Worldwide, the severity of climate change and other global environment issues is increasing. Japan is no exception. Weather abnormalities have caused many large natural disasters and have greatly impacted Japan. Companies cannot overlook the impact of climate change. Against this backdrop, we believe that climate change is an important issue we should address in our sustainability-oriented management, and that the risks and opportunities accompanying climate change will greatly impact our business strategies.
The Company expressed its support for the Task Force on Climate-related Financial Disclosures (TCFD) recommendations in 2022 and is involved in the TCFD consortium, a discussion forum for the companies and financial institutes supporting the recommendations.
Based on the TCFD recommendations, we will continue to disclose information about governance, strategies, risk management, metrics and targets regarding our actions to address climate change in pursuit of a sustainable society.
Recommended disclosure items based on TCFD recommendations
Governance
The Sustainability Promotion Committee was established in August 2021 and promotes activities related to climate change.
Being a "leading-edge service company" as stated in our management philosophy, we have a basic aim of helping establish a society that is more convenient, enriched and sustainable than it is now by leveraging our unique expertise, management resources and the experience of our employees and by contributing to the development of society and the resolution of problems in a way that only Credit Saison can through its usual business operations.
Taking action to address sustainability-related issues such as the consideration of climate change and other global environmental issues, respect for human rights, the health and working environment of employees, the fair and appropriate treatment of employees, fair and appropriate trade with suppliers and crisis management to handle natural disasters and other events is very important in our management of our business. These actions help mitigate risks and create revenue opportunities. Based on this understanding, the Sustainability Promotion Committee was established in August 2021 as an organization for discussing the direction of our activities to achieve our sustainability-related strategies and to respond to inquiries from the representative director.
The Committee pursues the establishment of a sustainable society by taking action to address climate change and promoting diversity, equity and inclusion, including the empowerment of women and other initiatives.
With a view toward advancing our businesses and undertaking corporate activities to support sustainable economic development, and fusing these activities with our DNA to become a truly unique global company originating in Japan, the chairperson of the Sustainability Promotion Committee was replaced by the Director and Senior Managing Executive Officer in charge of Global Business. The new Sustainability Promotion Dept. was also established in March 2024.
- *1 Working group (the same hereinafter)
- ・The chairperson should be a Director who can advance our businesses and undertake corporate activities to support sustainable economic development from a global perspective.
- ・The Representative, Executive President and COO should also participate in the working group.
- ・The members should represent a wide variety of departments including the Branding Strategy Dept., Corporate Planning Dept., Strategic Human Resources Dept., Sustainability Dept. and Global Business Division.
- ・The members should have a sense of gender equality
- ・The Committee should also include outside directors to hear opinions from objective and neutral perspectives.
- ・Third-party organizations should also be involved in committee activities to obtain advice and recommendations in the area of their expertise.
＜Sustainability Promotion Committee organization chart＞
＜Sustainability Promotion Committee Members＞
| Chairperson | Kosuke Mori, Director, Senior Managing Executive Officer |
|---|---|
| Members | Katsumi Mizuno, Representative, Executive President and COO |
| Yumiko Hoshiba, Outside Director |
|
| Ryuki Tabata, Managing Executive Officer |
|
| Kazue Yasumori, Managing Executive Officer |
|
| Naoki Misaka, Executive Officer, General Manager of the Corporate Planning Dept. |
|
| Yuka Wakamatsu, General Manager of the Sustainability Dept. |
Criteria for selection of members of the Sustainability Promotion Committee
Strategy
We predicted changes in the external environment and analyzed the impact of climate change on our operations in the future, in accordance with the TCFD framework and using a scenario analysis method.
It is important for us to pursue sustainable growth by mitigating climate change and adapting to it through our business activities. Based on this understanding, we believe that actions to address climate change are important in the management of our business. We identify and assess its impact on us by forecasting changes in the external environment and our operating environment accompanying the manifestation of climate-related risks and by identifying risk events. In the scenario analysis, we referenced multiple existing scenarios published by organizations such as the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC).
・Specifying the businesses to be analyzed
- Scenario analysis is performed on a consolidated basis.
・Specifying risk items and opportunity items
- The TCFD recommendations divide the risks of climate into two categories, transition risks and physical risks. Based on these classifications, we examined risk items to identify the major risk items and opportunity items that are closely related to our businesses.
・Process of assessment and management
- The Climate Change Strategy WG takes the lead in the examination of risks, assessing their impact and discussing measures. The Sustainability Promotion Committee monitors policies for the handling of risks and the seizing of opportunities and the formulation of strategies and related efforts, and the Board of Directors supervises and receives reports from the Sustainability Promotion Committee as necessary. (The Sustainability Promotion Committee and the Climate Change Strategy WG meet every month)
- *The Climate Change Strategy WG includes the Corporate Planning Dept., Treasury & Accounting Dept., General Affairs Dept., Corporate Risk Management Dept. and Public Relations Office.
・Definition of timeline (short, medium and long term)
- A characteristic of climate change is that it usually takes a longer time for its impact to manifest. We take this into consideration along with the target years specified by the Paris Agreement and the Japanese government to define the short-, medium- and long-term timelines as follows.
- *Short-term (currently - 2025)/medium-term (2030) / long-term (2050)
・Definition of degree of importance (large, medium and small)
- In assessing the impact of climate change on our financial affairs, we referenced the relevant matters of the timely disclosure standards of the financial instruments exchange concerning the correction of performance forecasts to classify the matters impacting operating income and ordinary profit. Matters that increase or decrease the net revenue forecast 10% or increase or decrease the business profit forecast 30％ were classified as having a large impact as the scenario analysis would be performed on a consolidated basis.
| Classification of impact | Ratio to revenue | Amount | Ratio to profit | Amount |
|---|---|---|---|---|
| Large | 10% or more | 32.2 billion yen or more | 30% or more | 18.2 billion yen or more |
| Medium | 5% or more and less than 10% |
16.1 billion to 32.1 billion yen |
15% or more and less than 30% |
9.1 billion to 18.1 billion yen |
| Small | Less than 5% | 16.0 billion yen or less | Less than 15% | 9.0 billion yen or less |
*Calculated based on FY2022 results
| Types of risks and opportunities | Risks and opportunities | Business impacts | Indicators of impact on business operations | Financial impact | Extent of impact | Time span | |
|---|---|---|---|---|---|---|---|
| Risks | Transition risks | Policies and legal restrictions | Increased anti-global warming taxes, etc. | Impact on SG&A expenses | Approx. 0.38 billion yen | Low | Short term to long term |
| Introduction of a carbon tax leading to the prices of building materials soaring and the increase of real estate acquisition prices | Impact on revenue and assets | Approx. 1.56 billion yen | Low | Short term to long term | |||
| Adaptation to the building energy conservation act and ZEB | Impact on revenue and assets | Approx. 3.25 billion yen | Low | Short term to long term | |||
| Market | Rising energy prices | Impact on SG&A expenses | Approx. 0.21 billion yen | Low | Short term to long term | ||
| Decreasing demand for products and services due to changes in consumer behavior | Impact on revenue and assets | Approx. 0.27 billion yen | Low | Long term | |||
| Physical risks | Acute physical risks | Declining sales due to damaged buildings and operations being halted by more severe storms and floods | Impact on assets, including the head office, sales divisions and data centers, and revenue from business | Approx. 0.25 billion yen | Low | Short term to long term | |
| Chronic physical risks | Worsening of the macro economy due to the impact of rising temperatures on agriculture, water resources, health, etc. | Impact on doubtful account costs | Low | Short term to long term | |||
| Frequent occurrence of heatstroke due to a rise in the average temperature and an increase in electric power costs due to the use of air-conditioners | Impact on SG&A expenses | Approx. 0.11 billion yen | Low | Short term to long term | |||
| Opportunities | Energy sources | Zero GHG emissions | Exemption from a carbon tax through the achievement of zero GHG emissions | Impact on SG&A expenses | Approx. 0.38 billion yen | Low | Short term to long term |
| Market | Impact of an increase of sustainability-oriented subscribers on our sales indicators | In pursuit of Japan’s 2050 carbon neutrality target and the achievement of a decarbonized society through co-creation with enterprises and individuals, we started issuing SaisonCard for becoz (=be CO2 zero), a credit card with a carbon neutrality perspective, the first of its kind in Japan, in June 2022. The CO2 emissions of the cardholder are visualized by category using the cardholder’s card payment data within becoz (=be CO2 zero), a DATAFLUCT Inc. application platform. This motivates the subscriber to change their behavior to achieve decarbonization. In recognition of our initiative visualizing the CO2 emissions due to daily purchasing activities to increase awareness of environmental issues, we received the grand prize in Nikkei Inc.'s 2022 NIKKEI Decarbonization Awards (project category) and the grand prize of FINOLAB Inc.'s Japan Financial Innovation Award 2023, which commends financial innovations, in March 2023. In June 2023, a year after the first card was issued, we started inviting card users to participate in nature conservation activities at Akagi Nature Park managed by Credit Saison in Shibukawa, Gunma, in line with their card usage. Our goal is to expand our services. The issuing of the credit card and the promotion of its use encourage the sustainability-conscious younger generations of people to change their behavior to contribute to the decarbonization of society. It is expected that this use of credit cards will increase the reduction of CO2 emissions and to contribute to our revenue long-term. Profit has not yet been assessed. |
- | Short term to long term | |||
*Calculated to a limited extent based on the FY2022 consolidated results
Risk management
The Risk Management Committee and Corporate Risk Management Dept. lead the efforts to mitigate risk and minimize the impact of risks should they occur. To this end, our employees regularly receive in-house training and endeavor to maintain our risk management system in accordance with the Risk Management Regulations, Regulations on Management of Risks of Losses and Crisis Management Regulations. Regarding the issues underlying the Credit Saison Group or governance-related matters accompanied by serious risks, the Group Strategic Management Department leads the supervision of the companies of the Credit Saison Group's execution of business and shares information with the supervisory divisions of the Credit Saison Group companies.
For climate change risks, the Sustainability Promotion Committee leads the formulation of policies and strategies for minimizing risks and seizing opportunities and structurally monitors related efforts.
The Comprehensive Planning Office of the Corporate Planning Dept., the Public Relations Office and the Corporate Risk Management Dept., which collectively are the administrative body supporting the Sustainability Promotion Committee, lead the regular review of risks and opportunities relating to climate change.
The Climate Change Strategy WG met more than ten times to deepen its discussions in FY2022 while in September 2021 the Sustainability Promotion Committee began to meet once a month to advance the discussion of climate change (a report was submitted to the Board of Directors in December 2021 and June 2022).
Metrics and targets
| Unit: Tons CO2 | |||||||||||
| Result | Target | Target | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| FY2020 | FY2021 | FY2022 | FY2025 | Compared to FY2020 21% reduction | FY2030 | Compared to FY2020 42% reduction | |||||
| Scope1 | Direct greenhouse gas emissions from the business operator itself | 1,023 | 388 | 341 | 808 | 593 | |||||
| Scope 2 (market standard) | Indirect greenhouse gas emissions from the use of electricity, heat, and steam, which are supplied from other companies | 17,540 | 17,847 | 17,854 | 13,857 | 10,173 | |||||
| Scope 2 (location standard) | 17,856 | 17,947 | 17,658 | 14,106 | 10,356 | ||||||
| Scope 1 + Scope 2 (market standard) subtotal | 18,563 | 18,235 | 18,195 | 14,665 | 10,767 | ||||||
| Scope 1 + Scope 2 (location standard) subtotal | 18,879 | 18,334 | 17,999 | 14,914 | 10,950 | ||||||
| Category 1 | Purchased products and services | 81,712 | 65,355 | 74,710 | 71,498 | Compared to FY2020 12.5% reduction | 61,284 | Compared to FY2020 25% reduction | |||
| Category 2 | Capital goods | 323,542 | 332,878 | 402,507 | 283,099 | 242,657 | |||||
| Category 3 | Fuel and energy-related activities that do not fall under Scopes 1 and 2 | 3,071 | 2,999 | 2,952 | 2,687 | 2,303 | |||||
| Category 4 | Transportation and distribution (upstream) | - | - | - | - | - | |||||
| Category 5 | Waste generated by operations | 132 | 277 | 380 | 116 | 99 | |||||
| Category 6 | Business travel | 781 | 1,133 | 1,046 | 684 | 586 | |||||
| Category 7 | Employee commute | 1,587 | 2,295 | 2,173 | 1,388 | 1,190 | |||||
| Category 8 | Leased assets (upstream) | - | - | - | - | - | |||||
| Category 9 | Transportation and distribution (downstream) | - | - | - | - | - | |||||
| Category 10 | Fabrication of sold products | - | - | - | - | - | |||||
| Category 11 | Use of sold products | 47,510 | 60,347 | 63,392 | 41,571 | 35,633 | |||||
| Category 12 | End-of-life treatment of sold products | 9,355 | 7,553 | 2,808 | 8,185 | 7,016 | |||||
| Category 13 | Leased assets (downstream) | 262,955 | 251,332 | 252,721 | 230,085 | 197,216 | |||||
| Category 14 | Franchises | - | - | - | - | - | |||||
| Category 15 | Investment | - | - | - | - | - | |||||
| Scope3 | Indirect greenhouse gas emissions, which does not fall under Scopes 1 and 2 (emission from other companies associated with the activities of the reporting company) | 730,645 | 724,168 | 802,691 | 639,314 | 547,984 | |||||
| Scope 1,2,3 Total (supply chain emissions) | 749,207 | 742,403 | 820,886 | 653,979 | 558,750 | ||||||
【FY2022】Factors for Scope 3 increase
Emissions increased from the previous year due to business expansion in the lease and real estate-related businesses.
*C4: Relevant activities have been included in other categories
*C8: Relevant activities have been included in Scopes 1 and 2
*C9,10,14: No relevant activity
*C15: We will consider calculating it in the future
*Targets set by referring to SBT (Science Based Targets)
*The initiatives based on the calculation of Scopes 1, 2 and 3 emissions and the TCFD disclosure framework have gained the cooperation of WasteBox Co., Ltd.