Natural Capital and Biodiversity | Environment | Sustainability | IHI Corporation

Approach

The IHI Group regards natural capital as an important foundation that supports society and its business activities. Recognizing that its business activities both depend on and may have impacts on natural capital, the Group believes it is important to appropriately understand these relationships and strive to reduce negative impacts and ensure the sustainable use of natural capital.
The Group also seeks to contribute to the realization of a society in harmony with nature by providing technologies, products, and services that help conserve and restore natural capital. In advancing these initiatives, the Group complies with relevant laws and regulations and places importance on promoting employee understanding, appropriate information disclosure, and dialogue with stakeholders.
Based on this approach, the IHI Group is working to organize its policy on natural capital and biodiversity.

Policy

IHI Group Basic Environmental Policy

Governance

The IHI Group has established a subcommittee dedicated to the conservation of natural capital under its environmental governance framework. This subcommittee is responsible for formulating policies and strategies, identifying risks, and examining and promoting appropriate countermeasures.

Environmental Management and Activity Promotion Structure

Strategy

The IHI Group believes that ensuring the sustainable use of natural capital, including mineral resources and water resources, is essential for the continuity of its business operations. In addition, the Group recognizes that environmental impacts arising not only from its own production activities but also from upstream and downstream activities across its value chain can have significant effects on biodiversity. Accordingly, the Group promotes the conservation of natural capital, including biodiversity, in conjunction with efforts to address climate change, prevent pollution, and advance the transition to a circular economy.
Furthermore, to systematically identify and organize nature-related risks and opportunities, the Group will continue to examine its future initiatives with reference to the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD). At present, the Group is placing priority on deepening its understanding of the importance of natural capital and gaining a clear understanding of its current situation. From fiscal 2026 onward, the Group plans to progressively develop and expand its initiatives in line with the concepts and recommendations of the TNFD. First, we assess our dependencies and impacts on natural capital, and then analyze related risks and opportunities and evaluate their potential impacts on our business and financial performance. We will subsequently disclose and report these results.
Regarding biodiversity, the Group conducts initiatives at offices and plants in alignment with the 2030 global targets set forth in the Kunming-Montreal Global Biodiversity Framework (GBF), which was formulated at COP15. In addition, the Group has been participating in the 30by30 Alliance for Biodiversity of the Ministry of the Environment since May 2024.

Risk Management

To understand the relationship between natural capital and its business activities, the IHI Group conducted an initial screening using ENCORE, an international database that maps dependencies and impacts between economic activities and natural capital (ecosystem services). Based on the results, and considering the characteristics of its manufacturing-centered businesses, the Group’s dependencies and impacts on natural capital were categorized into the following three types.
(1) Social Infrastructure Business
A business segment characterized by relatively high levels of both dependency and impact on ecosystem regulatory functions (such as water, soil, and disaster risk mitigation), requiring prioritized detailed consideration.
(2) Resources, Energy and Environmental Business; Industrial Systems and General-Purpose Machinery Business
A business segment with limited direct dependency on natural capital, but where managing environmental impacts arising from manufacturing processes (including emissions, air and water pollution, and waste) represents a key issue.
(3) Aerospace, Space and Defense Business
A business segment in which overall physical dependency and impact on natural capital during manufacturing activities are relatively limited, with a focus on monitoring and managing environmental impacts through site-level environmental management.

Results of the Initial Screening Using ENCORE

Business	ISIC Division	ISIC Group/Class	Dependencies
Business	ISIC Division	ISIC Group/Class	Water Supply	Global climate regulation services	Rainfall pattern regulation services	Local climate regulation services	Air filtration services	Soil and sediment retention service	Solid waste remediation	Water purification services	Water flow regulation services	Flood mitigation services	Storm mitigation services	Noise attenuation services	Other regulation and maintenance services Dilution by atmosphere and ecosystems	Other regulation and maintenance services Mediation of sensory impacts
Social Infrastructure	Civil engineering	Construction of utility projects Construction of other civil engineering projects	M	M	VH	L	VL	H	-	M	M	H	H	VL	L	VL
Resources, Energy and Environment	Manufacture of machinery and equipment n.e.c.	Manufacture of special-purpose machinery	M	VL	VL	L	VL	L	L	M	M	M	M	VL	L	VL
Industrial Systems and General-Purpose Machinery	Manufacture of machinery and equipment n.e.c.	Manufacture of general-purpose machinery	M	VL	VL	L	VL	L	L	M	M	M	M	VL	L	VL
Aero Engine, Space and Defense	Manufacture of other transport equipment	Manufacture of air and spacecraft and related machinery	L	VL	VL	L	VL	M	M	M	M	M	M	VL	L	VL

Business	ISIC Division	ISIC Group/Class	Impacts
Business	ISIC Division	ISIC Group/Class	Disturbances	Area of freshwater use	Emissions of GHG	Area of seabed use	Emissions of non-GHG air pollutants	Genration and release of solid waste	Area of land use	Emissions of toxic pollutants to water and soil	Volume of water use	Introduction of invasive species
Social Infrastructure	Civil engineering	Construction of utility projects Construction of other civil engineering projects	VH	VH	M	M	L	M	L	H	L	L
Resources, Energy and Environment	Manufacture of machinery and equipment n.e.c.	Manufacture of special-purpose machinery	M	-	L	-	L	L	L	M	M	-
Industrial Systems and General-Purpose Machinery	Manufacture of machinery and equipment n.e.c.	Manufacture of general-purpose machinery	M	-	L	-	M	L	L	M	M	-
Aero Engine, Space and Defense	Manufacture of other transport equipment	Manufacture of air and spacecraft and related machinery	H	-	L	-	L	L	L	H	L	-

VHVery High
HHigh
MMedium
LLow
VLVery Low

Initiatives

The IHI Group seeks to fully understand the impacts of its business activities on natural capital and is committed to conserving natural capital and biodiversity.

Environmental Conservation of the “Higashiomi Tatebe Waterway for Creatures” (IHI Infra-square Co., Ltd.)

IHI Infra-square Co., Ltd. (IIS) are involved in water management for agricultural waterways in the Echi River basin, which flows near the IIK Shiga Plant (Higashiomi City, Shiga Prefecture), and conduct environmental conservation activities in the surrounding river basin. Cleaning the agricultural waterways and improving the environment has also led to improved habitats for Biwa trout and sweetfish, species that are endemic to the Echi River, where the water drains. This initiative is the first for the IHI Group to be registered by the Ministry of the Environment of Japan as a Nationally Certified Sustainably Managed Natural Site for the first half of 2024. Such natural sites are locations where private-sector and other initiatives preserve biodiversity, certified by the national government. In fiscal 2025, this environmental conservation initiative was registered in the international database as an OECM (Other Effective area-based Conservation Measures).
(GBF Target 1: Plan and Manage all Areas To Reduce Biodiversity Loss)

Maintenance of Healthy Ecosystems in a Nature Symbiosis Area (IHI Yokohama Office)

The IHI Yokohama Office has established a “Nature Symbiosis Area” within its premises and conducts conservation activities for rare plant species classified as Vulnerable (Category II), such as Cephalanthera falcata (kinran) and Cymbidium nipponicum (kugenuma-ran), as well as for Sugita plum tree, a species native to the Sugita district of Isogo Ward in Yokohama City, Kanagawa Prefecture, where the office is located. In addition, the Office is conducting pilot initiatives for the cultivation of sustainable crops using synecological agriculture methods (coexistence-based farming).
The IHI Yokohama Office Nature Symbiosis Area was recognized as a Nationally Certified Sustainably Managed Natural Site on September 16, 2025, in recognition of its efforts to maintain a healthy ecosystem composed of diverse flora and fauna centered on native species, as well as to expand habitats for rare plant and animal species.
(GBF Target 4: Halt Species Extinction, Protect Genetic Diversity, and Manage Human-Wildlife Conflicts)

Cooperation with Tokyo Bay Eelgrass Field Restoration Activities (IHI Yokohama Office)

Since 2008, the IHI Yokohama Office has been participating in eelgrass field restoration activities sponsored by the Amamo Revival Collaboration in Kanazawa-Hakkei, Tokyo Bay Area together with neighboring companies. Eelgrass field restoration is a program that involves collecting eelgrass seeds, growing them, and then planting them in the sea to expand eelgrass fields. Eelgrass is referred to as the “cradle of the sea” and contributes to biodiversity by providing hiding places for small fish and fixing CO₂ through photosynthesis.
(GBF Target 8: Minimize the Impacts of Climate Change on Biodiversity and Build Resilience)

Biodiversity Habitat Disclosure (IHI Aioi Office)

The IHI Aioi Office is located in a rich natural environment surrounded by the Aioi Bay and mountain forests. Green spaces make up approximately 70% of the site’s area, and the biodiversity potential of those areas was confirmed through surveys of the flora and fauna and green infrastructure development. In fiscal 2018, the site was newly certified as a wildlife coexistence business establishment through the sixth certification selection process of the Association for Business Innovation in Harmony with Nature and Community (ABINC), and the certification was renewed in fiscal 2024.
In fiscal 2025, at the survey sites of the IHI Aioi Office, it conducted surveys of invasive alien species and monitoring of valuable plant species in collaboration with external experts. In addition, it also carried out biodiversity monitoring and inspections of forest management areas.
(GBF Target 2: Restore 30% of all Degraded Ecosystems)

Environmental Top