Climate change

Climate change initiatives

The Furukawa Company Group recognizes that risks and opportunities associated with climate change represents an important management issue and is working to reduce greenhouse gas (GHG) emissions among other things.
The group expressed its support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and participate in the TCFD Consortium in August 2023.

Information Disclosure Based on TCFD Recommendations

The TCFD recommends that information be disclosed in accordance with four core disclosure elements: Governance, Strategy, Risk Management, and Metrics and Targets. The Group will work to further enhance disclosure based on these four elements.

Governance

The Sustainability Promotion Meeting, chaired by the President and Representative Director, deliberates on how to address issues related to climate change and reports details of its deliberations to the Board of Directors.
The Sustainability Promotion Meeting discusses various matters related to climate change. These include formulation of basic policies and action plans for the Group’s climate change responses, development of a promotion framework, verification and evaluation of the status of activities, and education and public relations measures, and so on. In addition to Company directors and the presidents of each core operating companies, the Meeting includes the chairman of the Environmental & Safety Management Committee (general manager of the Environmental & Safety Management Department) and the general manager of the Sustainability Promotion Department. The Sustainability Promotion Department and the Environmental & Safety Management Department formulate the Group’s climate change response strategies, manage targets, and develop a climate-related transition plan (roadmap) based on deliberations and suggestions made by the Meeting. Those departments also work together with the implementation bodies (the Group companies and every company department) to develop a PDCA cycle of planning, execution, evaluation, and improvement.
Implementation of climate change responses by the Group companies and every company department is subject to institutional decisions by the Company’s Management Council, Board of Directors, and others according to the level of importance. The director in charge of the Sustainability Promotion Department reports on the progress and results of climate change responses to the Board of Directors from time to time, thereby providing proper oversight by the Board.

Governance Structure for Climate Change Response

Organizations and Meeting Bodies and Their Roles
Board of Directors
Request/instruct the Sustainability Promotion Meeting on climate-related matters and deliberate on matters reported and/or proposed by the Meeting Oversee the resolution and execution of important matters related to climate change
Sustainability Promotion Meeting
Discuss and formulate basic policies and action plans for the Group’s climate change responses, development of a promotion system, verification and evaluation of the status of activities, and education and public relations measures Meet once a year, in principle, and otherwise as needed
Sustainability Promotion Department Environmental & Safety Management Department
Formulate the Group’s climate change response strategies, manage targets, develop climate-related transition plan (roadmap), etc. Oversee the PDCA cycle in collaboration with the implementation bodies for climate change responses
Relevant departments of Furukawa Co., Ltd. Core operating companies
Serve as implementation bodies to deploy PDCA cycle for climate change responses

Strategy

The Group operates numerous businesses and recognizes that the risks and opportunities associated with climate change vary from business to business. With this in mind, we previously conducted scenario analyses of the Rock Drill Machinery segment and Metals segment from two perspectives: the impact of climate change and the scale of business sales. In fiscal 2023, we conducted similar analyses of the UNIC Machinery segment and Chemicals segment. For the scenario analyses, we set 1.5˚C and 4˚C scenarios based on scientific evidence from the International Energy Agency (IEA) and other sources. We then evaluated the significance of climaterelated risks and opportunities that could affect our business in 2030 (interim) and 2050 (long term).
Going forward, we will conduct scenario analyses of the remaining segments while continuously reviewing the analyses already conducted.

Set Scenarios	Worldview
1.5˚C Scenario Emergence of transition risks and opportunities ⇒ 2030 assumption	There is a risk of cost increases due to the Japanese government’s push to introduce GHG emission regulations and a carbon tax. With attention focused on products with low environmental impact, we see opportunities for increased revenues from sales of materials for EVs and renewable energy facilities, as well as products with high energy-saving performances.
4˚C Scenario Emergence of physical risks and opportunities ⇒ 2050 assumption	Extreme weather conditions will cause increases in natural disasters and rising temperatures, leading to the risk of damage to business sites and system facilities, as well as the risk of increased costs, such as higher raw material prices, due to difficulties in procuring materials. Given progress in technological countermeasures and investments to address extreme weather events, we see opportunities for increased revenues from related products, technologies, and services.

Set Scenarios

Worldview

1.5˚C Scenario
Emergence of transition
risks and opportunities
⇒ 2030 assumption

There is a risk of cost increases due to the Japanese government’s push to introduce GHG emission regulations and a carbon tax.
With attention focused on products with low environmental impact, we see opportunities for increased revenues from sales of materials for EVs and renewable energy facilities, as well as products with high energy-saving performances.

4˚C Scenario
Emergence of physical
risks and opportunities
⇒ 2050 assumption

Extreme weather conditions will cause increases in natural disasters and rising temperatures, leading to the risk of damage to business sites and system facilities, as well as the risk of increased costs, such as higher raw material prices, due to difficulties in procuring materials.
Given progress in technological countermeasures and investments to address extreme weather events, we see opportunities for increased revenues from related products, technologies, and services.

Lists of risks and opportunities

Below are the risks and opportunities we have identified that have a “medium” or larger level of impact on our business.
<Degree of impact>
Large: Major impact on the Company group
Medium: Limited impact on the Company group
Small: Minimal impact on the Company group

List of Risks

Type of Risk			Risk Description	Segment	Impact		Countermeasures	Segment
					1.5℃	4℃
					Medium term	Long term
Risk	Transition risk	Government policies/regulations	Introduction of a carbon tax will increase transportation and other fuel procurement costs, as well as production costs and operational costs (GHG response costs related to electricity and delivery).	Rock Drill Machinery, UNIC Machinery, Metals, Chemicals	Medium	Small	Switch to renewable energy, save energy, and reduce the environmental impact of our products
							Utilize renewable energy sources, such as solar power Introduce LED lighting and energy-saving equipment Increase use of environmentally friendly vehicles, such as EVs Reduce GHG emissions through purchase of non-fossil certificates, etc. Closely monitor raw material price trends, negotiate with customers regarding passing on product costs, and collaborate with suppliers to promote low-carbon initiatives	Rock Drill Machinery, UNIC Machinery, Metals, Chemicals
							Improve energy efficiency by reviewing manufacturing processes and strengthening GHG emission controls at production facilities	Rock Drill Machinery, Chemicals
							Reduce environmental impact of our products by using recyclable materials and extending product life	Rock Drill Machinery
							Transition Company-owned vehicles to EVs and electrify forklifts	UNIC Machinery
							Promote modal shift and diversify transportation methods	Chemicals
		Technology	Failure to meet needs of the market, which favors products with low environmental impact, will result in lower sales.	Rock Drill Machinery, UNIC Machinery	Medium	Small	Collaborate with suppliers to manufacture and develop products with low environmental impact	Rock Drill Machinery
	Physical risk	Acute	Extreme weather events (such as floods) may cause shutdowns at business sites or factories, leading to a decrease in sales and an increase in recovery costs. Additionally, supply chain instability can result in higher operating costs, delayed deliveries, and potential damage to our reputation.	Rock Drill Machinery, UNIC Machinery, Metals, Chemicals	Small	Large	Minimize damage and ensure proper management when disaster strikes
				Rock Drill Machinery, UNIC Machinery, Metals, Chemicals	Small	Large	Secure multiple means of transportation and procurement channels Diversify suppliers and work to minimize damage in the event of extreme weather conditions Reinforce flood countermeasures at factories Conduct regular water risk assessments at suppliers and sites and perform rigorous risk management in the event of flooding or inundation Implement a BCP as a support and reporting protocol in the event of damage	Rock Drill Machinery, UNIC Machinery, Metals, Chemicals
			Extreme weather conditions may lead to increased air conditioning costs, reduced productivity, and a rise in health risks for employees working outdoors.	UNIC Machinery	Small	Medium	Expand/upgrade air conditioning systems in factories Insulate factory buildings Use solar power and other self-generation methods to reduce costs	UNIC Machinery

List of Opportunities

Type of Opportunity		Opportunity Description	Segment	Impact		Countermeasures	Segment
				1.5℃	4℃
				Medium term	Long term
Opportunity	Market	Rising demand for machines that contribute to decarbonization will help bolster sales.	Rock Drill Machinery	Medium	Small	Make capital investments to meet demand	Rock Drill Machinery
		Reconstruction projects after disasters caused by extreme weather events will generate demand for our products	Rock Drill Machinery, UNIC Machinery	Small	Large	Make capital investments and develop products to meet demand	Rock Drill Machinery
			Rock Drill Machinery, UNIC Machinery	Small	Large	Deploy ICT to develop and offer remote control and automated solutions	UNIC Machinery
	Technology	Sales of products that contribute to energy conservation will increase.	Rock Drill Machinery, UNIC Machinery	Medium	Small	Collaborate with suppliers to expand lineup of energy-saving products	Rock Drill Machinery
			Rock Drill Machinery, UNIC Machinery	Medium	Small	Make capital investments to develop products and technologies that help reduce environmental impact Expand sales of energy-saving products, such as motorized mini-crawler cranes	UNIC Machinery
		Timely responses to customer requests and technical support to address specification changes related to the shift to EVs will help bolster sales.	UNIC Machinery	Medium	Small	Collaborate with chassis manufacturers to swiftly develop cranes that can be installed on EVs	UNIC Machinery

Risk Management

Assessment of climate-related risks and consideration of countermeasures are conducted by the Risk Management Committee, which comprehensively deliberates important matters related to Groupwide risk management. The Committee is chaired by the director in charge of sustainability of the Company, and the Sustainability Promotion Department serves as its secretariat. The Committee meets twice a year in principle. Its members are selected from every Company departments and core operating companies. Together with the secretariat, the members assess climate-related risks affecting the Group, consider and formulate countermeasures, and report the results to the Board of Directors, thereby proper oversight is provided by the Board.

Metrics and Targets

In fiscal 2023, we expanded the scope of calculation of CO2 emis- sions, from major domestic production operations to a consolidat- ed basis, including overseas sites. Accordingly, on July 30, 2024, we announced our new CO2 emission reduction targets, using fiscal 2023 as the benchmark year. In line with the Paris Agree- ment and the targets set by the Japanese government, the Group aims to reduce Scope 1 (energy origin) and 2 emissions by 25% compared with fiscal 2023 by 2030 and achieve carbon neutrality by 2050.

Data

Sustainability Book