Information Disclosure Based on the TCFD Recommendations
The impact of climate change is intensifying every year, society's interest in this issue is on the rise, triggering demands that companies step up their actions. The Task Force on Climate-related Financial Disclosures (TCFD), which was established by the Financial Stability Board, published its final report in 2017 that urged companies to disclose information on their climate-related risks and opportunities. We have endorsed the TCFD recommendations and are a member of the TCFD Consortium, which aims to promote actions by organizations in Japan in support of the TCFD recommendations. We will actively disclose information on climate change in the four areas (Governance, Strategy, Risk Management, and Metrics and Targets) specified by the TCFD.
We have a system in place that has the Board of Directors appropriately supervise our efforts to address climate change and other important sustainability-related issues. For important issues related to management risks and opportunities in particular, the executive in charge of sustainability and the executive in charge of environment bring them up to all directors, including outside directors, at the Board of Directors meetings to be reflected in the Group's management strategy.
Prior to reporting to the Board of Directors meetings, specific policies, strategies, and measures related to the environment, including climate change, are deliberated at the Corporate Environmental Management Committee, which is chaired by the executive in charge of environment. This semiannual meeting is attended by the environmental promotion managers of key Group companies, corporate staff division managers, and Corporate Environment Management Office personnel.
In FY2020, the Corporate Environmental Management Committee deliberated on the formulation of a new long-term vision Environmental Future Vision 2050 as well as the establishment of GHG reduction targets and the acquisition of approval of the SBT initiative to achieve the vision. These matters were then reported to the Board of Directors.
We established the Sustainability Strategy Committee above the Corporate Environmental Management Committee to further strengthen Toshiba Group's sustainability management structure from FY2021 onward. The Sustainability Strategy Committee is chaired by the President and CEO and convened semiannually. Corporate officers involved in sustainability, corporate staff division managers, and presidents of key Group companies discuss sustainability-related issues including climate change. Important matters related to management are regularly reported to the Board of Directors.
We consider a variety of mega-trends at the development stage of Toshiba Group's Mid-term business plan, and consider the risks and opportunities presented by climate change, which are then reflected in our business strategy. For example, in response to the trend toward achieving carbon neutrality in Japan and abroad, we decided to suspend the receipt of new orders for coal-fired thermal power plant construction work in FY2020. Furthermore, we announced that we will accelerate our efforts toward achieving carbon neutrality throughout the entire value chain under the new Mid-term business plan which starts in FY2022.
We are attempting to predict the future, specifically 2030 and 2050, by analyzing climate change-focused scenarios such as the 2°C (and beyond 2°C) scenario by the International Energy Agency (IEA) and the 4°C scenario (RCP 8.5) by the Intergovernmental Panel on Climate Change (IPCC). The 2°C (and beyond 2°C) scenario predicts risks (e.g., stricter energy efficiency regulations and the introduction of a carbon tax) as well as opportunities (e.g., increased demand for energy-saving products and energy technologies to realize decarbonization). The 4°C scenario predicts higher physical risks due to disasters such as floods and typhoons. Based on these predictions, the Group companies analyze risks and opportunities in each of their respective business fields and share results at Corporate Environmental Management Committee meetings. Based on the TCFD recommendations, we will estimate the medium-to long-term risks and opportunities for market expansion/creation for each business and reflect them in our future business strategies.
The table below shows the currently assumed risks and opportunities for Toshiba Group.
|Area||Assumed risks||Toshiba Group's response|
|Policy and regulations||Increased costs due to the tightening of energy efficiency regulations and the introduction of a carbon tax; missing out on sales opportunities in the case of a failure to adapt to these changes||
|Technology and markets||Delayed response to market demand for energy-saving products and services as well as energy technologies to realize decarbonization; missing out on sales opportunities due to delayed adaptation to country-/region-specific energy mixes||
|Reputation||Lower corporate evaluations and reputation due to delayed response to climate change; the impact of such delays on the stock price and sales||
|Assumed risks||Toshiba Group's response|
|Damage to production equipment due to disasters (e.g., floods and typhoons); suspended procurement of raw materials and parts; suspended operations of production sites due to disrupted logistics and sales capabilities||
|Assumed opportunities||Toshiba Group's response|
|Increased demand for products related to automobiles and industrial products as electrification continues in such fields||
|Growth in the renewable energy business and increased demand for energy technologies to realize decarbonization||
|Increased market demand for climate change adaptation solutions as the impact of climate change becomes more visible||
Response to climate change is one of the priority actions in the Environmental Future Vision 2050, and addresses both the risks and opportunities for Toshiba Group's sustainable growth. We will aim to significantly reduce GHG emissions throughout the value chain and create more products and services that contribute to the reduction of GHG emissions in society.
We also understand the importance of taking into consideration the characteristics of the Group's businesses; that most of the GHG emissions occur during the use of our products and services throughout our value chain, while in some business areas, such as electronic devices and storage, GHG emissions during the manufacturing stage account for much of the total emissions. We will appropriately deal with both by enhancing product and service energy efficiency and expanding our energy business to realize decarbonization for the former; and promoting emissions reduction measures at production sites for the latter.
At the Business Risk Review Committee meeting, we assess risks of matters including climate change-related risks that have a significant impact on management. Matters that are especially important in terms of business risks are discussed at the Management Committee meeting. Countermeasures and preventive measures for matters related to environmental risks including climate change are also discussed at the Risk Compliance Committee, directly under the control of the President and CEO.
Climate change-related risks and opportunities that have been assessed and identified are shared by the executive in charge of environment, Group companies, and corporate staff divisions at Corporate Environmental Management Committee meetings, and are managed through the aforementioned organizational structure for promoting environmental management.
Metrics and Targets
Under the Environmental Future Vision 2050, we aim to achieve carbon neutrality throughout Toshiba Group's entire value chain by FY2050. As a milestone, we aim to reduce GHG emissions by 70% by FY2030 compared to the FY2019 level.
We set out the following breakdown of GHG reduction target for FY2030 and are promoting related initiatives.
- Reduce the total of Scope 1*1 and Scope 2*2 (GHG emissions generated from Toshiba Group's own business activities)
by 70% by FY2030.
- Reduce use-phase GHG emissions of “products and services associated with power supply”*3 sold in Scope 3*4 by 80% by FY2030.
- Reduce use-phase GHG emissions of “products and services associated with power consumption”*5 sold in Scope 3 by 14% by FY2030.
- Reduce GHG emissions from products and services purchased from other companies in Scope 3.
- Volume of direct emissions through fuel use at Toshiba Group
- Volume of indirect emissions through use of electricity and heat purchased by Toshiba Group
- Power generation plants, etc.
- Volume of indirect emissions generated by Toshiba's value chain (raw materials procurement, distribution, sales, disposal, etc.) outside Scopes 1 and 2
- Social infrastructure products, building-related products (air conditioners, lighting equipment, elevators and escalators), retail and printing equipment, power devices, etc.