Climate change response

In order to contribute to achieving the goals of the Paris Agreement on climate change, an international framework, we have set our own goals to address climate change and will actively take initiatives to reduce greenhouse gas emissions through our business.

In addition to reducing direct greenhouse gas emissions from our own activities, we will achieve this by providing a wide range of services that contribute to reducing environmental impact through our proprietary technologies, thereby increasing the effectiveness of reducing greenhouse gas emissions in society as a whole.

Indicators and Targets

We have selected greenhouse gas (GHG) emissions as a measure of climate change and disclose our performance for Scope 1-3 of the GHG Protocol. In addition, we have set the following goals to reduce risks and create new opportunities for climate change:

Scope1&2Reduce GHG emissions to 0 by 2030: For Scope 1 & 2, reduce GHG emissions from in-house operations to zero (net) by converting 100% of electricity consumption to renewable energy.
Scope3Reduce GHG emissions to 0 by 2030: Reduce indirect GHG emissions from Scope 3 business activities to zero (net) by contributing to the reduction of environmental impact through the provision of our products and services.

GHG emissions results		Unit	2020	2021	2022
Scope1	Direct GHG emissions	t-co2	4	6	8
Scope2	Direct GHG emissions	t-co2	1,275	1,232	873
Scope3	Direct GHG emissions	t-co2	4,373	3,734	5,297
Total emissions		t-co2	5,652	4,973	6,178
	Scope 3 breakdown:
	Category 1: Products and services purchased	t-co2	3,948	3,071	4,541
	Category 2: Capital finance	t-co2	110	364	93
	Category 5: Waste from business operations	t-co2	4	0	0
	Category 6: Business trips	t-co2	133	130	455
	Category 7: Employer commuting	t-co2	179	169	208

Governance structure

We have established the Sustainability Promotion Committee as an organization to evaluate and monitor our policies and initiatives to achieve our climate change-related goals. The CEO and other members of management are involved in the development of climate change strategies and report their efforts to the Board of Directors.

Strategy

The risks and opportunities we face in relation to climate change were assessed by the relevant departments and the Sustainability Promotion Committee for the timing of their manifestation and their impact on our business, and then we identified risks and opportunities of particular importance.
We recognize the following as important transition and physical risks and opportunities related to climate change:

Type of risks/opportunities			Time of manifestation	Probability of manifestation	Impact on business	Response policy
Transition risks	Policy and regulations risks	Introduction of carbon pricing	Short	Low	Scope 2 is scheduled to be 100% renewable by 2030. There is no risk of applying the carbon tax.	Take measures to ensure that we can continue to purchase renewable energy Reduce GHG emissions from Scope 1 to zero
	Technical risks	Delays in developing solutions that contribute to GHG emissions reductions	Mid	Med	Decrease in product value and corporate value due to inability to contribute to GHG emissions reduction: Loss of customers Decrease in sales	Improve energy-saving performance of existing and new products and services Research solution technologies that contribute to GHG emissions reduction
	Market risks	Lost sales opportunities due to lack of solutions that contribute to GHG emission reductions	Mid	Med	Loss of sales opportunities for products and services: Loss of customers Decrease in sales	Develop solutions that contribute to GHG emission reductions Measure the contribution of existing products and services to GHG emissions reduction
	Reputation risks	Lack of information disclosure, resulting in loss of trust from customers, society, financial institutions, and investors	Short	Med	Decline in external evaluation: Difficulty in raising funds Decrease in sales Increase in disclosure costs	Promote appropriate information disclosure and decarbonization toward carbon neutrality
Physical risks	Acute risks	Damage to business locations due to wind and flood damage: Damage to business locations Difficulty in transportation to and from work, etc.	Short	Low	Suspension of operation of a business location: Suspension of service provision Decrease in sales Recovery costs	Decentralization of business locations Establishment of BCP measures (crisis response manuals) at each site Establish a remote work system Education on BCP measures for remote work
	Acute risks	Damage to supply chain due to wind and flood damage: Damage to data centers Logistics stagnation	Short	Low	Stagnation of business, including data center servers and mailing: Suspension of service provision Payment of compensation to customers due to suspension of cloud services Decrease in working capital due to delays in debt collection	Establishment of BCP measures (crisis response manuals) at each site Establish a remote work system Educate employees on BCP measures for remote work Conduct workshops for each possible event Establish an environment for download shipments and remote support
	Chronic risks	Damage to business locations Damage to data centers	Mid	Med	Suspension of operations of business locations and data centers: Suspension of service provision Decrease in sales	Secure appropriate facilities for stable operations Establish a remote work environment
	Chronic risks	Spread of diseases, including infectious diseases	Mid	Med	Stagnation of business operations due to health hazards to employees: Suspension of service provision Decrease in sales Difficulty in securing human resources	Consideration for the health of employees and their families Thorough sterilization of workspaces (including remote work areas) Improvement of air-conditioning facilities in workspaces (including remote work locations)
Opportunities	Energy conservation	Use of renewable energy	Mid	Low	Lower procurement costs Reduced cost of carbon offsets	Prepare for future increases in fossil fuel costs (because fossil fuels may become more expensive) Expand use of renewable energy sources
	Products & services	Increased demand for products and solution services that contribute to GHG emissions reduction	Mid	Med	By providing products and solution services that contribute to GHG emission reductions Increase sales by providing products and solution services that contribute to GHG emissions reduction Cultivate new markets	Develop products and solutions that contribute to GHG emissions reduction (e.g., reduction of GHG emissions through visualization of product usage time).
	Market	Enhance corporate reputation through appropriate disclosure of climate-related information	Mid	Med	Improvement of ESG evaluation by financial institutions and investors Increase sales by improving corporate value image	Promote appropriate information disclosure and decarbonization toward carbon neutrality

Risk Management

Regarding our risks and opportunities in climate change, the office of the sustainability committee conducts an annual company-wide risk identification with the relevant departments.

The policy for responding to the selected important risks is reviewed on an annual basis by the office of the sustainability committee and relevant departments and is identified after discussion by the Sustainability Committee, which includes the management team.

The results of the above risk assessment are then reported by the office of the sustainability committee to the risk management department, which is responsible for company-wide risks, and to the risk and compliance committee.

1 The office of the sustainability committee identifies risks and opportunities related to climate change with relevant departments
2 The office of the sustainability committee selects important risks with the relevant departments, and reviews the policies
3 The Sustainability Committee discusses and identifies risks and response policies
4 The office of sustainability committee reports the results to the risk management department, which oversees company-wide risks, and to the risk and compliance committee.

Visualizing GHG through the power of data

WingArc1st visualizes GHG to respond to the climate crisis and aims to contribute to the decarbonization of society as a whole through the power of data.

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