TCFD and TNFD Index

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Climate and nature-related risk management and responses to TCFD and TNFD

Bridgestone supports the Task Force on Climate-related Financial Disclosures (TCFD). It has been participating in the Taskforce on Nature-related Financial Disclosures (TNFD) Forum since March 2022.

As the world becomes increasingly concerned about climate change and the loss of natural capital, there is a growing movement towards a decarbonized society, as exemplified by the Paris Agreement. Additionally, efforts to achieve a nature positive* world, as outlined in the Kunming-Montreal Global Biodiversity Framework, are gaining momentum. Within this context, Bridgestone is working to comprehensively assess and manage its dependency and impact on the climate and natural capital, as well as the risks and opportunities associated with climate change and the loss of natural capital, reflecting these in business strategy.

Based on recognition of these risks and opportunities, Bridgestone is striving to build the foundation for sustainable value creation by enhancing its unique sustainability business model. The business model integrates Bridgestone's efforts to realize carbon neutrality and a circular economy across the entire value chain from "produce and sell" and "use" of products to "renew" to raw materials. Also, Bridgestone aims to evolve this model towards a more circular and regenerative approach in order to contribute to the realization of a nature-positive world.

* Nature positive: The term "nature positive" refers to action for stopping or reversing losses to biodiversity and natural capital with the goal of spurring the recovery of the natural environment. It is used to highlight transitions to social and economic activities aimed at reducing the impact of businesses on biodiversity and natural capital, preserving and restoring natural bounties, and using natural capital in a sustainable manner.

Status of adoption of TCFD and TNFD recommended disclosures

Bridgestone has become an Early Adopter of the TNFD and started disclosing in line with the TNFD Recommendations in October 2023.

Bridgestone’s response status in accordance with recommended disclosures on final recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) and the Taskforce on Nature-related Financial Disclosure (TNFD) version 1.0, is as follows. The index is also covered on Bridgestone’s Annual Securities Report (106th Fiscal Period).

Governance

Recommended disclosures Status of Bridgestone’s Response Link
TCFD TNFD
Board of Directors’ oversight of dependencies, impacts, risks and opportunities
  • The Board of Directors receive and review regular reports on the status of sustainability initiatives, including achieving carbon neutrality, realizing a circular economy and promoting a nature-positive world.
Management’s role in assessing and managing dependencies, impacts, risks and opportunities
  • The Global EXCO, the highest level of corporate management, approves and manages the progress of mid-long term strategies, targets and action plans, including achieving carbon neutrality, realizing a circular economy and promoting a nature-positive world.
Human rights policies and engagement activities, and oversight by the Board of Directors and management, with respect to indigenous peoples, local communities, affected and other stakeholders

(TNFD recommended disclosure)

  • The Global Human Rights Policy and the Global Sustainable Procurement Policy of Bridgestone’s articulate its strong commitment to respect and support internationally recognized human rights principles such as the UN Guiding Principles for Business and Human Rights. The Global Sustainable Procurement Policy contains minimum requirements for suppliers to acquire or use land only by legal means in accordance with UN Declaration on the Rights of Indigenous Peoples, and to follow Free, Prior, and Informed Consent (FPIC) principles when acquiring land and assessing any forest development or creating forest management plans. Bridgestone promotes the implementation of these policies within the Group, with suppliers, and across the supply chain.
  • Bridgestone collaborates with the World Wildlife Fund (WWF) to study and develop a due diligence process for ensuring the company’s supply chain is in compliance with the Global Sustainable Procurement Policy. On-site ESG audits are conducted for suppliers, including natural rubber smallholders, using a self-assessment questionnaire developed in conjunction with WWF, and risks are evaluated. This questionnaire includes inquires on the FPIC.
  • Bridgestone establishes a grievance mechanism for the natural rubber supply chain and publicly discloses the standard operating procedure and status of each grievance. It uses the grievance mechanism, among others, to monitor any potential/actual issues related to indigenous peoples and local communities’ rights in its supply chain.
  • The Global EXCO approves and manages action plans and progress for sustainability, including respect for human rights, which are reviewed by the Board of Directors.

Strategy

Recommended disclosures Status of Bridgestone’s Response Link
TCFD TNFD
Dependencies, impacts, risks and opportunities over the short-, medium-, and long-term
  • Bridgestone comprehensively assesses and manages its dependency and impact on the climate and natural capital, as well as the risks and opportunities associated with climate change and the loss of natural capital. Dependencies, impacts, risks and opportunities have been identified as follows.
  • Important risks and opportunities are incorporated into the management strategy and Mid Term Business Plan in working to establish a unique Sustainability Business Model that links our business with achieving carbon neutrality across the entire value chain, realizing a circular economy, and promoting a nature-positive world.

Dependencies on climate and natural capital*

  • Dependency on nature’s provision of water and biomass in the raw material procurement stage as well as climate and healthy soil maintenance and regulating services provided by ecosystems.
  • Dependency on nature’s provision of water in the tire production stage.

Impacts on climate and natural capital*

  • Impact of land use in the raw material procurement stage.
  • Impact of water resource usage and waste generation in the tire production stage.
  • Impact of greenhouse gas emissions, water resource usage, emissions to air, water and soil and waste generation throughout the value chain.

Physical risks and opportunities related to climate change and loss of natural capital

  • Risks of stronger typhoons and increased frequency of flooding and drought, which pose the risk of interrupting business activities.
  • Risks related to the procurement of raw materials as a result of changing rainfall patterns leading to poor harvesting of natural rubber.
  • Risk of lower demand for winter tires due to reduced snowfalls.
  • Opportunities to commercialize natural rubber derived from guayule, which grows in arid regions. Risks due to poor harvesting of natural rubber derived from Para rubber trees, which are found predominantly in tropical regions.

Risks and opportunities related to the transition to a decarbonized society and a society in harmony with nature

  • Risks of adverse effects on operating results and financial position, such as limitations on business activities and increased costs, if R&D expenses required to meet the rapidly changing needs of society and customers do not produce sufficient results when systems and regulations to combat climate change and loss of natural capital are introduced (for example, carbon taxes, CO2 emission reduction obligations and emissions trading systems, and systems and regulations related to low-fuel consumption performance of tires, recycling used tires, water withdrawal and sustainable natural rubber, etc.).
  • Opportunities associated with changes in competitive factors due to changes in mobility needs (for example, increased demand for tires for electric vehicles, increased demand for tires and solutions that help customers reduce CO2 emissions).
  • Opportunities to commercialize the recycling business resulting from increased regulation around the recycling of used tires.

* This refers to the main areas of dependency and impact throughout the value chain of the tire business that were evaluated as either “very high” or “high” in importance by the UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC) and industrial groups using ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure).

Impact on business model, value chain, strategy, and financial planning
Resilience of the organization’s strategy, taking into consideration different scenarios
  • Bridgestone assesses risks and opportunities based on multiple climate- and nature-related scenarios. It has already begun to address those important risks and opportunities identified and will continue to do so on a regular basis.
Locations applicable to direct operations, upstream and downstream
  • Locations with high integrity ecosystems and/or areas of decline in integrity
  • Areas where biodiversity is of high importance
  • Water stress areas
  • Areas where the organization is likely to have significant potential dependencies and/or impacts

(TNFD recommended disclosure)

  • Expand CO2 absorption and fixation through afforestation of degraded land
  • Bridgestone regularly evaluates production sites located in water stress areas with a risk of declining water resources in terms of quantity and quality. A water stewardship plan based on the water situation in each location has been formulated and is being implemented at all 17 production sites located in water stress areas as of end of 2024.

Management of risks and opportunities

Recommended disclosures Status of the Bridgestone’s Response Link
TCFD TNFD
Process for identifying, assessing, and prioritizing dependencies, impacts, risks and opportunities in direct operations and upstream and downstream value chain
  • Bridgestone strives to comprehensively and appropriately identify and address risks and opportunities across its operation while considering the business scale and characteristics of each Group company. Bridgestone identifies risks and opportunities associated with climate and natural capital by considering dependency and impact throughout the value chain based on evaluations from ENCORE by UNEP-WCMC and others and the Business & Biodiversity Interrelationship Map® released by Japan Business Initiative for Biodiversity (JBIB).
  • In terms of business strategy risks and opportunities directly related to the execution of the Mid-Long Term Business Strategy, since 2022, Bridgestone has established the Global Management Risk Committee (GMRC) chaired by Global ERM Leader, consisting of EAST and WEST CEOs, Group presidents, and global function leaders, as well as others with relevant expertise within the organization. In addition, global and regional enterprise risk management leaders and professionals attend meetings to provide programmatic updates and ensure the overall global alignment and maturity of the program.
  • The GMRC bi-annually identifies and evaluates the most critical global management risks, and meets periodically to formulate appropriate response strategies, and thereby verifies their effectiveness. Under GMRC, Bridgestone has established global working groups for the priority global management risks, facilitating cross-organizational risk responses. The outcomes of these discussions and monitoring activities are reported to G-EXCO and further to the Board of Directors.
Management process
Integration into and informing the organization’s overall risk management

Metrics and Targets

Recommended disclosures Status of Bridgestone’s Response Link
TCFD TNFD
Metrics used in the assessment and management of risks and opportunities
  • Establishing targets and regularly monitoring CO2 emissions (CO2 emissions reduction in Scopes 1, 2, and 3, and the reduction contribution of CO2 emissions throughout the lifecycle and value chain of Bridgestone’s products and services) as one of the metrics for assessing and managing climate-related risks and opportunities.
  • Bridgestone evaluates the cost of CO2 emission (US$100/tCO2) and the effect of reductions based on internal carbon pricing in order to assess the risks and opportunities associated with an investment.
  • Bridgestone sets water withdrawal in water stress areas, environmental footprint (amount of hazardous/non-hazardous waste and landfill, VOC emissions, SOx/NOx emissions), size of habitat management area, and number of supported natural rubber smallholders as metrics in the assessment and management of nature-related risks, opportunities and impacts and regularly monitors status.
Metrics used in the assessment and management of dependencies and impacts
Targets and performance in metrics used in the management of dependencies, impacts, risks and opportunities
  • Setting long term environmental vision (2050 and beyond) and mid- term target (2030) to achieve carbon neutrality, realize a circular economy and promote nature-positive world; evaluating and disclosing performance every year.
  • Setting targets toward 2030 to reduce our absolute CO2 emissions (Scope 1 and 2) by 50% compared with 2011 levels, contribute to global CO2 emissions reductions across the lifecycles and value chain (Scope 3) of the Bridgestone’s products and services exceeding five times our operation’s CO2 emissions (Scope 1 and 2) compared with 2020 levels, increase ratio of recycled and renewable material to 40%, and promote water stewardship plans to reduce water risks at production bases in water-stressed areas.
  • Setting target of supporting 12,000 natural rubber smallholders by 2026 in seeking to curb deforestation
  • The main results for targets toward 2030 are as follows.
Priority items to be addressed Metrics 2023
results
2024
results
2030
targets
Establishment and evolution of the Sustainability Business Model Develop readiness toward carbon neutrality Ratio of absolute CO2 emissions reduction (Scopes 1 and 2) compared with 2011 levels 57% 62% 50%
Expand circular economy business activities Ratio of recycled and renewable material*1 39.6% 39.9% 40%
Activities for achieving a nature-positive world 12,000 supported natural rubber smallholders*2 5,640 11,687 (2026)
12,000
Formulate and implement a water stewardship plan at production sites located in water stress areas Completed formulating at all 17 targeted sites Being implemented at all 17 targeted sites Implemented at all targeted sites
  1. Within total material weight for tire products including tire casing for retreading
  2. Cumulative total from 2023

Transition Plans

Bridgestone’s climate and nature transition plans have been organized using the structures outlined in the Transition Plan Taskforce (TPT) disclosure framework and the discussion papers of the Taskforce on Nature-related Financial Disclosures (TNFD) discussion paper on nature transition plans published in October 2024 referring to the final recommendations and guidance of the Task Force on Climate-related Financial Disclosures (TCFD), the TPT disclosure framework, and the TNFD discussion paper.

Recommended disclosures Status of Bridgestone’s response Links
Climate transition plan Nature transition plan
Foundations Strategic ambition
  • Bridgestone has formulated a Mid Long Term Business Strategy Framework to assist in realizing its vision of continuing to provide social value and customer value as a sustainable solutions company toward 2050.
  • In alignment with the Paris Agreement, Bridgestone has established medium- to long-term climate change goals for 2026, 2030, and 2050.
Framing and scope
  • Bridgestone is promoting initiatives based on material issues it has identified in terms of both the impact its business activities have on the environment and the contribution they make to the environment throughout the product life cycle and entire value chain.
Business model, value chain, transition financing strategies
  • To create both social value and customer value through its business and achieve a win-win-win relationship for society, customers, and Bridgestone, Bridgestone is incorporating its unique Sustainability Business Model into its corporate strategy and Mid Term Business Plan (2024-2026). This model links the Company’s business with the realization of carbon neutrality, a circular economy, and promoting a nature-positive world across the entire value chain, from the “produce and sell” and “use” stages of products through to their “renewal” to raw materials.
Plan priorities
  • Bridgestone determines an order of priority based on assessment of its dependency and impact on natural capital, as well as the risks and opportunities associated with loss of natural capital.
  • To promote a nature-positive world, Bridgestone’s Mid Term Business Plan (2024-2026) focus will be on “initiatives for sustainable use of natural rubber & water resources”, which are directly related to its business.
Key assumptions and external factors
  • Bridgestone will identify climate- and nature-related dependency and impact, transition risk, and physical risks and opportunities based on comprehensive assessment of multiple climate- and nature-related scenarios.
Implementation
Strategy
Business planning and operations
  • In terms of CO2 emissions (Scope 1 and 2) reduction, Bridgestone aims to achieve stable procurement of its renewable energy through optimization of the portfolio, as well as improving productivity in conjunction with BCMA and steadily improving energy intensity. This approach is aimed to balance business growth and CO2 emissions reduction at an even higher level. In parallel, Bridgestone pursues technology development and verification to enable further reductions, enhancing its ability to meet rising societal expectations and providing ongoing value to society and customers.
  • Bridgestone seeks to improve its environmental impact based on Milestone 2030.
  • Based on its Water Stewardship Policy, by 2030 Bridgestone will create and implement specific water stewardship plans that are tailored to the local environment, focusing on production sites located in water stress areas.
  • In order to support smallholder farmers in improving productivity and preventing deforestation, Bridgestone will support small-scale natural rubber farmers with technologies and disease control know-how developed at its own farms.
Products and services
  • Bridgestone strives to increase its contribution to reducing CO2 emissions and reducing its environmental footprints on natural capital through the development and sale of fuel-efficient tires, growth of its retread tire business, use of recyclable and renewable resources, and provision of mobility solutions, including expansion of its ENLITEN, base technology for product design.
Policies and conditions
  • Bridgestone established the Bridgestone Environmental Management Policy, which incorporates the commitments made in its Environmental Mission Statement (to exist in harmony with nature, value natural resources, and reduce CO2 emissions), as well as its 2050 long-term environmental vision.
  • To assist in reducing CO2 emissions, Bridgestone introduced internal carbon pricing (ICP), which it uses to reflect the impact of CO2 reductions/increases in its investment decision-making.
  • Bridgestone is strengthening supplier engagement under its Global Sustainable Procurement Policy.
  • Bridgestone’s Global Human Rights Policy articulates its strong commitment to respect and support internationally recognized human rights principles such as the UN Guiding Principles for Business and Human Rights.
Financial planning
  • Bridgestone’s Implementation Strategy is reflected in Mid Term Business Plan (2024-2026).
Engagement Strategy Engagement with the landscape, river basin and seascape
  • For its production sites in water stress areas, Bridgestone is implementing Water Stewardship Plans tailored to local water conditions, based on its Water Stewardship Policy.
  • Bridgestone established a Capacity Building Task Force to provide training and technical support to smallholder farmers, in doing so strengthening efforts aimed at protecting forests and enhancing the productivity of small-scale natural rubber farmers.
  • In collaboration with local communities and partners, Bridgestone established The Bridgestone In Harmony with Nature – Promoting Biodiversity Program to encourage all its manufacturing facilities across the globe to promote activities to conserve biodiversity.
  • As part of its collaboration with WWF Japan and the Deloitte Tohmatsu Group on a trial analysis of the Science Based Targets for Nature (SBTs for nature), Bridgestone participated in a sustainable natural rubber project in Indonesia and confirmed the alignment of the project’s metrics, targets and countermeasures with the elements for landscape engagement targets indicated in the guidance by SBTs for nature.
Engagement with value chain
  • Under Bridgestone’s Global Sustainable Procurement Policy, suppliers are required to reduce their energy usage and GHG emissions, formulate plans for these reductions, and report on emission volume.
  • Bridgestone holds workshops on CO2 emissions reduction in order to support suppliers’ efforts in this regard.
  • Bridgestone conducts monitoring by such means as conducting surveys on CO2 emissions reduction targets and current levels of CO2 emissions.
  • Bridgestone addresses environmental stewardship practices, respect for human rights, support of fair labor practices, and increased transparency, as articulated in its Global Sustainable Procurement Policy.
  • Bridgestone’s sourcing and production activities help protect and restore the High Conservation Value (HCV) and High Carbon Stock (HCS) areas and virgin forests that are critical to addressing climate change and preserving wildlife.
Engagement with industry
  • Bridgestone is participating in the World Business Council for Sustainable Development’s (WBCSD) Tire Industry Project (TIP), a global initiative bringing together 10 leading tire companies that represent more than 60% of the world’s tire manufacturing capacity.
  • Bridgestone is participating in rubber and tire industry organizations in each region.
  • Through the Global Platform for Sustainable Natural Rubber (GPSNR), Bridgestone is working to harmonize standards to improve respect for human rights, prevent land-grabbing and deforestation, protect biodiversity and water resources, improve natural rubber yields, and increase supply chain transparency and traceability while also participating in the GPSNR’s Smallholder Representation and Capacity Building Working Group.
Engagement with government, public sector and civil society
  • Bridgestone supports the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
  • Bridgestone is a member of the Japan Climate Initiative (JCI) and the GX League in Japan.
  • Bridgestone is a participant in the Taskforce on Nature-related Financial Disclosures (TNFD) Forum.
  • Bridgestone participates in Business for Nature and the Japan Business Initiative for Biodiversity (JBIB).
Metrics and Targets Dependency and impact metrics and targets
  • Bridgestone sets a goal of supporting 12,000 natural rubber smallholders by 2026 in seeking to curb deforestation
  • To support sustainable use of water resources, Bridgestone regularly evaluates production sites located in water stress areas with a risk of declining water resources in terms of quantity and quality, including regular monitoring of water withdrawal.
  • Through its partnership with WWF Japan, Bridgestone is participating in a sustainable natural rubber project in Indonesia. It conducted a pilot study regarding a landscape engagement target of SBTs for nature, identifying metrics, confirming the baseline for each metric, setting targets and countermeasures.
Governance, business and operational, financial, and GHG metrics and targets
  • Bridgestone regularly monitors CO2 emissions (Scope 1, 2, and 3), CO2 reduction contributions, and its renewable energy (electricity) usage, obtaining third-party verification of the data to ensure its reliability.
  • Bridgestone has set long-term and mid-term environmental goals, obtaining SBT certification for its mid-term goals.
Carbon credits
  • Bridgestone does not use carbon credit purchases in pursuing its CO2 reduction targets.
Governance Board oversight and reporting
  • The Board of Directors receives and reviews regular reports on the status of sustainability initiatives, including achieving carbon neutrality, contributing to a circular economy, and progress toward being in harmony with nature.
Management roles, responsibility and accountability
  • The Global Executive Committee (Global EXCO), the highest level of corporate management, approves and manages the progress of mid-long term strategies, targets, and action plans, including achieving carbon neutrality, contributing to a circular economy, and progress toward being in harmony with nature.
Culture
  • The Bridgestone E8 Commitment defines eight values to serve as the company’s axis and vectors for value creation in relation to carbon neutrality and promoting a nature-positive world.
    • Energy: Committed to the realization of a carbon neutral mobility society.
    • Ecology: Committed to advancing sustainable tire technologies and solutions that preserve the environment for future generations
Incentives and remuneration
  • As a mid- to long-term incentive, remuneration for Board of Directors and Executive Officers includes the allocation of restricted stock as compensation for sustainability and transformation initiatives undertaken each fiscal year.
Skills, competencies and training
  • Bridgestone provides education through training and e-learning in each region.
  • In Japan, Bridgestone conducts sustainability training (e-learning and in-person training) once a year for all employees.

Sustainability