Toward a decarbonized society, Kioxia Group treats initiatives addressing climate change as a management priority and we refer to these priority areas as “sustainability materiality”. We aim to reduce greenhouse gas emissions and energy consumption across our operations—both in terms of our business activities and product lifecycles—throughout our value chain.

In April 2023, Kioxia Group announced that by FY2050, the company aims to achieve net-zero Scope1 greenhouse gas emissions (direct emissions from our business sites) and Scope2 emissions (indirect emissions resulting from our use of purchased energy) across our global operations.

We have additionally set a target of procuring 100% of our energy from renewable sources by FY2040. During 2023, we have installed solar power generation systems at our Kitakami and Yokkaichi plants – the largest of their kind at any semiconductor plant in Japan.¹ At the same time we are moving forward with the procurement of non-fossil certificates² to boost our use of renewable energy.

Regarding direct emissions from our manufacturing sites, we have installed abatement equipment in 100% of our targeted facilities since 2011, aiming to eliminate during manufacturing the emission of PFCs³ with high global warming potential. 

In addition to these energy conservation initiatives, we will continue implementing measures to combat climate change in the course of our business activities. 

In June 2021, Kioxia Group announced our endorsement of the recommendations published by the Task Force on Climate-Related Financial Disclosures (TCFD).⁴ We believe that accurately ascertaining the climate-related impact of our business, disclosing such information to stakeholders and deepening mutual understanding are indispensable for sustainable corporate growth, and we proactively disclose that information in accordance with the TCFD recommendations.

Kioxia Group is undertaking various activities aimed at mitigating climate change under its sustainability management structure.

At Sustainability Strategy Meetings chaired by the President and CEO, executive officers discuss our strategies and policies and check the level of achievement, while consulting with the Board of Directors on key issues. The Sustainability Committee, chaired by the Executive Officer in Charge of Sustainability, discusses and formulates key themes and sets key performance indicators (KPIs) based on the strategies and policies formulated at the Sustainability Strategy Meetings.

We have also set up Environmental Taskforce under this conference body to tackle important sustainability issues across the organization; the task force reports their areas of focus and progress to the Sustainability Committee.

In FY2022, we discussed the policy of net-zero greenhouse gas emissions and the following items based on the recommendations of the TCFD: scenario analysis, analysis of climate-related risks and opportunities, and strategies, metrics and targets.

For more information on our sustainability promotion structure, please refer to the below website.

Kioxia Group carried out an impact analysis of the effects of climate change on our operations by stakeholder and by business using two scenarios stipulated by the International Energy Agency (IEA) and other organizations: the 2℃ Scenario and 4℃ Scenario.⁵ Under the 2℃ Scenario, we believe government action, regulatory strengthening and the preferences of customers and other stakeholders will have a significant impact. For example, we assume that there will be an increase in the costs associated with the implementation of measures to reduce greenhouse gas emissions at manufacturing sites, and higher research and development costs arising from the need to develop more energy-efficient products with increased capacity. Under the 4℃ Scenario, we project rising material costs and the emergence of physical risks to our company bases.

Kioxia Group assesses the risks and opportunities outlined in the table below arising from the external environment in 2030, based on an analysis of potential scenarios.

We recognize the transition risks, posed by the migration to low-carbon economies, such as increased power supply costs resulting from the introduction of a carbon tax, and the cost of installing additional equipment to remove PFCs in line with increases in our manufacturing output. In addition, we recognize the potential for physical risks such as an increase in clean room air-conditioning costs resulting from a rise in outdoor temperatures.

In terms of potential opportunities arising from the transition to low-carbon economies, we envisage expanding business opportunities through the manufacture of more efficient products that use less electricity, and by reducing our own power consumption during manufacturing through the implementation of energy conservation measures.

To clarify the potential effects of climate-related risks and opportunities on our business activities, our task force conducts detailed calculations of their financial impact. Given the expansion of our business and the demand from our stakeholders for us to respond to climate change, we believe that the financial impact of both risks and opportunities in our research and development, our transactions with customers, and our electricity costs will be significant, regardless of the scenario. However, we believe that the costs of PFCs abatement equipment and of the associated renewable energy installations will have a relatively small financial impact.

We will continue to address any risks related to climate change, seeing these more as opportunities.

⁶ Business Continuity Management

To help achieve net-zero greenhouse gas emissions by FY2050, Kioxia Group has established KPIs related to energy consumption, environmental impact, and the use of our products. We review the degree of achievement of these at Environmental Management Review meetings held every six months.

For example, with regard to Scope2-related energy consumption, we are promoting energy-saving activities with the stated goal of reducing the volume of emissions by 1% each year compared to the previous fiscal year. For details, please refer to “Greenhouse Gas Emissions Across our Entire Value Chain” and “Our Efforts to Adapt to Climate Change” below.

Moreover, we have set the long-term goal of using 100% renewable energy by FY2040. Through creation of an energy portfolio that incorporates energy conservation activities and the use of non-fossil certificates, we will work to secure the optimal and stable procurement of renewable energy in line with the expansion of our business. We will also work to install renewable power generation system and carbon-neural city gas in our factories.

Scope1, 2 and 3 CO₂-equivalent greenhouse gas emissions from Kioxia Group’s business operations in FY2022 are shown in the chart below. The figures in the table below cover emissions from Kioxia Corporation, including the company’s Head Office, Yokohama Technology Campus and Yokkaichi Plant, Kioxia Iwate Corporation, and the Solid State Storage Technology Corporation (SSSTC).

(Hyphenated cells in the below list indicate “not applicable”)

We plan and implement capital expenditure to secure the production capacity that will allow us to respond to the dramatic increase in the volumes of data now circulating every day. As a result, our energy consumption is on the rise.

The graph below shows Kioxia Group’s energy consumption and Scope1 and 2 greenhouse gas emissions. In order to achieve our goal of 100% renewable energy usage by FY2040 and net zero greenhouse gas emissions by FY2050, we are introducing solar power generation systems and progressing with the purchase of non-fossil fuel certificates in respect of some of the electricity we use, among other initiatives.

Kioxia Group is progressing efforts to adapt to climate change throughout our value chain, taking into account the identified risks, opportunities and their impact.

In the data storage market, the need for low-power consumption-type products is growing extremely rapidly, and we expect to expand sales opportunities by further developing these products. We are working on the research and development of more energy-efficient processes and increased capacity through the development of advanced integrating technology. We have set the challenging target of reducing the energy consumption of our products by 50% per 1GB from 2017 levels by FY2025.

Please see below for details.

Kioxia Group has set the goal of achieving net-zero Scope1, direct emissions, and Scope2, indirect emissions resulting from its use of purchased energy.

To help achieve the reduction of Scope1 emissions, we have been proactive in the installation of abatement equipment to deal with PFCs – greenhouse gases with high global warming potential. Since FY2011, we have installed PFCs abatement equipment in 100% of the target facilities. The number of PFCs abatement equipment installed between FY2020 and FY2022 averaged more than 170 per year. Since FY2017, the total amount of CO₂ reduced with PFCs abatement equipment has reached 4.24 million t-CO₂.

Note: Subjects are Kioxia Corporation, Kioxia Iwate Corporation and SSSTC (SSSTC results are in respect of the period from FY2021 onward).

We also conduct research and development in environmentally conscious facilities. The Flagship Building, a new research development building at the Yokohama Technology Campus that was completed in 2023, is the first building in the Group that has acquired ZEB-Ready certification.⁷ The other newly constructed building, the Shin-Koyasu Technology Front, features a clean room with an environmentally conscious design.

We will continue to reduce the amount of Scope2 indirect emissions resulting from our use of purchased energy by making more use of renewable energy sources.

In order to optimize the efficiency of our energy consumption, Kioxia Group’s manufacturing sites have the stated goal of reducing Scope2 energy consumption by 1% compared to the previous year's total, in line with the directives contained in the Act on Rationalizing Energy Use and Shifting to Non-fossil Energy (hereinafter, “the Energy-Saving Act”) in Japan.

In FY2022 we achieved our goal of reducing energy use through various energy-saving activities, recording an actual reduction of 31,000 t-CO₂ emissions per year against a target reduction of at least 25,000 t-CO₂. From FY2017 to FY2022, the result of our energy conservation programs was a cumulative reduction of approximately 130,000 t-CO₂ emissions.

To promote energy conservation and efficiency at each facility, we endeavor to improve and incorporate new technologies while periodically addressing priority areas and assessing the progress of improvements at meetings of our Energy Conservation Committee.

Our flash memory products are manufactured in smart factories that incorporate cutting-edge technologies such as AI and IoT. Big data collected by IoT and fully automated control facilities improve the quality and efficiency of our manufacturing processes and also help reduce their environmental impact.

As climate change continues in the form of global warming, damage due to water-related natural disasters including typhoons and heavy rains is becoming more apparent every year. These events impact on the production of component manufacturers and on logistics, increasing the risk of disruption to our manufacturing processes and product supplies.

Kioxia Group has targeted all business units with the drafting of business continuity management (BCM) policies, and has established response protocols that take account of a variety of risks, including natural disasters.

Under our BCM policy, we strive to be fully conscious of the status of our materials and products even at times of no disruption, and ensure we have multiple suppliers. Furthermore, we are making efforts to ensure we are able to swiftly assess the situation in the event of an emergency, and to minimize effects on the business at such times by means of a collaborative process designed to ensure the early recovery of services.

Addressing climate change is also an important issue for our customers, and we closely communicate with them on the related challenges and responses. We will continue to work with our partners across the entire value chain to expand the market share of our products that consider environmental impacts and help realize a decarbonized society.

The Kioxia Group is helping to address climate change, gathering information and making recommendations to the government through participation in industry associations and other activities.

Following the announcement by Kioxia Holdings Corporation of its endorsement of the TCFD in 2021, we are participating in the activities of the TCFD Consortium with effect from 2022. Moreover, Kioxia Corporation is involved in the addressing of energy and global warming issues as a member of the Environmental Working Group of the Japan Electronics and Information Technology Industries Association (JEITA), a group representing the electronic device industry. As a supporting member of the Japan Climate Leaders’ Partnership (JCLP) a corporate group that aims to achieve a decarbonized society, we have collaborated in measures aimed at achieving the targeted 1.5℃ reduction stipulated in the Paris Agreement, as well as in discussions about proposals to be made to the government.