Environmental Conservation

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

Organization chart of Risks, Opportunities and Responses

Roles of managers and director monitoring system for climate-related risks
  • The President is the chief officer for promoting environmental management, including climate-related risk management. Important matters related to environment are decided at the Management Committee, etc.
  • The Sustainability Promotion Working Group considers issues related to sustainability, including climate change, and reports to the Management Committee.
  • Matters that may significantly impact business are reported to the Board of Directors.
Strategy
Scenario analysis
  • 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°C and social changes needed to limit this increase to 2°C or 1.5°C.
  • 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 has established the countermeasures on the following page.
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 group and the corporate group 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 emission volume
  • Environmental contribution net sales
SCOPE1, 2, 3
  • Entered on ESG data section (see p.53-54) of this report and on the table published on website.
Targets/results
<CO2 emission volume>
  • Lifecycle CO2*2: Targets of 40% reduction by 2030, 80% reduction by 2050 (compared to 2013). In FY 2020, we achieved a 54% reduction.
  • CO2 emissions from energy source on site: Targets of 50% reduction by FY2030 (compared to 2013), zero actual emissions by FY2050. In FY2020, we achieved a 34% reduction.

<Environmental contribution sales>
  • Target of 50% of net sales of the entire Group by FY2030. In FY2020, this figure was 32%. (We are enhancing categories and definitions. Please see P39 of the OKI report.)
  • *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
  • *2Lifecycle CO2: CO2 emissions by the entire Group for each process in the product lifecycle (procurement→workplace location→distribution→product use by the customer*→disposal of end-of-life product)
    *Product use by customer = expected years of customer use x annual consumed power x number of units sold x emission units

Strategy Based on Scenario Analysis

As societal changes to limit the increase in temperatures below 2°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
2°C climate change scenario (transitional risks)
Referencing IEA sustainable development scenario (SDS) and IPCC’s RCP2.6
  • 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
  • Response to customer demands for renewable energy usage in the manufacturing process
  • Higher costs stemming from strengthening decarbonization at business sites
  • Product: Energy-saving for hardware
    • Set development targets that anticipate stronger regulations
    • Strengthen R&D
  • Site: Promote through effective combination of CO2 emission reduction initiatives
    • Improve production equipment efficiency; improve efficiency and reform production processes
    • Introduction of ZEB (Zero Energy Building) at factories
    • Implementation of renewable energies
Opportunity
  • Expansion of demand for decarbonization/energy-saving solutions
  • Expansion of needs of technologies that support the spread of renewable energy
  • Expansion of demand for hardware products that operate on renewable energy
  • 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
    • 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 climate change scenario (physical risks)
Referencing RCP8.5
  • 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
  • Site: Equipment breaks due to higher temperatures
  • 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
Opportunity
  • Product: Expansion of demand for advanced disaster prevention/mitigation solutions (disaster prevention field, maritime field)
  • 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: Emissions standards violations due to deterioration of facility
  • Product: Strengthen sharing of operations across the entire Group
  • Site: Review inspection/exchange standards
Opportunity
  • Product: Expansion of demand for efficiency improvement in chemical substance management (manufacturing field)
  • 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
  • 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
Opportunity
  • Product: Expansion of demand for resource-saving products and recycling services
  • Product: Reduce burden on customers by recovering used products utilizing the wide area certification system for industrial waste

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