Response to Climate Change

Climate-Related Disclosures Based on TCFD Recommendations

In December 2020, Kobe Steel announced that it supports the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and decided to join the TCFD Consortium, an organization of TCFD supporter organizations in Japan.

tcfd

tcfd

Basic Concept

The Kobelco Group recognizes CO2 reduction as a top management priority. As such, we announced our aim to increase corporate value through a transition to carbon neutrality that we aim to achieve by 2050 in the Kobelco Group Medium- Term Management Plan (fiscal 2021–2023) announced in May 2021.

Going forward, the Kobelco Group will continue to pursue reduction of CO2 emissions in order to contribute to realization of “a world in which people, now and in the future, can fulfill their hopes and dreams while enjoying safe, secure, and prosperous lives” as envisioned in KOBELCO’s View of the Future.

Climate-Related Governance

We established the CO2 Reduction Promotion Subcommittee under the Sustainability Management Committee (chaired by the Executive Vice President and Representative Director) as an organization that specializes in dealing with issues related to the risks and opportunities associated with climate change. The subcommittee, tasked with conducting strategic reviews of climate change, studies and implements Companywide activities to address the risks and opportunities of climate change.

Assessment and management of climate-related risks and opportunities are regarded as important management issues, and important decisions of the CO2 Reduction Promotion Subcommittee are subject to the approval of the relevant Executive Steering Committee. The Steering Committee consists of directors and executive officers, as knowledge from a wide range of perspectives and viewpoints is required for climate-related issues, including business, management, legal, and technological development.

The activities of the CO2 Reduction Promotion Subcommittee and its study outcomes are reported through the Sustainability Management Committee to the Board of Directors quarterly for supervision and guidance from the Board of Directors. Important decision-making related to climate change involves a system of direct governance by senior management. Under this system, recommendations are made to the Executive Council through the Sustainability Management Committee, with the matter then approved by the President and CEO or a resolution of the Board of Directors following deliberation by the Executive Council.

Climate-Related Governance Structure

Climate-Related Strategy

The Kobelco Group analyzes the medium- to long-term risks and opportunities associated with climate change considering various guidelines, including the social scenarios presented by the International Energy Agency (IEA); the long-term visions formulated and announced by the Japan Iron and Steel Federation, the Japan Aluminium Association, and other industry organizations; and the energy policies of Japan. Based on the analysis results, we evaluate the appropriateness of our Group’s activities.

Climate Change-Related Risks and Opportunities over the Short and Medium and Long Term

Response to Risks and Opportunities (R&D)

Impacts on Business, Strategy, and Finance

According to the “Mandatory Greenhouse Gas Accounting and Reporting System (published by the Ministry of the Environment)”, Kobe Steel is one of the largest emitters of greenhouse gases in Japan. Our Company pays the carbon tax, Tax for Climate Change Mitigation (289 yen per ton of CO2 emissions from the use of coal, oil, LPG, and LNG), and in the future, if the carbon tax is increased or new taxes are imposed with the introduction of carbon pricing, it is expected to have a significant impact on our business, so we are constantly monitoring these trends. If regulations or taxes are imposed on CO2 and other emissions in the future, our Group’s business activities, particularly those related to steel, will be restricted, which may have an impact on our Group’s business performance with a decrease in sales, an increase in costs, etc.

The Kobelco Group has been promoting energy conservation efforts as a measure to mitigate the impact of carbon pricing. Our Group invested approximately 0.38 billion yen in energy conservation capital investments in fiscal 2022.

Examples of investments in fiscal 2022 include updating the blast furnace pneumatic cooler at the Kakogawa Works. For other initiatives, please refer to “Initiatives to Save Energy and Reduce CO2 Emissions” on page 26.

In addition, the Kobelco Group is engaged in the development of various technologies related to the reduction of CO2 emissions in production processes and contribution to reduction of CO2 emissions through technologies, products, and services in order to contribute to the reduction of CO2 emissions by society as a whole. In fiscal 2022, we spent approximately 3.6 billion yen on research and development related to climate change.

Detail is below:

Scenario Analysis

In order to better understand future climate-related risks and opportunities, we carried out mediumterm (2030) and long-term (2050) scenario analysis.

Our scenario analysis is based on the International Energy Agency (IEA)’s 2°C scenario (SDS:Sustainable Development Scenario) and 1.5°C scenario (Net Zero by 2050) as well as the 4°Cscenario presented by the Intergovernmental Panel on Climate Change (IPCC) in its Sixth AssessmentReport. For our analyses and evaluations, we also refer to long-term visions published by industryorganizations to which we belong, such as the Japan Iron and Steel Federation (JISF) and the JapanAluminium Association. For the electric power business, which is closely related to Japan’s energypolicy, we conduct scenario analysis based on the energy policy of the national government. Wealso regularly review our analysis and evaluation of risks and opportunities based on changes in theexternal environment.

  • Impact on Business

As more than 90% of our Group’s CO2 emissions come from the steelmaking process, the medium- to long-term trends in the steel industry will have the greatest impact on our business. According to the “JISF Long-Term Vision for Climate Change Mitigation—A Challenge towards Zero-Carbon Steel,” there is a certain correlation between economic growth and the amount of steel stock per capita. Therefore, the demand for steel is expected to continue to increase along with the world’s economic growth and population growth.

Steel production can be broadly divided into production with natural resources (iron ore, mainly using blast furnaces and DRI) and production with reused scrap (mainly using electric arc furnaces). According to JISF predictions, the reuse of scrap is expected to increase significantly due to the increase in the total amount of steel stock. On the other hand, demand for steel cannot be met by reused scrap alone. Accordingly, production using natural resources (iron ore) will continue to require the same level of production as at present.

Amid growing interest in the response to climate change and the disclosure of relevant information, the importance of CO2 reduction efforts in the iron and steel industry is expected to continue increasing. For this reason, we anticipate that our stakeholders, including national and local governments, investors, and customers, will pay greater attention to our efforts to reduce CO2 emissions from our own facilities and expand our environmental menu that contributes to CO2 reduction.

  • Risks and Opportunities

One of our Group’s core businesses is the manufacture and sale of steel products, which falls under the industry category of energy-intensive basic materials. Our Group’s CO2 emissions from energy use in fiscal 2022 totaled 15.6 million tons (Scope 1 and Scope 2), which ranks high even in Japan’s manufacturing industry. Accordingly, we recognize that the trends of future national climate change policies, laws, and regulations, including carbon pricing, are transition risks that may have a significant impact on our business operations.

In May 2021, the Kobelco Group announced in its Medium-Term Management Plan (Fiscal 2021–2023) that it will take on the challenge of realizing carbon neutrality by 2050 and aim to increase corporate value through this transition. The Kobelco Group has set targets for 2030 and a vision for 2050 from two angles: (1) reducing CO2 emissions in the Group’s own production processes, and (2) contributing to the reduction of CO2 emissions through the Group’s distinctive technologies, products, and services.

Regarding the reduction of CO2 emissions in our own production processes, we will promote CO2 reduction initiatives and mitigate risks by formulating roadmaps for carbon neutrality in the ironmaking processes and in the electric power business. On the other hand, regarding the contribution to the reduction of CO2 emissions through the Group’s distinctive technologies, products, and services, we will make the most of opportunities by formulating a roadmap for the contribution to the reduction of CO2 emissions through the MIDREX® Process.

As for physical risks, the Japan Meteorological Agency (JMA) and various research institutes have reported that, as global warming progresses, the amount of precipitation tends to rise due to the increase of water vapor in the atmosphere, and damage caused by heavy rain and typhoons tends to become more severe. The risk of production stoppages and supply chain disruptions stemming from severe typhoons and heavy rains in recent years is also becoming more and more evident. Our Company recognizes that further intensification of typhoons, floods, and other natural disasters caused by climate change poses a risk that could have a significant impact on its operations and lead to suspension of production activities.

In accordance with its Risk Management Regulations, our Company has defined “climate-related regulations” and “natural disaster preparation and recovery” as Top Risks that are expected to have a particularly severe impact when an event occurs, with the aim of strengthening our risk management.

As for opportunities, demand for low-CO2 products and services is increasing amid growinginternational interest in climate-related issues. Along with this, we expect demand for products thathelp reduce CO2 emissions, such as our automotive weight-reduction materials and the MIDREX®Process, to grow over the medium to long term.

Targets and Vision Announced in the KOBELCO Group Medium-Term Management (Fiscal 2021–2023)

  • 1 Most of the reduction targets are associated with iron and steel making processes.
    We reviewed the targets announced in September 2020 (with the change from BAU to the total amount basis, and theincreased use of original solutions reflected).
    Business As Usual (BAU): Emissions of greenhouse gases, or emissions per unit, assuming no additional measures are taken.

    2 The KOBELCO Group contributes to the reduction of CO2 emissions in various areas of society through its distinctivetechnologies, products, and services.

    3 Reviewed calculation formula announced in September 2020

Roadmap for Carbon Neutrality in the Ironmaking Process

Roadmap for Carbon Neutrality in the Electric Power Business

Roadmap for Carbon Neutrality in the Electric Power Business

Roadmap for CO2 Reduction through the MIDREX® Process

Roadmap for CO<sub>2</sub> Reduction through the MIDREX<sup>🄬</sup> Process

Climate-Related Risk Management

In regard to climate-related risks, we have identified (1) transition risks (policies and regulations) and (2)physical risks (preparations for and recovery from natural disasters) as Top Risks, which are risks thatmay have a material impact on the Group and its stakeholders and require a Groupwide response. Weare working to strengthen risk management by appointing risk owners to each risk category.

For our basic policies on risk management and details about our risk management structure, please refer to “Risk Management”

Climate-Related Metrics and Targets

Metrics

The Kobelco Group sets specific metrics for CO2 reduction activities, such as Reduction of CO2 Emissions in Production Processes (Metric A) and Contribution to Reduction of CO2 Emissions through Technologies, Products, and Services (Metric B), and sets and manages targets for each.

Kobe Steel positions these two metrics as non-financial key performance indicators (KPIs) and manages them. Non-financial KPIs including CO2 reduction are discussed annually at the Executive Council as important items in the budget, and then they are discussed and approved by the Board of Directors.

Energy Consumption

The star (★) symbol indicates items that have received third-party assurance

Unit Fiscal 2020 Fiscal 2021 Fiscal 2022
Energy consumption PJ 182 192* 187
Consolidated net sales Million of yen 1,705,566 2,082,582 2,472,508
Energy intensity
(per consolidated net sales)
GJ / Million of yen 107 92 75
Products
(crude steel, aluminum rolled products, copper rolled products)
Million t 6.3 7.2 6.7
Energy intensity per t-product GJ / t-Product 28.7 26.6 27.9
    <Calculation method>
  • Calculations made based on Keidanren Carbon Neutrality Action Plan. However, figures for Kobelco Power Kobe Inc., KobelcoPower Kobe No. 2 Inc., and Kobelco Power Moka Inc. (the three subsidiaries of the Electric Power Business Unit) are calculatedbased on the Act on Rationalizing Energy Use.
  • Energy consumption does not include energy consumption equivalent to electricity sold externally by the three subsidiaries of the Electric Power Business Unit and the Steelworks of Kobe Steel (166 PJ).
    <Boundary>
  • Kobe Steel, 17 domestic consolidated subsidiaries, 12 overseas consolidated subsidiaries, and 1 coke manufacturing plant of equity-method affiliate
  • Japan: April 1 to March 31
    Overseas:January 1 to December 31
    <Calorific conversion factors>
  • Agency for Natural Resources and Energy, “List of Standard Calorific Value and Carbon Emission Factor for Fossil Fuel EnergySources” (Comprehensive Energy Statistics) (revised on January 31, 2020).
  • However, the three subsidiaries of the Electric Power Business Unit apply the Act on Rationalizing Energy Use.
    * Due to the revision of the calculation method, the figure for fiscal 2021 has been revised retroactively.

Greenhouse Gas Emissions (Scope 1, 2, and 3)

Energy-Derived CO2 Emissions (Scope 1 and 2)The star (★) symbol indicates items that have received third-party assurance

Unit Fiscal 2020 Fiscal 2021 Fiscal 2022
Scope 1
Emissions from the use of our own fuel (direct emissions)
Million t-CO2 14.61 15.3 14.7
Scope 2
Emissions associated with theuse of electricity, heat, and steam supplied by other companies(indirect emissions)
Million t-CO2 0.8 0.9※1 0.9
Scope 1+22 Million t-CO2 15.41 16.1 15.6
Consolidated net sales Million of yen 1,705,566 2,082,582 2,472,508
CO2 emission intensity from energy use per net sales t-CO2 /Million of yen 9.0 7.81 6.3
Products (crude steel, aluminum rolled products, copper rolled products) Million t 6.3 7.2 6.7
CO2 emission intensity from energy use t-CO2 / t-product 2.4 2.2 2.3
    <Calculation method>
  • Calculations made based on Keidanren Carbon Neutrality Action Plan. However, figures for Kobelco Power Kobe Inc., KobelcoPower Kobe No. 2 Inc., and Kobelco Power Moka Inc. (the three subsidiaries of the Electric Power Business Unit) are calculated based on the Act on Promotion of Global Warming Countermeasures.
  • Scope 1 and Scope 1+2 do not include CO2 emissions equivalent to electricity sold externally by the three subsidiaries of the Electric Power Business Unit and the Steelworks of Kobe Steel (12.8 million t-CO2).
    <Boundary>
  • Kobe Steel, 17 domestic consolidated subsidiaries, 12 overseas consolidated subsidiaries, and 1 coke manufacturing plant of equity-method affiliate
  • Japan: April 1 to March 31、Overseas: January 1 to December 31
    <CO2 emission factors>
  • Fuels: Carbon emissions factor in National Greenhouse Gas Inventory Report of JAPAN (NIR) 2022 x CO2 conversion factor (44/12).
  • Electricity: For Japan, the fiscal 2021 preliminary figures of The Electric Power Council for a Low Carbon Society apply.
    For overseas, IGES List of Grid Emission Factors version 11.1 applies. However, for the United States “EPA’s eGRID2021” applies.
  • However, the three subsidiaries of the Electric Power Business Unit apply Greenhouse Gas Emission Calculation and Reporting Manual for both fuels and electricity.
    1: Due to the revision of the calculation method, the figures for fiscal 2020 and fiscal 2021 have been revised retroactively
    2: The totals may not match as a result of rounding.

Breakdown of Greenhouse Gas Emissions (Unit: Thousand t-CO2)

Category Fiscal 2020 Fiscal 2021 Fiscal 2022
Energy-derived CO2 emissions (Scope 1) 14,591 15,292 14,687
Non-energy-derived CO2 emissions 498 568 887
Methane (CH4) 5 6 5
Nitrous oxide (N2O) 50 7 5
Hydrofluorocarbons (HFC) - - -
Perfluorocarbons (PFC) - - -
Sulfur hexafluoride (SF6) 18 18 16
Nitrogen trifluoride (NF3) - - -
Total* for Non-energy-derived CO2 emissions
and greenhouse gases other than CO2
571 598 913
    <Calculation method>
  • Calculations made based on Keidanren Carbon Neutrality Action Plan. However, figures for Kobelco Power Kobe Inc., KobelcoPower Kobe No. 2 Inc., and Kobelco Power Moka Inc. (the three subsidiaries of the Electric Power Business Unit) are calculated based on the Act on Promotion of Global Warming Countermeasures.
  • Scope 1 and Scope 1+2 do not include CO2 emissions equivalent to electricity sold externally by the three subsidiaries of the Electric Power Business Unit and the Steelworks of Kobe Steel (12.8 million t-CO2).
    <Boundary>
  • Kobe Steel, 17 domestic consolidated subsidiaries, 12 overseas consolidated subsidiaries, and 1 coke manufacturing plant of equity-method affiliate
  • Japan: April 1 to March 31、Overseas: January 1 to December 31
    <CO2 emission factors>
  • Fuels: Carbon emissions factor in National Greenhouse Gas Inventory Report of JAPAN (NIR) 2022 x CO2 conversion factor (44/12).
  • Electricity: For Japan, the fiscal 2021 preliminary figures of The Electric Power Council for a Low Carbon Society apply.
    For overseas, IGES List of Grid Emission Factors version 11.1 applies. However, for the United States “EPA’s eGRID2021” applies.
  • However, the three subsidiaries of the Electric Power Business Unit apply Greenhouse Gas Emission Calculation and Reporting Manual for both fuels and electricity.
    1: Due to the revision of the calculation method, the figures for fiscal 2020 and fiscal 2021 have been revised retroactively
    2: The totals may not match as a result of rounding.

Other Indirect Emissions in the Supply Chain (Scope 3) (Unit: Thousand t-CO2) The star (★) symbol indicates items that have received third

Category Fiscal 2020 Fiscal 2021 Fiscal 2022 Calculation Method
1 Purchased goods
and services
5,5471 6,5301 5,888 The Company’s usage of main raw
materials (iron ore, coking coal, purchased
coke, aluminum, copper and titanium)
multiplied by CO2 emission factors
2 Capital goods 262 113 144 Capital investment cost multiplied by
CO2 emission factors
3 Fuel- and energy-related
activities not included
in Scope 1 or Scope 2
3171 3051 338 Annual consumption of electricity,
steam, fuel, etc., multiplied by CO2
emission factors
4 Upstream
transportation
and distribution
180 217 225 Calculated using the calculation method
for energy-derived CO2 emissions related
to freight transportation by shippers as
stipulated in the Act on Rationalizing
Energy Use
5 Waste generated
in operations
30 30 30 The amount of waste for each type
multiplied by CO2 emission factors
6 Business travel 2 1 1 Number of employees multiplied by CO2
emission factors
7 Employee commuting 5 5 5 Number of employees multiplied by CO2
emission factors
10 Processing of
sold products
2,4451 2,7051 2,563 Calculated by multiplying the production
volume of main steel products by
CO2 emission factors associated with
processing each type of steel product.
11 Use of sold products 36,985 21,478 17,696 Lifetime emissions for the main machinery
products sold by Kobe Steel (energy
used during use: electricity)
are calculated
based on units sold, expected average
life, average power consumption, and
CO2 emission factors for electricity
12 End-of-life treatment of
sold products
56 63 60 Calculated by multiplying CO2 emission
factors by the production volume of
crude steel, aluminum, and
copper products
Total2 45,8291 31,4471 26,950
    <Calculation method>
  • Calculated based on Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout the Supply Chain (Ministry of the Environment and Ministry of Economy, Trade and Industry).
    <Boundary>
  • Kobe Steel, April 1 to March 31 of each fiscal year
    <Source of CO2 emission factors>
  • Categories 1, 3, and 10: “LCI Database IDEA Ver. 3.3 (April 15, 2023)” IDEA Lab, The Research Institute of Science for Safety and Sustainability, National Institute of Advanced Industrial Science and Technology (AIST).
  • Categories 2, 5, 6, 7, and 12: “Database of Emissions Unit Values for Calculation of Greenhouse Gas Emissions, etc. (Ver. 3.3), by Organizations Throughout the Supply Chain”
  • Category 11: National average in japan for “emission factors by electric utility” (published by the Ministry of the Environment and the Ministry of Economy, Trade and Industry)

    1 Due to the revision of the calculation method, the figures for fiscal 2020 and fiscal 2021 have been revised retroactively
    2 The totals may not match as a result of rounding.
    3 Category 8 is contained in Scope 1 and 2. Categories 9, 13, 14, and 15 are not applicable.

Targets and Results on Risk and Opportunity

In May 2021, the Kobelco Group announced, in its Medium-Term Management Plan (Fiscal 2021–2023), that it would take on the challenge of realizing carbon neutrality by 2050 and aim to increase corporate value through this transition. The Kobelco Group has set targets for 2030 and a vision for 2050 from two angles: (1) reducing CO2 emissions in the Group’s own production processes, and (2) contributing to the reduction of CO2 emissions through the Group’s distinctive technologies, products, and services.

Metric A: Reduction of CO2 Emissions in Production Processes (target initiated in fiscal 2019)

2050 Vision:
Taking on the challenge of achieving carbon neutrality
2030 Target:
Reducing CO2 emissions in production processes 30–40%1, 2 (compared with fiscal 2013)
Results:
Due to the decrease in production volume, CO2 emissions in fiscal 2022 declined compared to the previous fiscal year. As a result, there was a 20% reduction1, 2 compared to fiscal 2013.
  • 1 Total of Scope 1 and Scope 2
  • 2 Covered range for reduction target: Major business locations of Kobe Steel, Ltd. and Kobelco Construction Machinery Co., Ltd., together representing around 93% of CO2 emissions of the entire Group (results for fiscal 2022)
  • Fiscal 2013 emissions in covered range: 18.2 million tons
    Fiscal 2022 emissions in covered range: 14.5 million tons
Initiative:
  • In the wake of the oil crisis, which spanned from the 1970s to the 1990s, Japan’s steel industry moved to utilize energy more effectively by installing waste heat recovery systems and conserving energy while switching to continuous process flows and streamlined processes. From the 1990s, the steel industry took steps to effectively use waste materials, focused on upgrading waste heat recovery systems and increasing the efficiency of equipment. In recent years, industry players have installed highly efficient gas turbine power plants.
  • The Kobelco Group also has maintained a consistent approach in advancing various energy conservation and CO2 reduction measures through proactive capital investments. For example, we installed highly efficient gas turbine power generation facilities that use gas from blast furnaces at Kakogawa Works over the period of fiscal 2009−2014, resulting in a substantial reduction of CO2 emissions.
  • In the ironmaking process, we verified through a demonstration test that we can reduce CO2 emissions in the blast furnace process by approximately 20% by charging a large quantity of hot briquetted iron (HBI: compacted form of direct reduced iron) manufactured using the MIDREX🄬 Process into our blast furnaces. Going forward, we will further pursue the potential of HBI charging technology and AI-based blast furnace operation technology to reduce CO2 emissions from blast furnaces and reach our target for fiscal 2030. In addition,as part of our efforts to realize carbon neutrality by 2050, we will take a two-track approach to reduce CO2 emissions through utilizing blast furnaces and manufacturing high-grade steel in large electric furnaces.

Metric B: Contribution to Reduction of CO2 Emissions through Technologies, Products, and Services

The Group has a variety of products and services that contribute to CO2 reduction. By expanding sales of these, we will contribute to the reduction of CO2 during use.

2050 Vision:
CO2 reduction contribution: 100 million tons or more
2030 Target:
CO2 reduction contribution: 61 million tons
Results:
The CO2 Reduction Promotion Subcommittee estimates that the Kobelco Group’s technologies, products, and services contributed to the reduction of CO2 emissions totaling 58.9 million tons in fiscal 2022.

CO<sub>2</sub>排出削減貢献量

CO<sub>2</sub>排出削減貢献量

Initiative:
Regarding the contributions to reduction of CO2 emissions through technologies, products, and services, the Group has instituted an internal accreditation system. For the formulas used in accreditations, we receive advice from Kiyotaka Tahara, the Director of the Research Laboratory for IDEA at The Research Institute of Science for Safety and Sustainability, National Institute of Advanced Industrial Science and Technology (AIST), which ensures their fairness and objectiveness.

認定の流れ

Other Major Technologies, Products, and Services That Contribute to CO2 Reductions

Technologies, Products, and Services CO2 Reduction Concept
Automotive/transportation field Fuel-cell separator materials, titanium for aircraft components Improvement of fuel economy by reducing weight of automobiles and transportation equipment, effects of replacing gasoline-powered automobiles for next-generation vehicles
Hydrogen utilization field High-purity Hydrogen Oxygen Generator (HHOG) Effects of reducing fossil resource consumption through hydrogen utilization
Power generation field Conversion of sludge to fuel and its utilization at coal-fired thermal power plants (planned) Reducing fossil resource use through the use of resources that contribute to carbon neutrality

Progress of Qualitative and Quantitative Targets for Metric A and Metric B (including 2030 Targets)

Initiatives for
Implementation
Long-Term Policies Medium-Term Targets Fiscal 2022 Results
Self-Assessment
〇:Progressing as planned
△:Issues remain
×:Plan not achieved
Measures against global warming Contribute to preventing global warming by promoting energy conservation and CO2 reduction in all business activities
<Target for 2030>
Reduce CO2 emissions from production processes by 30–40% (compared with fiscal 2013)
<Vision for 2050>
Taking on the challenge of achieving carbon neutrality
Promote mediumto long-term technological development based on the roadmap and continue working on energy conservation initiatives, in order to achieve the targets for 2030 and vision for 2050

Implement initiatives and reviews following the Roadmap toward Carbon Neutrality in the Ironmaking Process and Power Generation Business.
Fiscal 2022 Results: 20% reduction (compared with fiscal 2013)

Contributing to the environment through technologies, products, and services Create environmentally sustainable products and new businesses with due consideration of the environment in all technological and product development
<Target for 2030>
Contribution to CO2 reduction: 61 million tons (including at least 45 million tons of MIDREX🄬)
<Vision for 2050>
Contribution to CO2 reduction: 100 million tons or more
Contribute to the creation of a lowcarbon society through the efforts of the entire Kobelco Group by working on issues related to the environment and energy fields, such as weight reduction of transportation vehicles, the creation of a hydrogenbased society, and the diversification of power sources

FY2022 Results: 58.91 Mt contribution to reduction of CO2 emissions

Climate-Related Organizations to Which We Belong

As a member of the Global CCS Institute and the Carbon Recycling Fund Institute, we actively acquire the latest information on Carbon Capture, Utilization, and Storage (CCUS) technology and work on technological development and research on CO2 separation, capture, recycling, and sequestration for future practical use.

Climate-Related Organizations to Which We Belong Description
Global CCS Institute The Global CCS Institute is an international think tank whose mission is to accelerate the deployment of Carbon Capture and Storage (CCS), a vital technology to tackle climate change and deliver climate neutrality. The institute is headquartered in Melbourne, Australia, with offices in Tokyo, Washington, D.C., Brussels, Beijing, and London.
Carbon Recycling Fund Institute The Carbon Recycling Fund Institute aims to address the global warming issue and improve energy access throughout the world. The institute promotes innovation in carbon recycling by public relations and sponsoring research and development in the field.

In addition, each of the following industry groups to which the Kobelco Group belongs have formulated actions plans for carbon neutrality. Our Group will contribute to the achievement of the targets set out in the action plans of each industry group to which we belong by pursuing energy savings and CO2 reduction in production processes.

Industry Groups Fiscal 2030 Industry Targets for Reducing CO2 Emissions
from Production Processes in the Carbon Neutrality
Action Plan
The Japan Iron and Steel Federation 30% reduction compared to fiscal 2013
Japan Aluminium Association 31% reduction compared to fiscal 2013
Japan Copper and Brass Association 33% reduction compared to fiscal 2013
The Japan Society of Industrial Machinery Manufacturers 10% reduction compared to fiscal 2013
Japan Construction Equipment Manufacturers Association 17% reduction compared to fiscal 2013 (energy intensity)

Policies and Commitments to Ensure Consistency with Industry Associations’ Initiatives

In order to respond to climate change in a consistent manner, Kobe Steel has established a Groupwide governance system centered on the Sustainability Management Committee.

The Sustainability Management Committee informs and educates employees about our Group Corporate Philosophy, ESG policies, and various initiatives to ensure that employees fully understand our corporate policies concerning these matters.

We collect information not only on the policies set by the Japanese government but also on industry targets and initiatives related to our business, as well as trends in regulations in the countries where we conduct business. Such information is shared with internal stakeholders, including directors and management.

When the Kobelco Group engages in any activities that may influence the national government, local governments, industry associations, etc., all members of the Group shall report such activities to the Sustainability Management Committee in advance. The committee shall confirm whether such activities are consistent with the Group Corporate Philosophy and ESG policies. The committee shall report such activities to the Executive Council and the Board of Directors for oversight in accordance with the importance of such activities.

In addition, if the efforts of industry associations/groups are not in line with the Group Corporate Philosophy or ESG policies, Kobe Steel shall put forward its opinions to industry associations/groups and work to ensure that their initiatives are consistent with its policies.

Initiatives to Save Energy and Reduce CO2 Emissions

Examples of Energy-Saving and CO2 Reduction Initiatives in the Kobelco Group (Fiscal 2022)

Production Facility / Company Name Location Examples of Initiatives
Kakogawa Works, Kobe Steel, Ltd. Kakogawa, Hyogo Prefecture Updated blast furnace pneumatic cooler
Moka Plant, Kobe Steel, Ltd. Moka, Tochigi Prefecture Switched a portion of plant lighting to LED lighting
Chofu Works, Kobe Steel, Ltd. Shimonoseki, Yamaguchi Prefecture Switched heat sources at certain buildings at plants
Stopped use of cooling fans by improving operations
Daian Works, Kobe Steel, Ltd. Inabe, Mie Prefecture Switched a portion of plant lighting to LED lighting
Ibaraki Plant, Kobe Steel, Ltd. Ibaraki, Osaka Prefecture Switched a portion of plant lighting to LED lighting
Upgraded heating, ventilation, and
air-conditioning (HVAC)
Saijo Plant, Kobe Steel, Ltd. Higashihiroshima, Hiroshima Prefecture Upgraded dust collectors
Upgraded transformer
Fukuchiyama Plant, Kobe Steel, Ltd. Fukuchiyama, Kyoto Prefecture Switched a portion of plant lighting to LED lighting
Reduced load on electrical machinery through process improvements
Stopped use of cooling fan after process improvement
Fujisawa Plant, Kobe Steel, Ltd. Fujisawa, Kanagawa Prefecture Switched electric motors to inverters
Linked production lines
Takasago Works, Kobe Steel, Ltd. Takasago, Hyogo Prefecture Switched a portion of plant lighting to LED lighting
Updated transformers to high-efficiency models
Kobe Corporate Research Laboratories, Kobe Steel, Ltd. Kobe, Hyogo Prefecture Upgraded heating, ventilation, and air-conditioning (HVAC)
Switched a portion of lighting to LED lighting
Amagasaki Works, Shinko Wire Company, Ltd. Amagasaki, Hyogo Prefecture Upgraded heating, ventilation, and air-conditioning (HVAC)
Improved insulation performance of furnaces
Onoe Works, Shinko Wire Company, Ltd. Kakogawa, Hyogo Prefecture Switched a portion of plant lighting to LED lighting
Upgraded transformer
Switched electric motors to inverters
Nishikinohama Works, Shinko Wire Company, Ltd. Kaizuka, Osaka Prefecture Switched a portion of ceiling lighting to LED lighting
Koshuha-Foundry Co., Ltd. Hachinohe, Aomori Prefecture Switched to high efficiency compressor
Shinko Aluminum Wire Co., Ltd Sakai, Osaka Prefecture Switched a portion of plant lighting to LED lighting
Shinko Leadmikk Co., Ltd Kitakyushu, Fukuoka Prefecture Upgraded heating, ventilation, and air-conditioning (HVAC)
Shinko Industrial Co., Ltd. Kurayoshi, Tottori Prefecture Switched a portion of lighting to LED lighting
Hanshin Yosetsu Kizai Co., Ltd. Okayama, Okayama Prefecture Switched a portion of lighting to LED lighting
Harima Plant, Kobelco Compressors Corporation Kakogun, Hyogo Prefecture Switched a portion of office and plant lighting to LED lighting
Shinko Engineering Co., Ltd. Ogaki, Gifu Prefecture Repaired air leaks
Harima Plant, Kobelco Eco-Solutions Co., Ltd. Kakogawa, Hyogo Prefecture Reduced the number of compressors
Switched a portion of lighting to LED lighting
Kobelco Power Kobe Inc. Kobe, Hyogo Prefecture Reduced driving steam
Reduced fan power
Kobelco Power Kobe No.2 Inc. Kobe, Hyogo Prefecture Reduced fan power
Hiroshima Factory, Kobelco Construction Machinery Co., Ltd. Hiroshima, Hiroshima Prefecture Reduced electrical power of compressors
Switched to electrical coating pumps
Okubo Factory, Kobelco Construction Machinery Co., Ltd. Akashi, Hyogo Prefecture Reduced use of electricity and gas by updating the coating line
Kobelco Automotive Aluminum Rolled Products (China) Co., Ltd. China Switched a portion of plant lighting to LED lighting
Kobelco Spring Wire (Foshan) Co., Ltd. (KSW) China Switched a portion of plant lighting to LED lighting
Kobe Precision Technology Sdn. Bhd. Malaysia Switched a portion of plant lighting to LED lighting
Upgraded air compressors
Installed solar powered lighting in parking lot
Kobe Aluminum Automotive Products, LLC (KAAP) United States Switched a portion of plant lighting to LED lighting
Kobe Aluminum Automotive Products (China) Co., Ltd. (KAAP-C) China Conserved electricity by switching to high efficiency motor
Switched to electric forklifts
Switched HVAC to latest models
Reuse of backwashing wastewater of water purifiers
Kobelco Aluminum Products and Extrusions, Inc. (KPEX) United States Switched compressors to inverters
Thai-Kobelco Welding Co., Ltd. (TKW) Thailand Repaired air leaks
Switched HVAC to inverter model
Kobelco MIG Wire (Thailand) Co., Ltd. (KMWT) Thailand Repaired air leaks
Switched a portion of plant lighting to LED lighting

Response to the CDP Climate Change Questionnaire

Kobe Steel, Ltd. has been responding to questionnaires from CDP* since fiscal 2009. Please refer to the following link for our response to 2023 Climate Change Questionnaire.

  • * An international NGO working on environmental issues. It sends environment-related questionnaires to companies and compiles the results to analyze and evaluate on a common scale.

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