CSR & the Environment

Chief Operating Officer’s Message

Chief Operating Officer’s Message: Yanmar Holdings Co., Ltd. Chief Operating Officer (COO) and Representative Director Tetsuya Yamamoto

Social issues we need to solve

110 years ago, founder Magokichi Yamaoka, was the first in the world to succeed in making the first practical, small size diesel engine, driven by a desire to reduce the heavy labor burden on farmers. Based on the philosophy of “To Conserve Fuel Is to Serve Mankind,” Yanmar’s diesel engines were able to reduce labor thereby enriching rural areas. These values remain a central theme in our brand statement "A SUSTAINABLE FUTURE - New Value through Technology," which we declared on our 100th anniversary. Our purpose is to solve issues in society, leading to a sustainable future.

The business areas that we should focus on are the fields of food production and energy conversion as stated in our mission statement. It is estimated that the world's population will reach 9.7 billion people in 2050. With the decline in the agricultural workforce and shrinking arable land, it is essential to enhance efficiency and sophistication in agriculture to meet the growing food demand. Additionally, energy demand continues to rise, particularly in urban areas. The risks of climate change are increasing annually, and there is a growing expectation for the use of next-generation fuels such as ammonia, methane, and hydrogen, as well as a shift towards electrification.

These are critical areas where Yanmar can make significant contributions. We remain committed to adapting flexibly to societal trends and environmental changes, striving to solve our customers' challenges.

Challenges in the food and energy fields

In modern society, where information is spread globally, the commoditization of all products and services is accelerating. At Yanmar, it is becoming difficult to differentiate ourselves from other companies by simply manufacturing products, and we believe it is important to listen carefully to what our customers are having trouble with on the ground. We are returning to our roots in creating customer value and are working to create a win-win relationship between our customers and ourselves, working together to solve problems .

In relation to food, Yanmar is involved not only in the production of agricultural products, but also in the processing, distribution, and sales of agricultural products. We are working on activities to develop a "food and agriculture industry” by supporting the entire food cycle, adding to the sector’s appeal. For example, we are working to return compost made from food waste to farmland. Also, to minimize waste Yanmar purchases food from farmers that would otherwise be difficult to sell and makes use of them in our employee cafeteria.

We have also proposed a variety of smart agriculture solutions, such as SMARTASSIST and robotic/autonomous tractors. We are currently developing small agricultural machinery with an electric powertrain, and plan to launch it on the market by 2025. Small agricultural machines are sometimes used in garden greenhouses, and electrification can reduce the impact that emissions have on crops and the health hazards of farmers. Additionally, we are conducting trials of SMARTASSIST, a telematics service that provides machines diagnostics, in collaboration with governments and our distributors in Asian countries.

In the energy field, we are working to achieve carbon neutrality as part of the YANMAR GREEN CHALLENGE 2050 activities. Our strength in diesel engines is our efficient engine technology based on combustion and reciprocation. The problem with achieving carbon neutrality is not the engine itself, but the fact that it burns fuels that contain carbon. Hydrogen is considered to be a promising alternative.

A hydrogen pipeline is already in operation in Germany, and efforts to realize a hydrogen society are accelerating in Japan. We are developing gas cogeneration systems that can co-combust up to 30% hydrogen, and opened YANMAR CLEAN ENERGY SITE, in Okayama Prefecture, Japan. We provide the public with the opportunity to see the actual systems in action, including the hydrogen fuel cell power generation system that was released in September 2024, delivering optimized energy solutions to our customers.

We are also progressing with the development of electrification using batteries and motors. The challenge of electrification is to control the powertrain in a well-balanced manner, and here too we can make use of our powertrain optimization technology.

Diversity and Inclusion

The actions in these business areas are supported by none other than each and every employee. Developing a workforce that is able to work enthusiastically and has diverse values, regardless of nationality, culture, religion, gender, or age, is crucial for advancing our globalization strategy.

We have long been committed to localizing our subsidiaries, with many subsidiaries now led by local talent. In Japan, we established the Diversity & Inclusion Group in the Sustainability Promotion Division in July 2024 to promote diversity within the company. We will continue to strengthen initiatives such as promoting women's active participation and encouraging men to take childcare leave.

At Yanmar, we uphold values that recognize the potential within every individual and encourage them to take on challenges. These values, known as HANASAKA, are still the driving force behind our initiatives. We have increased opportunities for employees to embody HANASAKA through internal events like product idea contests and global awards. In December 2023, we launched the HANASAKA app, a smartphone app for Yanmar Group employees, as a new global communication platform. One of its features enables employees to declare challenges that they want to take on. It also allows other employees to provide support in achieving their goals. We will deepen employees' understanding of what HANASAKA means through these initiatives and workshops held worldwide.

To foster a deeper connection with Yanmar's internal culture and activities among more employees, dialogue is essential. It is crucial for management to engage in dialogue with employees to create an environment where everyone, regardless of their position or role, can understand and promote various initiatives. Through these dialogues, we can cultivate greater appreciation towards the company's policies and values, which I believe is vital for our daily operations.

Sustainability

Yanmar aims to create a prosperous society where people and nature coexist harmoniously. However, it is also true that activities aimed at achieving sustainability do not always yield immediate results. Just like investing in product development, a medium- to long-term perspective and continuous pursuit are essential to truly realize a sustainable society.

We will continue to listen to the challenges faced by our customers and society and create new customer value. By combining the technology and know-how we have cultivated so far with the new innovations born from HANASAKA, we aim to generate prosperity and become a leading company in sustainability management.

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