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.

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 Group businesses are targeted for analysis.

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

Following updates to the reference scenarios, we reviewed the impacts on our business. These impacts have 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 urgent 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 and 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. We are also creating a system for calculating and disclosing Scope 3 emission data.

In fiscal 2021, the Group established an interdepartmental Carbon Neutrality Project team and launched the Carbon Neutrality Action Plan to accelerate efforts toward achieving its CO₂ reduction targets. All departments advance initiatives to carry out the plan with a focus in the areas in the following table. These initiatives will help us achieve our targets for 2030, after which we will redirect our efforts to attaining carbon neutrality by 2050.

The Environment Team meets with each department at least once a year to review progress on the Carbon Neutrality Action Plan and the status of CO₂ reduction targets. When necessary, the team consults with the departments to determine whether revisions to the plan and targets are required.

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. Nippon Electric Glass (Malaysia) Sdn. Bhd., a Group company based in Selangor, Malaysia, which mass-produces high-quality pharmaceutical glass tube containers, converted a portion of its production to all-electric melting furnaces and began operating them in December 2025.

Gas-fired Furnace and All-electric Melting Furnace

In fiscal 2025, energy consumption decreased from the previous fiscal year, mainly due to productivity improvements in the displays business and business restructuring in the composites business. However, Scope 1 plus 2 CO₂ emissions increased due to a revised CO₂ emission factor used in the third-party verification process, resulting in Scope 1 plus 2 CO₂ emissions intensity increasing to 77% of the fiscal 2018 level.

We have already achieved our fiscal 2030 Scope 1 plus 2 CO₂ emissions target. The Group will continue to monitor our targets and initiatives while reviewing each country’s CO₂ emission reduction targets and trends in green transformation (GX) policies.