Overview of "Yamaha Motor Group Environmental Plan 2050"

Environmental Plan 2050

The expectations of international society are mounting toward those companies that proactively undertake Environmental, Social, and Governance (ESG) issues, such as the signing of the Paris Agreement on climate change, and the UN’s Sustainable Development Goals (SDGs).

Yamaha Motor has a diverse range of products that are actively used outdoors in nature, whether on land, sea, or in the air. Yamaha’s strength is creating lightweight, compact products with smaller environmental footprints, and the Company has achieved growth by providing freedom, mobility, and richness to the lives of people around the world.
Going forward, Yamaha Motor will continue aiming for achievement of a sustainable society. As a company that proactively addresses ESG issues, we established the Yamaha Motor Group Environmental Plan 2050.

In the Yamaha Motor Group Environmental Plan 2050, we set up goals to achieve by 2050, with climate change, recycling of resources, and biodiversity as priority action areas, as well as targets to achieve by 2035 as milestones.
For climate change in particular, our goal is carbon neutrality by 2050. Therefore we are accelerating efforts to reduce CO₂ emissions from our business activities and products while simultaneously striving to reduce CO₂ emissions from the whole supply chain.

Overview of the Plan

The Yamaha Motor Group aims for carbon neutrality by 2050.

Action Themes	2050 Targets		Priority Actions
Climate Change	1	Reduce CO2 emissions from products (Scope 3.cat11. 90% or higher reduction compared to 2010) *Per unit sold	Improve the fuel efficiency of the ICE* system Expand the lineup of BEV Develop power trains in respond to diversification of energy sources, such as CN fuels* ※ICE: internal combustion engine ※CN (carbon-neutral) fuel: fuels such as Hydrogen, Biofuel, and Synthetic Liquid Fuels, which are derived from renewable energy sources.
	2	Reduce CO2 emissions from business locations (Scope 1.2. Achieve carbon neutrality in 2035)	Reduction of CO2 emissions generated in operation of production (t-CO2/net sales) Reduction of CO2 emissions in logistics
Resource Recycling	3	Effective utilization of limited resources and promotion of recycling (Zero landfill waste in business activities, waste reduction: basic unit 1% / year)	3R designs and promotion of product recycling Qualitative improvement in recycling/Zero landfill/Reduction of waste generated at the manufacturing stage Promotion of the reduction of water consumption amounts based on the water stress scenario
Biodiversity	4	Strengthening of environmental conservation and biodiversity promotion activities in various countries and regions	Activities to protect the places (land, sea and air) where our products are used Activities that contribute to solving environmental issues in various countries and regions
Management	5	Management	Strengthening of compliance with environmental laws and regulations, strengthening of the control of chemicals in products Contribution to the improvement of the air pollution of various countries and regions Reduction of VOC emission through production activities Promotion of environmental activities in collaboration with suppliers Building awareness on environmental conservation through global environmental education

2050 Society

The current global population of 7.8 billion is predicted to reach 9.7 billion by 2050, increasing 2 billion over the next three decades.
Economic growth in Africa and India, among other regions, will drive the world's consumption of primary energy, increasing 1.3-fold from the current level of 14.3 billion tons to 19.2 billion tons by 2050.
Based on these predictions, it is assumed that the world will face a significant shortage of resources and energy in 2050.

In terms of the global environment, the world is moving toward decarbonization in an effort to reduce CO₂ emissions—believed to be the primary cause of global warming—shifting from fossil fuels to alternative energy sources in the use of primary energy. In light of these predictions and assumptions concerning society and our business environment in 2050, we identified long-term environmental issues.

Identification of Material Issues (Materiality)

We intend to address not just climate-related risks but also a variety of social issues in ways that embody the unique style of Yamaha. Resolving social issues is also very important for Yamaha Motor's sustainable growth, and therefore, in formulating our long-term vision and medium-term management plan, we have used the steps shown below to identify material social issues that we can resolve using our strengths.

• Addressing Materiality (Material Social Issues)

Selected Social Issues

* Text in red: climate-related issues

		Material issue areas
Importance to stakeholders	Financial crisis in important economic zones Unmanageable inflation Failure of national governance Failure of regional or global governance Inter-government conflict over regional problems Deepened social uncertainty Abuse of technological progress	Introduction of industrial processes taking into account clean technologies and efficient use of resources Heightened awareness of sustainability Promotion of economic growth based on fair work environments Reduction of waste materials Curtailment of corruption and bribery	Improved energy efficiency (including promotion of use of renewable energy) Promotion of use of inexpensive, reliable energy Promotion of safe and secure work environments Advancement of diversity and inclusion Effective use of water resources and prevention of pollution Securing of clean water resources
	Abolition of inequality Responses to multi-stakeholders Promotion of innovation (active use of global partnerships) Implementation of fair taxation Promotion of sustainable industrialization	Elimination of discrimination against women/protection of human rights Use of women's skills Strengthened disaster prevention and response Eradication of forced labor, human trafficking, and child labor Increased employment for socially vulnerable people	Prevention of pollution and damage from harmful chemical substances Strengthened measures to address climate change Sustainable use of natural resources Promotion of innovation (promotion of sustainable industrialization) Promotion of innovation (promotion of sustainable forms of consumption and production in developing countries)
	Strengthened support for emerging and developing countries	Promotion of protection and recovery of land ecosystems Provision of stable living environment Halting of deforestation Protection and recovery of marine ecosystems	Expansion of educational systems (including vocational training) Enhanced education environment in developing countries Promotion of social infrastructure development Prevention of traffic accidents Protection of small-scale agricultural and fishing industries Advancement of sustainable fishing industry Improved access to fishing areas and markets in least developed countries

Importance to Yamaha Motor

Climate-related Risks and Opportunities

Material environmental and social issues	Strengthened measures to address climate change Improved energy efficiency	Effective use of water resources and prevention of pollution Reduction of waste materials Introduction of industrial processes taking into account clean technologies and efficient use of resources Sustainable use of natural resources	Promotion of protection and recovery of land ecosystems Halting of deforestation Protection and recovery of marine ecosystems

Action Themes	Climate Change	Resource Recycling	Biodiversity
Risks	Short-term Development costs associated with addressing regulations may increase significantly, with each country and territory moving to tighten motorcycle emission standards, and the U.S. introducing more stringent CARB (California Air Resources Board) and EPA (Environmental Protection Agency) emission standards for marine engines. Medium-term A growth of demand for motorcycles triggered by economic growth in India, African countries, and other regions may increase CO2 emissions from operations, and the introduction of carbon tax may increase operational costs. Long-term Heightened environmental awareness may lead to decreased sales of products that use fossil fuels.	Short- to medium-term The worldwide drive to make the whole supply chain carbon neutral makes initiatives for carbon-free raw material procurement highly important. As the electrification of mobility accelerates globally as a response to climate change issues, scarce resources such as nickel and cobalt required for storage batteries may become shortage, and procurement costs may increase. Long-term Increased consumption of resources accompanying the economic growth of emerging nations may heighten procurement risks, including a shortage of resources and cost increase.	Short- to long-term Climate change will cause abnormal weather events, including forest fires, droughts, extreme temperature changes, storms, and snowfall, destroying the ecosystems of the oceans, mountains, and forests where our products are used.
Opportunities	Short- to medium-term Demand for motorcycles as an affordable means of transportation is growing due to economic growth in India, African countries and other places. Demand for electric models is growing, mainly in developed countries. Long-term Electric models may be widely adopted.	Short-term When it comes to the recycling of resources, demand is increasing for mobility vehicles that save resources in terms of raw materials and energy used. Medium-term Rental business and sharing services Long-term Ultra-compact mobility vehicles that are small, lightweight, and resource-saving may be incorporated into the social infrastructure.	Short- to long-term Increased awareness of the need to conserve the natural environment may trigger growth of the outdoor market where people seek and cherish interaction with nature.

Impact of CO₂ Emissions

The world produced 33.6 billion tons of CO₂ emissions in 2019. Of this amount, products accounted for just 0.07% of the total as a source of emissions and are therefore products with an extremely low environmental impact. In 2021, CO₂ emissions across the Yamaha Motor Group's entire supply chain were 151,002 t-CO₂ for Scope 1,　349,901 t-CO₂ for Scope 2,　28,488,585 t-CO₂ for Scope 3, and 28,989,488 t-CO₂ overall. Scope 3 "Category 11. Use of products sold" accounted for 80.2%, followed by "Category 1. Purchased products and services (Emissions associated with sourcing of raw materials)" at 15.9%. In setting reduction targets for CO₂ emissions, we recognize the importance of improving the fuel (electric) efficiency of our products, promoting the adoption of next-generation mobility vehicles, and using resources efficiently.

Task Force on Climate-related Financial Disclosures (TCFD) items

1. Governance

Climate change-related governance structure

The Board of Directors formulates policies on dealing with issues concerning sustainability and regularly reviews their implementation status.
With regard to issues concerning sustainability, the Board of Directors oversees the Sustainability Committee which meets three times a year, chaired by the President and Chief Executive Officer and comprising executive officers appointed by the Board of Directors.

For issues concerning sustainability, we positioned the environmental field in particular as an important area to be tackled by management, and established the Environment Committee, chaired by an executive officer in charge of environmental activities.
The Environment Committee meets three times a year to discuss policies concerning the environment (e.g., policies on how to respond to recommendations from the TCFD) and visions, formulate the Yamaha Motor Group's long-term environmental plan (Environmental Plan 2050), and conduct annual reviews of how each operating division has progressed against its targets. It reports its findings to the Board of Directors at least twice a year.

To increase progress towards carbon neutrality, along with a review of the Environmental Plan 2050 in 2021, the Sustainability Committee changed its meeting frequency from twice to three times a year and the Environmental Promotion Meeting was established as a sub-organization of the Environment Committee.
Additionally, to encourage effective initiatives, materiality KPI results including climate change and external evaluations of ESG were linked to the compensation of management and executives.

With regard to issues concerning sustainability, we positioned the environmental field in particular as an important area to be tackled by management, and established the Environment Committee, chaired by an executive officer in charge of environmental activities. The Environment Committee meets three times a year to discuss policies concerning the environment (e.g., policies on how to respond to recommendations from the TCFD) and visions, formulate the Yamaha Motor Group's long-term environmental plan (Environmental Plan 2050), and conduct annual reviews of how each operating division has performed against its targets. It reports its findings to the Board of Directors at least twice a year.

2. Strategy

Define scenarios

• SSP1：A sustainable development scenario where both mitigation and adaptation are easy Low challenges.
• SSP2：A moderate development scenario for both mitigation and adaptation.
• SSP3：A development scenario of regional rivalry where both mitigation and adaptation are High challenges.
• SSP4：A development scenario with an unequal society, where mitigation is easy Low challenges but adaptation is High challenges.
• SSP5：A fossil fuel-dependent development scenario where mitigation is High challenges but adaptation is Low challenges.

In the IPCC Sixth Assessment Report, SSP1-1.9 was set as the scenario corresponding to the new target of a 1.5℃ change in the average global surface temperature due to the agreement made at COP26 to pursue efforts to limit the rise in temperature to 1.5℃ compared to pre-Industrial Revolution times. The report predicted that all five scenarios evaluated on the changes to the average global temperature by 2100 had a high likelihood of reaching an increase of 1.5°C by 2040, and thus there was the need for countries and corporations to intensify their climate change measures.

When Yamaha Motor formulated its strategy to become carbon neutral by 2050, to cope with uncertainties (risk factors), we referred to the IPCC Sixth Assessment Report and selected two scenarios, namely SSP1-1.9 or SSP1-2.6 and SSP3.

Evaluate Risks and Opportunities and Their Financial Impact

We evaluate the materiality of climate-related risks and opportunities based on whether they are likely to materialize in the short term, medium term, or long term, and the estimated scale of the resulting financial impact.

Short term: May have an immediate impact on business performance (including possibilities that may materialize in a period of 0 to 3 years)

Medium term: May necessitate a major adjustment of our strategies (including possibilities that may materialize in a period of 3 to 6 years)

Long term: May radically impact the feasibility of our long-term strategies and business models (including possibilities that may materialize in a period of 6 years or more)

Business activities and scope exposed to physical risks

According to the IPCC Sixth Assessment Report (AR6), “Climate change is already affecting every inhabited region across the globe, with human influence contributing to many observed changes in weather and climate extremes.”

IPCC AR6 WG1 reference area：

■ North America

NWN（North-Western North America）、NEN（North-Eastern North America）、WNA（Western North America）、CNA（Central North America）、ENA（Eastern North America）

■ Central America

NCA（Northern Central America）、SCA（Southern Central America）、CAR（Caribbean）

■ South America

NWS（North-Western South America）、NSA（Northern South America）、NES（North-Eastern South America）、SAM（South American Monsoon）、SWS（South-Western South America）、SES（South-Eastern South America）、SSA（Southern South America）

■ Europe

GIC（Greenland/Iceland）、NEU（Northern Europe）、WCE（Central and Western Europe）、EEU（Eastern Europe）、MED（Mediterranean）

■ Africa

MED（Mediterranean）、SAH（Sahara）、WAF（Western Africa）、CAF（Central Africa）、NEAF（North-Eastern Africa）、SEAF（South-Eastern Africa）、WSAF（West Southern Africa）、ESAF（East Southern Africa）、MDG（Madagascar）

■ Asia

RAR（Russian Arctic）、WSB（West Siberia）、 ESB（East Siberia）、RFE（Russian Far East）、WCA（West Central Asia）、ECA（East Central Asia）、TIB（Tibetan Plateau）、EAS（East Asia）、 ARP（Arabian Peninsula）、SAS（South Asia）、SEA（Southeast Asia）

■ Australasia

NAU（Northern Australia）、CAU（Central Australia）、EAU（Eastern Australia）、NZ（New Zealand）

■ Small Islands

CAR（Caribbean）、PAC（Pacific Small Islands）

In the section in AR6 about "Observed changes in heavy precipitation," out of the 11 areas that the company has manufacturing locations in, 7 areas and 27 locations were experiencing increases in heavy precipitation. There is the risk of operating shutdowns due to flooding of factories or fractured transportation in the supply chain for raw materials and parts caused by floods.

Regarding this risk, we are working on prevention and countermeasures by establishing rules to minimize damage by taking appropriate measures based on the "Business Continuity Regulations".The implementation status is reported and evaluated by the Sustainability Committee, which is chaired by the President and Executive Officer, and we are working to further improve the BCP level.

Yamaha Motor’s Net-zero CO₂ Emissions (Carbon Neutrality) Strategy

Compact Mobility Vehicles with Low environmental impact

Yamaha Motor proposes compact mobility vehicles with low CO₂ emissions and Low environmental impact throughout their life cycle, from raw materials to manufacturing, use, and disposal. For example, the CO₂ emissions of two-wheeler vehicles are less than those of four-wheelers. In terms of the whole product life cycle, CO₂ emission amounts are 70% less for ICE vehicles, and 75% less for Battery Electric Vehicles at the raw materials stage.
More effective CO₂ emission reduction can be achieved through the reduction of CO₂ emissions during the manufacture of batteries, and excellent charging facilities that utilize renewable energy sources.

[ Assumptions for the Estimate ]
Four-wheeler ICE/BEV: IEA standard; Two-wheeler ICE: Yamaha Motor 125 cc; Two-wheeler BEV is a Yamaha Motor BEV of a similar output class to the aforementioned; driving distance per year: 15,000 km; duration of use: 10 years
[ Four-wheeler data reference ] Global EV Outlook 2020 (IEA)
※ICE: internal combustion engine ※BEV: Battery Electric Vehicle

Promotion of the reduction of CO₂ emissions through greater efficiency achieved by optimal methods

Utilization of compact mobility vehicles

Electrification Strategy

Yamaha Motor will undertake: 1. the improvement of the fuel efficiency of ICE systems, 2. expansion of the lineup of electrified models and their popularization, and 3. the development of power trains powered by renewable energy.

In regard to the Electrification Strategy, an important point related to product roll out is to take CO₂ emission reduction into consideration and consider the state of the diffusion of electricity generated through renewable energy sources and development of a supply infrastructure in a country or region.

We will work toward achievement of net-zero CO₂ emissions (carbon neutrality) by 2050 by first rolling out products in Europe, which has a high rate of the use of renewable energy to generate electricity. Between 2030 and 2035, we will then move onto the ASEAN region, which is a high-volume zone in terms of CO₂ emissions.

In relation to outboard motors, we will engage in the following as the technological strategy toward achievement of net-zero CO₂ emissions (carbon neutrality). 1. Improvement of the fuel efficiency of ICE systems, 2. Development of electrified models, and 3. The development of models that use hydrogen, e-fuel, and other renewable energy as sources of power.

The sales composition of outboard motors is 60% in industrialized countries and 40% in emerging countries and developing countries. In industrialized countries, they are primarily used for fishing, marine sports and other leisure activities. Meanwhile, their use in emerging countries and developing countries is mainly focused around supporting people’s livelihoods, such as through fisheries. Their usage environments are also harsh.
Because Yamaha Motor rolls out electrified models while keeping an eye on the state of the spread of the infrastructure for the supply of renewable energy as well as the suitability level of a country or region’s usage environment, the roll out of electrified models is carried out sequentially beginning with industrialized countries. They are then deployed to other regions. By doing so, we are contributing to net-zero CO₂ emissions (carbon neutrality) as the most trusted brand.

We have assumed the achievement of technical innovation in CN fuels (e.g., Hydrogen, Biofuel, Synthetic Liquid Fuels, etc.) and have made CN fuel adoption rates of 2.6% in 2030, 20% in 2035, and 30% in 2050 the preconditions.

Going forward we will continue to review our measures as needed toward achievement of carbon neutrality by 2050. We will do so by engaging in the analysis of future forecast scenarios drafted by the IEA and others, obtaining an understanding of the electrical power supply composition policies and infrastructure circumstances of various countries and regions, and developing environmental technology that anticipates trends in carbon-neutrality technology.

ICE: Internal Combustion Engine; burns fuel to acquire moving force.
HEV: Hybrid Electric Vehicle; driven through the combination of an engine and motor.
BEV: Battery Electric Vehicle; drive a motor using battery power.
FCV: Fuel Cell Vehicle; power is generated using fuel cells to drive a motor.
CN fuel: Carbon-neutral fuel; moving force is acquired by burning Hydrogen, Biomass, Synthetic Liquid Fuels, and other renewable fuels.
Synthetic Liquid Fuels: Fuel obtained by synthesizing hydrogen and CO₂, which are obtained by electrolyzing water with renewable energy.

3. Risk Management

Process of Identifying and Evaluating Climate-related Risks

We identify and evaluate climate change risks from two perspectives: business strategy and business continuity.

Process of Managing Climate-related Risks

The Environment Committee manages the annual progress toward the goals and targets of specific initiatives undertaken as a business strategy on risks and opportunities identified by each operating division and functional division. It reports results to the Sustainability Committee, which consists of the same members as the Management Committee, and the Board of Directors.

Specifically, each operating division and functional division considered NDC scenarios and two scenarios out of SSP1-1.9 or SSP1-2.6 and SSP3, using the information in the IPCC Sixth Assessment Report as a reference. They then evaluated the short-term, medium-term and long-term risks and opportunities and their impacts on business, strategies and finances and formulated specific numerical targets for 2030 (and 2035) as a step towards achieving carbon neutrality by 2050.

4. Indicators and Targets

Initiatives for "Climate Change"

※NDCs: Nationally determined contributions are the GHG reduction targets, measures, and efforts toward target achievement determined by each country on the basis of the Paris Agreement.
※ICE: Internal Combustion Engine; burns fuel to acquire moving force.
※BEV：Battery Electric Vehicle; motors are driven by battery power.
※CN fuel: Carbon-neutral fuel; moving force is acquired by burning Hydrogen, Biomass, Synthetic Liquid Fuels, and other renewable fuels.
※Synthetic Liquid Fuels: Fuel obtained by synthesizing hydrogen and CO₂, which are obtained by electrolyzing water with renewable energy.

2050 (2030, 2035) targets

On its way to achieving carbon neutrality by 2050, the Yamaha Motor Group has set 2030 and 2035 as milestones for Scope 1.2. and Scope 3. emissions and is promoting efforts to reduce CO₂ emissions.

Targets for 2050

• The whole supply chain must be carbon neutral

Targets for 2035

• Scope 1.2. : Achieve carbon neutrality
• Scope 3. : 38% reduction (compared to 2010) * mainly at the product use phase

Targets for 2030

• Scope 1.2. : 80% reduction (compared to 2010)
• Scope 3. : 24% reduction (compared to 2010) * mainly at the product use phase

2021 emission results and reduction results

Category 11: In general, we calculate emissions for products sold domestically and overseas in the relevant period by multiplying the number of products sold in Asia, Europe, North America, Japan, Oceania, Central and South America and other regions (pleasure boats are limited to those sold in Japan) by the model average fuel consumption (or model electricity usage), yearly running distance (or yearly usage) and lifetime years of use to obtain the lifetime fuel consumption (or lifetime electricity usage) of the products sold in that period and then multiplying the lifetime fuel consumption (or lifetime electricity usage) by an emissions factor to obtain the amount of emissions.

Initiatives for "Resource Recycling"

* Water risks are indexes related to water supply and demand that were uniquely established by Yamaha Motor using Aqueduct, published by the World Resources Institute, and other materials as reference

Environmental Management

Environmental technology briefing 　

• July 19, 2021　Environmental Technology Briefing Session Video
• July 19,2021　Presentation of Environmental technology briefingPDF