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- Information disclosure based on TCFD recommendations
Information disclosure based on TCFD recommendations
Nissha Group publicly endorsed the recommendations made by the Task Force on Climate-related Financial Information Disclosures (TCFD) in January 2022. We have analyzed the financial impact of risks and opportunities related to climate change on our business based on the framework of the TCFD recommendations, and we disclosed them.
A summary of the analysis is as follows.
(For more details, please refer to the relevant page of the Nissha Sustainability Report 2022.)
(For more details, please refer to the relevant page of the Nissha Sustainability Report 2022.)
Governance
Risks and opportunities related to climate change are managed by the Sustainability Committee as one of the material issues (materialities) resolved by the Board of Directors. The Sustainability Committee is chaired by the President and CEO and vice-chaired by the Director of the Board, Executive Vice President (in charge of sustainability), and reports to the Board of Directors once a year on the progress of initiatives related to materialities.
Strategy
We conducted a scenario analysis on the impact of future climate change on our businesses under the following assumptions.
| Time horizon | 2030 |
|---|---|
| Target business | Devices business (currently accounts for half of the Group’s net sales) |
| Assumed scenario | Referred to two scenarios from the International Energy Agency (IEA)
|
As a result of the scenario analysis, it was confirmed that there are financial risks due to the impact of climate change and countermeasures have been taken for risks that could have a large impact in both scenarios.
Risks with particularly large impact and countermeasures
【Transition risks】
| Risks to Nissha | Countermeasures |
|---|---|
| Increase in energy consumption and raw material procurement costs at production bases due to introduction and strengthening of carbon taxes (1.5°C scenario) | Reduce power consumption at production bases by improving production efficiency and saving energy in production and infrastructure equipment, and switch to renewable energy for electricity supplied by electric power companies gradually. |
| Loss of business opportunities due to insufficient responses to customers’ requests to reduce CO2 emissions (1.5°C scenario) |
【Physical risks】
| Risks to Nissha | Countermeasures |
|---|---|
| Increase in costs due to damage to company assets such as buildings, equipment, and inventories due to floods (both 3°C and 1.5°C scenarios) | Verification and improvement of effectiveness of business continuity plan (BCP) |
We also have concluded that the following 2 items will have a large impact on our climate change opportunities.
| Opportunities to Nissha |
|---|
| Increase in sales for mobility products due to expansion of EV market (1.5°C scenario) |
| Growth in demand for products contributing to greenhouse gas reductions leads to increasing sales of gas sensor modules for refrigerant detection (both 3°C scenario and 1.5°C scenario) |
Risk management
To realize our Sustainability Vision (long-term vision), the Group has identified particularly important items as materialities, and set specific strategy items and key performance indicators/action items, backcasting from 2030 as a starting point. We have identified the following materialities relating to climate change from the perspectives of risk reduction and creating business opportunities.
| Materialities | Related SDGs | |
|---|---|---|
|
Risk reduction |
Responding to climate change |
|
|
Creating business opportunities |
Contribute to the safety and comfort of transportation and logistics, and the reduction of environmental impact |
|
| Promotion of circular economy |
|
Indicators and targets
We have defined total CO2 emissions as an indicator for assessing and managing risks related to climate change. Our Sustainability Vision aims for a 30% reduction in CO2 emissions in 2030 (compared to 2020), with a view to achieving carbon neutrality by 2050.
