環境

Responses to TCFD Recommendations

At Rigaku we are firmly committed to a sustainable future and believe that our contributions to material science will help our customers to succeed in a world that is dealing with the challenges of climate change.
We have conducted an analysis of the potential risks and opportunities around our business in relation to climate change. From this analysis, we find that Rigaku’s business is well-positioned to respond to mega-trends related to climate change, such as the shift to electric vehicles and to renewable electricity supplies, and the increasing demand for energy-efficient data processing technology. The risks and opportunities identified in our analysis are consistent with Rigaku's Materiality.
We hereby state our agreement with the principles of the Task Force on Climate-related Financial Disclosures (TCFD). We will proactively disclose information on risks and opportunities to our business related to climate change, as recommended by the TCFD, and will work to reduce such risks and maximize the opportunities that we identified.

1.Governance

Recognizing the growing importance of building a sustainable society through social issue resolution while enhancing corporate value, we established the 'ESG Promotion Committee' in July 2022. Chaired by the group CEO, the Committee convenes at a minimum once per quarter, to drive sustainability-focused management.

The Committee deliberates on sustainability policies and strategies, setting plans and defining performance targets while considering sustainability-related risks and opportunities. It also monitors progress and reports its findings and recommendations to the Board of Directors at least twice a year.

The Board of Directors oversees all sustainability-related risks and opportunities across the company. It reviews reports from the ESG Promotion Committee and supervises/ deliberates on the development and execution of action plans to address these issues.

In addition, we established the 'ESG Promotion Project’ (from now on 'the Project') to implement the Committee’s decisions and drive sustainability initiatives in collaboration with Rigaku’s group companies and divisions. Within the Project, members discuss and promote sustainability efforts at the working level, including consolidating agenda items for the Committee, making internal adjustments as needed based on the Committee's instructions and submitting reports and recommendations for further guidance.

We regularly evaluate and refine our goals, identify key priorities, and communicate risks, opportunities, and financial impacts to our stakeholders.

The chart is shown. on the right.

Board of Directors

Oversee

Report and Propose

ESG
Promotion
Committee

Direction

Report and
propose

ESG Promotion Project

Request

Report and propose

Each company and division

2.Strategy

Scenario Analysis

Our group conducted scenario analyses for 2030 and 2050, based on two possible temperature rise scenarios by 2100: a 1.5°C increase and a 4°C increase. The 1.5℃ scenario assumes significant effort and actions to limit global warming, while the 4℃ scenario assumes no significant errors.

These analyses focused on Rigaku Holdings and its subsidiaries.

We referred to various scenarios from governmental and research bodies to evaluate significance and assess the potential financial impacts.

  • IEA「World Energy Outlook 2023」　（2023）　　
    NZE2050　／　STEPS
  • IPCC「AR6」　　SSP1-1.9（1.5℃ scenario）　
    ／　SSP5-8.5（4℃ scenario）

Identifying Key Risks and Opportunities

Starting from a long list of various risks and opportunities caused by climate change, we identified the relevant items to our business.

We then narrowed down to the key risks and opportunities critical to our business by evaluating them using multiple assessment criteria.

Risks and Opportunities

We identified seven risk categories and six opportunity categories that are likely to impact our business.

For each, we estimated the potential financial impact on our operations by 2030, assessing their effects on EBITDA as "High," "Medium," or "Low" across scenarios of 1.5°C, and 4°C temperature increases. However, in cases where appropriate parameters were unavailable, we partially used scenarios of a 2°C increase.

Category Driven factors Specific content Time line Financial impact
FY2023
1.5℃ 4℃
Transition
risks		 Policy
and
regulation		 Acceleration of GHG emission pricing, enforcement of reporting obligations for GHG emissions Increased costs related to raw materials, suppliers, transportation, energy, and compliance ~2050
(long-term)		 Medium Small
Enforcement of energy conservation policies Higher development, capital investment, transportation, and procurement costs due to stricter energy efficiency standards ~2050
(long-term)		 Large Small
Technology Existing products /
replacement by
low-carbon options		 Reduced revenue due to market share decline related to shifts in demand for products with higher environmental performance ~2030
(middle-term)		 Small -
Reputation Sector criticism and growing stakeholder concerns Reduced demand for our products due to delayed or inadequate response to regulatory changes ~2050
(long-term)		 Large Large
Physical
risks		 Acute Increasing severity and
frequency of extreme
weather events		 Higher response costs and potential profit loss due to damage to company or contractor facilities 1～3 years
(short term)		 Small※ Small※
Chronic Extreme shifts in
weather patterns		 Reduced labor productivity and increased response costs from inadequate handling of extreme weather changes ~2050
(long-term)		 Small Small
Changes in precipitation patterns and rising sea levels Higher transportation costs due to disruptions in logistics caused by altered precipitation patterns or sea-level rise ~2050
(long-term)		 Small Small

※We did not include logistics or supply chain disruptions caused by natural disasters in this evaluation, as they couldn’t be quantified. However, we recognize these risks and plan to quantify them in the future.

Category Driven
factors		 Specific content Time line Financial impact
FY2023
1.5℃ 4℃
Opportunity Energy
sources		 Utilization of low-carbon energy sources Reduced energy costs through facility updates ~2050
(long-term)		 Small Small
Products
and
Service		 Ability to diversify business activities Increase in demand for products that contribute to decarbonization through new technological developments such as power electronics innovation ~2050
(long-term)		 Large -
Increase in demand for products that alternative manufacturing technologies for major carbon-emitting industries (e.g., cement, steel) ~2050
(long-term)		 Small -
Expansion and development of low carbon service Increase in demand for our products through higher power efficiency and luminance ~2050
(long-term)		 Medium -
Market Access to new markets Increased revenue in new markets such as products, solutions, or countries of sale, by identifying megatrends through customer dialogue and collaboration with other companies. ~2050
(long-term)		 Large -
Reputation Changes in stakeholder evaluations Increased demand for our products driven by more proactive information disclosure compared to competitors, stock price improvement, talent acquisition, and reduced capital costs ~2050
(long-term)		 Large Large

Solutions

We identified 5 measures to maximize the financial impact from the opportunities and minimize the financial impact from the risks.

We will enact these measures in our business operations. This will enhance the resilience of business operations, and we will monitor the effectiveness as we proceed.

Measures Specific content
Contributing to the societal shift toward low carbon emissions through our products

Maintaining and strengthening a development and sales framework capable of responding to social environment changes toward low carbon emissions.

Contributing to energy efficiency for power semiconductors and AI data centers: high-efficiency power supplies with compound semiconductors such as SiC/SiN, three-dimensional integration of memory, logic, and packaging, R&D and in-line metrology contributing to high density and low power consumption, the realization of production by inspection device.

Understanding our contribution to the market and identifying new market needs by enhancing dialogue with stakeholders, including customers, shareholders, and employees.
Decarbonization of the company's business activities

Actively introducing solar power generation and electricity from renewable energy sources.

Conserving energy by renewing facilities, equipment, and vehicles.

Improving operational efficiency and reducing raw material usage through value analysis (VA).

Reviewing the Minimum Order Quantity (MOQ) based on the premise of delivery dispersion for cost reduction.
Decarbonization of supply chain

Collaborate with customers and suppliers to reduce GHG emissions and enhance engagement.

Thoroughly optimize delivery efficiency across the entire supply chain.
Communication with society toward decarbonization

Enhancing the efficiency and quality of regulatory compliance and information disclosure.

Engaging with society through platforms such as our website and advertising media.

Building stakeholder trust through proactive information disclosure.
Strengthening the supply chain

Enhancing business continuity management by establishing response standards for wind and flood damage, providing employee training, diversifying development and production sites, and increasing the number of bases and outsourcing companies.

Working with suppliers to understand their business continuity management status and requesting improvements as needed.

Reevaluating and upgrading facilities and equipment to prepare for extreme weather events.

Creating a sustainable work environment to ensure operational stability even under extreme weather conditions.

3.Risk Management

Our group primarily identifies climate-related risks and opportunities and prioritizes which risks and opportunities should be addressed through discussion at the ESG Promotion Committee.

This Committee monitors the status of our response to climate-related risks and opportunities, and the results are reported to and overseen by the Board of Directors.

We manage climate-related risks and opportunities by executing the following activities, which are reviewed annually:

  • ①Climate-related scenario analysis
  • ②Identification of short-, medium-, and long-term climate-related risks and opportunities
  • ③Determination of strategic approaches to address the identified key climate-related risks and opportunities
  • ④Consideration of concrete measures to address climate-related risks and opportunities
  • ⑤Execution and progress management of measures to address climate-related risks and opportunities

Regarding overall risk management within our company group, we have established a "Risk Management Committee" (minimum twice a year) to identify and monitor various operational risks within our company group. The Committee takes action to build a risk management system that enables prompt and optimal responses based on the level of impact on management. Significant climate-related risks are also reported to the Risk Management Committee to ensure alignment with the company-wide risk management process.

ESG Promotion Committee
（minimum once per quarter）

Coord
inate

Risk Management Committee
（minimum once per quarter）

4.Targets and Goals

Since FY2021, our group has been tracking CO2 emissions from business activities (from now on referred to as "Scope 1 and 2"). Starting in FY2023, we have also begun addressing CO2 emissions across our supply chain (from now on referred to as "Scope 3").

Additionally, we have set a target to reduce our scope 1 and 2 emissions by 50% by 2023 and support the aim of achieving carbon neutrality by 2050 and realizing a decarbonized society.
“50% reduction in Scope 1 and 2 by FY2030 (compared to FY2021)”

We will also disclose our calculated results for Scope 3 in the future, which includes materials purchased for production and the use of sold products. At the same time, we will contribute to reducing emissions through our products in response to the societal shift toward lower carbon emissions.

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