We support the TCFD recommendations to realize a decarbonized society.

Joined the TCFD Consortium

Daiwabo Holdings Co., Ltd. supports the TCFD (Task Force on Climate-related Financial Disclosures) recommendations*1 and is a member of the TCFD Consortium*2, which is a forum for discussions among supporting companies and financial institutions.

Recognizing global warming and climate change as important management issues, our Group’s basic environmental philosophy calls for protecting the global environment, which is essential for healthy and cultured living, through "Friendly to People and the Environment" corporate activities.By announcing our support for the TCFD recommendations and joining the TCFD Consortium, the Group will actively disclose information based on the TCFD recommendations, and promote its business activities to contribute to sustainable development by reducing the burden on the global environment.

 

Daiwabo Holdings Sustainability Site “Environmental Activities”
https://www.daiwabo-holdings.com/en/sustainability/environment.html

 

  • 1: The Financial Stability Board (FSB) was established in 2015 at the request of the Group of 20 countries and regions (G20). It assessed the financial impact of the risks and opportunities posed by climate change, and recommended information disclosure on “governance,” “strategy,” “risk management,” and “indicators and targets.” TCFD completed its role and was dissolved in October 2023. However, the final recommendations of TCFD have been taken over by the International Sustainability Standards Board (ISSB), established by the IFRS Foundation, and incorporated in the ISSB standards.
     

 

  • 2: The TCFD Consortium was established in 2019 as a forum to discuss effective corporate information disclosure and initiatives to translate the disclosed information into appropriate investment decisions by financial institutions, etc.
    （The TCFD Consortium website：https://tcfd-consortium.jp/en）

 

 

Governance

In April 2020, our group established the ESG Promotion Committee, chaired by the Representative Director, who is also responsible for overseeing environmental management including climate change risk, as an advisory body to the Board of Directors to deliberate on environmental, social, and governance issues. The ESG Promotion Meeting has been established as a subordinate organization of the ESG Promotion Committee for practical discussions about and the promotion of activities. Matters deliberated at the ESG Promotion Committee are reported to the Board of Directors with its opinions attached. The Board of Directors resolves matters reported and commented by the ESG Promotion Committee, and gives relevant instructions and supervision.
Regarding important matters related to climate change, centered on disclosed items based on TCFD recommendations in particular, comments and reports are sent to the Board of Directors once or more a year through deliberation at the ESG Promotion Committee as one of the materialities of the Daiwabo Group. Accordingly, an intensive effort is made to push forward with such matters.
If necessary, we report the impact of climate change as a company-wide risk to the Risk Management Committee, and make recommendations.

 

 

●Climate change risk management system

 

Strategy

Our group recognizes climate change as a medium- to long-term challenge. Therefore, we make analysis using multiple future scenarios based on the 1.5°C and 4°C scenarios, to account for risks and opportunities under a variety of circumstances.

In a world of +1.5°C, regulations to reduce greenhouse gas emissions will be tightened, and the risk of transition will increase due to the progress of low and decarbonization. 
On the other hand, in a world of +4°C, physical risks, such as abnormal weather, are expected to increase, although the impact of transition risks, such as regulations, are small.
The scenarios assume the period up to FY2050 and are based on SSP1-1.9, SSP2-4.5, SSP3-7.0, and SSP5-8.5 of IPCC, and NZE and STEPS of IEA.

Assumptions for Scenario Analysis

Scenario

1.5°C° scenario, 4°C scenario

Target business

IT infrastructure distribution business, Industrial machinery business

Time frame

Short-term (less than 5 years), medium-term (less than 10 years), and long-term (over 10 years) impact

Reason for changing the time frame:
　Addressing climate change is a global challenge. As the international community moves toward the ambitious goal of achieving carbon neutrality by 2050, we recognize that companies have an increasingly important role to play in realizing a decarbonized society. In our group, the previous FY2030 target served as a critical milestone for accelerating CO₂ reduction efforts. However, to make a lasting contribution to climate change mitigation and the realization of a sustainable society, we believe that long-term, continuous reduction targets and strategies are essential. Therefore, we have expanded our timeline to focus on a new, long-term goal for sustainable greenhouse gas reduction that looks beyond FY2031. The FY2030 target will now serve as a key milestone on this path. As part of our corporate social responsibility, we will continue to actively engage in climate action to contribute to the realization of a sustainable society.

 

Climate change scenarios

Sustainable society with low environmental impact

Society with environmental degradation

Reference scenario

Transition scenario

NZE

STEPS

Physical climate scenario

SSP1-1.5

SSP2-4.5、SSP3-7.0、SSP5-8.5

Temperature rise

Less than 1.5°C

4°C or more

Abnormal weather

Curbing intensification

Long-term intensification

Change in economic activities and social structure

Balancing decarbonization and economic growth

Economic growth not taking sustainability into account

Risk

Transition risk

Large

Small

Physical risk

Small

Large

 

DIS : Daiwabo Information System Co., Ltd. (consolidated)

OM : O-M Ltd. (consolidated, domestic)                                

▼Transition risk (assumed to be most evident in the 1.5°C scenario)
Key Risks Impact on Our Company Time Frame
*3		 Financial Impact
*4		 Significantly
high-impact item		 Key Expected Initiatives
DIS OM
Risk of policies and laws and regulations Increased costs of regulatory compliance, such as carbon prices Our company is working to reduce CO₂ emissions throughout the entire Group, but the introduction of carbon pricing is expected in the below 2°C scenario. If there is no progress in converting procured electricity to low-carbon energy, costs such as carbon pricing may increase. Medium to long term Small 〇 Thorough efficiency improvement and a transition to low-carbon energy to achieve FY2035 and FY2050 GHG emission targets
Technical risk Increased investment and R&D costs for environmentally conscious technologies In addition to increased R&D costs for environmentally friendly technologies, there is a possibility that the cost of introducing equipment that supports decarbonization and energy conservation will increase. Medium to long term Small 〇 Development and early commercialization of energy-saving, hydraulic-free, and automated products
Market risk Rising commodity prices due to tightening of supply-demand relations for renewable energy If commodity prices and raw material costs rise, it is expected that the impact will be small as we will be able to pass on the higher costs or propose alternative products at the time of sale. That said, sales may decrease due to customers’ reluctance to purchase as a result of increased prices. Medium to long term Small 〇 Securing inventory by having large warehouses and proposing alternative products utilizing multi-vendor functions
Rising raw material costs for products with low environmental impact 〇 Review sales strategies as appropriate, including passing of higher costs on to product prices
Reputational risk Loss of corporate brand due to delayed response Insufficient compliance with environmental information disclosure practices may impact stock prices, cause a decline in evaluations from stakeholders, decrease sales, etc. Short to long term Minimal to extreme 〇 〇 Thorough implementation of proactive environmental activities, active IR and SR activities, and timely disclosure of information via websites, etc.
▼Physical risk (assumed to be most evident in the 4°C scenario, etc.)
Key Risks Impact on Our Company Time Frame
*3		 Financial Impact
*4		 Significantly
high-impact item		 Key Expected Initiatives
DIS OM
Acute risk Stagnation of operations at business sites due to disasters If natural disasters such as heavy rain and flooding increase due to climate change, there is a possibility that the operation of distribution bases will be suspended or the arrival of handled goods will be delayed. While continuing to implement BCP measures, we will also continue to minimize impacts through risk hedging with insurance, diversifying the location of our distribution bases, etc. Medium to long term Medium 〇 Continuation of business through teleworking and correspondence to different locations through multi-base network, strengthening of BCP measures
〇 Strengthening of BCP measures at production sites against wind, flood, and other disasters
Stagnation of supply chain operations due to the regions affected by disaster In the event of supply chain operations stagnating, it is expected that the impact will be small as we will be able to propose alternative products. Medium to long term Small 〇 Leveraging the strengths of multi-vendors to secure multiple purchasing routes, and securing inventory thanks to having large warehouses
〇 Strengthening BCP measures at production bases
Spread of infectious disease Business activities may be restricted due to the unexpected spread of infectious diseases (pandemics, etc.). Medium to long term Small 〇 〇 Timely use of teleworking
Chronic risk Deterioration of the working environment due to rising temperatures Rising average temperatures and an increase in the number of extremely hot days may increase the cost of working environment measures needed to be taken at factories and distribution bases. Medium to long term Small 〇 〇 Development of a comfortable work environment at logistics centers and factories
Unstable upstream supply chain If there is instability in the upstream supply chain, it is expected that the impact will be small as we will be able to propose alternative products. Medium to long term Small 〇 Leveraging the strengths of multi-vendors to secure multiple purchasing routes, and securing inventory thanks to having large warehouses
Increased air conditioning costs due to rising temperatures According to the International Energy Agency (IEA), electricity prices are not expected to increase in the 4°C scenario, so we assume there is no risk to our company. Medium to long term - 〇 Consideration of investment in automation of logistics centers and utilization of robots under adverse conditions
▼Opportunity
Key Risks Impact on Our Company Time Frame
*3		 Financial Impact
*4		 Significantly
high-impact item		 Key Expected Initiatives
DIS OM
Resource efficiency Reduction of energy costs by improving production and transportation efficiency Improving energy efficiency through bulk shipping and streamlining logistics may lead to reduced distribution costs, and a reduction in energy consumption associated with production may lead to reduced fuel costs. Long term Small 〇 More efficiency in transportation and delivery by extending current conditions and utilizing nearest, bulk, and charter shipments
〇 Reducing operation costs by introducing energy-saving equipment
Products and Services Growth of earnings by providing products and services that contribute to climate change mitigation and adaptation Demand for IT products (such as virtualization), cloud platforms, and socially and environmentally conscious products that enhance energy-saving performance is likely to grow as demand with regard to environmental impact and resource conservation increases. Long term Medium 〇 Drawing up purchase plans in anticipation of future demand
〇 Development of energy-saving, hydraulic-free, and automated products
Increase in demand for materials, parts, and solutions required for environmentally conscious equipment (renewable energy, batteries, fuel cells, etc.) Long term 〇 Expanding sales opportunities to industries that produce environmentally conscious equipment such as for wind power generation, gas turbines, and nuclear power generation
Market Better corporate image by promoting disclosure of climate-related information This may lead to increased stock prices and improved stakeholder evaluations, and have an impact on sales. Short to long term Minimal to extreme 〇 〇 Thorough implementation of proactive environmental activities, active IR and SR activities, and timely disclosure of information via websites, etc.

*3 Time Frame: Short-term (less than 5 years), medium-term (less than 10 years), long-term (over 10 years)

*4 Financial Impact: As a consolidated group, Extreme (10 billion yen or more), Large (5– less than10 billion yen), Medium (1– less than 5 billion yen), Small (100 million– less than1 billion yen), Minimal (less than 100 million yen)

 

Risk management

Mechanism for assessing the risks and opportunities of climate change

The ESG Promotion Meeting, which promotes issues related to climate change, assesses risks and opportunities related to the impact of climate change, in cooperation with each office of Daiwabo Holdings and Group companies, and monitors the status. Risk assessment is conducted at least once a year and as necessary, and the ESG Promotion Meeting reports and makes recommendations to the ESG Promotion Committee.

The ESG Promotion Committee deliberates on risk assessment, relevant proposed countermeasures, and related indicators and targets at least once a year, followed by reports to the Board of Directors. The Board of Directors resolves matters reported by the ESG Promotion Committee, and gives relevant instructions and supervision.
In the first fiscal year of TCFD disclosure, only risks and opportunities are disclosed. The Group will consider further disclosure of the financial impact.

Indicators and Targets

Recognizing global warming and climate change as important management issues, we have established Group-wide greenhouse gas reduction targets to realize a decarbonized society.

Materiality

Making efforts toward achieving a decarbonized society

KPI

Short-term target

Medium-term target

Long-term target

CO2 emissions reduction

(Scope1+2)

GHG emissions reduction

(Scope1+2)

Base year

FY2013

FY2022

Target

Target year

FY2030

FY2035

FY2050

Target value

-31%

-55%

Carbon neutral

Scope

Group (domestic)

Group (domestic and overseas)

Progress as of the end of FY2024

-20% vs. FY2013

-6% vs. FY2022

Implementation and study of various specific measures to achieve carbon neutrality

Self evaluation*

★★★★☆

★★★☆☆

★★★☆☆

※Self evaluation

★★★★★

Goal achieved

★★★★☆

Progressing beyond plan

★★★☆☆

Progressing as planned

★★☆☆☆

Some delays compared to plan

★☆☆☆☆

Overall delays compared to plan

Short-term target
Scope 
IT Infrastructure Distribution Business: Daiwabo Information System Co., Ltd. (consolidated)

Industrial Machinery Business: O-M Ltd. (consolidated, domestic)

Daiwabo Holdings Co., Ltd. (non-consolidated)
Excluding Alphatec Solutions Co., Ltd. and some bases

 

CO2 emissions 
Scope 1: Direct emissions from the company itself

Scope 2: Indirect emissions from the use of electricity supplied by other companies 

Medium to long term target
Scope
IT Infrastructure Distribution Business: Daiwabo Information System Co., Ltd. (consolidated)
Industrial Machinery Business: O-M Ltd. (consolidated, domestic and overseas)  
Daiwabo Holdings Co., Ltd. (non-consolidated)

 

GHG emissions 
Scope 1: Direct emissions from the company itself including other than CO2

Scope 2: Indirect emissions from the use of electricity, cold water and hot water supplied by other companies