Environment Response to Climate Change

The Group recognizes the problem of climate change as a key social issue. We believe that it poses a risk to the Group, while also presenting new business opportunities. Accordingly, through our business activities, we will contribute to the realization of a transition to a decarbonized society.

Our Concept of Climate Change

As a global manufacturing partner, the Group will contribute to the realization of a decarbonized society through the distribution of eco-friendly electronic and other materials.As a global manufacturing partner, the Group will contribute to the realization of a decarbonized society through the distribution of eco-friendly electronic and other materials.

Governance

Governance related to climate change is incorporated into our overall sustainability-related governance. With regard to issues related to climate change, working groups covering climate change study and implement specific initiatives and monitor the results. The Sustainability Committee deliberates the contents of initiatives and the monitoring of results, and the contents of these deliberations are presented and reported to the Board of Directors. We have built a structure by which responses to issues are properly carried out under the supervision of the Board of Directors and the directions of representative Directors.

Strategy

"Regarding the impact of climate change on the business activities and profit of the Group, we identified risks and opportunities by referring to climate change scenarios, such as those of the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC).
Furthermore, the Group aims to achieve a 50% reduction by FY2030 from the level of the Group's Scope 1 + Scope 2 GHG emissions in FY2021, and in our recent scenario analysis, we similarly use 2030 as a timeframe for analysis.
"

Reference Scenarios

Scenario		Below 1.5°C/2°C	4℃
Summary		A scenario in which stronger measures against climate change will be imposed, resulting in the increase in global average temperatures being limited to below 1.5°C/2°C by 2100 compared with pre-industrial levels Compared with the 4°C scenario, the impact of transition risk is greater, but the impact of physical risk is more limited.	A scenario in which new policies and regulations that go beyond current measures against global warming are not introduced, and global average temperatures rise by approximately 4°C by 2100 compared with pre-industrial levels Compared with the below 1.5°C/2°C scenario, the impact of transition risk is smaller, but the impact of physical risk is larger.
References	Transition	IEA Net Zero Emissions by 2050 Scenario (NZE) IEA Sustainable Development Scenario (SDS)	IEA Stated Policies Scenario (STEPS)
References	Physical	IPCC RCP2.6	IPCC RCP8.5

IEA: International Energy Agency

IPCC: Intergovernmental Panel on Climate Change

Climate Change-Related Risks and Opportunities

Classification		Climate change factor	Risk	Opportunity	Impact on the Company	Response
Transition risks	Policy and legal	Introduction of carbon taxes	○		Increased carbon tax burden, higher raw material prices, and increased logistics costs	Utilize our worldwide network to reduce logistics costs
	Policy and legal	Mandatory disclosure of GHG emissions and other climate change-related information	○		Increased administrative costs associated with compliance with disclosure obligations	Reduce administrative costs by utilizing DX to calculate disclosure information, etc.
	Market and technology	Increased demand for products and services adapted to the impact of climate change	○	○	Changes in profit due to changing trends in products handled as a result of climate change	Expand sales of commercial products for environmentally friendly vehicles and clean energy (solar power, offshore wind power, etc.) facilities, as well as environmentally friendly products
Physical risks	Acute	Increasingly severe natural disasters and abnormal weather, such as heavy rain and floods	○	○	Reduced sales opportunities due to reduced production and production stoppages at plants and disrupted distribution networks Opportunities to utilize our worldwide network to acquire new business	Utilize domestic and overseas bases to strengthen global supply chain management
Physical risks	Chronic	Increase in average temperature	○		Impact on business sites and employees of a deteriorating working environment	Maintain the working environment through the formulation, operation, and management of BCP (Business Continuity Plan) and capital investment

Risk management

The risk management related to climate change is embedded in the risk management for sustainability in general. Against risks related to climate change, the Sustainability Committee and the Working Group on Climate Change will take specific countermeasures and monitor indicators that result from those countermeasures.

Indicators and targets

As part of its policy toward achieving a decarbonized society, the Group's has set targets of achieving a 50% reduction by FY2030 from the level of the Group's Scope 1 + Scope 2 GHG emissions in FY2021, and achieving carbon neutrality by FY2050. To achieve these targets, we will work to reduce GHG emissions from our business activities.

Elematec Group GHG emission reduction target