Global Warming Mitigation

Looking beyond the 2020 Environmental Vision, USHIO will continuously maintain its current CO2 emissions reduction efforts (annual reduction rate of 1%), with the aim of continuing to reduce CO2 emissions by 10% over the next 10 years through 2025 by upgrading measures such as productivity enhancements. Another major goal will be to reduce the impact resulting from the use of products under Scope 3*.

* Scope 3: This is one of the scopes of calculation for greenhouse gas emissions. Scope 3 corresponds to a company's entire value chain as well as the company itself, including greenhouse gas emissions generated at the time of production and transportation and greenhouse gas and other emissions occurring when a customer uses or discards a company's products.

Thoughts on Climate Change

There is a concern that global warming can impact climate change. Even though we are only a single group of companies, we are moving ahead with the idea that countermeasures are a priority item when it comes to avoiding impacts on the business caused by natural disasters and developing in a sustainable manner. The USHIO Group realizes that activities at its business sites raise concerns about increasing greenhouse gas emissions, such as CO2 generated in the course of consuming energy during business activities, which can have an increasing impact on climate change. USHIO considers it has a responsibility to take into account the power consumption needed when customers use its products, and has formulated an environmental policy and promotes saving energy in a variety of different forms.

For activities at divisions, our primary focus is on increasing production per unit, as enhancing productivity conserves energy. Therefore, we continue engaging in energy-saving activities such as installing solar panels, using energy-saving air conditioners and converting lighting to LED lights. With products, we will promote those with environmentally friendly designs that will contribute to saving energy, and will make active efforts to reduce the impact on climate change by curbing the output of CO2 emissions from all our business activities.

USHIO's core technology of lamps has an issue in that their luminous efficiency does not go as far as LED or LD products. If customers are able to make use of products such as LEDs or LDs in their production activities, this will improve power consumption (namely, COO) compared to using lamp light sources. If USHIO actively makes proposals to introduce LEDs and LDs, this will result in suppressing climate change and also contribute to the environment and society. USHIO recognizes that the act of making these proposals has an extremely high priority for our business.

The LED and LD business is a significant driving force for USHIO's future. The target value for net sales in the year ending March 31, 2018 has been set at 1.6 times greater than net sales recorded in the year ending March 31, 2016. With other products as well, USHIO believes that it can continue to contribute to energy conservation by promoting the sales of certified products, because USHIO's unique Super Green Product certification criteria now includes an item regarding energy conservation.

Targets and Results of Phase Five of the Environmental Action Plan

Reduction of Energy-Derived CO2 Emissions

Reduce CO2 emissions by 3% from the fiscal 2016 level on a production unit basis ⇒ Fiscal 2017 results increased by 7.7%

Under Phase Five of the Environmental Action Plan, in fiscal 2017, an increase in CO2 emissions caused a worsening in the sales unit basis, despite growth in cleanroom and life electricity, which do not add to production value. However, we achieved the 1.0% target due to ongoing initiatives to reduce CO2 emissions equivalent to 1.0% of the electricity used at key business sites. (101% achievement)

Reduction of Distribution-Derived CO2 Emissions

Reduce CO2 emissions per unit of shipments (reduction of 1% year on year) ⇒ Down 3.1% from the fiscal 2016 level at the Harima Division, and down 24.1% from the fiscal 2016 level at the Gotemba Division

Both the Harima Division and the Gotemba Division achieved their targets thanks to initiatives to improve transportation efficiency as the highest priority.

Targets and Results for Fiscal 2017 under Phase Five of the Environmental Action Plan (Fiscal 2017 to Fiscal 2019)

Fiscal 2017 Targets

・Cut emissions 1% on a production unit basis (compared with fiscal 2016)

・Reduce CO2 emissions in logistics operations

 Cut emissions 1% on a shipment unit basis (compared with fiscal 2016)

 Reduce number of shipments in Asia 7.4% compared with fiscal 2016 (25 times / month)

Initiatives

・Implemented measures to reduce emissions centered on seven main business sites

・Worked to reduce emissions in distribution in Japan and Asia

Fiscal 2017 Results

・Increased 7.7% on a production unit basis (compared with fiscal 2017)

⇒Under Phase Five of the Environmental Action Plan, in fiscal 2017, an increase in CO2 emissions caused a worsening in the sales unit basis, despite growth in cleanroom and life electricity, which do not add to production value. However, we achieved the 1.0% target due to ongoing initiatives to reduce CO2 emissions equivalent to 1.0% of the electricity used at key business sites. (101% achievement)

・Distribution-related CO2 emissions on a shipment unit basis declined 3.1% at the Harima Division and fell 24.1% at the Gotemba Division

・Number of shipments in Asia: 23.8 times / month

Issues

・Reduce use of electricity that does not contribute to production value

・Need to select transportation vehicles as products become larger in order to improve transportation efficiency

Future Initiatives

・In some Group companies, we will expand the management site in stages with a target of a cover rate of 80% or more, and we will understand the situation and develop measures.

・Manage numerical targets with data from each business site, focus on measures to reduce electricity usage by using longer-lasting experimental lights
 (Target reduction of 680MWh in annual usage at eight main business sites)

Managing Progress on the Environmental Action Plan

USHIO has a CSR Committee that is chaired by the president. The CSR committee makes progress reports on the three-year Environmental Action Plan and shares upcoming challenges, while continuing to go through the PDCA cycle. Directly beneath this CSR Committee is the Global Warming Countermeasure Subcommittee, which specifically promotes initiatives that include the CSR Action Plan and Phase Five of the Environmental Action Plan.

Scope 3 Initiatives

USHIO is working to reduce CO2 emissions at its business sites through energy-saving activities, and recently, there has been a call to grasp indirect CO2 emissions that occur throughout the product life cycle, for example, when products are being used. This is because CO2 is generated not only by the energy used at business sites; CO2 is generated in a wide variety of scenarios related to conducting business, including when companies transport parts and products, when employees are moved, and when products are used or discarded. These scenarios can be made to result in a reduced generation of CO2 if corporate efforts are made.

In addition to previous activities to grasp and reduce CO2 emissions associated with activities at business sites under Scope 1 and 2, USHIO has started to grasp CO2 emissions from all aspects of business under Scope 3, including use of products and materials, transportation, and movement of people. As a result of analyzing these matters, and because we are manufacturing and selling products that use energy, USHIO recognizes that the proportion of of CO2 emissions in "product use" is high, and that it is important to develop environmentally friendly products.

In fiscal 2017, CO2 emissions decreased 7% year on year overall, reflecting changes in production and less CO2 emitted from raw materials and in the product use stage. We will work on further improvements in all our business activities by better understanding the impact of our operations.

SCOPE 1, 2, and 3 (Fiscal 2017)

Category SCOPE1 SCOPE2 SCOPE3
Purchased goods and services Capital goods Fuel and energy-related activities not included in Scopes 1 and 2 Upstream transportation and distribution Waste generated in operations Business travel Employee commuting Use of sold products End-of-life treatment of sold products
t-CO₂ 3,814 35,179 511,841 25,342 3,853 312 655 775 2,292 569,784 8
Percentage 0.33% 3.05% 44.36% 2.20% 0.33% 0.03% 0.06% 0.07% 0.20% 49.38% 0.00%

ECO-SYS – USHIO's Environmental Management Information System

The USHIO Group has an environmental information management system called ECO-SYS designed to monitor progress toward targets for environmental performance and environmental management indicators based on its Environmental Action Plan. The system gathers environmental information, allowing the data to be analyzed from different angles and disclosed.

ECO-SYS enables the integrated management of environmental information for the USHIO Group, and it also serves as a support tool for managing progress toward environmental targets, such as energy conservation and waste reduction, at Group companies and business sites. The environmental data gathered by ECO-SYS has been used to evaluate water usage at business sites, analyze CO2 emissions, and shape measures to conserve energy. ECO-SYS is a platform for environment management at USHIO as it aims to improve environmental business efficiency through ongoing data collection and monitoring of CO2 emissions, water usage and waste at each business site, while sharing issues and identifying and deploying best practices. Based on this data, we respond to research requests from outside the company, enhancing the reliability of the data.
Aiming to improve reliability further, we plan to automate and accelerate data collection, analysis and feedback.

Sharing Information and Analysis Assessment Implementation through the Environmental Management Information System

The USHIO Group has been collecting highly efficient environmental data from each Group company and each business site since 2006 through the Environmental Management Information System (ECO-SYS). In fiscal 2012, USHIO installed a system tool to automatically collate the data, aggregate it and improve analysis. In recent years, it has periodically analyzed trends in the entire Group's CO2 emission volume. Every month, it confirms the monthly report figures, and inquires if any irregular reading was found. In addition, it continues to make improvements as a whole, including by sharing good examples of measures taken with Group companies and business sites.

Contributing to Industry Organization Activities

USHIO takes part in the Japan Electrical Manufacturers' Association's plan for a low-carbon society. By sharing long-term numerical targets and regularly submitting progress reports, it promotes efforts to reduce CO2 emissions on a unified industry basis. USHIO also promotes active participation in the Ministry of the Environment's Environmental Information Disclosure Base Maintenance Project by reporting on Scope 3 aggregates for the Carbon Disclosure Project*.

* The Carbon Disclosure Project is a project through which institutional investors collaborate and request that companies announce their strategies regarding climate change and specific greenhouse gas emissions. The Carbon Disclosure Project is also the name of the non-profit organization headquartered in London that operates the project.

Initiatives at Main Business Sites

Harima Division

The Harima Division accounts for about 41% of the USHIO Group's total CO2 emissions. The Harima Division reduced its electric power consumption by 174 MWh (89.0 t-CO2 equivalent) in fiscal 2017 as a result of autonomous efforts to evaluate and reduce standby power consumption in all buildings and life tests of lamps, as well as activities to conserve energy regarding the power consumption at production facilities.

Every summer and winter, USHIO cooperates with energy conservation initiatives in the Kansai region by reducing electricity usage during peak demand periods based on demand projections for production facilities and the power usage of life tests of lamps.

Gotemba Division

The Gotemba Division accounts for about 13% of total Group CO2 emissions (as of March 2017, forecast is 11% next year).
Most of the products made at the Gotemba Division are assembled in cleanrooms. Accordingly, air conditioning accounts for about 60% of all energy usage.
The humidity of clean booth areas of cleanrooms can exceed thresholds due to heat emitted from equipment. We had planned to upgrade aging constant temperature and humidity air conditioning systems, but instead installed radiators that take advantage of low-temperature industrial water at Gotemba to remove equipment waste heat. This allowed us to lower the required specifications for air conditioning systems and sharply reduce initial outlays and running costs. This also reduced CO2 emissions by 240t-CO2 annually.

Switching to LED bulbs for lighting

USHIO LIGHTING

USHIO LIGHTING reduced energy consumption by 31MWh annually by replacing fluorescent tubes with LED lights inside business sites.

USHIO (SHAOGUAN) CO., LTD. (USG)

USG replaced 40W U-shaped lamps in its warehouses with 20W LED lighting, saving 7MWh annually. USG plans to convert more lighting to LED.

Award for Excellent Plant Energy Management (Gotemba Division)

The Kanto Bureau of Economy, Trade and Industry bestowed on us an award from the Director-General of the Kanto Bureau of Economy, Trade and Industry in recognition of our excellent plant energy management. We had originally planned to upgrade aging constant temperature and humidity air conditioning systems. Taking a different approach, we instead installed radiators that take advantage of low-temperature industrial water at Gotemba to remove equipment waste heat. This allowed us to lower the required specifications for air conditioning systems and sharply reduce initial outlays and running costs. This also reduced CO2 emissions by 240t-CO2 annually.