Disclosure Based on TCFD Recommendations
One of the Sanken Group's basic CSR policies is to "contribute to the development of the international community through the development, production, and sale of products in power electronics and peripheral areas using high reliability and state-of-the-art technologies, with the aim of realizing a sustainable social environment." In order to realize a sustainable social environment, we recognize that responding to climate change is a key issue. We are advancing initiatives and disclosing information in line with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD).
Governance
- The Sustainability Committee has been established to discuss the sustainability (ESG management) of the Sanken Group across the organization. Mr. Satoshi Yoshida who is the Director of the Board in charge of ESG, has been appointed as Chairman of the Sustainability Committee by the Representative Director. The Sustainability Committee is composed of members at the level of general manager and above in each division.
- The Sustainability Committee is established as an advisory body to the president and chief executive officer. The committee discusses various environmental issues, including responses to climate change, and reports on the results of its deliberations to the Executive Committee. In addition, climate-related deliberations at the Executive Committee are regularly reported to and discussed by the Board of Directors.
- The Sustainability Committee meets twice a year to discuss the following matters in relation to climate.
- Climate-related scenario analysis
- Identification and importance assessment of short-, medium-and long-term climate-related risks and opportunities
- Strategic approach policies for significant identified climate-related risks and opportunities
- Consideration of specific responses to climate-related risks and opportunities
- Managing the progress of responses adopted with respect to climate-related risks and opportunities
- ESG Management and Promotion Structure/Sustainability Committee Structure
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Strategy
Based on the International Energy Agency's (IEA) STEPS (published policy scenario), SDS (sustainable development scenario), APS (published national ambitions reflection scenario) and the Intergovernmental Panel on Climate Change (IPCC) RCP2 6, RCP8 5, etc., we analyzed medium-to long-term (2030 and 2050) changes in the social and business environment associated with climate change based on three temperature band scenarios of 1.5°C, 2°C and 4°C. For the analysis, we refer to the scenarios disclosed by the government agencies and research institutes shown in the table below.
Throughout our products and their supply chain, our Sustainability Committee discusses how social responses to climate-related issues and issues can have an impact and identifies climate-related risks and opportunities.
| Worldview | Scenarios used in the analysis |
|---|---|
| 1.5℃, 2℃ | Sustainable Development Scenario (SDS), IEA, 2020, 2021 |
| Announced Pledges Scenario (APS), IEA, 2021 | |
| Representative Concentration Pathways (RCP2.6), IPCC, 2014 | |
| 4℃ | Stated Policy Scenario (STEPS), IEA, 2020, 2021 |
| Representative Concentration Pathways (RCP6.0, 8.5), IPCC, 2014 |
Risk
As a result of scenario analysis, our results could be significantly affected by increases in energy costs and other factors due to the introduction of policy measures to promote climate change measures, such as the introduction of a carbon tax, and the strengthening of regulations.
| Type | Major Risks | Measures | Degree of importance | |
|---|---|---|---|---|
| Transition risk | Policies and Regulations | Higher fossil fuel prices lead to soaring electricity costs and higher operating costs | Reducing CO2 emissions ・Energy-saving activities ・Electricity Replacement for Renewable Energy ・Efficiency in production ・Optimization of transport ・Promoting Recycling | High |
| Introduction of carbon tax raises operating costs | High | |||
| Decrease in sales due to lower demand for existing products due to new regulations on climate change | Expand sales by developing new energy-saving and highly efficient products under the medium-term management plan | Medium | ||
| Reputation | Delays in climate change measures reduce stakeholder confidence and market reputation | Formulated and implemented a plan for realizing carbon neutrality | Medium | |
| Physical risk | Acute | Sales decreased due to the impact on production caused by natural disasters, the shutdown of suppliers, and damage to logistics functions. | Strengthen risk management such as enhancement of crisis management system | Low |
Opportunities
As a result of scenario analysis, the provision of products that meet the low carbon needs of society and customers, and the efficient use of energy resources, which could have a significant impact on our results of operations.
| Type | Overview | Measures | Degree of importance |
|---|---|---|---|
| Products and services | Sales increased due to the market expansion of products for a low-carbon society (automotive, white goods, etc.) | ・Development of products for inverters ・Development of IPM ・Development of high-efficiency power supply devices ・Development of next-generation semiconductors |
High |
| Efficiency of resources | Energy and resource conservation on production lines and in-house infrastructure | Introduced DX/Smart Factory | High |
| Reputation | Enhance trust of stakeholders by promoting low-carbon production | Formulated and implemented a plan for realizing carbon neutrality | Medium |
Risk management
- Climate change-related risks are discussed by the Sustainability Committee, and the content of the discussions is communicated to the Executive Committee and reported to the Board of Directors.
- In addition, under the Sustainability Committee, we have established a subcommittee specializing in the environment (E), society (S), and governance (G). Under the Social (S) Subcommittee, we have established a Crisis Management Committee to respond to natural disasters, information management risks, and other issues. In addition, by establishing the Internal Control Promotion Committee, we support the inspection of operations in each division of our company and Group companies, and review and evaluate the effectiveness of control activities at the company-wide level and at the business process level. The content of this risk management is reported to the Sustainability Committee, where all business risks, including climate change-related risks, are managed in an integrated manner.
Indicators and Targets
- Emissions of greenhouse gases (CO2) can be a significant risk factor in our financial condition. In addition, providing products that are accepted by a carbon-free society will also leads to business opportunities. We recognize the reduction of CO2 emissions on a Group-wide basis as one of the most important issues in sustainability. We set medium-to long-term emission reduction targets for reduction, plan specific efforts to reduce emissions, and establish indicators to manage the progress of our efforts.
Sanken Group's Scope1,2 Emissions
Trends in Greenhouse Gas Emissions (Total for Domestic Production Sites)
Trend in CO2 Emission Compared to Net Sales
Sanken Group's Medium-to Long-Term GHG Emission Reduction Targets
- With regard to climate-change, we intend to reduce CO2 in accordance with the content adopted by COP21,26. We are currently working to identify Scope3 in 2020 and, depending on the outcome, we will prioritize and proceed with activities to reduce CO2, including Scope1,2. We will announce our plans for reducing CO2 on this website in fiscal 2022.
The Sanken Group's Efforts to Reduce Medium-to Long-Term GHG Emissions
- Please refer to our separate page for information on our efforts to tackle climate change.