Mitigating and Adapting to Climate Change

The Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) states that “it is unequivocal that human influence has warmed the atmosphere, ocean and land.” In 2023, parts of the world experienced heatwaves, leading to the highest average summer temperatures ever recorded globally, a phenomenon that was described as “The era of global boiling has arrived.” With countries declaring their intentions to achieve net-zero CO₂ emissions and carbon neutrality, the movement driving society’s transition to a decarbonized society is gaining momentum, which certainly indicates that the initiatives of individual companies to reduce greenhouse gases are growing increasingly important.
The Kubota Group sees “Mitigating and Adapting to Climate Change” as one of its materiality and is committed to the challenge of achieving carbon neutrality by 2050. It has been advancing initiatives toward the “mitigation” of climate change by reducing greenhouse gas emissions mainly through energy-saving activities and the introduction of renewable energy sources and “adaptation” to be prepared for the impact of climate change.

Activities towards achieving SDGs
Long-Term Environmental Conservation Targets 2030 and the Results
Medium-Term Environmental Conservation Targets and the Results
Mitigation of Climate Change
Adaptation to Climate Change

Activities towards achieving SDGs

Related SDGs and targets
Major Activity Content	Promotion of manufacturing which can lead to the mitigation of climate changes, adaptation to them, and reduction of their impacts Improvement of energy usage efficiency, such as through energy saving and conservation Promotion of measures to reduce energy waste and losses, focusing on JIT and automation Expansion of the use of renewable energy, etc.
2030/2025 Activity Targets (KPIs)	Long-Term Environmental Conservation Targets 2030： CO₂ emissions from the Kubota Group: 50% reduction compared to the base year 2014 Medium-Term Environmental Conservation Targets 2025： CO₂ emissions per unit of production at global production sites: 45% improvement compared to the base year 2014 Ratio of renewable energy usage at global production sites: 20% or more Energy consumption per unit of production at global production sites: 35% improvement compared to the base year 2014

Details of Related SDG Targets (PDF)

Long-Term Environmental Conservation Targets 2030 and the Results

2030 Targets	Reduce CO₂ emissions from the Kubota Group^* by 50% compared to the base year 2014.
Result	In FY2023, CO₂ emissions of the Kubota Group^* were reduced by 28.0% compared to the base year FY2014.

CO₂ emissions refer to Scope 1 and 2 emissions from all Kubota Group sites (100%) and include greenhouse gases from non-energy sources

Medium-Term Environmental Conservation Targets and the Results

Actions items	Management Indicators^*2	Base FY	Targets for FY2025^*4	Targets FY2030^*4	FY2023 Results
Reduce CO₂^*1	CO₂ emissions per unit of production (Scopes 1, 2)	2014	▲45%	▲60%	▲46.6%
Reduce CO₂^*1	Ratio of renewable energy usage^*3	—	20% or more	60% or more	15.9%
Save energy	Energy consumption per unit of production	2014	▲35%	▲40%	▲37.8%

*1.CO₂ emissions indicate 90.6% of base-year Scope 1 and 2 emissions and include greenhouse gases from non-energy sources. We use the emissions coefficient for electric power of the base year in our calculation of CO₂ emissions from energy sources.
*2.The figures per unit of production represent the intensity of the environmental load per unit of money amount of production. The exchange rate for FY2014 is used when translating the money amount of production of overseas sites into Japanese yen.
*3.The applicable boundary is global sites.
*4.▲ indicates a negative figure.

Mitigation of Climate Change

1.CO₂ Emissions (Scope 1 and Scope 2)

In FY2023, CO₂ emissions were 560 kilotons CO₂e, a decrease of 4.3% compared to the previous year. On the other hand, CO₂ emissions per unit of sales improved by 15.2% compared to the previous year.
CO₂ emissions decreased due to implementation of reduction measures and reduced production at casting production sites, despite worsening emission factors associated with electricity usage.
Emissions per unit of sales improved due to an increase in consolidated sales and by promoting CO₂ reduction measures such as expanding the use of renewable energy, promoting energy conservation activities, and installing high-efficiency equipment.

Trends in CO₂ Emissions^*1 and Emissions Per Unit of Sales

*1. The CO₂ emissions for companies acquired or sold that have a significant impact on the Group’s overall CO₂ emissions have been retroactively adjusted to before the acquisition or sale. The adjusted values are: 778 kilotons CO₂e in FY2014, 739 kilotons CO₂e in FY2015, 700 kilotons CO₂e in FY2016, 688 kilotons CO₂e in FY2017, 693 kilotons CO₂e in FY2018, 672 kilotons CO₂e in FY2019, 614 kilotons CO₂e in FY2020, 660 kilotons CO₂e in FY2021, and 595 kilotons CO₂e in FY2022. In FY2023 we had no acquisitions or sales subject to adjustments.
*2. CO₂ emissions (560 kilotons CO₂e) include portions of CO₂ that were not released into the atmosphere but absorbed as carbon into products such as iron pipe (14 kilotons CO₂e).
*3. CO₂ emissions refer to Scope 1 and 2 emissions from all Kubota Group sites (100%) and include greenhouse gases from non-energy sources.
*4. CO₂ emissions per unit of consolidated net sales. The Kubota Group adopted International Financial Reporting Standards (IFRS) instead of accounting principles generally accepted in the United States of America from FY2018.

2. Measures to Reduce CO₂ Emissions

The Kubota Group has established the Medium- and Long-Term Environmental Conservation Targets (p.26-28) and is devoting efforts to reducing CO₂ emissions and energy use associated with its business activities.
We have also established medium-term reduction measure implementation plans, which are reviewed every year by each production site. When we review the plans, we have introduced Internal Carbon Pricing* to calculate their effect on reducing CO₂ emissions and energy consumption, as well as the investment cost for the amount of CO₂ reduced, in the capital expenditure plans. The effectiveness and economical rationality of each project are identified from an environmental standpoint and used as information for making investment decisions.
We have implemented some of the specific reduction measures that include a switch to equipment with higher-energy efficiency, eliminating loss in energy consumption through proper operation management, and promoting the visualization of power consumption in each process. At the same time, we have expanded the use of LED lighting at all our global sites—as of end-FY2023 the ratio of LEDs as a percentage of all lights at production sites had increased to 90.4%. In FY2023, we implemented company-wide air-conditioner energy-saving measures.
We are also accelerating the introduction of renewable energy. In FY2023, solar power generation systems were expanded or newly installed at the Kubota Sakai Rinkai Plant (Japan), Siam Kubota Corporation Co., Ltd. (Thailand), Kubota Engine (Thailand) Co., Ltd., Kverneland Group Soest GmbH (Germany), Kverneland Group Ravenna S.r.l. (Italy), and elsewhere. This brought the renewable energy consumption of the entire Group to 132,287 MWh (roughly equivalent to a 69,614-ton reduction in CO₂ emissions). The renewable energy usage ratio in 2023 was 15.9% , versus the 2025 target of 20%.
As a result of the efforts toward achieving the Medium-Term Environmental Conservation Targets 2025 for CO₂ reduction, global production sites achieved a reduction of 9.9 kilotons CO₂e in FY2023 compared with the case where countermeasures were not implemented from the previous year. The economic effects of these measures reached 260 million yen compared to the previous year. CO₂ emissions per unit of production in FY2023 improved by 46.6% compared to the base year (FY2014).
We will continue to implement measures to save energy on production equipment and air-conditioning/lighting, as well as promote measures to reduce waste and loss in the use of energy based on the concept of the Kubota Production System (KPS) and expand the use of renewable energy.

Refers to the placing of an internal monetary value on carbon by an organization

Solar panels capable of generating 1,566 kW of power were installed at the Kubota Global Institute of Technology (Japan), a facility that opened in September 2022.

CO₂ Emissions by Region
CO₂ Emissions by Business

*1.CO₂ emissions generated from the production of products such as agricultural machinery, construction machinery, and engines.
*2.CO₂ emissions generated from the production of products such as ductile iron pipes and cast steel.

CO₂ Emissions by Emission Source
- Japan
- Overseas

*1. Greenhouse gases from non-energy sources include the following: CO₂ 4.2 kilotons CO₂e, CH4 1.4 kilotons CO₂e, N2O 0.6 kilotons CO₂e, HFC 0.4 kilotons CO₂e, PFC 0 kilotons CO₂e, SF6 0.006 kilotons CO₂e, and NF3 0 kilotons CO₂e

Trends in Energy Use at Business Sites and Energy Use per Unit of Sales

*1.PJ=10¹⁵J, TJ=10¹²J
*2. Energy use per unit of consolidated net sales. The Kubota Group adopted International Financial Reporting Standards (IFRS) instead of accounting principles generally accepted in the United States of America from FY2018.

3. CO₂ Emissions throughout the Value Chain

The Kubota Group makes concerted efforts to figure out CO₂ emissions throughout the value chain in addition to its business sites. Following guidelines^*, we calculate CO₂ emissions based on Scope 3, and continue to expand the categories in the Scope of its calculation of CO₂ emissions.

Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout the Supply Chain issued by the Japanese Ministry of the Environment and Ministry of Economy, Trade and Industry

**CO₂ Emissions in Each Stage of Value Chain**
Classification				Scope of calculation	CO2 emissions (kilotons CO2e)^*3
Classification				Scope of calculation	2021	2022	2023
Emissions of the Kubota Group’s business sites	Direct emissions (Scope 1)^*1			Use of fossil fuels	303	295	277
	Direct emissions (Scope 1)^*1			Non-energy-derived greenhouse gas emissions	6	7	7
	Indirect emissions (Scope 2)^*1			Purchased electricity and heat use	304	283	276
Upstream and Downstream emissions	Other indirect emissions (Scope 3)	Category	1	Resource extraction, manufacturing and transportation related to purchased goods/services	3,732	4,104	4,191
			2	Manufacturing and transportation of capital goods such as purchased equipment	406	567	492
			3	Resource extraction, manufacturing and transportation related to purchased fuels/energy	112	111	108
			4	Upstream transportation and distribution	285	282	246
			5	Disposal of wastes discharged from business sites	31	31	28
			6	Employee business travels	11	19	28
			7	Employee commuting	10	10	17
			8	Operation of assets leased to the Kubota Group	0^*4	0^*4	0^*4
			9	Downstream transportation and distribution	0	0	0
			10	Processing of intermediate products^*2	342	346	338
			11	Use of sold products^*2	28,133	36,951	36,787
			12	End-of-life treatment of sold products	61	68	69
			13	Operation of assets leased to other entities	0^*4	0^*4	0^*4
			14	Operation of franchises	0^*4	0^*4	0^*4
			15	Investments	0^*4	0^*4	0^*4
		Total of Scope 3			33,174	42,489	42,306
Total of Scopes 1, 2, and 3					33,787	43,074	42,866

Scrollable

*1. CO₂ emissions refers to emissions from all Kubota Group sites (100%).
*2. From FY2023, the boundary of products subject to calculations was changed. This change has been applied retroactively to previous years.
*3. Totals shown may differ from the simple sum of values shown due to rounding.
*4. CO₂ emissions are indicated as zero (0) because there are no applicable activities or the impact is extremely low.

Adaptation to Climate Change

1. Measures to Adapt to Climate Change

It is likely that the progression of climate change will have a negative impact on our lives. For example, the frequent occurrence of weather disasters, changes in agricultural practices, and an increase in the number of heat stroke cases. Our response to climate change needs to include ongoing measures aimed at reducing greenhouse gas emissions, as well as policies for avoiding or reducing damage brought on by climate change.
As part of its strategy to adapt to climate change, the Kubota Group is implementing a number of initiatives at its business sites and in its products and services.

**Initiatives on Products and Services**
Category		Major initiatives
Food		Provision of tractors that are capable of deep plowing necessary for growing rice in abnormally high temperatures without lowering the quality/yield, and the provision of information useful for soil cultivation, such as the proper distribution of fertilizers appropriate for high-temperature conditions Provision of the Kubota Smart Agri System (KSAS) which uses ICT and robot technology, and high-performance machinery that lightens the workload in fields such as agriculture, where workers often labor in scorching heat Provision of information for farmers on changes in temperature, precipitation, and the amount of solar radiation, as well as the impact thereof on crops
Water	Flooding	As a measure for floods or other disasters caused by abnormal climate, provision of disaster-relief pumper vehicles, ultra-light, emergency sump pump units, rainwater storage and filtration products, and piping systems for manhole toilets, and so on Provision of ductile iron pipes with tough tube body and excellent joint performance, which are highly effective during disasters such as typhoons and torrential rainfall
	Drought	To address water shortage, the provision of management systems using IoT, which contribute to the efficient operation of water supply and sewage treatment systems and treatment plants Provision of tank-submerged-type ceramic membrane filtering equipment and submerged membranes that purify wastewater for reuse
	Management systems	Provision of the Kubota Smart Infrastructure System (KSIS), that leverages IoT technology to manage a variety of facilities, from dams to drainage locations, using weather information in collaboration with the NTT Group Provision of the WATARAS farm water management system that allows accurate water management for remote rice paddies
Living environment		Provision of diesel engines for use as generators for emergency power supply during disasters and power outages Provision of construction machinery to contribute to disaster prevention, as well as recovery and reconstruction Provision of highly efficient air-conditioning equipment that creates a clean and comfortable indoor environment, even amid abnormal weather conditions

Provision of Farm Water Management System WATARAS

WATARAS is a farm water management system that allows users to remotely and automatically control water flowing in and out of rice paddies while monitoring water levels on a smartphone or PC.
So-called “smart rice paddy dam” demonstrations are underway in which rice paddies are temporarily made to fill up with rainwater by remotely raising the drainage level setting when rivers are at risk of flooding during heavy rainfall. These “rice paddy dams” have the potential to help prevent flooding.

1 agriculture.kubota.co.jp/product/kanren/wataras/(only in Japanese)

Overview of WATARAS-managed “smart rice paddy dam”

■ Initiatives taken at Business Sites

Typhoons and pouring rain can affect production equipment and distribution. We have formulated BCP measures and disaster response manuals and we continue to take steps to prevent any holdups or delays in business activity even during weather disasters. Alongside seismic retrofitting, our BCP measures include steps taken to minimize the impact of torrential downpours on buildings and the protection of power supply equipment from flooding. To be prepared for high tides and torrential rain, the sites have also installed sump pumps, hold emergency drills, and are equipped with water tanks for use during water shortages.