Basic approach and policy

Climate change and the degradation of natural capital pose various risks, such as reduced yield and quality of natural raw materials and tightening of related regulations. On the other hand, we also recognize numerous business opportunities, including increased demand for flavors used in alternative foods driven by rising environmental and health awareness, growing demand for environmentally friendly products such as plastic-reduction solutions, and enhanced reputation stemming from the Group’s sustainability initiatives.
In response to these anticipated environmental changes, the Group aims to help solve global challenges that are not limited to flavors and fragrances, by leveraging a wide range of technologies to create new value and inspiration, contributing to richer and more fulfilling lives.
The Group views climate change both as a medium-to-long-term risk to management and as an important opportunity for sustainable business growth. Therefore, the Group has established GHG emission reduction targets based on scientific evidence, which were validated by the Science Based Targets initiative (SBTi) on September 17, 2025. Going forward, the entire Group will advance initiatives to reduce GHG emissions throughout the value chain.

Governance and risk management

Governance

Climate-related risks and opportunities are managed within the Group’s sustainability promotion system. The CEO is responsible for sustainability matters, including climate change.
For more details, please refer to “Sustainability Promotion System”.

Risk management system

The Group has established a Risk Management Committee, chaired by the CEO, as a cross-functional body to analyze, manage, and consider responses to various risks. We identify and assess climate-related risks and opportunities that may affect the Group’s business. The results of these analyses are reported to the Risk Management Committee and the Board of Directors, alongside other risk categories.
For more details, please refer to “Risk Management”

Strategies

Scenario analysis

The Group discloses this information based on existing climate risk analysis in line with the Task Force on Climate-Related Financial Disclosures (TCFD).
For more details, please see “TCFD and TNFD Disclosure of T.HASEGAWA Group (PDF)”

Response to climate change through various initiatives

The T.HASEGAWA Group supports the goals of the Paris Agreement and those set by the Japanese government and endorses organizations that promote action on climate change. We participate in and express our support for various climate-related initiatives and industry groups, including the TCFD.
The Japan Flavor and Fragrance Materials Association, to which we belong, is a member of the International Fragrance Association (IFRA), and we are also a member of the International Organization of the Flavor Industry (IOFI). Through direct involvement and participation in the activities of the Japan Flavor and Fragrance Materials Association, we contribute to sustainability-related initiatives, including efforts to ensure the safety of flavors and fragrances.
IFRA and IOFI share the common belief that embedding sustainability into corporate business strategies is essential for long-term prosperity and a sustainable future. This belief is formalized in their Sustainability Charter. We have prioritized sustainability and have been continuously implementing relevant initiatives. To demonstrate our commitment at a higher level, we signed the above Sustainability Charter on March 31, 2020.
We are working to reduce our environmental footprint, including GHG emissions, and to address climate change in pursuit of a sustainable society.
As a member of these industry associations, we regularly review their climate-related policies. If any such policy were to significantly deviate from the goals of carbon neutrality, such as those outlined in the Paris Agreement, or from the Group’s own climate policy, we would engage in dialogue with the association and request that the policy be revised.

Indicators and targets

Based on scientific evidence, the Group has established GHG emission reduction targets, which were validated by the SBTi.

Our initiatives to reduce GHG emissions in line with the SBT

SBT validation

The Group identifies climate change both as a medium-to-long-term risk to management and as an important opportunity for sustainable business growth. To date, we have been working to reduce GHG emissions by calculating GHG emissions, continuing to undergo third-party verification, and rationalizing energy consumption, among other measures. To further enhance the effectiveness of these initiatives, we have always considered it essential to promote them under internationally aligned targets.
With this awareness, the Group established GHG emission reduction targets based on scientific evidence and submitted them for validation by the Science Based Targets initiative (SBTi), which calls for companies to establish such targets. On September 17, 2025, our targets were validated by SBT, an international standard aligned with the Paris Agreement goal of holding the increase in global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit it to 1.5°C. Many companies around the world have adopted this standard. The following are the Group’s GHG emission reduction targets.

The Group’s GHG emission reduction targets

• The Group commits to reducing its GHG emissions in Scopes 1 and 2 by 58.8% by 2034, compared with the 2024 baseline.
• In Scope 3, the Group commits to ensuring that suppliers accounting for 80% of the GHG emissions from the raw materials and auxiliary materials that it procures will have set science-based targets by 2029.

Our initiatives to achieve targets (Scopes 1 and 2)

The Group is promoting the reduction of GHG emissions in Scopes 1 and 2 through the following measures:

• Promote the purchase of green power.
• Streamline formula, improve processes, etc.
• Promote the shift to more environmentally friendly fuels (switching from heavy oil to city gas, etc.).
• Explore opportunities to utilize renewable energy.
• Establish intensity targets and track their progress through the Environmental Safety Committees.

Our initiatives to achieve targets (Scope 3)

In Scope 3, we identify Category 1 (procurement) as the biggest source of GHG emissions.
Through the following measures, we will accelerate the reduction of GHG emissions in this scope.

• Collect GHG emission data from suppliers.
• Engage in dialogue with suppliers and stakeholders.
• Evaluate and select suppliers in line with climate initiatives.
• Streamline logistics and reduce waste.

Progress in FY2025

• Scopes 1 and 2
  Compared to the baseline year of FY2024, we achieved a 3.0% reduction.
  As part of our GHG emission reduction plan, we aim to achieve a 100% green power procurement rate by FY2029. In FY2025, the rate reached 29.7%. While our headquarters maintains a 100% procurement rate, we will gradually increase the percentage at the R&D Center, Fukaya Facility, and Itakura Facility and expand this effort across the entire Group.
  In FY2025, we improved manufacturing processes, streamlined the formula, reviewed the use of steam to reduce loss, increased the efficiency of boiler operations, optimized air conditioning operating hours, updated lighting fixtures and refrigeration equipment, reviewed the operation of the wastewater treatment system, and made other improvements. As a result, we improved our energy intensity by 2.6%, achieving the target of 1.0% reduction year-on-year.

• Scope 3
  The Group has begun preparing for supplier engagement activities in line with its climate change measures. Going forward, we will continue our activities to reduce GHG emissions with the aim of achieving the SBT targets.

Third-party verification of GHG emissions

We have continued to have our GHG emissions (Scopes 1 to 3) verified by third parties: for T.HASEGAWA alone in FY2021, and from FY2022 onward, for T.HASEGAWA and its domestic consolidated subsidiary, T.HASEGAWA BUSINESS SERVICE CO., LTD. By continuing this practice, we will maintain the accuracy of our calculation method and the reliability of our data. In addition, we will work to reduce GHG emissions over the medium to long term, expanding our efforts to cover Scope 3 and our overseas group companies.
For more details, please refer to the T.HASEGAWA Group ESG Data Book (PDF).