Natural Environment Harmonization Product

Basic Stance

At DENSO, we leverage technologies accumulated to date in the automotive field to contribute to society through the development and commercialization of green environmental technologies supporting renewable and prosperous lifestyles.

Specific Initiatives

To minimize environmental destruction from resource extraction, DENSO is focused on the development of alternative fuels and raw materials utilizing biological resources that carefully take biodiversity into account, including the commercialization of a plant-derived plastic radiator tank, businesses that make use of algae, and expanding research on biofuels.

We also promote the development of agricultural support businesses and food transport systems utilizing automotive air-conditioning technologies.

Bio (Micro Algae)

We contribute to preservation of the global environment by utilizing an efficient algae cultivation process for CO₂ absorption and by producing biofuel as an alternative to fossil fuels.
Agricultural Support

We contribute to more efficient and stable vegetable cultivation and improved agricultural competitiveness, utilizing greenhouse environment control systems and energy conservation technologies.
Cold Chain

We contribute to safety and assurance in food transport and supply from production to consumption through energy-saving cooling and freezing technology as well as traceability management.

Information Disclosure Based on the TNFD

DENSO has contributed to ecosystem conservation through initiatives aimed at addressing climate change, preventing environmental pollution and resource depletion, and promoting resource recycling. In addition, our employees have collaborated with local communities to advance activities such as preserving and restoring ecosystems in the areas around our business sites and protecting endangered species.
Recently, in addition to climate change, there are rising global concerns regarding the loss of biodiversity. The loss of biodiversity ties in directly with the degradation of natural capital and therefore has a major impact on our corporate activities.
Accordingly, we believe it is essential that we accurately assess the relationship between biodiversity and our business activities and enact measures, when necessary, if we are to enhance the stability of these activities.
To that end, we have recently been utilizing the Taskforce on Nature-related Financial Disclosures (TNFD), an international framework for the disclosure of biodiversity-related information, to carry out a trial analysis of our dependence and impact on nature and identify relevant risks and opportunities. In this section, we report the latest progress we are making in this endeavor.

Governance

Important items regarding our dependence and impact on nature and the relevant risks and opportunities are being deliberated on by the Companywide Safety, Health, and Environment Committee. This committee monitors and supervises the progress made toward qualitative and quantitative targets regarding our response to nature-related issues and evaluates business opportunities and risks. In this way, the committee will engage in decision-making based on comprehensive assessments.

Strategy

Centered on the Safety, Health & Environment Division, we conducted an analysis in collaboration with external experts. This analysis was carried out with a high level of objectivity, utilizing the LEAP approach* stipulated by the TNFD as well as analysis tools such as Aqueduct of the World Resources Institute and the Integrated Biodiversity Assessment Tool of the International Union for Conservation of Nature and other organizations. The analysis focused on a long-term timeframe, around 20 years in the future.
The results of the current analysis are as indicated below. Moving forward, we will continue to conduct analyses and reflect their results in our policies and plans for environmental activities.

* The LEAP approach is a recommended set of steps by the TNFD for TNFD-based information disclosures. It involves four steps: Locate (interface with nature), Evaluate (dependencies & impacts), Assess (material risks & opportunities), and Prepare (respond & report).

Direct Operations

We conducted an analysis of our production sites. Based on the results of this analysis, we identified Japan among our regions of operation as the region with the highest risk exposure from the perspective of the risk of biodiversity loss, making it our top priority area. At DENSO, we promote various activities to preserve nature. Taking into account the results of the recent analysis, we will conduct further analysis regarding the effectiveness of our current initiatives and any relevant issues.

Representative Countries/Regions of Establishment	Japan	Mexico	Hungary	China	India
IUCN Red List	2,120	999	1,000	797	777
Protected Planet preservation areas (PA)	134	12	55	0	0
Key Biodiversity Area (KBA)	11	2	9	4	6

Value Chain

In the upstream of our value chain, we believe the risk of biodiversity loss is high, especially at our overseas suppliers of raw materials. Accordingly, we conducted an analysis and evaluation of mining sites for bauxite, which is a raw material for aluminum used in such representative products as inverters and HVAC systems. The results of this analysis and evaluation are as follows.

Analysis and Evaluation of Risks and Opportunities Related to Mining Locations for Raw Material Bauxite
		Dependence/Impact on Nature	Details of Major Risks and Opportunities	Response Measures
Risks	Nature	Dependence	･Destruction of ecosystems due to resource mining or wastewater	･Support for efforts by mining operators to restore ecosystems
	Nature	Impact	･Movement of invasive species due to land and marine transport (under investigation)	･Establishment of measures to prevent movement of invasive species
	Physical	Dependence	･Suspension of operations due to mining accidents (landslides, etc.) (short term)	･Disaster relief support for mining operators ･Diversification of alternative mines and suppliers
	Physical	Dependence	･Decrease of reserves (under investigation) (long term)
	Transition	Dependence	･Rise in prices due to the international situation	･Examination of alternative materials ･Diversification of alternative mines and suppliers
	Transition	Impact	･Decline in supply amounts / Suspended production due to tightening regulations on mining
Opportunities		Dependence	･Technologies to reduce dependence on mineral resources	･Development of alternative aluminum products and alternative aluminum materials
Opportunities		Impact	･Growing need for mining technology with low environmental burden	･Joint R&D on new mining technologies leveraging long-cultivated environmental technologies

Management of Risks and Impacts

The risks identified in the analysis and evaluation will be reported to the Companywide Safety, Health, and Environment Committee, which will discuss such matters as relevant response policies and action plans. For risks that were determined to be particularly important, the Risk Management Meeting will invest resources into measures to address such risks, thereby controlling them from the perspective of Companywide risk management.

Measurement Indicators and Targets

With a focus on contributing to a nature-positive* global society, we will continue to utilize the TNFD to conduct ongoing analyses of nature-related risks and opportunities. The results of such analyses will be reflected in the next Eco Vision and Environmental Action Plan (Eighth Phase of Environmental Action Plan) and used to examine the formulation of indicators and targets. At the same time, we will incorporate the results into our environmental management systems (EMS).

Nature positive: The concept of stopping biodiversity loss and shifting toward a path for recovery