Measures to Combat Global Warming during Business Activities

Measures to Combat Global Warming

Basic Concept

Climate change resulting from global warming is expected to have a wide range of effects on the ESPEC Environmental Test Business which is our main business and on the environmental conservation business operated by ESPEC MIC. Our company recently set a long-term target for reducing greenhouse gases (GHG) by 2030. We are working for a 60% reduction in SCOPE 1+2 (in-house emissions) GHG emissions compared to FY 2019, and a 30% reduction in SCOPE 3 (indirect emissions).
This target received SBT (Science Based Targets) certification from the international SBT Initiative^*.

* An international initiative that encourages firms to set scientifically-grounded targets for reducing greenhouse gas emissions so that the goals of the Paris Agreement may be achieved. Jointly managed by CDP, which is an NGO involved in environmental information disclosure, UNGC (United Nations Global Compact), WRI (World Resources Institute), and WWF (World Wide Fund for Nature).

Program Overview

We identify and calculate greenhouse gas (GHG) emissions from our own business activities (SCOPE 1 and SCOPE 2) and indirect emissions from our business activities (SCOPE 3).
In the FY2024 survey conducted by the CDP^*, we was awarded a B for climate change for a B- for water security. Furthermore, we received the highest rating--an A score--at the FY 2024 Supplier Engagement Ratings and was selected as a Supplier Engagement Leader for the third time in a row. In addition, we were listed for the second Year in a Row as one of the top 350 performers in the Asia-Pacific Climate Leaders survey done in partnership with the Financial Times in the UK and German data provider Statista. In the Fluorocarbon Countermeasure Rating 2024 survey conducted by the Japan Refrigerants and Environment Conservation Organization (JRECO), we received an “A” ranking for the first time.
In the future, we will continue to carry out further energy-saving activities in our manufacturing processes and at our offices, and will actively introduce renewable energy, increase energy savings in our products, and take other action in order to reduce GHG emissions throughout the supply chain.

* An international Non Governmental Organization (NGO) that investigates, evaluates, and discloses information about the environmental programs of corporations and other entities

Please scroll horizontally to look at table below.

FY 2024 supply chain greenhouse gas (GHG) emissions and ratios (Consolidated※1)

Programs for Reducing Greenhouse Gas (GHG) Emissions in Manufacturing Processes

ESPEC has been working to reduce GHG emissions in its manufacturing processes since 1996. In FY 2019, we completed the change to non-CFC foam heat insulation in all products produced at the Fukuchiyama Plant. Additionally, since FY 2022 we have been working to recover fluorocarbons left inside hoses when charging with CFC during the manufacturing process, working to prevent leaks. At the Kobe R&D Center, we switched over to renewable energy sources for air conditioning and other equipment, ceasing all use of city gas in July 2023.

Fluorocarbon Collection

Since FY 1995, we have collected fluorocarbons when performing product repairs and disposal. Based on the CFC Emissions Control Law, we are registered as a Type 1 CFC collecting business at municipalities throughout the country. All collected refrigerant CFCs are handed over to companies that can recycle CFC, and are rendered harmless through high-temperature plasma destruction at fluorocarbon destruction facilities. The recovered quantity amounts to approximately 86 tons (cumulative as of March 2025).

■ Collected quantity of fluorocarbon (Non-consolidated)

（Units:kg）

（FY）	2020	2021	2022	2023	2024
Collected quantity for a single fiscal year	3,668	3,208	3,695	3,471	3,115
Collected quantity for cumulative total	73,068	76,276	79,971	83,442	86,557

Initiatives in Product Transportation

We are beginning a modal shift (utilization of rail transportation) in order to prevent global warming. Starting from Osaka, we are switching from trucking to freight for long-distance transportation to destinations such as Hokkaido, Tohoku, Kyushu, and Tokyo.

Switching to renewable energy at business offices

ESPEC is actively introducing renewable energy, and completed the switch to renewable energy for power at all offices in Japan (excepting some rental properties) by the end of FY 2021. As a result, 98% of the power used (kWh) by the group in Japan is renewable energy. Solar power generating systems have been installed at the Fukuchiyama Plant (Training Center) and Kobe R&D Center (Testing Building). The amount of power generated at these two sites in FY 2024 was 61,000 kWh. We are also advancing initiatives overseas, with our U.S. Group company beginning the introduction of renewable energy in April 2025.

Fukuchiyama Plant Training Center (Fukuchiyama City, Kyoto Prefecture)

Commissioned testing services using 100% renewable energy

By April 2021, we had switched over to renewable energy sources for the electricity used at all five of our laboratories in Japan (Utsunomiya, Tokoname, Toyota, Kariya, Kobe). Providing Japan’s first laboratory testing services powered by 100% renewable energy sources allows us to help customers reduce their CO₂ emissions under SCOPE 3 Category 1 (purchased products and services). Reports for tests conducted at our testing laboratory bear the Green Power mark, indicating that the test was performed with no CO₂ emissions. This mark is equivalent to the environmental label (ISO/JISQ14021) for self-declared environmental claims “Type II” established by the International Organization for Standardization (ISO).

Green Power mark

Efforts to reduce GHG emissions at suppliers

We have requested that our suppliers reduce SCOPE 1+2 emissions by 20% by FY 2025, and we are working with them to achieve the goal together through activities such as study sessions on how to reduce GHG emissions. We also created a supplier environmental contribution recognition program in June 2025 to recognize suppliers that have reduced their GHG emissions and suppliers who have received SBT certification. In recognition of these efforts, we were given the highest rating—an A score—at the FY 2024 Supplier Engagement Ratings conducted by CDP, and were selected for the third year in a row as a Supplier Engagement Leader.

3rd Award Ceremony for Suppliers’ Environmental Contributions

Climate-related financial disclosures based on the TCFD Recommendations

ESPEC has expressed its support for the proposal of the Task Force on Climate-related Financial Disclosures (TCFD)*, which aims to promote the investigation and disclosure of the financial implications of the risks and opportunities posed by climate change. We are disclosing information related to climate change based on the four themes recommended by TCFD: governance, strategy, risk management, and metrics and targets.

*Task Force on Climate-related Financial Disclosures
Established in 2015 by the Financial Stability Board (FSB).

Nature-related financial disclosures based on the TNFD Recommendations

We support the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD),which seeks to identify and disclose dependencies and impacts on natural capital, as well as the associated risks and opportunities. Guided by the four themes recommended by the TNFD—“Governance,” “Strategy,” “Risk and Impact Management,” and “Metrics and Targets”—we have prepared our TNFD Report.

Initiatives in Which We Are Taking Part

● Task Force on Climate-related Financial Disclosures (TCFD)

In December 2021, we expressed our support for the proposal of the Task Force on Climate-related Financial Disclosures (TCFD). We also participate in the TCFD Consortium, which consists of companies and financial institutions that support the TCFD proposal.

TCFD website

● Task Force on Nature-related Financial Disclosures (TNFD)

In September 2025, we expressed our support for the proposal of the Task Force on Nature-related Financial Disclosures.

TNFD Website

● Japan Climate Initiative (JCI)

Since January 2019, we have taken part in the Japan Climate Initiative (JCI),* which is a network of companies and local governments working to combat climate change.

※Japan Climate Initiative. Established in 2018.

JIC website

Changes in the Amounts of Energy Used (Consolidated)

Please scroll horizontally to look at table below.

(Fiscal year)		2020	2021	2022	2023^*	2024
Gasoline		519㎘	528㎘	555㎘	540㎘	555㎘
Kerosene		-	-	0㎘	0㎘	0㎘
Diesel fuel		39㎘	7㎘	7㎘	6㎘	19㎘
LPG		1t	0t	0t	0t	3t
City gas		127,000 Nm³	110,000 Nm³	90,000 Nm³	73,000 Nm³	74,000 Nm³
Natural gas		166,000 Nm³	163,000 Nm³	167,000 Nm³	147,000 Nm³	252,000 Nm³
Electricity		23,112,000 kWh	25,414,000 kWh	24,913,000 kWh	27,987,000 kWh	30,733,000 kWh
	Amount of the above obtained from renewable energy (including in-house solar power generation, Renewable Energy Certificate power, and the Renewable Energy Power Menu)	4,374,000 kWh	17,717,000 kWh	18,124,000 kWh	20,266,000 kWh	20,724,000 kWh

* Excluding Cosmopia Hightech Corp., which was made a consolidated company in August 2023.

Changes in Breakdown of Electricity Use (Consolidated）

Please scroll horizontally to look at table below.

(Units:1,000kWh)

(Fiscal year)		2020	2021	2022	2023^*	2024
Purchased electrical power		23,020	25,334	24,824	27,934	30,675
	Amount of the above obtained from renewable energy (including in-house solar power generation, Renewable Energy Certificate power, and the Renewable Energy Power Menu)	4,282	17,636	18,035	20,213	20,666
Private power generation (Solar power generation)		99	84	94	60	61
Power used		23,112	25,414	24,913	27,987	30,733
	Amount of the above obtained from renewable energy (including in-house solar power generation, Renewable Energy Certificate power, and the Renewable Energy Power Menu)	4,374	17,717	18,124	20,266	20,724

* Excluding Cosmopia Hightech Corp., which was made a consolidated company in August 2023.