Toshiba Group has identified "Response to climate change" as one of its materiality issues and has positioned achieving carbon neutrality as a key management issue. As part of our Environmental Future Vision 2050, we are working to achieve carbon neutrality throughout our value chain by FY2050 by promoting initiatives at our business and production sites as well as initiatives for our products and services.
To reduce Scope 1 and 2 emissions, we focus on reducing the energy used in production processes, promoting the introduction of energy-efficient processes and equipment, expanding the utilization of renewable energy, and so on.
For Scope 3, we focus on reducing emissions in categories 1*1 and 11*2, which have particularly high emissions, and we work to encourage suppliers to act by conducting surveys and evaluating their initiatives as well as to develop products and technologies that contribute to achieving carbon neutrality.
In addition to "mitigation measures" to reduce greenhouse gas emissions, as "adaptation measures" to prepare for the impacts of climate change, we are also promoting the development of related products and services, such as business continuity plan (BCP) measures for production and business sites as well as disaster prevention solutions.
- GHG emissions from purchased goods and services
- GHG emissions from the use of products and services sold
■ Information Disclosure Based on the TCFD Recommendations
We have endorsed the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which was established by the Financial Stability Board, regarding the disclosure of climate change information. We are also a member of the TCFD Consortium, which was established to promote actions by organizations in Japan in support of the TCFD recommendations. In accordance with the TCFD recommendations, Toshiba Group will continue to disclose information on the risks and opportunities climate change poses for our business, and will promote initiatives to reduce such risks and maximize such opportunities.
Governance
Toshiba Group has established an environmental management structure and is promoting group-wide initiatives to respond to climate change. Items of the Environmental Action Plan and priority measures related to climate change are formulated and progress is checked at Toshiba Group Environmental Management Committee, and the content is reported to Sustainability Strategy Committee and the Board of Directors.
Strategy
As global warming continues and temperatures rise, we are likely to experience more natural disasters including typhoons and floods, which seriously affect people's daily lives and society. Other concerns include sea level rise and droughts due to low precipitation. To respond to these impacts, the world is accelerating the movement toward achieving carbon neutrality by lowering GHG emissions to net zero.
Toshiba Group has been driving responses to climate change, aiming to achieve carbon neutrality throughout its value chain. In addition to reducing GHG emissions within the Group, we are actively implementing measures in each stage of the value chain, including creating more products and services that contribute to reducing GHG emissions in society and cooperating with suppliers to reduce upstream emissions.
To realize highly resilient corporate management as society changes in various ways due to the impact of climate change, it is important to respond appropriately by grasping the risks and opportunities related to climate change facing Toshiba Group.
Under Sustainability Strategy Committee chaired by the President and CEO, we conduct scenario analysis for each business domain to grasp and consider countermeasures for climate change-related risks and opportunities.
Setting scenarios
In scenario analysis, we set up the following two scenarios:
●1.5°C scenario:
For mainly transition risks and opportunities, we use the Net Zero Emissions by 2050 (NZE) scenario created by the International Energy Agency (IEA), assuming a world where the temperature increases by 1.5°C compared to the level before the industrial revolution. This scenario predicts increase in costs due to carbon tax, energy saving related regulations, the introduction of renewable energy, etc., as well as increase in business opportunities due to growing demand for energy technologies to realize decarbonization and energy-saving products and services.
●4°C scenario:
For mainly physical risks and opportunities, we use the RCP 8.5 scenario described in the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC), assuming a world where the temperature increases by more than 4°C compared to the level before the industrial revolution. Although this scenario does not predict an impact due to regulations and technology as the 1.5°C scenario does, the impact of physical damage such as greater risk of natural disasters like typhoons and floods caused by unusual weather may increase.
Analysis method
●Scope:
To confirm the wider impact on all our main businesses, we expanded the targets of scenario analysis to the following seven business domains in FY2023. Since each domain has various 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
- Building Solutions Business
- Retail & Printing Solutions Business
- Electronic Devices & Storage Solutions Business
- Digital Solutions Business
- Other（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 the mid-term business plan, up to FY2030 as the mid-term in light of the setting periods of Toshiba Group's management policy and our GHG emissions reduction targets (mid-term), and up to FY2050 as the long-term in light of Toshiba Group's Environmental Future Vision 2050 and our GHG emissions reduction targets (long-term).
●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 "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 high 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 are calculated for the amount of financial impact and countermeasure costs by setting parameters, and we will give priority to formulating countermeasures for such items.
Analysis results
The main results of the latest scenario analysis conducted in FY2023 are as follows.
●Risks and Opportunities Common to Toshiba Group
| Category | Main Risks | Importance | Main Countermeasures | |
|---|---|---|---|---|
| Transition Risks | Policy and Legal |
|
Medium |
|
| Technology |
|
Medium |
|
|
| Market |
|
Medium |
|
|
| Reputation |
|
Small |
|
|
| Physical Risks |
|
Medium |
|
|
| Category | Main Risks | Importance | Main Countermeasures | |
|---|---|---|---|---|
| Transition Risks | Policy and Legal |
|
Medium |
|
| Technology |
|
Medium |
|
|
| Market |
|
Medium |
|
|
| Reputation |
|
Small |
|
|
| Physical Risks |
|
Medium |
|
|
| Category | Main Opportunities | Importance | Main Countermeasures |
|---|---|---|---|
| Opportunities |
|
Large |
|
| Category | Main Opportunities | Importance | Main Countermeasures |
|---|---|---|---|
| Opportunities |
|
Large |
|
- "Transition Risks" and "Opportunities" in common risks/opportunities are mainly identified assuming the 1.5°C scenario. "Physical Risks" are identified assuming the 4°C scenario.
- "Importance" of common risks/opportunities is based on the assessment of "impact" and "likelihood" as described in the "Analysis steps" above, and is determined comprehensively considering other factors such as the status of our response to the risks/opportunities.
●Toshiba Group’s Risks and Opportunities by Business
- For the details of the scenario analysis results for the Retail & Printing Solutions business, please refer to "Toshiba Tec Group Integrated Report 2024."
Toshiba Tec Group Integrated Report 2024 (Toshiba Tec Corporation)
As a result of the scenario analysis for each business assuming the 1.5°C and the 4°C scenario, we identified different risk factors depending on the characteristics of each business. For example, technology and market risks of renewable energy-related products in the Energy Systems & Solutions business, policy and legal risks concerning GHG emissions in manufacturing processes in the Electronic Devices & Storage Solutions business, and risks related to human resources in the Digital Solutions business. As for opportunities, we also identified various business opportunities for each business, including renewable energy-related technologies, railway systems, disaster management solutions, high efficiency LED lighting, elevators with high energy-saving performance, POS systems and multifunction peripherals (MFPs), power semiconductors, ICT solutions that contribute to reducing GHG emissions, and automotive batteries.
Countermeasures
Some of the countermeasures for risks and opportunities that were identified and assessed in the above scenario analysis are incorporated into the mid-term business plan of each business domain, and measures are promoted. Risks and opportunities of high importance will continue to be reflected in mid-term business plans, and their progress will be managed regularly.
Toshiba Group has declared that it regards the social trend toward carbon neutrality as an opportunity and will contribute to achieving carbon neutrality by building infrastructure and a data society through business activities. To increase this policy's effectiveness, we first launched a Group-wide project in FY2022 to formulate a GHG emissions reduction roadmap that incorporates specific measures toward achieving carbon neutrality at our own business and production sites, and we are now promoting implementation. In addition, to contribute to carbon neutrality for society as a whole, we have established a structure to promote our business quickly and effectively by making organizational changes to strengthen our energy aggregation business in FY2022.
Going forward, we will continue to link scenario analysis results to Toshiba Group’s business strategy and engage in resilient business management while appropriately responding to risks and opportunities.
- Our philosophy and strategy
- Response to Climate Change at Our Sites
- Response to Climate Change in Products and Services
- Initiatives for Carbon Neutral (Toshiba Energy Systems & Solutions Corporation)
Risk Management
Toshiba Group's risk management concerning climate change is incorporated into the company-wide risk management process. For business risks that have significant impact on management including climate-related risks, we clarify management decision criteria, permissible risk limits, and corporate policy on business withdrawal in making management decisions to achieve Toshiba Group's sustainable growth and increase corporate value. In addition, for each risk case, the Business Risk Review Committee conducts risk assessment, identifies the maximum risk, and establishes items for monitoring.
Matters of particular importance are discussed at the Management Meeting. The Business Risk Review Committee meeting is held several times monthly as matters arise. We have added climate-related risks (policy and legal risks, technology risks, market risks, reputation risks, and physical risks) based on the TCFD recommendations to the business risk criteria and will work to strengthen the assessment processes concerning climate change going forward.
With regard to risk management specialized for climate change, we identify risks and assess their importance as part of the scenario analysis for the main business domains, which are conducted under the Sustainability Strategy Committee. For the risks identified and assessed here, the Executive in charge of Sustainability and the Executive in charge of Environment bring them up to the Board of Directors meetings to be reflected in the Group’s management strategy.
Metrics and Targets
Under 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.
Toshiba Group's GHG reduction targets have been approved by the Science Based Targets*1 initiative (SBTi) as 'net zero targets' that are consistent with the goals of the Paris Agreement*2.
(For all items below, the base year is FY2019.)
Long-term target
- Reduce GHG emissions throughout the value chain to net zero*3 by FY2050.
Near-term targets
- Reduce Scope 1*4 and Scope 2*5 GHG emissions by 70% by FY2030.
- Reduce Scope 3*6 GHG emissions by 70% by FY2030.
- SBTs are scientifically grounded GHG reduction targets set by companies on a medium- to long-term basis, in order to keep the global average temperature rise well below 2 °C above pre-industrial levels, and to pursue efforts to limit the temperature rise to 1.5 °C. Science-based targets are validated by SBTi.
- An international framework adopted at the twenty-first session of the Conference of the Parties (COP21) that seeks to reduce GHG emissions.
- 90% reduction in gross emissions by 2050 at a rate consistent with a 1.5°C level reduction pathway, with the remaining carbon emissions removed from the atmosphere and permanently stored.
- Volume of direct emissions through fuel use and industrial process at Toshiba Group
- Volume of indirect emissions through use of electricity, heat, etc., purchased by Toshiba Group
- Volume of indirect emissions generated by Toshiba Group's value chain (raw materials procurement, distribution/logistics, sales, disposal, etc.) outside Scope 1 and 2
In addition, in order to monitor the progress made toward the above targets each year, we have set and are managing targets through to FY2026 in Toshiba Group's Environmental Action Plan. As of FY2023, reduction is progressing smoothly in all of Scope 1, 2, and 3 toward achievement of the targets. We will continue to promote GHG reduction measures at each stage of the value chain.
For the results of Scope 1, 2, and Category 11 of Scope 3 (Emissions from the use of products and services sold), we undergo a third-party verification to ensure data reliability.