Realize Carbon Neutrality

In response to climate change, the NTN Group aims to achieve carbon neutrality throughout its supply chain by FY2050 and has set targets for reducing Scope 1 and 2 emissions by FY2030 and FY2035. To that end, we are promoting CO₂ emission reductions in our business activities. In FY2024, we established a new working group to develop and promote measures for reducing domestic Scope 3 emissions as an initial step toward reducing CO₂ emissions across the supply chain. Domestically, we conducted interviews with suppliers to understand the current status of their CO₂ emissions. We also carried out a trial calculation of Scope 3 emissions at overseas regions and are advancing our review toward establishing a global calculation methodology. We will continue to strengthen collaboration with suppliers and others to promote activities toward achieving carbon neutrality by FY2050.

＊Note: The Company calculates and reports only energy-derived carbon dioxide (CO₂) emissions among GHG emissions.

■NTN’s carbon neutrality targets

Governance structure for promoting carbon neutrality initiatives

To promote carbon neutrality activities throughout the NTN Group, we established the Carbon Neutrality Strategy Promotion Department in April 2023, and in July of the same year, we established a company-wide Carbon Neutrality Promotion Committee as well as regional subcommittees to create a global promotion structure. The Carbon Neutrality Promotion Committee, chaired by the President, Executive Officer, meets twice a year online, connecting the Head Office with locations around the world to share best practices, deploy them globally, and encourage mutual learning. The regional subcommittees are chaired by the Executive Officers responsible for each region, and by holding regional subcommittee meetings four times a year, they examine measures and initiatives suited to the actual conditions of each region and report the results to the Carbon Neutrality Promotion Committee.

■Carbon neutrality promotion system

■Carbon Neutrality Promotion Committee

Progress management based on the carbon neutrality roadmap

The NTN Group has developed carbon neutrality roadmaps as a framework for effectively advancing its carbon neutrality initiatives. Based on these roadmaps, we closely follow the status of activities at each stage and manage progress toward our targets. The roadmaps are created by each region and each business site, showing specific measures and timelines in detail, and we are promoting initiatives toward achieving carbon neutrality through coordinated efforts across the Group. The FY2025 Scope 1 and 2 results were 434 thousand tons.

■Carbon neutrality roadmap

Reduction measures for each scope

This shows the overall picture of initiatives in each scope. We are promoting internal initiatives to reduce CO₂ emissions, including electrification, energy conservation, and the introduction of natural energy generation, while collaborating with external organizations to accelerate these efforts.

■Initiatives for each scope

CO₂ emission reduction results and initiatives

Own emissions (Scope 1 (direct emissions), Scope 2 (indirect emissions))

The FY2025 results were as follows: Scope 1: 77,935 tons (domestic: 43,749 tons, overseas: 34,186 tons), Scope 2: 355,850 tons (domestic: 167,447 tons, overseas: 188,403 tons).
Total Scope 1 and 2 emissions were 433.8 thousand tons, down approximately 62 thousand tons from 495.8 thousand tons in the previous fiscal year, reflecting the effects of carbon neutrality initiatives.
For Scope 2, domestic business sites are calculated using market-based emission factors, while overseas business sites are calculated using location-based emission factors.

■CO₂ emissions (Scope 1 and 2)

Initiative case studies

Highlight examples of CO₂ reduction initiatives.

Energy-saving measures for heat treatment equipment

To reduce CO₂ emissions from heat treatment facilities, we are promoting three measures: fuel conversion and electrification, energy conservation, and atmospheric gas control. All newly introduced heat treatment furnaces since 2017 are electric furnaces. Additionally, high-efficiency insulation materials have been introduced to minimize heat loss from the outer walls of the heat treatment furnaces, thereby reducing fuel consumption. Furthermore, we are also reducing CO₂ emissions by implementing measures to control furnace atmospheres in furnaces dedicated to conventional quenching. In FY2025, energy-saving measures for heat treatment equipment reduced CO₂ emissions by 405 tons, bringing the cumulative reduction since FY2023 to 1,537 tons. Domestic Scope 1 emissions decreased by 1,847 tons, from 45,596 tons in FY2024 to 43,749 tons in FY2025. The reduction of 405 tons achieved through energy-saving measures for heat treatment equipment was equivalent to approximately 22% of this year-on-year decrease.

■Overall picture of initiatives for heat treatment equipment (Domestic)

Energy reduction at production sites

To reduce CO₂ emissions from our operations, we are working to identify and visualize energy losses and reduce energy consumption.
The results of energy-saving measures at domestic business sites are compiled into a database, and best practices are also deployed and shared with overseas business sites. Going forward, we will enable overseas business sites to also register in the database, promoting bidirectional information sharing.
Additionally, since FY2023, we have introduced internal carbon pricing as an investment decision indicator for new capital investments, promoting low-carbon management.

■Examples of Energy Reduction Measures

Introduction of On-site Natural Energy Generation and Promotion of Renewable Energy Procurement

Track record

The NTN Group is introducing on-site natural energy generation systems for self-consumption at business sites using various schemes (PPA, lease, self-investment) to reduce CO₂ emissions (Scope 2). We are also actively promoting the procurement of carbon-offset electricity through renewable energy and carbon credits. In FY2025, we reduced CO₂ emissions by 47,393 tons domestically and 9,134 tons overseas. Furthermore, wind power virtual PPA has been in operation since May 2025, contributing to a reduction of 2,481 tons of CO₂ emissions in FY2025.

■Natural energy generation results (FY2025)

Region	Generation (kWh)	CO2 reduction (tons-CO2)
Domestic	5,659,121	2,335
Mexico	1,060,818	390
Thailand	9,749,171	4,691
India	18,630	14
China	6,861,136	4,039
Total	23,348,876	11,469

■Renewable energy procurement results (FY2025)

Region	Procurement (kWh)	CO2 reduction (tons-CO2)
Domestic	109,033,681	45,058
Total	109,033,681	45,058

■Allocation of Non-fossil Certificates under the Wind Virtual PPA (FY2025, Japan)

Business Site	Non-fossil Certificate Allocation (kWh)	CO2 Emissions Reduction (tons-CO2)
KUWANA WORKS	1,274,106	544
IWATA WORKS	2,304,308	984
OKAYAMA WORKS	1,745,529	746
NAGANO WORKS	207,251	88
WAKAYAMA WORKS	41,816	18
MIKUMO WORKS	167,935	72
ENGINEERING PLASTICS WORKS	67,000	29
Total	5,807,945	2,481

＊Equivalent CO₂ emissions reductions are calculated by multiplying the amount of non-fossil certificates allocated (kWh) by the national average emission factor and the FIT adjustment factor.

Initiatives

In addition to promoting carbon neutrality, we are advancing the utilization of natural energy in business activities to reduce electricity procurement costs, and are expanding the introduction of solar power generation at domestic and overseas business sites. In Japan, we are promoting the introduction of solar power generation utilizing PPA. In FY2025, power generation commenced at NTN KINAN CORP. in February 2026, and decisions were also made to install solar power generation equipment at OKAYAMA WORKS and NAGANO WORKS. Solar power generation equipment was also installed at business sites in China and the ASEAN region (Thailand). CO₂-free electricity continued to be introduced in FY2025 at all production sites except one (which purchases non-fossil certificates from the market).

■Promotion of Natural Energy Generation and Procurement of CO₂-free Electricity

Examples of solar power introduction sites

NTN KINAN CORP. Plant No. 3 (from February 2026)

Supply chain CO₂ emissions (Scope 3)

The NTN Group aims to achieve carbon neutrality, including supply chain emissions (Scope 3), by FY2050. Domestic business sites calculate Scope 3 emissions using input-output tables and emission factors from IDEA (Inventory Database for Environmental Analysis). To promote CO₂ reduction across the supply chain, we have newly established a working group responsible for planning and implementing reduction measures, and are actively advancing related initiatives. Among all Scope 3 categories, Category 1: “Purchased goods and services” accounts for the largest share of emissions. The majority of these emissions stem from the procurement of raw materials such as steel and semi-finished products, including forgings and machined components. To understand the current situation, we conducted interviews with suppliers and carried out a global trial calculation based on the calculation methodology used in Japan. Based on these results, we will establish a global Scope 3 calculation methodology and advance the development of a carbon neutrality roadmap that includes Scope 3.

■Supply chain emissions (Scope 3) [Domestic]

Collaborating with suppliers and enhancing logistics efficiency

We share the background and targets of our carbon neutrality initiatives with suppliers through opportunities such as ESG briefing sessions where we explain our business policies, while also introducing energy conservation practices and advancing collaboration-oriented activities. In addition, we are gathering information and conducting reviews for the future procurement of steel materials produced using CO₂-free electricity, and are working to reduce CO₂ emissions during product transportation by enhancing logistics efficiency, including reducing transportation distances through optimization of logistics routes.

■Collaborating with suppliers and enhancing logistics efficiency

Participation in the GX League

The domestic NTN Group has participated in the “GX League” led by the Ministry of Economy, Trade and Industry since its initial phase, and in FY2024 joined as a member of the “GX Human Resources Market Creation WG,” one of the frameworks under the League. In this WG, discussions were held on expanding the GX Skills Standard Ver. 1 formulated in FY2023 and on resolving challenges in advancing GX through the utilization of skills standards. Subsequently, the “GX League” concluded its activities at the end of FY2025, and from April 2026, its successor, the “GX Future Consortium,” was established, with the “GX Future League” newly formed as a sub-framework. NTN will continue to participate in both the Consortium and the League, leveraging knowledge and networks gained through past activities to contribute to the promotion of GX across society through public-private and inter-company collaboration, while working to simultaneously achieve a sustainable society and enhance corporate value.

Sustainability-linked loan

To accelerate our efforts towards achieving a sustainable society through financing linked to sustainability activities, we signed a sustainability-linked loan agreement with Norinchukin Bank in October 2023. With the support of Norinchukin Bank, we formulated a sustainability-linked finance framework that sets out the Sustainability Performance Targets (SPTs) linked to loan conditions, applicable interest rates, reporting requirements, and other related provisions. Under this Framework, the achievement status of the interim targets toward realizing our Group’s decarbonization goal —“Achieve carbon neutrality by FY2035 (and by FY2050, including the supply chain)” — has been established as SPTs, and we will accelerate our efforts to reduce CO₂ emissions in pursuit of achieving these SPTs. In FY2025, we recorded six borrowings totaling approximately 9 billion yen.

Internal education

The participation of all employees is essential in advancing carbon neutrality activities. To further deepen employees’ understanding and engagement, we provide internal education on carbon neutrality. Utilizing our internal e-learning system, we have launched courses to deepen understanding of fundamental knowledge on carbon neutrality and our company’s initiatives. For production sites where the e-learning system is not available, materials covering the same content are distributed to promote ongoing education and understanding at each site. In addition, we regularly distribute Carbon Neutrality News covering carbon neutrality topics familiar to employees in their daily lives, helping to deepen understanding and awareness. The news is prepared in both Japanese and English versions and distributed to overseas business sites as well, where it is effectively utilized through translation into local languages for local employees.

Third-party assurance on CO₂ emissions

Third-party assurance was obtained from BSI Group Japan K.K. for FY2025 CO₂ emissions, confirming that Scope 1 and 2 emissions and Scope 3 Categories 1, 2, 3, and 4 were free from material misstatement.

■Independent Assurance Statement

Independent Assurance Statement （PDF: 651KB）