NITTA DuPont sees environmental problems, including climate change, as critical management issues. Our internal system for dealing with environmental matters includes Environment Committee meetings (conducted once a month) and Energy-Saving Committee meetings (conducted four times per year) to direct and address matters related to environmental management and energy-saving activities.
TCFD-based disclosures
Led by the slogan “ADVANCED SURFACE CREATION™,” NITTA DuPont has made its mission to supply advanced polishing technology for creating optimized surfaces to customers in Japan, throughout Asia, and around the world, who manufacture semiconductors and silicon wafers, key devices in the electronics industry. Through this, we are contributing to the advancement of digital society.
We smoothly supply stakeholders with state-of-the-art technologies in the semiconductor field, which plays an important role in every part of modern society. In doing so, we recognize environmental problems such as climate change as being critical management issues. We implement initiatives and disclose information based on the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) with the aim of engaging in highly resilient business operation by recognizing the impact of climate change, formulating related strategies, and managing related risks.
＜Governance＞
Our President and Representative Director supervises and is responsible for our risks, opportunities, targets, and the implementation of specific initiatives related to environmental issues such as climate change.
Our internal system for dealing with environmental matters includes Environment Committee meetings (conducted once a month) and Energy-Saving Committee meetings (conducted four times per year) to direct and address matters related to environmental management and energy-saving activities. Our Environment Committee meetings are run by the environmental protection manager and environmental promotion manager. These meetings include reviews of environmental data and status reporting. The Energy-Saving Committee is run by the environmental promotion manager and representatives from each business division. It deliberates on concrete measures for achieving decarbonization based on information reported by the Environment Committee and individual business divisions, discusses the results of analyses and evaluations of risk opportunities, and examines activity policies.
The climate change-related risks and opportunities deliberated by the Energy-Saving Committee, along with the policies for dealing with them, are reported in NDLT Meetings, a higher-level meeting body chaired by the Representative Director.
The NDLT Meeting Board serves as a supervisory organization for responding to climate change. It approves the contents of deliberations regarding important issues, including climate change.
The status of initiatives is reported to the Board of Directors at their meetings, which are held twice each year. The Board considers the contents of these reports and deliberates and makes decisions regarding important issues.
＜Strategy＞
NITTA DuPont uses scenario analysis to clarify the future impacts of climate change and to reflect them in business strategies.
The scenario analysis performed in 2024 used its results together with multiple scenarios published by external organizations to comprehensively assess the risks and opportunities of climate change. It envisioned two possible scenarios: one in which the average global temperature surpassed pre-industrial levels by 4°C or more and one in which it was kept to only 1.5°C above pre-industrial levels in accordance with the Paris Agreement. We comprehensively evaluate the outcomes of climate change, including its impact on our supply chain. We performed evaluations for two target years: 2030, for which the government has set specific emissions reduction targets, and 2050, the target year of the Paris Agreement. We also used the following collections of scenarios into consideration when building our global outlooks.
| 4°C scenario | 1.5°C scenario |
|---|---|
|
Reference scenario
|
Reference scenario
|
In building our scenarios, we investigated whether the groups of scenarios we used for reference envisioned timelines for the manifestation of potential risks and opportunities, along with the degrees of these risks and opportunities. We deliberated on their importance, taking into consideration their impact and timing. Through these deliberations, we identified the risks and opportunities shown in the table below.
| Factor | Category | Impact on business | Timeline | Evaluation | ||
|---|---|---|---|---|---|---|
| Transition | Policy & Legal | Carbon pricing | Risk |
|
Medium to long term | Medium |
| Plastic regulations | Risk |
|
Medium to long term | Large | ||
| Renewable energy/energy-saving policies | Risk |
|
Short to long term | Medium | ||
| Opportunity |
|
Short to long term | Large | |||
| Market | Changes in energy mix/costs | Risk |
|
Short term | Medium | |
| Changes in raw material costs | Risk |
|
Long term | Large | ||
| Changes in demand for key products | Opportunity |
|
Short to medium term | Large | ||
| Changes in customer behavior | Risk |
|
Medium term | Medium | ||
| Opportunity |
|
Short to medium term | Medium | |||
| Reputation | Changes in reputation among customers | Risk |
|
Medium term | Medium | |
| Physical | Acute | Drought | Risk |
|
Medium term | Small |
| Intensification of extreme weather, changes in climate patterns | Risk |
|
Short to medium term | Large | ||
- • Timeline
- Short term: 1 year / Medium term: Up to 5 years / Long term: 5 years or more
- • Impact evaluation
- Impact is evaluated based on the following indicators.
The contents of the scenario analyses we performed when evaluating the severity of risks and the results of our resilience evaluation are as indicated below.
Deliberations regarding the 4°C scenario
In this scenario, we did not assume increases in climate-related targets or government regulatory levels beyond their current status, instead focusing on the growing severity of physical impacts from global warming. As all of our sites are located in Japan, we are particularly concerned about storm and flood damage resulting from extreme weather. Additionally, many of our products are semiconductor-related, including polishing agents used in semiconductor manufacturing processes. These processes consume large amounts of water, making them vulnerable to climate-related physical impacts such as droughts, which could also affect our clients. If such physical impacts become more frequent or severe, they could significantly affect the company financially, through direct damages and losses as well as potential revenue reductions resulting from operational interruptions at client companies, including our customers.
Deliberations regarding the 1.5°C scenario
In this scenario, we envisioned governments implementing new policies and regulations, markets intensifying decarbonization initiatives, and various other efforts aimed at achieving the 1.5°C target of the Paris Agreement and the Glasgow Climate Pact.
Our polishing agents are manufactured using materials such as silica and plastic, processes that involve relatively high greenhouse gas emissions. If countries intensify decarbonization efforts—for example, through carbon pricing or other regulatory measures—this could create various risks. Additional taxes may be imposed based on supply chain emissions, and we may be required to take further action regarding biomass materials and waste treatment. These factors could increase direct expenses and lead to higher costs being passed on to suppliers and customers. Furthermore, our plants primarily rely on electrical power. The global shift toward renewable energy could raise electricity costs due to the construction of new power plants and the adoption of more expensive generation methods, increasing our operational expenses.
At the same time, these trends also present opportunities. The construction of renewable energy infrastructure and the wider adoption of decarbonization technologies, such as electric vehicles (EVs), is expected to increase demand for semiconductors. Power semiconductors, which help reduce energy consumption across many applications, are a key component of this demand. As a result, sales of our semiconductor-related products have strong growth potential.
Based on the results of the above scenario analyses, we recognize the need to both adapt to and mitigate the impacts of climate change. Our current measures include advancing decarbonization by switching to 100% renewable energy for the power used at the Kyoto Plant, and we are exploring the use of renewable energy at our other plants.
To address physical risks, we conduct training, drills, and other specific actions as part of our preventative business continuity plans, which outline measures to restore operations following disruptions. These plans cover risks related to natural disasters, including supplier diversification and management of distribution challenges. In formulating and periodically updating these plans, we consider ways to mitigate the physical impacts of climate change.
Regarding opportunities, we are developing eco-friendly products in collaboration with our parent company, NITTA Corporation. We remain attentive to stakeholder requests and societal trends and will continue to take concrete actions under our decarbonization policies to achieve carbon neutrality by 2050 and reduce the impacts of climate change.
＜Risk management＞
Our Energy-Saving Committee oversees the entire process of identifying, evaluating, and managing climate change-related uncertainty risks. In identifying and evaluating risks, the committee collects reports from individual business divisions and applies scenario analysis methods. Critical issues are identified based on these reports and analyses. They identify critical issues based on these reports and the results of their analyses. Specifically, issues are mapped to a matrix with two axes: the economic impact of related activities (e.g., stock volumes, net sales) and timing/likelihood. This matrix is used to prioritize risks requiring immediate response. The committee deliberates on appropriate response measures, sets targets for the identified risks, and regularly reviews these measures and targets to prevent, avoid, or mitigate risks.
The outcomes of these deliberations are shared with the NDLT Meeting Board, a higher-level body that integrates company-wide risk management. The NDLT Meeting Board consolidates items discussed by individual business divisions and committees, managing matters related to company policies and operations. It also considers climate change-related risk and opportunity evaluations as needed, integrating them into overall strategies and company-wide risk management processes. Decisions made by the NDLT Meeting Board are reported to the Board of Directors.
＜Indicators and targets＞
NITTA DuPont’s GHG emissions results are as shown below. We will continue to deliberate and set necessary disclosed indicators and targets based on the results of our scenario analyses and our communications with stakeholders, while striving to create detailed initiatives for achieving decarbonization.
NITTA DuPont has defined a basic policy on reducing the emissions of greenhouse gasses (GHG) during production. This policy aims to cut GHG emissions by 46% compared to FY2013 levels by FY2030 and to achieve carbon neutrality by FY2050, and the company is working towards these targets. To reduce our GHG emissions, we are implementing initiatives from three perspectives:
(1) thoroughly conserving energy to reduce the amount of energy that is used,
(2) expanding our use of renewable energy, and
(3) purchasing GHG-free energy.
We are currently calculating our GHG emissions and preparing to publish our findings.