Endorsement of TCFD recommendations and related information disclosure

In support of the purpose of the TCFD recommendations to proactively disclose financial information related to climate change, ShinMaywa Industries disclosed information based on the recommendations in January 2023.
Going forward, we will continue to utilize the framework of the TCFD recommendations to enhance the quality and quantity of information disclosure, and at the same time, contribute to the realization of sustainable society by further promoting initiatives toward climate change.


1. Governance

The Board of Directors of the Company chaired by the President and Chief Executive Officer, sees climate risks and opportunities as key issues and topics concerning corporate management and is responsible for overseeing and deliberating on them. The Board of Director meets monthly in principle to discuss and examine key management issues including those concerning climate change based on the medium-term management plan, thereby supervising the execution of duties by Directors and Executive Officers.

The Company is oriented toward management from a long-term perspective and established the Sustainability Committee to respond to environmental, social and governance (ESG) issues in corporate management. The Committee, chaired by Deputy Chief Executive Officer (Sustainability management), is tasked with identifying key issues (materiality), setting key performance indicators (KPIs), monitoring and supervising the progress of investigations by sub-committees for the ESG elements (Environmental Subcommittee, Social Subcommittee, and Governance Subcommittee), checking achievements against KPIs and reviewing plans, and reporting to the Board of Directors on these topics (twice annually, in principle).

Going forward, climate risks and opportunities will be also handled under this framework as a key issue, and the Sustainability Committee will monitor developments.

2. Strategy

Given the significance of the potential impact that climate change may have on the business of the Company as well as long-term uncertainty, the Company conducts scenario analyses as a process to identify and assess climate risks and opportunities relevant to its business.
The Company conducted scenario analyses for two of its five divisions in FY2022 -- the Special Purpose Truck Business and the Fluid Business. The Company started with these two divisions for analysis because the Special Purpose Truck Business is its main business, accounting for about half of its sales on a consolidated basis, and the Fluid Business is highly relevant to climate opportunities.

The Company identified climate risks and opportunities in these two businesses based on two assumed scenarios for the world outlook: the 1.5/2.0 degrees Celsius scenario of globally achieving net zero by 2050 and the 4.0 degrees Celsius scenario of facing more extreme weather events and more serious disasters due to changing climate as a result of prioritizing economic activities.

The specific processes and results of the scenario analysis are provided below.

<Scenario Analysis Process>
<Scenario Analysis Result>
  • Time horizon definitions
    Short term: by 2023; medium term: by 2030; long term: by 2050
  • Scenarios used
    1.5/2.0 degrees Celsius scenario: IEA Energy Outlook, the 2.0 degrees Celsius scenario (RCP2.6) of the IPCC Fifth Assessment Report
    4.0 degrees Celsius scenario: IPCC Sixth Assessment Report, the 4.0 degrees Celsius scenario (RCP8.5) of the IPCC Fifth Assessment Report

3. Risk Management

With regard to risks associated with business operations, the Company established the ShinMaywa Group Risk Management Rules. Under these Rules, each of the divisions and Group companies is taking the initiative to build risk management systems suitable for their business characteristics. In addition, the Head Office monitors the status of risk management by those divisions and group companies and implements company-wide measures against risks, including disaster and financial risks, thereby establishing risk management systems.

The Sustainability Committee checks the establishment of risk management systems and activities in the ShinMaywa Group based on information reported by the Head Office and business divisions. The Committee also identifies company-wide key risks in light of their impact on business operations and reports such information to the Executive Committee and the Board of Directors on a regular basis to ensure the effectiveness of risk management in the group.

As for climate change, the Company has conducted scenario analyses for the first time in FY2022, covering two businesses, as a process to identify and assess climate risks and opportunities relevant to its businesses, given the significance of the potential impact that climate change may cause to its businesses, as well as long-term uncertainty. Under the company-wide risk management framework described above, the Company will manage climate risks and opportunities of special important, among those identified by the scenario analysis.

4. Metrics and Targets

As a medium-term greenhouse gas reduction target through 2030, the Company is currently working to achieve the target of “reducing total CO 2 emissions from energy use by 38% in FY2030 (compared to FY2017).” This means that the Company will reduce CO2e from energy use from 42,720 t-CO2ein FY2017 to 26,486 t-CO2ein FY2030 on an actual result basis.
Actual results of Scopes 1 and 2 emissions in the past are as shown in the table below. Going forward, we will work to calculate and disclose Scope 3 emissions as well.

Management indicator FY2017 FY2018 FY2019 FY2020 FY2021 FY2022
Scope1 11,754 11,513 12,059 10,528 9,796 9,494
Scope2 30,966 26,940 23,893 20,321 20,682 17,918
Total for Scopes 1 and 2 42,720 38,453 35,952 30,849 30,478 21,412
  1. *1Aggregate figures of ShinMaywa Industries on a non-consolidated basis

TotalCO2 emissions reduction plan

The actual results of CO2emissions have continued to meet targets since FY2017. However, one of the reasons for the recent achievement of the target is the temporary decrease in CO2emissions due to a slowdown in the expansion of business activities which was caused by the COVID-19 pandemic for the past several years and the Ukraine situation, among other things. Our business is expected to recover and expand in accordance with the Long-term management plan in the future, and CO2emissions tend to increase as a result. Accordingly, the Company plans to work on various initiatives to reduce emissions.