Roland DG believes that climate change issues are likely to affect corporate value in terms of both risks and opportunities, and has identified “developing an environmental management foundation that reduces environmental impact and responds to the circular economy” as one of our material issues. As part of its climate change initiatives, it is identifying risks based on scenario analysis and evaluating the financial impact. Furthermore, in order to mitigate transition risks, it has set medium- to long-term action themes and specific action content.
Regarding the issue of climate change, the Climate Change Working Group, established under the Committee, monitors GHG emissions, analyzes risks and opportunities, and considers countermeasures, and reports its activities to the Sustainability Promotion Administrator.
In order to consider the impact of climate change-related issues on the Company’s business, it assessed the financial impact in terms of transition risk and physical risk, using the 1.5°C and 4°C scenarios. The 1.5°C scenario assumes a higher risk of increased operational costs due to the strengthening of the carbon pricing policy and a lower preference for our products and services due to changes in customer preferences, values, and behavior. In the 4°C scenario, the impact of physical risks to manufacturing sites due to windstorms, floods, and other factors is considered to be significant. The main climate-related risks assessed based on the scenario analysis are as follows.
|
Large Category |
Middle |
Small |
Identified Climate Change Risks |
Time Horizon |
Impact |
|
|
1.5℃ |
4℃ |
|||||
|
Transition Risk |
Policy and Law |
Introduction of carbon tax |
Increased cost of carbon tax payments based on emissions from business activities |
Medium |
Low |
Low |
|
Increase in procurement costs due to price increases for highly carbon-intensive parts, etc. |
Medium |
High |
High |
|||
|
Technology |
Transition costs to low-carbon technologies |
Increase in procurement costs due to price increases for parts and other items associated with the transition to bioplastics |
Long |
Low |
Low |
|
|
Market |
Changes in Customer Behavior |
Decrease in product demand due to changing customer preferences |
Medium |
High |
Low |
|
|
Changes in the Energy Market |
Increase in procurement costs due to soaring electricity prices |
Short |
Low |
Low |
||
|
Physical |
Acute |
Increase in shutdowns due to disasters |
Decrease in sales due to suspension of operations at plants and other facilities due to wind and flood damage |
Short |
Low |
Medium |
|
Chronic |
Change in precipitation pattern |
Repair (or relocation) costs associated with damage to factories and other facilities caused by windstorms and floods |
Medium |
Low |
Medium |
|
Time horizon: “Short-term” is assumed to be within 3 years, “Medium-term” within 10 years, and “Long-term” more than 10 years.
Impact: “Small” is assumed to be less than ¥100 million, “Medium” is assumed to be between ¥100 million and ¥500 million, and “Large” is assumed to be ¥500 million or more (based on operating income).
In order to strengthen its resilience to climate change mitigation, the Company has set our medium- to long-term environmental theme as “Promoting GHG emissions reduction throughout the value chain and establishing a foundation for environmental management with an eye toward a circular economy,” The specific initiatives in the mid-term management plan starting in FY2024 are “reduction of Scope 1 and 2 GHG emissions,” “promotion of supplier engagement,” and “reduction of actual power consumption through improvement of added value (productivity) of products.” The Company believes that the physical risks to its Thai factory and other facilities due to windstorms, floods, etc. are generally acceptable by maintaining a production capability that allows the Company to continue production at the minimum level necessary in Japan.
Regarding risks related to sustainability issues, including climate change, the Sustainability Committee Secretariat analyzes and examines the impact on management and business, and the Sustainability Committee and the Board of Directors discuss and decide on materiality and the policy to deal with it.
These results are disseminated to related departments and BUs and managed under their respective risk management activities. The Risk Management Secretariat comprehensively manage and monitor these efforts across divisions.
In order to assess and manage the impact of climate change on our business and strengthen its resilience to climate change mitigation, the Company has set a target for Scope 1 and 2 GHG emissions of 38% reduction in FY2030 compared to FY2021 (4.2% reduction per year), consistent with the 1.5°C target.
In fiscal 2023, the Company renewed the CO~{2}-free electricity contract for the Hamamatsu area where its head office is located. The new head office building completed in October has acquired Nearly ZEB certification, which indicates that energy consumption has been reduced by 75% or more through energy conservation and energy creation compared to the standard primary energy consumption under the Act on the Rational Use of Energy for Buildings.
Regarding Scope 3, the Company promoted activities such as the use of paper-based ink cartridges instead of conventional plastic in FY2023, and we will set indicators and targets for future reductions and transition plans as part of our mid-term management plan starting in FY2024. However, we will continue to study the establishment of indicators, targets, and transition plans for future reductions based on the specific initiatives in our medium-term management plan starting in fiscal 2024: “promotion of supplier engagement” and “reduction of actual power consumption by improving the added value (productivity) of our products.”