We identify the financial and strategic impacts of climate change-related risks, then establish response measures based on each risk’s magnitude, and make decisions accordingly.
Climate change-related risks include global climate regimes, region-specific regulatory reinforcement, market changes, stakeholders’ requests, and changes in physical environments. Potential risks identified for the short term are an increase in investment amount due to rising carbon credit prices and high-efficiency technology development, investment in extreme weather response, and an increase in restoration expenses, Meanwhile opportunities include an easing of carbon credit price sensitivity due to the carbon credits acquisitions from various sources and a reduction in energy expenses driven by the development of high energy-efficiency technology.
Changes in consumption patterns - driven by increasing preference for environmentally responsible products - and expanded renewable energy use are projected as mid-term opportunities, while temperature increases and water resource depletion are identified as long-term risks.
As for long-term risks, we establish response measures in line with Nationally Determined Contributions based on the Paris Agreement and the RCP (Representative Concentration Pathways) adopted by the IPCC (Intergovernmental Panel on Climate Change) as well as the energy technology outlooks by the IEA (International Energy Agency).
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Climate risks and opportunities |
period
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Financial impacts of climate risks |
Financial impacts of climate opportunities |
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Transition risks and opportunities
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![]() 1. GHG emissions trading scheme |
Short- term |
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![]() 2. Adoption of energy efficient technologies |
Short- term |
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![]() 3. Changes in customer behavior |
Mid- term |
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![]() 4. Expansion of renewable energy use |
Mid- term |
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Physical risks and opportunities
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![]() 5. Natural disasters such as storm and floods |
Short- term |
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![]() 6. Rise in temperatures and yellow dust from accelerating desertification |
Long- term |
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DS Division conducted a pilot analysis of future financial impacts based on 2021 to respond to the industry paradigm shift due to climate change. As identifying risks and opportunities due to climate change is important for creating new businesses and entering new markets in the future, we identified the physical and transition risk factors of climate change and analyzed their financial impacts.
As a result, DS Division’s main physical risk factors were identified as heat waves, storm, and coastal erosion as key physical risks. To prepare for storm events, capable of significantly impacting semiconductor manufacturing facilities, we installed rain screens during facillity construction at our manufacturing sites, assuming the highest level of wind speed. DS Division plans to consider these risks when expanding lines and selecting new business sites in the future. For transition risks, increased costs due to increased greenhouse gas emissions were identified as a major risk, and we are continuing to invest in reducing this risk by expanding the RCS (Regenerative Catalytic System), a process gas treatment facility.
Physical risks | Transition risks |
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