As for the financial impact on the Group, additional costs will be incurred based on GHG emissions, such as when policies and regulations on climate change are strengthened and carbon pricing is introduced or enhanced. Furthermore, if we fail to keep pace with the global shift to decarbonized societies, this could invite a decline in our corporate value due to lost sales opportunities, etc. The world is rapidly moving to achieve carbon neutrality under the Paris Agreement. We also intend to rapidly respond to these changes in the social environment and continue to provide new value.
Specifically, we have defined GHG reduction targets. We will steadily reduce the amount of GHG emitted from Group business activities by introducing energy-saving equipment and increasing our use of renewable energy. Furthermore, in order to improve the market competitiveness of Group products, we will actively enhance our production processes, develop environmentally friendly products, and develop technologies such as CCUS* for reducing our environmental impact.
In our company-wide risk management activities, we manage physical water risks, including damage caused by acute and chronic risks such as torrential rains, floods, storm surges, and droughts, which are considered to be related to climate change.
Concerning transition risks, we expect an increase in demand for technologies, products, and services that contribute to energy saving and GHG emissions reductions due to the tightening of government policies regarding climate change. We envision this as providing more significant business opportunities. The Group takes initiatives such as the development of materials, products, and technologies that contribute to decarbonization, the development and promotion of the use of renewable energy such as geothermal power, the development of technologies related to CO2 capture and effective utilization, and conservation activities for the forest land we own. Through these initiatives, we aim to create both economic and social values.
In March 2021, the Group established and analyzed scenarios to ascertain the impact of climate change on the Group's business operations (risks and opportunities) and consider measures for reducing risks and securing opportunities.
At present, we are updating the scenario analysis and considering indicators, targets and strategies, while ensuring consistency with the next medium-term management strategy.
Identify risks and opportunities![]() |
Identify transition risks and opportunities and physical risks as climate change risks and opportunities relating to business operations |
---|---|
Identify key risk and opportunity factors ![]() |
Consider the impact of identified risks and opportunities on business operations, their relationship to business strategies and their level of interest to stakeholders, etc., and identify risks and opportunities with a high degree of importance. |
Analyze impact on business operations![]() |
Analyze the degree of impact of key risks and opportunities on business operation. In analysis and evaluations, we refer to scenario data for temperature increases of 2℃ and 4℃
|
Consider measures, indicators and targets | Consider measures to reduce risks and secure opportunities Set greenhouse gas emission reduction targets as monitoring targets |
2℃ Scenario (sustainable society) | 4℃ Scenario (society in which things are allowed to take their course) |
---|---|
|
|
|
|
|
|
Analysis theme | Description of analysis | Businesses covered by analysis |
---|---|---|
|
Common to all businesses | |
|
Common to all businesses | |
|
Advanced Products Business | |
|
Metalworking Solutions Business | |
|
Metals Business | |
|
Environment & Energy Business | |
|
Environment & Energy Business |
Envisaged world and business impact |
Increase in production costs due to introduction and toughening of carbon pricing systems
|
---|---|
Impact analysis |
Carbon pricing will be a factor contributing to cost increases for the Company The impact of carbon pricing will have an impact on society overall. If the passing on of these costs to the price of Company products does not progress then there is a risk that it may lead to a decrease in earnings. |
Future strategy and response |
|
Envisaged world and business impact |
Increase in the amount of damages due to the increase in the frequency of natural disasters worldwide
|
---|---|
Impact analysis |
The increase in damages due to disasters will be a factor contributing to cost increases for the Company If global temperature rises are not suppressed and the world heads toward a 4℃ scenario, depending on the location of the site, there is a risk of serious impact on operations and supply chains. |
Future strategy and response |
|
Envisaged world and business impact |
Rapid increase in demand for EV-related products aimed at decarbonization
|
---|---|
Impact analysis |
The major increase in EV sales is expected to lead to a major increase in demand for the Company's copper & copper alloys and electronic materials products, etc. Drawing in demand by strengthening the production system for related products will offer opportunities to expand sales. |
Future strategy and response |
|
Envisaged world and business impact |
Decline in demand for cutting tools for engines due to the increase in the percentage of EVs
|
---|---|
Impact analysis |
With the expected increase in demand for tools for use on hard-to-cut materials, accompanying the expansion of the electrification and weight reduction markets, reviewing product composition and taking in demand could provide opportunities to increase sales. At the same time, there is a risk that sales of cutting tools for engine-equipped vehicles—a current flagship product—will decline. |
Future strategy and response |
|
Envisaged world and business impact |
Increase in demand for recycling of scrap electronic appliances accompanying economic growth of various countries
|
---|---|
Impact analysis |
The volume of E-Scrap generated globally is expected to increase to 142% by 2030 in comparison with 2019. Increasing the volume of E-Scrap that the Company can process by augmenting the Company's recycling capabilities will create an opportunity to increase sales. |
Future strategy and response |
|
Envisaged world and business impact |
Increased frequency of replacement of home appliances with energy-saving appliances due to global warming and rising energy costs
|
---|---|
Impact analysis |
An increase in volume of waste home appliances such as air conditioners is expected due to factors such as temperature increase, change in number of households, and toughening of carbon regulations and recycling regulations This will be accompanied by an increase in the volume of waste home appliances processed of by the Company, which will present an opportunity for increasing sales. (209% in fiscal 2051 in comparison with fiscal 2020) |
Future strategy and response |
|
Envisaged world and business impact |
Medium to long-term expansion of the renewable energy market aimed at building a net-zero society
|
---|---|
Impact analysis |
While unit electricity prices and non-fossil fuel certificate prices will fluctuate due to environmental policies and technological advances, the demand for renewable energy itself will increase, presenting an opportunity for us to expand our renewable energy business operations. (Power generation: 286% in fiscal 2051 in comparison with fiscal 2020) |
Future strategy and response |
|
The vast majority (approx. 91%) of the water we consume at the Mitsubishi Materials Group is seawater used as cooling water. Consumption of fresh water (such as industrial water and groundwater) is relatively low. However, because a shortage of fresh water may affect our business activities, securing the necessary quality and amount of water is essential for the business operation of the Group. In addition, we have considered the seriousness of the water-related problems that have occurred frequently in recent years, such as flooding caused by typhoons or torrential rains, and the great impact of these problems. We manage the risks related to these problems accordingly.
We implement measures for reducing water risks at individual facilities. To secure water resources, we save water through measures including the recycling of water, the introduction of equipment with low water consumption, and the renovation of equipment to reduce water consumption. To counteract the risk of flooding, we take initiatives including the elevation of buildings, pumps, and electric equipment, the installation of drainage pumps, as well as the implementation of disaster drills assuming high water events. We also take measures to prevent abnormalities in the quality of the effluent from our facilities and to prevent water quality accidents. These measures include the management of effluent under our own standards that are stricter than laws and regulations, as well as the introduction of sensors that detect abnormal water quality and a system that stops water discharges automatically.
To ascertain the state of water risks at the Group's manufacturing facilities (including some research institutes), we are utilizing the Aqueduct water risk assessment tool developed by the World Resources Institute (WRI) to conduct individual risk assessments for each facility, covering various water risks including those relating to securing water resources and those of incurring flood damage.
Additionally, in order to ensure that water risk assessments are in line with actual conditions at these facilities, we supplement the results of water risk assessments performed using Aqueduct by taking into account the history of any past water risk manifestations at each facility (history of occurrences of flood, drought, and water supply quality deterioration, etc., at each location) and information on water usage associated with business activities (amount of fresh water and groundwater used, emissions of pollutants contained in wastewater).
The results of these supplemented water risk assessments are used to produce visual representations of water risks for each facility, using radar charts displaying risk scores for each assessment item, and shared with each business location. Each business site registers items assessed as high risk as risk factors for that particular facility, and engages in risk management by planning and implementing measures including the reduction of water risks.
"Water quality risks" are assessed separately for both water supply and wastewater, from the viewpoints of impact on operations due to the deterioration of water supply water quality and impact on the environment due to wastewater at business sites. "Regulatory and reputation risks" are also assessed for both water supply and wastewater, from the perspectives of toughness water supply and wastewater regulations and the reputation of the region.