CSR REPORT 2021

Revision History

Dec. 23 2021

First Edition

1 Message from the CEO

JFE Group Vision

  1. Corporate Vision/Business Conduct
  1. Value of Steel

12 Seventh Medium-term Business Plan

16 Material Issues of Corporate Management

CSR Management

26 CSR Structure

32 JFE Group Value Chain

46 Supply Chain Management

Environment

  1. Environmental Management
  1. Climate Change
  1. Scenario Analysis in Line with the TCFD Recommendations

90

Steel Industry Initiatives

  1. Development and Provision of Eco-friendly Processes and Products
  1. Efficient Use of Resources
  1. Water Security
  1. Prevention of Pollution
  1. Biodiversity
  1. Environmental Communication

Social

131 Responsibility to Customers (Provide Quality Products and Enhance Customer Satisfaction)

138 Occupational Health and Safety

  1. Labor Standards (Recruit and Nurture Diverse Human Resources)
  1. Human Rights
  1. Community
  1. Shareholders and Investors

Governance

  1. Corporate Governance
  1. Compliance
  1. Risk Management
  1. Tax Transparency

ESG Data

  1. Environmental Data
  1. Social Data
  1. Governance Data
  1. Independent Assurance Statement

External Evaluations and Awards

  1. External ESG Evaluations
  1. External Awards
  1. Third-partyComments

243 Editorial Policy

247 Guideline Content Indices

Message from

JFE Group

CSR

External

Editorial

Guideline

Environment

Social

Governance

ESG Data

Evaluations

the CEO

Vision

Management

Policy

Indices

and Awards

Message from the CEO

October 2021

Koji Kakigi

Representative Director, President and CEO of JFE Holdings, Inc.

Contributing to the Sustainable Development of Society for a Prosperous Global Future by Making Maximium Use of Group Resources

Where We Stand and What We Intend to Do

The social and economic environment surrounding the JFE Group is changing at an unprecedented pace in the face of challenges that include intensifying global competition amid the ascendency of China, an increasingly uncertain outlook for the global economy caused by the U.S.-China rivalry, the need to address climate change, and the spread of COVID-19. We must flexibly and effectively adapt to these changes by following our corporate vision of "Contributing to society with the world's most innovative technology." By doing so, we will fulfill our mission of being essential to society's sustainable development and create safe, comfortable lives for people everywhere. We will also be ensuring environmental and social sustainability (helping to solve critical issues) and establishing economic sustainability (stable earnings power) toward ultimately realizing sustainable growth for the Group over the medium to long term and increasing corporate value. Meanwhile, every employee will be motivated to do their jobs with a greater sense of purpose and satisfaction by engaging in the Company's contributions to sustainable development. The JFE Group will pursue medium- to long-term management to attain these goals.

JFE GROUP CSR REPORT 2021

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Message from

JFE Group

CSR

External

Editorial

Guideline

Environment

Social

Governance

ESG Data

Evaluations

the CEO

Vision

Management

Policy

Indices

and Awards

The Seventh Medium-term Business Plan and Material Issues of Corporate Management

JFE formulated the Seventh Medium-term Business Plan, which covers the period from FY2021 to FY2024, to steadily enhance corporate value over the medium to long term. We consider this target period as the most transformative period in the Company's history. We will establish a robust management foundation that can deliver stable profit through measures including the structural reform of the steel business, which we announced last year, and we will proactively address climate change and other ESG issues.

To date, the JFE Group has identified material CSR issues in its business activities from the perspective of its diverse stakeholders and has designated key performance indicators (KPIs) to evaluate its initiatives for these issues. In FY2021, under the policies of the medium-term plan, we have decided to identify and combine our economic issues with our material CSR issues to formulate and disclose our material issues of corporate management. By appropriately evaluating and revising these issues and KPIs to pursue activities for achieving our goals, we will build a solid foundation for sustainable growth for the Company while steadily advancing our initiatives for medium- to long-term environmental and social issues such as climate change.

Initiatives on Climate Change, and the JFE Group Environmental Vision for 2050

While the use of a blast furnace is the optimal manufacturing process for mass-producinghigh-quality,high-performance steel, it is not yet possible to avoid emitting CO2 with this method. Since the steel business constitutes the core of the JFE Group's operations, climate change is an extremely important management issue from the perspective of business continuation. JFE declared its support for the TCFD recommendations in May 2019 and has identified climate change- related issues based on the scenario analysis advocated in the TCFD to formulate strategies for sustainable growth. In September 2020, JFE disclosed its target of reducing CO2 emissions in FY2030 by 20% or more compared to FY2013 in the steel business, which accounts for most of the Group's CO2 emissions. We also declared its intention to achieve carbon neutrality by 2050, ahead of the Japanese government's announcement of the same goal. In our latest medium- term plan, we formulated the JFE Group Environmental Vision for 2050, laying out our concrete initiatives for reducing CO2 emissions. By reflecting the TCFD's philosophy in our management strategies, we will systematically address climate change. In the steel business, we will reduce CO2 emissions by 18% from FY2013 levels by the end of FY2024. By doing so, we will not only achieve our FY2030 target announced in FY2020 but also further promote technological development and disclose a more ambitious action plan in the form of a target for FY2030 during the period covered by the medium-term business plan. Moreover, we will take on the challenge of developing super-innovative technologies, such as carbon-recycling blast furnaces developed with our unique techonology, while also adopting a multitrack approach for pursuing other technologies to explore all possibilities for realizing carbon neutrality in 2050.

Efforts to realize carbon neutrality are gaining momentum around the world. JFE recognizes this trend as a business opportunity and is seeking to expand its contribution to reducing CO2 emissions across society by leveraging the Group's strengths as they are deployed in diverse businesses. We intend to contribute with a reduction of 12 million tons of CO2 in 2024 and 25 million tons in 2030, by expanding renewable power generation under development in the engineering business. We especially intend to unite our efforts behind the offshore wind-power business by making maximium use of Group resources.

Initiatives for Solving Social Issues and Enhancing Corporate Governance

I take seriously the fact that we have not been able to achieve our goal of zero major accidents, which is for managing the safety and health of our employees. We will promote efforts to ensure absolute safety by remodeling our facilities to eliminate accidents through measures such as installing sensors to reduce potential hazards as well as bolstering safety

JFE GROUP CSR REPORT 2021

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JFE Holdings Inc. published this content on 24 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 December 2021 15:46:05 UTC.