KIOXIA Group treats initiatives addressing climate change as one of our most important management issues and aims to reduce greenhouse gas emissions and energy consumption both in terms of our business activities and our product lifecycles.
Regarding greenhouse gas emissions, we have installed abatement equipment in 100% of our targeted facilities since 2011, aiming to eliminate the emission of PFCs*¹ with high global warming potential during manufacturing. We have additionally set the goal of reducing by 1% each year the previous year's total energy consumption (SCOPE 2: indirect emissions from business activities) based on a policy of reducing emissions through energy-saving activities in Japan in line with the Act on Rationalizing Energy Use (hereinafter, “the Energy-Saving Act”). 
Moreover, in FY2020 we formulated a long-term goal of ensuring that by FY2040, 100% of all energy we use will be from renewable sources.
During product development, we strive to incorporate features that will improve the energy efficiency of our products when they are in use. We also make every attempt to reduce greenhouse gas emissions throughout our value chain, by ascertaining the volume of these emitted by our suppliers, and taking steps to help reduce those.

In June 2021, KIOXIA Group announced our endorsement of the recommendations released by the Task Force on Climate-Related Financial Disclosures (TCFD).*^２ We believe that accurately ascertaining the climate-related impact of our business, disclosing information to stakeholders and deepening mutual understanding are indispensable for sustainable corporate growth, and we proactively disclose information in accordance with the TCFD recommendations.

At Sustainability Strategy Meetings chaired by the President and CEO, executive officers formulate our company strategies and policies on climate change and check the level of achievement before submitting recommendations to the Board of Directors. The Sustainability Committee, chaired by the Executive Officer in charge of sustainability, discusses key themes and sets KPIs based on the strategies and policies formulated at the Sustainability Strategy Meetings. We also set up task forces reporting to these organizations to tackle important sustainability issues; they report on progress and confirm direction. In FY2021, scenario analysis, analysis of climate-related risks and opportunities, and strategies, metrics and targets were examined, based on the recommendations of the TCFD.

KIOXIA Group carried out an impact analysis of the effects of climate change on our business for each stakeholder and each business using two scenarios stipulated by the International Energy Agency (IEA) etc.: the 2℃ Scenario and 4℃ Scenario.*³
Under the 2℃ Scenario, we believe there will be a significant impact from government provisions and strengthening of regulations, as well as changes in the preferences of customers and other stakeholders. For example, we assume that there will be an increase in the costs associated with measures for reducing greenhouse gases emissions developed at manufacturing sites, and higher research and development expenses arising from the need to develop high-energy efficiency and high-capacity products.
Under the 4℃ Scenario, we project rising material costs and the emergence of physical risks to our company bases. KIOXIA Group has aggressively employed energy-saving and renewable energy measures to address these risks and is moving forward with product development processes that address the need for more efficient energy usage and other requirements.

KIOXIA Group assesses, as shown in the table below, the risks and opportunities arising from the external environment in 2030 under the 2℃ Scenario (2DS) assumed by IEA etc.
We recognize risks 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 an increase in manufacturing output. In addition, we are aware of physical risks, such as an increase in clean room air-conditioning costs as a result of a rise in outdoor temperatures.
In terms of opportunities, we envisage using less power and accordingly reducing our expenditure on power in our manufacturing facilities by promoting energy conservation.
To clarify the potential effects of climate-related risks and opportunities on business activities, a cross-division taskforce conducts detailed calculations of the   financial impact of these. These risks and opportunities, and their potential financial impact are reported at Sustainability Strategy Meetings or at meetings of the Sustainability Committee, where response strategies are discussed.

Our strategy to avert climate change involves setting and meeting targets related to energy consumption, environmental impact, and our products. We review the degree of achievement of these at Environmental Management Review meetings held every six months. As mentioned earlier, with regard to energy consumption (SCOPE 2), we are promoting energy-saving activities with the stated goal of reducing the volume of emissions by 1% compared to the previous fiscal year. For details, please refer to Greenhouse gases emissions from our entire value chain and Efforts to adapt to climate change. 
Moreover, we have set the long-term goal of using 100% renewable energy by FY2040. By considering the creation of an energy portfolio that includes energy conservation activities and non-fossil certificates,*⁵ we will work to secure the optimal and stable procurement of renewable energy in line with our business expansion. We plan to install facilities that will allow the use of renewable energy in our factories, and to use carbon-neutral city gas in facilities.

Greenhouse gases (SCOPE 1, 2, 3: CO₂ equivalent) emissions from KIOXIA Group’s business operations in FY2021 are shown in the chart below.
(Hyphenated cells indicate “not applicable,” and we have not calculated “emissions generated during the use of products”)

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 circulating in everyday life. In so doing our energy consumption is on the rise.
The graph below shows KIOXIA Group’s energy consumption and greenhouse gas (SCOPE 1 + 2) emissions. We are striving to achieve our goal of 100% renewable energy usage by fiscal 2040 through the purchase of non-fossil fuel certificates in respect of some of the electricity used at our Head Office and Yokohama Technology Campus, among other initiatives.

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

In the 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 have set a challenging target of reducing the energy consumption per 1GB processed by 50% from 2017 levels by FY2025. We are working on the research and development of more energy-efficient processes and increased capacity through the development of advanced stacking technology.

Please see below for details.

KIOXIA is proactive in the installation of abatement equipment to deal with PFCs – greenhouse gases with high global warming potential. The installation of 160 items of PFCs abatement equipment in FY2021 led to a reduction of 610,000 tons of CO₂ emissions. From FY2011 onwards, we installed PFCs abatement equipment on 100% of the target facilities and reduced CO₂ emissions by 3,770,000 tons over the four years between FY2017 and FY2021.

KIOXIA manufacturing sites have the stated goal of reducing energy consumption by 1% compared to the previous year's total energy consumption (SCOPE 2), based on the aforementioned Energy Saving Act.
In FY2021 we achieved our goal of reducing energy use through various energy-saving activities, recording an actual reduction of 29,652 tons of CO₂ emissions per year against a target reduction of at least 23,313 tons of CO₂ emissions. Over the past 11 years, the result of our energy conservation programs was a cumulative reduction of approximately 210,000 tons of 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. In FY2021, the Yokkaichi Plant identified 10 power-related items as priority targets. One example is the use of different pressure boosters to generate the high-pressure air required for semiconductor manufacturing.
By changing the boost method, we successfully switched to equipment that requires no power supply and has no exhaust, enabling a reduction of 109 tons of CO₂ emissions per year.

As climate change continues in the form of global warming, damage due to river flooding is becoming more apparent every year. These events impact on the production of component manufacturers and logistics, and increase the risk of disruption to supply chains.  KIOXIA Group has targeted all business units with the drafting of business continuity plans (BCPs), and has established response processes that take account of a variety of risks, including natural disasters, throughout the entire supply chain. Under our BCP policy, we strive to be fully conscious of the status of our supply chains 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.

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.
Since FY2020 we have been 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 1.5℃ reduction target stipulated under the Paris Agreement, as well as in discussions about proposals to be made to the government. Moreover, following the announcement by KIOXIA Holdings of its endorsement of the TCFD in 2021, we are participating in the TCFD Consortium with effect from this year.
We will continue to devise appropriate measures to　handle climate change, collect information by participating in these industry organizations, and make recommendations to the government in order to contribute towards the realization of a sustainable society.