We have appointed an Executive Officer (CSuO) in charge of responding to Sustainability issues, including addressing climate change, and we are acting proactively. We have also established a Global Environment Affairs Department of the Corporate Division to plan and promote the Group’s strategic initiatives for risks and opportunities related to climate change. The Global Environment Committee, for which the Safety, Environment & Quality Department of the Sustainability Promotion Division serves as secretariat, conducts scenario analyses based on the TCFD recommendations, evaluates and manages risks and opportunities related to climate change, sets GHG reduction targets, formulates and manages action plans to reduce GHGs, and engages in other discussion and information sharing concerning climate change. In addition, activities are reported to the Strategic Management Committee and the Board of Directors for appropriate monitoring. (Matters for deliberation by and reporting to the Strategic Management Committee and Board of Directors)

• Greenhouse gas emission reduction target setting and reduction plans
• Climate change-related information for disclosure
• Assessment of climate change-related risks and opportunities for each business
   

Further, we have established the Energy Management Subcommittee, which is jointly managed by the Monozukuri and Corporate Production Engineering Department of the Manufacturing and R&D Strategy Division and the Safety, Environment & Quality Department, as a meeting body that manages the actions taken to achieve the GHG reduction targets set by the Global Environment Committee. The Energy Management Subcommittee shares examples of initiatives, supports the introduction of equipment, and carries out other activities to push forward with the reduction of plants’ energy usage.
The Board of Directors goes beyond the monitoring of sustainability initiatives. The Sustainability Committee, an advisory body to the Board of Directors, was established to actively consider the direction of sustainability efforts from different perspectives and present its findings internally. The committee monitors the Company’s action related to climate change, considers the methods and issues involved, and reports its findings to the Board of Directors.

In March 2021, based on the recommendations of the TCFD, we conducted scenario analyses to ascertain the impact (risks and opportunities) that climate change has on the Group’s business operations and consider measures aimed at mitigating the risks and capitalizing on the opportunities.
With regard to transition risks and opportunities, in February 2023 we updated our scenario analyses while maintaining consistency with the Medium-term Management Strategy FY2031, and set business indicators and targets. We set themes and analyzed them in the 1.5ºC and 4ºC scenarios. As a risk that is common to all business operations, we estimated the financial impact on the Group in the event that policies and legislation on climate change were stepped up, and carbon pricing was introduced and strengthened. We also analyzed the impact on our business operations in terms of risks and opportunities with regard to the shift in EV demand, changing forms of energy use, and changing demand for the recycling business due to the shift to a recycling-oriented society. Further, in terms of physical risks, in our Group-wide risk management activities we also manage water risks including damage from acute and chronic risks including torrential rain, flooding, storm surges and droughts thought to have materialized in relation to climate change.
For details about our scenario analysis results, please refer to the section on Climate Change-related Risks and Opportunities.
In addition, an ICP system has been introduced since the fiscal year ended March 2025 to raise awareness of GHG emissions within the company and to further promote decarbonization efforts.

Results of climate change scenario analysis, the Mitsubishi Materials Group recognizes that climate change risks are one of the key risks that could have a significant impact on the Group’s business performance and financial condition, and drives initiatives to address these risks within its risk management activities.
The implementation of risk measures is discussed and monitored by the SCQ Promotion Division and the Strategic Management Committee.
At these meeting bodies, the CSuO is responsible for implementation and operates independently of the Audit Committee. The Board of Directors also verifies and reviews the effectiveness of the risk management process and comprehensively oversees risk management.
For more details about the Group’s risk management system, operating status and the selection process for major risks, please refer to the section on “Risk Management”.

The Group has revised its GHG emissions (Scope1 + Scope2) reduction target to be set for emissions excluding GHG emissions from resource recycling efforts.
With the start of periodic reporting in the fiscal year ended March 2024 based on the revised Act on Rationalization of Energy Use and Shift to Non-fossil Energy (hereinafter referred to as "Energy Conservation Act") and the Act on Promotion of Global Warming Countermeasures (hereinafter referred to as "Global Warming Prevention Act"), both of which were revised in 2022, we have reorganized our GHG emissions based on these laws and regulations, and added GHG emissions from the combustion of plastic contained in E-Scrap and CO₂ generated from the chemical reaction of limestone used in the manufacturing process, which were previously excluded from the scope of calculation and reporting, have been added to the scope of reporting under both laws and regulations^*5.
Since we have set "For people, society and the earth, circulating resource for a sustainable future" as Our Commitment and have made strengthening resource recycling by leveraging the strengths of our business a pillar of our Medium-term Management Strategy, we have set a new GHG reduction target of GHG emissions from our resource recycling efforts of emissions^*6 excluding GHG emissions from resource recycling efforts, we have set a new GHG reduction target of a 47% reduction*7 from the fiscal year ended March 2021 level by the fiscal year ending March 2031.

Furthermore, in addition to the existing targets for the fiscal years ending March 2031 and 2046, and taking into account Japan's Nationally Determined Contribution (NDC) established by the Japanese government in February 2025, new Scope 1 (GHG emissions excluding emissions from resource recycling initiatives) emission reduction targets for the fiscal years ending 2036 and fiscal 2041 have been set based on the figures on the slope of the line connecting the targets for the fiscal years ending March 2031 and 2046. Targets set for total Scope 1 (GHG emissions excluding emissions from resource recycling initiatives) and Scope 2 are a 65% reduction by the fiscal year ending 2035 and an 82% reduction by the fiscal year 2041 compared to the fiscal year ended March 2021.

In addition to the GHG emissions reduction target, we have also set the goals of achieving 100% utilization of renewable energy for purchased electricity by the fiscal year ending March 2036 and 100% self-sufficiency in renewable energy for electricity by the fiscal year ending March 2051 by promoting the development and expansion of utilization of renewable energy sources such as geothermal power generation, in which the Group has strengths. In order to achieve these targets, we are working to achieve the following goals.
To achieve these goals, we will invest ￥10.5 billion in energy-saving measures and facility improvements, mainly at manufacturing sites, and ￥30 billion in renewable energy projects by the fiscal year ending March 2031.We will continue advancing energy savings and reducing emissions from fossil fuels at our manufacturing sites. We will also develop products that contribute to a carbon-neutral society and technologies such as CO2 capture and processing. Furthermore, by utilizing available technologies and other measures, we aim to achieve carbon neutrality by fiscal year ending March 2046, including reductions in GHG emissions from resource circulation initiatives.
From the viewpoint that reduction of GHG emissions in our business supply chain is essential to achieve a CN society in 2050, we have set a target to reduce Scope3 (emissions of other companies related to business activities other than Scope1 and Scope2) by at least 22% by 2030 compared to the fiscal year ended March 2021 (The reduction targets are for Categories 1, 3, and 15).

Ahead of adoption of the Kyoto Protocol in 1997, the Japan Mining Industry Association (of which Mitsubishi Materials is a member) formulated a Voluntary Environmental Action Plan to solve the issue of climate change. A further refinement of this plan was formulated starting in 2013 as the Action Plan for Low-Carbon Society, as part of continuing efforts to reduce CO₂ emissions from non-ferrous smelting in Japan. Interests and expectations for the realization of carbon neutrality had been growing since the government had set a target of carbon neutrality by 2050 and to reduce GHG emissions by 46% (the industrial sector’s target is 38%) from the fiscal year ended March 2014 levels by the fiscal year ending March 2031. So, JMIA revised the "Commitment to a Low Carbon Society" to the "Carbon Neutrality Action Plan" in the fiscal year ended March 2021.
In the fiscal year ended March 2021, JMIA was almost able to achieve its target of reducing CO₂ emissions per unit of production by 26% from the fiscal year ended March 1991 levels by the fiscal year ending March 2031. Therefore, JMIA reviewed the target with advice from the Industrial Structure Council in 2022. The latest target is below.
 

1. Target Assumptions:
   • 2030 production volume of 2.8 million tons (2.407 million tons in FYE March 2023)
   • Target indicator will be CO₂ emissions, and the base year will be FYE March 2014)
   • Electricity CO₂ emission factor (kg-CO₂/kWh) will be used as the adjusted emission factor (receiving end).
      
2. Target:
   • Reduce CO₂ emissions by 38% from FYE March 2014 levels by FYE March 2031.
      

As JMIA’s CO2 reduction target is consistent with the Paris Agreement-based target advocated by the Japanese government, we will continue to take part in initiatives to achieve the association’s targets.

For non-financial evaluation, each Executive Officer is required to set three target items, one of which is a sustainability issue. Each item is broken down into two or three sub-items. The table below summarizes details of non-financial sub-items set for the fiscal year ending March 2025 in accordance with the Sustainability Policy, etc. In the fiscal year ending March 2025, we have set targets for five executive officers with respect to "Proactive Engagement for the Global Environment," which includes climate change performance.

The Company established the Transition-Linked Finance Framework in November 2023 (Revised in August 2024 due to changes in setting GHG emission reduction targets) to promote our efforts to achieve carbon neutrality. Based on the framework, we are issuing Transition-Linked Bonds and executing Transition-Linked Loans.
We will promote our efforts to achieve carbon neutrality by utilizing the funds raised.
For more information, see 「Sustainable Finance」.

CFP^*8 calculations are attracting increasing interest from various sectors, such as governments and industry associations in Japan and abroad, exploring calculation and utilization methods.
Under these circumstances, we will promote our CFP activities in accordance with the following directions.

We will sequentially promote the calculation of CFP for the main products we manufacture.
We will start building a system to ensure data reliability.

We will promote verification and disclosure of products for which CFP quantification has been completed by a third-party organization as necessary.

We will systematically implement our GHG reduction measures to reduce CFP.
We will promote engagement with suppliers and promote consistent GHG reduction efforts from upstream to downstream.

Introduction of Internal Carbon Pricing (ICP) System MMC introduced an internal carbon pricing (ICP) system in April 2024 in order to raise awareness about GHG emissions and further promote its decarbonization efforts. Under the ICP system, the Company sets its own hypothetical price for GHG emissions and uses it for investment decisions.
The internal carbon price is set at ￥10,000 per t-CO₂e and is used in investment decisions for capital expenditures that contribute to reductions in our own GHG emissions (Scope1 + 2). We will actively promote the reduction of GHG emissions by promoting investments that contribute to decarbonization through the introduction of the ICP system.

The financial impact on the Group will be in the form of additional costs incurred in depending on the amount of greenhouse gas emissions, such as when policies and legal regulations on climate change are toughened, and carbon pricing systems (the emissions trading system and carbon tax) are introduced and strengthened. With the global shift to decarbonized societies, certain product markets in which the Group has traditionally been participating are expected to shrink. Any delay in taking action in new expanding markets could adversely affect the Group's results and financial position. The world is currently transitioning rapidly toward a carbon-neutral society based on the Paris Agreement. We believe we need to provide new value by responding quickly to these changes in the social environment.

Specifically, we will continue to steadily reduce greenhouse gas emissions from Group business activities by setting greenhouse gas reduction targets, introducing energy-saving equipment, and expanding the use of renewable energy. Furthermore, in order to improve the market competitiveness of Group products, we are enhancing our production processes and developing environmentally friendly products.
Physical risks - including damage from intensified acute water risks thought to be related to climate change such as superstorms, floods, storm surges, or drought, as well as chronic risks - are covered by Group-wide risk management activities.
Meanwhile, opportunities arising due to climate change include an expected increase in demand for technologies, products and services that contribute to energy saving and the reduction of greenhouse gas emissions due to the toughening of climate change policies and other measures. The Group takes initiatives such as the manufacturing of materials and products that contribute to decarbonization, the recycling of nonferrous metal resources, the development and promotion of the use of renewable energy such as geothermal power, the development of technologies related to CO₂ capture and effective utilization, and conservation activities for the forest land we own. Through these initiatives, we aim to create both economic and social value.

In March 2021, the Group established and analyzed scenarios to ascertain the impact of climate change on the Group's business operations (risks and opportunities) and consider measures for reducing risks and securing opportunities. In February 2023, we updated the scenario analysis and set indicators and targets, while ensuring consistency between transition risks and opportunities and the Medium-term Management Strategy FY2031. We will monitor the situation based on the indicators and targets. We are updating the analysis of physical risks and examining indicators and targets.

With regard to transition risks and opportunities related to climate change, we conducted scenario analysis for one theme across the Company and for three major themes for each business (total of nine minor themes). The external and internal data used in the analysis were updated.

Total GHG emissions for the fiscal year ended March 2025 was 1,111 t-CO₂e★, including GHG emissions from resource circulation initiatives .
GHG emissions from energy sources accounted for 24% of total GHG emissions, and GHG emissions from resource circulation initiatives accounted for 38%.

We regard it as a top priority to save energy wherever possible at our manufacturing facilities and plants. That is why we are so committed to energy saving activities. Specific activities include switching fuels, making effective use of untapped energy, upgrading processes and equipment, installing high-efficiency equipment, optimizing device specifications, and reviewing equipment controls and operating practices. We are constantly working to save energy at smaller facilities, too, including Head Office, branches, sales offices and research facilities, through measures such as installing LED lighting.

We have set a reduction target for Scope3 (Categories 1, 3, and 15) of GHG emissions of 22% below the fiscal year ended March 2021 level by the fiscal year ending March 2031. We are building relationships with our suppliers to reduce GHG emissions throughout our supply chain. Specifically, we send questionnaires to copper concentrate suppliers related to category 1, which accounts for approximately 24% of Scope3 emissions (actual emissions in FYE March 2025), based on reports published regarding the status of the actions taken to address global environmental issues and GHG reduction targets and plans, and receive responses from them. We engage in two-way communication with them in this way. We also exchange opinions with them during online meetings and push forward with initiatives to reduce GHG emissions throughout the supply chain. In the fiscal year ended March 2025, questionnaires were sent to suppliers accounting for approx. 90% of the copper concentrate that we procure.  The Company plans to continue these efforts and expand the suppliers that they apply to.
Among copper concentrate suppliers, we have also signed a Memorandum of Understanding (MOU) with Anglo American plc, a multinational mining company headquartered in London, UK, to promote collaboration for providing sustainable and responsible products throughout the copper-related products supply chain. As global demand for copper increases, there is a desire that those supplies be greener and more sustainable. The Company and Anglo American plc will work together to meet these market demands.

For more information on our efforts with suppliers in procurement through the Logistics and Materials Division, please refer to "Supply Chain Management."

Mitsubishi UBE Cement Corporation (MUCC) is an equity method affiliate, and the Company counts and reports 50% (shareholding ratio of MUCC) of MUCC’s Scope1 and 2 emissions as the Group’s Scope3 category 15 emissions. As these emissions account for approximately 60% of Scope3 emissions (as of the fiscal year ended March 2021), reducing MUCC’s emissions will contribute significantly to the Group’s Scope 3 emissions reduction. MUCC has taken the “promotion of global warming countermeasures” as one of its top priorities in its Medium-term Management Strategy, “Infinity with Will 2025: MUCC Sustainable Plan 1st Step,” announced in April 2023. It established the Carbon-neutral Technology Promotion Office and the Carbon-neutral Promotion Committee in the fiscal year ended March 2024, to strengthen the implementation structure by improving its organizational structure.
Through various efforts, it is aiming to achieve its interim goal of a 40% reduction in CO₂ emissions by 2030 (compared to 2013 levels) and carbon neutrality by 2050.
Regarding the reduction of CO₂, MUCC has jointly developed an eco-friendly concrete with Shimizu Corporation, which substitutes approximately 80% of the cement with blast-furnace slag. In addition, it has launched the world’s first demonstration test of ammonia co-combustion in the cement manufacturing process.
Regarding the utilization of CO₂, MUCC has participated in the Kitakyushu Circular Economy Vision Promotion Council’s subcommittee on the mineralization of concrete waste and its application, with the aim of building a business model to apply CO₂ fixed recycled products using CO₂ emitted from cement plants and concrete waste to construction projects.
Regarding the storage of CO₂, it has begun a joint study with MITSUI & CO., LTD. on carbon dioxide capture and storage (CCS) between Malaysia and Japan, aiming to achieve carbon neutrality in the cement manufacturing process. It has also initiated a joint study on carbon dioxide capture, utilization and storage (CCUS) with Osaka Gas Co., Ltd.
The Company will continue to promote communication with MUCC for Scope3 emissions reduction.

We have set a new GHG emissions reduction target (Scope1 + 2) of 47% from levels of the fiscal year ended March 2021 by the fiscal year ending March 2031. This target excludes GHG emissions from resource recycling efforts. To achieve this goal, we are promoting energy saving and shifting to fuels that contribute to CO₂ emissions reduction, as well as switching to electricity derived from renewable sources.
Electricity-origin emissions account for 38% (as of FYE March 2021) of the Group's total GHG emissions (excluding GHG emissions from resource recycling efforts).The Metals business, which accounts for approximately 60% of the Group's domestic electricity consumption, will further accelerate the switch to electricity derived from renewable energy sources among its purchased electricity, moving the completion of this plan forward by up to 11 years to the fiscal year ending March 2025 at 80% of its plants, and by 7 years to the fiscal year ending March 2029 at the Naoshima Smelter & Refinery and Onahama Smelter & Refinery.

CO₂ emissions from transportation in the fiscal year ended March 2025 were 18,546 tons (down 64 tons from the fiscal year ended March 2024) on a non-consolidated basis and 5,758 tons (up 684 tons from the fiscal year ended March 2024) for Group companies. The total CO₂ emissions of the parent Company and Group companies amounted to 24,304 tons (up 620tons from the fiscal year ended March 2024). Unit energy consumption* for the parent Company was 21.94 kℓ/million ton-kilometer (Improvement approximately 4.9% from the fiscal year ended March 2024), while the combined total of the parent Company and Group companies was 26.07 kℓ/million ton-kilometer (down approximately 13.2% from the fiscal year ended March 2024). We will continue to strive to save energy in transportation by promoting modal shifts and improving loading rates, and through Group-wide logistics optimization, we aim to build a logistics system that reduces environmental impact through the use of non-fossil energy.

For the Group, tackling climate change has been one of its most important management issues for building a decarbonized society. Reflecting this, the Group has been approaching manufacturing with a view to reducing the environmental impact and has developed and promoted the use of renewable sources of energy, such as geothermal energy.

Rare metals such as lithium, cobalt, and nickel, which are the materials used in LIBs, are expected to be in short supply in the near future, making them an important issue for growth strategies in the industry as a whole. To address the issue, in addition to the development of underground resources, measures are being taken to recycle materials and to develop alternative materials.
We have been developing technologies through small-scale tests to commercialize the recovery and refinement of rare metals such as lithium, cobalt, and nickel from Black Mass *8. Having achieved certain results, as a next step, we will build a pilot plant at Onahama Smelter & Refinery of Onahama Smelting and Refining Co., Ltd. in Iwaki City, Fukushima Prefecture to further develop technologies for the commercialization of high-efficiency recovery of rare metals from Black Mass.
The technical development associated with the construction of the pilot plant will be supported by a grant from the Ministry of Economy, Trade and Industry, which is related to its stable supply plan of critical minerals.

Raw materials：LIB derived Black Mass
Products：Battery-grade lithium carbonate, nickel sulfate, cobalt sulfate
Commencement of operation：2025
Location：On the site of Onahama Smelter & Refinery, Onahama Smelting and Refining Co., Ltd.

The four parties—Tohoku University (“Tohoku University”), Tokyu Corporation (“Tokyu”), Tokyu Railways Co., Ltd. (“Tokyu Railways”) and Mitsubishi Materials Corporation (“MMC”)—will commence research and development on the recycling of used cables generated by railroad operations (“R&D”) on Tuesday, April 1, 2025. This R&D has been selected for the FY2025 Environment Research and Technology Development Fund of the Environmental Restoration and Conservation Agency (ERCA) and will be carried out over three years, concluding in March 2028.

This R&D project uses cables from electrical facilities and signal cables along the tracks of Tokyu Railways, which are currently disposed of, as model cables to develop a combined plastic swelling and ball milling method (“Technology”) for separating the cables into copper wires and coating materials. This Technology applies the separation principle of plastic swelling followed by separation through moderate impact from ball milling*, a method that Tohoku University has pioneered and developed in collaboration with MMC. While the cables used in this project have excellent strength to withstand the harsh conditions typical of railroads, the coated wires are thin. Existing coated wire treatment technologies make it difficult to separately sort copper wire and the coating materials to a high purity. As a result, the materials that can be recovered as recyclable resources from used cables are limited. Tokyu Railways generates an average of approximately 10 tons of such used cables per year. We aim to recycle the copper wires and coating materials recovered using this Technology into recycled cables for use in the railroad industry, including Tokyu Railways. Furthermore, we will evaluate the ripple effects on the railroad industry in the future by quantifying the CO₂ emission reductions and economic benefits brought about by recycling.

This R&D has been made possible through the collaboration of four parties: Tohoku University, which has pioneered the research and technological development of the combined plastic swelling and ball milling method for coated wires; Tokyu, which formulated its Environmental Vision 2030 in March 2022 to realize a decarbonized and recycling-based society and tackles waste reduction by 10% by 2030; Tokyu Railways, which aims to solve environmental and social issues through activities including new value creation and contribution leveraging its business characteristics to realize a decarbonized and recycling-based society through its railroad business; and MMC, which has advanced smelting and recycling technologies for copper and other nonferrous metals.
Through this R&D, cables from the railroad industry will be made recyclable as recycled cables, which can be applied not only to the railroad industry but also potentially to other industries in the future. Through this effort, we aim to establish a system that reduces and recycles waste as much as possible.