Business and Other Risks - Natural Disasters and Unforeseen Incidents

7. Natural Disasters and Unforeseen Incidents

7-1. Damage from Earthquakes, Other Natural Disasters and Accidents

The Fujitsu group has established a company-wide disaster prevention organization and is regularly conducting various kinds of drills. Having dealt with recent large earthquakes in Japan, we also strengthen countermeasures in our workplaces such as countermeasures to mitigate damage from earthquakes and flooding and site inspections.

Furthermore, the Fujitsu Group has instituted a Business Continuity Plan (BCP), which is continually reviewed and improved, to ensure that it can continue critical business operations to fulfill its corporate social responsibility activities, while at the same time continuing to provide a stable flow of high-quality, highly reliable products and services, which our customers rely on for their business. This plan ensures continuity even in the event of natural disasters like earthquakes, major floods, or volcanic eruptions, as well as accidents or the outbreak of infectious diseases like novel influenza virus and/or novel coronavirus.

However, in recent years, the frequency and/or impact of natural disasters such as typhoons, flooding, and heavy snow has been increasing due to global climate change. Going forward, there is also a possibility that unforeseen events (i.e. major earthquakes in the Tokyo metropolitan area or along the Nankai Trough, outbreaks of infectious diseases, or volcanic eruptions) may occur on a scale that exceeds damage estimates carefully determined by the BCP.

In such cases, there is a possibility that the Group may be forced to suspend the delivery of products and/or services to customers in the event that an unforeseen natural disaster or accident inflicts damage to facilities and equipment, interrupts the supply of electricity or water, disrupts public transportation or communications infrastructure, or causes damage to our supply chains.

As novel coronavirus (COVID-19) infections spread worldwide and have a major impact on society, the Group continues providing products and services to customers and working to resolve various social issues arising from the spread of infection, and preventing the spread of infection, with the highest priority on ensuring the safety of customers, suppliers, employees and their families. Specifically, Fujitsu has been actively encouraging employees’ telecommuting and staggered commuting, as well as switching to web conferences and web distribution for in-house meetings and events hosted by the company. In addition, regarding the system development, operation, and maintenance work that has been done on-site for customers, we are asking them to switch to remote support such as telecommuting. When on-site work is necessary, customers are asked to take steps to ensure social distancing and keep worksites well-ventilated. By implementing various measures in cooperation with government authorities and customers in Japan and overseas, Fujitsu aims to maintain its important business and fulfill social responsibilities. Nevertheless, the outbreak of infections in the Group, contractors or customers, the shortage or delay of parts supply from component manufacturers, and future measures by Japanese and overseas government authorities may affect the sustainable supply of products and services. In addition, changes in market conditions resulting from sluggish economic activity may affect market trends in the Group's business areas and customers' ICT investment, which may have an impact on the Group's business.

7-2. Armed conflicts, Terrorism and Political Instability

Armed conflicts, terrorism, demonstrations, strikes, political instability, and other events in nations or regions where the Fujitsu Group operates could have a significant impact on its businesses.