MORIROKU HOLDINGS
Measures to combat climate change
Basic conceptBasic concept
The Moriroku Group aims to become a “400-year company” that is increasingly expected and sought after by all stakeholders by engaging in business activities that take all stakeholders into consideration and by contributing to the resolution of social issues, in order to help realize a sustainable society on the basis of the Sustainability Policy of the Moriroku Group.
The Moriroku Group has identified the urgent issue of climate change as a key sustainability (materiality) issue, and expressed support for the recommendations made by the Task Force on Climate-Related Financial Disclosures (TCFD) in October 2022. We will make efforts to expand our information disclosure on the basis of these recommendations, from the perspectives of governance, strategy, risk management, and metrics and goals, working simultaneously to reduce our environmental burden and boost our corporate value.
Governance
Governance structure with respect to environmental issues
At the Moriroku Group, deliberations and decision-making on basic policies, key issues, and key goals related to sustainability management, including the issue of climate change, are conducted through our Board of Directors meetings. The Group’s KPIs with regards to environmental issues have also been incorporated into the medium-term management plan, and are reflected in the goals set for each operating company.
Moriroku Group Sustainability Promotion System
Sustainability Committee
The Sustainability Committee, which is chaired by the president of Moriroku Holdings, and vice-chaired by the director in charge of sustainability at Moriroku Holdings, meets four times a year in order to actively promote sustainability management within the Group. The Committee formulates Group policies, identifies key sustainability issues, discusses sustainability strategies, and monitors the progression of efforts to address these key issues. The decisions that are made by the Committee are reported at the Board of Directors meeting twice a year, then reflected in the plans of the Group overall, based on the supervision and advice of outside directors.
In order to promote cooperation with Moriroku Technology and Moriroku Chemicals, the Sustainability Promotion Division of Moriroku Holdings serves as secretariat of the Sustainability Committee.
Linking climate change measures to executive compensation
The Group has made the decision to reflect the degree of achievement of key KPIs (50% reduction in GHG emissions by the end of FY2030, 55% implementation of renewable energy by the end of FY2030) in a portion of executive compensation, starting the fiscal year ending in March 2023.
Strategy
Establishment of scenarios
The Moriroku Group has established two scenarios for analysis: the “1.5-2℃ scenario,” in which decarbonization policies are actively implemented, and in contrast, the “4℃ scenario,” in which there is limited implementation of decarbonization policies. We then analyzed these scenarios for the impact they would have on our businesses.
Scenario-based analysis of main risks/opportunities and discussion of countermeasures
The Sustainability Committee identified key risks and opportunities related to climate change, and discussed measures to address them. The table below lists the main climate change-related risks and opportunities that were gleaned from these discussions with regards to the Group’s businesses.
The time frames listed in the table were assumed to be as follows: by 2025 for short-term, by 2030 for medium-term, and by 2050 for long-term.
Moriroku Group - Analysis of risks/opportunities related to climate change (as of November 2022)
Time frames: 4-10 years (by 2030) for medium-term, 11-25 years (by 2050)
Moriroku Group - Analysis of risks/opportunities related to climate change (as of November 2022)
Risk management
Establishment process and monitoring of key risks
The Moriroku Group has established the materiality of sustainability issues that should be taken on by the Group as a whole, according to its understanding and analysis of the current status of each operating company, and a close examination of risks common to the Group overall. We then identify high-priority risks by analyzing these key issues comprehensively, in terms of their impact and importance to the Group, from the perspective of Group-wide management.
Risks and decision-making processes with regards to the issue of climate change are established through discussions within the Board of Directors meetings. The Group also works to review these risks and opportunities as needed, in response to changes in the business environment and the progress of business strategies. These are discussed first within the Sustainability Committee, then presented as proposals to the Board of Directors.
Metrics and goals
Medium-term goals
The Moriroku Group has set a goal to reduce GHG emissions in Scope 1 and 2 by 50% by the end of FY2030 (base fiscal year: 2019). We will work to steadily reduce emissions in Scope 1 and 2, through the implementation of measures such as renewable energy, while also working with suppliers to gain an understanding of and reduce emissions in Scope 3, in order to achieve our KPIs.
Reference: Key KPIs for the promotion of sustainability
“Scope 1, 2, and 3 emissions (Total across three companies*)”
*Moriroku Holdings, Moriroku Technology, Moriroku Chemicals
*Category 8-15 are excluded from the calculations
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