TCFD-Based Information Disclosure

TCFD-Based Information Disclosure
Governance
Strategy
Risk Management
Metrics and Targets

The Task Force on Climate-Related Financial Disclosures (TCFD) was established by the Financial Stability Board at the request of the G20 with the objective of reducing the risk of instability in financial markets due to climate change. The task force announced its recommendations in June 2017, asking companies and organizations to identify and disclose the risks and opportunities arising from climate change. The Fujitsu Group announced its support for the TCFD recommendations in April 2019 and is making every effort to disclose information in line with those recommendations to investors and other stakeholders. Disclosures are provided via media such as financial statements, CDP (*1) questionnaires, the Integrated Report, and websites.

(*1)
CDP: An international nonprofit organization that conducts environmental surveys of more than 24,800 companies worldwide and acts on behalf of institutional investors with a combined US$140 trillion in assets. (As of January 2025)

Item

Response status

Reference

Governance

Oversight structure under the Board of Directors for climate-related risks and opportunities

In the Fujitsu Group, the Sustainability Management Committee shares the risks and opportunities arising from climate change, deliberates on medium- to long-term issues, and formulates policy. To date, matters such as the results of analyses using multiple climate change scenarios (including 1.5 °C), policies to achieve net-zero GHG emissions targets and increase the use of renewables, and materiality (including climate change and other environmental challenges) have been reported to the Board of Directors at meetings of the Executive Management Council.
The Risk Management & Compliance Committee regularly reports to the Board of Directors on the most serious risks identified for the group as a whole, including climate risks. The Fujitsu Group has also developed an environmental management system (EMS) based on the ISO 14001 standard. The results of EMS activities are reported to the Board of Directors at meetings of the Executive Management Council.

Role of management in assessing and managing climate-related risks and opportunities

Fujitsu’s CEO, in the role of Chair of the Sustainability Management Committee and the Risk Management & Compliance Committee, bears ultimate responsibility for all decisions made and all business conducted. The Board of Directors are responsible for oversight based on reports received from the Executive Management Council. The Chief Sustainability & Supply Chain Officer (CSSO) bears the highest level of responsibility for sustainability, and in that role proposes reforms to the Board of Directors and to senior management and conducts business that relates to sustainability.
As of FY2022, ESG indicators that include consideration of climate change issues were added to the evaluation indicators for bonuses paid to Executive Directors.

Strategy

Short-, medium- to long-term climate-related risks and opportunities

Based on analyses of climate change scenarios, the Fujitsu Group identifies the risks and opportunities relating to climate change and considers and promotes appropriate responses. Developing services and IT products that contribute to climate change mitigation and adaptation offers opportunities for increased sales, while factors such as physical and regulatory risks have an impact on the operating costs of Fujitsu's operations and supply chain.

Major risks: Stronger regulation (carbon tax, etc.), Stronger competition in low-carbon technologies, Insufficient responses to customer needs

Risk responses: Ongoing reductions in greenhouse gas emissions, Increased use of renewable energy, Information disclosure aimed at ensuring transparency in climate change strategy, etc.

Major opportunities: Supplying products/services to tackle climate change, Proposing new uses of digital technology, etc.

Opportunity responses: Services for climate change mitigation/adaptation(CO₂ emissions calculation, visualization, etc.), Energy-efficient products (HPC, 5G virtualization base stations, etc.)

Note: See the CDP responses (C 2.3, 2.4) for details.

Impacts on business, strategy, and financial planning

Resilience of the organization's strategy, taking into consideration different climate-related scenarios, including a 2℃ or lower scenario

In 2021, the Fujitsu Group conducted scenario analyses out to 2050 using 1.5℃ and 4℃ scenarios, focusing on businesses likely to be impacted by climate change.
As a result of our analysis with respect to Fujitsu’s risk responses and its ability to seize opportunities by helping customers to resolve issues, our assessment showed that Fujitsu’s business strategy was resilient in the medium- to long-term.

Risk Management

Climate-related risk identification and assessment process

Group-wide risk management is conducted by the Risk Management & Compliance Committee. This committee conducts matrix analysis of the results of the risk assessments by each department in terms of impact and likelihood of occurrence. It then identifies and assesses those risks and reports its findings to the Board of Directors.

Climate-related risk management process

Fujitsu monitors risks using environmental management systems that are based on the ISO14001 standard. The Sustainability Management Committee is responsible for managing the progress of climate change measures.

Status of integration with organization-wide risk management

The Risk Management & Compliance Committee identifies and assesses risk for the entire company, including climate change risk. It collaborates with the Sustainability Management Committee to identify, analyze, and assess risks, and then formulates and implements recurrence prevention measures.

Metrics and Targets

Metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process

The Fujitsu Group recognizes the importance of reducing greenhouse gas (GHG) emissions and adopting renewable energy sources in addressing climate-related risks. We also believe that the deployment of innovative energy-saving technologies implemented by our company will lead to the acquisition of climate-related opportunities. We therefore use our GHG emissions and our rate of renewable energy adoption as indicators. We have set SBTi certification and RE100 targets as medium- to long-term goals and established the "Environmental Action Plan" for short-term goals. We are monitoring those indicators, managing the progress of our strategies, and conducting risk management.

GHG emissions for Scope 1, 2, and 3

GHG emissions

Scope		Baseline year (FY2020)	Result (FY2023)
Scope 1		66 kT-CO₂	64 kT-CO₂
Scope 2 (Market-based)		499 kT-CO₂	266 kT-CO₂
Scope 3 (Across all categories)		4,966 kT-CO₂	3,646 kT-CO₂
Key categories	Category 1 (Purchased goods and services)	1,192 kT-CO₂	1,086 kT-CO₂
Key categories	Category 11 (Use of sold products)	3,470 kT-CO₂	2,283 kT-CO₂

Targets used by the organization to manage climate-related risks and opportunities and performance against targets

Climate-related targets and performance

Item		Targets		Performance (FY2023)
Reduction in own GHG emissions^*1	Medium term	100% reduction by 2030^*2	SBT Net Zero certification	41.6% reduction
Reduction in GHG emissions in the value chain^*3	Long term	90% reduction by FY2040	SBT Net Zero certification	28.1% reduction
Renewable energy usage rate	Medium term	100% renewable energy by FY2030	RE100 membership	42.7% deployment

*1: vs. 2020, *2: Scope 1 + Scope 2, *3: Scope 1, 2 and 3

Governance

The Fujitsu Group has established a Sustainability Management Committee, chaired by the CEO. This committee examines medium- to long-term issues, formulates policy, shares the business risks and opportunities of climate change and decides how to address those risks and opportunities, and manages the company’s progress. It also reports on the results of its activities to the Board of Directors at meetings of the Executive Management Council. In October 2020, the committee made a key decision by revising the Fujitsu Group GHG reduction target (SBT) from 2.0°C to 1.5°C. In April 2021, the new target was validated as 1.5°C-aligned to the SBTi. In October 2021, the results of scenario analyses using two external scenarios, one for 1.5°C and the other for 4°C, were reported to the Sustainability Management Committee. The findings prompted lively discussion among the committee members on topics such as the need to discuss management strategies, the selection of key solutions, and the measurement of impacts once solutions are provided.

Within the company-wide risk management regime and with oversight by the Board of Directors, the Risk Management & Compliance Committee, chaired by the CEO, conducts risk analysis and implements responses for the entire Group, including on issues relating to climate change. This committee is also the ultimate decision-making body for risk management and reports regularly to the Board of Directors regarding major risks that have been identified, analyzed, and assessed. The Fujitsu Group has also developed environmental management systems (EMS) based on the ISO 14001 standard, and the results of EMS activities are reported to the Board of Directors at meetings of the Executive Management Council.

To further strengthen governance relating to climate change, in April 2022 we added ESG-related third-party evaluations (DJSI(*2)) and CDP climate change program(*3) as assessment indices for the bonuses paid to Executive Directors. As of FY2022, these indices will apply to their bonuses. (Executive compensation consists of base compensation, bonuses, and performance-linked stock compensation.).

(*2)
Dow Jones Sustainability Index (DJSI): This is a share index published by S&P Dow Jones of the United States that analyzes companies with respect to their corporate economic, environmental, and social performance, and selects companies with superior corporate sustainability.
(*3)
CDP climate change program: A program run by CDP to survey and assess corporate climate change initiatives and publish the results of those surveys.

Strategy

Climate Change Risks and Opportunities

We have identified the risks and opportunities of climate change for the Fujitsu Group, and considered our responses, by analyzing the business impacts of climate change using external scenarios for 2℃ of global warming in FY2018, and for warming of 1.5℃ and 4℃ in FY2021.Our aim is to address the transitional and physical risks that negatively impact Fujitsu operations and supply chains, and to identify the climate-related risks faced by customers so that we can better make proposals that create value and grasp the business opportunities on offer.

Risks

Risk type		Term	Details	Key responses
Transition	Policy/Regulation	Short- to long-term	Increased costs due to stronger laws and regulations relating to greenhouse gas emissions and energy use (carbon taxes, energy-saving policies, etc.) Risk of lost corporate value if such laws or regulations are violated	Ongoing reductions in greenhouse gas emissions (increased use of renewable energy, comprehensive energy savings) Strict compliance with laws and regulations through EMS
	Market	Medium- to long-term	Surging electricity prices with the shift to a carbon-neutral world (widespread electrification, etc.)	Reduced electricity consumption by formulating internal company standards and developing innovative technology, etc.
	Technology	Medium- to long-term	Risk of missing out on business opportunities if we fall behind in fiercely competitive technology development (energy savings, low-carbon services, etc.) and cannot meet market needs	Promote innovation and develop products/services that address customers' climate change issues
	Reputation	Short- to long-term	Increased cost of responding to demands from stakeholders (investors, customers, etc.) Negative impacts on ratings and sales due to delays in responding to external demands	Formulation and promotion of our Medium/Long-term Environmental Vision and Environmental Action Plan Proactive information disclosure to ensure transparency in our climate change strategy
Physical (Natural disasters etc.)	Chronic/Acute	Short- to long-term	Increased cost of responding to changing rainfall/weather patterns, higher average temperatures, higher sea levels, droughts, etc. Increased recovery costs when operations, including supply chains, stop due to increasingly severe abnormal weather events	Implement measures such as greater multi-sourcing, stronger BCP measures, and conducting surveys of suppliers' business continuity systems Assess potential water risks and undertake monitoring

Financial impact of various risks * Estimates as at FY2024

Risk type	Example of risk	Details	Term	Financial impact (JPY)	Details of financial impact
Transition	Policy carbon pricing mechanism	Carbon taxes are progressively being introduced in the countries in which Fujitsu operates, such as Europe and the US. There is a risk of cost increases due to spending on renewable energy-related plant and equipment investment (2.1 billion yen in FY2023). According to the IEA (*4), in 2020 the US introduced a carbon tax; it is expected to continue increasing until 2050. If Fujitsu did not continue its use of renewable energy at its US facilities, comprising around 4.0% of the total power consumption across all our overseas offices, the financial impact of carbon tax costs could rise from 20 million yen to a maximum of 140 million yen.	Medium- term	Min.: 1,454,175,300 ～ Max.: 15,268,840,650	According to the IEA, the US carbon tax that was $20/t-CO₂ when it was introduced, is expected to rise to $140/ t-CO₂ in FY2040. If this rate is used in a simulation of the entire Fujitsu Group’s Scope 1&2 emissions, the financial impact increases from 1.5 billion yen to 15.3 billion yen (calculated at an exchange rate of 141 yen to 1 USD). In a worst case scenario, reports indicate a rise in the US carbon tax to $210/t-CO₂ by 2050, equivalent to a financial impact of 15.3 billion yen.
Transition	Policy increased expenditure related to fluctuations in electricity rates and decarbonization levies	In the Fujitsu Group, 80-90% of the Group’s entire energy usage is consumed in datacenter operations and plant manufacturing activities. Energy use is indispensable to business activity, so any increase in business spending associated with power price fluctuations is viewed as a major risk. Of particular concern is the transition risk of additional costs related to decarbonization. The unit cost of the FIT surcharge (*5) that was 1.40JPY/kWh in FY2023 rose to 3.49JPY/kWh in FY2024, and by FY2030 this is expected to increase 10%. If the FIT surcharge increases further in future, business spending will further increase, reducing the cost competitiveness of datacenter-related services.	Medium-term	3,900,000,000	The FIT surcharge is having financial impact on Fujitsu sites in Japan. Considering that, in future, similar schemes will also have financial impact on our overseas offices, with the FIT surcharge for 2030 estimated to be 1.1 times the FY2024 unit surcharge price of 3.49 yen/kWh, the financial cost is anticipated to be around 3.9 billion yen, based on the amount of power purchased by the Fujitsu group globally (1,005,232 MWh in FY2023).
Transition	Reputation increased concern among partners and stakeholders, and negative feedback	If Fujitsu becomes the target of negative campaigns or boycotts by NGOs due to its low ranking on climate change measures, our brand value will decline, with risks to the business such as loss of social trust and increase in cost of countermeasures. In recent years, investors and suppliers are demanding the disclosure of climate change measures and contract conditions, so effort is essential. According to RE100, in 2022, the rate of renewable energy usage in the Services sector, to which Fujitsu belongs, was 47%. With an average RE100 achievement target of year 2026, our sector is leading other industries, and industry-specific risks are higher.	Short-term	Min.: 14,200,000,000 ～ Max.: 28,500,000,000	With revenues of 1423.5 billion yen in our companies based outside Japan, where the influence of NGOs is greater, even an annual impact of 1% would result in a financial impact of 14.2 billion yen, and an estimated impact of 28.5 billion yen if that 1% was maintained over 2 years.

(*4)
IEA: An abbreviation for the International Energy Agency. An international energy organization that provides guidance on global energy policy, and conducts energy market analysis and the collection and publication of energy statistics.
(*5)
FIT surcharge: Abbreviation of Renewable energy power generation promotion Feed-In-Tariff levy. The partial bearing of electricity charges based on the renewable energy fixed price acquisition system (FIT system)

Opportunities

Opportunity type	Term	Details	Key responses
Products/services	Short- to long-term	Increased sales by developing and supplying products and services that are highly energy-efficient	Development and supply of high-performance, energy-saving 5G virtualization base stations, high-performance, low-energy supercomputers, etc.
Market	Short- to long-term	Seizing new market opportunities for climate change solutions created using ICT	Development and supply of measures to calculate and visualize CO₂ emissions in supply chains and more efficiently search for new materials in the shift to zero emissions
Resilience	Short- to long-term	Increased sales through new products and services for resilience enhancement	Development and supply of disaster prevention information systems and AI predictive water management systems to forecast river levels during floods

Scenario Analysis

Premise

In FY2021, the Fujitsu Group conducted scenario analyses out to 2050 using scenarios for 1.5℃ and 4℃ of global warming. The analyses studied businesses likely to be impacted by climate change in the following areas: Sustainable Manufacturing (sectors studied: petrochemicals, automotive, foods, electronic device-related businesses), Trusted Society (sectors studied: public sector, transportation, energy-related businesses), and Hybrid IT (sector studied: datacenter-related businesses).

Scenario selection	1.5℃, 4℃ scenarios *Established with reference to information published by the IPCC, the IEA, government agencies such as the Ministry of the Environment and the Japan Meteorological Agency, and various private research organizations. For the main reference scenarios, RCP 8.5 and RCP 2.6 are used as physical scenarios, and IEA NZE 2050 (Net Zero Emissions by 2050 Scenario) and IEA STEPS (Stated Policies Scenario) are used as transition scenarios.
Target businesses	Opportunity-focused analysis: Addressing climate-related risk in client industries Sustainable Manufacturing (sectors studied: petrochemicals, automotive, foods, electronic device-related businesses) Trusted Society (sectors studied: public sector, transportation, energy-related businesses) Analysis of both risks and opportunities: Addressing climate-related risk in Fujitsu businesses and client industries Hybrid IT (sector studied: datacenter-related businesses)
Period covered	2050

Analysis Steps and Details

The analysis was conducted in 4 steps: assessment of risk severity, definition of scenarios, evaluation of impacts on business, and discussion of countermeasures.

We began by organizing the risks and opportunities for the target businesses based on data such as the TCFD recommendations and external reports. We also conducted workshops to look at the qualitative aspects of business impacts stemming from each risk and opportunity item from the perspectives of Fujitsu and industry generally. We rated the severity of each risk or opportunity as “High”, “Medium” or “Low”. We then considered the future changes in each of the items classified as having a “High” severity and defined our scenarios using data from agencies such as the IPCC, IEA, and the Ministry of the Environment, together with the evidence provided in various reports. Specifically, we held an executive input session to consider global outlooks for 2050 given temperature rises of 1.5°C and 4°C, and then went on to consider the global outlook for each of the target industries, using tools such as Five Forces analysis. (See below for the 1.5°C global outlook.)

15℃ global outlook 'A carbon-neutral world in 2050' Global outlook of a 1.5°C “carbon-neutral world in 2050”

To look at the impacts on business, we then tentatively calculated the qualitative gap between the scenarios and our existing strategies and plans with respect to risks and opportunities. For Hybrid IT (sector studied: datacenter-related businesses), we discussed how the impacts of climate change on business would affect our Profit and Loss Statement, specifically looking at which financial indicators would be impacted and in what ways. We then summarized those impacts by developing calculation logic for each impact. Both internal and external data and information were used to confirm the positive (opportunities) and negative (risks) impacts on operating profit in 2050. For example, the calculations for the 1.5℃ scenario showed rising costs due to changes in power prices, but also revealed that there will be increased demand for carbon-neutral datacenters and for datacenters generally due to increased communications traffic as the uptake of smart devices accelerates. Overall, the calculations showed that the negative financial impacts of risks will be outweighed by the positive financial benefits arising from opportunities, ultimately leading to a net positive financial impact on operating profits.

Our analysis of Sustainable Manufacturing (sectors studied: petrochemicals, automotive, foods, electronic device-related businesses) and Trusted Society (sectors studied: public sector, transportation, energy-related businesses) focused on the business opportunities arising from climate change, assuming the potential to establish new climate change-related markets and concluding that the net impact on sales in 2050 would be positive.

Finally, we held a workshop in which we organized the trends in each industry that had been identified when defining the scenarios and the direction of measures to deal with the business impacts requiring emphasis. In specific terms, during the group work we reviewed the current initiatives and gathered views on the directions that future initiatives should take, taking into account the expectations on Fujitsu in the medium- to long-term.

Analysis Results

Because we were able to confirm that the study and development directions for our business unit offerings are aligned with the opportunities shown in the scenario analyses, and that countermeasures for the identified risks are also being prepared, our assessment was that Fujitsu’s businesses are strategically resilient from a medium- to long-term perspective.

Our current themes and areas are “Carbon Neutrality” and “Resilient Supply Chains” in the Sustainable Manufacturing area, and “Sustainable Energy & Environment” and “Sustainable Transportation” in the Trusted Society area, and we are progressing with the development of our offerings.

Main Risk and Opportunity ItemsPolicy/regulation, markets, technology, reputationNatural disasters

Target businesses : Sustainable Manufacturing

Sectors studied	Risk severity assessment (both 1.5℃ and 4℃)	Scenario definitions	Countermeasure considerations (in part)
Petrochemical businesses	<Policy/regulation, markets, technology, reputation> Proliferation of ICT in recycling-based business platforms in the shift to carbon-neutrality Carbon pricing Emissions targets Energy-saving measures Key product/Service price variations <Natural disasters> Increased damage to factories/supply chains due to heightened risk of natural disasters Flooding/Changing weather patterns More severe abnormal weather events	1.5℃ scenario
		Switch to environmentally friendly products that use carbon-neutral materials throughout the supply chain, increasing portfolio reform, increased demand for greater traceability and more efficient R&D	Visualization of CO₂ emissions throughout the supply chain, support for strategies and policies aimed at carbon-neutrality Eco-friendly materials development solutions that use materials informatics Management visualization with an ESG pivot, formulation and implementation of SX measures through data-driven management
		4℃ scenario
		Increased demand for resilient factories and supply chains due to increasingly severe natural disasters	Support for risk event simulation and timely provision of risk information Rapid solutions through data-driven management (review of manufacturing systems, suppliers, SCM, etc.)
Automotive businesses	<Policy/regulation, markets, technology, reputation> Stronger regulation of internal combustion engines; widespread adoption of electric vehicles, move toward carbon-neutrality in the entire product life cycle Carbon pricing Emissions targets Key product/Service price variations Proliferation of next-generation technology Changes in investor sentiment <Natural disasters> Increased damage to factories/supply chains due to heightened risk of natural disasters Flooding/Changing weather patterns	1.5℃ scenario
		Increased demand for services such as MaaS and greater supply chain traceability to help reduce environmental impacts through the entire life cycle	Visualization of CO₂ emissions throughout the supply chain, support for strategies and policies aimed at carbon-neutrality Support for EV demand (e.g., circular management of EV batteries) Management visualization with an ESG pivot, formulation and implementation of SX measures through data-driven management Process automation services using digital technology, from design through to manufacturing and maintenance
		4℃ scenario
		Faster rollout of internal combustion engines, increased demand for advanced technology. Also, increased demand for enhanced business continuity and stability in raw materials procurement in the face of more severe natural disasters	Support for risk event simulation and timely provision of risk information Rapid solutions through data-driven management (review of manufacturing systems, suppliers, SCM, etc.) Engineering outsourcing service which contributes to acceleration of development processes/technology and selection of management resources
Food-related businesses	<Policy/regulation, markets, technology, reputation> Increased awareness of ethical consumption, promotion of resource recycling and biodiversity, etc. Key product/Service price variations Proliferation of next-generation technology <Natural disasters> Increased damage to agriculture due to heightened risk from natural disasters and temperature rises Higher average temperatures More severe abnormal weather events	1.5℃ scenario
		Changed consumer awareness leading to increased demand for measures to deal with food waste and support for smart agriculture, certificates of origin, and environmentally friendly packaging materials	Visualization of CO₂ emissions throughout the supply chain, support for strategies and policies aimed at carbon-neutrality Support for greater traceability throughout the value chain (supply-demand optimization, help with changes in consumer behavior) Management visualization with an ESG pivot, formulation and implementation of SX measures through data-driven management
		4℃ scenario
		Increased demand for "resilient agriculture" to cope with issues of stable food supply resulting from natural disasters	Support for risk event simulation and timely provision of risk information Rapid solutions through data-driven management (review of manufacturing systems, suppliers, SCM, etc.)
Electronic device-related businesses	<Policy/regulation, markets, technology, reputation> Energy savings in factories and growth in the market for products for EVs; potential for fundamental manufacturing reforms, such as 3D printers and the "buy local" movement Carbon pricing Emissions targets Key product/Service price variations Proliferation of next-generation technology Changes in investor sentiment <Natural disasters> Increased damage to factories/supply chains due to heightened risk of natural disasters, water shortages Flooding/Changing weather patterns	1.5℃ scenario
		Proliferation of energy/labor-saving technologies. Increased demand from radical changes to business models (demand chains, etc.)	Visualization of CO₂ emissions throughout the supply chain, support for strategies and policies aimed at carbon-neutrality Process automation services using digital technology, from design through to manufacturing and maintenance Management visualization with an ESG pivot, formulation and implementation of SX measures through data-driven management
		4℃ scenario
		Increased demand for higher labor productivity in production sites and the construction of factories and supply chains capable of handling the risks posed by natural disasters	Process automation services using digital technology, from design through to manufacturing and maintenance Support for risk event simulation and timely provision of risk information Rapid solutions through data-driven management (review of manufacturing systems, suppliers, SCM, etc.)

Target businesses : Trusted Society

Sectors studied	Risk severity assessment (both 1.5℃ and 4℃)	Scenario definitions	Countermeasure considerations (in part)
Public sector, transportation, energy-related businesses	<Policy/regulation, markets, technology, reputation> The values by which we select cities and services, such as environmental concerns, will changes as we shift to carbon neutrality Carbon pricing Emissions targets Key product/Service price variations <Natural disasters> Increased damage to cities, buildings, and infrastructure due to heightened risk from natural disasters Flooding/Changing weather patterns More severe abnormal weather events	1.5℃ scenario
		Increased demand for quantifying and visualizing new values, such as environmental concerns, and the digitalization of urban and energy infrastructure	Services/solutions related to prediction and regulation of the energy supply-demand balance using real-time data as green energy is used to transition to a carbon neutral society
		4℃ scenario
		Increased demand for resilient urban infrastructure	Construction of Digital Twin platforms, enhanced use of simulations, optimization of urban infrastructure that caters for population flows and individuals, support for resilience in transport and logistics, disaster prevention/minimization

Target businesses : Hybrid IT

Sectors studied	Risk severity assessment (both 1.5℃ and 4℃)	Scenario definitions	Countermeasure considerations (in part)
Datacenter-related businesses	<Policy/regulation, markets, technology, reputation> Traceability of environmental values, datacenter electrification, and the adoption of smart technology will all progress Emissions targets Key product/Service price variations Proliferation of next-generation technology Changes in customer sentiment <Natural disasters> Increased damage to datacenters due to heightened risk from natural disasters Higher average temperatures More severe abnormal weather events	1.5℃ scenario
		Energy savings and environmental concerns become the standard for service selection by customers, and carbon neutrality in datacenters themselves becomes a source of competitive strength	Highly energy-efficient datacenters
		4℃ scenario
		Increased demand for resilient datacenters. Disaster risk for Fujitsu-owned datacenters is also increasing and countermeasures are needed	Disaster recovery center services in case disasters occur Resilient earthquake-proof datacenters equipped with every security measure

*The above scenario analyses are intended to verify the strategic resilience of Fujitsu businesses based on an assumed hypothesis and are positioned as one simulation that takes into account future uncertainties.

Risk Management

As part of our company-wide risk management system, we have established the Risk Management and Compliance Committee to identify, assess and manage risks across the entire Fujitsu Group, including those related to climate change. To conduct company-wide risk assessments on a regular basis, the committee prepares tools, distributes them to each Risk Management & Compliance Officer and gathers responses. The departments in charge of each risk across the company utilize these tools to conduct assessments on items such as the impact and likelihood of occurrence related to risk threats and the status of countermeasures, and they also provide responses regarding those risk threats. Climate change-related risk assessments are conducted by all relevant departments, using information collected from across the company, based on the expertise of each department in areas such as policy, reputation, natural disasters, the supply chain, and products and services. The Risk Management and Compliance Committee conducts an integrated matrix analysis of the assessments returned by each department with respect to impact severity and likelihood, and then identifies high-priority risks at the company-wide level. The results of this analysis are reported to the Board of Directors.

The Sustainable Management Committee shares the business risks, opportunities, and countermeasures resulting from climate change, and manages their progress. The Fujitsu Group has also established environmental management systems based on the ISO 14001 standard. Under these systems, we monitor regulatory compliance and other risks.

Metrics and Targets

In 2017, the Fujitsu Group obtained 2°C-aligned certification from the SBTi for its GHG emissions reduction targets, and in 2021 we were granted 1.5°C-aligned certification for our revised targets. To accelerate our efforts towards carbon-neutrality, we set new targets to achieve net-zero emissions from our business activities by FY2030 and net-zero emissions through our entire value chain by FY2040 and were granted net-zero certification by the SBTi. In line with the SBT updates, we have also revised our RE100 renewable energy target, bringing our target of 100% renewables by 2050 forward by 20 years and aiming to achieve 100% renewable energy by FY2030.

Against our target of 100% Scope 1 and 2 GHG reductions in our own emissions by FY2030, in the current year we achieved a reduction for FY2023 of 41.6% on FY2020 levels. Against our target of a 90% reduction (on FY2020 levels) in GHG emissions throughout the value chain (scope 1, 2 and 3 emissions) by FY2040, we also achieved a 28.1% reduction in FY2023.

We boosted our use of renewable energy up to 42.7% in FY2023 towards our target of 100% renewable energy use by FY2030.