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Establishment of a low-carbon
society
In November 2016, the Paris Agreement became effective as the new international rules for implementation of global warming countermeasures. The common global long-term target of the Paris Agreement is to suppress the increase in the global average temperature to well below 2 degrees Celsius and to expect participants to endeavor to suppress the temperature increase by 1.5 degrees Celsius compared with the temperature level of pre-industrial revolution times. The Agreement also stipulates its goal of achieving net zero emissions of global warming gas by the second half of this century. In October 2020, the Japanese government declared its goal to achieve a carbon-neutral, decarbonized society by 2050. Companies are also being required to step up their initiatives to reduce CO2, both directly and indirectly. To prevent global warming and mitigate the various effects of climate change, the JTEKT group as a whole strives to achieve carbon neutrality by 2040 by minimizing energy consumption in its business activities and promoting energy-saving, improvement of logistics efficiency, and use of renewable energy in all processes from product design to delivery.
Major FY2020 results

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Reponse to TCFD

JTEKT believes that the conditions for sustainable growth of a company lie in the identification of mid-to-long-term climate-related risks and opportunities in business, assessment of the resilience of its initiatives, and disclosure of information to investors and other stakeholders. For this reason, in 2018, JTEKT announced its support for the final report recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) established by the G20 Financial Stability Board (FSB).
This time, we disclose JTEKT’s initiatives for climate change in accordance with the TCFD framework.
In the future, we will use scenario analysis to identify climate-related risks and opportunities and evaluate the adaptability (resilience) of our initiatives upon setting the image of the future society by selecting multiple scenarios including the International Energy Agency’s 2-degree scenario (2DS), below-2-degree scenario (B2DS), and the scenario in which climate change countermeasures do not progress. We will also consider assessing and disclosing the financial impact of climate-related risks and opportunities.

【Initiatives in line with the TCFD framework】

Activity report

Reduction of CO2 emissions volume in production

JTEKT alone
JTEKT has been promoting activities with the target of reducing CO2 emissions per base unit by 15% by FY2020 compared to that of FY2008. In FY2020, while production volume decreased by 16% compared to the previous year, CO2 emissions were reduced by 13.8% and the CO2 emissions basic unit were reduced by 17.1% from the FY2008 level.
From FY2021, the base unit target will be changed to the total emissions target, and JTEKT will engage in activities to meet its challenge target of 35% reduction by FY2025 and 60% reduction by FY2030 compared to FY2013.
Additionally, consecutively since FY2017, JTEKT has been rated as the highest S class in the Business Classification Evaluation System based on the Act on the Rational Use of Energy (hereinafter referred to as the Energy Saving Act).
CO2 emissions
176,631t-CO2
CO2 emissions per in-house production volume
129.4 t/100 million yen (reduced by 17.1%)
Transition of total and per basic unit of CO2 emissions in production
CO2 emissions
CO2 emissions per basic unit
Company-wide
JTEKT is working to reduce CO2 emissions at all JTEKT group companies in Japan and overseas. The CO2 emissions basic unit for FY2020 were reduced by 10.2% compared to that of FY2012, which means that JTEKT achieved its FY2020 target.
CO2 emissions per in-house production volume
154.8 t/100 million yen (10.2% decrease)
Transition of total and per basic unit of CO2 emissions (company-wide)
CO2 emissions
CO2 emissions per basic unit

Initiatives for realizing Environmental Challenge 2050

Until FY2020, JTEKT had promoted various energy-saving measures based on the Environmental Action Plan 2020, which was formulated as the first step toward achievement of the Environmental Challenge 2050 goals. From FY2021, JTEKT will advance the measures to achieve those goals based on the Environmental Action Plan 2025 formulated as the second step.

1. Energy visualization / Award system

From 2016 to 2017, JTEKT improved the environment for “energy visualization” that allows us to grasp energy consumption in the main production lines at all plants.
Along with starting company-wide improvement activities using visualization, we started an award system to promote more ambitious activities from FY2018.
In FY2020, two award ceremonies were held, and over 550 improvements were implemented in total.
We will continue to hold the awards after FY2021 and beyond to promote improvement activities through visualization.

Message from the award recipient

Takashi Ikegami ITCC Production Section, Manufacturing Dept., Tadomisaki Plant

We were able to achieve great results by carrying out activities with participation of all members, a plant philosophy, collaborating with related departments, and practicing genchi genbutsu (go-and-see). I believe that this award has further raised awareness among our staff. We will further step up our initiatives as we carry out future activities.

2. Energy-saving audit

In order to create new energy-saving items and boost the level of energy-saving audit engineers, JTEKT’s internal audit team carried out the audits of the Kariya Plant and Toyooki Kogyo Co., Ltd., one of our group companies, in FY2020. The items created from the audits have been rolled out to all plants, contributing to the promotion of energy-saving activities. In FY2021, the internal audit team is scheduled to conduct audits of Shikoku Plant and two domestic group companies.

Measurement of cooling water flow rate using the ultrasonic flowmeter
Measurement of cooling water flow rate using the ultrasonic flowmeter

3. Reflow furnace: Power consumption reduction by heat insulation Hanazono Plant

Before improvement
・Heat radiation from the reflow furnace cover
After improvement
・Reduced heat radiation by attaching a heat insulation jacket to the cover and cut heater power consumption

4. Creative proposal system

JTEKT operates the “Creative Proposal System” as an improvement suggestion system for all employees.
Proposals related to CO2 reduction are included in this system in which the unit price for each energy type is set and the effects are calculated.

Internal Carbon Pricing Initiative

Carbon pricing is a system that aims to promote a response to climate change by offering economic incentives to reduce CO2 emissions by pricing carbon through carbon taxes and emissions trading.
Although JTEKT is not able to set carbon prices, we employ an internal carbon pricing system in which an eco-sheet stating the energy consumption of the equipment and CO2 emissions per product is attached to approval documents when introducing new equipment. By doing so, we have established investment decision criteria on which we operate to significantly reduce the CO2 base unit of each newly installed or newly developed product compared to conventional equipment.

By doing so, we have established investment decision criteria on which we operate to significantly reduce the CO2 basic unit of each newly installed or newly developed product compared to conventional equipment.

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Receiving the Energy Conservation Grand Prize
“Agency for Natural Resources and Energy Commissioner’s Award”

JTEKT’s CO2 Zero Challenge received the Agency for Natural Resources and Energy Commissioner’s Award (Small Group Activity Field), a part of the FY2020 Energy Conservation Grand Prize (Energy Conservation Case Category) sponsored by the Energy Conservation Center, Japan. The Energy Conservation Award recognizes companies and business establishments that promote excellent energy conservation efforts as well as products and business models that demonstrate outstanding energy conservation properties. JTEKT’s CO2 Zero Challenge was highly evaluated, earning the company the award for the first time. JTEKT promotes efforts to minimize CO2 emissions based on Environmental Challenge 2050, and this award was given to us for CO2 Zero Challenge, an initiative focusing on improvement in the field to significantly reduce energy consumption, which JTEKT has been working on since 2016. The JTEKT group will continue to take on the challenge of achieving the targets of Environmental Challenge 2050 in the spirit of JTEKT’s environmental philosophy “All for One Earth”.

Introduction of renewable energy

In FY2020, we installed a total of 3,285 kW of solar power generation systems at a total of five plants in Japan, China, and Malaysia, and reduced annual CO2 emissions by 1,340 tons. As a result, the amount of renewable energy introduced was 2.27 MW for JTEKT alone and 17.5 MW for the entire group. We will continue to make proactive efforts to reduce CO2 emissions by aiming for renewable energy introduction rates* of over 25% for JTEKT alone and over 20% for the entire group by 2030.

*Renewable energy introduction rate: Amount of renewable power generation/total power consumption

Activity Details
Domestic Plant: Hanazono Plant 
Overseas Group Company: KLF (China), JAMY (Malaysia)

In FY2020, JTEKT installed a total of 240 kW of solar power generation systems at the Hanazono Plant. At the Hanazono Plant, JTEKT has 1,168 kW of solar power generation including the amount from the systems introduced so far, and approximately 6% of total energy consumption is covered by renewable energy. JAMY in Malaysia and KLF in China have introduced 858 kW and 2,053 kW of solar power generation systems, respectively. In China, a total of 6,564 kW has been introduced, and approximately 5% of total energy consumption is covered by renewable energy. JTEKT will continue to work on the introduction of renewable energy with a low environmental load to create plants in harmony with nature.

Hanazono Plant
KLF (China)
JAMY (Malaysia)
Activity Details
Okazaki Plant

Promotion of energy conservation and cost reduction through the introduction of a cutting-edge gas cogeneration system. As the demand for fossil fuels increases due to worldwide denuclearization and a movement to reduce CO2, the Okazaki Plant aimed to level the initial investment and running costs by improving efficiency through upgrades to the latest gas cogeneration system and updating obsolete equipment to highly energy efficient ones and using them for energy services (lease). JTEKT promotes further energy conservation by introducing an energy management system that reduces costs by reviewing the operation of existing equipment.

My SDGs
Hirokatsu Yamasaki  Administration Dept. , General Affairs Section, Okazaki Plant (pictured at front right)
Environmental load reduction activities at Okazaki Plant
The Okazaki Plant’s casting plant is home to JTEKT’s only cast-iron molding line and also houses the aluminum die casting line. It tops JTEKT in the amount of waste discharged from casting sand used in the cast-iron molding line and in the waste base unit, and the cast-iron melting line consumes an enormous amount of electricity. To improve this situation and promote the achievement of a low-carbon, recycling-oriented society, JTEKT promotes environment conservation activities by formulating annual targets for environmental conservation at the Okazaki Plant, accumulating countermeasure items, and focusing on activities of subcommittees, including the Global Warming & Energy Conservation Subcommittee and Resource Recycling Subcommittee. For instance, last year the Okazaki Plant updated its cogeneration system, which supplies electricity and heat from its power generator and introduced an energy management system to improve efficiency and operations. At the cast-iron molding line, the entire plant is working as one to achieve a great effect through steady efforts, such as promoting the recycling of casting sand used at the foundry core. The Okazaki Plant will continue to contribute to the local community and the world through cost reduction by saving energy, recycling, and reducing the environmental load.

Initiatives to reduce CO2 through production engineering innovation

Purpose/Aim
JTEKT engaged in activities and met the targets for reduction of CO2 emissions through production technology innovations to achieve the FY2020 CO2 reduction target (1/2 of the 2001 level).
JTEKT also continues engaging in activities to achieve its new 2025 and 2030 targets.
Subcommittee activities
Through the activities of the Production Engineering Innovation for CO2 Reduction Subcommittee, in addition to ESG management and CO2 reduction, we are responding to diversifying customer needs and building a small-scale general-purpose line that supports high-mix low-volume production.
Furthermore, in the midst of this period of drastic change that comes every 100 years, as products are undergoing major changes including electrification, we are pursuing energy and resource conservation through a reform of construction methods tracing back to the materials.
We introduce examples of CO2 reduction efforts through “machining allowance reduction, machine and process saving, and energy and resource saving” with material and heat treatment innovations and halving machining allowances, which feature one-by-one production.
Activity Details

【Development Case 1】Development of energy-saving and high-precision casting techniques

Evolution and rollout of hybrid melting and holding furnace
JTEKT has reduced the amount of heat radiation by downsizing and increased heat insulation of furnace body. By adopting the immersion-type tube burner and immersion-type heater, we have also discontinued use of the holding burner, improved heat efficiency, and reduced CO2 by 50% compared to conventional measurements. Furthermore, we are also working on high-precision casting by improving the die and contributing to energy saving by reducing the cutting stock of post-processes.
Hanazono Plant:
Three units—DC4, !--DC10, and DC11—in operation, scheduled for expansion
Heat insulation coating
Radiant heat loss is reduced by high emissivity ε of insulation paint with added hollow ceramic beads.
Furnace surface temperature [Before heat insulation coating]
Total heat quantity: 21.5 kW
【After insulation coating】
Total heat quantity 14.75 kW (-30%)
Effect of the Hanazono aluminum casting process
CO2 reduction is -50% compared to conventional amounts. Measures implemented on Hanazono’s three units—DC4, DC10, and DC11—scheduled for expansion

【Development Case 2】Development of the hot sizing method

In the current CVJ molding process, after rough molding in four hot forging processes, the product undergoes controlled cooling, lubrication is applied, and the inner and outer sides of the cup are cold sized. In the development, the sizing process was incorporated into the four hot sizing processes, and process consolidation and reduced equipment were carried out as JTEKT strives to save energy by -16%.
Effects of the Tadomisaki CVJ forging process
By consolidating the warm forging process and incorporating the sizing process, JTEKT has achieved the reduction of equipment, processes, and intermediate inventory, and is expected to reduce CO2 emissions by -16% compared to the conventional results.

【Development Case 3】e-GL Management Board

The e-GL Management Board visualizes the safety and quality status of the production line, as well as staffing, real-time operational availability, yield rate, power consumption, and records them as data. It can be used to check line productivity, CO2 emissions, and basic unit in real time, and to analyze accumulated data and improve energy conservation.
e-GL Management Board
e-GL Management Board Link between cycle time error and recording function
Cause investigation and analysis (play Choco Tei Watcher)
Investigation of cause
Improvement
Effect on the Nara C-EPS line
The system achieved improved operational availability of +2%, shortened improvement period by 6 months, and reduced use of paper by 1,600 sheets annually and contributed to CO2 base unit reduction. Real-time production line information and accumulation and visualization of past data will be used for further process and productivity improvements. Real-time production line information and accumulation and visualization of past data will be used for further process and productivity improvements.

Reduction of CO2 emissions in logistics

In FY 2020, the introduction of fuel-efficient trucks in cooperation with logistics companies, request for cooperation by drivers to practice eco-driving, and consolidation of transport services led to improvement in the CO2 emissions basic unit. In addition, emissions decreased by about 20% year-on-year due to improved loading rate and efficiency due to use of JR train containers and full-loaded trailers as well as COVID-19.
In FY2021, JTEKT will continue to maintain and expand the use of JR train containers, replace trucks with full-loaded containers, and identify fluctuations in loading capacity to promote reform and abolition of truck freight to achieve reduction targets of 161 million tons in basic unit and 10.9 thousand tons of emissions.
CO2 emissions basic unit
Transition of CO2 emissions volume
Main activities

Reduction of CO2 emissions volume in logistics

1) FY 2020

① JTEKT improved loading efficiency and reduced CO2 emissions through improvement of truck fuel efficiency and reflecting eco-driving as the base unit, continued replacement of JR train containers for truck transport, and use of full-loaded trailers from the distribution center in the Tokai area to the Kanto area.

Use of JR train containers
Example of full-loaded trailers

② Implemented use of battery-driven logistics vehicles (forklifts)

Use of battery-driven forklifts
Use of battery-driven forklifts
2) FY2021

① JTEKT will continue our FY2020 efforts to maintain and expand use of JR train containers and full-loaded trailers.
② JTEKT will continue to promote the use of battery-driven logistics vehicles (forklifts).

Safety and Environmental Measures Meeting (held regularly three times a year)

In FY2020, the meetings were held remotely with logistics companies to discuss reduction of environmental load, due to COVID-19.
JTEKT will hold regular meetings in FY2021 and continue efforts to reduce environmental load.