T-Gaia announced support for the Task Force on Climate-related Financial Disclosures (TCFD) in December 2021.
We will strive to enhance the quality and quantity of our disclosures by analyzing climate change risks and opportunities in our business.
Governance
We have evaluated and managed environmental issues, including climate change, through our Sustainability Committee.
The Sustainability Committee is an advisory body to the Management Conference, and formulates and deliberates on matters such as policies, strategies, and measures to improve sustainability with regard to issues related to climate change.
The committee reports any discussions to the Management Conference and recommends important issues to be brought to the Board of Directors for discussion.
Major Climate Change-related Proposals for FY 2023
- Policy on Conversion of Major Electricity Generation at directly managed Shops to Renewable Energy
- Implementation of third-party verification of greenhouse gas emissions
- Non-Fossil Certificate Transaction Membership Admission (Brokerage Businesses)
Schematic Diagram
Board of Directors
Receives reports on policies, strategies, measures, and company-wide risks formulated and deliberated on by the Sustainability Committee and makes decisions on important matters. Oversees all sustainability initiatives.
Management Conference (Chairperson: President and Chief Executive Officer)
Discusses policies, strategies, and measures related to corporate management, including responses to climate change, and Group-wide risks. Receives reports from the Sustainability Committee and determines whether to submit them to the Board of Directors for discussion and reporting.
Sustainability Committee (Chairperson: the Corporate Officer Responsible for Sustainability)
Formulates and deliberates on sustainability policies, strategies, and measures to help resolve issues related to climate change. Also manages risks related to climate change in cooperation with the Risk Management Committee.
Strategies
Scenario Analysis
After we announced support for the TCFD in December 2021, we divided our analysis of the impact of climate change risks and opportunities on our business strategies and financial plans into four steps based on the TCFD recommendations.
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Risk Materiality Assessment
Based on the opinions of external experts, we identified the climate-related risks and opportunities that are important to our company in terms of those listed in the TCFD recommendations, looking ahead to the years 2030 and 2050.
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Scenario Selection
We selected several scenarios including 2°C or lower (4°C and 1.5°C) to eliminate any unforeseen developments. After understanding the scenarios, we obtained all possible related parameters and organized a worldview with stakeholders in mind.
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Business Impact Assessment
We sorted data into “sales” or “expenses” and then collected the necessary data. Using the relevant parameters and our data, we created a calculation formula and estimated the financial impact for 2030 and 2050.
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Countermeasures Discussion
A Sustainability Policy was established to address identified risks and opportunities. We are also reviewing our BCP measures. We will consider more specific measures going forward.
Results of Scenario Analysis
As a result of the four-step scenario analysis, we identified the following major risks and opportunities related to climate change and their degree of impact on our company.
Extreme weather event intensification is an issue that could have a significant business impact on our supply chain, including our own shops. Conversely, the continuously growing demand in the solar power generation business will provide a major opportunity to generate future financial benefits.
The financial impact caused by climate change on P/L and B/S was categorized based on net income in FY 2023.
Large (net income: 10% or more), Medium (net income: less than 10% to 1% or more), Small (net income: less than 1%)
Major Risks
| Type | Risk | Major Risks | Assessment | |
|---|---|---|---|---|
| Transition | Policies/ Regulations |
Carbon pricing (carbon tax) | - New regulations that significantly increase carbon taxation and emissions trading | Small |
| Response to GHG emissions regulations | - Increase in price of fossil fuels and fossil fuel-derived electricity | Small | ||
| Renewable energy/ energy-saving policies |
- Cost of renewable energy procurement and energy-saving measures | Small | ||
| Market | Changes in energy costs | - Demand grows for low-cost fossil fuel-derived electricity but not for renewable energy electricity | Small | |
| Reputation | Changes in reputation with investors | - Impact on stock prices due to a lower valuation caused by a delay in responding to investor requests for environmental disclosures | Large | |
| Physical | Acute | Intensification of extreme weather events | - Decline in sales due to damage or closure of sales offices, delay in product procurement due to supply chain disruptions - Damage to solar power generation facilities due to extreme weather events - Increase in fire insurance premiums |
Medium |
| Chronic | Rise in average temperatures | - Increase in cooling costs - Decrease in sales at sales offices due to reduced outings |
Small | |
Major Opportunities
| Type | Opportunity | Major Opportunities | Assessment | |
|---|---|---|---|---|
| Transition | Policies/ Regulations |
Emissions trading | - Increase in revenue from the sale of emission credits earned from reductions due to solar power generation | Small |
| Renewable energy policies | - Increase in sales from increased PPA installations due to an increase in demand for renewable energy electricity | Medium | ||
| Energy-saving policies | - Reduction in operating costs through the use of subsidy programs | Small | ||
| Technology | Adoption of renewable energy/energy-saving technologies | - Reduction in capital investment costs from the advancement of renewable energy technology and lower price of storage batteries | Small | |
| Advancement of low-carbon technologies | - Increase in sales from the introduction of high-efficiency solar cells | Small | ||
| Reputation | Changes in reputation with investors | - Decrease in capital procurement costs through proactive response to investor requests | Large | |
| Physical | Acute | Intensification of extreme weather events | - Increase in sales of remote work products - Increase in sales from increased demand for self-consumption soler power generation and uninterruptible power supply solutions as BCP measures |
Small |
| Chronic | Rise in average temperatures | - Increase in traveling sales due to the spread of off-site sales shops | Small | |
Transition risks and opportunities: Impact from the revaluation of financial assets with significant GHG emissions as a result of the transition to a lower-carbon economy
Physical risks and opportunities: Direct impact such as property damage caused by weather events such as floods and storms as well as indirect impact such as disruptions in the global supply chain and resource depletion
Business Impact Assessment
We used the 4°C scenario and 1.5°C scenario and evaluated their respective business impact based on a qualitative analysis of risks and opportunities related to climate change.
Under the 4°C scenario, we assumed an increase in damage to shops due to the intensification of extreme weather events. We used hazard maps to confirm the risk of flooding and landslides around 360 directly managed shops nationwide, and assessed the impact as medium. We have reviewed BCP measures and taken steps to ensure that there is no significant impact on business continuity.
Under the 1.5°C scenario, we assumed a strengthening of policies and regulations, such as carbon taxes, in line with the transition to a decarbonized society. We have established targets for the introduction of renewable energy electricity and GHG reductions based on calculation results of Scope 1, 2 and 3, but have determined that the financial impact of achieving these targets is limited. In addition, we determined that the anticipated increase in demand for renewable energy electricity such as solar power could become a business opportunity for the Group's Renewable Energy Business. We will seek to increase our supply volume going forward and provide renewable energy electricity in a variety of ways to capitalize on this business opportunity.
We will reflect the results of these analyses in our Environmental Policy,strive to reduce the environmental impact generated through our business activities, and contribute to the realization of a sustainable society. We will conduct regular analyses going forward, review our assessments and reflect them in our Environmental Policy, and enhance both the quantity and quality of our disclosures.
Risk Management
We have defined “TG Material Issues” as five important issues that we must address in order to realize our “Our Goal”. As specific initiatives, of which “Proactive approach to environmental issues and climate change” is recognized as a one of the key issues.
The Risk Management Committee identifies, assesses, and manages various risks related to the Group's business activities, including climate change. It also collaborates with the Sustainability Committee, which handles strategies and measures related to climate change response, to address issues related to climate change in the Group.
Risk Management Committee (Chairperson: CFO)
Identifies and assesses material issues in all businesses, including climate change, and cooperates with the Sustainability Committee to manage risks related to climate change.
Metrics and Targets
We have set a target of effectively zero emissions of greenhouse gases (Scope 1 and 2) in our business activities by 2040 (Medium-term target for 2030: 50% reduction compared to FY 2019).
In addition, we have learned that a large portion of our greenhouse gas emissions (Scope 1 and 2) are caused by the use of electricity. Therefore, we recognize the importance of energy-saving and renewable energy initiatives at our sales offices and distribution centers, and In order to achieve the target, the Company aims to introduce the proportion of electricity derived from renewable energy as 50% as of fiscal 2030 and 100% as of fiscal 2040.
In FY2023, we procured non-fossil certificates (1,608,963 kWh) equivalent to the amount of electricity used by our head office, branches and offices, resulting in a renewable energy rate of 14.0% (up approximately 4.9% from the previous year).
Decarbonization Roadmap
Greenhouse Gas Emissions
[CO2e-t]
| Scope/Category | FY 2019 CO2 Emissions |
FY 2020 CO2 Emissions |
FY 2021 CO2 Emissions |
FY 2022 CO2 Emissions |
FY 2023 CO2 Emissions |
|
|---|---|---|---|---|---|---|
| Scope1 | 577.7 | 441.7 | 507.1 | 538.7 | 556.4 | |
| Scope2 | Location-based | 9,119.9 | 9,275.0 | 9,040.1 | 9,877.4 | 9,147.9 |
| Market-based | 8,896.9 | 8,899.4 | 8,713.1 | 8,897.2 | 7,778.5 | |
| Scope3 | 747,810.9 | 651,089.0 | 611,297.5 | 703,140.0 | 658,111.4 | |
| Category 1 | Purchased goods and services | 691,997.7 | 605,791.8 | 572,779.3 | 657,971.5 | 613,827.0 |
| Category 2 | Capital goods | 6,857.2 | 12,818.6 | 7,334.7 | 11,738.2 | 13,758.1 |
| Category 3 | Fuel and energy related activities not included in Scope 1 or 2 | 1,456.2 | 1,444.7 | 1,427.7 | 1,640.9 | 1,489.3 |
| Category 4 | Transportation and delivery (upstream) | 4,672.0 | 1,958.2 | 2,251.7 | 2,761.3 | 2,255.8 |
| Category 5 | Waste generated in operations | 560.9 | 499.7 | 614.5 | 554.5 | 634.9 |
| Category 6 | Business travel | 1,832.2 | 643.8 | 1,006.1 | 1,276.1 | 1,318.4 |
| Category 7 | Employee commuting | 3,228.9 | 2,486.3 | 1,884.2 | 2,661.0 | 2,400.1 |
| Category 8 | Leased assets (upstream) | No calculation target |
No calculation target |
No calculation target |
No calculation target |
No calculation target |
| Category 9 | Transportation and delivery (downstream) | No calculation target |
No calculation target |
No calculation target |
No calculation target |
No calculation target |
| Category 10 | Processing of sold products | No calculation target |
No calculation target |
No calculation target |
No calculation target |
No calculation target |
| Category 11 | Use of sold products | 37,114.4 | 25,385.6 | 23,948.0 | 24,487.8 | 22,382.3 |
| Category 12 | End-of-life treatment of sold products | 91.4 | 60.4 | 51.3 | 48.5 | 45.4 |
| Category 13 | Leased assets (downstream) | No calculation target |
No calculation target |
No calculation target |
No calculation target |
No calculation target |
| Category 14 | Franchises | No calculation target |
No calculation target |
No calculation target |
No calculation target |
No calculation target |
| Category 15 | Investments | No calculation target |
No calculation target |
No calculation target |
No calculation target |
No calculation target |
*Greenhouse gas emissions include domestic group companies from FY2022.
Calculation method: In accordance with "General Guidelines on Supply Chain GHG Emission Accounting (Ver2.3)" (Released by the Ministry of the Environment and the Ministry of Economy, Trade and Industry in December 2017).
*Third-party verification has been obtained for greenhouse gas emissions (Scope 1 and 2) for FY2022.
