The global environment is the foundation for all human beings, living creatures and ecosystems on this earth. The activities of corporations could not continue without a sound global environment. Recognizing that climate change is a grave challenge faced by the world, the EBARA Group added its signature in endorsement of the TCFD in 2019. Through dialogue with our stakeholders, we will continue to improve our engagement with climate change and our information disclosures.
Summary of Disclosure Based on TCFD Recommendations 2022
2022: The climate-related scenarios for our businesses in the Oil and Gas Market as well as the Semiconductor Manufacturing Market.
Summary of Disclosure Based on TCFD Recommendations 2021
2021: A comprehensive scenario analysis conducted for all projects.
Governance Information (2022)
The Sustainability Committee, which held in 2021, discussed our policies on carbon neutrality and environmental management at each environment-related topic. In order to aim for 2050 Carbon Neutral as our group, we launched the Carbon Neutral Project in January 2022 and began organizing issues to achieve carbon neutrality. This initiative is one of the measures for “thorough environmental management,” which is one of E-Vision 2030's materialities. We will conduct a group-wide survey covering Scope 1 to 3, coordinate medium-to long-term policies and measures toward carbon neutrality with business divisions, and establish a promotion system. The progress of the project is reported to and discussed by the Sustainability Committee.
In addition, the Sustainability Committee confirmed the progress of climate-related scenario analysis based on TCFD recommendations, and decided to conduct climate-related scenario analysis for each of the facilities construction business, environmental business, and social-system business from the second half of 2022.
The Board of Directors fulfills its supervisory function by receiving reports from the Sustainability Committee and understanding the status of executives. As a member of the Board of Directors, we recognize the need to further enhance the status of supervision, particularly with regards to the environment and society. Accordingly, since 2022, the Board of Directors has been regularly discussing ESG and sustainability topics. One of the key themes of this initiative is addressing climate-related risks and opportunities. The system is designed to provide feedback to the Sustainability Committee through discussions aimed at realizing and promoting responses on the executive side. Information on climate-related risks and opportunities in 2022 based on TCFD recommendations was submitted by the Board of Directors to the Sustainability Committee. The Board of Directors then reviews the contents and discloses the information.
We followed the following processes in our consideration of the impact of climate change upon the EBARA Group’s businesses.
2022: Updated information on business strategies for the Oil and Gas Market and the Semiconductor Manufacturing Market
Identification and evaluation of risks and opportunities 2022 Update
Scenario analysis 2022 Update
Evaluation of financial impact 2022 Update
Establishment of measures 2022 Update
2021: Comprehensive Climate-related Strategies for All Projects
2021
2021
2021
2021
After comprehensively disclosing information on all of our businesses based on TCFD recommendations in 2021, we received an opinion in dialogue with investors that they expect us to analyze more in detail on climate-related risks in the Group‘s Oil and Gas Markets. Our group’s businesses for the Oil and Gas Market is mainly on pumps, compressors, and turbines, and currently focus on LNG (liquefied natural gas) related facilities and downstream areas (such as petroleum refining and petrochemical manufacturing). We examined how markets will change due to climate-related factors and how they could affect our business.
On the other hand, for businesses in the Semiconductor Manufacturing Market, we wanted to make our strategies for expanding climate-related opportunities more resilient, such as the efforts of Japan‘s Society5. 0, including the reduction of GHG emissions, as well as the market penetration of electric vehicles and the development of various products and technologies to realize decarbonization, by analyzing climate-related opportunities and risks more precisely.
We focused on operations for the Oil and Gas Markets and the Semiconductor Manufacturing Market, and analyzed how each business for the market would be affected by a 4°Cand 1.5°Ctemperature increase scenario. In the comprehensive climate-related scenario analysis for all projects disclosed in 2021, the year 2030 was set as the long-term. In our analysis of climate-related risks and opportunities for our two market operations, we set a long-term 2050 year target for the Paris Agreement and the Government of Japan. Backcasting from 2050, we have examined our E-Vision 2030 for "Our Aspiration for 2030."
We have identified climate-related risks and opportunities through 2050 for our Oil & Gas Market and Semiconductor Manufacturing Market businesses in line with the transition risks, physical risks, and opportunities outlined in TCFD recommendations.
Referring to reliable information sources such as SASB,IEA, Electric and Electronics Industry Climate Change Response Long-Term Visions, we extracted risk items that might affect our business and evaluated the importance of risks and opportunities.
| Risk Item | Importance | Major Risks and Opportunities | Risk | Opportu nities |
||
| Category | Subcategory | |||||
| Transition risk |
Policy/ regulation |
Carbon prices, national carbon emission targets and policies | Large | ・GHG emissions cost carbon. ・GHG emissions are regulated at our main production sites. |
● | |
| Industry/ Market |
Market changes (customers, governments, markets) | Large | ・Demand trends for oil, gas, and ammonia affect sales and operating income. | ● | ● | |
| Physical risk | Acute | Increasingly severe abnormal weather | Large | ・Due to heavy rains and typhoons, our main production sites and suppliers are affected, resulting in the suspension of production. | ● | |
Assessment of Climate Change Risks and Opportunities (2021)
| Risk Item | Importance | Major Risks and Opportunities | Risk | Opportu nities |
||
| Category | Subcategory | |||||
| Transition risk |
Policy/ regulation |
Carbon prices, national carbon emission targets and policies | Large | ・GHG emissions cost carbon. ・GHG emissions are regulated at our main production sites. |
● | |
| Industry/ Market |
Market changes (customers, governments, markets) | Medium | ・The demand for reduction of PFC gas increases with the rise in demand for semiconductors. ・Demand for semiconductors grows due to the spread of EV,FCV and the advancement of smart technologies and smart societies. |
● | ||
| Physical risk |
Acute | Increasingly severe abnormal weather | Large | ・Due to heavy rains and typhoons, our main production sites and suppliers are affected, resulting in the suspension of production. | ● | |
4 °C and 1.5 °C Scenarios for each market
4 °C and 1.5 °C Scenarios for the Oil and Gas Market and the Semiconductor Manufacturing Market
Major parameters for the Scenario Analysis
Major parameters for the Oil and Gas Market, Semiconductor Manufacturing Market
Scenario Analysis (2021)
Using our group's financial and non-financial information, public information from the IEA and other countries, and the database of international organizations, we estimated the financial impact of our business in the Oil and Gas Market and the Semiconductor Manufacturing Market due to laws and regulations, changes in markets and technologies, and physical risks.
Financial Impact Assessment Results (2022 Update)
Impact of climate-related risks and opportunities on financial planning, 2021
Based on the results of the financial impact assessment, we considered measures up to 2050 for climate-related risks and opportunities.
Strategy Based on Climate-Related Risks and Opportunities (2022)
Strategy on Climate-Related Risks and Opportunities, 2021
In E-Plan2022, we developed action plans for both financial and non-financial corporate management challenges, which set metrics and targets to manage the progress of these action plans. The non-financial action plans set metrics and targets for risks and opportunities regarding environment, including climate change, society, and governance. The Sustainability Committee and Corporate Planning Committee monitor progress of these plans.
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