Governance

As a place to deliberate basic policies and important items on the ESG and sustainability-related matters, INNOTECH has established the Sustainability Promotion Meeting. The meetings are held regularly, and Managing Executive Officers, General Managers of each business unit and representatives from its domestic group companies attend the meeting to pursue efforts on sustainability.

At the Sustainability Promotion Meetings, risks associated with climate changes are analyzed periodically (at least once a year) and measures as well as concrete efforts are discussed based on the latest status. Similarly, opportunities related to climate changes are identified and assessed and the results are reflected to the business strategies.

Also at the Sustainability Promotion Meeting, the progress is monitored with respect to goals and efforts pursued by the company.

The Sustainability Promotion Meeting is hosted by INNOTECH President and Representative Director, who also serves as the CSO (Chief Sustainability Officer) and the Director in charge of Sustainability is the Chairman. The President and Representative Director as well as the Director in charge of Sustainability report to the Board of Directors periodically (at least once a year) on the risks as well as opportunities associated with the climate changes and the Board establishes the mechanism to appropriately monitor and administer the management status of such risks.

Whenever the Board makes management decisions, it takes the climate-related matters into consideration.

Strategy

INNOTECH aims to realize the long-term goal of the Paris Agreement, which is to keep the global average temperature rise well below 2 degrees Celsius above pre-industrial times while pursuing to limit the increase even further to 1.5 degrees Celsius. INNOTECH continues to assess and analyze the criticality of business risks as well as opportunities brought by the climate changes for INNOTECH as well as for its domestic Group companies and reflect such assessment and analysis results to its business strategies.

Critical risks and opportunities, their possible impact on and measures to be taken for INNOTECH Group businesses are as follow;

1. Power train means equipment and so on to convey propelling energy generated by the motor to the driving wheels.
2. Our assessment on the aggregated financial impact caused by the introduction of carbon pricing (carbon taxes) and obligations to use of renewable energy is approximately as follows;

・INNOTECH Corporation Scope 1 and 2 GHG Emissions

• To calculate the GHG emission associated with the consumptions of city gas, the emission coefficient of the medium pressure supply published by Tokyo Gas Co., Ltd. is utilized (under the condition of 15℃ and gauge pressure being 0.981kPa (100㎜H2O)), which is 2.19〔t-CO2/1000㎥〕.
• To calculate the GHG emission associated with the consumptions of electricity in FY2022, the emission coefficient after adjustment of TEPCO Energy Partner, Incorporated in the “List of Emission Coefficient by Electricity Utility Companies(For submission as of 2023)” published by Ministry of the Environment of Japan is utilized, which is 0.000456〔t-CO2/kWh〕(Menu G（Coefficient）). For FY2023 calculation of the same, the emission coefficient after adjustment of TEPCO Energy Partner, Incorporated in the “List of Emission Coefficient by Electricity Utility Companies(For submission as of 2024)” published by Ministry of the Environment of Japan is utilized, which is 0.000390〔t-CO2/kWh〕（Menu J (Coefficient）).

・INNOTECH Corporation Electricity Consumptions

Risk Management

INNOTECH believes that precisely identifying, assessing, and analyzing the climate change-related risks and taking appropriate measures against them will lead to the company’s mid-term and long-term sustainable growth and further enhancement of corporate values.

At the Sustainability Promotion Meeting, INNOTECH comprehensively identifies transition risks which consist of “Governmental policies and laws and regulations”, “Technology”, “Market”, and “Reputation” as well as physical risks which consist of “Acute” and “Chronic” risks and assesses and analyzes them based on the probability of their occurrence and their financial impact. Then INNOTECH specifies critical risks for INNOTECH Group, considers measures to be taken, and manages the progress. Also, the latest status is reviewed periodically (at least once a year) to see if there is any change on the already-identified risks and occurrence of any new risks and reviews the list of critical risks by assessing and analyzing the probability of occurrence and the financial impact of such changed or newly emerging risks. Then INNOTECH considers measures to be taken against them and manages their progress, thus the company’s level of risk management continues to be upgraded and business is operated smoothly.

The content discussed at the Sustainability Promotion Meeting is periodically (at least once a year) reported to the INNOTECH Board of Directors and the Board establishes the mechanism to appropriately monitor and administer the management status of such risks.

Metrics and Targets

INNOTECH utilizes the Scope 1 and 2 GHG emissions as its metrics to manage the risks associated with the climate changes. GHG emissions for Scope 1 and 2 of INNOTECH in the fiscal year of 2023 was 1,512.7 t-CO2.

1. Direct GHG emissions from sources that are controlled or owned by an organization
2. Indirect GHG emissions from generation of purchased electricity, stream, heating and cooling consumed by an organization

INNOTECH has established a target “to make its Scope 1 and 2 GHG emissions as net zero by the year 2050” and has been engaging in thorough energy-saving efforts, such as changing all the lighting of its headquarter building to LEDs and setting up solar panels on the rooftop of the headquarter building as a part of its ISO-related activities. The company will keep working hard to become carbon neutral, such as by building a specific procurement plan of power generated from renewable energy resources.