Climate Change Mitigation and Adaptation

CONTENTS

Our Approach
Our Operations
Our Value Chain
Expanding Our Impact

Climate Change Mitigation and Adaptation

Progress in FYE2024 (as of March 31, 2024)

Scope 1 & 2 CO₂ emissions (vs. FYE2019): -34.7%

CO₂ emissions from Scope 3 (vs. FYE2019): -21.6%

Ratio of energy- and water-saving faucets sold (Japan): 94.1%

Ratio of water-saving toilets sold (Japan): 99.4%

Ratio of high-performance windows sold for new detached houses (Japan): 93%

Our Approach

Nineteen percent of global energy-related CO₂ emissions are from direct emissions by building construction and materials industries, and another 18% are due to indirect emissions from buildings and homes in use.^*1 To realize the LIXIL Environmental Vision 2050 ”Zero Carbon and Circular Living”, we have designated Climate Change Mitigation and Adaptation as one of our focus areas and a priority among in our material issues. LIXIL set long-term targets to reduce CO₂ emissions to net zero by 2050 by reducing the environmental burden of our operations and by providing environmentally sound products and services. This long-term target became the first in the Japanese building materials industry to receive SBT Net Zero approval in March 2024.^*2

LIXIL's commitment to reducing CO₂ emissions is not limited to our business processes, products, and services, but extends across society. We provide solutions for users to take measures against natural disasters or to prevent heat stroke, helping them adapt to climate change.

To achieve our targets, in 2024 we announced our Transition to a Low-Carbon Society which defines measures and actions for each of the three phases: Our Operations, Our Value Chain, and Expanding Our Impact. LIXIL’s comprehensive approach includes mid-term targets that go beyond fulfilling its responsibilities by minimizing the environmental burden of its business activities; but also for advancing efforts to create new value in the environmental field with our stakeholders for a greater impact on the environment and society.

*1 UNEP (A new page will open) ＞

*2 LIXIL Becomes First Japanese Building Products Company to Receive SBT Net-Zero Approval for 2050 Zero CO₂ Emissions Target (A new page will open) ＞

Defining Our Strategic Approach and Mid-Term Targets

Defining Our Strategic Approach and Medium-Term Targets

Our Operations

By FYE2031, LIXIL set the target of reducing CO₂ emissions from our business sites (Scope 1 ＆ 2) by 50.4% (vs. FYE2019). To minimize the environmental burden of our business processes, LIXIL is working to reduce CO₂ emissions by implementing thorough energy-saving measures at its plants and offices, by converting to renewable electricity and fuels with low CO₂ emissions, and through electrification.

Scope 1 & 2 CO₂ emissions

Boosting Efficiency, Reducing Energy Use, Electrification, and Fuel Conversion at Production Sites

Aging aluminum parts using hydrogen combustion

Aging treatment for aluminum parts using hydrogen combustion

We strive to improve our energy efficiency and reduce the amount of energy we use by identifying issues with our production processes, reviewing facilities, and by implementing various activities at each production site. All factories that manufacture GROHE products and all GROHE distribution centers have received ISO 50001 certification for their energy management systems.

Meeting the high heat demand of processing materials into LIXIL products requires significant amount of fuel. In Japan, we use IoT technology to visualize energy use for sash manufacturing processes that use large amounts of fuel such as aluminum melting and extrusion molding to adjust combustion conditions to the optimum state inside furnaces. This has contributed to significant reductions of energy consumption.

We are also actively engineering energy conversion to reduce CO₂ emissions. This includes transitioning from petroleum-based energy to electricity from renewable energy, and other sources that mitigate our environmental burden for low-temperature processes. At our Ariake Plant, we have switched from petroleum-based fuels to natural gas as fuel, lowering our CO₂ emissions and other air pollutants, such as nitrogen oxides (NOx) and sulfur oxides (SOx), during combustion.

Aside from such efforts, approaching manufacturing processes with a high-temperature ranges requires innovation beyond conventional fuel and manufacturing methods. LIXIL has started evaluating innovations that incorporate new technologies such as hydrogen fuel conversion and carbon capture and utilization (CCU) that separates, captures, and effectively uses CO₂. We are looking into other new technologies that are in the research stage with the view to apply for practical use from 2030 onward. In FYE2023, we successfully completed hydrogen combustion tests for manufacturing aluminum profiles at our Maebashi Plant. In FYE2024, we conducted hydrogen combustion experiments to successfully verify its use for high-temperature furnaces for aluminum-melting and firing sanitary ware and tiles. Moving forward, we are looking into equipment specifications and investment needed to consider practical applications for hydrogen fuel conversion as an alternative for decarbonizing our production.

While there are several major hurdles relating to the development of infrastructure for supplying hydrogen as a fuel, LIXIL has started technical verification for hydrogen procurement with the aim of establishing technologies across all processes from procurement through usage. In FYE2023, we conducted verification tests on the surface treatment process of applying color to aluminum parts being manufactured at our Oyabe Plant, and successfully recovered over 90% of the hydrogen generated.

Transition to Renewable Energy

Ratio of renewable energy used

Klaeng plant in Thailand

LIXIL is making the transition to renewable energy. As a testament to that commitment, we are a member of RE100, a global initiative of companies committed to sourcing 100% renewable electricity for their operations.

We have successfully switched to electricity derived from renewable energy sources at 14 production sites, 6 offices, 10 distribution centers, and 82 sales bases in Japan. Outside of Japan, all 10 plants and distribution centers for LIXIL International faucet fittings have switched to 100% renewable energy. In FYE2024, our renewable energy ratio reached 28.3%.

In addition to purchasing renewable energy certificates, we started introducing solar power generation facilities at our manufacturing plants based on the on-site Power Purchase Agreement (PPA) model* that considers additionality, encouraging further investment in renewable energy facilities inside and outside Japan. For on-site PPAs based outside Japan, all five of our GROHE plants generate approximately 10,200 MWh of electricity. The Klaeng plant in Thailand installed 3.2 MW solar panels on its rooftop, cutting annual CO₂ emissions by approximately 2,000 tons. Moreover, the Hemer Plant in Germany installed 3.8 MW solar panels across approximately 20,000 m² onsite, cutting annual CO₂ emissions by approximately 950 tons. We also have solar power generation facilities operating under on-site PPAs at the Dalian, Jiangmen, and Suzhou Science and Technology Plants in China, and the Da Nang Plant in Vietnam. Additionally, we adopted off-site PPAs for the first time at four plants in Mexico in FYE2023.

In Japan, we have been operating 8 locations of megawatt-scale solar power plants that produce approximately 34,000 MWh of power in total per year. In FYE2024, the Kumayama Plant installed solar panels for self-consumption. Solar power generation facilities under on-site PPAs started operations at Otani Plant in FYE2023 and five other locations in FYE2024: Ariake, Nabari, Hisai, Onomichi, and Saga Plants.

* A business model that enables PPA service providers to install solar power generation facilities on the premises and rooftops of buildings owned by electric power consumers, and to sell electricity generated from those facilities to electric power consumers.

Our Value Chain

By FYE2031, we set the target for reducing CO₂ emissions from our supply chain (Scope 3) by 30% (SBT WB-2ºC level*) (vs. FYE2019). Procurement and product use account for a large portion of Scope 3 CO₂ emissions across the LIXIL value chain. In response to the need to reduce CO₂ emissions from the lifecycle of buildings, which includes direct emissions from building construction and indirect emissions during building use, we continue to work with suppliers and other companies in procurement and logistics and to design more energy-efficient products. We are driving efforts to reduce CO₂ emissions across the entire lifecycle of our products and services by using more low-carbon raw materials and components, utilizing recycled materials, creating resource-saving products, and applying designs to extend product life and facilitate reuse.

* The well below 2°C target of the Science Based Targets initiative (SBTi) to cap global temperature increase well below 2°C compared to pre-industrial temperatures

LIXIL Becomes First Japanese Building Products Company to Receive SBT Net-Zero Approval for 2050 Zero CO₂ Emissions Target (April 3, 2024) (A new page will open) >

Scope 3 CO₂ emissions

Reducing CO₂ Emissions from Procurement

Collaboration with our suppliers is vital in reducing our CO₂ emissions from procurement, which takes up around 40% of our Scope 3 emissions. We engage with all of our suppliers for their full comprehension and cooperation in our procurement activities that are conducted internationally in accordance with LIXIL’s environmental activities and Supplier Code of Conduct, as well as an additional set of Green Procurement Guidelines for Japan.

To effectively reduce CO₂ emissions from our procurement, LIXIL is reaching out to suppliers through engagement. In FYE2023, we surveyed suppliers who account for the top 80% of all our procurement-related CO₂ emissions inside and outside Japan. The survey aimed to assess the status of their CO₂ emissions data collection and target setting. Based on the results of the survey and dialogue with suppliers, in FYE2024, we held briefings on LIXIL’s procurement activities and emissions accounting for approximately 400 major suppliers in Japan. These briefings were followed by additional briefings to provide Scope 1, 2, and 3 calculation tools and to demonstrate how to use them to suppliers who expressed their intent to start calculating CO₂ emissions. We also proactively held multiple follow-up sessions to assist suppliers with practical implementation of the calculation methods. In July 2024, a supplier survey conducted after a follow-up session revealed that 30% of participants have been able to improve standards and coverage for calculations. To drive efforts to further reduce our CO₂ emissions, we will continue to enhance our support for suppliers calculating their emissions through seminars, briefings, and other activities while ensuring the quality, quantity, and consistency of the collected data through discussions with individual suppliers. We will also be collaborating with overseas suppliers to meet national and regional conditions outside Japan.

To further ensure stable supply and responsible procurement, we will continue to facilitate acquisition and application of supplier data to strengthen collaborations that reduce CO₂ emissions from procurement. We will also accelerate efforts to achieve effective reductions in CO₂ emissions across our value chain by utilizing more low-carbon raw materials and components, and recycled materials.

Circular Economy >

Reducing CO₂ Emissions from Distribution

In FYE2024, we increased operation of our container round use program that allows shared use of logistics equipment with other companies. We achieved round use of 643 shipping containers in total with our partners, reducing CO₂ emissions by approximately 85 tons a year.

We are also addressing the issues of declining loading efficiency and driver shortages by combining freight transportation with other companies in the same industry. At our Hokkaido Distribution Center, we conduct joint freight transport in the entire region. Together with partner companies we have cumulatively reduced total mileage by approximately 590,000 kilometers and 21% CO₂ emissions per ton-kilometer, annually. In FYE2025, we will start conducting joint freight transport at the Tohoku Distribution Center to further reduce our CO₂ emissions.

Offering Energy-Saving Products that Help Reduce CO₂ Emissions During Use

LIXIL helps reduce CO₂ emissions by offering energy-saving toilet and kitchen products. For example, one of our toilet products, the Satis S Type Toilet, reduces CO₂ emissions by 111 kg annually. Our toilet products come with various features to conserve energy, including the Super Power-Saving Function that automatically lower toilet seat and hot water temperatures when not in use, and the One-Touch Power-Saving Switch that turns off the heating for a set period with a flick of the switch.

Our Energy-Saving Products (Japanese only, a new page will open) >

Energy-saving toilet image

Expanding Our Impact

In Japan, we have set a target to achieve a 100% sales ratio for high-performance windows in new detached houses by FYE2026. Similarly, we have set targets to reach a 100% sales ratio for energy- and water-saving faucets and water-saving toilets by FYE2031. In Japan, 60% of the energy consumption of a typical home in Japan is taken up by heating, cooling, and hot water supply. To address this issue, we offer high-grade insulating windows and entrance doors; high-performance home construction to enhance the insulation of entire homes including walls, ceilings, and floors; energy- and water-saving products for toilets, baths, and kitchens; energy-generating products and services; and IoT-driven delivery boxes, with the aim of expanding our impact on climate change mitigation. We are also working on climate adaptation by providing solutions to prepare for natural disasters such as typhoons and torrential rains, and to prevent heatstroke due to extreme heat.

Ratio of high-performance windows sold for new detached houses (Japan)

Ratio of energy and water-saving faucets and water-saving toilets sold (Japan)

Using Life Cycle Assessment to Offer Low-Carbon Window Products across Their Entire Life Cycles

In FYE2024, we launched GREEN WINDOW, a sales strategy for recommending window products that can effectively reduce CO₂ emissions by matching them with regional climate characteristics in Japan, with emphasis on energy conservation and circular economy. By promoting total CO₂ emissions calculation model based on life cycle assessment (LCA), which is poised to become the future standard in the Japanese building materials industry, and broadening our product lineup, we aim to expand our impact through our operations, our value chain, and the use of our products and services by our customers.

GREEN WINDOW (Japanese only, a new page will open) >
Report on “The Best Windows for Each Region Based on the Entire Product Life Cycle” (Japanese only, a new page will open) >

Developing High-Grade Thermal Insulation Products

・TW triple-glazed high-performance hybrid window (TOSTEM brand)

This hybrid-structured window combines the benefits of both strong, durable aluminum on the outer side and moisture-resistant, high-insulation resin on the inner side. It boasts of a tremendous insulation performance achieved by cutting-edge triple-pane glass with double Low-E specifications and two hollow layers filled with high-performance gas. Compared to a single-glazed window, a triple-glazed high-performance window can reduce heat loss by approximately 80%, leading to a 37% reduction in CO₂ emissions in new houses. The high-grade thermal insulation helps reduce CO₂ emissions by reducing energy consumption for heating and cooling.

Our thermal insulation products (Japanese only, a new page will open) >

・Home renovation for thermal insulation

Our Marugoto Dannetsu Reform is a high-performance home renovation method to insulate the entire house by enhancing the insulation of walls, floors, ceilings, and openings while utilizing existing structural parts. This method improves energy efficiency and transforms existing houses into high-performance homes without the need to rebuild from scratch. Our design scheme to support upgrades to superior whole-house insulation using our Super Wall construction method won the Agency for Natural Resources and Energy Commissioner’s Award at the 2021 Energy Conservation Grand Prize.

Winning award for our Super Wall construction method (Japanese only) >

Marugoto DannetsuReform

Developing Energy- and Water-Saving Faucets

・Navish Hands-Free faucet (with Eco Sensor) (INAX brand)

This touchless kitchen faucet with a built-in water purifier can be turned on or off using two sensors for filtered water or tap water. It conserves energy and water through its touchless feature using an automatic sensor to start and stop water flow, and the Eco Sensor feature separates the use of hot and cold water that prevents the inadvertent use of hot water, allowing users to save energy by about 37%^* and water by about 30%^* compared to conventional faucets.

Navish Hands-Freefaucet

* Please refer to the product webpage for more details on product features (Japanese only, a new page will open) >
Our water- and energy-saving products (Japanese only, a new page will open) >

・GROHE EcoJoy (GROHE brand)

The GROHE EcoJoy technology saves water and energy and is available in almost all of our shower products across different types and price ranges. The integrated flow limiter in the shower head automatically reduces water consumption by about 50%.

GROHE EcoJoy (A new page will open) ＞

GROHE EcoJoy

Climate Adaptation Solutions

・External Style Shade sun blinds (TOSTEM brand)

It blocks approximately 80% of the sun’s heat on the outside and reduce indoor temperature by as much as 3.5ºC,^* cutting energy use for air conditioning and preventing indoor heatstroke.

* Please refer to the product webpage for more details on product features (Japanese only, a new page will open) >
Our products for climate adaptation (Japanese only, a new page will open) >

Style Shade

・Residential Window Shutter (TOSTEM brand)

This shutter provides protection and mitigates damage from natural disasters. It prevents window glass breakage and the scattering of shattered glass during typhoons, and reduces the risk of roofs being blown off by strong winds indoors.

Our products for disaster risk reduction (Japanese only, a new page will open) >

Residential Window Shutter

ESG Data

Please visit the following links for the scope and details of our environmental data.

more >

Impact

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