NSG Group's initiatives to decarbonize and reduce environmental impact

As an energy-intensive and carbon-intensive manufacturing company, tackling climate change is essential for the Group. Contributing to a decarbonized society through our products and services will help us fulfil our mission to 'build a better world through the creation of comfortable living spaces'. We are actively working towards social issues such as climate change, contributing to a sustainable society and increasing our corporate value. The Group continues to endorse the TCFD, with actions including increasing the intensity and scope (to include all three emission scopes) of SBTi verified decarbonization targets in May 2022 (original verification in 2019). It has also committed to achieving carbon neutrality by 2050. The implementation of the roadmap to achieve this will lead to a reduction in CO₂ emissions and, in turn, to the continued development of Sutainability and products and the expansion of opportunities related to our business.

Initiatives to reduce Scope 1 (own emissions)

We are considering a range of technical options to reduce Scope 1 emissions, including:

1. Use of alternative fuels: we are actively engaged in technological development initiatives, such as the world's first successful production of float glass using hydrogen energy in September 2021, as well as the successful production of glass using 100% biofuels in February 2022
2. Electric melting of glass: efforts are being made to increase the amount of renewable electricity used as a substitute to fossil fuel in the glass production process in 2025, a project increasing to the highest level ever achieved within the Group for electric melting will be implemented with the support of the German Government.
3. Substitution of glassmaking raw materials: during the glass melting process, large amounts of carbon dioxide are emitted due to decomposition of CO₂ containing raw materials in the furnace. In order to reduce the carbon dioxide emissions from these raw materials, attempts are being made to replace the carbonates in the material with various oxides: in 2022, glass production using 'Dolime' (CaOMgO) was successfully achieved in a float furnace in Chile; studies will continue in 2023.
4. Carbon capture: the process for capturing CO₂ emissions from glass melting furnaces is not compatible with typical CO₂ capture processes, so we are working with a process development partner that is likely to be compatible with our needs We are planning to receive UK Government support for this project in 2023.

Procuring fuels on a larger scale at competitive prices is particularly important for hydrogen and biofuels. Long-term contracts with suppliers, as well as securing production sites and stable supplies of fuels in the vicinity of the sites, are some of the initiatives being promoted by the purchasing team to support reductions in Scope 1.

Initiatives to reduce Scope 2 (own emissions)

The company has set a target of 50% renewable electricity by end of 2024. To support this target, the Group continues to invest in on-site power generation including installing on-site solar power at the Lathom Research Institute in the UK and the Rossford plant in Ohio, USA. Many other solar projects are underway across the Group. We are also actively introducing power source certification and Power Purchase Agreements (PPA agreements) on a global basis.

Initiatives to reduce Scope 3

In 2022, the company launched a Sustainable Supply Chain Committee to examine sustainable supply chains with regard to all factors, including environmental and social aspects. In the course of its activities, it is also working on reducing Scope 3 emissions. We are working with actual suppliers to obtain emissions data and share best practice alongside various other initiatives.