Seikagaku Corporation considers addressing climate change to be an important management priority and is implementing measures to combat climate change. Since June 2022, Seikagaku has disclosed the status of its response to the TCFD* recommendations and to climate-related risks and opportunities.

 


*The Task Force on Climate-related Financial Disclosures (TCFD) was established by the Financial Stability Board (FSB) in December 2015 at the request of the G20 Finance Ministers and Central Bank Governors Meeting to examine climate-related information disclosure and the response of financial institutions to climate change.

In its final report, published on June 2017, the TCFD recommended disclosure by companies and other organizations of information on climate change risks and opportunities in the areas of governance, strategy, risk management, and metrics and targets.

Governance

In accordance with the Basic Policy on Sustainability, Seikagaku Corporation has identified by a resolution of the Board of Directors important issues that should be addressed on a priority basis (materiality) in the interest of achieving sustainable growth for Seikagaku and realizing a sustainable society.

We established the Sustainability Promotion Committee for the main purpose of addressing sustainability-related issues. In principle, the Committee meets twice a year to discuss the action policy for climate change issues, promotion measures, and related matters and to examine and assess progress. Also, climate change risks and opportunities are included among the group-wide risks evaluated by the Risk Management Committee, discussed by the Sustainability Promotion Committee, and reported to the Board of Directors, and the Board monitors and oversees progress in addressing these risks. The president and CEO serves as the officer responsible for the Sustainability Promotion Committee and Risk Management Committee.

Sustainability Promotion Structure

Strategy

To conduct a climate-related risk and opportunity materiality assessment, we used the following scheme to identify and assess scenarios for three categories: transition risks, physical risks, and opportunities. In addition to the Net Zero Emissions by 2050 Scenario (NZE) proposed by the Intergovernmental Panel on Climate Change (IPCC)*1 and the International Energy Agency (IEA)*2, which assumes a temperature rise of 1.5ºC, and the IEA’s Stated Policies Scenario (STEPS), which assumes a 4ºC rise, we carefully examined internal and external information and assessed the potential effects of climate-related risks and opportunities on businesses, strategy, and financial planning.

Scenario Analysis Scheme

Risk and Opportunity Analysis Based on Medium- and Long-term Scenarios

Transition risk

Risks and Opportunities

Details

Scale of Financial Impacts
1.5℃ / 4℃

Time Frame

Response and Resilience

Policy and legal risk

Rising costs due to tightening of regulations, such as introduction of a carbon tax

Medium / Medium

Medium to long term

Mitigation of carbon tax burden through promotion of energy conservation and introduction and expanded use of renewable energy; cost reductions from initiatives such as reduction of raw materials use

Market risk

Rising costs due to introduction of eco-friendly raw materials, etc.

Medium / Medium

Medium to long term

Mitigation of carbon tax burden through promotion of energy conservation and introduction and expanded use of renewable energy; cost reductions from initiatives such as reduction of raw materials use

Reputation risk

Investor resistance or decline in personnel recruitment opportunities due to inadequate sustainability information disclosure, etc.

Medium / Small

Short to medium term

Pursuit of corporate value enhancement and greater opportunities to secure  investment and personnel through proactive sustainability information disclosure

Physical risk

Risks and Opportunities

Details

Scale of Financial Impacts
1.5℃ / 4℃

Time Frame

Response and Resilience

Acute

Risk of damage to production facilities, etc. resulting from increasingly serious extreme weather events; rising costs of restoration and prevention measures; temporary shutdowns due supply chain disruption

Medium / Large

Medium to long term

Damage minimization through a continuous review of the business continuity plan (BCP), upgrading of BCP measures and  strengthening of impact assessment and response capabilities along supply chains

Chronic

Declining outpatient numbers due to a healthcare crunch
accompanying climate change-related spread of infectious disease

Medium / Medium

Long term

Promotion of R&D of long-acting drugs that entail little outpatient burden

Chronic

Decrease in natural resources used as raw materials or quality deterioration due to the impact of climate change on ecosystems

Small / Medium

Medium to long term 

Promotion of research on substitute raw materials and transition from biological raw materials to recombinant raw materials, such as fermented materials

Opportunities

Risks and Opportunities

Details

Scale of Financial Impacts
1.5℃ / 4℃

Time Frame

Response and Resilience

Energy and resource efficiency

Production facilities efficiency improvement

Small / Small

Medium to long term

Cost reductions from promotion of energy conservation and introduction and expanded use of renewable energy

Products, services, and markets

Climate-change related spread of infectious disease

Medium / Medium

Long term

Promotion of R&D in the infectious disease diagnosis field, etc.

Risk Management

In risk management, each division and department implements initiatives in response to risks and opportunities in accordance with the Corporate Risk Management Regulations. The Sustainability Promotion Committee, established in December 2021, and the Risk Management Committee share information on climate change risks, integrate and manage these risks as a form of business risk, and periodically report important risks to the Board of Directors.

Metrics and Targets

CO2 emissions reduction targets*

Scope 1 & 2: 33.6% reduction by 2030
            Pursuit of carbon neutrality by 2050


*CO2 emissions compared to the fiscal 2017 level