Environment

Major initiatives

Our Group contributes to the realization of a circular economy through a variety of businesses.
Due to the nature of its business model, leasing, which is our founding business, has a high affinity with the circular economy, and our Group has a variety of value propositions and solutions that maximize the value of the facilities and equipment covered by our contracts. As shown in the chart below, our Group s circular economy related businesses are linked to various factors for realizing a circular economy. Although this page covers representative examples, we are
working on businesses related to a circular economy in many areas other than those mentioned.
Social interest is also increasing, and we will continue to expand the functions we provide and work with our customers and partners to realize a circular economy

References: Tomohiro Tasaki, Transformation and information dissemination towards the realization of a circular economy (2024),
Bocken, N. M. P., De Pauw, I., Bakker, C., van Der Grinten, B.（2016）Product design and business model strategies for a circular economy. Journal of Industrial and Production Engineering, 33（5）: 308-320.

Value and solutions provided by our group at the lifecycle stages of things

Our Group provides solutions at each lifecycle stage, from introducing things to terminating the use of things, and we achieved many results in fiscal 2023 as well.

① Time of introduction: maximizing resource efficiency—narrowing the loop

We provide the appropriate things that meet customers needs, such as equipment that promotes decarbonization and energy conservation and engines that contribute to improving the utilization rate of aircraft. We also provide a wide range of financing functions such as operating leases, sharing, and rentals to fulfill customers needs for use (as opposed to ownership).

• Related businesses
• ESG lease promotion business, GX Assessment Lease, aircraft engine leasing, used equipment and instrument leasing, etc.

② Time of use: use of assets in stock—slowing the loop

In a lease contract, when the lease contract period expires, we provide two options: release contract (usually a one year extensi on contract) and return If release contract is chosen, the initial contract period will be extended. This allows for extended use every year at a lower cost than the initial contract period. In addition, residual value setting leases support the reassembly of leases (secondary leases ) based on residual value.
In an effort to encourage the use of assets in stock, in the real estate revitalization business, we acquire old offices and other facilities, and carry out projects to revitalize their re al estate value, such as updating their equipment and renovating their common areas. In addition, in the aircraft engine leasing business, we maintain and improve the asset value of engines through timely and appropriate maintenance, making it possible to use them for long periods of time.

• Related businesses
• Re-leasing (reference: Customer Solutions Unit's 2023 results: 48 billion yen), aircraft engine leasing, real estate revitalization business, etc.

③ Post-use: resource circulation—closing the loop

In the field of resource recycling, we are developing our business targeting a variety of things.
If return is selected when the lease contract expires, the returned property will be used for secondary use by new customers. Leveraging our Group's strengths such as our expertise and network, we work in multiple areas, purchasing not only equipment and instruments returned by customers, but also idle assets and equipment of customers, leasing them to other customers, and engaging in the refurbishing and reuse business. For example, after a lease expires in the marine container leasing business, those containers ar e used for stationary warehouses on land.
We are also pursuing the possibility of reuse and recycling of aircraft engines and information equipment, which are difficult to reuse as facilities and equipment, by dismantling and maintaining them and developin g a sales business for parts that can be used as spare parts. Ultimately, we contribute to the realization of a circular economy by properly disposing of items that are difficult to reuse and recycle.

Results Related to Resource Circulation (post-use) (fiscal 2023)

Target related to the resource circulation for plastics

The MHC Group has set a target to reduce plastic waste generated from operating assets such as leased assets in response to the Act on Promotion of Resource Circulation for Plastics.
<Target>
Effective utilization ^*1 of plastic waste ^*2 generated from operating assets, such as leased assets, by fiscal 2030 : 100%

• Target companies: Group companies with large amounts of waste (Mitsubishi HC Capital Inc. and MHC Eco Solutions Co., Ltd., which generate more than 250 tons of plastic waste)
• The percentage of the plastic waste processed through material, chemical, or thermal recycling

Percentage of Plastic Waste Generated from Operating Assets Such as Leased Assets Processed Using Material, Chemical, or Thermal Recycling

Stakeholder engagement

MHC closed a capital and business alliance agreement with ZERO CO., Ltd. (hereinafter “ZERO”), and is working to reduce food loss and CO ₂ emissions in Japan by providing sales support, financing for installation, and operational support for unmanned vending machines known as Food Loss Reduction Box ZERO provided by ZERO.
MHC, as a service user, introduced and installed the vending machine s at its Marunouchi Office, Nishi Shimbashi Offi ce, Nagoya Office, and Osaka Office, enabling i ts employees to buy foods that are safe to eat but cannot be distributed due to their short shelf life, seasonal packaging, damaged packaging, etc.