Climate Change and Energy Management

Climate change and energy management policies

KIOXIA promotes to reduce energy consumption and greenhouse gas emissions, both in terms of our business activities and our product lifecycles, aiming to realize a decarbonized society.

 

Regarding greenhouse gas emissions at our manufacturing sites, our policy is to reduce by 1% each year the previous year's total energy consumption (SCOPE2) through energy-saving measures in Japan based on the Act on the Rational Use of Energy (hereinafter, "the Energy Saving Act"). In FY2020 we set a long-term goal of ensuring that by FY2040, 100% of all energy we use will be from renewable sources. Moreover, in July 2021, KIOXIA Holdings announced its endorsement of the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), an industry-led body established by the Financial Stability Board. Going forward, Kioxia will continue to analyze climate-related risks and opportunities based on these four thematic areas—governance, strategy, risk management, metrics and targets—and ensure active information disclosure in accordance with the TCFD recommendations.

 

In our product development, we endeavor to reduce indirect emissions of greenhouse gases by promoting the efficient use of energy, ascertaining the volume of greenhouse gases emitted by our suppliers, and taking steps to contribute to the reduction of those emissions.

CO₂ emissions from business operations (FY2019)

Greenhouse gases (SCOPE1,2,3: CO₂ equivalent) emissions from KIOXIA‘s business operations in FY2019 are shown in the below chart.

 

(Hyphenated cells are not applicable, and we have not calculated ”use of sold products”)

  CO2 emissions in FY 2019(t-CO2) Outlines of categories
SCOPE1
(Direct emissions)
548,800 Direct greenhouse gas emissions in our own operations
SCOPE2
(Indirect emissions, electricity)
1,637,200 Emissions associated with the purchased energy
SCOPE3
(Indirect emissions through the value chain except for SCOPE1, SCOPE2)
Category    
1 Purchased goods and services 2,822,000 Emissions from activities up to manufacturing of raw materials
2 Capital goods 558,541 Emissions from construction and manufacturing of the capital goods
3 Fuel- and energy-related activities not included in SCOPE1 or SCOPE2 146,000 Upstream emissions of purchased fuels/electricity, etc.
4 Upstream transport and delivery 218 Emissions from transportation of products and waste in Japan (except for overseas transportation and suppliers' transportation)
5 Waste generated in operations 14,810 Emissions from treatment of waste
6 Business travel 4,116 Emissions from business travel by employees
7 Employee commuting 13,460 Emissions from transportation of employees when commuting
8 Leased assets (upstream) - -
9 Downstream transportation and delivery - -
10 Processing of sold products - -
11 Use of sold products - -
12 End-of-life treatment of sold products - -
13 Downstream leased assets - -
14 Franchises - -
15 Investments - -
SCOPE3 (Total) 3,562,002  

Energy use and greenhouse gas emissions generated by business activities

We plan and implement capital expenditure to secure the necessary production capacity that will allow us to respond to the dramatic increase in the volumes of data circulating in everyday life. In so doing we risk increasing our energy consumption, but we seek nonetheless to reduce by 1% the previous year's CO₂ emissions (SCOPE2) through energy-saving measures based on Japan’s Energy Saving Act, and to promote energy-saving activities.

 

Regarding direct emissions of greenhouse gases from manufacturing sites (SCOPE 1), the installation of 41 PFC abatement equipment devices in FY2019 led to reduced annual greenhouse gas emissions equivalent to 120,000 tons of CO₂.

Volume of Energy Used (MWh)

SCOPE 1 + SCOPE 2 Emissions (t-CO₂)

Climate Change-related Targets

KIOXIA manufacturing sites implement energy-saving measures aimed at reducing energy consumption and aim every year to reduce by 1% the previous year's total energy consumption (SCOPE2), based on Japan’s Energy Saving Act.

 

In FY2019 we achieved our goal of reducing energy use by the equivalent of at least 19,513 tons of CO₂ emissions, recording an actual reduction of 20,667 tons.

 

In FY2020, we set goals regarding the use of renewable energies, aiming to use 100% renewable energy by FY2040. To help achieve this target, we source intelligence through such means as participating in industry groups and making proposals to the government. In addition, as the initial step toward attaining this goal, we plan to promote the introduction of electricity derived from renewable energy sources in our development and test centers, and progress the installation of renewable energy facilities at our manufacturing sites.

Understanding and acting on climate change risks and opportunities in business

KIOXIA ascertains climate change-related risks in our business operations and classifies them into transitory risks such as policy and regulatory risks, technology risks, and reputation risks, as well as physical risks such as natural disasters, and reflects these in our management processes.

 

For example, we discuss issues such as future carbon pricing and carbon border adjustment mechanism at environmental management reviews, resulting in such steps as the formulation of long-term goals for the use of renewable energy.

Regarding opportunities, as 5G networks spread and edge computing develops, we anticipate there will be a requirement for faster, higher capacity, space-saving and power-saving memory and storage products, and we will respond to society’s demands by pushing ahead with the development of products that will meet these needs.

Efforts to adapt to climate change

KIOXIA is progressing efforts to adapt to climate change in the course of our product development, the establishment of our supply chains, and the operation of our manufacturing sites.

Product Development

In the storage market, the need for low power-consumption-type products is growing extremely rapidly, and we expect to expand our supply by further developing these products. KIOXIA regards the research and development of highly integrated technologies resulting in improving energy-saving performance as a priority management issue.

Supply Chain

As climate change continues in the form of global warming, the risk to component manufacturers’ production or distribution posed by disasters like flooding or large-scale typhoons is becoming more apparent year by year. We have set up a Business Continuity Plan Committee whose job it is to anticipate a variety of climate change-related risks, and to implement measures to prevent them from materializing, or to respond promptly in the event they do arise.

Operation of Manufacturing Sites

KIOXIA is proactive in the installation of abatement equipment to deal with PFC gases – greenhouse gases with high global warming potential. Installation of 41 items of PFC abatement equipment in FY2019 led to reduced annual greenhouse gase emissions equivalent to 120,000 tons of CO₂.

Taking Part in External Initiatives Related to Climate Change

KIOXIA 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.

Moreover, since FY2020 we have been a supporting member of the Japan Climate Leaders’ Partnership (JCLP), a corporate group that aims for a decarbonized society. We have collaborated to discuss measures aimed at achieving the 1.5℃ reduction target stipulated under the Paris Agreement, and are involved in discussions to make proposals to the government. Furthermore, in July 2021, KIOXIA Holdings announced its endorsement of the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), an industry-led body established by the Financial Stability Board.

Introducing the sustainability activities of the KIOXIA Group which contribute to the development of a sustainable society.

KIOXIA Group will continue to develop a sustainable society by contributing to the SDGs through its business.