Responses to Climate Change Issues
(Information Disclosure Based
on the TCFD Recommendations)
Reducing carbon dioxide and other greenhouse gas emissions (GHG) is a common challenge facing the whole of international society. Recognizing the importance of early action, at the Nippon Soda Group we will strive to engage in our own efforts to reduce GHG emissions as a member of international society. Furthermore, we will ascertain the medium- to long-term business risks and opportunities presented by global warming and other environmental changes, as well as by transformations in the structure of industry that seek to prevent these issues, and aim to achieve a sustainable society and improve our corporate value through continuous business development.
At the Nippon Soda Group, we have announced our support for the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). We have also established the GHG Emissions Reduction Working Group, which is responsible for setting numerical targets, examining countermeasures, and verifying the effectiveness of the countermeasures. Here we introduce our climate change initiatives in line with the TCFD’s four recommended areas of disclosure: governance, strategy, risk management, and metrics and targets.
Governance
We have set up the Corporate Social Responsibility Administration Meeting, chaired by the President and Executive Officer, to serve as the chief companywide decision-making body for promoting CSR activities, including response to climate change. Held twice a year, the Meeting is attended by all Nippon Soda directors, executive officers, plant managers, and officers from main domestic Group companies. Through these meetings, management sets CSR targets, assesses results, and revises the targets as necessary to ensure continuous improvement, and in turn improve the PDCA cycle.
Strategy
We view the increase in costs required to comply with regulations, such as the carbon pricing system, as a major impact of climate change, and have thus set GHG emissions as a climate change performance indicator. Furthermore, to cater to demand for environmentally friendly products, we are engaged in the development of agrochemicals that can counter the increase in pests caused by rising average temperatures; water treatment agents that can help conserve water resources; and hydrogen manufacturing and storage technologies that can help achieve the hydrogen economy.
Predicted Climate Change Risks and Opportunities
| Category | Details | Period of emergence |
Level of impact on business |
|
|---|---|---|---|---|
| Transitional risks | Policies/Laws and regulations | Increase in costs required to comply with regulations, such as carbon pricing | Medium term | Major |
| Technology | Increase in investment and R&D costs for the transition to low-carbon technologies | Medium term | Moderate | |
| Market | Lower demand for existing products due to changes in user selection criteria | Medium term | Minimal | |
| Physical risks | Acute risks | Negative impact on production caused by typhoons, floods, droughts, and other natural disasters | Short term | Moderate |
| Chronic risks | Increase in pests due to rising average temperatures and lower harvest yields | Medium to long term | Major | |
| Difficulty in securing water resources | Long term | Minimal | ||
| Opportunities | Resource efficiency | Reduced energy costs due to greater efficiency in production and transport | Long term | Moderate |
| Products | Increase in demand for environmentally friendly products and agrochemicals that counter the increase in pests | Medium term | Major | |
| Market | Response to integrated pest management | Long term | Moderate | |
Risk Management
Following discussions with the departments responsible for overseeing risks, once a year we specify risks, assess their level of impact, and identify major elements, and then formulate an action plan for the specified risks. This plan is examined and reviewed by management through the Corporate Social Responsibility Administration Meeting, and incorporated into the management plan of the entire Company.
Metrics and Targets
We have set GHG emissions as our climate change performance indicator. Furthermore, we also disclose the results of our Scope 1, 2, and 3 GHG emissions. For Scope 1 and 2, we aim to achieve a more than 20% reduction in groupwide GHG emissions by FY 2026 (compared with FY 2014) and a more than 30% reduction by FY 2031 (compared with FY 2014). In FY 2023, Scope 1 and 2 GHG emissions fell 25.1% over FY 2014 (Nippon Soda, non-consolidated).
