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The progress of IIJ Group's initiatives for the TCFD(*1)'s disclosure recommendations of "Governance," "Strategy," "Risk Management" and "Metrics and Targets" is as follows.
IIJ believes that issues concerning climate change are highly relevant to its future business from a long-term perspective, and that addressing these issues sincerely shall lead to IIJ Group's sustainable growth and enhancement of its corporate value over the long term. IIJ has established the Sustainability Committee chaired by the president under the direct control of management to promote these initiatives as company-wide efforts, and has been continuing related activities based on the "Policy for Environmental Initiatives". This committee consists of cross-functional members from corporate planning, technology, finance, public relations, and other divisions to identify, assess, and control climate change related risks and opportunities from a variety of perspectives. In addition, important policies, measures to be implemented, and their progress are submitted to and reported to the Board of Directors.
(As of the end of June 2022)
Committee meetings | Ten times(2021.08-2022.06)
Main topicsPolicy for environmental initiatives, climate related risks and opportunities, TCFD disclosure (scenario analysis, greenhouse gas emissions, environmental targets etc.), policy for data center initiatives etc. |
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Report to the Board of Directors | Three times
Subjects
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The TCFD recommends that analyses include the 2℃ or lower scenario, which is based on the Paris Agreement's targets. IIJ selected the 2℃ or lower scenario for the initial "Scenario Analysis" this year in line with this recommendation. The "Scenario Analysis" was conducted by setting the year 2030 as a point in time in consideration of the rapid progress of information technology and others. The table below shows the risks and opportunities related to climate change identified by IIJ that could have a significant impact on its business, measures to address them, and impacts on its business, strategy and others. As for physical risks such as increased occurrence of typhoons and floods, prolonged high temperatures, and sea level rise, IIJ recognizes that the impact on its business and strategies is low due to the selection of data center sites in consideration of hazard maps, and redundant designs of network circuits and equipment. Meanwhile, the use of electricity is essential for the provision of network related services, and IIJ believes that implementing measures such as the use of renewable energy and improvement of energy efficiency at data centers, which consume a large amount of electricity, is an important initiative to address transition risks and opportunities, including stricter laws and regulations toward a decarbonized society, increasing demand for low-carbon emission services, and increasing social demand for environmental responsibility.
Events | Risks and Opportunities | Measures | Time Horizon(*) | Business Impacts of the 2℃ or Lower Scenarios | |
---|---|---|---|---|---|
P h y s i c a l r i s k s / o p p o r t u n i t i e s |
Increase in extreme weather events such as typhoons and floods, and climate changes such as prolonged high temperatures |
Risk
OpportunityIncreasing demand for services that are highly resilient to natural disasters and climate changes |
|
Long-term | Low |
T r a n s i t i o n r i s k s / o p p o r t u n i t i e s |
Stricter laws and regulations on decarbonization and energy conservation |
Risk
|
|
Mid- to Long- term | High |
Increasing demand for low-carbon emission services |
RiskRisk of inability to provide services to meet the demand due to unavailability of renewable energy procurement or failure to achieve energy conservation OpportunityIncreasing demand for data center services that use renewable energy and energy-saving technologies, as well as low-carbon emission services that use them |
Mid- to Long- term | Medium | ||
Opportunity
|
Continued execution of current strategy | Short- to Long- term | Medium | ||
Increasing social demand for environmental responsibility |
Risk
|
Continuous execution of environment related initiatives, enhancement of information disclosure, and communication with shareholders, investors, ESG rating agencies, customers, and students etc. | Short- term | Low |
Information on climate change related risks is constantly collected at each division and business unit, and these risks are continuously recognized, assessed, and controlled by the Sustainability Committee held once a month in principle. Risks that could have a significant impact on businesses are integrated into company-wide risks, and the Sustainability Committee and front-line divisions work together to formulate corresponding policies, which are then reviewed and approved by the management meeting and submitted to and reported to the Board of Directors.
As of the end of June 2022, IIJ calculated greenhouse gas emissions and the scope of data collection is IIJ (non-consolidated base). In Scope 1 and 2, which calculate IIJ's own emissions, the Scope 2 emissions, which recognize the electricity consumption of its own data centers, account for 98% of the total emissions. In Scope 3, which calculates indirect emissions within the upstream and downstream of supply chain, a large proportion of indirect emissions are accounted for by Category 1 "Purchased goods and services" and Category 11 "Use of sold products," which are recognized through the purchase and sale of equipment and others when providing system integration, and Category 2 "Capital goods", which is recognized through the purchase of equipment and others used in service facilities. These account for 98% of indirect emissions. In comparison with the emissions of other companies in the same industry, the emissions are generally correlated with the size of the business, and the composition of the emissions is similar for each company.
IIJ (Non-consolidated basis) FY2020 Results (Unit: t-CO2)
Scope1+2
Scope3
IIJ Group contributes to the reduction of greenhouse gas emissions in society as a whole by improving the efficiency of social activities through the provision of network related services and by sharing computer resources through the provision of cloud services. However, the use of electricity is essential for delivering these services.
IIJ recognizes the importance of reducing greenhouse gas emissions at its own data centers, which account for more than 70% of greenhouse gas emissions (Scope 1 and 2 (*2)), by "usage of renewable energy (*3)" and "improvement of energy conservation". IIJ has set targets for each of these initiatives.
Measures | Targets |
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Usage of renewable energy | The target is to increase the renewable energy usage rate of data centers (Scope 1 and 2) to 85% in FY2030. |
Improvement of energy conservation | The target is to keep the PUE(*4) of the data center at or below the industry's highest level(*5) until FY2030 through continuous technological innovation. |
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