Information Disclosures Based on TCFD

TCFD(Task Force on Climate-related Financial Disclosures):The task force was set up by the Financial Stability Board (FSB: Financial Stability Board) in December 2015, an international organization for stabilizing the financial system. In June 2017, it published a proposal for “Supporting companies that disclose information on climate-related risks and opportunities” and “Stabilize financial markets through a smooth transition to a low-carbon society”.

Governance

Based on our sustainability policy∗1, Yaskawa is identifying sustainability challenges and targets (materiality) in the Board of Directors and Management Committee that serve as important challenges for sustainable growth and deciding on measures to solve those challenges and targets (materiality). We have also established the Sustainability Committee, which is chaired by the president and attended by heads of related divisions and outside directors as advisors, as our sustainability promotion system∗2 in order to monitor and accelerate the deployment of sustainability measures for the Group as a whole.
For our response to climate change, we have positioned it as an important challenge in our materiality, and we are monitoring it in the Sustainability Committee. For the overall execution of these and other measures, we are conducting PDCA (plan, do, check, action) management in the organization for environmental promotion∗3, which is run by the corporate environmental officer appointed by the president.
Additionally, the achievement of CO2 emissions reduction targets through Yaskawa products is being evaluated and incorporated into the compensation of directors (excluding outside directors and directors who are members of the Audit and Supervisory Committee) with the goals of achieving sustainable corporate activities and responding to social issues.

∗1 
Sustainability Policy:https://www.yaskawa-global.com/company/csr/group/policy
∗2 
Sustainability Promotion System:https://www.yaskawa-global.com/company/csr/group/promotion
∗3 
Organization for Environmental Promotion: https://www.yaskawa-global.com/company/csr/env/management

Strategy

We have investigated the risks and opportunities caused by climate change in motion control, robotics, and system engineering, which are our primary businesses. These risks and opportunities can be thought of as transition risks and opportunities caused by changes such as measures for climate change (e.g., policies and regulations) and physical risks caused by changes such as natural disasters and rising temperatures.
We have derived these risks and opportunities and evaluated their impact on our business activities as serious, moderate, or minor.

Business Impacts Related to Risk and Opportunity Factors

Risk/
Opportunity
Transition
/Physical
Factor Impact Evaluation
Risk Transition Carbon price
  • ・Increased fuel and material procurement costs due to the introduction of carbon taxes by national governments.
Serious
Government policies on carbon emissions
  • ・Increased costs (e.g., purchasing clean energy) that accompany the introduction of emissions trading and the strengthening of emissions regulations.
Serious
Transformation to energy savings and carbon reductions
  • ・Production impacts due to price increases and procurement difficulties for reasons such as insufficient related materials from electrification and the transition to electric vehicles.
Serious
Recycling regulations
  • ・Increased costs from using substitute materials, etc., due to regulations such as those on plastics.
Minor
Growth of low-carbon technologies
  • ・Increased investment costs, such as R&D costs, due to increased competition in the energy saving performance of products against a background of increasing demands for energy savings.
Moderate
Changing behavior of investors and customers
  • ・Increased support costs due to investors and customers preferring companies that are more environmentally responsive.
  • ・Decreased company valuation and loss of business opportunities due to delayed responsiveness to environmental responsibility related to information disclosure and procurement.
Minor
Physical Increasing average temperatures
  • ・Increased energy costs due increased air conditioning energy in our factories.
  • ・Need to move production sites where the risk of flooding exceeds tolerances due to sea rise.
Moderate
Intensification of unusual weather
  • ・Operation stoppages, reductions in production, and additional investment to restore equipment from typhoons, tornadoes, and flooding.
Serious
Opportunity Transition Transformation to energy savings and carbon reductions
  • ・Increased demands for factory automation devices and industrial AC drives due to increased energy saving needs.
  • ・Expanded business opportunities for solutions that increase the productivity and energy saving performance of factories and equipment.
  • ・Expanded demand for solar power generators and wind power/geothermal power/biomass power generation equipment due to feed-in tariff incentives and so on.
  • ・Expanded business opportunities for electronics in electric vehicles as the electrification of automobiles progresses.
  • ・Expanded business opportunities for marine electronics due to increased demands for electric and hybrid ships.
Serious
Changing behavior of investors and customers
  • ・Increased investor valuation, increased ESG investment, and increased corporate value due to expansion of businesses that contribute to the environment.
Minor

The derived risks and opportunities with a moderate and serious impact were analyzed with 2°C and 4°C scenarios for society in 2030.

Main scenarios used in the scenario analysis
 ・Used mainly to analyze transition risks : IEA∗4 : SDS∗5、STEPS∗6
 ・Used mainly to analyze physical risks : IPCC∗7 : RCP2.6∗8、RCP8.5∗9

∗4 
International Energy Agency
∗5 
Sustainable development scenario
∗6 
Stated policies scenario
∗7 
Intergovernmental panel on climate change
∗8 
Scenario in which the average temperature of the world rises about 2°C over the average temperature before the industrial revolution
∗9 
Scenario in which the average temperature of the world rises about 4°C over the average temperature before the industrial revolution

As a result, the 4°C scenario assumes carbon reductions have not gone ahead and unusual weather intensifies, so the response to physical risks caused by this are considered the most important challenges.
The 2°C scenario also requires a certain response to the intensification of unusual weather, but the response to the rising cost of materials and resources is more important. On the other hand, we understand that there are opportunities created by moving forward with reductions in carbon, such as expanding demands for factory automation devices, industrial AC drives, and renewable power generation equipment, as well as a solutions business that increases productivity and energy saving performance in the factories and equipment of companies by using these devices.
We have also learned that the impact on our financial plan from these analysis results is a larger increase in sales due to opportunities than a reduction in sales due to risks.
As a response to these opportunities, the Yaskawa Group is working on factory automation and optimization based on i3-Mechatronics, the goal in our long-term business plan “Vision 2025”, and moving into new challenges that expand the areas in which mechatronics are applied for the sustainable development of the company.

Risk Management

The Yaskawa Group has established the Risk Management Committee with a committee head appointed by the president to swiftly and accurately handle risks that may pose a problem either directly or indirectly to the management and business operations of the Group. The Risk Management Committee evaluates, manages, plans measures, and implements those measures for company-wide risks.
This committee also evaluates and manages risks related to climate change. When a crisis occurs, this committee establishes a crisis response headquarters according to the level of the crisis and implements a suitable response.
The Risk Management Committee shares information with the Board of Directors, Management Committee, and Sustainability Committee, and it supervises and monitors risk management for the entire company while also attempting to enhance risk management company-wide by ensuring consistency in risk assessments and materiality analysis.

Metrics and Targets

In order to prevent global warming, which is a social issue for all humankind, Yaskawa will go carbon neutral in 2050, essentially eliminating the CO2∗10 emissions (scope 1∗11 + scope 2∗12) that accompany Yaskawa Group global business activities, and as a milestone for achieving that goal, we have also established a target called “2050 CARBON NEUTRAL CHALLENGE” to reduce those same CO2 emissions by 36% in 2030 compared to 2018.
We are also contributing to the reduction of CO2 emissions in the world through the supply of AC drives and other products that boast the world’s highest performance utilizing power conversion technology, which is Yaskawa’s core technology. To this end, Yaskawa is working to achieve “CCE 100∗13“, with which it will promote the reduction of CO2 emissions of the world through its products and make the reduction more than 100 times the amount of CO2 emitted by Yaskawa Group in 2025.
Taking this opportunity to set new targets, we will continue our business activities with greater consideration for the environment, thereby contributing to the realization of a sustainable society and increasing our corporate value.

2050 CARBON NEUTRAL CHALLENGE and CCE 100

∗10 
Including carbon dioxide and other greenhouse gases (e.g., chlorofluorocarbon)
∗11 
Emissions primarily from using fuels (direct emissions)
∗12 
Emissions from using purchased electricity and heat (indirect emissions by power companies and other entities)
∗13 
Contribution to Cool Earth 100

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