Global Warming Prevention

Promoting measures toward a carbon-free society

Initiatives related to climate change (disclosure based on TCFD*1 recommendations)

Since the Industrial Revolution, especially since the 20th century when the population increased significantly, it has been acknowledged that carbon dioxide emissions have greatly increased.
This increase in carbon dioxide emissions is contributing significantly to climate change, including global warming. As the Intergovernmental Panel on Climate Change (IPCC) notes, in its Sixth Assessment Report (Synthesis Report) released in March 2023, that human activities have been causing global warming, we in the Mandom Group recognize that the implementation of concrete measures against climate change is an urgent issue that the world should work on together to realize a sustainable society.

Against the backdrop of the fact that addressing climate change is a social issue and that implementing measures against climate change is a social need, we regard "co-existence, mutual growth, and mutual creation with global society," which is included in our corporate philosophy, as the sustainability of the Mandom Group itself. In 2021, we formulated sustainability policies with sustainable management (ESG management + SDG management) for solving social and environmental issues as their foundation and identified key issues (materiality) in sustainability. Our aim is to evolve our Dedication to Service (Oyakudachi) and create corporate value through the initiatives of our core business. As part of specific efforts to promote the initiatives, we set key performance indicators (KPIs) for each materiality*2 in 2023.

The corporate slogan "BE ANYTHING, BE EVERYTHING" is also our ESG slogan.As a "human-oriented" company, we devised this slogan to be relevant to all employees; in As a "human-oriented" company, we devised this slogan to be relevant to all employees; in a society where social issues-such as environmental issues, globalization, diversity, and identity-are becoming increasingly diverse and complex, and where it is difficult to resolve the issues faced by consumers, the slogan represents Mandom's desire to be dedicated to service and to help realize a sustainable and affluent society where people can enjoy expressing their true selves, live healthy and positive lives, and continue to challenge themselves to express their true selves, rather than giving up or sacrificing one for the other, in a so-called trade-off relationship. In particular, in response to climate change, we expressed our support for the TCFD in June 2022, as a good corporate citizen living socially with the dynamism of the times, and in order to be more effective in evolving our Dedication to Service and creating corporate value through our core business. We will use the TCFD proposal framework to further strengthen our governance on climate change. In addition, by reference to scenarios*3 disclosed in various initiatives, including the IPCC Sixth Assessment Report, we will analyze and identify the risks and opportunities arising from climate change, and assess their impacts on our financial statements.

*1 TCFD: Task force on Climate-related Financial Disclosures
*2Sustainability strategy and Materiarty
*3

◆Governance

We regard response to climate change as a key issue in sustainability management, and set it as one of the themes in our initiatives for materiality. We formulate medium- to long-term targets, and bring them up for discussion by the Sustainability Committee, which is composed of management members and headed by the President Executive Officer, and relevant committees subordinate to the Sustainability Committee. The contents of those discussions are reported to the Management Council and the Board of Directors for deliberation to grasp and discuss the status of implementation.

<Medium- to long-term targets for key issues (materiality) in sustainability>

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<Promotion System>

◆Strategy (Analysis of Opportunities and Risks)

With regard to climate change issues, various scenarios can be considered depending on the status of measures to prevent global warming. We refer to the "4℃" scenario and the "1.5℃" scenario regarding the typical average temperature with reference to various materials, and examine both physical risks and transition risks in business management.

The 1.5℃ scenario predicts that technological innovations and more stringent regulations for suppressing global warming will progress, thereby changing society. The 4℃ scenario predicts that extreme heat and severe storms will occur if global warming is not sufficiently contained. Regarding the impact of these scenarios on our Dedication to Service (Oyakudachi) through products that are in our business domain, we will analyze risks and opportunities as well as the resulting impacts on our business model and value chain, and actively engage in initiatives and information disclosure.

Physical risks Transition risks
  • Frequent occurrence of natural disasters (acute risks), such as floods and typhoons, and irreversible changes in climate, such as rises in average temperature and sea level (chronic risks)
  • Frequent disruptions of supply chains, making procurement and supply unstable around the world
  • Amid rising nationalism, shutdown or relocation of plants in coastal areas or areas with poor water resources
  • Changes in the market and technologies due to tightened regulations on CO2 emissions (hard laws and soft laws) everywhere in the world
  • Cost increase or transformation of the method of cost management required in various places resulting from widespread concern about sustainability, including in the consumer's mind
  • Customers facing the necessity of reviewing their business activities from various aspects, including procurement, production/manufacturing, distribution, and sales

<Climate Change-related Risks and Opportunities>

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・

[Expected time for the impact to become apparent] short term: 0-1 year; medium term: 3-5 years; long term: 10 years or more

・

[Expected level of impact] ++: significant impact, +: some impact, −: minor or virtually no impact

◆Risk Management

Under the Sustainability Committee, relevant committees examine the impact of climate-related opportunities and risks on our business activities, grasp the situation of the entire group, consider how to respond to the opportunities and risks, and manage the progress on each key issue (materiality) and target through deliberations and approval by the Sustainability Committee, as well as through reports to the Management Council and the Board of Directors.
For actual CO2 emissions, we calculate the amount of CO2 emissions derived from group-wide energy and electric power consumption (Scopes 1 & 2) and emissions produced throughout the value chain in Japan (Scope 3) once a year, to manage progress toward the targets.*4
In particular, we recognize that our CO2 emissions are largely attributable to electric power consumption in Scope 2 and the procurement of raw materials and the use of products in Scope 3. We approach the issue of reducing CO2 emissions in terms of both risks and opportunities in our business activities, set medium- to long-term targets, and concentrate our efforts on switching to renewable energy sources for the electricity used for our business activities and developing eco-friendly products. For CO2 emissions produced throughout the value chain, we will promote efforts to make calculations and grasp the situation on an entire-group basis.

<Risks and Opportunities: Business Impact Level Assessment>

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<CO2 Emissions Produced in Business Activities>

*4 Main Environmental Indicators (5 Years) - Scope 1+2+3 emissions in Japan

◆Metrics & Targets

We are proceeding with our efforts to grasp GHG emissions (Scopes 1, 2 & 3) in order to realize a sustainable society. Believing it was necessary to further accelerate our efforts, in addition to the long-term targets that had been formulated, we newly formulated medium-term targets in December 2021 to achieve those long-term targets. We also developed a road map concerning risks and opportunities, based on the scenario analysis conducted in 2022, and we are currently promoting its implementation as a group-wide initiative.

○Reducing GHG emissions in the group

  • Long-term goal
    Aiming to achieve zero CO2 emissions Group-wide in 2050.
  • Medium-term goal
    Aiming to reduce CO2 emissions in Scope 1+2 in Japan and Overseas by 46% or more compared to fiscal 2013 by fiscal 2030.
    Aiming to reduceCO2 emissions in Scope 1+2 in Japan and Overseas by 43% or more compared to fiscal 2013 by fiscal 2027.

<Related objectives>：Environmental considerations in products

  • Long-term goal
    By 2050, we aim to turn 100% of products marketed by the Mandom Group into eco-friendly products.
  • Medium-term goal
    By 2027, we aim to turn 90% of Mandom products marketed in Japan into eco-friendly products.

<Road Map for Initiatives Related to Risks and Opportunities>

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<Status of Progress>

In FY2022, we implemented a switch to electricity with an REC (Renewable Energy Certificate) for the power used at the head office in Japan and a switch to LED lights in the head office and the R&D building. Although there was an increase in CO2 emissions (an increase of 442 t-CO2 from the previous year) in Scope 1 because of an increase in production resulting from the recovery of the market that had been slow due to the impact of COVID-19, CO2 emissions in Scope 2 were reduced (a reduction of 524 t-CO2 from the previous year). Consequently, we achieved a reduction of 81 t-CO2 (from the previous year) in total in Scopes 1 and 2.
As for initiatives for eco-friendliness in products, we are promoting the expansion of eco-friendly product lines. As of the end of FY2022, eco-friendly products accounted for 53.5% of Mandom products sold in Japan (45.8% in FY2021). In addition, as part of efforts to respond to changes in consumer value in the market due to rising outside temperatures associated with climate change, we are working on the roll-out of products to which our unique "Kai-tech technology"*5 is applied (e.g., GATSBY Space Shower Paper for the scalp and body, Mandom Happy Deo Body Sheet (Super Refreshing/Extra Cool types), and Mandom Happy Deo Cool Face Mist Refresh Mint).

*5

Kai-tech technology: Mandom's unique technology developed to pursue more comfortable feeling in use by utilizing its knowledge related to transient receptor potential (TRP) channels, which are sensors in skin cells

Calculating greenhouse gas emissions for the entire value chain

Mandom is helping the move toward a carbon-free society. We believe that reducing greenhouse gas emissions is vital throughout the value chain, from the procurement of materials to the manufacture of products, and then on to their sale, use, and disposal. As such, since FY2018, we have been calculating the greenhouse gas emissions produced throughout the value chain based on the Scope 3 Standard established by the GHG Protocol.

Scope of calculations: Japan

Period of calculations: April 2022 - March 2023

Our calculations show that more than 90% of greenhouse gas emissions fall under Scope 3 and we were able to see that emissions were particularly large in Category 1 (Purchased goods and services) and Category 11 (Use of sold products).
In addition to improving the accuracy of future calculations, we will strive to reduce our environmental impact throughout the value chain, such as by developing environmentally friendly products that can help reduce emissions in the categories detailed above.

Fukusaki Factory Systems

Power Monitoring System and Effective Use of Power

At the Fukusaki Factory, the power consumption data taken from the power monitoring system is shared at a monthly supervisors' meeting by the plant manager and used in the various sections of the factory to develop energy-saving measures.
A switch was made to thermal energy for nighttime power for the air conditioning and refrigeration system, and an ice thermal storage system was adopted for daytime for the most effective use of power. We are also upgrading airconditioning equipment, and changing lighting to LEDs.

Power monitoring system

Keeping an eye on power usage levels
Data by production line

New Boilers and Initiatives to Reduce the Carbon Footprint of Boiler Fuel

When relocating the boilers at the Fukusaki Factory, we decided to install new boilers, changing our kerosene-fired units into LPG-fired ones. The new set-up began operations in November 2018 and will lead to a significant reduction of the boilers' environmental impact by reducing carbon dioxide emissions by around 15 percent, improving combustion efficiency, and slashing emissions of pollutants like sulfur oxides and nitrogen oxides. Other benefits will include lower administration costs, and moving forward, we are also eager to boost the efficacy of our energy-efficiency initiatives by providing visual measures of steam use.

Office Systems

Our head office building uses demand monitoring to manage electric power consumption in different ways at different times of the day and reduce peak demand-side consumption.
Furthermore, we are engaged in an ongoing shift to LED lighting and high-efficiency transformers. We take many measures to reduce power consumption in the peak summer and winter seasons from July to September and December to March. We carefully control indoor temperatures, use air circulators that boost air conditioning efficiency, keep some lights off, use computers in energy-saving mode, and turn off or limit use of equipment that draws power.
Demand monitoring equipment

Product Distribution

To reduce CO2 emissions in distribution, we have been streamlining operations and pursuing a modal shift from trucks to freight trains and cargo ships. We started outsourcing operations in October 2004 with the aim of streamlining distribution, using freight trains primarily for transporting products from Himeji to Kyushu, and cargo ships for transporting products from Maizuru to Hokkaido.
In truck transportation we strive to continue achieving close to a 100% load efficiency.

Using Renewable Energy: Solar panels installed at Fukusaki Factory and two factories in Indonesia

We are working to achieve carbon neutrality—net zero CO2 emissions—for the entire Group by FY2050. We regard the use of renewable electricity as one of the important approaches to realize a carbon-neutral society, and 1,728 solar panels have been installed on the roof of a new production building completed on the premises of the Fukusaki Factory in September 2021 to generate up to 500 kW of electricity for the building when it is sunny. Moreover, we switched all electricity procured for our head office building to renewable electricity in April 2022.

Outside Japan, solar panels installed on the roofs of our two factories in Indonesia are in operation. Solar power generation commenced at Factory 1 (filling plant) in May 2023 and at Factory 2 (container manufacturing plant) in April 2023. A combined total of up to 1,100 kW of electricity is generated at the two factories when it is sunny.

Fukusaki Factory
Solar panels on the roof of a new production building
Factory 1 (Indonesia)
Solar panels on the roof of the factory
Factory 2 (Indonesia)
Solar panels on the roof of the factory