TCFD-Based Information Disclosure

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 to reduce 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 thousands of companies worldwide and acts on behalf of institutional investors with a combined US$130 trillion in assets. (As of June 2022)

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- and long-term issues, and formulates policy. It also reports on the results of these activities to the Board of Directors at meetings of the Management Council. In October 2021, the results of analysis using multiple climate change scenarios, including limiting global warming to 1.5℃, were reported on and discussed by the Sustainability Management Committee. 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, and the results of EMS activities are reported to the Board of Directors at meetings of the Management Council.	Sustainability Management in the Fujitsu Group Corporate Governance Environmental Management Systems Risk Management
	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 is responsible for oversight based on reports from meetings of the Management Council. The Chief Sustainability Officer (CSO) bears the highest level of responsibility for sustainability, and in that role proposes reforms to the Board of Directors and to management and conducts business that relates to sustainability. In April 2022, it was decided to add "non-financial indicators" that include consideration of climate change issues to the evaluation indicators for bonuses paid to Executive Directors.
Strategy	Short-, medium- and 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.	Response to Environmental Risks The Fujitsu Group Medium/Long-term Environmental Vision
	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- and 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.	Response to Environmental Risks Environmental Management Systems Risk Management
	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 targets and RE100 targets as medium- and 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.	The Fujitsu Group Medium/Long-term Environmental Vision Fujitsu Group Environmental Action Plan
	Scope 1 and 2, and the corresponding Scope 3 GHG emissions	GHG emissions Item GHG Emissions Performance (FY2021) Scope 1 68 ktons-CO2 Scope 2(Location-based) 524 ktons-CO2 Scope 2(Market-based) 422 ktons-CO2 Scope 3(Category 1) 1,207 ktons-CO2 Scope 3(Category 11) 3,142 ktons-CO2
	Targets used by the organization to manage climate-related risks and opportunities and performance against targets	Climate-related targets & performance Item Targets Performance (FY2021) Reducing the volume of our own GHG emissions *1 Short-term 33.6% reduction by 2021*2 Environmental Action Plan 37.2% reduction Medium-term 71.4% reduction by 2030*2 SBT 1.5℃ certification Long-term 80% reduction by 2050*2, *3 SBT certification Reducing the volume of the value chains' GHG emissions *1 Medium-term 30% reduction by 2030*4 SBT certification 46.9% reduction Renewable energy adoption rate Medium-term 40% adoption by 2030 RE100 membership 20% adoption Long-term 100% adoption by 2050 RE100 membership *1: vs. 2013 *2: Scope 1 + Scope 2 *3: Excluding carbon credits *4: Scope 3 Category 1 + Category 11 GHG emissions reduction targets & performance (Scope 1＋2) Progress against renewable energy adoption targets

Governance

The Fujitsu Group has established a Sustainability Management Committee, chaired by the CEO. This committee examines medium- and 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 Management Council. In October 2020, the committee made a key decision by revising the Fujitsu Group GHG reduction target (SBT) from 2.0℃ to 1.5℃, and in April 2021 the new target was validated as 1.5℃-aligned by the SBTi. And in October 2021, the results of scenario analyses using two external scenarios, one for 1.5℃ and the other for 4℃, 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 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) evaluations 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

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>

<Opportunities>

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).

Analysis steps & 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 the respective items from the perspectives of Fujitsu and industry generally, and we assessed 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℃ and 4℃, 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℃ global outlook.)

1.5℃ global outlook "A 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- and 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- and long-term perspective.

Using the scenario analysis results as one input for business consideration, we also announced the value proposition themes for our Key Focus Areas such as Carbon Neutrality (promoting the visualization and reduction of CO₂ emissions), Resilient Supply Chain(resilient response to uncertainty) in the Sustainable Manufacturing area, and Sustainable Energy & Environment (carbon neutrality through green energy) in the Trusted Society area. We are now progressing with discussions on the details of our offerings, considering the opportunity-related measures revealed by the scenario analyses.

<Risk & Opportunity Analysis>

*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 employee responsible for risk management and compliance, 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.