Information disclosure based on the TCFD recommendations

The impact of climate change is intensifying every year, society’s interest in this issue is on the rise, triggering demands that companies step up their actions. The Task Force on Climate-related Financial Disclosures (TCFD), which was established by the Financial Stability Board, published its final report in 2017 that urged companies to disclose information on their climate-related risks and opportunities. Toshiba Tec Group aims to proactively disclose information on climate change in the four areas (Governance, Strategy, Risk Management, and Metrics and Targets) specified by the TCFD.
Toshiba Group has endorsed the TCFD recommendations and are a member of the TCFD Consortium, which aims to promote actions by organizations in Japan in support of the TCFD recommendations.

Governance

At Toshiba Tec Group, matters on climate change and other important environmental issues are reported from the Corporate Environmental Officer to the President at Management Committee meetings then reflected in the Group’s management strategy, if they are important and relevant to risks and opportunities that affect corporate management.
Prior to the deliberation and decision-making by the Management Committee meetings, policies, strategies, and measures related to the environment, including climate change, are discussed at the Corporate Environmental Conference chaired by the President (Chief Environmental Management Officer). The conference takes place semiannually, with the participation of each business group’s Environmental Management Officer, the Environmental Promotion Officer, the Corporate Staff Group Manager, and the Strategic Environmental Management Division.

Strategy

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 NZE2050 scenarios created by the International Energy Agency (IEA), assuming a world where the temperature increases by 1.5°C. 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 RCP8.5 scenario by the Intergovernmental Panel on Climate Change (IPCC), assuming a world where the temperature increases by 4°C. Although this scenario does not predict a greater impact of regulations and technology than the 1.5°C scenario, the impact of physical damage such as greater risk of natural disasters like typhoons and flooding caused by unusual weather may increase.

Analysis method

Scope:

We perform scenario analysis for both our Retail Solutions Business Groups and Workplace Solutions Business Groups in order to identify the risks and opportunities 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).

Time frames:

Three time frames are set (short-, medium -, and long-terms). Short-term covers 0 to 3 years later, medium-term covers 4 to 10 years later (up to FY2030), and long-term covers 11 to 30 years later (up to FY2050).

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 latest scenario analysis, we will conduct analysis in the business areas listed in the “Scope” above, evaluate the level of importance, and proceed to consider countermeasures for those of high importance and priority.

Analysis results

The main results of the latest scenario analysis of risks and opportunities by business are as follows.

Risks and Opportunities in the Retail Solutions Business

Type Risks or Opportunities Time frames Response
Risks Transition Risks Policy and Legal
  • Increase in company energy costs due to the introduction of carbon tax and the emissions trading system.
  • Increase in costs due to the introduction of renewable energy at our sites and introduction/changeover of energy-saving equipments.
 Short to mediumterm
  • Planned introduction of renewable energy at our sites.
  • Planned introduction and renewal of energy-saving equipments at our sites.
  • Investigate trends in policies and legals (carbon taxes, emissions trading schemes, etc.) in each country and review investment plans for renewable energy and energy conservation to reduce energy cost increases in the company.
  • Additional condition of introducing renewable energy at the time of selecting suppliers and partner collaboration.
 Mediumterm
  • Consider the criteria for introducing renewable energy at the time of selecting suppliers and partner collaboration.
  • Increase in POS products development costs associated with achieving the efficiency standards of the European Ecodesign Directive (ErP Directive) and other countries' stricter energy-saving performance regulations.
  • Increase in POS products development costs due to compliance with stricter environmental regulations in various countries, including the adoption of EU taxonomy.
  • Survey of trends in energy-saving technologies in POS products, development of elemental technologies, and human resource development.
  • Trend survey and adoption study of key units and components with high energy-saving performance.
  • Establish a POS products recycle systems.
  • Improve development efficiency and cost reduction measures.
  • Research policy and legal trends for POS products in target countries and review development plans for POS products.
  • Increase in costs to comply with tighter disclosure requirements such as the EU Corporate Sustainability Reporting Directive (CSRD).
  • Consideration of adequate disclosure content, budgetary measures, and appropriate disclosure.
Technology
  • Lost sales opportunities for POS products due to slow development of energy-saving technologies in response to rapidly growing demand for decarbonization-related products and services.
 Mediumterm
  • Survey of trends in energy-saving technologies in POS products, development of elemental technologies, and human resource development.
  • Trend survey and adoption study of key units and components with high energy-saving performance.
  • Review development and sales plans for POS products suitable for energy-saving technology trends.
  • Loss of sales opportunities due to lack of energy saving and renewable energy benefits to customers from solutions to the rapidly growing demand for decarbonization-related products and services
  • Study and proposal of energy-saving by solutions
  • Feasibility study of renewable energy by solutions.
Market
  • Loss of sales opportunities when standards for POS products and solutions required by the market and customers are not met.
 Mediumterm
  • Survey of market trends and customer requirements for energy saving in POS products.
  • Review development plans and sales plans for POS products suitable for market trends and customer requests.
  • Consideration of effective energy conservation advocacy.
  • Increase in costs due to price shift to procurement goods and logistics costs as a result of accelerated decarbonization efforts by procurement/logistics suppliers.
  • Procurement/logistics suppliers survey and request for cooperation to reduce increased energy costs.
  • Find new suppliers for multiple procurement/logistics transactions.
Reputation
  • Increased business risk due to loss of market and customer confidence in the Retail Solutions Business as a result of delays in addressing climate change.
  • Increased business risk due to lower evaluation of the Retail Solutions Business as a result of lack of disclosure of information on climate change response.
 Mediumterm
  • Planned implementation of climate change measures in light of external requirements.
  • Consideration of adequate disclosure content, budgetary measures, and appropriate disclosure.
Physical Risks Acute
  • Impact of the severity and increase in extreme weather events (cyclones, floods, etc.) on our own sites.
    • Suspension of operations due to buildings and equipments damage, increased costs for countermeasures.
    • Delays in operations due to difficulties in getting employees to and from work.
    • Increased expenses due to damage incurred to employees and houses.
 Longterm
  • Formulate BCP measures in regions and at each site where there is assumed to be a risk of large-scale extreme weather events.
  • Confirm BCP measures in assessments at the time of construction of new sites.
  • Impact of the severity and increase in extreme weather events (cyclones, floods, etc.) on suppliers and logistics providers.
    • Delays in production and sales caused by unavailability of parts due to damage to suppliers.
    • Damage to logistics providers, delays in production and sales due to logistics stoppages.
    • Loss of trust due to maintenance and service outages and delays to customers.
  • Survey location/BCP measures of suppliers and logistics providers, as well as cooperation requests.
  • Arrange for availability of multiple suppliers and logistics providers.
Chronic
  • Impacts on our own sites due to the severity and increase in heavy rainfall and precipitation, rising average temperatures, rising sea levels, etc.
    • Increase in buildings repair costs for stronger leakproof measures, etc.
    • Increase in energy costs for air-conditionings.
    • Suspension of operations due to submergence or flooding, increased costs for countermeasures.
    • Increase in costs for health management of employees.
 Longterm
  • Predict heavy rainfall and precipitation at the locations of our sites and formulate countermeasures.
  • Predict temperature rise at the locations of our sites and formulate countermeasures.
  • Predict sea level rise at the locations of our sites and formulate countermeasures.
Opportunities Products &
Services,
Market
  • Increased demand for energy-saving products in the Retail Solutions Business
    • Increase in revenues from expanded sales of energy-saving POS products to new markets.
 Mediumterm
  • Survey of trends in energy-saving technologies in POS products, development of elemental technologies, and human resource development.
  • Trend survey and adoption study of key units and components with high energy-saving performance.
  • Consider sales strategy for energy-saving POS products.
  • Increase in demand for services in the Retail Solutions Business that contribute to customers’ activities to reduce environmental burden.
    • Increase in retail media (ad serving service) revenue due to expansion of smart receipts.
    • Increase in data service revenues such as data sales revenues due to more data collected via ID-POS in line with expansion of smart receipts.
  • Consider sales strategy for securing more smart receipt orders.
  • Data service platform enhancements.
  • Higher demand for products and services that contribute to preventing an increase in food waste due to shortened food consumption periods.
    • Increase in revenue of POS panel data sales to restaurants.
    • Contribution to prevention of waste loss and increased revenue thereof through restaurant visit forecasting and menu trend analysis.
    • Increased revenue through contribution to prevention of increased food waste loss at mass retailers.
  • Development of products and services and consideration of partner collaboration for service expansion.
  • Data service platform enhancements.

Risks and Opportunities in the Workplace Solutions Business

Type Risks or Opportunities Time frames Response
Risks Transition Risks Policy and Legal
  • Increase in company energy costs due to the introduction of carbon tax and the emissions trading system.
  • Increase in costs due to the introduction of renewable energy at our sites and introduction/changeover of energy-saving equipments.
 Short to mediumterm
  • Planned introduction of renewable energy at our sites.
  • Planned introduction and renewal of energy-saving equipments at our sites.
  • Investigate trends in policies and legals (carbon taxes, emissions trading schemes, etc.) in each country and review investment plans for renewable energy and energy conservation to reduce energy cost increases in the company.
  • Additional condition of introducing renewable energy at the time of selecting suppliers.
 Mediumterm
  • Consider the criteria for introducing renewable energy at the time of selecting suppliers.
  • Increase in MFP/Auto-ID products development costs associated with achieving the efficiency standards of the European Ecodesign Directive (ErP Directive) and other countries' stricter energy-saving performance regulations.
 Short to mediumterm
  • Survey of trends in energy-saving technologies in MFP/Auto-ID products, ongoing development of elemental technologies, and human resource development.
  • Trend survey and adoption study of key units and components with high energy-saving performance.
  • Establish products recycle/reuse systems.
  • Establish systems for collecting empty toner cartridges.
  • Consider extending the life of products and components (consumption period)
  • Installation of equipments reduce various chemical substances used in the manufacturing process.
  • Improve development efficiency and cost reduction measures.
  • Research policies and legals trends for MFP/Auto-ID products in target countries and review development plans for MFP/Auto-ID products
  • Increase in MFP/Auto-ID products development costs due to compliance with stricter environmental regulations in various countries, including the adoption of EU taxonomy.
 Mediumterm
  • Increase in costs to comply with tighter disclosure requirements such as the EU Corporate Sustainability Reporting Directive (CSRD).
 Short to mediumterm
  • Consideration of adequate disclosure content, budgetary measures, and appropriate disclosure.
Technology
  • Lost sales opportunities for MFP/Auto-ID/Inkjet Head products due to slow development of energy-saving technologies in response to rapidly growing demand for decarbonization-related products and services.
 Mediumterm
  • Survey of trends in energy-saving technologies in MFP/Auto-ID/Inkjet Head products, development of elemental technologies, and human resource development.
  • Trend survey and adoption study of key units and components with high energy-saving performance.
  • Review development and sales plans for MFP/Auto-ID/Inkjet Head products suitable for energy-saving technology trends
  • Loss of sales opportunities due to lack of energy saving and renewable energy benefits to customers from solutions to the rapidly growing demand for decarbonization-related products and services
  • Study and proposal of energy saving by solution
  • Feasibility study of renewable energy by solution
  • Decrease in revenue due to delayed response to advances in maintenance technologies for products that do not require visits.
 Short to mediumterm
  • Establishment of service technologies not requiring visits (further permeation of remote service tools, self-maintenance by customers’ themselves through a shift to CRU).
Market
  • Loss of sales opportunities when standards for MFP/Auto-ID products, and solutions required by the market and customers are not met.
 Mediumterm
  • Survey of market trends and customer requirements for energy saving in MFP/Auto-ID products.
  • Review development plans and sales plans for MFP/Auto-ID products suitable for market trends and customer requirements.
  • Consideration of effective energy conservation advocacy.
  • Loss of sales opportunities when efficiency standards required for Inkjet Head products to be incorporated into customer products are not achieved.
  • Research on market trends and customer requirements for energy conservation for products incorporating Inkjet Head products
  • Review development plans and sales plans for Inkjet Head products suitable for market trends and customer requirements.
  • Mass production of Inkjet Head products with low power consumption per nozzle
  • Loss of sales opportunities due to delays in responding to the shift to electronic and other methods as opportunities for printing on paper decline.
  • Consideration of expansion of inkjet printing business domain.
  • Increase in costs due to price shift to procurement goods and logistics costs as a result of accelerated decarbonization efforts by procurement/logistics suppliers.
  • Procurement/logistics suppliers survey and request for cooperation to reduce increased energy costs.
  • Find new suppliers for multiple procurement/logistics transactions.
Reputation
  • Increased business risk due to loss of market and customer confidence in the Workplace Solutions Business as a result of delays in addressing climate change.
  • Increased business risk due to lower evaluation of the Workplace Solutions Business as a result of lack of disclosure of information on climate change response.
 Mediumterm
  • Planned implementation of climate change measures in light of external requirements.
  • Consideration of adequate disclosure content, budgetary measures, and appropriate disclosure.
Physical Risks Acute
  • Impact of the severity and increase in extreme weather events (cyclones, floods, wildfires due to droughts, heavy snowfall, etc.) on our sites.
    • Suspension of operations due to buildings and equipments damage, increased costs for countermeasures.
    • Delays in operations due to difficulties in getting employees to and from work.
    • Increased expenses due to damage incurred to employees and houses.
 Longterm
  • Formulate BCP measures in regions and at each site where there is assumed to be a risk of large-scale extreme weather events.
  • Confirm BCP measures in assessments at the time of construction of new sites.
  • Impact of the severity and increase in extreme weather events (cyclones, floods, wildfires caused by droughts, heavy snowfall, etc.) on suppliers and logistics providers.
    • Delays in production and sales caused by unavailability of parts due to damage to suppliers.
    • Damage to logistics providers, delays in production and sales due to logistics stoppages.
    • Loss of trust due to maintenance and service outages and delays to customers.
  • Survey location/BCP measures of suppliers and logistics providers, as well as cooperation requests.
  • Arrange for availability of multiple suppliers and logistics providers.
Chronic
  • Impacts on our own sites due to the severity and increase in heavy rainfall and precipitation, rising average temperatures, rising sea levels, etc.
    • Increase in buildings repair costs for stronger leakproof measures, etc.
    • Increase in energy costs for air-conditionings.
    • Suspension of operations due to submergence or flooding, increased costs for countermeasures.
    • Increase in costs for health management of employees.
 Longterm
  • Predict heavy rainfall and precipitation at the locations of our sites and formulate countermeasures.
  • Predict temperature rise at the locations of our sites and formulate countermeasures.
  • Predict sea level rise at the locations of our sites and formulate countermeasures.
Opportunities Products &
Services,
Market
  • Increased demand for energy-saving products in the Workplace Solutions Business
    • Increase in revenue due to sales expansion of Eco-MFP (paper recycling) and liner-less label (mount-less label) printers, etc.
    • Increase in revenue due to expanded sales of refurbished (used) MFP products.
    • Increase in revenue due to sales expansion of Inkjet Head products that contribute to low power consumption and reduction of environmental impact.
 Short to mediumterm
  • Survey of trends in energy-saving technologies in MFP/Auto-ID/Inkjet Head products, development of elemental technologies, and human resource development.
  • Trend survey and adoption study of key units and components with high energy-saving performance.
  • Consider sales strategy of energy-saving MFP/Auto-ID products.
  • Consider product design for MFP/Auto-ID products that are easy to reuse, and the construction of reusable sites/lines.
  • Consider mass production of inkjet products with low power consumption, resource conservation through replacement with Inkjet Head systems, and sales strategies.
  • Increase in demand for services in the Workplace Solutions Business that contribute to customers’ activities to reduce environmental burden.
    • Increase in revenue due to expanded sales of Eco-MFP (paper recycling) and MPS/MDS (customer printing cost optimization) solutions.
    • Increased revenue through sales expansion due to providing Inkjet Head solution services.
 Mediumterm
  • Consider development and effects of new eco solutions/services
  • Consider development and effects of energy-saving Inkjet Head solutions, and the commercialization thereof.

Response Measures

The measures to address the risks and opportunities identified and evaluated in the above scenario analysis will be incorporated as part of future medium-term business plans in each business area, and progress will be managed on a regular basis.
Response to climate change has also been set as a priority item in our Toshiba Group’s Environmental Future Vision 2050. In addition, since most of the GHG emissions in the entire value chain of Toshiba Tec Group are generated during the use of our products and services, we will take appropriate measures such as improving the energy-saving performance of our products and services and expanding businesses that are compatible with a decarbonized society. We will continue to incorporate the results of scenario analysis into Toshiba Tec Group’s business strategies to ensure sustainable corporate management while appropriately responding to the risks and opportunities of climate change.

Risk Management

Toshiba Tec Group’s risk management related to climate change is integrated into the company-wide risk management process. For each matter that could majorly impact the Group’s management, including climate change-related risk, the Business Risk Review Committee conducts risk assessment, and then those considered to be of particularly high concern from the perspective of business risk are discussed at Management Committee meetings. Moreover, all risks and opportunities evaluated and identified as relating to climate change are shared through the Corporate Environmental Conference and managed under the above-mentioned promotion system.

Indicators and Targets

Toshiba Tec Group is aiming to achieve carbon neutrality by FY2050 throughout the value chain. Also, as milestones, we have set the below targets and are striving to achieve them by FY2030.

Reduce the total of Scope 1※1 and Scope 2※2 (GHG emissions generated from Toshiba Tec Group business activities) by 100% by FY2030.

* Purchasing of carbon credits are incorporated into the carbon neutrality process. The target is set by 97% reduction if purchasing of carbon credits are excluded.

Reduce GHG emissions for use of sold “products and services associated with power consumption”*3 sold in Scope 3*4 by 28% by FY2030.

*1 Direct GHG emissions via the use of fuel at Toshiba Tec Group

*2 Indirect GHG emissions via the use of power and heat purchased by Toshiba Tec Group

*3 Retail and printing products, etc.

*4 Indirect GHG emissions other than Scopes 1 & 2 that arise from Toshiba Tec Group's value chain (raw material procurement, logistics, sale, disposal, etc.)