Support for the TCFD

The Toyo Ink Group expressed support for the Task Force on Climate-related Financial Disclosures (TCFD)* in November 2020, thought that addressing climate change is an important environmental task.

The Task Force was established by the Financial Stability Board (FSB) in 2015. The TCFD Recommendations Report, published by the TCFD in June 2017, identifies the risks and opportunities associated with the transition to a low-carbon economy and climate change and recommends companies to incorporate them into their management strategies as well as to disclose climate change-related impact in their financial reporting. Currently, more than 1,500 companies and institutions around the world have declared their support for the recommendations (as of November 2020, as announced by the TCFD).

Moving forward, we will enhance and accelerate our environmental initiatives, including ones on climate change, and disclose information in accordance with TCFD recommendations.

* The TCFD is an organization established by the Financial Stability Board (FSB) in 2015, to analyze the impact of climate change on the financial affairs of companies and it recommends the disclosure of information about strategies and other initiatives to address climate change.

TCFD / Task Force on Climate-related Financial Disclosures

Governance

We understand that measures to address climate change and other environmental issues are essential issues that manufacturers should address. We have included efforts to solve and respond to the problem of climate change in our actions to address Material Issue 2.
The Toyo Ink Group's environmental management that is based on the environmental goals and fiscal year objectives is implemented by the Environment and Safety Committee chaired by the director in charge of the environment under the CSR Generalization Committee.
The Production-Logistics Division of Toyo Ink SC Holdings Co., Ltd. serves as an organization dedicated to the supervision of safety, the environment, quality assurance, supply chain management, chemical substance control and trading management of the overall Group. Its Planning Department evaluates and manages environmental investments. Its Environment & SCM Promotion Department engages in the formulation of environment-related strategies, cooperation and implementation with related departments and the evaluation of achievements.
In FY2021, we launched a cross-functional task force on climate change. It has been studying information disclosure in accordance with the Task Force on Climate-Related Financial Disclosures (TCFD).

Organizations and System Related to Environmental Safety Management
Figure: President, Representative Director, Group COO / Group-wide Meeting (CSR Conference) / Sharing the policies, strategies and results of the Toyo Ink Groupʼs CSR activities in Japan and overseas / CSR Generalization Committee / Environment and Safety Committee / Promotion of Group-wide environment and safety management / Production-Logistics Division / Planning Department / Evaluation and management of environmental investments / Quality Assurance & Safety Section / Formulation of strategies related to quality assurance, environmental safety and security, cooperation and implementation with related departments and the evaluation of achievements / Environment & SCM Promotion Department / Formulation of environment- and SCM-related strategies, cooperation and implementation with related departments, and evaluation of achievements / Chemical Management Department / Provision of information and management support for ensuring that group companies comply with chemicals control legislation in different countries as well as make appropriate use of economic partnership agreements regarding trade and observe security export control. / Control and management / Group Companies in Japan and Overseas

Strategy

In FY2020, we reviewed our environmental goals, setting new goals aimed at accelerating environmental efforts. Our long-term environmental targets include reducing CO2 emissions and achieving carbon neutrality by 2050.

Major actions related to climate change

FY2018

・Actions commenced in three directions to achieve environmental goals related to the long-term corporate vision SIC27

・KPIs and end of SIC-I targets (FY2018 to FY2020) set for each action to address Material Issue 2

FY2019

・In-house workshop held for identifying climate-related risks and opportunities

FY2020

・Support announced for the TCFD recommendations

FY2021

・New environmental goals set towards the reduction of CO2 emissions by 12% from the FY2020 level during SIC-II (FY2021 to FY2023) and by 35% from the FY2020 level or by 50% from the FY2013 level by 2030 in an effort to achieve carbon neutrality by 2050

・Task force on climate change established

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Climate-related risks and opportunities

Climate-related risks
Risks Our response
Risks related to the transition to a low-carbon economy

Policies and legal regulations

Establishment and enhancement of policies, laws, and regulations, in addition to the need to comply with the systems and regulations of each country and region, such as environmental taxes including the global warming tax in Japan and emissions trading.

We are advocating measures including the replacement of boilers and other equipment with highly efficient ones and the introduction of solar power generation systems for self-consumption in addition to daily energy conservation activities in our efforts to reduce costs and improve efficiency.

Technologies

We will lose opportunities to sell our products and services if we are unsuccessful in developing technologies for reducing customers' environmental impact and thereby fail to fulfill customers' requirements or market needs.

We are working to reduce the environmental impact by evaluating a variety of environmental aspects of products through lifecycle assessment (LCA). We are also working on the development of technologies reflecting considerations of customers' environmental issues and market needs.

Market and reputation

Stakeholders' assessment of our approach to the climate change problem and changes in the set of values in the market will influence customers' decisions on the selection of products and services, thus constituting a business continuity risk.

We will continue to develop environmentally friendly products and disclose our specific achievements through our website, Integrated Report, Sustainability Data Book, and others, in our efforts to secure market confidence and respond to changes in market needs.

Risks related to the physical impact of climate change

Heat stroke risk at production sites increases due to the rise in the average temperature resulting from global warming.

We introduced Wet Bulb Globe Temperature (WBGT) meters at our production sites to assess the heat stroke risk. We also check safety (face check) before starting work. In addition, we are advancing the introduction of cooling devices, preparation of refrigerants, and other measures sequentially.

The operation of factories and other facilities located on low-lying land will be impossible due to flooding or the rising sea level.

We assess water-related risks using AQUEDUCT, an assessment tool from the World Resources Institute. In addition, we take risk reduction measures in business locations with a high flooding risk by applying the method from Toyo Ink (Thailand) Co., Ltd., which experienced large-scale flooding in 2011.

Climate-related opportunities
Opportunities Our response

The markets for environmentally friendly products will expand, partly reflecting the promotion of energy conservation and environmental impact reduction by customers and rising environmental awareness in emerging countries.

We set criteria for each stage of the product lifecycle based on the Environmentally Friendly Product Criteria Table. Products that fulfill certain conditions are registered as environmentally friendly products, and we promote their sales.

Increasing demand for heat-shield and heat-insulation products for mitigating the temperature rise resulting from global warming.

We will develop and sell heat-shield coatings, heat-insulation sheets, and similar products. Sales of the products are expected to increase because they will be used as heat-shield and heat-insulation materials for houses, buildings, automobiles, and other items.

We will need to purchase carbon credits if a carbon cap-and-trade system is introduced, with emissions caps allocated to companies, and we fail to keep our emissions below our cap.

The Kawagoe Factory of Toyochem Co., Ltd., to which the Saitama Prefecture Global Warming Strategy Promoting Ordinance applies, has achieved the reduction of emissions to a level that is far below the benchmark, due to the introduction of a cogeneration system and energy-saving activities. The company may be able to sell emission credits to other companies in the prefecture that failed to achieve the target.

Risk Management

The Toyo Ink Group defines risks that may hamper business continuity as a subject for business continuity planning (BCP) to carry out risk control measures. We also identify, evaluate and study climate change risks as we do other risks to identify material risks. We conduct BCP to address physical risks, and the Environment & SCM Promotion Department under the Production-Logistics Division evaluates the state of CO2 emissions including the emissions of affiliates in Japan and overseas.

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Metrics and Targets

With a view toward reducing CO2 emissions, we will proceed with actions in accordance with our medium- and long-term environmental targets. We will also monitor Scope 3 greenhouse gas emissions to press ahead with the reduction of CO2 emissions in the supply chain.

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