Disclosure based on TCFD recommendations
Our Basic Policy on Climate Change Risks
Based on the philosophy of "continuing to be a company that values the environment, life, and human resources," SNBL strongly recognizes the importance of preserving the global environment for the sustainable growth of the company, and considers climate change to be one of the most important issues.
In October 2020, we expressed our support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). In the "Sustainability Report 2021" published in October 2021, we identified "CO2 emissions reduction" as one of our material issues and are implementing focused initiatives to address climate change.
Additionally, in October 2021, we set a "carbon neutral target" aiming to achieve net-zero Scope 1 and Scope 2 emissions in our domestic business activities by 2030, in line with the Paris Agreement goals.
TCFD Recommended Disclosure Items and Our Initiatives
The items recommended by TCFD for disclosure regarding climate-related risks and opportunities are as follows.
Governance
Disclose the organization's governance regarding climate-related risks and opportunities
1. Board oversight of climate-related risks and opportunities
We recognize climate change as a critical management issue and have identified "CO2 emissions reduction" as one of our material issues. Our basic policies and important matters related to climate change are deliberated and formulated by the SDGs Committee, an advisory body to our Board of Directors, established to promote sustainability management centered on SDGs/ESG initiatives. These are reported to the Board of Directors regularly (about twice a year) and decided upon by the Board to ensure proper oversight of initiatives and risk management.
Regarding basic policies and important matters, prior to the deliberations of the SDGs Committee, the Environmental Committee, which is responsible for the response and management of our company's environmental management, including climate change measures, conducts hearings and exchanges of opinions with the respective business managers of our company as needed, and holds thorough discussions.
2. Management's role in assessing and managing climate-related risks and opportunities
In the SDGs Committee, an outside director is appointed as the chairperson, and the Executive Vice President participates as a member. Both the outside director and the Executive Vice President are members of the Board of Directors. They receive reports on the basic policies, policies, risks and opportunities, goals, action plans, and progress related to climate change, which are deliberated and decided by the SDGs Committee, and discussed by the Environmental Committee. They oversee the efforts and risk management related to climate change measures.
Additionally, we have appointed the environmental officer as the chairperson of the environmental committee and are promoting the understanding and sharing of awareness regarding environmental responses, including climate change, among all employees.
strategy
Disclose actual and potential impacts of climate-related risks and opportunities on the organization's business, strategy, and financial planning when such information is material
3. Climate change risks and opportunities identified by the organization in the short, medium, and long term
We recognize climate change issues as material (important issues) to be addressed and reflect climate-related risks and opportunities in our management decision-making.
"risk"
In particular, in our main business of life sciences (pharmaceutical development support), we recognize that physical risks such as operational shutdowns due to intensified weather disasters, supply chain disruptions, and deteriorating raw material procurement costs and access are significant business risks, leading to social risks such as reduced pharmaceutical supply capacity.
On the other hand, we have been promoting initiatives related to climate change, such as operating geothermal power plants expected to be stable renewable energy and company-wide energy-saving efforts, even before SDGs and ESG gained attention, and we recognize that the transition risk to a decarbonized society is relatively small.
"opportunity"
As a company-wide opportunity, we recognize the potential to gain new opportunities through reducing the environmental impact of business activities by further promoting energy-saving activities and energy efficiency, expanding carbon-free energy centered on renewable energy (geothermal and hot spring power generation) and hydrogen businesses, enhancing climate change resilience across the entire supply chain, and improving ESG ratings by promoting initiatives towards a decarbonized society.
4. Impact of Climate-Related Risks and Opportunities on the Organization's Business, Strategy, and Financial Planning
Based on the above environmental awareness, our company conducts scenario analysis and identifies risks and opportunities for each business, referring to the TCFD recommendations and the IPCC Sixth Assessment Report SSP1-2.6 and SSP3-7.0. We formulate and promote business strategies related to climate change and assess the impact of climate change on our finances.
5. Resilience of the Organization's Strategy Based on Climate-Related Scenarios
Through scenario analysis based on TCFD recommendations and identifying risks and opportunities, we develop countermeasures for risks and opportunities in each business related to climate change, striving to enhance the resilience of our business against climate change.
Risk Management
Disclosure of How the Organization Identifies, Assesses, and Manages Climate-Related Risks
6. Process for Identifying and Assessing Climate-Related Risks by the Organization
Our company evaluates climate change-related risks and opportunities on an annual cycle as a principle. Although we have multiple business divisions with different business models, the Environmental Committee collaborates with each division to conduct identification and assessment, including scenario analysis, in line with the TCFD framework.
7. Process for Managing Climate-Related Risks by the Organization
For risks identified as having a significant impact on business through scenario analysis, we develop preventive and mitigation measures. The Environmental Committee regularly monitors identified risks and the status of responses, and based on this, conducts evaluation and identification of risks and opportunities for the next cycle.
8. How the Process of Identifying, Assessing, and Managing Climate-Related Risks is Integrated into the Organization's Comprehensive Risk Management
The results of scenario analysis and countermeasures such as preventive and mitigation measures in each business division are compiled by the SDGs Committee and reported regularly to the Board of Directors. The Board considers the impact of climate change on the organization and society during corporate decision-making, integrating climate change-related risks into the organization's comprehensive risk management process.
Indicators and goals
If that information is important, specify the metrics and targets used to evaluate and manage climate-related risks and opportunities.
9. Metrics used by the organization to evaluate climate-related risks and opportunities in line with its strategy and risk management process.
Our company has set a "carbon neutral goal" to achieve net zero Scope 1 and Scope 2 emissions in domestic business activities by 2030, referencing the IEMA GHG management hierarchy to reduce GHG emissions.
10. GHG (Greenhouse Gas) emissions for Scope 1, Scope 2, and applicable Scope 3.
For Scope 1 and Scope 2, we disclose emissions after obtaining third-party verification statements. For Scope 3, we are working towards calculating and disclosing significant areas by 2025.
11. Goals used by the organization to manage climate-related risks and opportunities, and performance against those goals.
Towards achieving carbon neutrality by 2030, we are working on the following goals for Scope 1 and Scope 2.
Scope 1 Goal: Reduce Scope 1 emissions by 45% compared to the fiscal year 2020 by 2030.
Scope 2 Goal: Procure all electricity used in our business from renewable energy sources by 2030 (100% renewable energy usage).
| Scope Boundary |
unit Unit |
Fiscal year ending March 2021 (FY 3/2021) |
Fiscal year ending March 2022 (FY 3/2022) |
Fiscal year ending March 2023 (FY 3/2023) |
Fiscal year ending March 2024 (FY 3/2024) |
remarks | ||
|---|---|---|---|---|---|---|---|---|
| Scope1 | Consolidated basis | t-CO2 | 3,176 | 3,145 | 5,389 | 5,452 | ★ | |
| Scope2 | Market-based | Consolidated basis | t-CO2 | 7,630 | 8,416 | 9,234 | 11,895 | ★ |
| Market-based | t-CO2 | -- | -- | -- | 11,193 | ★ | ||
| Total | Consolidated basis | t-CO2 | 10,806 | 11,561 | 14,623 | 17,347 | ★ | |
| CO2 Emissions Basic Unit | Consolidated basis | t-CO2 / million yen |
0.72 | 0.65 | 0.58 | 0.666 | ||
| CO2 Eco-Efficiency | Consolidated basis | million yen / t-CO2 |
1.40 | 1.54 | 1.72 | 1.52 | ||
| Per employee and greenhouse gas emissions | Consolidated basis | million yen / t-CO2 |
11 | 12 | 12 | 13 | ||
Scenario analysis results for climate change risks.
Adopted climate change scenarios.
Our company conducts scenario analysis considering financial impacts of climate change, referencing two SSP (Shared Socio-economic Pathways) scenarios from the IPCC Sixth Assessment Report: SSP3-7.0 (4°C scenario) and SSP1-2.6 (2°C scenario), to evaluate our resilience.
| scenario name |
Climate change measures | Best estimate Long-term (2081-2100) |
Possibility Very high level Long-term (2081-2100) |
|---|---|---|---|
| SSP1-2.6 | Scenario with low GHG emissions where CO2 emissions become net zero after 2050 and then net negative. | 1.8℃ | 1.3~2.4℃ |
| SSP3-7.0 | Scenario with high GHG emissions where CO2 emissions double by 2100. | 1.8℃ | 1.3~2.4℃ |
Scenario analysis results
We conducted a comprehensive evaluation, including financial impacts, by organizing potential impacts and resilience for each business.