Sustainability

Environment

Environmental Management Risks and Opportunities

Information Disclosed According to the Task Force on Climate-related Financial Disclosures (TCFD*1)

OKI announced its support for the TCFD in May 2019 from a perspective of a positive economic and environmental cycle. Along with systemically managing climate-related risks, opportunities, and countermeasures for them, OKI aims to enhance information disclosure about these efforts.

Governance	Roles of managers and director monitoring system for climate-related risks The OKI Group established a Sustainability Promotion Working Group (WG) in FY2020, with the President as its chief officer, to manage climate-related risks and other sustainability-related risks and promote initiatives based on the Material Issues identified. In April 2023, the WG was transformed into the dedicated Sustainability Promotion Division and a new executive officer in charge of sustainability was appointed. The Management Committee makes decisions on important matters related to sustainability. The above-mentioned promotion body reports to the Management Committee on the status of environmental, social, and governance initiatives and issues that embody the Material Issues. Matters that may significantly impact business are reported to the Board of Directors.In fiscal year 2022, deliberations included the revision of the OKI Environmental Vision 2030/2050 and the establishment of the OKI Group Human Rights Policy.
Strategy	Scenario analysis for identifying and addressing risks and opportunities OKI identifies physical and transition risks based on reports related to climate change issued by international institutions and performs scenario analysis that considers the intensification of climate change if temperatures rise 4℃ and social changes needed to limit this increase to1.5℃. As shown on the following page, perspectives of climate change, resource circulation, and prevention of pollution are included in scenario analysis. OKI identifies risks and opportunities based on these scenarios and establishes countermeasures to better respond flexibly to phenomena that could occur in the future. (Regarding the 1.5℃ target, see "Indicators/Targets" below and page 43.)
Risk Management	Risk selection/evaluation process At least once a year, OKI identifies climate change or other recent phenomena to evaluate the impact, frequency, and period of the risks and opportunities that emerge from them in order to determine their importance. Risk management process OKI considers countermeasures for the above risks and opportunities, developed a Group-wide plan for environmental management, and is implementing this into environmental action plans at each organization and site. The execution status of these plans is checked through internal auditing and revised as needed. Method of integrating comprehensive risk management Comprehensive risk is managed centrally by the environmental management system of the entire OKI Group under the responsibility of the President. Each business division and the corporate division work together to plan, execute, monitor, and revise this system. OKI has deployed countermeasures in the Group to prevent "common risks" as established by the Risk Management Committee, which manages risks across the entire Group.
Indicators/Targets	Indicators used CO2 emissions in the supply chain including OKI sites (Scopes 1+2, Scope 3 categories 1 and 11) Environmental contribution net sales SCOPE1, 2, 3 Entered on ESG data section (see pages 59-60) of this report and on the table published on the website. Targets CO2 emissions reduction (in compliance with SBT2):All of the following are compared to FY2020 CO2 emissions3 reduction at OKI sites: 42% reduction in FY2030, with 21% reduction by FY2025 as an interim target CO2 emissions4reduction at suppliers and from the use of products: 25% reduction in FY2030, with 12.5% reduction by FY2025 as an interim target Environmental contribution sales : Ratio to total Group sales of 50% by FY2030, with 35% by FY2025 as an interim target Results CO2 emissions reduction (in compliance with SBT2) All of the following are compared to FY2020

*1TCFD (Task Force on Climate-related Financial Disclosures): Proposal that suggest the need for companies to disclose information to investors on their response toward climate change
*2SBT (Science Based Target): Target standard for reducing greenhouse gas emissions in line with the levels required by the Paris Agreement
*3SCOPE1 (fuel derived) + SCOPE2 (power derived)
*4Total of SCOPE3 Category 1 (purchased good and services) and Category 11 (use of sold products), which make up over 67% of SCOPE3 emissions in FY2020

Strategy Based on Scenario Analysis

As societal changes to limit the increase in temperatures below 1.5°C progress, there will be changes in laws for decar-bonization, technological progress, and market needs. We expect that there will be rising demand for OKI’s decarbon-ization solutions. If temperatures rise 3 to 4°C, there will be increased physical risks from intense disasters due to the impact of climate change. It is possible that severe impact will hit the supply chain, including OKI’s own sites. Needs are also expected to rise for disaster information systems that serve to prevent severe damage.

Scenario Analysis					Strategy/Initiatives
Category	Expected Phenomena	Risk/ Opportunity	Impact on Future Finances	Time frame*3	Strategy/Initiatives
1.5˚C climatechange scenario*1(transitional risks)	Need for decarbonization increases further and spreads	Risk	Loss of sales opportunities due to not meeting energy-saving standards on hardware products and customer demands	short-term	CO2 emission reduction targets in compliance with 1.5˚C SBT and promotion of the following initiatives Product: Energy-saving for hardware Set development targets that anticipate stronger regulations Strengthen R&anp;D and technology development and accelerate commercialization Site: Promotion of the following initiatives for zero CO2 emissions (ZEB, etc.) Thorough energy saving: Improve efficiency of production equipment and facilities at sites and streamline all operations Introduction of renewable energy: Install renewable energy equipment at our sites, enter into contracts for electricity derived from renewable energy, etc.
			Response to customer demands for renewable energy usage in the manufacturing process, impact of fossil fuel tax (carbon tax)	mid-term
			Higher costs stemming from strengthening decarbonization at business sites	short-term
		opportunity	Expansion of demand for the following OKI Group products Decarbonization/energy-saving solutions Technologies that support the spread of renewable energy Hardware products that operate on renewable energy	short-term	Product: Expansion and creation of environmentally friendly products Visualize and seek out environmental contribution net sales Creation of decarbonization/energy-saving solutions that utilize IoT and AI E.g., Transportation, construction/infrastructure, finance, logistics, maritime, business communications, building energy management fields Support to improve efficiency of customer operations through operations outsourcing E.g. ATM full outsourcing services Expansion of hardware products that operate on renewable energy E.g. Zero Energy Gateway Strengthening of R&D (AI weight reduction, etc.)
4˚C climatechange scenario*2(physical risks)	Abnormal weather becomes more frequent and intensifies (increased typhoons/flooding, extreme heat and cold, increased lightning)	Risk	Sites/suppliers: Loss of business assets due to disasters at factories and suppliers/suspension of operations/severance of supply chain	short-term	Site: Strengthen climate change BCP/BCM Install water stop boards; lift height of equipment Devices to stop manufacturing equipment during lightning storms Redundant air conditioning units for inspection devices Suppliers: Strengthen procurement BCP Strengthen surveys of climate change risks for suppliers
		Risk	Site: Equipment breaks due to higher temperatures	short-term
		opportunity	Product: Expansion of demand for the OKI Group’s advanced disaster prevention/mitigation solutions (disaster prevention field, maritime field)	mid-term	Product: Strengthen business deployment through disaster information systems, etc.
Prevention of pollution through chemicals	Expansion and complication of laws and regulations for substances	Risk	Product: Standards violations for chemicals contained in products Site: Pollution due to deterioration of facilities	short-term	Product: Strengthen sharing of operations across the entire Group Site: Review facility inspection/exchange standards
Prevention of pollution through chemicals		opportunity	Product: Expansion of demand for efficiency improvement in chemical substance management (manufacturing field)	short-term	Product: Deployment of survey systems and analysis services for chemicals in products
Resource circulation	Strengthening of laws and regulations for oceanic plastics and microplastics	Risk	Site: Inflation of waste product disposal costs; refusal to accept from waste disposal companies Product: Risks of resource deprivation; risks of materials supply shortage	mid-term	Site: Waste reduction Reuse of plastic packaging Reduction of percentage of disposed items through improved efficiency in extracting metal materials Product: Recovery and reuse of parts from used products utilizing the wide area certification system for industrial waste
Resource circulation		opportunity	Product: Expansion of demand for resource-saving products and recycling services	mid-term	Product: Provide solutions to extend the service life of customer facilities, reduce burden on customers by recovering used products utilizing the wide area certification system for industrial waste

*1See IEA NZE 2050.
*2See IPCC RCP8.5.
*3Long term means more than 10 years, medium term means 3 to under 10 years, and short term means 1 to under 3 years

About OKI

Contact

Reports on misuse of public research funds and misconduct related to research
activities can also be filed from the page that opens when you click the above button.

Special Contents

Contact