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Risks and opportunities related to environmental issues such as climate change and biodiversity conservation, together with measures to address them, are put forward through the Climate Change Project. These measures are discussed by the Sustainability Committee and the Risk Management Committee, both of which are comprised of executive directors, executive officers, and department heads, etc. Following these discussions, final decisions are made by the Board of Executive Officers, the Company’s central body for business execution, under the supervision of the Board of Directors.
The Group conducts scenario-based analyses based on a global average temperature increase of 1.5/2°C and 4°C, respectively, with the aim of assessing the risks and opportunities that climate change presents to the Group, evaluating its impact on our businesses, and developing appropriate countermeasures.
We identify the impact on businesses under the transition risks, physical risks, and related business opportunities for each average temperature increase scenario, and have begun initiatives to implement response measures by 2030.
Based on these assumptions, we analyze the potential impact of climate change and develop new growth opportunities aligned with our business strategy and medium-term management plan under each average temperature increase scenario.
1.Term: Short-term (within 2 years), Medium-term (3–5 years), Long-term (6 years or more)
2. Impact: Large: \500 million or more; Medium: \50 million or more but less than \500 million; Small: less than \50 million
For the scenario analysis, we adopted NZE 2050, a scenario published by the International Energy Agency (IEA) that is aligned with a 1.5°C world. We set 2030 as the time horizon and calculated the Group’s tax increase risk. Based on projected carbon tax data for developed countries under NZE 2050, Japan’s carbon tax rate in 2030 was set at $140/t-CO2 (\21,000/t-CO2 at an exchange rate of $1 = \150). This assumes an exchange rate similar to the current level.
The Joshin Group conducts scenario-based analyses assuming global average temperature increases of 1.5/2°C and 4°C respectively, with the aim of assessing the risks and opportunities that climate change poses to the Group and impact on our businesses, as well as formulating appropriate countermeasures.
For each average temperature increase scenario, we identify the impact on businesses under the transition risks, physical risks, and related business opportunities, and we are already taking steps toward implementing response measures by 2030. The Group’s main long-term objectives through 2050 are outlined under the seven material issues. Based on this foundation, we analyze the potential impact of climate change, and under both temperature scenarios, we formulate new growth opportunities aligned with our business strategy and medium-term management plan.
The Group analyzes medium- to long-term issues impacting our businesses and identifies potential risk factors, which are then used to formulate a medium- to long-term business strategy. The Climate Change Project reviews progress on environmental initiatives and challenges therein, and then reports are submitted to the Sustainability Committee. Upon receiving the Sustainability Committee’s reports, the Board of Executive Officers deliberates on the Group’s environmental response and all other sustainability matters. This is all supervised by the Board of Directors.
Furthermore, the Risk Management Committee examines and manages key risks within the Group.
Metrics and Targets
The Group has established Scope 1, 2, and 3 GHG emissions, as well as the percentage of renewable energy in the electricity used in our business operations, as indicators for assessing risks and opportunities related to climate change.
|
Metric |
Target fiscal year |
Target value |
|
Scope 1 + 2 emissions |
FY2030 |
42.0% reduction compared to FY2021 |
|
FY2040 |
Carbon neutrality |
|
|
Scope 3 (Categories 1 and 11) emissions |
FY2030 |
25.0% reduction compared to FY2021 |
|
FY2050 |
Carbon neutrality |
|
|
Renewable energy usage rate |
FY2030 |
80% |
|
FY2040 |
100% |
