For disclosure based on TCFD
In order to understand the risks, opportunities, and impacts of future climate change on our business activities, we predicted and analyzed changes in the external environment in accordance with the framework proposed by the Task Force on Climate-related Financial Disclosures (TCFD). As a result, we perceive that there are significant opportunities in our business domains, represented by the potential rise in demand for cloud services, and on the other hand the risks are relatively small. On the opportunity front, we will explore possibilities of expanding our business scope, whereas on the risk front, we will minimize exposure while assessing cost-effectiveness.
*We support TCFD, and Join TCFD Consortium Japan.
Governance
The Company has set up the Compliance and Risk Management Committee and Sustainability Committee under the Board of Directors. Both are composed of members appointed by the board, and chaired by the Representative Director,President and CEO.The Compliance and Risk Management Committee (hereinafter referred to as the “Risk Committee”) oversees risk management, instructs countermeasures to departments responsible for respective risks, and reports the situation to the Board of Directors. Meanwhile, the Sustainability Committee oversees climate change risks, instructs countermeasures to departments responsible for respective risks, and together with the Risk Committee reports the situation to the Board of Directors. The Internal Audit Office checks and supervises the overall risk management structure and status from an independent standpoint.
Strategies
We have identified the following risks and opportunities related to climate change.
Scenario | Risk or Opportunity for the Company | Impact Level | Countermeasures | ||
---|---|---|---|---|---|
Transitional Risks | Policy and Regulatory Risk | Introduction of carbon tax | Increased tax burden due to carbon tax | Small | Reduce greenhouse gas (GHG) emissions |
Market Risk | Rise in renewable energy prices | Increased cost burden for procuring renewable energy | Small | Reduce costs by diversifying and optimizing power suppliers | |
Reputational Risk | Accelerated ESG investments | Difficulty raising funds Reputational Accelerated ESG from financial institutions investments and investors if climate change measures are evaluated as inadequate | Small | Enhance information disclosure and engage in appropriate dialogue with financial institutions and investors | |
Physical Risks | Acute Risk | Intensification of natural disasters | Outage of data center Damages to the office and Medium employees | Medium | Strengthen business continuity plans (BCPs) (including dispersing risks of facility damages and promoting offsite measures) |
Opportunities | Product/ Service | Accelerated DX | Increased demand for cloud services | Large | ー |
Risk Management
In order to understand and evaluate the impact of climate change on the Group’s business, we analyze scenarios and identify related risks and opportunities. Risks and opportunities that are identified are monitored by the Sustainability Committee in collaboration with the Risk Committee. There is also a process flow in which reports and recommendations are made to the Board of Directors depending on the gravity of the case.
Indicators and Goals
We calculate GHG emissions as an indicator for climate change. Scope 1 and 2 emissions are currently as follows.
- Scope 1
- 0(t-CO2)
- Scope 2(location basis)
- 370(t-CO2)
We have also been using 100% renewable electricity at our headquarters since 2021, and at our Tokai Branch and Nagoya development base since 2022. We will continue to consider ways to reduce emissions at each of our locations.