Environment

Gunze Environmental CharterAs part of the global community, we at Gunze are fully aware of our responsibility to safeguard the earth and its resources for future generations. Gunze is a responsible corporate citizen committed to building a prosperous global society that enjoys sustainable development. To support our efforts, we will actively address environmental issues to minimize the environmental impact of our activities and implement necessary measures to improve and maintain the environment. In accepting our social responsibility to help solve environmental problems, we have established a basic environmental philosophy and determined action guidelines.

Basic Environmental Philosophy

By offering environmentally responsible products and services, we aim to contribute to the development of an affluent, sustainable global society. We fully understand our reliance on the gift of nature, so we strive to maintain harmony with the global environment and promote the preservation of biodiversity.

Environmentally Responsible Action Guidelines

We will direct our efforts toward minimizing the environmental impact of all our corporate activities, considering the impact on biodiversity inside and outside Japan, and the local communities related to our business.
We will comply with all related laws and regulations, but also will strive to upgrade the level of our environmental management by establishing internal voluntary standards.
We will promote effective use of resources, including raw materials and energy, aiming to reduce greenhouse gas emissions.
We will reduce waste, and promote recovery and recycling for recirculation of resources.
We will promote research and development of environmentally sound products as well as manufacturing and environmental technologies to lessen the environmental impact of our activities.
We will implement programs to increase the environmental awareness of our employees, and encourage them to cooperate with and contribute to the environmental preservation efforts of local communities.
We will advance environmentally conscious practices, and promote the transfer of environmental technologies to our overseas operations.
We will immediately take action to reduce the damage in the event of an environmental accident.

Basic Policy for Plastic Resource CirculationThe problem of marine plastic waste is growing worldwide, and waste problems have worsened, particularly in emerging nations. This has led to stricter regulations for single-use and disposable plastics. Compliance with these regulations is also required by the SDGs (Sustainable Development Goals) adopted by all United Nations Member States in 2015. Activities to combat the problem of marine plastic waste are accelerating on a global scale, and GUNZE recognizes its social responsibilities as a company engaged in the manufacture and sale of plastic film packaging materials.

GUNZE proactively implements the “3Rs + Renewable^※” initiative for plastics,
to reduce the amount of plastic waste and help build a society
that promotes plastic resource circulation.

As such, we have established the following policies.

Reduce the volume of plastics and promote the reuse and recycling of plastic items.
Help implement effective and efficient plastic resource circulation through easy-to-classify and easy-to-recycle product design and by aggressively using renewable raw materials.
Help reduce the use of petrochemical raw materials by developing products using bio-based materials.
Conduct appropriate management of waste, and ensure that production activities have a smaller impact on the environment, so as to fulfill our responsibility as a manufacturer.

3R + Renewable3Rs stands for Reduce (using fewer resources for production and reducing waste), Reuse (using products and parts repeatedly), and Recycle (effectively using waste as raw materials or energy sources). “3Rs + Renewable” means adding the use of renewable resources to the 3Rs initiative.

TCFD climate change related disclosures

Climate Change Initiatives and Efforts to Address the TCFD

In October 2021, the Gunze Group expressed support for the recommendations put forward by the FinancialStability Board (FSB) Task Force on Climate-relatedFinancial Disclosures (TCFD). TCFD requires disclosure of the frameworks for examining climate change, indicators, and targets for evaluating the medium- and long-term impact of climate change on corporate value and for identifying risks and opportunities from climate change, and the way in which these examinations are reflected incorporate management.

①Governance

Governance on climate change is incorporated into the sustainability governance structure.

②Risk management

Major risks related to climate change are based on the Sustainability Governance Structure Chart. Important issues are reported from the Sustainability Committee and Risk Management Committee to the Corporate Officers’Meeting and then to the Board of Directors, thereby integrating and managing Group-wide risks.

③Strategy

We selected the plastic films field and apparel business (innerwear) as the Gunze Group’s main businesses for scenario analysis, and we identified short to long-term risks, studied countermeasures, and for these, extracted considerations and opportunities.

This time, we conducted analysis in response to the 1.5°C target since this has become the global target.Specifically, we have formulated two scenarios that reference reports issued by governments and international organizations. These include the decarbonization scenarios (1.5°C scenario) such as the NZE2050^*1 presented in the IEA World Energy Outlook and the warming progression scenarios (4°C scenario) based on the IPCC AR5 RCP8.5 scenario^*2. The two scenarios are analyzed based on transition risks toward a decarbonized economy and physical risks associated with the progression of global warming.
The Gunze Group will continue to revise its scenario analysis to improve its strategies.

NZE2050（Net Zero by 2050）NZE2050 (Net Zero Emissions by 2050): One of the scenarios presented in the IEA’s World Energy Outlook 2020. It is a 1.5°C scenario that surpasses the target of the Paris Agreement and aims for zero CO2 emissions by 2050.
RCP8.5 ScenarioA scenario in Figure SPM6 of the summary for government policymakers of Synthesis Report (SYR) of the IPCC Fifth Assessment Report (AR5), which forecasts a temperature increase of 2.6°C to 4.8°C by 2100.

Responding to Climate Change related Risks and Opportunities

Risk items		Risks	Period	Degree of financial impact	Plastic films field	Innerwear field	Responding to Risks and Opportunities
Transition risk （1.5℃）	Coal prices	Emissions trading and carbon taxes introduced in many countries, increasing operating costs	Medium to long term	Large	○	○	Risk responseReduce the financial impact of carbon taxes by increasing investment in renewable energy and shifting to low-carbon energy sources
	Plastics regulations in various countries	Raw material prices increased due to stricter regulations prompting the introduction of bio-materials and recycled materials	Medium to long term	Large	○	○	Risk responseEstablish technologies that break down and reuse waste plastic and provide products that meet customer needs
	Changes in energy mix (electricity prices)	Higher ratio of renewable energy to electric power has driven up electricity prices	Medium to long term	small	○	○	Risk responseUse of equipment with low power consumption; promote the installation of self-consumption solar power generation
	EV and renewable energy penetration rates	－	Medium to long term	Large	○		OpportunitiesStrengthen sales of lithium-ion batteries and semiconductor film with the spread of EVs
	Price shifts in key commodities	Manufacturing costs for crude oil-derived synthetic fibers has increased	Medium to long term	Large		○	Risk responsePromote a shift from petroleum-derived to green materials.
	Changes in customer behavior	More consumers are making purchasing decisions in line with their environmental impact	Medium to long term	Medium		○	Risk responseIncrease sales of environmentally responsible products for ethical consumption
Physical risks （4℃）	Abnormal weather	Lower sales due to business activity suspensions and supply chain disruptions caused by wind and flood damage	Short to medium term	Medium	○	○	Risk responseEnhance supply chain disaster prevention at manufacturing sites and in logistics to strengthen business continuity capabilities
	Rising temperatures (volume of cotton cultivation)	Cotton prices up due to rising temperatures	Medium to long term	Medium		○	Risk responseDevelop biomaterials and recycled materials
	Rising temperatures	－	Medium to long term	Medium	○	○	OpportunitiesProducts that address rising temperatures. Strengthened sales (shrink films, innerwear)

Time periodShort-term 1-2 years, medium-term 3-5 years, long-term 6-10 years
Financial impact in 2050Small = less than 100 million yen, Medium = 100 million yen to 1 billion yen, Large = 1 billion yen or more

④Indicators and Targets

To systematically reduce CO2 emissions, we will strengthen our efforts to save energy, create energy, and use renewable energy in our business activities, and take measures to promote the 3Rs (reduce, reuse, and recycle) and implement other resource recycling and eco-friendly initiatives.
In fiscal 2022, we will redouble our efforts to reduce Scope 1^*1 and 2^*2 CO2 emissions and formulate reduction scenarios for Scope 3^*3. In addition, the Gunze Group will focus its efforts on promoting the Circular Factory Plan in the plastics films field and the Net Zero Factory Plan in the apparel (innerwear) field.

1 Scope1Greenhouse gas emitted directly by the Gunze Group (fuel combustion, industrial processes)
2 Scope2Indirect emissions from the use of electricity, heat and steam supplied by other companies
3 Scope3Indirect emissions other than from Scope 1 and Scope 2 (emissions from other companies related to the activities of the Gunze Group)

CO2 reduction results (Scope 1, 2 ,3)

		FY2022	Compared to FY2021		Compared to FY2013
		Emission volume(t-CO₂)	Reduction volume(t-CO₂)	Reduction rate(%)	Reduction volume(t-CO₂)	Reduction rate(%)
Achievements	Scope1+2	118,324	5,832	4.7%	54,184	31.4%
	Scope1	38,643	335	0.9%	13,669	26.1%
	Scope2	79,681	5,496	6.5%	40.515	33.7%
	Scope3	423,860	-13,192	-3.2％	－	－

Scope 1 and 2 are calculated for all Gunze Group business sites in Japan and overseas (Scope 2 calculation is based on market criteria)
Scope 3 is calculated for all Gunze Group business sites in Japan.