Free Word Search


Search by Topic

  • Keyword
    Industry
    Purpose
    Expert
    Area

HOME Sustainability Contribute to global environment Addressing Climate Change and Preservation/Restoration of Natural Resources (TCFD/TNFD)

Contribute to global environment

Addressing Climate Change and Preservation/Restoration of Natural Resources (TCFD/TNFD)

  • Facebook
  • Twitter
  • LinkedIn

Governance

The NRI Group positions sustainability, including responses to climate change and biodiversity, as a critical management issue. The Board of Directors considers sustainability in its composition and oversight, and in addition to appointing outside directors who have insight regarding sustainability, the Board makes decisions on basic sustainability policies (including materiality) and other important matters.
In addition, under the supervision of the Board of Directors, a Sustainability Committee, chaired by a director in charge of promoting sustainability management, has been established. There are subcommittees under this Committee, each chaired by a senior managing director. They are the Social Value Creation Promotion Committee and the Sustainability Promotion Committee, which promote group-wide sustainability and regularly report their progress to the Board of Directors. Climate-related matters are reported to the Board of Directors at least twice each year.

Sustainability governance structure

Promotion of Net-Zero Journey

The Sustainability Promotion Committee, chaired and vice-chaired by senior managing directors, and composed of employees with climate-related expertise, designates "Net-Zero Journey" as one of its key themes. The Committee advances the consideration and implementation of climate-related measures, such as decarbonizing data centers and offices, reducing Scope 3 emissions, and procuring renewable energy. It also considers issues related to the conservation and restoration of natural resources within this theme.
In addition, a system has been introduced that takes into account the NRI Group's efforts towards achieving sustainability indicators, including greenhouse gas emissions reductions, when determining stock-related compensation for directors (excluding outside directors), senior managing directors, and other employees with officer status.

Strategy

The NRI Group conducts scenario analyses to identify risks and opportunities related to climate change and natural resources, as well as their financial impact on the NRI Group (TCFD scenario analysis, TNFD scenario analysis).

Identification of Risks and Opportunities from Climate Change (TCFD Scenario Analysis)

Assumed scenarios

In the TCFD scenario analysis, two scenarios were assumed: the "1.5°C scenario" with strengthened regulations and measures, and the "4°C scenario" under the current scenario.

Reference Scenarios and Anticipated Contents

Scenario analyses conducted to date

From FY2019 to FY2021, scenario analyses were conducted for individual businesses.

• Scenario analysis for the data center business [FY 2019]

• Scenario analysis for the asset management solution business [FY 2020]

• Scenario analysis for the consulting business [FY 2020]

• Scenario analysis for the capital markets & wealth management solution business [FY 2021]

Scenario analysis for all NRI Group businesses

In FY2023, the risks, opportunities, and financial impact on the NRI Group's business overall were re-assessed, based on the results of these analyses. In the table's Category column, "transition" primarily refers to risks and opportunities under the "1.5°C scenario," while "physical" refers to those under the "4°C scenario."

Risks, opportunities, and financial impact of climate change on the NRI Group (223KB)

In addition, for some representative risks and opportunities, we have estimated the financial impact on the NRI Group's business overall as follows.

Estimated financial impact of individual risks and opportunities (assuming FY2030)

Classification Impact Estimated
value
Assumptions of estimate, possibility of risk mitigation, etc.
Transition Risks Increased cost burden from implementation of a carbon tax Approx. 1 billion yen to 2 billion yen The tax amount is calculated from the net greenhouse gas emissions assuming business expansion without changing the current renewable energy usage (carbon tax price is based on the IEA scenario).
However, if the renewable energy usage rate reaches 100% by FY2030 according to the low-carbon transition plan, the tax amount can be almost zero.
Transition Opportunities Increased revenue from consulting and IT solutions due to customers transitioning to decarbonization Approx. 6 billion yen to 7 billion yen Assumes expansion of consulting themed on decarbonization in line with the growth of consolidated sales from current orders, recording the entire increase.
Similarly, for the business platform business, it assumes expansion in line with the growth of consolidated sales, recording 10% of the increase as resulting from customer transition to decarbonization.
Physical Risks Interruption of business activities due to the company experiencing a disaster Approx. 1 billion yen to 2 billion yen The decrease in sales was calculated on the assumption that the business platform operation revenue of the NRI Group is not obtained for 2 days due to impact on the infrastructure (electricity, water, communication, etc.) around the Data Center from large-scale flooding, etc.
However, the possibility of this risk materializing is considered extremely low due to various measures and training to prevent system stoppage, such as using Osaka Data Center II as a DR site if the Tokyo Data Center is not operational.
Physical Risks Disruption of the supply chain disruptions due to a business partner experiencing a disaster Approx. 2 billion yen to 3 billion yen Assumes a decrease in sales due to project delays, on the assumption that 10% (based on procurement amount) of business partners commissioned for system development by the NRI Group cannot operate for one month due to large-scale flooding.

Identification of Risks and Opportunities from Natural Capitals (TNFD Scenario Analysis)

Recognition of points of contact with nature

Since July 2022, the NRI Group has participated in the TNFD Forum and advancing scenario analysis, with the Locate, Evaluate, Assess, Prepare (LEAP) approach outlined in the TNFD disclosure framework as a reference.
In conducting the analysis, the NRI Group first grasped the general points of interaction between its business and nature. Specifically, the NRI Group's value chain was laid out to provide an understanding of the relationship of dependency and impact each element has on nature, with tools such as ENCORE* as a reference. As a result, three main points of interaction were identified. These are (1) interaction related to Data Center and office use (including upstream in the value chain such as energy and equipment procurement), (2) interaction with recipients of services such as IT solutions and consulting (downstream in the value chain), and (3) indirect interaction through societal change initiatives like recommendations for society and consulting services.

  • * 

    ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure): A web-based tool provided by Natural Capital Finance, among others, which allows understanding of the potential dependencies and impact on nature of 157 industries based on GICS. It is also used by TNFD as a useful tool for referencing in Scoping and the Locate step of LEAP, etc.

Points of contact between the NRI Group’s business and nature

Identification of risks and opportunities for the NRI Group based on LEAP analysis

Based on these results, further examination was conducted in FY2023 to identify nature-related risks and opportunities.
During the Locate and Evaluate stages, the NRI Group's relationship of dependence and impact on nature, including geographical information, was investigated in more detail. Using tools such as ENCORE, it was found that the NRI Group primarily impacts nature through waste disposal, and greenhouse gas emissions in Data Centers and offices. In particular, it was confirmed that the Data Centers are highly dependent on water resources. The detailed impact of greenhouse gas emissions is as described in the previously mentioned TCFD scenario analysis. Regarding water usage and waste disposal, the amounts are minimal compared to overall regional usage and disposal, and it is currently believed that the NRI Group's operations alone do not significantly alter the state of nature. In addition, some of the NRI Group's sites are adjacent to wildlife conservation areas, but there has been no immediate impact on these areas due to the Group's operations. The impact on nature at these sites will continue to be monitored closely.
In the Assess stage, considering the interactions and dependencies/impact on nature mentioned above, a scenario analysis was conducted to understand the potential future risks and opportunities for the NRI Group. The following risks and opportunities were identified as a result of the analysis.
In the Prepare stage, based on the above analysis results, the goals outlined in the "Indicators and Targets" section were set. As TNFD recommends setting science-based targets for nature (SBTs for Nature), we will continue to monitor these trends and conduct further analysis, periodically revising the targets as needed.

Risks, opportunities, and financial impact related to natural resources for the NRI Group (251KB)

Risk Management

In managing the overall risks of the NRI Group, including climate-related and nature-related risks, an officer responsible for risk management is appointed, and the Integrated Risk Management Office is established as the risk management department. The Integrated Risk Management Office is responsible for building and maintaining the risk management framework, and for identifying, evaluating, and monitoring risks, and for organizing the overall risk management structure. The Integrated Risk Management Committee, chaired by the officer responsible for risk management, meets twice a year to evaluate the PDCA cycle of risk management and deliberate on risk response measures, reporting the results to the Board of Directors.
Specifically, the risks that may arise in the execution of the NRI Group's business are classified into 13 categories, and risk items are set for each risk classification. The risk items are periodically evaluated by the department in charge of risk management, and the risk items, importance, and impact are reviewed. Of the 13 risk classifications, those recognized as particularly important each fiscal year are selected as "key themes for risk management" by the Integrated Risk Management Committee. One of the 13 risk classifications is "management strategy risk," which includes "sustainability management risks (including responses to climate change)."
In addition, particularly regarding the identification, evaluation, and response to climate-related risks and opportunities, since FY2018, the Sustainability Promotion Committee has considered and decided on measures for each climate-related risk, including business continuity risks due to the intensification of natural disasters, by taking into account the external environment, initiative status, and information from service provision departments.

Indicators and Targets

The NRI Group has established the following environmental goals. For climate-related goals, the Group has publicly committed to achieving net-zero greenhouse gas emissions for Scopes 1, 2, and 3 by FY2050, which aligns with the "Net-Zero Standard" of the Science Based Targets initiative (SBTi). This net-zero target received SBTi certification in February 2024. In addition, the Group raised its existing greenhouse gas emission reduction targets (Scope1+2) for FY2030 to meet the latest SBTi standards and received updated certification.

Environmental Targets of the NRI Group


Indicators Targets (Reference) FY2023 results
Rate of reduction Results
Greenhouse gases Rate of reduction of greenhouse gas emissions
(Base year: FY2019)
[FY2030]
Scope 1 + 2: 97% reduction, remaining emissions neutralized*1
86% reduction 8,000 tons*2
[FY2030]
Scope 3: 30% reduction
21% increase*3 218,000 tons*3*4
[FY2050]
Scope 1 + 2 + 3: Net Zero
(92% reduction, remaining emissions neutralized*1)
6% reduction*3 226,000 tons*3
Rate of use of renewable energy [FY2030]
100%
-- 95%*2
Water resources Clean water usage
(Base year: FY2013, target: Data Center)
[FY2030]
10% reduction
26% reduction 174,000 m3*2
Waste Final waste disposal volume
(Base year: FY2020, target: domestic)
[FY2027]
10% reduction
71% reduction 23 tons
Energy conservation Reduction of Electricity Usage through Energy Conservation Measures*5
(Base year: FY2023, target: Data Center)
[FY2030]
+ 1,000,000 kWh
-- + 0,000 kWh
(For the base year)
  • *1  

    “Remaining emissions” refers to emissions that cannot be reduced within the value chain by the target fiscal year. “Neutralization” refers to offsetting these remaining emissions using carbon removal technologies outside the value chain.

  • *2  

    Results values have been verified by a third party.

  • *3  

    Scope 3 calculations are based on simplified methods outlined in the Ministry of the Environment's guidelines, and actual reductions are not reflected in the numbers. The calculation method is currently under review.

  • *4  

    The values listed have been verified by a third party, based on the assumption that the simplified calculation method indicated in *3 was used.

  • *5  

    Energy conservation measures include free cooling, and machine learning optimization of air conditioning.

For more details about the NRI Group's environmental goals, please see here.

  • Facebook
  • Twitter
  • LinkedIn