Endorsement of TCFD Recommendations
In 2022, we declared our support for the Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures.Since then, we have been working to identify the risks and opportunities that climate change poses to our business activities, and to disclose information in line with the recommendations of the TCFD.
Fundamental Approach to Climate Change
Recent years have seen disasters and other events caused by abnormal weather around the world, heightening the sense of impending crisis over climate change. At the same time, the global trend towards decarbonization is accelerating, and the Japanese government has also declared its aim to achieve carbon neutrality by the year 2050.
Under such circumstances, to better embody our corporate philosophy of “Connecting People, Connecting Technology and Enriching the World,” the DJK Group aims to resolve customers’ environmental issues through business activities leveraging our unique engineering functions as well as aspire to always be a valued partner for our stakeholders. We will endeavor to mitigate and adapt to climate change through our business activities by providing products and services that help protect and improve the global environment.
TCFD Report
TCFD Recommended Disclosure Elements
TCFD Recommendations prescribe the disclosure in line with the four elements of governance, strategy, risk management, and metrics & targets in order to better understand how risks and opportunities accompanying climate change will affect company management as well as financial affairs.
DJK strives to enhance the disclosure in accordance with these elements, and firmly recognizes that addressing climate change contributes to the sustainable development of society and the medium to longterm improvement of our corporate value. Hence, we will continue to further promote initiatives in sustainability.
Governance
Since January 2004, we have operated an environmental management system (EMS) based on ISO14001 to systematically promote the reduction of environmental impact. We have designated the Representative Director, President & COO as the top management and Executive Officer, General Manager of the Administration Division as the person in charge of environmental management. Based on our environmental policy, we are making continuous improvements using the PDCA cycle.
The Sustainability Promotion Committee (currently, the Sustainability Committee) was established in April 2022 for the purpose of ensuring DJK’s sustainable growth. The committee deliberates sustainability-related matters, including climate change. It is chaired by the Representative Director, President & COO, and the Director, Managing Executive Officer, and Sustainability Officer serves as the officer in charge. The committee regularly monitors in-house initiatives and engages in the deliberation and consideration of future initiatives. The contents of its deliberations are reported to the Board of Directors, whose evaluation of sustainability initiatives also incorporates the perspectives of independent outside directors.
In April 2023, the Corporate Sustainability Department was established. This has further reinforced EMS operation and accelerated sustainability initiatives across the entire DJK Group, under the leadership of the CSuO with the Corporate Sustainability Department serving as the secretariat for the Sustainability Committee.
Strategy
The DJK Group has identified contributing to a sustainable global environment as one of our materialities. We've also established a basic philosophy on sustainability, an environmental policy, and set the realization of a decarbonized society as our target.
In addition to designating greenhouse gas (GHG) reduction rate targets for Scope 1 and 2 emissions, we have launched initiatives through our businesses. This includes engaging in decarbonization as part of our investment strategies under the "V2030" growth strategy.
Climate Control Risks and Opportunities
DJK has conducted a review of items affecting our business, based upon the climate-related risks and opportunities presented in the TCFD Recommendations. In conducting our review, we launched the TCFD Analysis Working Group, which is comprised of relevant business divisions, administrative units, and other departments, and spearheaded by the Corporate Sustainability Department. The Working Group has engaged in discussions and reviews, which have then been approved by the Sustainability Committee chaired by the Representative Director, President & COO. The major climate-related risks and opportunities that we anticipate, as well as their estimated impact on our businesses, are as follows.
Scenario Analysis Results
Reference Scenario
Climate Control Risks and Opportunities
Below are the results for the scenario analyses of our Plant & Energy
and Automotive
Business.
We have identified contribution to a sustainable global environment as one of our material issues and set the realization of a decarbonized society as a key goal. As part of this effort, we have begun initiatives across our business, including setting reduction targets for Scope 1 and 2 emissions and incorporating decarbonization into the investment strategies of our V2030 Growth Strategy.
Measures
The impact of climate change on our businesses in terms of both risks and opportunities is not inconsequential, so we recognize this to be one of the key issues management faces in achieving growth over the medium- and long-term. Based on our analyses of multiple scenarios, we have adopted measures to reduce climate change-related risks and secure corresponding opportunities. More specifically, we are incorporating climate-related risks and opportunities into consideration of business investments and advancing initiatives such as biomass power generation and ammonia manufacturing technologies.
As we move forward, we will continue to gradually expand the businesses which we analyze as well as regularly and continually monitor these analysis results. In addition, along supply chains where the DJK Group is positioned, we will not only offer environmentally-friendly products and services to our manufacturing customers, but also enter new growth markets and engage in a range of activities aimed at achieving carbon neutrality. These efforts will enable us to optimize our business portfolio and enhance the resilience of our business strategy.
Risk Management
The Risk Management Committee performs a central role in DJK’s risk management, and also considers sustainability-related risks among its agenda items. However, climate change risk and other important risks that should be addressed as a priority are monitored by the Sustainability Committee.
To implement effective and efficient risk management, the Risk Management Committee manages climate change risk, together with other risks, in line with DJK’s strategies, based on the Risk Management Regulations.
Metrics & Targets
The Group's metrics, targets, and results related to climate change risks are as follows.
Participation in Initiatives