Protecting biodiversity

Basic approach of biodiversity protection
Basic approach of TNFD
Governance
Strategy
Risk and opportunity management
Metrics and targets
Initiatives for the protection of biodiversity

Basic approach of biodiversity protection

Biodiversity is a vital concept highlighting the fact that all living organisms on Earth rely on and support one another to live.
Murata, valuing harmony between local communities and nature, conducts business activities based on the relationship of trust cultivated with those communities over many years while fulfilling its responsibilities as a company that utilizes natural capital.

As part of its “EHS Disaster Prevention Policy,” Murata actively promotes biodiversity protection initiatives and strives to reduce its overall environmental impact across the entire value chain. In doing so, Murata seeks to preserve, restore and enhance the natural environment while ensuring that each initiative for decarbonization, resource recycling and biodiversity protection is pursued without being traded off against each other. Guided by the “Murata Green Policy” established in 1988, we continue to engage in local ecosystem preservation activities such as Satoyama (woodlands in developed areas) conservation and worksite greenification through the “Murata Forest” program. We, with each employee holding an awareness of preserving diverse ecosystems, will collaborate with local communities to aim for harmony with nature, contributing to the realization of a sustainable society on a global scale and the promotion of nature positive.
Link: Murata Group EHS Disaster Prevention Policy

Basic approach of TNFD

Based on the TNFD^* framework, Murata is adopting the LEAP approach to conduct assessments and analyses. We recognize that aligning with the TNFD framework and guidelines is essential for accurately assessing the impacts and dependencies on natural capital of our business activities on ecosystems, enabling us to effectively address both risks and opportunities. We review the relationship between our business model and ecosystems, and then develop a sustainable growth model that harmonizes environmental responsibility with economic value.

Link: TNFD Adopter site
Link: TNFD LEAP approach

※Taskforce on Nature-related Financial Disclosures: It is a framework designed to help organizations evaluate interactions between nature and society and continuously disclose their evaluation results.

Governance

Murata has instituted a governance system dedicated to protecting biodiversity. In this system, seamless lines of communication run from on-site teams all the way up to senior management.

The Board has overall accountability for the management of all risks and opportunities, including natural capital. Our President and an Executive Vice President, who are Executive Directors of the Board, chair Murata’s CSR Management Committee and Environmental Committee respectively and are ultimately accountable for assessing and overseeing how our business activities depend on and impact natural capital. The Environmental Committee is responsible for governing Murata’s overall strategies regarding environmental initiatives and monitoring the delivery of objectives across the Murata group of businesses. The Environmental Committee reports its activity track records to the CSR Management Committee and the CSR Management Committee reports these results to the Board of Directors for discussion. The Board of Directors takes the risks and opportunities associated with Murata’s business activities in relation to natural capital into consideration, and directs business plans and business strategies while considering related policies and current initiatives of Murata.

At each business site, we set specific targets in pursuit of our company-wide environmental goals, and monitor progress by reporting quarterly on our achievement status to the Sustainability Department at headquarters. In addition, we encourage each business site to carry out environmental initiatives and greening activities deeply rooted in its local community, and we boost internal collaboration by setting up regular forums where the responsible staff can exchange ideas and insights. Furthermore, as part of our incentive program, we have established an awards system for business site initiatives. We recognize and commend notable achievements based on our internally defined criteria and metrics.

Strategy

Murata selected the business activities and sites to be assessed and, using evaluation tools, evaluated the potential impact on surrounding environments and dependency upon natural capital. (Table 1)

Using the ENCORE tool, we evaluated how our business activities depend on and impact the natural environment.
As a result of the evaluation, we found that our business activities depend on natural systems—including water supply/purification, flow regulation, and natural buffers during flood or storm—and that they have a high impact on pollution in terms of water and soil quality.
In addition, utilizing the WWF Risk Filter Suite, we assessed and summarized data regarding the environmental impact and dependencies of industries within our upstream and downstream supply chains. (Tables 2, 3)

Table 1 Tools Used for Evaluation
Used tools	Evaluation targets
ENCORE	Murata’s dependencies and impacts
WWF Risk Filter Suite	Dependencies and impacts of Murata and its stakeholders in the upstream and downstream supply chains
WWF Biodiversity Risk Filter	Physical risks related to soil, water, ecosystem, atmosphere, etc.
WWF Water Risk Filter/Aqueduct	Water stress, depletion risk, flood risk

Table 2 Supply Chain’s Dependency on Nature

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Risk and opportunity management

The CSR Management Committee regularly evaluates the materiality related to social, environmental, and economic issues through a structured process.
Link: Identifying material issues

At Murata, our relevant departments responsibly regularly collect information on environmental social trends (such as climate change and resource circulation) and on customer demands, and identify risks and opportunities that affect our business activities. Risk and opportunity analysis results will be applied to future biodiversity protection initiatives.

We are currently collecting data on risks and opportunities related to biodiversity protection, and we will further examine scenario analyses and countermeasures by establishing evaluation methods and indicators in line with the TNFD guidelines.
Link: Risk assessment in response to TCFD

Table 4 Risk
Category		Description
Physical risks	Acute risk	Examples: Production shutdowns due to fire or natural disaster, legal sanction on an environmental incident such as chemical leak
Physical risks	Chronic risk	Examples: Use of VOCs, flooding caused by climate change, water depletion or water pollution near a business site Securing of resources with high depletion risk, rising raw material cost, increased business cost due to stricter environmental regulations
Transition risk	Policy	Examples: Change in law/regulation in Japan and other countries where a manufacturing site is located Cost increased to address a regulatory change
	Market	Examples: Request from an investor or customer for environmental consideration Growing demand for supply chain sustainability Resource depletion/geopolitical risks, increasing interest in eco-friendly goods and green procurement
	Technology	Examples: Decline in market share due to delayed new technology development
	Reputation	Examples: Decreased confidence due to deficiency in sustainability report, etc., damage to reputation in the business community Criticism or lawsuit from customer, negative campaign on social media
	Liability	Examples: Compensation for environmental damage, breach of contract with business partners, complaint related to product defect Accountability for a failure to meet sustainability goal

Table 5 Opportunity
Category		Description
Managing physical risk	Short-term opportunity	Examples: Enhancing corporate image through environmental protection activity Gaining competitive advantage by strengthening infrastructure against natural disasters
Managing physical risk	Long-term opportunity	Examples: Transitioning to a circular economy model, strengthening regional collaboration through co-creation of natural capital
Managing transition risk	Policy	Examples: Acquiring new customer by properly complying with environmental regulations
	Market	Examples: Expanding our eco-friendly product lineup to reach new customer segments Developing and cultivating a new market for a product made of eco-friendly materials Responding to the rising ESG trend among investors and customers
	Technology	Examples: Driving new product development or business expansion through environmental technology innovation Strengthening our brand through the introduction of renewable energy utilization technologies
	Reputation	Examples: Enhancing our brand value through support from eco-conscious customers Enhancing our corporate image through harmonious coexistence with local communities and contributions to the natural environment

Metrics and targets

We analyze and assess data on items with targets internally set based on TNFD guidelines’ core metrics. The data is then verified by third parties before disclosure.
For data on other items (those without internally set targets or analyzed data), we are currently selecting analytical tools and working to enhance numerical accuracy in preparation for future disclosure.

Table 6 Metrics and targets
Metric item number	Impact driver to nature	Metric	Disclosed information/result	2025-2027 medium-term target or initiative
C1.0	Land/freshwater/saltwater	Total spatial footprint	Set a baseline year and calculate/disclose the total land use alteration area.	No target set. Conduct land surveys and evaluations when altering land, such as for establishing or expanding business sites.
C1.1	Land/freshwater/saltwater	Land/freshwater/seawater, marine utilization, extent of change	Calculate and disclose the total land area for green spaces, biotopes, and Satoyama activities.	No target set Regularly gather, summarize and evaluate information from each business site on the progress of initiatives, and create initiative strategies.
C2.0	Pollution/decontamination	Pollutant released into soil	Implement appropriate soil contamination prevention measures for company-owned land. Follow legal procedures before purchasing new land or altering land shape. Have internal procedures and management methods in place for when a potential contaminant leak is confirmed, ensuring appropriate responses as needed.	No target or evaluation metrics set. Responses are as outlined to the left.
C2.1		Water discharge	Disclose discharged water volume. Link: Water resource management	No common company-wide target set. However, individually develop measures, such as water intake strategies for areas with high water stress, and monitor the progress of their implementation.
C2.2		Waste generation and treatment	Disclose total waste emissions, including hazardous/non-hazardous waste volumes, and the percentage diverted from landfill via waste-to-energy conversion. Link: Waste management	Targets set. Rate of use of sustainable resources: 16% (input ratio of recycled materials) Resource recycling rate: 41%
C2.3		Plastic pollution	Summarize and disclose plastic consumption and recycling rates.	No target set. Advance measures to comply with legal regulations or requirements regarding plastic consumption and recyclability.
C2.4		Total non-GHG air pollutants	Disclose data on (NOx, SOx, and VOC) emissions. Link: Managing chemical substances	Targets set. Set a target to reduce VOC usage by 30% by 2030 compared to the 2021 level.
C3.0	Resource usage/replenishment	Water intake and consumption in water-scarce areas	Summarize and disclose water consumptions at high-risk business sites.	No common company-wide target set. However, individually develop measures, such as water intake strategies for areas with high water stress, and monitor the progress of their implementation.
C3.1	Resource usage/replenishment	Volume of high-risk natural products procured from land/sea/freshwater	Internal discussions are ongoing to determine appropriate measures for managing high risk procurement. Adhere to the CSR Procurement Guidelines, clearly communicate compliance requirements to suppliers, and monitor conflict mineral restrictions within the upstream supply chain.	No target set.
C7.0	Risk	Assessment of nature-related “transition risks” is currently being conducted. Summarize and disclose vulnerable assets, liabilities, revenues, and expenses, if any.		-
C7.1		Assessment of nature-related “physical risks” is currently being conducted. Summarize and disclose vulnerable assets, liabilities, revenues, and expenses, if any.		-
C7.2		No fines, penalties, or lawsuits due to nature-related negative impacts in fiscal 2024.		-
C7.3	Opportunity	Quantitative figures not yet calculated. Proceed with summarization while referencing each classification method.		-
C7.4	Opportunity	Continuously develop and create products and services that positively impact nature. Quantitative figures not yet calculated.		-

Initiatives for the protection of biodiversity

Promoting greenification

Not content to merely observe the stipulations of the Factory Location Act and take the landscapes around our facilities into consideration, at Murata we are carrying out greenification activities that seek to both form and protect regional ecological networks.

1.
When planting trees, we study the birds that live in the region, and actively attempt to plant trees that bear the fruit, nuts, etc. preferred by those birds.
2.
In addition to composting the weeds that spring up as a result of our greenification activities in order to improve the soil, we use chips created from pruned branches for various purposes, including creating habitats for insects such as rhinoceros beetles.
3.
In addition to refraining from the use of herbicides that would be incompatible with our goal of protecting ecosystems, we attempt as much as possible to restrict our use of chemical substances such as insecticides and disinfectants.
4.
We are providing opportunities for our staff and for local children to learn about ecology by creating biotopes in order to protect the living creatures that make specific regions their habitat and conducting activities to restore and revitalize ecosystems.
5.
In order to protect endangered flora, we work to protect and restore plants such as spoon-leaved sundew, white egret orchids, and Japanese buttercup.
6.
In and around the grounds of our facilities, we eliminate and control the spread of nonnative species which threaten local ecosystems, such as Canada goldenrod, lance-leaved coreopsis, and the common dandelion.

Murata has continued greening activities at each of its business sites with the primary goal of contributing to local communities.

1996 Yasu Awarded Silver Prize at the Shiga Prefecture Factory Greening Contest
1998 Fukui Awarded Promotion-consortium Chairman’s Award at the Flower Town Planning Competition
1998 Yasu Awarded at the Factory Greening Promotion Conference held by the Japan Greenery Research and Development Center
1999 Izumo Awarded at the National Factory Greenery Promotion Conference held by the Japan Greenery Research and Development Center
2000 Izumo Awarded by the Director of the Chugoku Bureau of International Trade and Industry
2007 Headquarters Launched “Murata Forest” activities as Japan’s first official participant in the Model Forest Initiative
2007 Headquarters, Yokohama, Yasu, Youkaichi, Kanazawa, and Okayama
Obtained SEGES (Social and Environmental Green Evaluation System) certification (the first in the Kansai region)
2018 Azumi Awarded Director-General of the Kanto Bureau of Economy, Trade and Industry at the National Factory Greenery Promotion Conference
2021 Yokaichi Awarded the Kinki Bureau of Economy, Trade and Industry for Excellent Greening plants
2023 Okayama Awarded the Environmental Okayama Grand Prize

Promoting the "Murata Forest" program

Protecting Satoyama has been recognized as an important measure for the protection of biodiversity. Murata is engaged in Satoyama conservation activities under the “Murata Forest” program at several locations across Japan. With the support of local residents, Murata employees and their family volunteers carry out tasks such as thinning vegetation and clearing undergrowth.

The purpose of these activities is to provide our employees and their families with opportunities to refresh their bodies and souls.