Sustainability

Initiatives Related to Climate Change

Basic Approach

Warnings have been raised about global warming caused by greenhouse gases, and countries around the world have committed to GHG emissions reduction targets and are working on reduction activities. At the same time, however, various climate-related disasters associated with global warming are occurring worldwide. Their frequency and intensity are increasing year by year, creating a critical situation not only for human life but also for the continued existence of the society and environment that form the foundation of our business activities.

Under these circumstances, the Mitsuboshi Belting Group supports the Paris Agreement concluded at the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21), as well as Japanese climate-related laws and regulations, including the Act on the Rational Use of Energy (Energy Conservation Act) and the Act on Promotion of Global Warming Countermeasures. The Group has positioned “contribution to the realization of a decarbonized society” as an important management issue (materiality), and is working on CO₂ emissions reduction activities, energy-saving activities, the development of Environmental Contribution Products, and related initiatives by setting specific measures and KPIs.

Disclosure Based on the TCFD Recommendations

To further accelerate climate change initiatives, in December 2022 the Mitsuboshi Belting Group announced its support for the Task Force on Climate-related Financial Disclosures (TCFD) and joined the TCFD Consortium, a forum in which supporting companies and financial institutions hold discussions. The Group promotes stronger initiatives related to climate change and aims to further enhance engagement with all stakeholders by providing timely and appropriate disclosure based on the TCFD framework.
Note: The TCFD Consortium was reorganized on April 1, 2026 into the “GX Future Consortium,” for which the GX Acceleration Agency serves as secretariat.

Governance

1. Board Oversight of Climate-related Risks and Opportunities

Management direction related to climate change is based on recommendations compiled by the Sustainability Committee in light of climate-related risks and opportunities. These recommendations are reported to the Board of Directors, which makes decisions on and supervises climate-related matters.

2. Management’s Role in Assessing and Managing Climate-related Risks and Opportunities

For progress on each materiality issue, the promotion departments responsible for the measures specified for each issue (business departments, committees, affiliated companies, or working groups) report implementation status to the Sustainability Committee. The meeting reviews and monitors the status and confirms progress toward goals and issues, thereby promoting continuous improvement of activities.
Climate change response activities, one of the materiality issues, include “CO₂ reduction activities,” “energy-saving activities,” “development of Environmental Contribution Products,” and “supplier emissions management,” which are discussed at the Sustainability Committee.

Risk Management

The Group has established a Risk Management Committee for the purpose of monitoring and evaluating risk management activities for issues that should be addressed by the entire Group (significant risks) from the perspective of their impact on the Group’s business activities, and for maintaining and developing the management system.

Climate-related Risk Identification and Assessment Process

Climate-related risks are identified as one type of business risk through risk assessments conducted with participation by the persons responsible for all business departments and affiliated companies. The Risk Management Committee, chaired by a Director and composed of those responsible for all affiliated companies, business departments, and all administrative departments at the head office, identifies significant risks requiring response based on likelihood and impact (impact: large: ¥1 billion or more; medium: ¥100 million to less than ¥1 billion; small: less than ¥100 million / time horizons: short term, through FY2026; medium term, through FY2030; and long term, through FY2050).

Climate-related Risk Management Process

The persons responsible for business departments and affiliated companies aggregate the identified risks, clarify the issues to be addressed, response measures, responsible departments, targets, and other items, and develop them into policy documents, which are then approved by the Company President. The approved policy documents are developed into action plans by the responsible departments, and after approval by the persons responsible for the business departments and affiliated companies, the plans are implemented.
Implementation status is monitored and evaluated by the persons responsible for the business departments and affiliated companies, and in principle is reported to and reviewed by the President once a year. The results are reflected in the following fiscal year’s policy documents. The implementation status of measures corresponding to materiality issues in ESG management is reported to the Sustainability Committee, which is held monthly, and is subject to instruction and evaluation.

Integration of Climate-related Risk Management and Overall Risk Management

Proposed significant risks determined after deliberation by the Risk Management Committee are reported to the President and the Board of Directors through the committee. Measures for the determined significant risks are monitored and evaluated on a day-to-day basis by the persons responsible for the business departments and affiliated companies to which the responsible departments belong, and the details are reported to the Risk Management Committee.
In FY2025, as in the previous fiscal year, “suspension of suppliers’ business activities” and “disruption to the supply of raw and auxiliary materials” due to various factors including climate change were identified as climate-related risks in the risk assessment conducted by the Risk Management Committee. CO₂ emissions reduction activities conducted by business departments and affiliated companies are monitored and evaluated by the Sustainability Committee and reported to the Board of Directors.
Risks relating to ESG materiality, including climate change, are managed by the Sustainability Committee through progress management of the implementation details for the relevant risks.

Business departments and affiliated companies identify risks and opportunities, and identify the risks and opportunities to be addressed based on likelihood of occurrence and magnitude of impact.
The Risk Management Committee evaluates and identifies significant risks to be addressed by the Group as a whole and appoints the responsible organizations.
The Risk Management Committee supervises and instructs the implementation status of the responsible organizations and reports the details to the Board of Directors.

Note: The overlapping area in the figure represents “risk management related to ESG materiality.” Except for compliance and information security, the Sustainability Committee supervises and instructs implementation status and reports the details to the Board of Directors.

Strategy

For the purpose of verifying the future impact of climate change on the Group’s value chain and the effectiveness of climate change countermeasures, the Group conducted scenario analysis based on two climate change scenarios: a “1.5°C scenario,” in which decarbonization trends strengthen and the impact of transition risks and opportunities becomes larger, and a “4°C scenario,” in which climate change progresses significantly and the impact of physical risks becomes stronger. The results of the scenario analysis were reflected in the identification of climate-related risks and opportunities.”

Scenario Analysis

Analysis Scope and Assumptions

Region	Time Horizon	Scope	Principal Reference Scenarios
Countries and regions where the Group operates	Present to 2050	Value chain	IEA WEO 2025 (NZE, STEPS), IPCC AR6 (SSP1-1.9, SSP3-7.0, SSP5-8.5), etc.

Future Social Landscape Surrounding the Group’s Business

Scenario	2030	2050
1.5°C scenario	Carbon prices reach USD 140/t-CO₂e in developed countries and USD 90/t-CO₂e in developing countries.	Carbon prices reach USD 250/t-CO₂e in developed countries and USD 205/t-CO₂e in developing countries.
	Demand for products supporting low-carbon and decarbonization technologies expands worldwide.	Demand for products supporting low-carbon and decarbonization technologies expands further worldwide.
	Electrification advances in the automotive industry, with electric vehicles accounting for approximately half of new vehicle sales.	Electrification advances further, with electric vehicles accounting for nearly all new vehicle sales.
	Global average temperature increase reaches 1.5°C, making physical climate risks more apparent and increasing investment in disaster prevention and mitigation.	Global average temperature increase reaches 1.6°C, making physical climate risks more apparent and increasing investment in disaster prevention and mitigation.
4.0°C scenario	Carbon prices reach USD 90/t-CO₂e in developed countries and remain zero in developing countries.	Carbon prices reach USD 130/t-CO₂e in developed countries and remain zero in developing countries.
	Demand for products supporting low-carbon and decarbonization technologies expands worldwide.	Demand for products supporting low-carbon and decarbonization technologies continues to expand worldwide.
	Electrification advances in the automotive industry, with electric vehicles accounting for approximately half of new vehicle sales.	Electrification reaches only about half of new vehicle sales. Internal combustion engine vehicles remain dominant in developing countries.
	Global average temperature increase reaches 1.5°C, making physical climate risks more apparent and increasing investment in disaster prevention and mitigation.	Global average temperature increase reaches 2.1°C, making physical climate risks more apparent and increasing investment in disaster prevention and mitigation.

Risks and Opportunities

Risks and Opportunities Associated with the Progress of Automotive Electrification

With the progress of automotive electrification, demand for belts for internal combustion engines is expected to decrease by approximately ¥6 billion by FY2030 compared with FY2019. During the same period, however, the Group expects an increase in sales of approximately ¥10 billion through expanded sales of belts for automotive and electric units (including EPB, EPS, and PSD) and rear-wheel drive belts for electric motorcycles. The Group views the progress of automotive electrification as an opportunity and will strive to develop products that can realize sustainable growth.

CO2 Emissions

CO₂ emissions are calculated in accordance with the GHG Protocol and within a scope consistent with the financial statements. In FY2025, CO₂ emissions from sales offices without production activities were 800 t-CO₂e. Because this represented 1.14% of the Group’s total emissions, and therefore had only a minor impact on total emissions, these emissions were excluded from the calculation scope based on the materiality principle of the GHG Protocol.

As a result of initiatives that the Group has been pursuing, including installation of solar power generation equipment at business sites, switching to renewable electricity, and converting equipment that used heavy oil as fuel to gas, Scopes 1 and 2 (market-based) CO₂ emissions at domestic sites in FY2025 were 26,086 t-CO₂e, a decrease of 36.2% compared with FY2013. Scopes 1 and 2 (market-based) CO₂ emissions at overseas sites were 44,058 t-CO₂e, a decrease of 22.2% compared with FY2013. Scope 3 emissions increased by 67,933 t-CO₂e year on year to 346,449 t-CO₂e due to factors such as increased capital investment.

The Group is also focusing not only on reducing emissions from its own operations but also on reducing emissions across the entire value chain. In FY2025, the Group’s emissions across the entire value chain, including Scope 3, were 416,592 t-CO₂e. The Group will continue to work on emission reduction activities within its own operations, and in particular will collaborate with business partners to reduce greenhouse gas emissions in Category 1 (Purchased goods and services), which accounts for a high proportion of Scope 3 emissions. In FY2025, the Group used an ESG information management tool for business partners to conduct a questionnaire survey on the status of ESG issue initiatives among 70 major companies.

Scope 1-3 Composition

Scope 3 Category Composition

Implemented Measures to Reduce CO₂ Emissions

Timing	Business site	Measure	Annual reduction / estimated reduction^※
From Dec. 2021	Kobe Head Office / Kobe Plant R&D center	Solar power generation system (on-site PPA) started operation	110t-CO₂e
From Jan. 2022	MITSUBOSHI POLAND Sp.z o.o.	Switched to renewable electricity (all purchased electricity covered)	100t-CO₂e
From Jul. 2022	Shikoku Plant	Switched to renewable electricity (all purchased electricity covered)	4,000t-CO₂e
From Oct. 2022	Kobe Head Office / Kobe Plant R&D center	Switched to renewable electricity (all purchased electricity covered)	1,200t-CO₂e
From Oct. 2022	Suzhou Mitsuboshi Belting Co., Ltd.	Solar power generation system (self-generation) started operation	900t-CO₂e
From May 2023	MBL (USA) CORPORATION	Switched to renewable electricity (all purchased electricity covered)	2,400t-CO₂e
From Nov. 2023	PT. MITSUBOSHI BELTING INDONESIA	Switched to renewable electricity (20% of all purchased electricity covered)	1,000t-CO₂e
From Dec. 2023	STARS TECHNOLOGIES INDUSTRIAL LIMITED	Solar power generation system (on-site PPA) started operation	500t-CO₂e
From Jan. 2024	Shikoku Plant	Switched from heavy oil to LNG	1,000t-CO₂e
From May 2024	Seishin Plant	Solar power generation system (self-generation) started operation	50t-CO₂e
From Jan. 2025	Ayabe Production System Development Center	Switched from heavy oil to LNG	2,700t-CO₂e
From Jan. 2026	Nagoya Plant	Solar power generation system (self-generation) started operation	390t-CO₂e

※　Reduction amounts may vary depending on energy input. The figures shown are approximate values.

Internal Carbon Pricing

The Group is considering the possible introduction of internal carbon pricing (ICP) as one method for quantitatively assessing climate-related risks and opportunities. Although the system is not yet in operation, the Group will continue considering introduction, including whether it can be incorporated into business strategy and capital investment decisions.

Metrics and Targets

The Group identifies “contribution to the realization of a decarbonized society” as one of the materiality items positioned as important elements of its business activities. For domestic sites, the Group has set targets for Scopes 1 and 2 emissions (market-based), with FY2013 as the base year, to reduce emissions by 40% by FY2026 and by 46% by FY2030, and to achieve carbon neutrality by 2050 (8 domestic sites, Scopes 1 and 2).

For overseas sites, the Group has set targets for Scopes 1 and 2 emissions (market-based), with FY2013 as the base year, to reduce emissions by 27% by FY2026 and by 40% by FY2030, and to achieve carbon neutrality by 2050 (7 overseas sites, Scopes 1 and 2). In February 2025, the Japanese government submitted to the United Nations a new Nationally Determined Contribution (NDC) that sets emissions reduction targets for FY2035. In addition, social demands are increasing every year for target setting aligned with a 1.5°C scenario and for obtaining SBT certification for emissions reduction targets. Taking this background into account, the Group will work to establish new emissions reduction targets in order to respond more reliably to global warming.

The Group will continue promoting initiatives to contribute to the realization of a decarbonized society and will also focus on emissions reduction activities across the entire supply chain, including Scope 3.

Collaboration with External Organizations

For the purpose of revitalizing climate change initiatives across society as a whole, including the Group, the Group has joined the aforementioned TCFD Consortium* and the Japan Rubber Manufacturers Association, an industry association for rubber product manufacturers. Through the provision of information, policy recommendations, and other activities, the Group participates in each organization’s activities related to climate change. The activities of each organization can be confirmed on the following websites.

※ The TCFD Consortium was reorganized on April 1, 2026 into the “GX Future Consortium,” for which the GX Acceleration Agency serves as secretariat.。

GX Future Consortium: https://gx-future-consortium.go.jp/
Japan Rubber Manufacturers Association: https://www.rubber.or.jp/