1. Policy and Basic Concept

Individual Climate Change Policies

• We consider climate change problems to be an important management issue.
  We have clearly stated that we will reduce the environmental impact of our operations in our environmental policy. We formulated concrete target values for the reduction in greenhouse gas (GHG) emission by 2025, 2030 and 2040 as a resolution by our Board of Directors in April 2022. We are aiming to achieve carbon neutrality by 2040 even more proactively based on the Paris Agreement and Japan's NDC.
  We view our response to climate change problems as an opportunity to grow. Accordingly, we will continue to take an even more proactive response in the future aiming to realize a sustainable society.
• We consider achieving corporate sustainability by reducing our energy consumption and using alternative energies to be an important issue. We have set a target to reduce our greenhouse gas emissions by 30% compared to 2019 in the short term by 2025 in our latest Mid-term Management Plan (2023 to 2025) which we announced in April 2023. That target is based on our Climate Change Policy which we enacted in 2022. We will proactively work to reduce the consumption of all the energy we use and to improve our energy efficiency by transforming our business model in addition to reducing greenhouse gases.

2. Governance of Risks Related to Climate Change

• The Board of Directors established Materiality Themes and Environmental Policy in 2019. The materiality defined environmental protection as one of the social issues to be addressed. As we observe more global actions on climate change, we are evaluating its impact on our business and society, continuing to promote aggressive measures mainly with carbon neutralization. We also established the governance system that ensures appropriate and effective management on the issue.
  • We have Sustainability Promotion Division as a dedicated permanent office headed by the Officer in Charge of Sustainability to continuously analyze risks related to climate change, develop plans and take actions, and manage effects of the actions.
  • The Board of Directors take responsibility on the issue related to climate change through assigning a director in charge of climate change. We have also assigned an officer in charge of group-wide risk management including risks related to climate change (Chief Risk Officer (CRO)).
  • Organization chart

    

3. Scenario analysis and strategy

• Our Business model mainly consists of call center types of businesses. There are about 40 call center locations. Among them, just one is our property and the others are rental facilities. Almost all business activities are carried out indoors. Our employees generally commute to their centers, but some work from home. In our model, our sales and profits are basically proportional to the number of employees and centers to a large degree.
• The dominant factors for our greenhouse gas emissions are the electricity consumption of the centers and the employees' commutes and business travels.
• We chose the "4℃ scenario" and the "well-below 2℃ scenario" to analyze risks and opportunities due to the future temperature increase, also referring other scenarios in order to have the better images about the world that the scenarios are suggesting. Then we evaluated our current strategy again.

Scenario analysis to update strategy

• In either scenario, we have concluded that there is no significant negative risk to our finances in the short term (~ 2030) or in the medium to long term (~ 2040). We believe that our business model has extremely little impact on or from the environment.
• On the other hand, we will continue to actively respond to climate change issues, sincerely considering social responsibility and the ideal model of making a profit.
• Suggestions for our strategy
  • The decrease in demand due to rising prices because of the increasing transition cost is minor.
  • Reduced availability of the centers due to physical damages caused by disasters will remain within controllable margins.
  • The direct impact of temperature rise on demand and profits for our services is small. On the other hand, we have to strengthen control over the impact of our possible inadequate responses to climate change issues on brands and recruitment.
  • Overall, we see opportunities outweigh risks if our business has a proactive attitude on climate change.

4. Risk management

Identifying risks related to climate change

• The Sustainability Promotion Division collaborates with each division to identify risks and opportunities, evaluate financial impact, and carry out regular reviews.
• We evaluate the impact on our company by industry, referring to the risk analysis results of our customers' industries such as the beverage industry (increased sales of beverages), the pharmaceutical industry (increased sales of products for infectious diseases), the food industry (rising prices of raw materials), and the energy industry (significant changes in business structure).

Relationship with company-wide risk management

• We manage risk by linking the company-wide risk management system under the control of the Risk Management Division with the risk management related to climate change under the control of the Sustainability Promotion Division.
• In terms of risks related to climate change, based on the analysis of the Sustainability Promotion Division, both divisions jointly evaluate the importance and impact and develop countermeasures. The results will be reported to the Sustainability Promotion Committee, which is chaired by the Representative Director.
• The Sustainability Promotion Committee reports important issues to the Board of Directors at least once a year.
• Medium-term and long-term plans are revised based on the decisions made by the Board of Directors on risks and opportunities, and roadmaps are revised as well.

Introduction of an internal carbon pricing scheme (ICP scheme):

• We have introduced an internal carbon pricing scheme (ICP scheme). We use the ICP scheme to convert into costs greenhouse gas emissions arising from large-scale capital investment and to create economic incentives to reduce emissions. We will promote low-carbon investment in our business activities and expand our initiatives to achieve our emissions reduction targets by adopting the ICP scheme as the basis for selecting equipment and making investment decisions. In addition, we will strive to raise awareness of decarbonization within our company and to expand these initiatives in our daily operations.
• We will appropriately set the ICP every fiscal year referring to the numerical values in IEA documents.
  FY2023: 7,000 yen per t-CO2

5. Metrics and targets

• We aim carbon neutrality by 2040, based on the Climate Change Policy. The target and result for each fiscal year will be disclosed regularly.
• We support the Paris Agreement and are actively working towards carbon neutrality by 2040 to achieve a world that limits global warming to 1.5℃.

  Our Climate Change Policy and Participating Initiatives（PDF）

  Greenhouse Gas Reduction Targets and Progress^*1

  Target	Progress
  50%*2 reduction by FY 2030	Achieved against the target*3 as of the end of FY2023

  • *1 Scope of aggregation : Scope1-3
  • *2 Base Year : FY2019
  • *3 Target : 20% reduction from the base year
• In order to achieve carbon neutrality, we simultaneously promote activities to reduce energy consumption and to fully utilize clean energy such as solar power generation and wind power generation.
• Target to reduce energy consumption (electricity used at facilities)
  The Target is to reduce energy consumption by at least 1% annually.

  Energy Consumption Reduction Record

  		FY2018	FY2019	FY2020	FY2021	FY2022	Average Change in Intensity over Five Years
  Intensity concerning the use of energy		0.04308	0.04111	0.04	0.0393	0.0378
  	Year-on-year comparison (%)		95.4	97.3	98.3	96.2	96.8

• We are disclosing the risks and the opportunities related to climate change and the impact on our company in line with the recommendations of the TCFD.
• We have obtained SBT 1.5℃ certification (certified in December 2023)
• We have been disclosing information to the CDP since 2022.
• Renewable energy has already been installed in the head office, Chubu, Kobe, Tohoku, and other locations, totaling 10 sites, since the fiscal year 2022 (Actual results for FY2022: 8.17 million kWh / by the end of February 2023).
• Kobe Solution Center had already installed renewable energy in FY2022, and Matsue Solution Center has been installed since March 2023.

6. Initiatives in Which We Are Participating

Initiatives

Support for the TCFD (Task Force on Climate-related Financial Disclosures) Recommendations

We have expressed our support for the recommendations of the TCFD. In line with the recommendations, we are collecting, analyzing and disclosing the necessary data about the impact of climate change risks and opportunities on our business activities, strategies and financial plans.

Science Based Targets initiative（SBTi）

The SBTi is an international initiative that certifies Science Based Targets (SBTs). The SBTs are greenhouse gas emission reduction targets scientifically consistent with the targets established by the Paris Agreement. Four organizations - the World Wide Fund for Nature (WWF), CDP, World Resources Institute (WRI) and United Nations Global Compact (UNGC) - jointly established the SBTi. The SBTi encourages companies to set reduction targets based on scientific evidence toward the target of limiting the global average rise in temperature to 1.5°C compared to before the Industrial Revolution. We were certified in December 2023.

Support for "COOL CHOICE"

We expressed its support for COOL CHOICE, the national campaign for realizing decarbonized society.

7. Data

Third-party Verification

We believe it is important to disclose highly transparent and reliable environmental information. Accordingly, we have had the data we disclose verified by a third party since FY2022.
SGS Japan Inc. has conducted a third-party verification in compliance with the ISO14064-3 international standard for calculating greenhouse gas emissions on the data marked with a ★ below.

Greenhouse Gas Emissions

Performance Data