Our group identified five materialities (important issues) in April 2023, with the aim of contributing to the realization of a sustainable society through our business as well as the sustainable growth of the group.
We have defined “contributing to a recycling-oriented society” as one of our material issues, and recognize that climate change issues have a significant impact on our group’s business activities and society. Therefore, we believe that by understanding the effects of climate change and taking countermeasures, we can contribute to the realization of sustainable growth and a sustainable society. Based on this idea, we are proceeding with information disclosure in accordance with a framework based on the recommendations of the TCFD (Task Force on Climate-related Financial Disclosures).
Our group recognizes that reducing greenhouse gas and industrial waste emissions is an important issue for sustainable business operations as a measure to minimize the effects of climate change. Therefore, we have set the following reduction objectives by fiscal 2031. From now on, we will move forward with concrete initiatives in stages to achieve these objectives.
Goal for Fiscal Year 2031 （Compared to Fiscal Year 2019）
Initiatives to achieve carbon neutrality
Energy conservation Improving factory heat, electricity, and water usage efficiency and rebuilding production systems, etc.
Energy creation Installation of solar power generation equipment in factories
Renewable energy Improving renewable energy utilization rate
In addition, as a measure to comply with plastic regulations, we have introduced a waste plastic extinguishing device to promote reductions in emissions.
※The above figures (including objectives) are for Warabeya Nichiyo Holdings Co., Ltd. and Warabeya Nichiyo Foods Co., Ltd.
Our group conducts assessment analysis using scenario analysis methods to identify risks and opportunities influenced by climate change. In reference to the scenarios published by the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC), that is, the two future worldviews: the scenario 4℃ and the scenario 1.5℃ , we are evaluating the impact both quantitatively and qualitatively.
Projected Scenario
| Scenario ４℃ | Scenario 1.5℃ |
|
Anticipated worldview in which economic activities take priority and physical impact expands.
|
A worldview in which efforts to realize a decarbonized society are actively pursued.
|
Results of Risk Impact Analysis
|
Item |
Impact on our Group |
Time Axis ※1 |
Impact ※2 |
|||
|
Classification |
Factor |
４℃ |
1.5℃ |
|||
|
transition risk |
policy・legal regulations |
carbon pricing |
A carbon tax will be imposed on CO2 emissions associated with business activities, increasing operating costs. Additionally, the cost of purchasing certificates and credits to comply with emission regulations will increase. |
Mid-term～ |
S |
L |
|
renewable energy/energy saving policies |
Investment in environmental considerations will expand as the use of renewable energy increases and equipment is updated to energy-saving equipment. |
Short term～Mid-term |
L |
L |
||
|
strengthening plastic regulations |
Regulations will be enforced for petroleum-derived plastic containers and packaging, increasing purchasing and processing costs for packaging materials. |
Short term～Mid-term |
S |
M |
||
|
market |
changes in energy prices |
Operating costs will increase deriving from soaring electricity prices with the increase in proportion of electricity used from renewable energy sources, as well as price hikes from changes in demand for fossil fuels. |
Mid-term～Long term |
S |
M |
|
|
physical risk |
acute |
intensification of abnormal weather |
Direct damage to the headquarters and factories, as well as operational losses by disruption of the supply chain will occur. |
Short term～Long term |
M |
S |
|
Agricultural crops will be directly damaged and procurement costs will increase. |
Short term～Long term |
L |
M |
|||
|
chronic |
average temperature rise |
Although the yield of rice, the main raw material, will increase, the quality will decline, and the yield of dried seaweed will decrease, leading to an increase in procurement costs. |
Mid-term～Long term |
M |
S |
|
※1 Definition of Time Axis
Short term：０～３years Mid-term：around FY 2030 Long term：around FY 2050
※2 Evaluation criteria of Impact
Large：more than 500 million yen Medium：200～500 million yen Small：less than 200 million yen
Analyses of Scenarios
＜Analysis of Scenario４℃＞
In the ４℃ scenario, higher prices due to poor growth of key raw materials caused by rising average temperatures could have a significant long-term financial impact. In addition, some of our group’s factories may be damaged by floods, mainly caused by typhoons and heavy rain disasters, and if these abnormal weather events become more severe and more frequent in the future, it is conceivable that damage to the property and assets or losses from temporary suspension of operations will arise and magnify. Also, as abnormal weather becomes more severe, raw material production areas may suffer damage, inducing high rise in procurement costs.
＜Analysis of Scenario 1.5℃＞
In the 1.5℃ scenario, the additional costs of introducing a carbon tax could have a significant financial impact. Then, in response to the introduction of a carbon tax and the strengthening of policies related to renewable energy and energy conservation, it is possible to introduce renewable energy and update equipment with high energy-saving performance. However, there are concerns regarding increased energy and capital investment costs. In addition, since plastics are used in product containers and packaging, stricter regulations on the use of petroleum-based plastics may increase the cost of purchasing packaging materials.
As for damage caused by climate change, we will conduct simulations to develop countermeasures and production systems to minimize the damage. Furthermore, we will investigate and consider alternative products and alternative production areas for raw materials that are significantly affected by climate change. Currently, this analysis covers two companies, “Warabeya Nichiyo Holdings Co., Ltd.” which is the holding company and “Warabeya Nichiyo Foods Co., Ltd.” which operates food-related businesses, but we plan to expand gradually the scope of coverage in the future.
Our group has established a Sustainability Committee, chaired by the President and Representative Director, to promote group-wide efforts to address sustainability issues including climate change. This committee meets four times a year to discuss various aspects of sustainability and decides on various policies, goals, and measures related to sustainability. Regarding climate change, it analyzes risks and opportunities through scenario analysis, set objectives for reducing CO2 emissions and industrial waste emissions, considers measures to achieve these objectives, and manages progress. The deliberations and decisions made by this committee will be reported to the Board of Directors each time it is held.
The Board of Directors makes decisions on important issues related to sustainability, including climate change, and oversees overall sustainability.
The Sustainability Committee identifies and assess climate change risks through scenario analysis for our group, and considers and promotes risk reduction measures.
The Risk Management Committee, which manages risks for the entire group, receives information about climate change risks from the Sustainability Committee and incorporates them into company-wide risk management.
Additionally, the Board of Directors receives reports from the Sustainability Committee regarding the results of analysis of climate change risks, measures to reduce risks, and their progress, and supervises whether risk management is being carried out appropriately.
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