Sustainability
Status of response to TCFD recommendations (Statement of support)
Recognizing that ESG (Environment, Social, Governance) is extremely important for improving corporate value over the medium to long term, the Group has joined the TCFD (Task Force on Climate-related Financial Disclosures). ) Based on the recommendations, we disclose the risks and opportunities for each risk item related to climate change, the degree of impact on business, and the Group's response.
Additionally, we have joined the Climate Change Initiative (JCI)*, which was established to strengthen the dissemination of information and exchange of opinions among various non-state actors such as companies, local governments, and NGOs that are actively working on climate change countermeasures. We joined in March 2023 and announced our support for the TCFD recommendations in May 2023.
Click here for details on the Climate Change Initiative (JCI) *
Governance
Our group has established a Sustainability Committee with the aim of strengthening corporate governance functions in order to achieve sustainable growth based on our management philosophy. This committee will play a central role in setting and reviewing important issues and related goals, monitoring progress, and other social issues, including ESG, SDGs, Society 5.0, climate change, and other environmental issues, as well as diversity and inclusion. We evaluate, review business portfolios, and decide on medium- to long-term management plans and direction. We also recognize that responding to climate change is an important management issue, and based on the discussions of each internal committee, activity reports, and policy recommendations, the Board of Directors meets from time to time to comprehensively deliberate, and decisions are being made.
Strategy
The Group's Fifth Medium-Term Five-Year Business Execution Plan sets a vision for what it wants to be in 2030, and assumes scenarios of 2℃ or below and 4℃ in 2030, and takes important physical measures related to climate change. We recognize multiple risks, transition risks, and opportunities. We referred to the global warming scenarios (RCP2.6-8.5, SSP1-8.5) from the IPCC Fifth and Sixth Assessment Reports, the 1.5℃ Special Report, and the IEA World Energy Outlook. We evaluated the importance of climate change-related risks and opportunities and identified them as ``material risks'' from the perspective of urgency (timing of manifestation) and degree of impact on business.
We calculate the amount of impact on revenue if a high-priority risk event among the identified material risks occurs in 2030, and show the degree of impact.
As a result of scenario analysis, we have determined the impact that climate change will have on our business and supply chain by appropriately responding to climate change risks, such as reducing CO₂ emissions and improving sustainable procurement rates, in order to achieve the goals of the KIZUNA index. I realized once again that it is possible to reduce the We will raise awareness of risks and opportunities that can be predicted from a medium- to long-term perspective, and will lead to the formulation and implementation of strategies, including time frames.
*1 Short-term: 0-3 years, Medium-term: 3-10 years, Long-term: 10-30 years
*2 The impact on sales revenue is evaluated in three levels: large (1 billion yen), medium (hundreds of millions of yen), and small
(less than 100 million yen).
Risk management
Our group conducts its corporate activities from a long-term perspective through environmental, social, and governance management. We have formulated 20 materialities (important issues) from the perspective of interest and impact on all stakeholders, including the global environment and society, and their importance to our group, and have further identified 12 issues that should be prioritized. , we have set 23 KIZUNA indicators and are promoting activities. Regarding climate change, we believe that reducing CO₂ emissions through business activities, paying attention to the environment, and contributing to solving social issues are of high importance, and we have set numerical targets listed in "Indicators and Targets." Regarding company-wide risks, including risks related to climate change, the Risk Management Specialist Committee plays a central role under the Risk Management and Compliance Committee, and conducts periodic risk management (listing priority risks and managing the progress of countermeasures) and We are working to strengthen risk assessment.
Metrics and goals
We have selected [Reduction of CO₂ emissions] and [Consolidated sales index of sustainability products] as KIZUNA indicators related to responding to climate change, and are managing progress. This indicator is linked to the Group's medium-term environmental and safety goals and KPIs for Sustainability Link Bonds.
Click here for details on Sustainability Link Bonds
Items to be considered for future disclosure
In the future, we will improve the accuracy of verifying the financial impact, and we will gradually disclose risk items that have been insufficiently evaluated while making appropriate adjustments, and we will work to understand Scope 3 and set greenhouse gas emissions reduction targets in the supply chain of our group. We will continue to work toward this goal.