Integrated Information Disclosure Based on the Recommendations of the TCFD and TNFD
Based on our management philosophy of "Constantly creating new value, striving to realize a sustainable society, and contributing to the happiness of humanity," Toyo Seikan Group has formulated the Toyo Seikan Group Sustainability Charter and is promoting sustainability management throughout the group. We have also set medium-term environmental goals, the Eco Action Plan 2030, and are implementing various initiatives to reduce our environmental impact. Regarding our efforts to address climate change, we expressed our support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in 2021, and regarding the preservation of natural capital and biodiversity, we began initiatives based on the Task Force on Nature-related Financial Disclosures (TNFD) in fiscal 2024. This page reports on Toyo Seikan Group 's efforts to address climate change, natural capital, and biodiversity in accordance with the TCFD and the TNFD-recommended disclosure framework.
"Integrated Information Disclosure Based on the TCFD and TNFD Recommendations" PDF versionGovernance
Toyo Seikan Group has established Group Sustainability Committee, which oversees the Group's sustainability-related activities, including addressing climate change, natural capital, and biodiversity issues. Along with the Group Risk and Compliance Committee, the committee is positioned as one of the Group's key committees. This committee serves as a forum for discussing matters related to the promotion of sustainability management. It not only monitors progress toward goals and plans, but also reviews plans and considers new initiatives in light of social and international circumstances, legal and regulatory trends, and changes in the external environment. The committee also monitors progress toward the "Eco Action Plan 2030," which sets goals and plans related to climate change, natural capital, and biodiversity. Toyo Seikan Group recognizes various social issues in each country and region, and engages in dialogue and collaboration with stakeholders, including customers who use Toyo Seikan Group 's products and services, business partners, and local communities, to address these issues through its business.
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Strategy: Climate Change
We referenced climate change scenarios published by the International Energy Agency (IEA) and others, and selected the 1.5-2°C and 4°C scenarios. Recognizing that the impacts of climate change will become apparent over the medium to long term, we analyzed the impacts of climate change up to 2030.
Businesses analyzed: Packaging Business, Engineering, Filling and Logistics Businesses, Steel Plate Related Business, Functional Material Related Business
Scenario analysis
Transition Risk
In a 1.5-2°C scenario in which climate change policies are introduced, we identified a risk of an increase in costs of approximately 40 billion yen due to the imposition of a carbon tax, including operating costs and procurement costs for petrochemical raw materials and steel. In considering countermeasures, we confirmed that achieving the targets for reducing GHG emissions and exhaustible resources under the Eco Action Plan 2030 would reduce negative impacts by more than 60%.
Additionally, in anticipation of the future imposition of a carbon tax and rising raw material prices, Toyo Seikan Group has introduced an internal carbon pricing system (ICP) that applies a shadow price. We have set the carbon price at 10,000 yen/t-CO2 and will use this to invest in GHG reductions, such as the introduction of energy-saving equipment and renewable energy, as we work toward achieving our roadmap for realizing a carbon-neutral society.
Physical Risks
We have confirmed that climate change, under a 4°C scenario, will increase the risk of drought in water-stressed regions and the risk of flood damage due to more severe extreme weather, which could have a significant impact of more than 15 billion yen.We will work to mitigate these negative impacts by building a comprehensive management system (to begin operation in 2024) for water risks, including drought and flood damage.
Opportunity
In the 1.5-2°C scenario, we have identified opportunities worth more than 20 billion yen related to increased demand for environmentally friendly products and battery materials for EVs and PHEVs. We will work to identify the upcoming increase in demand and make preparations, such as strengthening our production system, to ensure that these opportunities lead to steady growth for Toyo Seikan Group.
List of scenario analysis results
Transition Risk
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| Important risks and opportunities | Timeline | Financial impact on Toyo Seikan Group | Toyo Seikan Group 's response | |
|---|---|---|---|---|
| policy· Regulation |
Carbon tax burden |
middle period |
New carbon tax increases operating costs |
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| Fluctuations in electricity prices |
short term |
Increase in operating costs due to rising electricity prices |
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| Plastic tax imposed on containers and packaging made from virgin plastic |
middle period |
Decrease in sales when new taxes are introduced and the tax amount is deducted from the unit price |
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| Mandatory use of recycled plastic in beverage bottles |
middle period |
Increased costs due to increased recycled plastic content |
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| Raw material prices | Fluctuations in petrochemical raw material prices due to fluctuations in crude oil prices |
short term |
Fluctuations in petrochemical raw material procurement costs due to fluctuations in crude oil demand |
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| Fluctuations in raw material prices due to carbon taxes |
middle period |
The introduction of a new carbon tax will increase procurement costs for petrochemical raw materials, steel, aluminum, paper, and glass. |
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| The impact of green steel |
middle period |
Increase in steel procurement costs due to the spread of green steel |
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Physical Risks
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| Important risks and opportunities | Timeline | Financial impact on Toyo Seikan Group | Toyo Seikan Group 's response | |
|---|---|---|---|---|
| weather changes | Water intake suspended due to drought |
middle period |
Production activities are restricted in areas with high water stress |
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| Impact of rising temperatures on air conditioning |
middle period |
Increased operating costs due to increased air conditioning power consumption in summer |
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| Increasing severity of extreme weather | Property damage and lost profits due to the disaster |
short term |
Increased property damage and lost income due to increased flood risk |
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Opportunity
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| Important risks and opportunities | Timeline | Financial impact on Toyo Seikan Group | Toyo Seikan Group 's response | |
|---|---|---|---|---|
| Changes in consumer behavior | Increasing demand for environmentally friendly products |
middle period |
Increased sales of environmentally friendly products |
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| Increasing demand for pesticides |
middle period |
Rising average summer temperatures have led to increased demand for insecticides, leading to increased sales in the aerosol filling business |
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| Expanding low-carbon products | The spread of EVs and PHEVs |
long term |
Demand for battery materials used in EVs and PHEVs will increase, leading to increased sales. |
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[Timeframe] Short term: within 2-3 years from now, medium term: from 2-3 years from now until around 2030, long term: from around 2030 onwards
Impact on operating profit (FY2030 1.5-2°C scenario)
Impact on operating profit (FY2030 4°C scenario)
Water risk assessment
Among the physical risks of climate change, it was confirmed that the risk of drought and flood damage will have a significant impact on the management of Toyo Seikan Group. As a result, a risk assessment was conducted on 93 of the Group's major production sites in Japan and overseas using Aqueduct, a water risk assessment tool created by the World Resources Institute (WRI), and ENCORE*, created by the Natural Capital Finance Alliance (NCFA). As a result, the following six sites were selected as priority sites.
Toyo Seikan Group will work to minimize water risks, focusing on high-risk bases identified in this assessment, and will contribute to resolving water issues in each region.
| Water resource risk | 2 overseas bases |
|---|---|
| Regulatory Reputation Risk | 1 overseas base |
| Flood risk | 3 domestic locations, 2 overseas locations |
Strategy: Natural capital and biodiversity
As part of our efforts based on the TNFD recommendations, we have assessed the dependence and impact on natural capital and biodiversity of our metal and plastic Packaging Business at all production sites and business areas of Toyo Seikan Group.
Assessment of environmental risks arising from the location of business sites
Toyo Seikan Group used BRF * to assess natural capital and biodiversity risks arising from the locations of all its production bases. As a result, several risk factors were identified. Among the physical risks, "tropical cyclones (typhoons)" and "pollution" arising from the locations of its bases received particularly high scores, and Toyo Seikan Group has positioned these as risk factors for which it should focus on taking measures.
The risk of "tropical cyclones (typhoons)" can affect our bases and the entire value chain in various ways, including damage to land and buildings due to wind and rain, inundation due to flooding, and power outages. This could lead to the temporary or long-term closure of production bases and loss of revenue. Furthermore, with regard to the risk of "pollution" arising from location, contaminated land, water, and air could cause a decline in product quality and harm to the health of employees.
To minimize the impact of these risks, Toyo Seikan Group will consider and implement risk reduction measures at each of its sites.
Map of East and Southeast Asian regions with high risk of tropical cyclones (typhoons) identified by BRF *
Map of Group bases in East Asia and Southeast Asia with high contamination risk identified by BRF *
- The Biodiversity Risk Filter (BRF) is an online tool announced by the World Wide Fund for Nature (WWF) at the World Economic Forum (Davos Conference) in January 2023 to screen and prioritize biodiversity-related risks in a company's business or supply chain.
Relationship between business activities and natural capital/biodiversity
Among Toyo Seikan Group 's main business activities, we used ENCORE to assess the impact of its metal and plastic Packaging Business on natural capital.
The results revealed that the greatest impact on the natural environment in the metal and plastic Packaging Business is the release of harmful pollutants into water and soil. Additionally, other factors such as external disturbances (noise, light, etc.) and greenhouse gas emissions were also identified as impact factors in Toyo Seikan Group 's business. To mitigate these risks, Toyo Seikan Group systematically implements disaster prevention measures for the land and buildings of each site and measures to prevent waste from leaking. This aims to limit the scope and extent of damage to assets and the surrounding environment in the event of a natural disaster or accident, and to reduce the time and cost required for recovery. Furthermore, we believe that strengthening this proactive risk management will also help curb increases in product liability insurance and general liability insurance premiums.
The relationship between Toyo Seikan Group Packaging Business and natural capital/biodiversity as identified by ENCORE
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| Natural change factors in TNFD | pressure | Packaging Business | |
|---|---|---|---|
| metal products (aluminum cans, etc.) |
Plastic products (PET bottles, etc.) |
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| Evaluation results | |||
| Resource utilization/complementation | Water usage | M | L |
| Other biological resource collection (fish, timber, etc.) | N/A | N/A | |
| Other biological resource collection | N/A | N/A | |
| Changes in land, freshwater, and marine use | Land use area | L | L |
| Freshwater area | N/A | N/A | |
| Seabed area used | N/A | N/A | |
| Climate change | greenhouse gas emissions | L | M |
| Emissions of air pollutants other than greenhouse gases | L | M | |
| Solid waste generation and discharge | Discharge of harmful pollutants into water and soil | VH | VH |
| Nutrient pollutant discharges to water and soil | N/A | N/A | |
| Solid waste generation and discharge | L | M | |
| External disturbances (noise, light, etc.) | M | M | |
| Invasive alien species introduction/removal | Invasion of invasive species | N/A | N/A |
- L: Low (low impact) M: Middle (medium impact) VH: Very High (high impact) N/A: No impact
Risk Management
The Group Risk and Compliance Committee monitors the risk management situation across the entire Toyo Seikan Group and implements improvements and preventative measures. Each group company also formulates risk management policies and basic plans under its own promotion system, and compiles information on the company's overall risk management situation. Environmental risks, including climate change, natural capital, and biodiversity, are also discussed at Group Sustainability Committee and are handled by the Group Risk and Compliance Committee as one of Toyo Seikan Group 's material risks.
Indicators and Goals
GHG reductions
Toyo Seikan Group aims to achieve carbon neutrality by 2050 by significantly reducing GHG emissions as its long-term goal. To that end, the Eco Action Plan 2030 sets the GHG emission reduction targets for 2030 as shown on the right.
This target has been certified as meeting the new standard of the international initiative Science Based Targets (SBT), which calls for a 1.5°C target.
Trends in GHG emissions from business activities (Scope 1, 2) *
- Due to the addition and correction of data for some bases, figures for previous years have been retroactively revised.
GHG emissions in the supply chain (FY2024)
Progress and evaluation of Eco Action Plan 2030
Evaluation indicators: ★★★ Goal achieved ★★ Goal slightly below target ★ Insufficient efforts
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| 2030 goals (Eco Action Plan 2030) | FY2024 results | evaluation |
|---|---|---|
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Zero-Carbon Society |
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★★★ |
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★★★ |
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Zero-Waste Society |
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★★ |
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Society Coexisting with Nature |
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★★ |
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★★★ |
- Exhaustible resources: Natural resources that cannot be replenished by natural processes at a rate faster than the rate at which they are used by humans and others.
- Fossil resources: oil, natural gas, etc.