Climate Change Initiatives

transcosmos has expressed its support for the Task Force on Climate-Related Financial Disclosure (TCFD*) Recommendations. Accordingly, we now disclose climate-related risks and revenue growth opportunities on the four items below in line with the TCFD recommendations.

【Disclosure Items】(Source: Ministry of the Environment: Practical guide for Scenario Analysis in line with the TCFD recommendations)

  • 1. Governance: Disclose the organization’s governance around climate-related risks and opportunities
  • 2. Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities in the organization’s businesses, strategy, and financial planning where such information is material
  • 3. Risk Management: Disclose how the organization identifies, assesses, and manages climate-related risks
  • 4. Metrics and Targets: Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material

*transcosmos discloses information about 1. Governance and 3. Risk Management above together.

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Governance / Risk Management

  • At transcosmos, the transcosmos SDGs Committee, chaired by the Representative Director & Chairman, plans, deliberates and decides sustainability-related initiatives in line with our Fundamental Sustainability Policy. The committee members attend the Board of Directors meetings, and report status updates on key sustainability activities as well as other sustainability-related information to the board. The transcosmos SDGs Committee also discusses and decides material matters including response policies for climate-related risks and revenue growth opportunities, greenhouse gas emissions (GHG) targets, and initiatives towards the goal to reduce emissions. The Board of Directors oversees and gives directions to the committee.
  • The transcosmos SDGs Committee plans response policies and key initiatives on climate-related risks and revenue growth opportunities, and gives directions to the SDGs Promotion Department to draft policies and initiatives. After receiving proposals from the department, the transcosmos SDGs Committee deliberates the proposals and makes final decisions on the policies and key initiatives. The SDGs Promotion Department and members in charge of climate change initiatives in each Headquarters organization execute the initiatives in line with the policies set by the transcosmos SDGs Committee.
  • To address wide-ranging business risks, transcosmos has developed Risk Management Basic Rules, and each Headquarters organization has established internal risk management systems based on the rules. The Board of Directors receives reports on climate-related risks and other sustainability-related risks from the transcosmos SDGs Committee, and other business risks from each Headquarters organization. Based on the information, the board identifies, assesses and manages all risks across transcosmos.

Governance / Risk Management

Meetings & Structure Roles & Responsibilities
Board of Directors transcosmos Board of Directors, which consists of 16 members including seven outside directors, meets once a month, as well as holds extraordinary board meetings when necessary, to make decisions on important management matters including sustainability-related ones, and oversees the execution of duties by the corporate officers.
transcosmos
SDGs Committee		 The transcosmos SDGs Committee is chaired by the Representative Director & Chairman, with internal directors serving as vice-chair. It is a corporate-wide executive organization to which members from each department under all Headquarters organizations take part. The committee deliberates and decides all corporate sustainability matters, and reports to the board several times a year.
SDGs Promotion Department Based on drafts developed by the transcosmos SDGs Committee, the SDGs Promotion Department discusses and submits proposals on response policies and key initiatives on climate-related risks and opportunities.
Members in charge of Climate Change Initiatives Each department under Sales, Service, Global and Corporate Headquarters organizations has members responsible for climate change initiatives, and they carry out and lead initiatives discussed and decided by the transcosmos SDGs Committee.
Environmental Management Team
(ISO Office)		 The team operates environmental management systems based on ISO14001, an international environmental management system standard. For ISO14001 certified locations, the team sets and manages environmental objectives and leads them toward the objectives. The team also cooperates with external auditors.

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Strategy: Scenario Assumptions

Identifying and defining the range of scenarios

Based on the TCFD recommendations, transcosmos has conducted scenario analysis to understand the impact of climate-related risks and revenue growth opportunities on all businesses under the parent company. Specifically, we have defined worldviews under two different scenarios; namely, one with a rise of 1) less than 2℃ (including 1.5℃) in average global temperature and 2) a rise of 4℃ in average global temperature, and assessed the materiality of the impact of climate-related risks and revenue growth opportunities on the businesses from the year 2022 through the year 2050 under the two scenarios. For the analysis and assessment, we have referred to materials published by the International Energy Agency (IEA) and Intergovernmental Panel on Climate Change (IPCC). These materials cover diverse business domains, are internationally recognized as credible, and are referenced in the TCFD recommendations.

Scenario Below 2℃ (including 1.5℃) 4℃
Worldview
  • Bold climate policies implemented internationally and technological innovation is accelerated, limiting the global average temperature rise by the end of this century to below 2℃. A society where a transition to a decarbonized society brings changes in society, which in turn is highly likely to impact our business.
  • Despite each country taking actions according to their intended nationally determined contribution under the Paris Agreement, the global average temperature rises by about 4℃ by the end of this century. A society where climate change such as increasing temperature is highly likely to impact our business.
Reference Transition Risk
  • Net Zero Emissions by 2050 Scenario (IEA WEO2022), etc.
  • Announced Pledges Scenario (IEA WEO2022)
  • Stated Policies Scenario (IEA WEO2022), etc.
Physical Risk
  • RCP2.6 (IPCC AR5)
  • SSP1-1.9 (IPCC AR6)
  • SSP1-2.6 (IPCC AR6), etc.
  • RCP8.5 (IPCC AR5)
  • SSP5-8.5 (IPCC AR6), etc.
Risks and Revenue Growth Opportunities
  • Transition risks and revenue growth opportunities are more likely to emerge.
  • Physical risks and revenue growth opportunities are more likely to emerge.

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Strategy: Identifying Risks and Revenue Growth Opportunities

Results of scenario analysis

transcosmos has performed scenario analysis to understand the impact of potential social changes on our businesses under the two climate scenarios; namely, 1) below 2℃ (including 1.5℃) scenario, which assumes countries implement stringent policies, laws and regulations towards achieving a decarbonized society, and 2) 4℃ scenario, which assumes countries do not step up their climate policies beyond those already adopted.
We will continue to conduct scenario analysis, identify and take measures against material climate-related risks and growth opportunities to mitigate such risks as well as capturing revenue growth opportunities without fail. Ultimately, transcosmos will increase its resilience for an uncertain future.

Below 2℃ (including 1.5℃)
Category Description Impact Our Response
2030 2050
Transition
Risk		 Policy /
Regulation
  • Increased costs such as additional tax burdens due to the introduction of carbon tax.
 Moderate Moderate
  • Expand the scope of environmental management systems to include more business locations.
  • Switch to renewable energy.
  • Higher costs for collecting and disclosing detailed environmental information to comply with tighter GHG emissions disclosure requirements or expanded obligations.
 Low Low
  • Implement environmental management systems to streamline operations.
Market
  • Increased electricity and operating costs due to higher demands for renewable energy.
 Moderate Moderate
  • Establish environmental objectives using environmental management systems.
  • Expand the scope of environmental management systems to include more business locations.
  • A decline in existing business or lost business opportunities if fail to act swiftly to tackle climate-related challenges.
 High High
  • Review and enhance information disclosure in line with the TCFD recommendations on an ongoing basis.
  • Expand the scope of environmental management systems to include more business locations.
  • Enhance the well-being of our people, organizations, and clients by the following actions;
    1. Ensure the safety of our people and strengthen BCP across transcosmos.
    2. Diversify disaster risks to our facilities by further increasing home-based contact centers.
    3. Develop a pandemic response plan for offices.
Reputation
  • Lower sales and higher financing costs due to lower ESG ratings as more investors use ESG factors in business valuation.
 Moderate High
  • Enhance ESG disclosures and receive higher ratings from rating agencies.
Transition Revenue
Growth Opportunity		 Market
  • Higher profitability due to higher demands for new environment-related services that can address diversified consumer behavior as well as rising customer awareness towards environmental issues.
  • The preferred choice for more clients with decarbonization services that help clients reduce GHG emissions.
 High High
  • Sort out our existing services through an ESG lens.
  • Create Green Transformation business.
  • Monetize our environmental management systems.
Reputation
  • The preferred choice for more clients as a result of taking aggressive climate action.
 High High
  • Create Green Transformation business.
  • Increase business with clients, suppliers and partners taking climate actions.
  • Carry out environmental initiatives involving our people (education, tree planting activity, etc.)
  • Promote zero emission strategy such as using solar energy, etc.
4℃
Category Description Impact Our Response
2030 2050
Physical
Risk		 Acute
  • Lost opportunities to provide services due to damages on our facilities as a result of severer and more frequent natural disasters and extreme weather.
 Moderate Moderate
  • Identify, analyze and mitigate risks on a regular basis.
  • Enhance the well-being of our people, organization and clients by the following actions;
    1. Ensure the safety of our people and strengthen BCP across transcosmos.
    2. Diversify disaster risk to our facilities by further increasing home-based contact centers.
    3. Develop a pandemic response plan for offices.
  • Suspended service due to increased infectious diseases caused by unknown viruses and pandemics.
 Moderate Moderate
Chronic
  • Lost opportunities to provide services as flood or storm surge damage our facilities located in coastal areas due to rising sea levels.
 Low Low
  • Higher air conditioner costs as average temperature rises.
 Low Low
  • Install air conditioners with high energy efficiency.
  • Extend the “Cool Biz” campaign period, a period to promote energy conservation by allowing our people to dress casually.
Physical Revenue
Growth Opportunities		 Acute
  • Order growth for commissioned business due to increased needs for BCP.
  • The preferred choice for more clients with enhanced BCP that enables us to continue sound business operations.
 High High
  • Standardize operations and increase flexibility in service delivery.
  • Create Disaster-prevention Digital Transformation (DX) business.
  • Create Green Transformation business.
  • Sort out our existing services through a BCP lens and promote the services as decarbonization and BCP services.
  • Increased growth opportunity along with higher needs for non-face-to-face services due to increased infectious diseases caused by unknown viruses and pandemics.
 High High
  • Increase home-based contact centers.
  • Drive DX and expand outsourcing service opportunities.
    • - Respond to clients’ urgent requests to change their business categories.
    • - Implement SaaS (shift to paperless)
    • - Offer helpdesk services
    • - Open pandemic control grants administration centers
    • - Expand e-commerce business

*Business impact levels are assessed based on the following criteria; High: \1 billion or more, Moderate: \100 million to less than \1 billion, Low: Less than \100 million.

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Metrics and Targets

transcosmos has set greenhouse gas (GHG) emissions reduction targets. The table and graph below show our GHG emissions and reduction targets.

GHG Emissions

The table below shows transcosmos’s GHG emissions.

(t-CO2)

Scope FY2022/3 Emissions FY2023/3 Emissions Changes from FY2022/3
Scope1 434 590 136％
Scope2 18,817 13,432 71%
Scope1+Scope2 Total 19,251 14,022 73％
Scope3 - 118,314 -
Scope1+2+3 Total - 132,336 -

*Above data covers GHG emissions at transcosmos inc. only.
*CO2 is the only applicable GHG for transcosmos inc.

The table below shows transcosmos Group's GHG emissions.

(t-CO2)

Scope FY2023/3 Emissions
Scope1 682
Scope2 23,178
Scope3 194,087
Scope1+2+3 Total 217,947

(t-CO2)

Scope 3 emissions by category FY2022/3 Emissions
Category 1 (Purchased goods and services) 145,597
Category 2 (Capital goods) 18,204
Category 3 (Fuel- and energy-related activities not included in scope 1 or scope 2) 3,120
Category 4 (Upstream transportation and distribution) 12,999
Category 5 (Waste generated in operations) 520
Category 6 (Business travel) 4,826
Category 7 (Employee commuting) 8,773
Category 11 (Use of sold products) 23
Category 12 (End-of-life treatment of sold products) 25
Total scope 3 emissions 194,087

*Scope 3 includes value chain emissions of our consolidated subsidiaries.

Energy consumption

The table below shows transcosmos Group’s energy consumption.

Energy consumption Unit FY2022/3 Emissions
Electricity 1000 kWh 43,668
  Renewable energy use kwh 1,925
Share of renewable energy use % 4.41%
Gasoline KL 75
City gas 1000 m2 196

*Above data includes GHG emissions of our consolidated subsidiaries.
*Above data covers energy consumption included in scope 2 only.

Scope 1 & 2 Carbon Emissions Reduction Targets

  • Endorsing the Japanese government’s milestones, we will reduce our CO2 emissions by 46% from the FY2022/3 levels, with the goal of achieving net zero by the year 2050.
  • To reduce our CO2 emissions even further, we will set short to medium term CO2 reduction targets, and continuously revisit target CO2 emissions from our business operations.

Carbon Emissions

Key Initiatives Toward Achieving the Targets

  • Our study shows that to achieve 100% renewable energy in our own facility, Omoromachi Center located in Naha city, Okinawa prefecture, will incur additional costs. Apart from this center, we do not own any office facility and are leasing commercial buildings for rent as a tenant. For rented facilities, we will confirm each real estate company’s contract terms with their electric power companies, and if the contracts allow each tenant to choose the energy source, we will study the feasibility to switch to renewable energy.
    *If it proves difficult to switch to renewable energy in our office facilities other than our owned building due to real estate companies’ contract terms with their electric power companies, we will aim to achieve net zero through carbon offsetting.

Member of RE Action

再エネ100宣言RE Action

In August 2024, we joined RE Action, an initiative run by RE Action Council. RE Action is the renewable energy initiative bringing together local governments, educational and medical institutions, and small to medium-sized enterprises in Japan committed to 100% renewable electricity. The initiative accelerates change towards 100% renewable electricity in society by members’ declaration and implementation and gives an impact on markets and policies.

To achieve carbon neutrality by 2050, we will take action with the goal to shift to 100% renewable energy as a Group by the same year.

RE Action (no translation available)

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