Roadmap to Carbon Neutrality

The original Greenhouse gas reduction target of NSG Group approved by the Science Based Target initiative (SBTi*) in October 2019 was revised during FY2022/3. The new target is significantly more challenging and represents the increased ambition of NSG Group to decarbonize its activities. The new target was formally approved by the SBTi in May 2022 and is aligned with a well below 2°C global warming scenario. In addition to this increased level of ambition, the new target also includes a commitment to reduce Scope 3** emissions.

By 2030, NSG Group commits to reduce absolute GHG emissions (Scope 1, Scope 2 and Scope 3**) by 30% compared to the 2018 baseline level.

Committed to support the mitigation of risks of climate change, NSG Group continues to actively investigate and implement the following measures:

• Converting the energy source in glass manufacturing processes from heavy fuel oil to natural gas and/or other alternative low carbon fuel sources.
• Implementing various measures to reduce CO₂*** emissions associated with the glass manufacturing process, including; LED lighting, heating & ventilation, high efficiency motors and inverters and waste heat recovery systems
• Expanding the use of renewable energy
• Developing and supplying glass products which contribute to the reduction of CO₂ emissions in their use from energy saving or energy generation.

Carbon Neutrality

NSG Group announced a commitment to achieve carbon neutrality by 2050 as part of the FY2022/3 financial results presentation to the Tokyo Stock Exchange (May 2022). This target is aligned to numerous stakeholder requests throughout the NSG value chain. The target covers all scopes of NSG GHG emissions with no exclusions. This target replaces the original vision that NSG had published for net zero as part of the FY2021/3 financial results presentation (May 2021).

The first key milestone towards carbon neutrality will be the delivery of the NSG Group RP24 targets by the end of FY2024 (April 2024). The second key milestone will be the achievement of the verified SBT in 2030. We expect to publish further SBTi commitments over the coming years, to establish further milestones for absolute emission reductions. These absolute target reduction milestones will align to future NSG Group transformation project timescales, effectively a rolling 4 year plan of milestone targets.

■ CO₂ emission and SBT

*SBTi is a partnership between CDP (former Carbon Disclosure Project), UN Global Compact, WRI (World Resources Institute) and WWF (World Wildlife Fund), which helps companies set the science-based goals for reducing GHG emissions to prevent the impact of climate change.

**Scope 1: Direct emissions by business operators (Use of fuel in manufacturing processes, etc.)
Scope 2 Location: Indirect emissions by consumption of energy sources (Purchased electricity used in manufacturing processes, etc.)
Scope 3: Value chain emissions including both upstream and downstream of the organization's activities.

*** Because >99.9% of our GHG emissions are CO₂, thereafter we only mention CO₂

CO₂ emission reduction target toward FY24

In 2022, NSG Group was responsible for the emission of 6.7 million tonnes of CO₂. This is 6.4 percent decrease on the previous year (7.2 million tonnes). Positive impacts were due to a combination of the many proactive operational energy and CO₂ saving initiatives and continued increases in the proportion of renewable electricity use. Negative impacts included increased consumption of materials associated with increased production output across the Group.

Our scope 1 emissions were 2.9 million tonnes of CO₂ (3.0 million tonnes in 2021). These direct emissions occur from a combination of the combustion of fossil fuels within the manufacturing process and the decomposition of carbonate raw materials in the glass melting process.

Our scope 2 emissions (market based approach) were 0.54 million tonnes of CO₂ (0.65 million tonnes in 2021). These indirect emissions occur from the use of purchased electricity & heat.

Scope 3 emissions were estimated at 3.3 million tonnes of CO₂ (3.6 million tonnes in 2021). This figure has increased since the baseline year primarily due to improved scope 3 reporting analysis as well as actual increases in the quantities of purchased goods and services and other scope 3 emission categories.

In the operation of our float plants, heavy oil to natural gas conversion has helped to reduce carbon emissions by around 50 percent over the past 40 years and a combination of design and operational innovations continue to make further progress.

In 2020, we have introduced a revised target for CO₂ emission per tonne of equivalent product, with the new target being an 8% improvement in this metric by end of FY24 compared to FY18 baseline.

During FY2023/3, numerous decarbonization project activities continued to be implemented. The benefit of these projects was also supplemented by increased operational utilization of manufacturing assets.