Impact of Climate Change on Customer Businesses, Collateral Values and Credit Costs
First written in FY2021. 2 of 3 entries say "Mitigated", first in FY2022. Latest entry: FY2026.
The whole theme swung hardest in 2024: 6 of 35 companies on the "Worse" side.
2 other companies' latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「For the first time, we have expanded the scope of loans subject to scenario analysis for physical risks from "only borrowers providing real estate collateral" to "all corporate borrowers in Yamagata and Akita prefectures, our operating base, regardless of whether they provide real estate collateral," with the aim of making the scenario analysis more detailed.」
The scope of the climate change risk analysis was expanded to all corporate borrowers. Estimated maximum credit costs were ¥680 million for transition risk and ¥4.61 billion for physical risk and related factors, supporting more sophisticated risk management. - FY2022MitigatedAnnual report
「The Group has expressed its support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Taking into account the impact of climate change on the Group's business activities, we will manage these risks by pursuing measures and disclosures in each of the four categories: governance, strategy, risk management, and metrics and targets.」
The Group set out its policy for managing climate change risk by expressing support for the TCFD recommendations and pursuing measures and disclosures across the four categories. - FY2021First statedAnnual report
「In recent years, damage caused by extreme weather and other events has become increasingly severe worldwide. In Tohoku, the Group's operating base, substantial damage has also occurred, including power outages and disruptions to transportation and other social infrastructure caused by repeated heavy snowfall and other events. We therefore recognize addressing climate change as a major management issue. As part of our initiatives in support of the SDGs, we have actively supported the renewable energy sector, including wind power and biomass generation. However, if climate change risks materialize, the Group's business results and financial position could be adversely affected by deterioration in customers' business performance due to business disruptions and higher credit costs resulting from impairment of collateral values.」
Climate change was identified for the first time as a standalone material risk, separate from natural disasters and infrastructure disruptions, with its potential effects on customer business disruptions, collateral impairment and higher credit costs described.