Environment
TCFD, Climate Change Measures
Climate change is a very critical issue facing us today. Torishima has long been committed to reducing its environmental impact and addressing climate change in our business operations and the products and services we supply. Furthermore, one of the key issues (materiality) in our Medium-Term Management Plan, Beyond 110, is addressing energy issues while working toward carbon neutrality.
Compliance with the recommendations of
the Task Force on
Climate-Related Financial Disclosures (TCFD)
In May 2023, Torishima concurred with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). Under the TCFD recommendations, companies are encouraged to disclose climate-related information that has potential financial impacts on their company in four pillars: Governance, Strategy, Risk Management, and Metrics and Targets. Torishima will continue to enhance its climate change-related information disclosure and conduct business operations in an even more environmentally friendly manner, thereby contributing to realizing a sustainable society and further increasing its corporate value.
- Governance
- Strategy
- Risk Management
- Metrics and Targets
Corporate governance structure
Torishima believes that addressing climate change issues through our pump business is not only an important social demand but also an opportunity to create new business. To achieve this, we have created a system in which the Board of Directors meets once a year to discuss key issues (materiality) regarding sustainability and receive reports from the executive side on decisions made and the implementation status of the business plan.
As the highest consultative body on the executive level, the Executive Committee, led by the COO (Chief Operating Officer), is composed of Executive Officers and other members and serves as a forum to discuss the status of the development of environmentally friendly products and new market development in each business segment to address our important business challenges: addressing energy efficiency issues to realize a decarbonized society, building a safe and secure society, and building new manufacturing and services through the use of data and AI, as well as to monitor the implementation of the business plan approved by the CEO.
During the Executive Committee meetings, the Executive Officer in charge of the Corporate Division provides information on climate-related laws, regulations, and other disclosure requirements to form a consensus on selecting and prioritizing items to be addressed. As targets, metrics, and risk management related to environmental management are cross-departmental matters, the Sustainability Promotion Team, established under the Executive Officer in charge of the Corporate Division, examines such matters and submits them to the Executive Committee for deliberation through the Executive Officer in charge of the Corporate Division.
The Environment Committee mainly discusses policies to reduce CO₂ emissions and rationalize electricity consumption at factories, gives instructions and shares the development status of environmentally friendly products with the Sustainability Promotion Team, and then receives reports from the team.
Meeting bodies
| Meeting body | Leading members | Key roles in climate change | Frequency of meetings |
|---|---|---|---|
| Board of Directors |
Directors (including outside directors) |
|
In principle, once a month |
| Executive Committee |
Director and COO (Chief Operating Officer), all Executive Officers ＊CEO attends as an observer. |
|
Approximately once a week |
| Environment Committee |
Division managers (Executive Officers) and department managers of production, development
design, and sales divisions ＊CEO and COO attend as observers. |
|
Twice a year |
| Sustainability Promotion Team |
Division manager (Executive Officer) of corporate division, department managers and section
managers of legal, HR, and environmental departments ＊Finance and business department managers attend depending on the matter. |
|
Approximately once a month (Held as needed) |
Scenario analysis process
Torishima carries out scenario analysis using the following steps, aiming to assess financial and business impacts under different scenarios and evaluate our strategy’s resilience to climate-related risks and opportunities.
| Classification | Scenario overview | Major reference scenarios |
|---|---|---|
| 1.5°C/Below 2°C scenario |
A scenario where policies and regulations are implemented to achieve a decarbonized society
that limits the global temperature increase from the pre-industrial era to less than
2°C. Transition risk is high, but physical risk is low compared to the 4°C scenario. |
|
| Below 4°C scenario |
A scenario that assumes that the announced targets, such as national targets in the Paris Agreement, will be achieved. No new policies or regulations will be introduced, leading to a continuous increase in global energy-derived CO2 emissions. Transition risk is low, but physical risk is high. |
|
Scenario analysis steps
Financial impact associated with climate-related risks/opportunities and Torishima’s actions
| Classification | Details | Time frame＊1 | Business impact | Torishima’s action/Resilience | |||
|---|---|---|---|---|---|---|---|
| 1.5℃/ Below 2℃ |
4℃ | ||||||
| Transition Risk |
Policy and Legal |
Increase in costs associated with application of carbon taxes and other carbon pricing | Short to long term | Medium | Medium |
|
|
| Market | Decrease in demand for existing products due to growing demand for low-carbon and decarbonized products | Short to medium term | Medium | Medium |
|
||
| Reputation | Decrease in order opportunities due to selective behavior of customers caused by inadequate response to climate change | Medium to long term | Medium | Medium |
|
||
| Physical Risk |
Acute | Profit decrease due to damage to production facilities and delays in material procurement and construction work triggered by the frequency and severity of extreme weather phenomena, such as torrential rains and large-scale typhoons | Short to long term | Small | Small |
|
|
| Opportunity | Products and Services |
Increase in demand for decarbonization, renewable energy, and energy-efficient technologies due to changes in the energy mix as per government policy | Increase in demand for pumps for biomass power plants and high-efficiency waste incineration plants | Short to medium term | Medium | Small |
|
| Increase in demand for pumps for ammonia and hydrogen power plants | Medium to long term | Medium | Medium |
|
|||
| Market | Increase in demand for pumps for seawater desalination plants due to water shortages | Medium to long term | Large | Large |
|
||
| Resilience | Increase in demand for pumps that integrate disaster mitigation technology as social infrastructure resilience is strengthened | Short to long term | Small | Small |
|
||
＊１ Short-term: less than 5 years; Medium-term: 5 to 10 years; Long-term: more than 10
years
＊２ Pumps capable of lowering water levels and increasing drainage volume as a measure to
increase drainage volume in a short period during torrential rains, etc.
＊３ Pumps that can operate
even in the event the pumping station is flooded
In response to climate change issues, the Risk Management Committee receives reports from the Sustainability Promotion Team established in the Corporate Division and identifies risks such as legal regulations surrounding climate change issues (e.g., carbon tax). The executive officer in charge of the Corporate Division then reports to the Executive Committee, which carries out risk assessments.
For matters deemed high-risk by the Director and COO, who chairs the Executive Committee, the officer in charge of the relevant department formulates an action plan and executes it in their department. With the support of the Sustainability Promotion Team, officers self-inspect whether the risk measures are functioning effectively on a practical level and periodically report on the progress to the Executive Committee.
Targets for reducing greenhouse gas emissions
FY2029
Scope 1 and 2: Virtually zero for the entire group (Scope 3
target values are under consideration)
[Overview of reduction measures]
- Reducing power consumption in factories (electric furnace for casting, compressor, and test power)
- Increasing ratio of purchased electricity generated from renewable energy sources
- Updating electrification of facilities using fossil fuels
ICP (ICP on capital investment)
Currently under consideration for introduction by the end of FY2023