The ROHTO Group recognizes that the prevention of global warming and harmony with the natural environment are important management issues for achieving both business growth and the realization of a sustainable society.
In June 2021, informations expressed our support for the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD).
In the future, based on the recommendations of TCFD, we will promote information disclosure to stakeholders from the four perspectives of governance, strategy, risk management, and indicators and targets regarding the "risks" and "opportunities" posed by climate change on our business, and we will actively work to respond to climate change on a Group-wide basis.
Governance
The Company established a Sustainability Committee to discuss risks and opportunities related to climate change, determine policies for addressing them, and roll out these policies to the Group. The Board of Directors receives reports on the content of these deliberations and discussions, and deliberates on the Group’s response to climate change, including disclosure to and dialogue with stakeholders and capital expenditure plans from a long-term perspective, and supervises the implementation of these plans.
The Sustainability Committee consists of two Directors and one Outside Audit & Supervisory Board member who serves as an advisor, and is chaired by the Executive Vice President. The Executive Vice President concurrently holds the position of Chief Financial Officer (CFO) of the Group, and is responsible for evaluating and managing environmental issues as financial issues.
Strategy
We evaluated the impact of risks and opportunities related to climate change on our business, focusing primarily on the financial impact. We have local development and production bases in major countries with business footprint and have built a system that is resilient to the fragmentation of the value chain caused by climate change. Here we assumed a 2℃ scenario and analyzed the comprehensive impact on our major global operation bases: Japan, China, Vietnam, the Americas, and others. At this point, we are only assessing the 2℃ scenario. However, going forward, we will assess and evaluate various scenarios and deliberate on countermeasures to enhance our resilience to an uncertain future.
Transitio Risks and Opportunities
| Item |
Business impact |
Degree of impact |
Measures being taken |
| Category |
Subcategory |
2℃ scenario |
| Policiy and regulations |
Introduction of carbon tax |
Increased cost of sales and selling, general and administrative (SG&A) expenses due to rising transportation costs (risk) |
Medium |
Promote efficient deliveries and palletization |
| Increased cost of sales due to rising costs to dispose of defective products, etc. (risk) |
Medium |
Reduce inventory and returned goods, and sell older products and returned goods in an ethical manner |
| Regulatory control of CO2 emissions |
Increased cost of sales and SG&A expenses due to rising electricity costs as a result of switching to renewable energy (risk) |
Medium |
Install solar generation (private power generation) and exhaust-heat utilization systems |
| Market |
Changing demand and consumer preferences |
Increased cost of sales due to increase of development and raw material costs incurred by the development of environmentally friendly products (risk) |
Medium |
Reduce raw material usage by adopting label-free packaging and reducing package inserts |
| Increased sales due to higher needs for environmentally friendly products and improved market recognition of these efforts (opportunities) |
Medium |
Adopt label-free packaging, reduce package inserts, and use environmentally friendly materials |
*If the right edge of the table is cut off, scroll horizontally to check.
Physical Risks and Opportunities
| Item |
Business impact |
Degree of impact |
Measures being taken |
| Category |
Subcategory |
2℃ scenario |
| Chronic |
Rising average temperatures / Extreme weather events |
Increased procurement costs due mainly to a supply shortage of natural materials (risk) |
Medium |
Diversify sources of procurement and optimize inventory levels |
| Increased energy bills due to extended use of air-conditioners (risk) |
Small |
Introduce summer time, allow business casual attire, and accelerate other energy conservation efforts / Prevent unnecessary overtime chiefly by reforming work styles |
| Rising sea levels |
Flooding of plants and offices in the lowlands (risk) |
‐ |
Expect almost no impact at present |
| Fluctuations in demand for seasonal products |
Reduced sales of anti-dryness products (risk) |
Medium |
Create a portfolio not relying on particular products |
| Increased sales of sunscreen and the like(opportunity) |
Medium |
| Acute |
Typhoons and other natural disasters and extreme weather events |
Reduced earnings due to the stoppage of procurement and supply caused by supply chain disruptions (risk) |
Large |
Collaborate closely with suppliers and distributers while diversifying sources of procurement |
*If the right edge of the table is cut off, scroll horizontally to check.
Risk management
(1) Identification and evaluation process for climate-related risks
In accordance with the framework proposed by the TCFD and the prediction of changes in the external environment, the Sustainability Committee identifies the degree of impact which climate change risks poses to our business, based on our resources and the services we provide.
(2) Process for managing climate-related risks
The Sustainability Committee manages the identified risks and holds discussions on their responses. The Committee convenes the heads of related sections as necessary to confirm more specific measures and promote them in a flexible manner.
(3) A system to integrate the above process into the Company’s comprehensive risk management
The Sustainability Committee also evaluates and manages risks other than environmental issues that may affect the sustainability of our business in a comprehensive manner. Depending on the case, the Sustainability Committee will also discuss with the Compliance Committee, which is chaired by the President and Chief Operating Officer, to formulate a BCP.
Metrics and targets
We have set our CO2 emission reduction target for Scope 1 and 2 for 2030 at a 46% reduction compared to fiscal 2013 levels, and are taking actions to achieve this goal. CO2 emissions in fiscal 2022 are 13,120 tons for Scope 1 and 2 combined (reduction of 17% compared to fiscal 2013 levels). Going forward, we will calculate Scope 1 and 2 emissions by summing the emissions of domestic and overseas subsidiaries with major production bases, and we will work toward refining the calculation of emissions and setting a target for Scope 3.
Low-carbon Society