Environment

Foster Electric has obtained ISO 14001 certifications at its headquarters and all of its overseas manufacturing sites, and promotes the Group’s Environmental Philosophy and mid-term environmental goals. At headquarters, we monitor the activities conducted at each site and check their performance.

Environmental Philosophy

As a global corporation in the acoustic industry, Foster Group contributes to the realization of a sustainable society in all fields of corporate activities by considering the harmony between its mission of “To make contributions for future society through acoustics,” and the environment as one of essential tasks.

Environmental Policy

- Preface -
At the Foster Group, we pursue eco-friendly technologies in the lifecycle of our products and each one of us acts by prioritizing eco-friendliness, aiming to conserve the global ecosystem by addressing climate change and by contributing to building a resource-recycling society.

1. We contribute to the realization of a sustainable society by continually improving our environmental management systems, and by communicating and cooperating with our stakeholders proactively.
2. For addressing climate change, we reduce CO₂ emissions and promote the use of renewable energy throughout our value chain including procurement of raw materials, manufacturing, transportation, selling and disposal of our products.
3. We strive for the waste reduction by promoting effective use of resources in our groupwide activities and product development. We also use water resources responsibly in our manufacturing processes.
4. We strive for the promotion of activities considering Biodiversity conservation, prevention of pollution and environmental load reduction by chemical substance management.
5. We comply with domestic and international environmental laws and regulations and other requirements related to our group-wide activities.
6. We develop human resources who practice environmental activities through enlightening people involved in group activities and educating employees.

【Issued following the approval by senior management in July 1993. Revised in July 2025.】

Mid-Term Environmental Goals 2025-2027

Because we achieved the 2025 environmental goal (35% reduction from the FY2018 base year) ahead of schedule, we set the next environmental goals one year earlier than originally planned. In the new goals, we have set two priority tasks of “Addressing climate change” and “Conserving the global ecosystem by contributing to building a resource-recycling society.”

Material issues	Target (April 2025 to March 2028)
	Improving resilience to climate change
	Reducing greenhouse gas emissions*FY2030 Target
	Reducing the use of energy and promoting the use of renewable energy
	Realizing a circular economy
	Complying with environmental regulations of each country and reducing environmental impact
	Protecting and restoring natural ecosystems

Activities to Preserve Biodiversity

We have set “Biodiversity conservation” as one of the tasks for the new mid-term environmental goals and continue to hold lecture meetings and training on biodiversity and carry out neighborhood cleanup activities. Currently, we began to prepare for information collection and other initiatives for disclosing information based on the recommendations of the Task Force on Nature-related Financial Disclosures (TNFD).

Water Risk Management

Each site manages water withdrawal and discharge by setting their standards based on local laws and regulations. The headquarters uses “AQUEDUCT,” a water risk assessment tool of the World Resources Institute (WRI), to understand the local water risks at each site. Since 2020, we have been addressing water risks by including “Reduce water consumption” in the mid-term environmental plan.

Chemical Substance Management

We have set forth its autonomous management standard, in which applicable laws and regulations of countries and customers’ requests are reflected, for handling environmentally hazardous substances contained in its products to minimize their impact on the environment. We eliminate any controlled substances from our products via eco-friendly procurement and management of necessary parts and/ or materials purchased. Based on the aforementioned scheme, we have established an optimum management system for the efficient search and collection of information about chemical substances that are contained in parts and materials and precise communication of information necessary in the supply chain.

The Foster Group's Environmental Initiatives

Initiatives at our headquarters building

Our headquarters employs environmental load reduction technologies such as lighting control by daytime sunlight, air conditioning by outside air, ice thermal storage air conditioning system, and double-skin facade. Electricity consumption is controlled further by limiting maximum power consumption during the day, promoting Cool Biz and Warm Biz campaigns, turning off all the lights in the building for lunch breaks, and promoting the replacement of all of the lights in building with LEDs. In October 2024, we began to use electricity certified as coming from renewable energy power plants* and all of the electricity consumed at the headquarters now comes from renewable energy sources.

*Electricity using Non-Fossil Certificates (with renewable energy specified as the sources) which is 100% virtually from renewable sources of energy and whose actual CO₂ emission factor is zero

Introduction of electronic waste manifests in Japan

The waste manifest (industrial waste control form) system enables generators of industrial waste to track and manage the process of industrial waste from its generation to the final disposal. The electronic version of this system is called an electronic manifest. The introduction of this system streamlines administrative processes, ensures data transparency, and prevents illegal dumping, allowing waste generators to fulfill their responsibilities. Centralized management also leads to the strengthening of legal compliance. At present, we have introduced the electronic manifest for regularly generated industrial waste. We continue to use it, aiming to introduce electronic manifest for 100% of waste, including irregularly generated waste.

Effective utilization of water resources

One of our strengths is the in-house production of diaphragms, which are the most important parts of speakers in determining the sound quality. However, the papermaking process is a necessary part of manufacturing the paper parts used in these diaphragms. This process uses a large amount of water as paper is made from raw materials dissolved in water. At the headquarters and the Panyu Factory (China), we have been studying the reuse of discharged water for many years. As of March 31, 2025, 60% of the water used in the papermaking process is recycled water, allowing us to effectively utilize this resource.
We have also been considering the recycling of the paper raw materials collected during the wastewater recycling process. We are using them for paper ring subcomponents and other purposes, enabling us to recycle 6% of the waste materials. Moving forward, we will take inspiration from the reuse of waste materials in industries such as clothing to incorporate waste materials into our diaphragms and other components, further reducing waste.

Reduction of GHG emissions (Scope 1 & 2)

We implement various initiatives to efficiently use limited resources in accordance with local regulations and the requests of customers, as well as the Foster Group Environmental Policy and the CO₂ Reduction Action Program. We have all employees share the targets and drive reduction activities by establishing a cooperative framework, such as the sharing of best practices between bases.
We promote the use of renewable energy as an initiative to address climate change. In 2022, we installed solar panels at Heyuan Factory in China and at Bac Ninh Factory in Vietnam. At offices, we use electricity from renewable energy sources and purchase green energy certificates to reduce CO₂ emissions. We will continue to expand the introduction of renewable energy.

Solar panels installed at the Heyuan Factory (China)

Solar panels installed at the
Bac Ninh Factory (Vietnam)

Reduction of GHG emissions activity (Scope 3)

We have set a target of reducing Scope 3 emissions by 15% from the 2018 base year by 2030 as one of our mid-term environmental goals, and are taking actions to achieve it.
To reduce the category 1 emissions (from purchased goods and services), which has the greatest percentage of Scope 3 emissions, we began to conduct an energy consumption survey with cooperation from our suppliers in FY2023. We continued this survey in FY2024, and based on its results, we held meetings with our suppliers and conducted fact finding. We also hold sustainable procurement briefings for our suppliers, explaining the latest trends and our future policies on sustainability and our CO₂ reduction targets, while requesting them to cooperate in the energy consumption survey.
Regarding category 4 emissions (from upstream transportation and distribution), we introduced GHG emission calculation and reduction support services from a logistics specialist company in FY2024. By using data from the current logistics control system and increasing the frequency of calculation, we can now efficiently visualize specific key points for the reduction and changing points. Moving forward, we will take measures against the points to make improvements.

External communications

Green Value Chain platform

As a corporate member, we participate in a network for promoting Green Value Chains (available in Japanese)as part of the Ministry of the Environment’s Green Value Chain Platform.

Japan Climate Initiative (JCI)

In 2020, we joined the Japan Climate Initiative (JCI) (available in Japanese)by agreeing to its declaration of “Joining the front line of the global push for decarbonization from Japan”.

Environmental Digital Platform

In March 2023, we joined the Environmental Digital Platform (available in Japanese) operated by Konica Minolta, Inc.

Speakers

We are accelerating moves to develop basic technologies for next-generation speakers for eco-friendly vehicles and to introduce such technologies to commercial products.

Reduce the weight of speakers

We are using CAE analysis to optimize the design of resin and metal components and study carbon fiber reinforced thermoplastics (CFRTP) as new materials. We are also working to commercialize self-developed products, incorporating lightweight technologies to address concerns related to EVs, particularly extending their range and improving their power consumption efficiency.

Reduction of volatile organic compounds (VOCs)

As initiatives to reduce the volume of VOCs remaining at production sites and in the passenger cabins of vehicles, we have cut the use of organic solvent adhesives for bonding parts and drive the development and adoption for commercial products of an adhesive with a reduced solvent content.
We are also committed to the development of bonding methods which do not use adhesives, such as use of quick-drying adhesives and ultrasonic bonding that do not use a drying furnace, as well as clamp terminal and tinsel wire (no soldering).

*We will continue development and introduction with a target of achieving 30% as the ratio (to net sales) of commercialized car speakers incorporating these environmental technologies.

Reduction of CO₂ emissions

We are undertaking design development activities for reducing power consumed in manufacturing speakers to cut CO₂ emissions. We are making development efforts to achieve the mid-term CO₂ emissions reduction target, by improving and changing methods of bonding parts and by reducing the use of a drying furnace in stages.

Actuators

We proactively apply environmentally friendly design to haptic vibration actuator devices, which are a part of new user interfaces for CASE*, VR, AR, and other technologies. In consideration of VOC emissions, we have adopted adhesives that do not contain harmful solvents. To reduce the labor necessary to manufacture products, we have realized quick curing using UV radiation and pulse heat soldering. In addition, to reduce solder consumption, we have developed resistance welding, etc. and put it to practical use.

* CASE: Connected, Autonomous, Shared, Electric

Headphones and Headsets

We have been active in incorporating environmental considerations in our product and/or process design. In reducing environmentally hazardous substances in our products, we address the most up-to-date information regarding country-specific legal requirements and the RoHS2, and propose to our customers. In addition, to reduce the energy consumed during manufacturing and the volume of waste materials, we need to continue to minimize waste materials, reuse raw materials by introducing new equipment, and develop products made of natural materials. For products with electronic circuits, we have adopted power-saving parts in our efforts to develop products with low power consumption. For microspeakers used for headphones or headsets, we are working towards environmentally friendly product manufacturing by introducing adhesives that do not contain toluene for new microspeakers in order to reduce VOCs. (replacing the parts that use solvent adhesives.)
As a mechanism for achieving our targets, we have built an internal system to examine whether toluene is used in the development and design phases and continue to check that products are toluene-free every month thereafter. We are also exploring alternative adhesives on an ongoing basis.

Environment Lecture Presentation

We invited an outside expert to speak about what biodiversity is and why biodiversity needs to be protected to our officers, department heads, and group leaders (in the form of a Web conference). The lecture served as an opportunity to think about issues that we should address.

Headquarters: Akishima City Cleanup Movement (Mini-Clean Activities)

The annual number of participants increased by as much as 14% from the previous fiscal year, to 402 (participation rate: 35.8%). The total weight of waste increased to 49.5 kg. In addition, junior high school students were able to participate in the activities through a work experience program.

Shizuoka Office: River cleanup activities

Since 2022, the Shizuoka Office, has participated in the Kasen Kankyo Adopt Program (lit. river environment adoption program), hosted by the city government of Shizuoka. This program divides neighboring rivers into specific sections, which are “adopted” by participants to support environment beautification and provide information. Under this program, our office carries out cleanup activities twice a year.

Other activities

At the headquarters, we created opportunities to think about environmental initiatives from different perspectives through activities such as asking people to submit photos of the natural environment around them and providing environmentally friendly lunch menus.

The Foster Group’s environmental activities

Although June has traditionally been designated as Environment Month, this fiscal year, we extended the period and held environmental events.
At our sites in China, Vietnam, Myanmar, and the United States, we held events including workshops and internal training related to environmental knowledge and waste management, planting activities on premises, and emergency drills, as part of our efforts to raise the environmental awareness of employees. We also cleaned up the area around each factory under the themes of environmental protection and harmonious co-existence with nature, and implemented activities with an awareness of biodiversity.

1.Governance

2.Strategy

Under the framework advocated in the TCFD recommendations, we considered changes in the external environment in 2030 and analyzed the impact of climate change on us.
We adopted the 1.5-degree and 4-degree scenarios for analyzing risks and opportunities. Regarding transition risks, we considered how policies and markets will change for the alleviation of climate change. Concerning physical risks, we also analyzed how the frequency and impact of climate change-related weather disasters will change.
We reflected the identified risks and opportunities in the medium-term business plan. Moving forward, we will also consider the financial impact on the Company. We are conducting an analysis of the part of the automotive business, which is subject to a significant impact. We will continue the analysis by focusing on other businesses as well.

Impact on Business Related to Climate Change Risks and Opportunities

・Target business: Automotive as the Company's main business
・Level of impact on business activities: Evaluated on a three-point scale of Large, Medium, and Small

[Scenarios that were used]

Transition risks: International Energy Agency (IEA)^*1

・World Energy Outlook 2022:APS^*2, STEPS^*3
・Net Zero Emissions by 2050 Scenario^*4

Physical risks: Intergovernmental Panel on Climate Change (IPCC)^*5

・6th Report: SSP1-1.9, SSP5-8.5 ^*6

*1. IEA: International Energy Agency
*2. APS: Announced Pledges Scenario
*3. STEPS: Stated Policies Scenario
*4. NZE: Net Zero Emissions by 2050 Scenario
*5. IPCC: Intergovernmental Panel on Climate Change
*6. SSP: Shared socioeconomic pathways

3.Risk Management

We have established the Risk and Crisis Management Committee, which is chaired by the president, to ensure that risks which may affect business management are addressed promptly and appropriately. This committee evaluates and manages company-wide risks and devises and implements measures to address them.
Especially, climate change-related risks are positioned among the top risks in the committee's total risk assessment. The Sustainability Committee identifies and evaluates such risks, implements measures to tackle them, and takes other initiatives to improve the effectiveness of risk management.
Information about the statuses of risk management and measures is also shared with the Board of Directors, which supervises and monitors risk and crisis management of the overall company and tries to ensure consistency between risk management and materiality analysis, thus enhancing the total risk management in the entire company.

4.Metrics and Targets

We revised our CO₂ emissions reduction targets in 2021. The revised mid-term goals are to reduce absolute Scope 1 and 2 emissions 50% by 2030 from a FY2018 base year and to reduce absolute Scope 3 emissions 15% by 2030 from a FY2018 base year. We also set a new long-term goal of achieving carbon neutrality by 2050. We are actively promoting initiatives to achieve the reduction.

To achieve this goal, we have developed the CO₂ Reduction Action Program [Ver. 2025]. The headquarters and the other sites will work together in accelerating CO₂ reduction activities in a group-wide manner.