Our scenario analysis is conducted in the following five business domains taking into consideration the scale of the business and the significance of the impact of climate change. Since each domain has a range of businesses and the content and degree of impact of risks and opportunities vary according to the business, we conduct a detailed analysis for each business division to identify risks and opportunities that are specific to each business. Not stopping at the initiatives of our own company, the analysis covers the entire value chain including the upstream (suppliers) and downstream (customers, users).
- Energy Systems & Solutions Business
- Infrastructure Systems & Solutions Business
- Electronic Devices & Storage Solutions Business
- Digital Solutions Business
- Battery Business
● Time frames :
Three time frames are set (short-, mid-, and long-terms). We assumed the present to 3 years as the short-term in light of the period of Toshiba Group’s Seventh Environmental Action Plan (final year: FY2023), 4 to 10 years as the mid-term in light of the setting periods of Toshiba Group’s management policy (FY2025 and FY2030), and 11 to 30 years as the long-term in light of Toshiba Group’s Environmental Future Vision 2050.
● Analysis steps:
We conduct scenario analysis in line with the steps, “Risk importance assessment,” “Definition of scenario groups,” “Business impact assessment,” and “Definition of countermeasures” based on the TCFD recommendations.
In the most recent scenario analysis, we used a common format in the business domains listed in the above scope. First, each business division identifies transition and physical risks and opportunities that climate change would pose to their respective business in line with the two scenarios, “1.5°C and well-below 2°C” and “4°C,” based on the risk and opportunity categories presented in the TCFD recommendations, in light of the relevant business circumstances. Then, each business division assesses the importance of each risk and opportunity in accordance with the company-wide assessment standards. We set (1) three levels of impact (assessed by impact on sales or expense amounts) and (2) three levels of likelihood (assessed by probability and frequency) as the assessment standards. By multiplying the two assessment results, we categorize the final importance into one of three levels: low, medium, and high. Note that in this report we have mainly disclosed risks and opportunities with medium and higher importance based on the assessment results.
In addition, these analysis results were reviewed by related corporate staff divisions (Strategic Planning Division, IR Division, Sustainability Division, Environment Division) to reflect the viewpoint of each area of expertise. Moreover, of the risks and opportunities that have been identified and assessed, those with particularly high importance or those that are unique to each business will be calculated for the amount of financial impact by setting parameters, and we will give priority to formulating countermeasures for such items.