Addressing Climate Change

An oxy-fuel firing furnace differs from an air combustion furnace in that nitrogen is not taken into the furnace, which means that less exhaust gas (and consequently exhaust heat) is produced, thus reducing fuel consumption and CO₂ emissions. Furthermore, the generation of thermal nitrogen oxides (NOx) in a furnace is reduced. In fiscal 1993, we installed Japan’s first oxy-fuel firing glass melting furnace. This technology has now been adopted for almost all of our furnaces.

The president is responsible for the execution of business and implements measures in accordance with the resolutions and advice of the Board of Directors.

The Management Committee deliberates matters important to company management and draws up detailed action plans for decisions made at the Board of Directors meetings.

The CSR Committee engages in comprehensive discussion about the direction and content of climate-related measures and other CSR activities, and takes a flexible approach to developing related activities. The committee also addresses broad sustainability-related challenges, such as ESG and the SDGs, centered on the three priority CSR themes of the environment, diversity and inclusion, and community contribution. Comprised of CSR-related department heads and other managers, the committee is chaired by an executive officer in charge of general affairs and has a secretariat based in the General Affairs Division. To increase the effectiveness of our initiatives, three working teams have been established to address the priority themes. The Environment Team handles climate change response and environmental preservation, the Diversity and Inclusion Team handles human capital and human rights, and the Community Contribution Team handles educational support and similar matters.

The CSR Committee develops basic CSR policies, identifies priority issues, and plans, reviews, and implements measures to address them. It also formulates and evaluates information disclosure policies and content, and submits recommendations and reports to the Management Committee and Board of Directors.

The CSR Committee’s Environment Team handles climate-related matters and the TCFD framework. The team conducts hearings with staff and business departments to identify and review climate-related risks and opportunities, and evaluates and reviews business impact based on scenario analysis. The division responsible for these risks and opportunities promotes the Carbon Neutrality Action Plan, which is central to the Group’s strategic resilience. The Environment Team regularly verifies progress and reports to the CSR Committee. The committee drafts, discusses, and supports divisional activities related to the reported items from the standpoint of sustainability. In addition, the committee drafts and discusses the policy for data disclosure and content and, when deemed necessary, provides recommendations and reports to the Management Committee and Board of Directors.

We endeavor to mitigate climate-related risks and capitalize on opportunities through the carbon neutrality action plan and other initiatives.

The climate-related risks and opportunities, as well as countermeasures, identified and evaluated by the CSR Committee are integrated in the periodic risk auditing conducted by the NEG Group in line with our basic policy on internal control. The division responsible for risks and opportunities promotes countermeasures.

We have carried out the following scenario analysis in order to evaluate the business impacts under different scenarios, as well as to evaluate our strategic resilience with regard to climate-related risks and opportunities.

All NEG Group businesses are targeted for analysis.

The impact on the NEG Group’s business by major climate-related risks and opportunities identified from scenario analysis was evaluated on a timeline focused on the year 2030.

Following updates to the reference scenarios, we reviewed impacts on business. The impact has changed due to global inflation and other factors that have led to soaring costs for raw material and fuel, and fluctuations in foreign exchange rates. We are incorporating new technologies and solutions from inside and outside the company, and implementing the Carbon Neutrality Action Plan and other initiatives to further fortify our business resilience.

Cognizant of the pressing and global need for climate change action, we pursue sustainable manufacturing practices and strive to effectively address climate change. In February 2022, we set Scope 1 + Scope 2 CO₂ emissions reduction targets for fiscal 2030 and committed to achieving carbon neutrality by fiscal 2050. We are undertaking ambitious measures to achieve our targets, including introducing all-electric melting furnaces across our product lines, switching over to energy-efficient facilities, and investing in renewable energy. In addition, we have created a system for calculating and disclosing Scope 3 emission volume data.

In order to achieve CO₂ emissions reduction targets, the NEG Group has created a carbon neutrality action plan, which involves a variety of initiatives, focusing primarily on those in the table at right. Through these, we will achieve our targets by 2030, after which we will pursue improvement activities that will make us carbon neutral by 2050.

We currently use both gas and electricity as power sources for our glass melting processes. When using electricity, we insert electrodes into the molten glass, a method of heating that uses the direct passage of electric current. This method is highly energy efficient and produces less exhaust heat than gas combustion. Electric processes also make it possible to reduce carbon emissions even further by introducing renewable energy sources. We are currently shifting to hybrid melting furnaces partially powered by electricity and ultimately intend to incorporate all-electric melting furnaces.

Gas-fired furnace and All-electric melting furnace

To further reduce our carbon footprint, we have entered into Virtual Power Purchase Agreements (VPPAs) with renewable energy providers. Through our VPPA with a solar power plant in Mie Prefecture, we achieved a 608 t-CO₂ reduction in fiscal 2024. Additionally, in July 2024, we entered into a VPPA for solar power generation in Malaysia, which is expected to deliver an estimated 41,000 t-CO₂ annual reduction starting in fiscal 2026.

Due mainly to structural reform in the displays and composites businesses in FY2023, CO₂ emissions (Scope 1 + 2) in FY2024 declined from the previous fiscal year. CO₂ emissions intensity (Scope 1 + 2) was stable on a unit basis from the previous fiscal year. We are also continuing to calculate Scope 3 emissions to gain a comprehensive understanding of emissions throughout the supply chain.

Scope 2 figures calculated using a market-based approach.