Climate Change Mitigation and Adaptation

Rapid climate change poses a major threat to humanity and to all life-forms on earth. We recognize that helping combat this threat and contribute to the decarbonization of society are corporate responsibilities and important management issues.

Under the guidance of the Working Group for Climate Change, a working group chaired by a managing executive officer positioned under the Sustainability Committee, which is chaired by the president, the Yamaha Group is working to contribute to the global movement to reduce CO₂ emissions. At the same time, we are preparing for the potential impact of climate change by identifying risks, formulating mitigation measures, and incorporating these into business strategies. Endorsing the goals of Science Based Targets (SBT),^*1 an international initiative encouraging companies to formulate greenhouse gas emission reduction targets in accordance with scenarios based on scientific evidence, the Group received certification from this initiative for its medium- to long-term reduction targets in June 2019. Later, in September 2021, the Company received certification for a new greenhouse gas emission target of achieving a reduction of 55% in Scope 1 and Scope 2 emissions from fiscal 2018 to be achieved by fiscal 2031, substantially higher than the prior target of a 32% reduction. The certification indicates that this new more ambitious target is viable for limiting global warming to 1.5ºC above pre-industrial levels. The move was taken in response to the carbon neutrality trends of the international community. Furthermore, the Group declared its endorsement of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)^*2 in June 2019 and commenced initiatives for analyzing the impact of climate change on its finances and disclosing related information.

Also at this time, the Group declared its endorsement of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)^*2 and commenced initiatives for analyzing the impact of climate change on its finances and disclosing related information.

Going forward, the Group will continue to pursue reductions in greenhouse gas emissions and work to address the impact of climate change. At the same time, we will seek to create products, services, and business models that help mitigate climate change and promote the decarbonization of society through energy-efficient products and other means.

• *1 SBT is an international initiative that encourages companies to formulate greenhouse gas emission reduction targets in accordance with scenarios based on scientific evidence to contribute to the accomplishment of the goals of the Paris Agreement.
• *2 TCFD is a task force created by the Financial Stability Board that has released recommendations aimed at facilitating appropriate investment decisions through disclosure of the potential financial impacts of climate change.

• Sustainable Consumption
• Yamaha Eco-Products Program

• Reduce total Scope 1^*3 and Scope 2^*4 greenhouse gas emissions by 55% from fiscal 2018 levels by fiscal 2031 (achieve effective carbon neutrality by fiscal 2051)
• Reduce total Scope 3^*5 greenhouse gas emissions by 30% from fiscal 2018 levels by fiscal 2031

• *3 Scope 1 emissions are direct greenhouse gas emissions from a business operator through sources such as fuel use on company premises.
• *4 Scope 2 emissions are indirect greenhouse gas emissions from use of electricity, heat, and steam supplied by third parties.
• *5 Scope 3 emissions are indirect greenhouse gas emissions from areas of the supply chain not accounted for under Scope 1 and Scope 2.

• Energy-saving initiatives including optimization of production methods and equipment placement, installation of high-energy-efficiency equipment and LED lighting, and exhaustive management of facility operation times, air-conditioning temperatures, and other energy consumption factors
• Introduction of cogeneration systems and solar power generation systems
• Transition to fuel sources with low greenhouse gas emissions
• Switch to purchasing renewable energy
• Facilitate investment in high-efficiency and renewable energy equipment through internal carbon pricing system
• Improvement of transportation efficiency and shift to low-carbon transportation methods (ships and trains) in distribution
• Development of energy-efficient products (reduction of emissions from large-volume Scope 3 emissions category (product use))

Yamaha Corporation and domestic production sites are advancing energy conservation and other initiatives in manufacturing processes and at offices to achieve the long-pursued target of reducing CO₂ emissions per unit of production by 1% or more each year. For example, we have been introducing renewable energy at our business sites, and were thereby able to transition to renewable energy for 100% of the power used at the Company headquarters in April 2021. We then later switched to Shizuoka Green Electricity, a service that supplies electricity produced through hydroelectric power generation in Shizuoka Prefecture offered by Chubu Electric Power Miraiz Co., Inc., in September 2021. At overseas production sites, quantitative reduction targets are set on an individual-site basis, and proactive initiatives are being implemented toward the accomplishment of these targets.

In advancing emission reduction initiatives, we manage greenhouse gas emission volumes in accordance with the Greenhouse Gas Protocol.*6 In addition, third-party verification has been received for Scope 1 and Scope 2 emissions and certain Scope 3 emissions since fiscal 2017.

• *6 The Greenhouse Gas Protocol is a set of standards for calculating and reporting greenhouse gas emission volumes.

• Third-Party Verification

After conducting Yamaha Forest tree planting activities in Indonesia over the period from 2005 to 2016, the Company confirmed the growth status of the forest via satellite imagery and estimated the volume of CO₂ absorbed by the trees in 2017. The Company estimates that approximately 42,000 t-CO₂ had been absorbed leading up to 2017, and that 6,000 t-CO₂ have been absorbed on a consistent basis each year thereafter.

• Protection of Biodiversity
• Yamaha Group Environmental Data

Yamaha Music Manufacturing Japan Corporation (the Iida Factory) has established the Energy-saving Promotion Committee and has been engaged in initiatives to reduce CO₂ emissions. Measures taken have included ensuring the appropriate pressure for compressors, partitioning work booths, introducing power usage monitors, and installing door and window screens for ventilation in offices. This company is also implementing measures to improve energy efficiency and to save space by consolidating equipment inside factories and rationalizing equipment layouts. Furthermore, this company has applied a thermal-barrier coating to the roof of the factory, improving air-conditioning efficiency as a result.

Yamaha Music Manufacturing Japan (the Kakegawa Factory) is conducting a range of ongoing efforts to conserve energy. Specific activities include removing unnecessary lighting, changing from fluorescent lighting to LED lighting, replacing prior compressors with inverter compressors, upgrading distribution transformers and air-conditioning equipment, and improving air-conditioning control. Energy conservation efforts in fiscal 2021 included integrated compressor control to allow for efficient operation during low-load periods. Through these activities, this company has succeeded in reducing CO₂ emissions by 500 t-CO₂ and cutting electricity usage by 840 MWh on an aggregate basis over the eight-year period from fiscal 2015 to fiscal 2022. Furthermore, cogeneration systems have been utilized to cut CO₂ emissions by 2,900 t-CO₂ a year (equivalent to 420 kL of crude oil a year).

At Yamaha Fine Technologies Co., Ltd., steps are taken to cut peak power consumption during the summer by efficiently managing air-conditioning and sprinkling water on the factory roof. In addition, a summer-time system was introduced in fiscal 2015. Over the three-month period from July to September, the work start time is moved two hours ahead to 6:00 a.m. for certain automobile interior parts painting processes that require high levels of air-conditioning. Through these measures, the peak power consumption point was shifted from 2:00 p.m. to 11:00 a.m. As a result, peak power consumption was reduced by approximately 310 kW in the hotter part of the afternoon, and power consumption was lowered by 200,000 kWh during the three-month period from July to September. Moreover, this company is making efforts to conserve electricity, such as improving labor efficiency by shortening facility operating hours, reviewing workplace layouts to reduce air-conditioning requirements, and revising how steam is used during the winter.

Hangzhou Yamaha Musical Instruments Co., Ltd., has introduced various energy conservation activities that include making technological improvements and enhancing management of daily work activities to curb the increase in energy consumption stemming from rising production levels. Recognizing these energy conservation activities and other environmental initiatives, Hangzhou City officials presented this company with Cleaner Production Certification in accordance with China’s Cleaner Production Promotion Law at the end of 2011. Since then, this company has continued to implement the following measures to reduce energy usage.

Yamaha Resort Inc. is implementing the following CO₂ emission reduction initiatives at the resort facilities it operates.

Reduction of CO₂ Emissions and Fuel Consumption in Golf Course Operations (Katsuragi Golf Club):

• Annual reductions in CO₂ emissions of more than eight tons achieved by switching from gasoline golf carts to electric carts (fiscal 2014)
• Annual electricity savings of 25 MWh through “green fan” initiatives (greens maintenance) and adjustment of facility air-conditioning (fiscal 2019–2020)
• Approx. 30% reduction in boiler fuel consumption (heavy oil) and one-hour reduction in boiler operation time through replacement of all large-scale, air-conditioning systems that use hot water for heating with energy-efficient air-cooling systems (completed in fiscal 2020)
  Two high-efficiency boilers installed to replace existing boilers and introduction of four EV charging stations (fiscal 2022)

Reduction of CO₂ Emissions in Hotel Operations (Katsuragi Kitanomaru):

• Two high-efficiency boilers installed to replace existing boilers in both fiscal 2019 and fiscal 2020
  Upgrade to high-efficiency air-conditioning units using new refrigerants in seven customer rooms and installation of high-efficiency air-conditioning unit in hotel lobby (fiscal 2022)

Transition to LED Lighting (Katsuragi Golf Club and Katsuragi Kitanomaru):

• Annual electricity savings of 49 MWh through switch to LED lighting and installation of motion sensors in restrooms
• Annual electricity savings of 28 MWh through replacement of mercury lamps with LED lighting in clubhouse lobby and Kitanomaru garden

Electricity conservation measures at offices include reducing the amount of lighting (after verifying lighting levels), introducing LED lighting, turning off lit advertisements, halting elevator operation, and notifying employees of electricity consumption amounts to raise awareness.

The Yamaha Corporation headquarters is promoting the transition to LED lighting in office spaces, and approximately 1,400 fluorescent lights and mercury lamps have been replaced with LED lighting over the nine-year period spanning from fiscal 2014 to fiscal 2022. As a result, annual electricity consumption has been reduced by 52 MWh. Meanwhile, the transition to LED lighting outside of the Toyooka Factory has produced annual savings of 44 MWh while an additional reduction of 70 MWh in annual electricity consumption has been achieved by replacing approximately 5,100 fluorescent lights inside of the factory with LED lighting over the six-year period from fiscal 2017 to fiscal 2022. Going forward, we will continue to systematically transition to LED lighting in factories and offices.

The Yamaha Group is working to increase energy efficiency and reduce CO₂ emissions in logistics operations together with efforts to improve transportation efficiency and shorten transportation lead times. To this end, we are incorporating CO₂ emission reduction initiatives into various activities. For example, we are working to raise truck and container loading ratios, review warehouse locations and transport routes to shorten transportation distances, examine the possibility of incorporating low-carbon modes of transportation (ships and trains), revise transportation packing specifications, conduct joint transportation with other companies, and dispose of waste in the area it is produced.

The Group’s total domestic transport volume (including transportation by domestic sales companies, etc.) in fiscal 2022 decreased 3.1 million ton-kilometers year on year, to 1.6 million ton-kilometers. CO₂ emissions were down 566 t-CO₂ year on year, to 2,527 t-CO₂. Reducing CO₂ emissions from logistics requires the cooperation of transportation companies. As such, we are working with them to develop the necessary systems by requesting that the transportation companies we work with cooperate in environmental efforts and incorporating environmental matters into questionnaires.

• Yamaha Group Environmental Data

Previously, the Yamaha Group has used disposable iron packing racks when transporting piano frames from Japan to overseas factories. However, we are gradually introducing returnable packing racks for piano frames that can be used multiple times in order to conserve resources. In addition, by shortening transportation routes and improving load efficiency, the Company has achieved a 100-ton reduction in CO₂ emissions associated with the disposal of iron packing and a 1,600-ton reduction in iron resource consumption. Going forward, we will examine the possibility of shortening transport distances and reducing disposable packing material use, including for parts aside from piano frames.

The Yamaha Group is pursuing enhanced efficiency in transportation by increasing the number of products shipped per container through the use of more compact packaging that better matches the sizes of the containers used during shipping. For example, a 17.0% reduction in the size of the packaging used for Yamaha P series digital pianos resulted in a 12.5% increase in container packing rates. This change led to an annual reduction in the number of 40-foot high-cube containers used of 269 together with a 26-ton decrease in annual CO₂ emission volumes.

Rapid climate change poses a major threat to humanity and to all life-forms on earth. We recognize that helping combat this threat and contributing to the decarbonization of society are corporate responsibilities and important management issues.

In fiscal 2019, the Yamaha Group declared its endorsement of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and commenced initiatives for analyzing the risks and opportunities for its business created by climate change. This information is reflected in management strategies, and information on the financial impacts of these risks and opportunities is disclosed.

Climate change and other important sustainability issues are discussed at meetings of the Sustainability Committee, which is an advisory body to, and chaired by, the president that was established in January 2021, after which these matters are discussed and examined by the Board of Directors to make for a system of appropriate supervision by the Board of Directors. The Sustainability Committee met 10 times in fiscal 2022.

Measures for responding to climate change-related risks and opportunities are discussed by the Working Group for Climate Change, a working group chaired by a managing executive officer positioned under the Sustainability Committee, and the results of these discussions are reported to the Sustainability Committee.

In fiscal 2022, Yamaha revised its sustainability priorities (materiality), the management issues with the potential to impact corporate value over the medium to long term, to include climate change among these issues. The new medium-term management plan “Make Waves 2.0” launched in April 2022 defines “set sustainability as a source of value” as one of its key policies, thereby positioning response to climate change as a central theme of the plan.

Scenario analyses have been performed to confirm the potential impacts of climate change on the Yamaha Group. The specific scenarios utilized were the Sustainable Development Scenario (global warming of less than 2°C above pre-industrial levels) and the NZE Scenario (net zero emissions by 2050 and global warming of 1.5°C above pre-industrial levels) based on the 2021 World Energy Outlook of the International Energy Agency (IEA) for transition risks and the Representative Concentration Pathway (RCP) 8.5 (global warming of 4°C above pre-industrial levels) scenario from the Fifth Assessment Report of the Intergovernmental Panel on Climate Change for physical risks. Applied to all businesses, these assessments were used to identify short-term, medium-term, and long-term risks and opportunities.^*1

The Risk Management Committee has been established as an advisory body to the president. This committee meets to discuss risk management-related themes from a Companywide perspective, and the findings of these discussions are reported to the president.

The committee also assesses and categorizes a variety of climate change and other risks based on the potential damages and frequency. In addition, risk control levels are evaluated to identify serious risks requiring priority attention, to designate the divisions responsible for managing these risks, and to thereby improve the overall level of risk management.

In addition, the Working Group for BCP and Disaster Prevention Management has been set up under the Risk Management Committee to establish business continuity plans and implement other business continuity management initiatives to address the physical risks associated with natural disasters.

Relevant executive officers report on these activities to the Board of Directors, which carries out confirmation and oversight of the effectiveness and progress of risk management frameworks.

Reductions to CO₂ emissions are managed in a comprehensive manner encompassing the entire Yamaha Group and its supply chains. To facilitate these efforts, the Greenhouse Gas Protocol is used as the standard for calculating total greenhouse gas emissions (Scope 1, Scope 2, and Scope 3 emissions), and third-party verification is received for these calculations.

Yamaha has set the medium-term targets of reducing total Scope 1 and Scope 2 greenhouse gas emissions by 55% (a target certified by Science Based Targets as sufficient for helping limit average global warming to below 1.5ºC) and total Scope 3 greenhouse gas emissions by 30% from fiscal 2018 levels by fiscal 2031. In addition, we have set a long-term target for Scope 1 and Scope 2 emissions of achieving carbon neutrality by fiscal 2051.

• Scope 1, Scope 2, and Scope 3 emissions

In addition, we have set the goal of achieving a ratio of certified timber use of 50% by fiscal 2022 in order to help preserve forest resources and protect biodiversity. This goal was successfully accomplished in fiscal 2022 with a ratio of 52%. Going forward, we plan to establish internal standards to guide wider-ranging management of timber sustainability. At the moment, we are targeting a ratio of sustainable timber use, as defined based on our internal standards, of 75% in fiscal 2025. Ongoing initiatives will be advanced toward this goal.

In 2021, Yamaha Corporation was selected, for the first time, for inclusion in the climate change A List by CDP, an international NPO tackling climate change and other environmental issues. Positions on this list are reserved for companies exhibiting excellence on a global scale in addressing climate change and disclosing information related to those efforts.

Approximately 13,000 major companies from around the world were assessed in the fiscal 2022 CDP climate survey. These companies were assigned ranks ranging from D- to A, and 200 companies, 55 of which were Japanese companies, were included in the A List, the highest honor in this survey.

Yamaha Corporation has been included on the Supplier Engagement Leaderboard, the highest honor in the Supplier Engagement Rating of CDP, for two consecutive years.

Launched in 2017, the Supplier Engagement Rating is a program through which CDP assesses the climate change and greenhouse gas emission reduction initiatives that companies are conducting across their supply chains. In 2021, approximately 23,000 companies from around the world were surveyed and assessed with 518 companies, including 105 Japanese companies, being selected for the Supplier Engagement Leaderboard. Yamaha’s selection for this honor is thought to be a reflection of the Company’s ongoing efforts to reduce greenhouse gas emissions from across the life cycles of its products, spanning from raw material procurement to production, distribution, use, and ultimately disposal or recycling.

• External Recognition