Information disclosure based on TCFD proposal
Information disclosure based on TCFD proposal
In October 2021, the MIRAIT ONE Group joined the TCFD Consortium*2, endorsing the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)*1, which aims to proactively disclose the financial impact of climate-related risks and opportunities. In May 2022, we disclosed information based on the recommendations on "Governance," "Risk Management," "Strategy (Scenario)," "Target," and "Actual Performance" as described in the section below. In the future, we will monitor changes in the external and internal environment associated with climate change with respect to "identified risks" and "opportunity examination." We will also work to expand the scope of disclosure further to include the development of risk management system, continued review of risks and opportunities based on scenario analysis, etc. and progress toward achieving the greenhouse gas emissions reduction targets.
- *1 Established by the Financial Stability Board to facilitate more informed decision making on investments, credit, and insurance underwriting, help stakeholders better understand the concentration of carbon-related assets in finance, and formulate recommendations for more effective climate-related disclosures.
- *2 An organization established as a forum for companies, financial institutions, etc. that endorse the TCFD, working together to discuss effective information disclosure by companies and initiatives to help financial institutions make appropriate investment decisions based on disclosed information.
Governance
In FY 2021, the ESG Management Promotion Committee (see ESG Management Promotion Structure) was established in September. In its six meetings held since that time, the Committee adopted the materiality theme of “Building and Maintaining an Environmentally-Friendly Society” following deliberations by the Executive Committee and Board of Directors. To step up its contribution to realize a decarbonized society, the Group set the “greenhouse gas emissions reduction target (FY 2030)" as one of the KPIs in its Medium-term Management Plan and established a system to monitor its progress.
It was held five times in fiscal year 2022.(four times after the launch of MIRAIT ONE).
By submitting a letter of commitment to SBTi, the 2030 greenhouse gas emission reduction targets created by our company have been recognized as SBT (Science Based Targets*1).
After the establishment of the new company in July 2022, we created the ESG Management Promotion Committee, developed an operating schedule, and discussed the specific reduction status and measures of GHG emissions. We also conducted an evaluation and analysis of the results of the response from various ESG rating agencies.
*1 Greenhouse gas reduction targets set by companies with a target year of 5 to 15 years in the future consistent with the level required under the Paris Agreement (limiting global warming to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C). (From the Ministry of the Environment and Ministry of Economy, Trade and Industry Green Value Chain Platform)
We also revised the remuneration system for board members to raise the awareness of management on ESG initiatives. In FY 2022, a non-financial target of “greenhouse gas emissions” was introduced as a new indicator in addition to the conventional indicators for performance-linked compensation: “consolidated operating profit” and “consolidated ROE.”
Risk Management
We have established a basic policy and promotion system for risk management as a corporate group in the form of “Risk Management Regulations,” as we take appropriate steps to deal with various risks based on our risk management plan.
In fiscal year 2022, the “Risk Management Execution Committee” was held twice. We discussed and addressed the usage status of helplines and the management status of significant risks such as litigation cases across each company in the corporate group. Based on the analysis of the results of the "Compliance and Risk Management Survey" conducted for all employees and executives, we clarified countermeasures for each department and raised awareness by introducing recent cases of "compliance violations".(Related section: Thorough risk management.)
The ESG Management Promotion Committee also takes the initiative on climate-related risks and opportunities, monitoring changes in the external and internal environment associated with climate change and identifying climate risks and opportunities that affect our business. The identified risks and opportunities are evaluated and analyzed to determine their impact on the Group with a focus on risks and opportunities that have a high degree of impact. Following deliberations by the Board of Directors and the Executive Committee, these are incorporated as company-wide risks and opportunities.
Strategy
The MIRAIT ONE Group has analyzed the potential climate-related risks and opportunities in the future by referring to the scenarios based on the average temperature rise of less than 2°C (e.g. 1.5°C) and 4°C*1. Consequently, it was assessed that the transition to a decarbonized society (policy/legislation/market/reputation) would be subjected to the impacts that manifest as a result of anticipated future events and physical (acute/chronic) impacts from climate change.
We reviewed our medium-term management strategy with respect to these risks and reaffirmed the "realization of a decarbonized society through business activities" as a material issue. In terms of our business engagement, we have also identified the growing demand for smart infrastructure/energy solutions as a prospective opportunity.
*1 The scenarios refer to the following.
A scenario in which a decarbonized society is realized quickly:
• International Energy Agency (IEA) World Energy Outlook 2018 Sustainable Development Scenario (SDS)
• IEA Energy Technology Perspectives 2017 Beyond 2°C Scenario (B2DS)
A scenario in which the physical impact is manifested:
* Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report
* An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty
Future where the target of less than 2°C (such as 1.5°C ) is achieved: A scenario for the rapid materialization of a decarbonizing society
Envisioned scenario | Tighter carbon emission regulations | Increasing awareness toward decarbonization | |
Identified risks | |||
Duration until risk occurrence | Medium- and long-term | Short-, medium- and long-term | Short-term |
Type | Policy/regulation | Policy/regulation | Market/reputation |
Description |
・Increase in material and fuel procurement costs due to carbon taxation ・Increased business burden due to insufficient compliance with regulations such as carbon pricing ・Risk of cost increase due to the purchase of credits for emissions in case of failure to achieve reduction targets. |
・Increase in electricity costs due to a shift to renewable energy sources | ・ When environmental measures turn out to be inadequate - Decrease in orders for new construction projects - Termination of existing maintenance contracts - Loss of customers due to higher reputation risks |
Opportunity examination | |||
Duration until risk occurrence | Medium- and long-term | Short-, medium- and long-term | Short-term |
Type | Product/service/energy | Product/service/energy | Market |
Description | ・Increase in demand for renewable energy and energy-saving projects (solar power generation, EV charging, LED lighting, etc.) | ・Increase in demand for shift to energy-saving equipment ・Promotion of the efficient electricity use with the use of IoT |
・Increase in demand for renovation work ・Increase in demand for ZEB and smart city-related projects |
Initiatives | |||
Details | ・Promotion of power-saving through DX and work-style reform. ・Improvement in fuel efficiency through the use of fuel additives for vehicles, and promotion of EV adoption. ・Promotion of renewable energy utilization in purchased electricity. |
・Identifying and promoting the procurement of low-carbon products. ・Proper disclosure of information to stakeholders. |
Future where average temperatures rise by 4°C: A scenario characterized by the manifestation of physical impact
Envisioned scenario | Increase in the frequency and severity of natural disasters | Rise in average temperatures | ||
Identified risks | ||||
Duration until risk occurrence | Short-, medium- and long-term | Short-, medium- and long-term | Long-term | Medium- and long-term |
Type | Acute | Acute | Chronic | Chronic |
Description | ・Damage to telecommunication equipment and base stations caused by heavy rains and typhoons and increase in restoration costs ・Decrease in workforce due to disaster. |
・Discontinuation of products and services due to disruption of the value chain | ・Increase in air conditioning costs incurred by data centers, etc. | ・Decrease in labor productivity and increase in health issues such as heat stroke due to deterioration of outdoor working environment. |
Opportunity examination | ||||
Duration until risk occurrence | Short-, medium- and long-term | Medium- and long-term | Long-term | Medium- and long-term |
Type | Market/resilience | Market | Market | Resilience |
Description | ・Increase in demand for pole-free electricity to deal with abnormal weather conditions | ・Growing demand for disaster prevention and mitigation work for telecommunication equipment and base stations due to the increase in the frequency and severity of natural disasters | ・Replacement of air conditioning equipment with high-efficiency equipment ・Improvement of the operation of HVAC equipment |
・Further promotion of DX and remote working style |
Initiatives | ||||
Details | ・Increase in demand for facility enhancements such as battery storage systems and emergency power supply. ・Development of multi-skilled human resources. ・Enhancement of collaboration with MIRAIT ONE Partners*1. |
・Water supply solution business. | ・strengthening of air conditioning business. | ・Streamlining construction through DX and strengthening worker health management. |
*1 Collaboration with partner companies is a core theme of ESG management foundation. We have launched the "MIRAIT ONE Partners" with approximately 350 core companies out of the 2,200 cooperating companies and partner companies within the Mirait One Group.(July 2022)
Target
To achieve carbon neutrality by 2050, we have set the greenhouse gas emission reduction targets toward FY2030, which was certified by the SBTi (Science Based Targets initiative) in February 2023 as a science-based target. These are also included as non-financial targets in our Medium-term Management Plan that begins in FY 2022, in order to steadily capture growth opportunities for our business in relation to decarbonization.
Greenhouse gas emissions reduction targets toward FY 2030
Actual results
The results of greenhouse gas emissions for fiscal 2020 and subsequent years are as follows.
Reduction of greenhouse gas emissions
Independent assurance statement for fiscal year 2022(PDF:334KB)
(For past independent assurance statements, click here.)
Category | Emissions | |||
---|---|---|---|---|
FY 2020 (Standard) |
FY 2021 | FY 2022 | ||
Scope 1 | Direct emissions | 66,890 | 67,907 | 65,166 |
Scope 2 | Indirect emissions | 22,841 | 21,277 | 19,754 |
Scope 3 | Other indirect emissions | 2,471,130 | 2,413,496 | 2,222,900 |
Category1 | Purchased goods and services | 513,292 | 452,295 | 337,073 |
Category11 | Use of sold products | 1,892,870 | 1,848,997 | 1,814,356 |
Others (Category2,3,5,6,7,12,13) Total | 64,968 | 112,204 | 71,471*1 | |
Sum total for Scope1ー3 | 2,560,861 | 2,502,680 | 2,307,820 |
*Figures for FY 2020 (Standard) include those for Seibu Construction Co., Ltd.
*Emission unit: Scope1,2 (t-CO2), Scope3 (t-CO2e)
*1 Appendix: Breakdown of Others
Category | Emissions(t-CO2e) | |
---|---|---|
Category2 | Capital goods | 32,442 |
Category3 | Fuel-and-energy-related activities (not included in Scope 1 or 2) | 13,165 |
Category5 | Waste generated in operations | 3,362 |
Category6 | Business travel | 1,866 |
Category7 | Employee commuting | 3,392 |
Category12 | End of life treatment of sold products | 3,163 |
Category13 | Downstream leased assets | 14,081 |
*Category 4, 8, 9, 10 are not applicable to our company.