LIXIL announced the endorsement of the Task Force on Climate-related Financial Disclosures (TCFD) in March 2019. Later, in January 2024, we announced our registration* as a TNFD Early Adopter and our adoption of the Task Force on Nature-related Financial Disclosures (TNFD) recommended framework in our disclosures.

Accordingly, starting with reporting for FYE2024, we have linked information on nature-related issues—previously included within disclosures on environmental issues such as climate change—and integrated these disclosures into a comprehensive report on environmental issues, including climate change, natural capital, and biodiversity, based on the recommendations of both the TCFD and TNFD. The report is issued as the “Disclosure Report in Response to TCFD and TNFD Recommendations.”

LIXIL Environmental Vision 2050 established Climate Change, Water Sustainability, and Circular Economy as focus areas to realize our vision. We also prioritize Conservation of Biodiversity as a material issue, which serves as a common foundation for these three focus areas.
Upon receiving reports on these initiatives, the Board of Executive Officers and the Board of Directors approve and oversee them, advancing the integration of environmental strategy into our business strategy.

* Registered in December 2023

Executive Summary:

1．Governance

The Board of Directors discusses and oversees the targets, action plans, progress status, and other matters reported by the Board of Executive Officers. In addition, the Board of Directors receives regular reports from the responsible departments and oversees the progress of sustainability initiatives related to climate change, loss of natural capital and biodiversity, and other environmental issues. The Board of Directors also reviews and approves the validity and feasibility of our environmental strategies to address these issues and continuously ensures its alignment with the overall management strategy.
Through deliberations and resolutions by the Board of Executive Officers and oversight by the Board of Directors, the Chief Executive Officer bears ultimate responsibility for management decisions related to environmental issues, including risks and opportunities associated with climate change, natural capital, and biodiversity.

Environmental Management System>
Governance Structure>

Recognizing the link between human rights and environmental issues, including natural capital and biodiversity loss, the LIXIL Human Rights Principles assert our commitment to conducting business activities with a fundamental respect for human rights.
Guided by these principles, we work to uphold the human rights of all our stakeholders: our customers, suppliers and other business partners, residents living near our factories and offices, and our employees.

Human Rights＞
LIXIL Human Rights Principles (Opens new window) PDF: 612KB＞
Stakeholder Engagement＞

2．Strategy

Climate Change Scenario Analysis

We conducted scenario analysis to identify the risks and opportunities related to climate change across our value chain, which could have particular significance to our business and society. We identified transition risks stemming from policy and regulatory changes and market shifts, as well as physical risks associated with extreme weather events, and assessed their financial impacts for both 1.5°C and 4°C scenarios. We recognize that the consequences of climate change are closely interconnected with other environmental issues, such as water sustainability, resource circularity, and biodiversity, and we are proactively working to address them.

Assessment of Natural Capital and Biodiversity based on the LEAP Approach

We conducted an assessment based on the LEAP approach recommended by the TNFD to identify dependencies, impacts, risks, and opportunities related to natural capital and biodiversity across our value chain.
With the scope encompassing both upstream and direct operations within the value chain, the assessment covered over 90% by volume of our raw materials identified on the High Impact Commodity List (HICL). Beyond analyses using general assessment tools, we conducted our own quantitative assessments based on our proprietary data related to the subject raw materials and water. As a result, we confirmed that our responses to nature-related risks and opportunities are highly aligned with our climate change initiatives.

Strategic Response

Key risks and opportunities identified through scenario analysis in line with the TCFD recommendations and the LEAP approach recommended by TNFD, along with our strategies to respond to these challenges, are shown in the tables below: Strategic Response to Risks and Opportunities

Climate Change＞
Water Sustainability＞
Circular Economy＞

3．Risk and Impact Management

We identify significant climate-, natural capital-, and biodiversity-related risks and opportunities, and assess their impact on our business under the direction of the Environmental Strategy Council. We evaluate the significance of each business risk and develop, implement, and monitor countermeasures at all levels of the organization to continuously improve measures and mitigate these risks.

Business Risks＞
Risk Management＞

4．Metrics and Targets

We set metrics to evaluate and manage climate- and nature-related dependencies, impacts, risks, and opportunities, and monitor our progress. Additionally, as mid-term targets to achieve the LIXIL Environmental Vision 2050, we have set metrics for climate- and nature-related risks and opportunities, and disclose our progress towards such targets.

Targets and Progress＞
ESG Data＞

Strategic Response to Risks and Opportunities