TCFD
TCFD Information Disclosure
The THK Group has identified climate change as a material issue (significant challenge), and as of February 2023, it has become a supporter of the TCFD (Task Force on Climate-Related Financial Disclosures) recommendations. The TCFD recommendations are structured around the four core elements of governance, strategy, risk management, and metrics and targets. In accordance with the TCFD recommendations, THK has analyzed the impact of climate change on its business.
Governance
THK has established a Sustainability Committee, headed by the CEO, that investigates and discusses risks, opportunities, and responses related to climate change and acts as an advisor to the Board of Directors.
As an organization beneath the Sustainability Committee, the Sustainability Promotion Subcommittee is made up of representatives of each business division, and they analyze scenarios related to climate change risks and opportunities in accordance with the TCFD recommendations.
The Sustainability Committee confers on the results of the analysis performed by the Sustainability Promotion Subcommittee, determines measures to respond to climate change, and monitors the progress.
Based on the items discussed and resolutions determined by the Sustainability Committee, the Board of Directors receives and discusses reports and proposals as appropriate and provides general supervision for the climate change efforts of each division.
Strategy
Based on 1.5°C and 4°C climate change scenarios proposed by the IEA (International Energy Agency) and IPCC (International Panel on Climate Change), the THK Group has been analyzing scenarios primarily with regard to its Japanese industrial machinery business and automotive and transportation business in consideration of their long-term impact up to 2050 in order to investigate strategies and the resilience of those strategies with reference to climate change risks and opportunities.
- * 1.5°C scenario: Scenario in which regulations for minimizing global warming are strengthened and market changes are enacted (IEA NZE, IPCC AR6 (Sixth Assessment Report) SSP1-1.9, etc.)
- * 4°C scenario: Scenario in which physical impacts such as extreme weather events result from global warming (IPCC AR5 (Fifth Assessment Report) RCP8.5, etc.)
Scenario |
Cause |
Change |
Risk/Opportunity |
Level |
Impact on THK |
THK's Response |
1.5°C |
Introduction of carbon taxes |
Increased procurement costs |
Risk |
Major |
The introduction of carbon taxes will cause raw material price increases to be passed on to THK, and procurement costs will rise. |
|
---|---|---|---|---|---|---|
Increased operating costs |
Risk |
Major |
The introduction of carbon taxes will cause carbon tax payments to increase based on Japanese Scope 1 and Scope 2 emissions. |
|
||
Change to renewable energy |
Increased energy procurement costs |
Risk |
Minor |
The change to renewable energy will increase energy procurement costs. |
|
|
Increased need for energy savings |
Increased demand for environmentally friendly technology solutions |
Opportunity |
Major |
There will be more equipment designs, fabrications, modifications, and product demand for automation and efficiency improvements for the purpose of boosting energy efficiency. |
|
|
Increased business opportunities in semiconductors |
Opportunity |
Major |
Business opportunities will increase for the manufacture of semiconductor manufacturing equipment components, particularly involving power semiconductors, which form the core of energy savings. |
|
||
Increased demand for failure diagnosis/predictive failure detection service |
Opportunity |
Minor |
Demand will increase for a failure diagnosis/predictive failure detection service that utilizes the IoT and helps boost productivity and reduces energy loss. |
|
||
Advancement of electric vehicles |
Increased demand for electric vehicle components |
Opportunity |
Major |
As more vehicles become electric, new types of products become required, and demand for THK products will increase. |
|
|
Expansion of environmental business |
Increased ESG investment |
Opportunity |
Minor |
Expanding THK's business in environmental fields will capture the attention of investors and make them evaluate THK more favorably, and ESG investment will increase. |
|
|
4°C |
Serious damage from weather-related disasters |
Supply chain interruptions |
Risk |
Minor |
Supply of raw materials will be interrupted if the supplier suffers a disaster. |
|
Increased costs from global warming |
Risk |
Minor |
Rising temperatures will cause air conditioning costs to increase for factories, distribution centers, and offices. |
|
Risk Management
In terms of overall risk management, the Risk Management Committee, which serves as an advisor to the Board of Directors, comprehensively and exhaustively identifies and assesses risks in accordance with risk management regulations, evaluates their severity, and determines the priority for addressing them.
For risks related to climate change, the Sustainability Committee and the Sustainability Promotion Subcommittee, which is under the Sustainability Committee, conduct an analysis of scenarios specific to climate change, identifies risks, and evaluates them in order to determine countermeasures.
Based on the risks and measures identified by the Risk Management Committee and the Sustainability Committee, the Board of Directors coordinates the impact of climate change on the business.
Metrics and Targets
In August 2021, the THK Group formulated the following medium-term and long-term targets for reducing greenhouse gas emissions in order to combat global warming.
Medium-Term Target
By 2030, reduce CO2 emissions to 50% of 2018 levels.
Scope: THK Japan and Group companies in Japan
2018 emissions: 106,514 tons
2030 target emissions: 53,257 tons
Long-Term Target
By 2050, achieve net-zero CO2 emissions.
*
Scope: Entire THK Group
* Net-zero CO2 emissions: Achieving a balance between man-made CO2 and greenhouse gas emissions with their removal by carbon sinks such as forests.
Based on these targets, the THK Group will develop products that further contribute to energy and labor savings, continue conducting its business with environmental considerations in mind, and work to achieve a sustainable and affluent society.