Initiatives to Achieve a Decarbonization

By continuing to truly focus upon babies, we want to make the world more baby-friendly.
At the same time, we aim to achieve sustainable growth as a company by reducing environmental impact and solving social issues surrounding babies and families in all countries and regions where we conduct business activities. We particularly recognize the urgency of climate change. Pigeon’s Eighth Medium-Term Business Plan (2023 - 2025) as well as the Seventh Medium-Term Business Plan (2020 - 2021) identifies climate change as one of the most important management challenges and outlines measures to tackle it.

Greenhouse Gas (GHG) Emissions Reduction Targets and Performance

In our 7th Medium-Term Management Plan (2020-2022), we set the group-wide target of reducing Scope 1 & 2 CO2 emissions per unit of sales in 2022 by 10% compared to FY2018, and had promoted activities to achieve the target.
The reduction target was reviewed in 2022 with the aim of contributing to realise a decarbonised society. Under the Pigeon Green Action Plan, a long-term environmental target has been set for the Pigeon Group to reduce Scope 1&2 GHG emissions by 50% from the FY2018 level by 2030 and to reduce Scope 1&2 GHG emissions to net zero by 2050*．

In the 8th Mid-Term Management Plan (2023-2025), as a milestone towards the 2030 target, the Pigeon Group's short-term target of reducing Scope 1 and 2 GHG emissions by 35% by 2025 compared to FY2018 was determined in 2022. Each business segment has incorporated this short-term target into its medium-term management plan, and has worked to reduce GHG emissions through the use of renewable energy, energy saving and other measures.

* Organizational boundary for GHG reduction targets for 2030 and 2050 covers Pigeon Corporation and its consolidated subsidiaries in Japan and overseas. (The target coverage is 100%)

Pigeon Group's Scope 1 and 2 Greenhouse Gas (GHG) Emissions

Our GHG emissions across the entire group in FY2023 were 2,903 t-CO2e for Scope 1 and 8,489 t-CO2e for Scope 2 (total: 11,392 t-CO2e). As a result of GHG reduction activities such as the introduction of on-site power generation using solar panels, purchase of Renewable Energy Certificates and energy saving activities, our scope 1&2 emissions decreased by 16,812 t-CO2e (60%) compared to FY2018.

Unit: tonnes of CO2e

Business segment	FY2018 (base year)	FY2019	FY2020	FY2021	FY2022	FY2023
	GHG Emission	GHG Emission	GHG Emission	GHG Emission	GHG Emission	GHG Emission	Reduction (vs. FY2018)
Group total	28,203	26,931	24,973	23,510	11,741	11,392	-16,812
Japan Business	6,232	5,496	5,265	3,947	3,490	3,416	-2,816
China Business	9,884	8,886	8,923	8,737	4,346	4,582	-5,302
Singapore Business	11,305	11,306	10,442	10,610	3,786	3,277	-8,028
Lansinoh Business	782	1,243	343	216	118	117	-665

■Boundary of calculations

Pigeon Corporation and all of the consolidated subsidiaries in Japan and overseas.(Coverage is 100%)
The financial control approach is used to consolidate CO2 emissions.

■Calculation method

Scope 1 emissions: For the period January 2019 to December 2022, only CO2 emissions from energy sources are included in the scope of calculation; from the period December 2023, non-energy greenhouse gases including methane and nitrous oxide are also included in the scope of calculation. CO2 emission coefficients specified in the Law Concerning the Promotion of the Measures to Cope with Global Warming are used for our Japanese operations. For overseas projects, CO2 emission coefficients published by local governments are used when available, but if not, CO2 emission coefficients from the IPCC or the Japanese Law Concerning the Promotion of the Measures to Cope with Global Warming are used.

Scope 2 emissions: Emissions are calculated on a market basis. Where supplier-specific CO2 emission coefficients are available, we use those coefficients. If not available, we use the average CO2 emission factor of the local country or grid. CO2 emission coefficients are set to zero for electricity consumption corresponding to the amount of renewable energy certificates (electricity) purchased.

Independent Verification on CO2 emissions

To enhance the credibility of CO2 emissions data, we engaged third parties to provide verifications on Scope 1 and scope 2 CO2 emissions.

Subsidiaries that their emissions were independently verified in 2023

The following three domestic and five overseas subsidiaries have completed independent verification on their Scope 1 and Scope 2 emissions for FY2022.
The total Scope 1 and Scope 2 CO2 emissions of the following eight companies amounted to 5,500 tonnes-CO2* in FY2022, representing 47% of the Group's 11,741 tonnes-CO2 emissions.

The market-based method is used for Scope 2 accounting. The total Scope 1 and Scope 2 CO2 emissions of subsidiaries that underwent third-party verification were lower than that for FY2021 because of the following reasons.
Lansinoh Laboratories and Thai pigeon had zero Scope 2 emissions in FY2022 as a result of the purchase of electricity from renewable sources or the purchase of Renewable Energy Certificates.
Pigeon Industries (Changzhou) did not undergo third-party verification for FY2022 emissions.

Verified Organization	Verification agency	Issue Date of Verification Report
Pigeon Home Products Corporation Pigeon Manufacturing Hyogo Corporation Pigeon Manufacturing Ibaraki Corporation	Japan Quality Assurance Organization	April 26, 2023
Lansinoh Laboratories, Inc	GUTcert	July 17, 2023
Pigeon India Pvt. Ltd.	URS Verification Pvt. Ltd.	July 26, 2023
Thai Pigeon Co., Ltd.	LRQA Limited	August 8, 2023
Pigeon Manufacturing (Shanghai) Co., Ltd	SGS-CSTC Standards Technical Services Co., Ltd.	September 9, 2023
Pigeon Industries (Thailand) Company Limited	LRQA (Thailand) Ltd.	December 21,  2023

Subsidiaries that their emissions were independently verified in 2022

3 subsidiaries in Japan and 6 subsidiaries overseas shown as below have completed third-party verifications on Scope 1 and scope 2 CO2 emissions for FY2021. (As of December 2022)
A total of scope 1 and scope 2 CO2 emissions for these 9 subsidiaries was 16,619 tonnes of CO2 in FY2021, this account for 70.7% of 23,510 tonnes of CO2 for the Pigeon Group.

Verified Organization	Verification agency	Issue Date of Verification Report
Pigeon Home Products Corporation Pigeon Manufacturing Hyogo Corporation Pigeon Manufacturing Ibaraki Corporation	Japan Quality Assurance Organization	June 7, 2022
Pigeon Manufacturing (Shanghai) Co., Ltd.	SGS-CSTC Standards Technical Services Co., Ltd.	September 9, 2022
Pigeon Industries (Changzhou) Co., Ltd.	Hangzhou WIT Assessment Co., Ltd.	July 27, 2022
Pigeon India Pvt. Ltd.	URS Verification Pvt. Ltd.	June 8, 2022
Pigeon Industries (Thailand) Company Limited	LRQA (Thailand) Ltd.	June 20, 2022
Thai Pigeon Co., Ltd.	LRQA (Thailand) Ltd.	October 25, 2022
Lansinoh Laboratories Inc.	GUTcert	August 29, 2022

Subsidiaries that their emissions were independently verified in 2021

3 subsidiaries in Japan and 4 subsidiaries overseas shown as below have completed third-party verifications on Scope 1 and scope 2 CO2 emissions for FY2020. A total of scope 1 and scope 2 CO2 emissions for these 7 subsidiaries was 14,684 tonnes of CO2 in FY2020, this account for 58.8% of 24,973 tonnes of CO2 for the Pigeon Group.

Verified Organization	Verification agency	Issue Date of Verification Report
Pigeon Home Products Corporation Pigeon Manufacturing Hyogo Corporation Pigeon Manufacturing Ibaraki Corporation	Japan Quality Assurance Organization	November 26, 2021
Pigeon Manufacturing (Shanghai) Co., Ltd.	SGS-CSTC Standard Technical Services Co., Ltd.	June 25, 2021
Pigeon India Pvt. Ltd.	BSI India	November 27, 2021
Pigeon Industries (Thailand) Company Limited	Lloyd’s Register International (Thailand) Ltd.	August 30, 2021
Thai Pigeon Company Limited	Lloyd’s Register International (Thailand) Ltd.	August 30, 2021

Pigeon Group's Scope 3 GHG emissions

Pigeon Group recognizes the need to identify not only Scope 1 and Scope 2 greenhouse gas emissions from our production and non-production sites, but also greenhouse gas emissions throughout the entire value chain, including raw and packaging materials, transportation, use of sold products, and end-of life treatment of sold products (scope 3 emissions) and the need to work with our business partners to reduce scope 3 emissions.

The Scope 3 GHG emissions of the entire Pigeon Group (Japan Business, China Business, Singapore Business and Lansinoh Business) in 2022 were 205.8 thousand tonnes of CO2e.

Total scope 3 emissions in 2022 were 12% lower than in 2021. The main reason for the decline was lower production, largely due to the impact of the lockdown caused by the COVID 19 pandemic in China.

The largest proportion of this was Category 1 emissions from purchased goods and services, which amounted to 151.0 thousand tonnes of CO2e, or 73% of total Scope 3 emissions.

GHG emissions from purchased products and services comprise GHG emissions from the procurement of raw materials and packaging materials for products produced in-house, and GHG emissions from the procurement of Pigeon's or Lansinoh's branded products manufactured by external manufacturers, such as baby drinks. Among GHG emissions of raw materials for products manufactured in-house, GHG emissions from the procurement of non-woven fabrics consumed for wet and dry wipes, breastfeeding pads and disposable diapers, fluff pulp and silicone are a major source of GHG emissions. Among products manufactured by external suppliers, baby drinks and baby skin care products are a large source of GHG emissions due to their large procurement volumes.

To reduce GHG emissions from purchased products and services (Category 1), we consider it essential to work with our suppliers, and since 2023 we have used the the CSR Procurement Self-Assessment Questionnaire to collect the Scope 1 and Scope 2 emissions data of our suppliers.

We will set a reduction target for Scope 3 GHG emissions in the future and work to reduce them.

Pigeon Group's Scope 3 GHG emissions

Categories		FY2021	FY2022
		GHG emissions (Thousand tonnes of CO2e)	GHG emissions (Thousand tonnes of CO2e)	Ratio （%）
Category 1	Purchased goods and services	174.3	151.0	73%
Category 2	Capital goods	20.2	19.2	9%
Category 3	Fuel- and energyrelated activities not included in Scope 1 or Scope 2	2.9	2.5	1%
Category 4	Upstream transportation and distribution	8.5	7.1	3%
Category 5	Waste generated in operations	4.0	4.3	2%
Category 6	Business travel	0.5	0.7	0%
Category 7	Employee commuting	2.3	2.9	1%
Category 9	Downstream transportation and distribution	1.9	1.8	1%
Category 11	Use of sold products	3.3	2.1	1%
Category 12	End-of-life treatment of sold products	16.2	14.2	7%
Category 14	Franchises	0.02	0.02	0%
Total		234.1	205.8	-

＊Figures for emissions in categories 1, 4 and 12 for FY2021 have been recalculated as a result of errors. (October 2023)

■ Boundary of calculations
Pigeon Corporation and all the consolidated subsidiaries in Japan and overseas, including Lanshinoh Business. (Coverage: 100%)
For Category 9 emissions, only Lansinoh Business is covered. Categories 8, 10, 13, and 15 are not relevant to us. Duplicate GHG emissions occurred from intra-group trading between Japan, China, Singapore and Lansinoh Businesses have been deleated.
■Calculation methods
GHG emissions are calculated principally using "Emissions Unit Value Database for Accounting Greenhouse Gas Emissions, etc., by Organizations Throughout the supply chain (Ver.3.2)", published in March 2022 by Japan's Ministry of the Environment and Ministry of Economy, Trade and Industry, hereafter, "Emissions Unit Value DB", or the LCI database "IDEA version 2.3" developed by the IDEA Laboratory established in Research Institute of Science for Safety and Sustainability, hereafter, "IDEA v2.3".
The calculation methods for selected categories are as follows. For the GHG emissions calculation methods of other categories, please refer to the Pigeon ESG Databook 2022.

Category		Calculation method
Category 1	Purchased goods and services	Raw materials and packaging materials procured for products produced by the Pigeon Group, and products with Pigeon's brands or Lansinoh's brand produced by external suppliers such as baby foods and drinks are covered by the calculations. Raw materials and packaging materials consumed for the production of products with third-party's brands outside the Pigeon Group are not included in the calculations. For raw materials, materials, and purchased products whose weight can be determined, GHG emissions are calculated by multiplying mass of purchased materials and products (kg) by a GHG emission factor per unit of mass included in the IDEA v2.3. For those whose weight can not be determined, GHG emissions are calculated by multiplying monetary value of those purchased by a GHG emission factor per economic value included in either the Emissions Unit Value DB or the IDEA v2.3. The GHG emission factors for silicones were taken from the document titled Silicon-Chemistry Carbon Balance: An assessment of Greenhouse Gas Emissions and Reductions, Bernd Brandt et al.
Category 2	Capital goods	GHG emissions are calculated by multiplying the Pigeon Group's capital investment in the reporting year by the emission factor per unit value set for each sector, which is included in the Emissions Unit Value DB.
Category 11	Use of sold products	GHG emissions are calculated by estimating the amount of energy consumed by our users during the period of product use. Indirect emissions associated with energy consumed when our cuctomers use electric sterilizers sold by other companies out of the Pigeon Group, when they boil their baby bottles, or when they use microwaves in order to stearilize their bottles are not included.
Category 12	End-of-life treatment of	For products sold by the Pigeon Group, GHG emissions are calculated by multiplying the mass of each product sold (kg) by an GHG emission factor specific to waste type included in the Emissions Unit Value DB.
Category 14	Franchises	This category covers the franchised childcare business operated by Pigeon Hearts Corporation. GHG emissions are calculated by multiplying the total floor area of childcare facilitie for the business by the emission factor per floor space specific to building use included inthe Emissions Unit Value DB.

Lansinoh Group's Long-term Targets for Reduction of Greenhouse Gas Emissions

We recognize the importance of addressing climate change throughout our value chain. In FY2020, our Lansinoh Group set a long-term goal of achieving climate neutrality by 2030 and committed to net zero emissions by 2050 for the entire value chain. These plans align with the Paris Agreement, which strives to limit global warming to 1.5℃ above pre-industrial levels. The corresponding near-term reduction targets by 2030 were validated and approved by the Science Based Target Initiative (SBTi ) in FY2020.

^{The net-zero commitment covers scopes 1, 2, and 3 of the entire Lansinoh business, which accounts for 14.3%* of consolidated net sales. (2021 actual)} 

^{Categories covered by Scope 3 reduction targets and Net Zero committment,  
Category 1: Purchased goods and services, Category 2: Capital goods, Category 4: Upstream transportation and distribution, Category 5: Waste generated in operations, Category 6: Business travel, 
Category 7: Employee commuting, Category 9: Downstream transportation and distribution, Category 12: End-of-life treatment of sold products}

Lansinoh Group's Greenhouse Gas Emissions (Scopes 1, 2 and 3)

[Boundary of calculations]
All sites of Lansinoh Laboratories Inc

CO2 Reduction and Energy Conservation Initiatives

Pigeon Group's Energy Consumption

Recognizing the need to address climate change and conserve depletable energy sources, we are working to save energy and switch to renewable energy at our facilities. Our total energy consumption in 2022 was 47,062MWh. The largest proportion of this was made up of electricity, which accounted for 70%.

Unit: MWｈ

Energy carriers	FY2021	FY2022
Fuel	12,612	10,423
Biofuels	96	131
Purchased electricty	36,962	33,114
Purchased heat	24	26
Electricity generated by own solar panels installed at our manufacturing sites	2,328	3,368
Total	52,022	47,062

[Boundary of calculations]
Pigeon Corporation and all of the consolidated subsidiaries in Japan and overseas. (Coverage is 100%) 

[Calculation method]
Fuel consumption is calculated based on higher heating values specified in the Energy Saving Act in Japan. 

Use of Renewable Energy

The Pigeon Group advances the use of renewable energy as a means of reducing emissions of greenhouse gases.
In 2022 electricity generated from renewable sources comprised 17 % of total electricity consumed by the Group, contributing to a 3,085 tonnes reduction in CO2 emissions.
Solar panels have been installed at each manufacturing site to generate their own electricity while we have purchased electricity generated by renewable sources or Renewable Energy Certificates.
We started installing photovoltaic (PV) power systems in 2019, as of the end of 2022, nine manufacturing and non-manufacturing sites have installed PV systems.
In 2022 the Head Office and the Central Laboratory of Pigeon Corporation, two manufacturing sites in Japan, and UK and Germany offices of Lansinoh purchased electricity from renewable sources.
The Pigeon Group will continue to expand its usage of renewable energy in Japan and overseas, and further advance our efforts for reduction of greenhouse gas emissions.

Pigeon Group's consumption of electricity from renewable sources and CO2 emissions avoided

	FY2019			FY2020			FY2021			FY2022
	Consumption (MWh)	Percentage of total electricity consumption（％）	CO2 emissions avoided*⁴ (tonnes of CO2)	Consumption (MWh)	Percentage of total electricity consumption（％）	CO2 emissions avoided*⁴ (tonnes of CO2)	Consumption (MWh)	Percentage of total electricity consumption（％）	CO2 emissions avoided*⁴ (tonnes of CO2)	Consumption (MWh)	Percentage of total electricity consumption（％）	CO2 emissions avoided*⁴ (tonnes of CO2)
Total electricity consumption (renewable & non-renewable sources)*¹	39,973	-	-	39,630	-	-	39,290	-	-	36,482	-	-
Electricity generated from renewable energy sources	880	2%	711	1,928	5%	1,233	3,649	9%	2,127	6,021	17%	3,085
Of which, electricity generatd by our own PV systems*²	880	2%	711	1,159	3%	944	2,328	6%	1,617	3,368	9%	2,005
Of which, purchased electricty	0	0%	0	769	2%	289	1,321	3%	510	2,653	7%	1,079
Renewable Energy Certificates (RECs) purchased*³	0	0%	0	1,855	5%	800	3,364	9%	1,462	13,844	38%	7,174

Boundary: Pigeon Corporation and all its consolidated subsidiaries in Japan and overseas.（Coverage: 100%）
*¹ Electricity generated by own solar panels is included in.
*² Electricity generated by solar panels installed at our production sites and non-production sites are covered.
*³ Purchases of Renewable Energy Certificates (RECs) and J-credits generated from solar power generation are covered.
*⁴CO2 emissions avoided are calculated by multiplying a CO2 emission factor of electricity in each fiscal year, either a factor specific to the electricity supplier or an
average factor for the country in which the site locates, by in-house power generation and the quantity purchased respectively.　

Our efforts to reduce CO2 Emissions in Logistics

To reduce CO2 emissions through logistics, we are shortening transportation distances, reducing transportation frequency, and switching to transportation methods that emit less CO2.

1. Reduction of transportation distance

We are working to shorten transportation distances by reviewing unloading locations and shipping bases.

• Shortened transportation distances by eliminating our own logistics bases and outsourcing to outside logistics providers located near ports (PIGEON MALAYSIA (TRADING) SDN.BHD.).
• Shortened the transportation distance of industrial waste by changing the industrial waste processor (PIGEON INDUSTRIES (THAILAND) CO.)
• Changed the port of shipment for imported raw materials to shorten the transportation distance (LANSINOH LABORATORIES MEDICAL DEVICES DESIGN INDUSTRY AND COMMERCE LTD.)

 2. Reduction of transportation frequency

We are working to reduce the frequency of transportation by improving loading efficiency, reducing the percentage of empty vehicles, and improving procurement efficiency in cooperation with suppliers.

• Efforts are underway to change the number of items placed in the outer box, the method of packing in the box, and the size of the outer box (Pigeon Corporation).
• Reviewing packaging specifications to eliminate the need for inner layer material (Lansinoh Group)
• Collaborated with suppliers of secondary materials to improve the accuracy of demand forecasting and inventory control, and to reduce the frequency of transportation. (LANSINOH LABORATORIES MEDICAL DEVICES DESIGN INDUSTRY AND COMMERCE LTD.CO., PIGEON SINGAPORE PTE.LTD. and PIGEON MALAYSIA (TRADING) SDN.BHD.)
• Switched from wooden pallets to paper slip sheets, forest certified, and improved loading rates and significantly reduced transportation weight (LANSINOH LABORATORIES MEDICAL DEVICES DESIGN INDUSTRY AND COMMERCE LTD.CO., LANSINOH LABORATORIES, INC.)

 3. Switching to transportation methods that emit less CO2

We are also switching to trucks that use cleaner fuels for transportation.

• Use of natural gas and biodiesel vehicles (THAI PIGEON CO., LTD.)

Developing Carbon Neutral (Climate Neutral) Products

Our Lansinoh business is actively working toward greenhouse gas (GHG) emissions reduction goals based on scientific evidence. To begin with, Lansinoh has completely switched to renewable energy for the electric power used at all of its sites. It has also calculated the full carbon footprint of its main products, opened negotiations with suppliers about using renewable energy in order to reduce their emissions, and begun actively working toward GHG emissions reduction at the product level. In 2021, Lansinoh was the first company in the Pigeon Group to launch products certified climate-neutral by a third party (the DFCE Institute). The products are certified climate-neutral because Lansinoh has determined their GHG emissions over their entire life cycle (from raw material procurement to disposal after use) and is not only independently working to reduce these emissions but also striving to compensate for emissions that are difficult to eliminate by purchasing climate credits, which support activities by environmental groups certified to reduce and absorb greenhouse gases.

Other Initiatives

・Eliminating electricity generation from fuel oil
In order to reduce GHG emissions, in fiscal 2020 we stopped using electric generators that use fuel oil. (Pigeon Manufacturing Hyogo)

・Energy efficiency through LED lighting
We are making progress on the changeover to LED lighting, and using less electricity in our offices and other sites. (Central Laboratory, Tsukuba office, Pigeon Manufacturing Ibaraki)

Further Initiatives

Although we have not introduced ICP (Internal Carbon Pricing), we have set long-term GHG reduction targets in consideration of the future rise of carbon taxes and Japan's reduction target of carbon neutrality by 2050. During the discussion process, we refer to the IEA's forecast of carbon tax increase in order to promote shifts to renewable energy, application of renewable energy certificates, and capital investment for the purpose of energy conservation and on-sites renewable energy generation.

Response to CDP Climate Change Questionnaire

Pigeon responded to CDP Climate Change Questionnaire conducted by CDP, a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. Please see below for our responses (Japanese language only).