Response to Environmental Risks

Environmental Risk Management Structure

The Fujitsu Group built and operates a group-wide risk management system to identify, prevent, and mitigate a variety of potential risks, or prevent their recurrence, including issues related to climate change and environmental pollution. The Risk Management & Compliance Committee, which reports directly to the Board of Directors, has set up regional Risk Management & Compliance Committees, in addition to deploying Risk Management & Compliance Officers to each Fujitsu division and Group company in Japan and overseas, to build a structure where these organizations cooperate with each other to promote risk management and compliance throughout the Fujitsu Group, both in terms of preventing potential risks and responding to risks that have emerged. The Committee identifies, analyzes, and assesses key risks associated with the business activities of each Fujitsu division and Group company in Japan and overseas (focusing on 33 risks considered to be important to the Group), and formulates and reviews the countermeasures for these risks after confirming the status of countermeasures for avoiding, mitigating, transferring, or retaining them. The Committee makes regular reports to the Board of Directors about key risks that have been identified, analyzed and assessed, using methods such as the creation of visualized rankings and maps which take the degree of impact and likelihood of occurrence into account. In addition, we have put response processes into place in the event that risks become tangible, despite the implementation of various measures. Each division and Group company will immediately report to the Risk Management & Compliance Committee about any key risks that become tangible, such as natural disasters, accidents, product accidents or failures, system or service problems, compliance violations such as fraud, information security incidents, or environmental problems.

We also leverage the group’s Environmental Management System (EMS), which is based on ISO14001, for minimizing risks to the environment through continuous improvements.

Efforts to Minimize Risks to the Environment

Dealing with Risks Related to Climate Change

There is a possibility of significant impacts on our business continuity from increases in the frequency and effects of natural disasters as a result of recent climate changes. For that reason, we have formulated a business continuity plan and are devoting effort to continually revising and improving the plan.

Furthermore, the implementation of stricter regulations for greenhouse gas emissions and a carbon tax creates a risk of increasing the energy cost incurred by the Fujitsu Group, as well as the cost required for measures aimed at reducing greenhouse gases. Additionally, if climate change countermeasures are insufficient, there is a risk of harm to our corporate reputation or a disadvantage at bidding. In order to minimize these risks, we are conducting short-term, medium-term and long-term risk analysis/response within our company-wide risk management structure. Moreover, based on the FUJITSU Climate and Energy Vision, we are working to achieve net zero CO2 emissions by 2050 and to contribute to mitigation/adaptation for climate change through business.

In accordance with the recommendations issued in 2017 by the Task Force on Climate-Related Financial Disclosures (TCFD), the Fujitsu Group analyzes and discloses information related to risks accompanying climate change that may have an impact on business and financial strategies. Refer to the table below for the currently recognized potential major risks and responses.

Risks Associated with the Transition to a Low Carbon Economy, and Our Response to Them

Policy/Legal Risks● Risks: Increase in cost in order to respond to the strengthened laws and regulations on greenhouse gas emissions and energy use (such as a carbon tax), and diminished corporate value in the event of a violation.
○ Response: Complete compliance with laws and regulations through EMS. Continual reduction of the amount of GHG emissions through steady implementation of Science Based Targets and the Environmental Action Plan.
Technology Risks● Risk: Unrecovered investments and market share decline in the event that the company lags behind in a fierce competition in technological developments toward a carbon-free society (such as energy-saving performance and low-carbon services).
○ Response: Enhance development of energy-efficient products and energy-efficient enabling technologies, solutions, and services through steady implementation of Science Based Targets and our Environmental Action Plan.
Market Risks● Risk: Losing business opportunities if products, solutions, and services do not meet energy-saving performance needs.
○ Response: Enhance development of energy-efficient products and energy-efficient enabling technologies, solutions, and services through steady implementation of Science Based Targets and our Environmental Action Plans.
Risks to Reputation● Risk: Decline in corporate value and an increase in response costs associated with a negative assessment from stakeholders with regard to the response status of measures to counteract climate change (such as the percentage of renewable energy adoption).
○ Response: Enhance measures to counteract climate change and promote reduction of environmental footprint through steady achievement of the group's Science Based Targets and Environmental Action Plan.

Climate Change Related Risks in the Supply Chain, and Our Response to Them

Upstream Supply Chain● Risk: A temporary suspension of the suppliers' business activities due to the occurrence of severe natural disasters such as large-scale floods, sudden heavy downpours, and lightning strikes, which affects the procurement of materials.
○ Response: Conduct surveys of the business continuity capabilities of suppliers and implement measures to procure materials from multiple sources.
Downstream Supply Chain● Risk: Losing business opportunities due to the inability to obtain environmental labelling, which is a green procurement requirement of customers.
○ Response: Conduct trend surveys and risk assessments of the environmental labelling scheme. Develop and provide top-level energy-efficient products through steady implementation of Science Based Targets and our Environmental Action Plan.

RELATED INFORMATION

Assessing and Monitoring of Potential Water Risks

In recent years, due to a tight demand-supply situation in many areas around the world because of water damage⁠—such as flooding⁠—and droughts that are caused by a variety of factors, including population growth and climate change, there is a growing concern that this issue may become a business risk. The Fujitsu Group conducts assessments of and monitors potential water risks for direct operations sites and supply chains.

In particular, the Group uses tools and databases provided by NGOs and governments at both country and municipal levels to check the status of water stress and the risk of natural disasters in the areas where businesses are located. We then comprehensively assess the water risk at each site by analyzing how important water use is in the business activities of each operations base, and we confirm the level of compliance in a variety of activities such as the reduction of water intake, measures to reduce pollution in wastewater, business continuity management (BCM) systems, and others. For the supply chain, we also assess our suppliers' flood preparedness and other water risks based on the supply chain BCM surveys, field surveys conducted according to the Responsible Business Alliance's (RBA) code of conduct and the CDP Supply Chain Program. As a result, we have confirmed that there are no significant risks that could substantially affect our business activities.

RELATED INFORMATION

Flooding Damage Impact Assessments Through Hazard Maps and Measures Against Flooding

Fujitsu and its domestic Group companies conduct impact assessments of flooding damage according to a rainfall scale with two types, depending on the magnitude of the impact on our business, as follows. We identify and assign rankings to business sites which will be highly impacted. If a business site falls under a level 4 impact ranking, we implement various measures.

[Assessment 1 Planned scale (Rainfall on a scale that occurs about once every 10-100 years)]

  • Assessment subjects: 169 sites for Fujitsu, 280 sites for Group companies All owned properties and major leased properties (such as sales offices and data centers) in the Fujitsu Group
  • Assessment method: We assess whether or not the site falls within the "estimated flood inundation area (planned scale)" for nearby rivers as established by the Ministry of Land, Infrastructure, Transport and Tourism or the prefectural government, as well as the extent of the impact within and outside the site and the impact of flooding on buildings.
    We rank sites that were assessed as being impacted by flooding on a scale of 1 (minor impact) to 4 (major impact).

[Assessment 2 Assumed maximum scale (Rainfall on a scale that occurs about once every 1000 years)]

  • Assessment subjects: Domestic data centers and business sites that will be heavily impacted by flooding (such as Fujitsu Solution Square (SS) and the Kawasaki factory)
  • Assessment method: We conduct reassessments by upgrading the criteria to "estimated flood inundation area (assumed maximum scale)," and rank the sites on a four-point scale.

[Results for Assessment 1 and Assessment 2 *Only sites with an impact rank of 4 are shown below.]

 SitesAssessment 1
(Assessment on a planned scale)
Assessment 2
(Assessment on an assumed maximum scale)
Final impact
FujitsuFujitsu SSImpact rank 4Impact rank 4Impact rank 4
FujitsuKawasaki factoryNo impactImpact rank 4Impact rank 4
Group companiesNo sites which fall under impact rank 4

[Major Measures]

(a) Retaining walls and embankments
(a) Retaining walls and embankments
(b) Sliding gates
(b) Sliding gates
Fujitsu SS: The site perimeter is protected by retaining walls and watertight panels
(a) Removable watertight panels
(a) Removable watertight panels
(b) Gates that can be raised and lowered
(b) Gates that can be raised and lowered
Kawasaki factory: Perimeter entrances and exits are protected by watertight panels

Preventing Water Pollution

In order to preserve the water quality of surrounding waterways, including rivers, groundwater and sewers, we have set voluntary controls that are even tougher than legal mandates, and conduct measurement and monitoring on a regular basis. We recover and recycle chemicals used in production processes, instead of discharging them into wastewater. We are also working to properly manage and reduce discharge of harmful substances and other regulated substances (COD, BOD, etc.) by ensuring appropriate chemical use, preventing chemical leaks and penetration, and properly managing the operations of water treatment and purification facilities, among other measures.

Preventing Air Pollution

We have set voluntary control values that are more stringent than legally mandated emissions standards in order to prevent air pollution and limit acid rain. Regular measurement and monitoring are conducted based on these controls. Efforts are also made to appropriately process dust and soot, sulfur oxide, nitrogen oxide, and other harmful substances, and reduce emissions through measures including combustion management at facilities that produce soot and smoke, use of fuels with low sulfur content, and managing the operations of exhaust gas processing equipment. Furthermore, we have installed activated carbon adsorption treatment equipment and are reducing our atmospheric emissions of organic solvent vapors containing substances like VOCs. Moreover, with the enactment in April 2015 of the Act on Rational Use and Proper Management of Fluorocarbons, we have set in-house stipulations and striven for proper management of specified products (commercial refrigerators and air conditioners containing fluorocarbon refrigerants) while working to identify the volume of our fluorocarbon leakage.

In addition, emission of dioxins has been prevented by suspending use of all in-house incineration facilities as of January 2000.

Preventing Destruction of the Ozone Layer

By implementing a precision water-wash system and non-wash soldering technology, we have completely eliminated the use of ozone-depleting substances in manufacturing processes (parts washing and solvents). We have also implemented leakage countermeasures for refrigerant chlorofluorocarbons used in air conditioning facilities (freezers, etc.), and are switching to non-chlorofluorocarbon gas when updating facilities.

Results for complete elimination of ozone-depleting substances
Ozone-depleting substancesTime of complete elimination
Washing chlorofluorocarbons (CFC-113, CFC-115)End of 1992
Carbon tetrachlorideEnd of 1992
1,1,1-trichloroethaneEnd of October 1994
Alternative chlorofluorocarbons (HCFCs)End of March 1999

Preventing Pollution of Soil and Groundwater

We have established rules for soil and groundwater surveys, measures and disclosures. We review these in accordance with changes in the law and social circumstances and respond based on these rules. We systematically examine soil and groundwater, based on the rules, and if pollution is confirmed, we carry out cleanup and countermeasures at each plant according to the situation, while working together with government authorities to disclose information.

As of FY 2020, there are three business sites where soil and groundwater pollution from prior business activities have been confirmed. At those business sites, we have installed observation wells to observe effects outside the site due to groundwater pollution, while also working on purification measures through water-pumping aeration, etc.

Monitoring the Imoact of Groundwater Cintamination Outside of Fujitsu Sites

Business Sites Where Soil or Groundwater Contamination Has Been Found

Site NameLocationCleanup and Measure Execution StatusMaximum Value Found at Observation Well (mg/L)Regulated Level
(mg/L)
SubstanceMeasured Value
Kawasaki PlantKawasaki City, Kanagawa PrefectureWe are continuing to clean up VOCs by pumping and aeration1, 2-dichloroethylene2.40.04
Chloroethylene110.002
Oyama PlantOyama City, Tochigi PrefectureWe are continuing to clean up VOCs by pumping and aeration.Trichloroethylene0.1750.03
1, 2-dichloroethylene1.9420.04
Chloroethylene4.2890.002
FDK Washizu PlantKosai City, Shizuoka PrefectureWe are continuing to clean up VOCs by pumping and aeration.Cis-1, 2-dichloroethylene0.60.04
Trichloroethylene0.110.03
Tetrachloroethylene0.0370.01
Chloroethylene0.00720.002

Chemical Substance Control

To prevent pollution of the natural environment or damage to health due to the use of harmful chemical substances, we are controlling the use of some 1,300 substances using our original Chemical Information System called "FACE" and working to appropriately control and reduce emissions at our business sites.

With regard to chemical substances included in products, we have determined banned substances according to regulations in Japan and worldwide and are working to thoroughly control them, not only inside the Group but also with business partners who deliver materials and products to us.

Appropriately Processing Waste

We regularly carry out on-site audits in order to confirm that subcontractors are appropriately handling the waste processing tasks we entrust to them.

In addition, with regard to high concentration polychlorinated biphenyl (PCB) waste (transformers and condensers) processing, we have registered with the Japan Environmental Storage & Safety Corporation (JESCO), which handles temporary storage and disposal of PCB waste under government supervision, and are carefully carrying out processing based on JESCO plans.

Environmental Liabilities

In properly assessing the Fujitsu Group’s expected future environmental liabilities, and communicating our integrity and corporate stance of not deferring our liabilities, we have recorded liabilities of 2.72 billion yen in soil pollution cleanup costs, high-level polychlorinated biphenyl (PCB) waste disposal costs, and asbestos processing costs during facilities demolition, which is the amount we calculate, as of the end of FY 2020, to be necessary for the Fujitsu Group to conduct these tasks domestically in the next fiscal year and beyond.

Conserving Biodiversity

Recognizing that our business activities benefit from the riches of the Earth’s biodiversity, while at the same time impacting it, the Fujitsu Group considers the conservation of biodiversity to be an important issue, and formulated the Fujitsu Group Biodiversity Action Principles in October 2009. We promote them based on the two pillars of reducing the impact of our business activities on biodiversity and contributing to the creation of a society that conserves biodiversity, and implement various policies to conserve biodiversity through leveraging ICT and other means. In addition, we established “visualizing and reducing the impact of corporate activities on ecosystems and on biodiversity” as a target in our Environmental Action Plan (Stage X).

  • Policy Example 1: Project for Recognizing Blakiston’s Fish Owl Vocalizations
    We offer vocal recognition software used for habitat surveys of Blakiston’s fish owls, which are an endangered species. The software helps the surveys to be more efficient by automatically extracting their cries, greatly reducing the time for analysis.
  • Policy Example 2: Support for the Harapan Rainforest (Forest of Hope)
    We provided support for reforestation activities in the Harapan Rainforest (Forest of Hope) on the Indonesian island of Sumatra. Through the introduction of ICT, we greatly improved the efficiency of patrols in the forest, contributing to forest conservation.
  • Policy Example 3: Activities to Make Tsushima, An Island Facing a Severe Plastic Waste Pollution Problem, Greener
    We conducted eco-tours sponsored by Fujitsu Limited and conducted by Fujitsu Group employees. We also held a coastal cleanup and an ideathon to come up with solutions to local issues.
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