Response to TCFD
SMK recognizes climate change as a key management issue and are committed to strengthening our efforts in this regard. We support the recommendations of the TCFD (Task Force on Climate-related Financial Disclosures) and will continue to enhance both the quality and quantity of our disclosure information, fulfilling our accountability in ESG management.
Governance
Under the CSR and Sustainability Committee, the TN Environmental Conservation Committee has been established. The Environmental Conservation Committee is chaired by the Executive Vice President and Officer in charge of environmental affairs, and is composed of representatives from business divisions, production sites, and other related departments. The TN Environmental Conservation Committee manages environmental conservation activities across the entire group and determines activity policies and indicators. Important matters are deliberated and approved by the Executive Officers’ Committee and the Board of Directors through the CSR and Sustainability Committee.
Strategy (Risks/Opportunities)
Based on the TCFD guidelines, we strive to assess the risks and opportunities that climate change poses to our business. Going forward, we will continue to improve our evaluation methods and pursue more accurate analyses.
- Assumed Scenarios
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2°C scenario (SSP1-2.6):
Scenario in which climate change measures are strengthened internationally and aggressive greenhouse gas reductions are pursued, with the goal of keeping temperature increase below 2°C. -
4°C scenario (SSP5-8.5):
A scenario in which temperature increase is likely to reach 4°C due to continued dependence on fossil fuels and little implementation of climate change measures.
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Risks
| Classification | Impact on business | Assessment(*) | |
|---|---|---|---|
| Transition | GHG emission control（policy and legalities/customer requirements） | Increase in electricity costs due to energy policies, new costs arising from carbon taxes and emissions trading | Medium |
| Technology | Insufficient response to the needs of a low-carbon society may lead to delays in technological development, resulting in decreased market competitiveness and loss of business opportunities | High | |
| Changes in market/customer behavior | Decrease in corporate value and loss of business opportunities due to lack of response to climate change | Medium | |
| Physical | Increase in extreme weather | Disruption of supply chains caused by natural disasters such as floods, droughts, and storms | High |
Opportunities
| Classification | Impact on business | Assessment(*) |
|---|---|---|
| Resource Efficiency / Energy Sources / Resilience | Reduction of greenhouse gas emissions and electricity costs, and strengthening resilience through ownership of renewable energy power plants. | High |
| Reduction of greenhouse gas emissions through promotion of high energy-efficiency equipment and energy-saving activities. | High | |
| Product and service/market | Increase revenues by developing and offering products for low-carbon society and markets. (Renewable energy, telework, EVs, bicycles, etc.) | High |
Risk management
The TN Environmental Conservation Committee is progressively working on identifying and evaluating climate-related risks and opportunities. Currently, we are developing a framework for a more effective risk management process in collaboration with relevant departments, and reporting findings and important matters to higher-level committees for necessary actions.
Targets and Indices
Each year, we set management indices (environmental indices) related to the environment in order to contribute to climate change countermeasures and business cycles.