We, Ahresty Group endorse the TCFD (*) recommendations and work to enhance information disclosure from the perspectives of “Governance,” “Strategy,” “Risk Management,” and “Metrics and Targets.”
*TCFD：Task Force on Climate-related Financial Disclosures
Governance
b) Describe management’s role in assessing and managing climate-related risks and opportunities.
The Ahresty Group identifies climate-related risks and opportunities, analyzes their impacts, and compiles countermeasures at the Sustainability Meeting. Important matters discussed at the Sustainability Meeting are proposed and reported at the Executive Committee Meeting, which deliberates important matters related to business execution and reports the results at the Board of Directors Meeting.
The Board of Directors Meeting, chaired by the Representative Director and Chairman, receives regular reports on the content of the meetings of the Executive Committee Meeting and supervises sustainability initiatives, including the status of responses to TCFD recommendations.
*Responsible department: department or office of Ahresty Corporation that supervises the entire group regarding a specific operation (function) for which it is responsible
Board of Directors Meeting
・Regularly receive reports from the management on sustainability initiatives, including the status of response to TCFD recommendations, and supervise them
・Oversee the management’s response to risks, including the climate change risk, which have a significant impact on the company’s management
Executive Committee Meeting
・Deliberate, make decisions, or receive reports on important matters related to the Group’s sustainability, such as sustainability-related risks and opportunities; activity guidelines and plans; and information dissemination and disclosure, including that in line with TCFD recommendations
Sustainability Meeting
・Identify sustainability-related risks and opportunities, analyze their impacts, compile countermeasures, and report the results at the Executive Committee Meeting
・Communicate and disseminate the decisions to the responsible department, as well as the relevant divisions, departments, and working groups to reflect them in the business plan and other measures
Risk Management Secretariat
・Formulate a risk management plan, manage its implementation status, and report at the Executive Committee Meeting and the Board of Directors Meeting
Strategy
The Ahresty Group has created an environmental roadmap and a sustainability roadmap and are working to improve them because the risks related to environmental issues can affect its business activities over a long period of time. In fiscal 2022-2024, which is the implementation phase of the medium-term management plan, we examine physical risks such as extreme weather brought about by climate change, the introduction of government policies and regulations, and changes in market needs, looking ahead to fiscal 2030, which is the target year of the 10-year business plan. As a result, we reflect the identified risks and opportunities in the Group’s strategy.
c) Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.
To identify risks and opportunities due to climate change and disclose the degree of impact on its financial plans and the countermeasures to be taken, the Ahresty Group is extracting risks and opportunities for fiscal 2030, using the 1.5 to 2°C and 4°C climate-related scenarios published by IEA or IPCC.
IPCC…RCP 2.6、RCP8.5IEA…Net Zero Emissions by 2050 Scenario、Sustainable Development Scenario etc
| Contents | Impact on business and financial results | Our response policy | ||||
| scenario | ||||||
| 2°C or lower |
4°C scenario | |||||
| Risks | Transition risks | Policy/ regulation |
Increase in procurement costs due to introduction of carbon tax, etc. | Large | Small | ・Promote measures to reduce CO2 emissions (introduction of solar power generation, energy conversion, energy conservation activities, purchase of renewable energy) toward the challenge of achieving carbon neutrality in 2050 ・R&D of carbon neutral die casting (CNDC) ・Collect information on trends in environmental regulations and CO2 emissions reduction policies, and swiftly reflect the results in business strategies based on impact analysis |
Technology development | Increased costs of carbon offsets (CCUS, carbon credits) (CO2capture, conversion and storage technologies) | Large | Small |
| Market trend | Decrease in market size due to materials other than aluminum replacing steel | Large | Large | ・Ensure the competitiveness of aluminum die-cast products by developing and proposing demand creation technologies that focus on the superiority of LCA (low CO2 emissions, recyclability) and the characteristics (light weight, flexibility in shape, rigidity) of aluminum die-cast products | ||
| Market trend | Increase in procurement costs due to soaring aluminum prices | Large | Small | ・Mitigate the impact by devising procurement strategies and negotiating with customers to shorten the delay in reflecting aluminum market prices in selling prices | ||
| Market trend | Decrease in sales of existing products due to the electrification of vehicles | Large | Small | ・Increase orders for parts for electric vehicles (strengthen sales to OEMs, Japanese Tier 1 companies, and foreign-affiliated companies that are leading the way in electrification, and formulate and promote order strategies for each region in view of trends in environmental regulations and the shift to electrification) ・Increase orders for vehicle body parts (promote the development of joining technology for dissimilar materials and seek cooperation with companies that have a competitive edge in the production of vehicle body parts) ・Strengthen profitability in non-automotive fields (MOVAFLOR products) |
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| Market evaluation | Decrease in the acquisition of new customers or suspension of transactions, etc. (decrease in orders received) due to lack of response to climate change and environmental issues, or lack of disclosure of such activities | Large | Medium | ・Multifaceted initiatives (CO2 reduction, vehicle weight reduction, CNDC development) as company-wide key strategic items in the 10-year business plan and medium-term 3-year policy ・Proactively disclose and externally disseminate information on efforts to reduce CO2 emissions, the importance of activities as part of business strategies, targets and results, etc. ・Foster trust and earn high evaluation by strengthening engagement with stakeholders ・Collect information on trends in environmental regulations and CO2 emissions reduction policies, and swiftly reflect the results based on impact analysis in business strategies for each region |
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| Market evaluation | Delays in responding to environmental issues will damage the reputation of stakeholders, discourage customers from purchasing, make it difficult to raise funds from investors, and affect investors’ decisions on ESG investment. | Medium | Small | |||
| Physical risks | Acute | Damage to production bases and suspension of their operations due to natural disasters, and delays in procurement due to logistics paralysis | Medium | Medium | ・Strengthen BCP ・Secure emergency power supply (secure emergency power sources and utilize in-house power generation equipment) |
|
| Chronic | Decrease in working hours and operating rate due to preventive measures against prevailing infectious diseases | Large | Large | ・Flexibly establish a crisis center ・Prepare infectious disease response manuals, etc., implement infection prevention measures, and mitigate the impact on operations, based on the experience gained in responding to COVID19 | ||
| Opportunities | Resource efficiency | Growing need for recycled ingots in line with the need to reduce CO2 emissions (Reduce the amount of new ingots used and expand the use of recycled materials) Possibility of meeting the needs through the evolution of compounding technology at the Kumagaya Plant Increasing demand for recycled materials |
Large | Small | ・Explore compounding and melting technologies ・Propose the use of aluminum ingots using recycled materials |
|
| Energy source | Decrease in renewable energy procurement costs due to the development of new policies and systems related to renewable energy | Large | Small | ・Promote measures to reduce CO2 emissions (introduction of solar power generation, energy conversion, energy conservation activities, purchase of renewable energy) toward the challenge of achieving carbon neutrality in 2050, and accumulate knowledge relating to the use of renewable energy ・Collect information on renewable energy procurement routes and the introduction of relevant policies and systems |
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| Product/Service | Increase in sales of climate change mitigation and adaptation products | Large | Small | ・Ensure the competitiveness of aluminum die-cast products by developing and proposing demand creation technologies that focus on the superiority of LCA (low CO2 emissions, recyclability) and the characteristics (light weight, flexibility in shape, rigidity) of aluminum die-cast products ・R&D of CNDC |
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| Product/Service | Sales increase due to increase in orders for products for ZEVs including EVs and FCVs (e.g., motor cases, E-Axle housings) | Large | Large | ・Earn a good track record in receiving orders for parts for electric vehicles and secure medium- to long-term competitiveness (expansion of customer base, improvement in competence of sales personnel, enhancement of price (factory cost) competitiveness) ・Steadily receive orders for target products by sharing strategies between manufacturing plants and sales departments |
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| Market | Increase in the proportion of aluminum die-cast products in automobile parts due to the need for weight reduction (replacement of steel with aluminum) | Large | Large | ・Increase orders for vehicle body parts (specify a specific target market to newly receive orders for BEV parts that require further weight reduction, and collect information on trends in large die castings such as giga presses and changes in the supply chain) | ||
Risk Management
b) Describe the organization’s processes for managing climate-related risks.
c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management.
Ahresty identifies climate-related risks and analyzes their degree of impact at the Sustainability Meeting.
Risks that have been analyzed to have a large impact are integrated into the company-wide risks to be evaluated and managed by the Risk Management Secretariat.
| Risk management process | Function | Responsible party |
|---|---|---|
| ①Risk identification /analysis | Identify risks that may affect Ahresty’s management. Analyze the possibility of such risks becoming manifest and the degree of impact of the manifested risks. | Sustainability Meeting |
| ②Risk assessment | Assess risks based on the results of risk analysis. (Identify the risks that need to be addressed by risk management plans.) |
Risk Management Secretariat |
| ③Formulation of risk management plans |
For the risks evaluated as subject to risk management plans, set goals and activity plans and receive approval at the Executive Committee Meeting. | Risk Management Secretariat |
| ④Promotion of risk avoidance/reduction activities |
Promote activities to avoid/reduce identified risks based on risk management plans. | Department responsible for the risk Relevant business offices |
| ⑤Monitoring/management/reporting of risk management activities |
Monitor the progress status of risk management plans. Report the activity results once a year at the Executive Committee Meeting and the Board of Directors Meeting. |
Risk Management Secretariat |
Metrics and Targets
b) Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks.
c) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.
The Ahresty Group has set reduction targets for CO2 emissions, which account for more than 90% of its GHG emissions.
Using Scope 1 and 2 CO2 emissions as metrics, we are working to reduce CO2 emissions.
We plan to complete the calculation of Scope 3 CO2 emissions in the first half of fiscal 2023 and make additional disclosures.
CO2 emissions（Scope1,2）
Scope of aggregation: All domestic manufacturing bases (8 locations) + Head Office/Technical Center, Tokyo Head Office, All overseas manufacturing bases (7 locations)
Reference source: Scope 1: We used the factors according to the purchased energy type specified in the List of Calculation Methods and Emission Factors in the Calculation, Reporting and Publication System, published by the Ministry of the Environment.
Scope 2: We used the factors according to the results of each country and each fiscal year specified in the IEA Emission Factors released by IEA.
