Environment Addressing Climate Change and the TCFD
Endorsing the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), the Hakuhodo DY Group in FY2022 identified material risks and opportunities arising from climate change and evaluated their financial impact quantitatively.
We are taking climate action for sustainable growth in view of the implications for our operations of the risks and opportunities thus identified.
Hakuhodo DY Group Environmental Policy and Environmental Management System
Please refer to the Environmental Management page for details.
Environmental ManagementStrategy: Scenario Analysis
The scope of the scenario analysis covers the entire value chain from research and development (R&D) to procurement, production, and service provision, with a focus on Japan, the Hakuhodo DY Group’s principal area of operation. To consider long-term assumptions for 2030 and beyond, analysis was conducted against two scenarios: a 1.5°C scenario, which assumed an average global temperature at the end of this century of no more than 1.5°C warmer than that prior to the Industrial Revolution (in some instances a 2.0°C scenario was also analyzed), and a 4°C scenario, which assumed a rise in average global temperature of around 4°C.
Analysis of the 1.5°C scenario confirms that while there is a risk of increased costs associated with the introduction of a carbon tax and higher electricity and other energy prices, there are opportunities to increase our corporate value through increased sales from clients that deal in low-carbon emission products and services due to changes in general consumer preferences, and the provision of services that contribute to decarbonization. On the other hand, this also means that a delay in carbon reduction efforts could be a business risk.
In the 4°C scenario, a severe increase in wind and flood damage, such as from typhoons and floods, could pose the risk of shutting down the office buildings that support our business, but we are taking measures, such as promoting telework, to ensure that our business could continue without delay even in an emergency.
These analyses and response measures were approved and implemented following discussions with the Group Sustainability Committee Chair and the Environmental Manager, who received a report from the Environmental Management Subcommittee. We will continue to conduct scenario analysis on an ongoing basis to enhance its quality and quantity and further integrate it into our management strategies to enhance our resilience for dealing with an uncertain future.
| Type | Risk | Term | Impact | Response measures | |
|---|---|---|---|---|---|
| Transition Risks | Policies and Regulations | ・ Increased business operating expenses due to the introduction of a carbon tax on GHG emissions associated with fossil fuel-derived energy use | Short–Long | Low |
・ Procure renewable electricity through power purchase agreements (PPAs), renewable electricity offerings, certificates, etc. ・ Introduce energy-saving equipment such as LEDs ・ Promote renewable energy and energy conservation through educational activities for employees |
| ・ Increased unit price of electricity purchased due to rising demand for renewable energy-derived electricity | Medium–Long | Low | |||
| ・ Increased land rent due to conversion of leased office space to net zero energy buildings (ZEBs) | Medium–Long | Low | |||
| Market | ・ Decreased advertising income from companies related to industries with high GHG emissions due to the impact of policies and regulations aimed at decarbonization | Medium–Long | High | ・ Reduce not only our own Scope 1 and 2 emissions, but also reduce Scope 3 emissions in collaboration with suppliers | |
| Reputation | ・ Loss of new business opportunities and loss of business to other companies if clients perceive our efforts to decarbonize as insufficient | Medium–Long | High |
・ Disclose information through TCFD, CDP, etc. ・ Consider participation in SBT and other initiatives |
|
| ・ Reduced share price if investors perceive our efforts to decarbonize as insufficient | Medium–Long | High |
| Type | Opportunity | Term | Impact | Response measures | |
|---|---|---|---|---|---|
| Transition Opportunities | Market | ・ Increased advertising revenues from clients that manufacture and sell decarbonization and environmentally friendly products and services | Medium–Long | High | ・ Reduce not only our own Scope 1 and 2 emissions, but also reduce Scope 3 emissions in collaboration with suppliers |
| ・ Provision of services that meet clients’ growing awareness of climate-related issues, such as our SDGs Corporate Value Creation Program, and increased orders for public awareness business from companies and government agencies that place importance on environmental communication for consumers | Medium–Long | High |
・ Promote educational activities related to the SDGs and ethical consumption ・ Contribute to addressing climate change through our ESG Transformation service and other business |
||
| Reputation | ・ Creation of new business opportunities and an influx of business from other companies if clients perceive our efforts to decarbonize as proactive | Medium–Long | High |
・ Disclose information through TCFD, CDP, etc. ・ Consider participation in SBT and other initiatives |
|
| ・ Increased share price if investors perceive our efforts to decarbonize as proactive | Medium–Long | High |
| Type | Risk | Term | Impact | Response measures | |
|---|---|---|---|---|---|
| Physical Risks | Extreme weather events (typhoons, torrential rain, sediment, storm surges, etc.) | ・ Increased losses from property damage and business shutdowns due to flooding, storm surges and other damage | Short–Long | Medium | ・ Implement our business continuity plan (BCP) measures, including teleworking and procurement risk diversification |
| Type | Opportunity | Term | Impact | Response measures | |
|---|---|---|---|---|---|
| Physical Opportunities | Extreme weather events (typhoons, torrential rain, sediment, storm surges, etc.) | ・ Increased demand for IT solutions to meet growing BCP needs due to the increasing frequency of severe disasters | Short–Long | Medium | ・ Advance clients' BCPs by providing teleworking tools, etc. |
Risk Management
In September 2024, we conducted a review of our materiality in order to promote sustainability management based on our Global Purpose and the new Medium-Term Business Plan.
The Group Sustainability Committee will manage progress on and review risks, including climate-related issues, on a case-by-case basis to establish an appropriate risk management system.
Indicators and Targets
In September 2024, we conducted a review of our materiality in order to promote human-centered sustainable management based on our Global Purpose and the new Medium-Term Business Plan.
To achieve carbon neutrality in FY2050, the Hakuhodo DY Group has set an interim target of a 50% reduction in Scope 1+2 emissions in FY2030 compared to FY2019 (fiscal year ended March 31, 2020) and a 30% reduction in Scope 3 emissions in FY2030 compared to FY2019 (fiscal year ended March 31, 2020). To achieve this goal, we will not only conduct conventional energy conservation activities, but also aim to introduce renewable energy-derived electricity to account for 60% of our total electricity consumption in FY2030, and 100% in FY2050.
We will continue to enhance the quality and quantity of information disclosure in accordance with TCFD recommendations, and will also consider expanding the scope of calculation and target setting, as well as participation in various initiatives.
Third-party Guarantee
A third-party guarantee has been received from Deloitte Tohmatsu Sustainability Co., Ltd., for the CO2 emissions report available on the Company’s corporate website containing data on Scope 1, 2, and 3 CO2 emissions from fiscal 2023.
CO2 Emissions Report (in Japanese)Major Targets and Results
| Item | Target | Base year (fiscal 2019) |
Results for fiscal 2023 |
Progress in fiscal 2023 |
|---|---|---|---|---|
| Scope 1 and Scope 2 CO2 emissions*¹ | Reduction of 50% by fiscal 2030 (compared with fiscal 2019), carbon neutral by fiscal 2050 | 11,174 tons | 7,487 tons | 33.0% reduction |
| Scope 3 CO2 emissions*¹ | Reduction of 30% by fiscal 2030 (compared with fiscal 2019) | 30,063 tons | 22,297 tons | 25.8% reduction |
| Introduction of renewable energy*¹ | 60% by fiscal 2030, 100% by fiscal 2050 | 0% | 36.5% | 36.5% |
| Energy conservation*¹ | Reduction of 30% (compared with fiscal 2019) | 5,372 kl | 3,912 kl | 27.2% reduction |
| Waste reduction*² | Maintain an average reduction of 50% or more (compared with fiscal 2019) | 486 tons | 290 tons | 40.3% reduction |
| Recycling rate*³ | 85% or higher | 82.2% | 83.5% | 83.5% |
- *¹ Total values for Hakuhodo, Daiko Advertising, YOMIKO ADVERTISING, Hakuhodo DY Media Partners, and HAKUHODO PRODUCT’S
- *² Waste volume and waste reduction targets for Hakuhodo head office in Tokyo
- *³ Recycling rate at Hakuhodo head office in Tokyo
Initiatives
Introduction of Renewable Energy
Following YOMIKO ADVERTISING, which introduced renewable energy in April 2022, we have since April 2023 switched electricity used in Akasaka Biz Tower, where various Hakuhodo DY Group companies are located, to green power*¹. Utilizing a green power supply service*², the Group succeeded in making Akasaka Biz Tower’s electricity use 100% green for all of fiscal 2023.
*¹ Green power: An effectively renewable energy source with environmental value derived from residential solar power generation that has reached the end of its power purchase period under the feed-in tariff (FIT) scheme. Mitsui Fudosan Co., Ltd., and TEPCO Energy Partner, Inc., have concluded a comprehensive agreement related to the greening of power consumption for office buildings to provide a stable supply of electricity to tenant companies. *² Green power supply service: A service developed by Mitsui Fudosan that provides effectively renewable energy for electricity used in office buildings and other facilities through the utilization of non-fossil fuel certificates. This service is designed to flexibly meet tenant needs in achieving the Science Based Targets (SBTs) for the reduction of greenhouse gas emissions, allowing for customizable implementation rates and other specifications.Climate Change Measures Through Our Business
The Group implements business and activities for the social implementation of sustainability, drawing on our strengths in such areas as collaborating with clients and the media, consulting and co-creating innovation, and regional development initiatives.