Risks of Tighter Regulations and Natural Disasters Due to Climate Change

「To achieve the 2027 target of reducing GHG emissions by at least 30% from fiscal 2018 levels, we are pursuing initiatives including improvements to manufacturing processes, such as reducing N2O emissions at the nitric acid plant, and expanding the use of renewable electricity, in addition to reductions already achieved through the conversion of boiler fuel at the Onoda Plant and the cessation of melamine production.」

「Scenario analysis and quantification of the financial impact using a 1.5°C scenario identified increased operating costs resulting from the introduction of carbon pricing and lower sales resulting from an inability to provide low-carbon products as significant risks. We will further promote decarbonisation investments that take GHG emissions reductions into account through the use of internal carbon pricing, thereby reducing these risks.」

「We have introduced internal carbon pricing and are further promoting decarbonisation investments that take into account GHG emissions reductions and energy conservation. We are also implementing measures including the formulation of BCPs for major products, their ongoing review, and multiple sourcing of critical raw materials, in anticipation of the impact that increasing extreme weather events may have on our factories and supply chain.」

「However, if greenhouse gas (GHG) emission regulations are introduced in countries where the group operates, or if climate change causes natural disasters to increase in regions where the group has locations, this could affect its operating results and financial condition.」