II. Risks in Fujitsu Group Business Activities

15. Environment and Climate Change

[ Overview and impact of risks ]
The Group’s defines our Purpose as making the world more sustainable by building trust in society through innovation. We regard sustainability issues including environmental protection as one of our most important management items. However, if environmental pollution occurs in the course of the company’s business activities, it may lead to a decline in the societal trust of the Group, and the costs incurred for cleanup measures may impact the profit or loss of the Group.

In addition, the frequency and impact of natural disasters, which have increased due to climate change in recent years, have the potential to disrupt our procurement, distribution, and energy supply networks, and long-term changes in temperature have the potential to increase our use of energy for air conditioning, which may have an impact on the Group's businesses. Currently, as countries around the world set targets to achieve carbon neutrality by 2050, institutional investors are also using climate change initiatives as investment criteria, and the trend toward carbon neutrality is accelerating in society and the economy. In addition to stricter regulations on greenhouse gas emissions and the introduction of a carbon tax, we are required to contribute to achieving carbon neutrality to customers and society. If we fail to comply with these regulations, we could lose business opportunities due to a decline in corporate reputation, and we may become unable to participate in bidding that requires regulatory compliance and the costs required to comply with these regulations may increase. Further, if the competition to develop technologies for carbon neutrality intensifies and we are late to respond to the competition, it may lead to uncollected investments and a decline in market shares and profit margins, which may affect the Group’s revenue and profit or loss.

[ Measures against the risks ]
The Fujitsu Group has established internal rules in accordance with laws and regulations and is working to reduce our environmental impact and prevent the occurrence of pollution. For energy consumption, we ascertain the energy usage of our business offices by using an environmental performance management system. For electricity, we use an in-house power procurement system and compare and analyze electricity costs from various companies to optimize the costs of our contracted electricity and CO2 emissions. For wastewater and exhaust gas, we have established voluntary control values that are stricter than the emission standards in applicable laws and regulations, and we monitor the values through regular measurements. We also conduct soil and groundwater investigations and purification activities at the former sites of the Group’s plants.

Further, we are analyzing the evaluation criteria of major external assessments, disclosing information incorporated into the evaluation axis of environmental management, and making improvements with the aim of bettering our environmental performance. To fulfill our societal responsibility as a leading global environmental company, we are also reducing greenhouse gas emissions in line with the 1.5℃ level outlined in the Paris Climate Agreement and strategically promoting carbon neutrality to our customers as measures against climate change. On top of this, in order to contribute to carbon neutrality for our customers and society, we have started a new project aimed at building an effective environmental value trading ecosystem. In regard to this environmental value trading market for CO2 reductions that goes beyond companies and countries, we are working on market application and optimization of an environmental value distribution platform based on blockchain technology and carbon-neutrality related technology.