunities and assessing their timing of occurrence and significance using scenario analysis (1.5°C and 4°C scenarios) that cover all our business operations. The assessment results are discussed by the Sustainability Committee, which assigns a priority order to them and regularly monitors and reviews them. These processes are integrated into the overall risk management framework and are operated with reporting to and supervision by the Board of Directors.
• 1.5°C scenario: The 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
• 4°C scenario: Global warming progresses without additional climate change measures beyond current levels, resulting in significant physical impacts.
[Important risks and opportunities]
We identified climate related risks and opportunities and examined the importance of climate change to the Group and when it might occur.
• Time horizon (time of occurrence) – Short term: Less than 3 years, Medium term: 3 to less than 10 years, Long term: Approx. 10 to 30 years
• 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 related 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.

[Future direction of management]
Our Group is implementing initiatives to promote sustainability management in light of domestic and international policies and laws and regulations regarding climate change as well as requests from stakeholders, among other factors. However, increased costs largely resulting from research and development and capital expenditures, coupled with factors such as lost opportunities due to delays in these initiatives, could affect our Group’s business performance and financial condition.
As part of our Group’s response, we have established a dedicated organization to strengthen our capacity to address the accelerating worldwide trend toward vehicle electrification and carbon neutrality. Our current efforts include promoting energy conservation and renewable energy activities at our domestic and overseas production plants.
Among the risks facing our Group, as the shift to EVs progresses and sales are expected to decline due to falling demand for products for internal combustion engines, we will optimize production to enhance our competitiveness and endeavor to expand our market share. At the same time, we will pursue other actions such as developing and expanding sales of products for EVs and alternative fuels, expanding sales of bearings for marine and industrial medium- to high-speed engines, and pursuing market entry through the application of our core technologies to sliding components that leverage tribology, such as eAxle.
Simultaneously, in order to expand sales in the wind turbine business, we established the Wind Turbine Technology R&D Institute as an organization dedicated to the development of fundamental technologies (design and evaluation) related to wind turbine bearings, and built a research facility. Our Group is 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.

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. This fiscal year, we have identified climate related risks, risks attributable to natural disasters, and others as priority risks for our Group, and have established a structure in which the risk management department in charge oversees risk management for the entire Group.

[HP Link]→ Risk Management