TCFD

In May 2019, Mazda declared its support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) *1 and joined the TCFD Consortium,*2 showing its commitment to strengthening its efforts to address climate change. In addition, in January 2021, the Company announced that it would endeavor to achieve carbon neutrality throughout the entire supply chain by 2050. Mazda's major initiatives to address climate change in accordance with the TCFD recommendations*3 are as follows.

*1 The TCFD is a private-sector organization set up by the Financial Stability Board in response to a request from the G20 Finance Ministers and Central Bank Governors.

*2 The TCFD Consortium is an organization established in Japan for the purpose of holding discussions on effective corporate information disclosure related to climate change and efforts for tying disclosed information to appropriate investment decision-making by financial institutions and other entities. The Ministry of Economy, Trade and Industry, the Financial Services Agency, and the Ministry of the Environment participate in the consortium as observers.

*3 For more information, please refer to the following website. TCFD Consortium (External link)

a) Board’s oversight of climate-related risks and opportunities

b) Management’s role in assessing and managing climate-related risks and opportunities

Taking on the challenge of achieving carbon neutrality by 2050, Mazda has assigned a director to oversee its carbon neutrality strategy and executive officers to be in charge of carbon neutrality. In 2021, Mazda formed a specialized team (hereinafter referred to as specialized team) dedicated to carbon neutrality matters. At its head is the Corporate Strategy Office working closely with the specialized team composed of members involved in products, manufacturing, purchasing, logistics, sales and recycling. Under the supervision of the executive officers in charge of carbon neutrality , the Corporate Strategy Office has been leading the team, which formulated and promoted strategies from a Life Cycle Assessment (LCA) perspective for responding to risks and opportunities selected based on Intergovernmental Panel on Climate Change (IPCC) and International Energy Agency (IEA) scenarios and trends, while also considering the investment and expenses required for such initiatives and response schedules.

In April 2023, some of the functions of Corporate Strategy Office and Product Strategy Division were integrated to newly established Corporate Strategy Division, which has a new department to promote CN strategy. Under the leadership of this department, existing specialized team formulates strategies in respective areas of expertise of its members and implements plans based on the strategies that have been formulated so far. In addition, in order to promote the execution of plans throughout the company, the company has started a management approach that integrates CN initiatives into the existing ISO 14001 Environmental Management System (EMS). The company shares the progress on plan implementation at the twice-yearly Carbon Neutrality Promotion Meeting. In the area of products and technologies, the newly established department in the Corporate Strategy Division promotes planning consistent with company-wide strategies. The CN strategies are deliberated* over at the Executive Committee Meetings and the Board of Directors attended by the Representative Directors and President. Also, issues concerning climate change and other sustainability-related matters are reported to the Board of Directors in a timely and appropriate manner.

* Carbon neutrality strategies had been reported to and discussed at Board of Directors' meetings nine times as of May, 2025.

Measures for responding to torrential rains, an acute physical risk associated with climate change, are managed as part of its business continuity plan (BCP) through its emergency risk management structure. In addition, in response to concerns about storm surges and water depletion, which are chronic physical risks, the Company promote reinforcement of seawall infrastructure and water resources conservation efforts as part of the activities of specialized departments.

a) Climate-related risks and opportunities identified over the short, medium, and long term

b) Impact of climate related risks and opportunities on business, strategy, and financial planning

c) Resilience of strategy taking into consideration climate-related scenario

Based on IPCC and IEA scenarios, policy and regulatory trends, and industry trends, Mazda formulated a scenario based on its own assumptions and identified the following major opportunities and risks.

Mazda is implementing the following initiatives as part of its efforts to seize opportunities and avoid or minimize the impact of the risks it faces.

■Enhance Development of Electrification Technology

During a period of transition to EVs up to around 2030, Mazda sees its multi-solution approach to be effective. The company offers a variety of solutions, including internal combustion engines, electrification technologies and alternative fuels, so the Company can provide appropriate combinations that suit power generation conditions in each region. On the other hand, the company expects its EV ratio in our global sales in 2030 to be in 25 to 40%, considering each region's electrification policies or more stringent regulations. Recently, various variable factors became apparent, such as regulatory tendencies, energy crises, and power shortages. Furthermore, it is extremely uncertain how each of these will develop in the future. As it allows it to be flexible and adaptive to coming changes, such as changes in regulations, consumer needs and acceptance levels, and infrastructure development, the following three-phase electrification approach will work for this uncertain situation. The company proceeds with electrification step by step with the cooperation of our partner companies.*1

Phase 1 (2022–2024): Acceleration technology development for the age of electrification

By fully using our technology assets of multiple electrification technology, Mazda has launched attractive products while also meeting market regulations. The company has enhanced its earning power with the introduction of large products offering plug-in hybrids and diesel engines with a mild hybrid system that achieve both environment and driving performance. In addition, the company has developed technologies for BEV in a full-fledged manner.

Phase 2 (2025–2027): Transition to electrification

In order to reduce CO₂ by improving fuel economy in the phase of transition to EVs, the company will introduce new hybrids, further refining its multi-electrification technologies. In addition to introducing vehicles dedicated to EVs in China where electrification is advancing, Mazda will introduce BEV models such as MAZDA EZ-6 and MAZDA EZ-60, and in Europe, the company will introduce the MAZDA 6e Additionally, the company plans to develop Auto Alliance (Thailand) Co., Ltd., its production facility in Thailand, into a hub for the annual production of 100,000 units of a new compact SUV, and introduce a total of five models, including two Battery EV models, one PHEV model, and two hybrid models. This initiative aims to expand our electrified product lineup in Thailand, where electrification is advancing.

In Japan, the company will build a new module pack plant for cylindrical lithium-ion batteries for automotive use in Iwakuni City, Yamaguchi Prefecture, with the aim of commencing operations at the plant by FY March 2028. The completed battery packs will be installed in Mazda's first Battery EV, that uses a dedicated EV platform and will be manufactured at Mazda's vehicle plant in Japan.

As for internal combustion engines, Mazda will boost efficiency to the utmost by the introduction of SKYACTIV-Z which has the further improvement technology of thermal efficiency and the preparation of possibility for future use of renewable fuels.

Phase 3 (2028–2030): Full-scale launch of BEVs

Mazda moves forward in our efforts for the full-fledged launch of Battery EV models, the company will also consider the possibilities, including investing in battery production based on the extent of changes in the external environment and progress in strengthening our financial foundation.

Roadmap for the electrification transition

* About cooperation of our partner companies;

• For the sustainable local economic growth and the successful transformation of electrification, Mazda has joined together with local companies to establish a joint venture company for the purpose of developing the high-efficiency production technology required for the manufacture of electric drive units as well as for the production and supply of those units, as a first step of the development for electrification technologies of related components and the evolution entire supply chain in the Chugoku region.

• Regarding the core parts of an electric drive unit such as inverters containing SiC power semiconductors and motor, Mazda has also established a joint venture with several partner companies in possession of high-quality technology.

• Regarding the batteries, we will procure them from our partner companies while promoting research and development of our advanced battery technologies adopted by the Green Innovation Fund Project at our facilities.

• Leveraging collaboration and partnerships, Mazda works together in areas such as electrical and electronic architecture, advanced driver assistance systems, and electric powertrains to promote the development of efficient electrification technologies.

• The MAZDA EZ-6, MAZDA EZ-60, and MAZDA 6e are developed and manufactured in collaboration with Chongqing Changan Automobile Co., Ltd., a joint venture partner.

■Lean Asset Strategy

• Mazda will enhance its corporate value as a small player by developing and producing a wide range of products and electrification technologies in a timely manner and introducing them to the market, while maximizing the utilization of existing assets.
• This approach will enable it to reform the structure of its supply chain and promote optimization through structural cost reductions, including the optimization of supply chain and value chain, the selection and concentration of operations, investment efficiency improvements, and productivity improvements through the use of Digital Transformation, thereby strengthening our management resilience.

Expected Effects

Mazda committed to making Mazda factories globally achieve carbon neutrality by 2035 as a milestone, keeping an eye on its goal of making its whole supply chain carbon neutrality by 2050. To realize CN, the company is working on the following three pillars at its plants and operational sites in Japan*1, which account for approximately 75% of its global total CO₂ emissions, as the first step:

(1) Energy conservation, (2) Shifting to renewable energy, and (3) Introducing carbon neutral fuels. Furthermore, Mazda will capitalize on these initiatives conducted in Japan and use them as a basis to implement the optimal approach for each facility outside Japan.

(1) Energy conservation

Mazda has long continued to implement energy conservation activities throughout the entire Mazda Group in Japan by introducing low CO₂ emission manufacturing technologies and constantly improving them on a daily basis. In addition to continue these activities, Mazda will expand and promote such activities to achieve CN goals from a medium-to long-term perspective throughout the entire company, including not only manufacturing areas but also indirect departments. Furthermore, when introducing new facilities or renewal facilities in the manufacturing areas, the company introduces internal carbon pricing*2 at 9,100 yen per ton of CO₂ emissions as one of its capital investment criteria. As a result, investment decisions will take the future price of carbon trading into account and prioritize investments with a major contribution to CO₂ emissions reduction.

(2) Shifting to Renewable Energy

■Expansion of Renewable Electricity

In November 2021, Mazda participated in as secretariat company and began activities a part of the Carbon Neutral Electricity Promotion Subcommittee, which was set up as one of the special subcommittees under the Chugoku Region Carbon Neutrality Promotion Council, established by the Chugoku Economic Federation. In cooperation with member partners, the company has formulated a roadmap to expand the supply and demand. From FY March 2024, related partners will collaborate and work toward the demonstration and implementation stage to realize the roadmap. As an example of the expansion of renewable electricity, in March 2023, the company signed an offsite corporate power purchase agreement (PPA)*3 using solar power generation with local companies. The company will continue to expand its PPA in the Chugoku region, also expand its PPA in other regions, then the company promotes purchasing of electricity derived from non-fossil power sources, such as renewable energy, from electric power companies.

■Procuring CN Energy

Mazda is working to decarbonize its cogeneration (electricity and steam supply) facilities located on its premises by switching from coal to other fuels. In order to take more realistic steps toward achieving CN, the company is considering the most appropriate measures from various perspectives, including efficient technologies, and the stability of procurement of low-cost alternative fuels.

(3) Introducing Carbon-Neutral Fuels

■Expansion of next-generation biofuels

Efforts for the Spread of Next-generation Bio-liquid Fuels In 2018, the Hiroshima Council of Automotive Industry-Academia-Government, in which the Company participates, and Euglena Co., Ltd. jointly launched a "Your Green Fuel" project, which established an entire biofuel value chain - from material manufacture and supply to the use of next-generation biodiesel fuels - as a "local production for local consumption model" within the Hiroshima area. Since 2020, as Mazda confirmed that the above mentioned fuel had same performance as petroleum-derived diesel fuel, the company has continued demonstration tests with its part of company-owned vehicles equipped with diesel engine. Furthermore, the company has been increasing such tests of next-generation biodiesel fuels through various activities, including participation in the Super Endurance Race, one of the motorsports in Japan, since 2021, and operation of buses to transport Sanfrecce Hiroshima players in home games since 2022.

■Subscription to Convertible Bonds Issued by Euglena Co., Ltd.

Mazda has decided to subscribe to unsecured convertible bonds to be issued by Euglena in January 2023, and the company supports Euglena's biofuels business that aims to expand the use of next-generation biofuels through the subscription. With a view to procuring next-generation biofuels to be manufactured in this project, the company considers using them for logistics and other utilities in its site.

■Initiatives to expand supply and demand of carbon-neutral fuels in Chugoku region

Mazda participates in the CN Fuel Promotion Subcommittee established under the Chugoku Region Carbon Neutrality Promotion Council promoted by the Chugoku Economic Federation in June 2023, and promote as the secretariat company for the Liquid Fuel Subcommittee. In November 2024, the recommendations summarized by the main committee and the subcommittee had been submitted to the relevant government ministries by the Chugoku Economic Federation, and the company is working to promote discussions within the country.

■Demonstration operation of cupola melting furnace using biomass fuel 100%

Mazda has announced that it conducted a demonstration operation of a cupola melting furnace (cupola), the core casting facility installed at its Hiroshima Plant, by fully replacing fossil fuels that emit CO₂ during combustion with bio-coal briquettes, a biomass fuel derived from palm kernel shells, and confirmed the stable operation in February 2025.

This is a demonstration of the results achieved through the establishment of the Cupola CN Co-creation Working Group (established in March 2023), which was formed by soliciting volunteer companies and organizations to conduct research and development for the shift to biomass fuels, the establishment of production methods, and studies on the local procurement of raw materials. While bio-coal briquettes derived from palm kernel shells were used in the demonstration experiment, the company has been working to establish a locally produced, locally consumed energy circulation scheme in Hiroshima and neighboring areas, from biomass waste collection to production, with the aim of revitalizing local industries and contributing to the local communities. In the future, Mazda will expand the circle of regional cooperation and promote an energy circulation scheme for local production for local consumption, aiming for carbon neutral (CN) operation of cupolas using waste-derived biomass fuels such as bio-coal briquettes by fiscal year 2030.

■J-credits

In cases where generating power from alternative fuel sources proves difficult, Mazda will utilize J-credits*4, which are certified for CO₂ absorption through forest conservation in the regions where the company has its bases. By utilizing these credits, the company will contribute to decarbonization, sustainable forest management, and economic development in the regions.

*1 The three pillars of initiatives will be promoted at a total of 17 sites of operation in Japan, including Mazda's headquarters and main factory (Aki-gun and Hiroshima City, Hiroshima Prefecture), Hofu plant (Hofu City, Yamaguchi Prefecture), and Miyoshi Plant (Miyoshi City, Hiroshima Prefecture).

*2 Internal carbon pricing is a framework for promoting low-carbon investment and measures.

*3 A PPA is a long-term contract for the purchase of electric power under which a company producing electricity through solar power generation facilities agrees to provide power generated using those facilities to a designated user or users based in a location separate from the solar power generation facilities, supplying that power to them via an electric power transmission network operated by an electric power retailer.

*4 Mazda and Mitsui & Co., Ltd. had concluded a sales and purchase agreement covering J-Credits generated through appropriate forest management targeted toward the creation of a carbon-neutral society. The Credits are certified by the Japanese government under the J-Credit Scheme. As the first company to use the Credits, Mazda will purchase credits based on the absorption of CO₂ through forest conservation over an eight-year period from fiscal 2022 to fiscal 2029.

■Reduction of CO₂ Emissions with Suppliers

After explaining the challenges of CN to major business partners in Japan and overseas and promoting their understanding, Mazda began collecting data on CO₂ emissions by Tier 1 suppliers in Scope 1 & 2 including logistics for delivery to Mazda since 2021. Given the current level of CO₂ emissions and the difficulty of reducing them vary depending on the types of suppliers' businesses, the company is working with them to draw a roadmap to achieve reduction targets. In addition, the company have established a new award system to honor the efforts of its suppliers since 2023.

■Establishment of System for Rapid Response to Torrential Rains

As part of our BCP, Mazda is continuously improving its response in both tangible and intangible aspects in anticipation of natural disasters. On tangible aspect, the company is taking a planned approach in reinforcing buildings, equipment, seawalls, etc., and on intangible aspect, promoting the introduction of a safety confirmation system, the development of an emergency contact network, and the construction of self-disaster-defense teams organization. In addition, for initial disaster response, the company conducts joint drills with public fire departments and drills conducted by the in-house self-disaster-defense teams on its own.

In the supply chain, the company has introduced the supply chain risk management system called "SCR (Supply Chain Resiliency) Keeper" in cooperation with its business partners to speed up initial response by quickly grasping on-site information in the event of a disaster. In addition, in the logistics network, the company has established an emergency communication system with transportation companies and have established a system to minimize the impact on operations while coordinating with the production system based on the content of measures according to the impact ranking of typhoons and heavy rains.

■Future-Oriented Measures for Maintaining Seawalls

As Mazda's major plants in Japan (Hiroshima and Hofu) face the sea and rivers, the company carried out reinforcements and maintenance work of seawalls every year. In addition, the company has completed the construction of seawalls for protection against flooding damages caused by the highest tide level and maximum tsunami height estimated by the prefecture in the event of Nankai Trough earthquake.

■Water Resource Conservation in Preparation for Water Resources Depletion

Mazda promotes activities to eliminate wasteful water use and circulate water resources by treating used water so that it is the same quality as it was taken from nature. In order to implement its initiative of water resource reuse and recycling at a domestic model plant* by 2030. The company promotes the further use of rainwater and recycled water as well.

* The model plant is a pilot plant where new measures are tested ahead of implementation at other facilities.

a) Process for identifying and assessing climate-related risks

b) Process for managing climate-related risks

c) Status of integration of climate-related risk management processes into overall risk management 

Mazda has identified major risks and opportunities based on scenarios from the IPCC and the IEA, government policies, regulatory and industry trends. Based on this identification, Mazda is promoting initiatives to avoid risks and seize opportunities. Strategies derived from these progresses are deliberated over at the Executive Committee Meetings and the board of Directors attended by the Representative Director and President.

Mazda also shares climate-related information with its suppliers periodically through a shared platform.

• Mazda has established a system for rapid response to torrential rain and other disasters, and has been managing them as part of our BCP in the context of an emergency risk management system. In addition to these efforts, as torrential rain disasters have become more severe and frequent in recent years, The company is enhancing its ability to collect weather forecasts and making it possible to make quick disaster prevention decisions based on a predetermined time schedule. In addition, the company reviews its response every heavy rain season to improve its response capabilities.
• In response to concerns about storm surges and water resources depletion, the company is promoting reinforcement of seawall infrastructure and water conservation efforts in the practice of specialized departments.
• In response to the heat waves that have become more frequent in recent years, the company regularly measures and evaluates the heat environment of each workplace as part of employee health management, which leads to the maintenance and management of appropriate air conditioning equipment. In addition, the company uses heat insulating materials and heat-insulating paints in its buildings as environmentally friendly measures.
• As a measure against the spread of the epidemic, the company developed a working rule to assume that employees and other families living with them become infected.

a) Metrics used to assess climate related risks and opportunities

b) Scope 1, Scope 2, and Scope 3 greenhouse gas (GHG) emissions and the related risks 

c) Targets and performance in managing climate-related risks and opportunities

To take on the challenge of achieving carbon neutrality throughout its entire supply chain, it will be essential to understand the GHG emissions of Scope 1, 2 and 3. In addition, it is possible that more stringent carbon pricing, including the introduction of carbon taxes, could impact finances. In order to run eco-friendly operations more effectively throughout the Mazda Group and its entire supply chain, Mazda manages to integrate CN into the existing ISO 14001 Environmental Management System (EMS).

In addition, the company asks its suppliers to provide it with CO₂ emission data in Scope 1 & 2 as well as logistics at the time of delivery to us (Scope 3 Category 1 for Mazda) every year, and set targets together with them to manage the results.

In addition, the company officially participated in GX League* sponsored by the Ministry of Economy, Trade and Industry, in May 2023. The company shows its non-consolidated reduction targets, and disclose its progress on GX dashboard.

* The GX League is an organization that aims to provide value for social structural reform toward carbon neutrality together with member companies through the four initiatives of voluntary emission trading (implementation), market rule formation (co-creation), business opportunity creation (dialogue), and "GX studios" (exchange). "GX" is an abbreviation for "green transformation."

Target of GHG emissions of Scope 1, 2 (Mazda's non-consolidated sights) (Registered as GX League)

Scope of coverage: Total of 17 places of operation in Japan including headquarters and Hiroshima plant, (Aki-gun and Hiroshima City in Hiroshima Prefecture), Hofu plant (Hofu City, Yamaguchi Prefecture) and Miyoshi office (Miyoshi City, Hiroshima Prefecture).

*1 Mazda is currently reevaluating these targets in light of the latest situations.

*2 Projection for 2035 is a global projection. Achievement of carbon neutral at Mazda's own plants

GHG emissions of Scope 1, Scope 2 and Scope 3 (Global)

*1 Scope of coverage:
Scope 1 and 2: Mazda Motor Corporation, 21 domestic consolidated Group companies and 11 domestic equity-method Group companies, and 22 overseas consolidated Group companies and 4 overseas equity-method Group companies
Scope 3:

• Categories 1, 2, 6 and 7: Mazda Motor Corporation
• Category 3: Mazda Motor Corporation's 4 domestic production sites and 6 overseas production companies (2 consolidated Group companies and 4 equity-method Group companies)
• Categories 4 and 9: Mazda Motor Corporation, 21 domestic consolidated Group companies and 11 domestic equity-method Group companies
• Category 5: Mazda Motor Corporation's 4 domestic production sites
• Categories 8, 10, 13, 14 and 15: Mazda Motor Corporation, 21 domestic consolidated Group companies and 11 domestic equity-method Group companies, and 22 overseas consolidated Group companies and 4 overseas equity-method Group companies
• Category 11: Used by Tank to Wheel method for FY 2019-2022 and Well to Wheel method for FY 2023.
• Categories 11 and 12: From 2023, we revised the calculation method as follows, in order to improve the comprehensiveness and accuracy.
  - Prior to 2022 : Calculated based on vehicle sales in Japan and major sales regions (North America, Europe, and China) using Tank to Wheel (fuel consumption during driving) method
  - From 2023 : Calculated based on global production volume using Well to Wheel (fuel extraction, refining, and electricity generation + fuel consumption during driving)

*2 The emissions calculated using the previous calculation method for 2023 are 29,763 (1,000 t-CO₂e). The increase in emissions is primarily due to an increase in sales volume (approximately 12% year-on-year).

Ratio of electrified vehicles to global sales volume* (Global)

* Volumes Include OEM units. HEV includes mild hybrids.

GHG emissions of Scope 1, 2 (Mazda's global factories)

GHG emissions per vehicle produced (Mazda's global factories)

Energy consumption and electricity consumption and renewable energy usage ratio (Mazda's global factories)

* Scope of coverage: Mazda Motor Corporation's 4 domestic production sites and 6 overseas production companies (2 consolidated Group companies and 4 equity-method Group companies)

GHG emissions of Scope 1, 2 (Mazda's non-consolidated sights) (Registered as GX League)

* Scope of coverage: Total of 17 places of operation in Japan including headquarters and Hiroshima plant, (Aki-gun and Hiroshima City in Hiroshima Prefecture), Hofu plant (Hofu City, Yamaguchi Prefecture) and Miyoshi office (Miyoshi City, Hiroshima Prefecture).

Water is essential in automobile manufacturing processes such as cooling (e.g. cooling furnaces in casting), dilution (diluting the mother liquor used for cutting and cleaning in the machining process), and cleaning (e.g. cleaning of vehicle bodies in the painting process). In preparation for potential risks and concerns in future such as water resources depletion and rising water prices, Mazda aims to realize initiatives for the recycling and circulation of water resources at model plants in Japan by 2030. By 2050, Mazda aims to realize this initiative in our global production processes.

Water intake by entire Mazda Group companies in Japan

Water intake (Mazda Group companies in Japan)

Scope of coverage: Mazda Motor Corporation, 21 domestic consolidated Group companies and 11 domestic equity-method Group companies