Kamigumi has established a Sustainability Committee, for which the President & Representative Director serves as chair, to consider and make decisions on matters related to climate change. The Sustainability Committee considers and makes decisions on related policies and measures, and reports or refers them as necessary to the Board of Directors for consideration.
This Committee also monitors progress and results related to the Company’s materiality items, including decarbonization targets, reports to the Board of Directors at least twice a year on the need for improvements and related issues, and drafts necessary measures.
The Board of Directors oversees climate change initiatives based on submissions and reports from this Committee and provides instruction as necessary.
The Sustainability Committee consists of internal directors, executive officers, administrative section heads, and others. The Corporate Sustainability Sect. serves as its secretariat, and the committee solicits advice from outside experts as necessary. Operationally, Sustainability Subcommittees and the Sustainability Liaison Committee have been established underneath, with all bodies working in coordination.

In addition to various risks such as disaster risk, information risk, employment and personnel risk, the Group has also established Risk Management Rules for environmental risks, and regularly holds the Compliance and Risk Management Committee (hereinafter referred to as Committee) to manage, improve and strengthen risks. This committee is chaired by the President, and consists of the head office managers as members.
In addition, we have set up a Risk Management Department as a permanent department, and there are ten people who specialize in safety, customs clearance, and quality, three of whom are in the operation secretariat of the Committee.
The Sustainability Committee is in charge of risk management for sustainability, including climate change. As part of this effort, the Committee monitors climate change progress and regulatory trends while identifying risks and opportunities related to climate change under 1.5℃ and 4℃ scenarios over a medium- to long-term timeframe and assessing potential financial impact. The Committee periodically reassesses risks and opportunities thus identified and reports on, or submits, them for consideration to the Board of Directors at least once a year. After prioritizing the risks, decisions are made on how to manage them (mitigate, transfer, accept, or control). By conducting this scenario analysis annually, we regularly review climate change-related risks.
In addition, climate-related risks reported to, or submitted, for consideration by the Board of Directors are reported to the Compliance and Risk Management Committee, and preparations are underway to treat these as company-wide risks.

■ Baselines for scenario analysis

We conduct scenario analysis to assess the medium- to long-term risks and opportunities related to climate change for our business and consider countermeasures. In this fiscal year’s analysis, which focused on our domestic non-consolidated operations, we identified risks and opportunities assumed to impact us by FY2030 and FY2050, and examined their potential financial impacts and countermeasures. As baseline scenarios, we assumed a 4℃ scenario where existing policies remain unchanged, and a 1.5℃ scenario where decarbonization policies are aggressively implemented to limit the global average temperature rise to 1.5℃ above pre-industrial levels at the end of the 21^st century.

• * Overview of the scenarios referenced:
  IEA NZE: The 1.5℃ equivalent scenario published by the International Energy Agency (IEA). A scenario that achieves net zero by 2050.
  IEA STEPS: The 4℃ equivalent scenario published by the International Energy Agency (IEA). A scenario where existing policies remain unchanged without additional measures.
  IPCC: Abbreviation for the Intergovernmental Panel on Climate Change.
  IPCC SSP 1-1.9: IPCC’s 1.5℃ equivalent scenario. CO₂ emissions reach net zero around 2050, limiting temperature rise to 1.5℃ at the end of the 21^st century.
  IPCC SSP 5-8.5: IPCC’s 4℃ equivalent scenario. Both CO₂ emissions and average temperatures continue to rise, with temperatures projected to increase by more than 4℃ at the end of the 21^st century.

■ Process for conducting scenario analysis

As part of our scenario analysis, we first listed all potential climate-related transition risks, physical risks, and opportunities across our entire value chain. From this list, we extracted items deemed to have a particularly significant impact on our company. Next, for each extracted risk and opportunity, we considered, while referencing published scenarios, the assumed external environment and outcomes our company could face under the 1.5℃ and 4℃ scenarios for each target year. We then organized the calculation logic forming the basis for our financial impact estimates and the internal and external data required for the calculations. After calculating the actual financial impact using the collected data, we conducted a three-tier assessment of the relevant risks and opportunities based on their degrees of likelihood and impact, thereby assessing the importance^* of each to our company. Finally, based on the results of our financial impact estimates and assessments of importance, we considered countermeasure policies for each item.

• *1 Medium term refers to 2025–2030, while long term refers to 2031–2050. Since these risks are assumed to occur at most once every 1,000 years, the financial impact of one occurrence is assessed.
• *2 For financial impact, the medium term estimates the single-year monetary impact for FY2030, while the long term does so for FY2050. The financial impact is calculated based on the impact of the assumed maximum-scale storm surge.
• *3 Minus sign (–): negative impact on P/L; plus sign (+): positive impact on P/L
• *4 Assessment of importance. Refer to “Process for conducting scenario analysis” above for our decision-making process.

■ Climate change-related targets

Amid the accelerated global movement toward a carbon-zero society, the Japanese government has identified CO₂ reduction targets　as part of efforts to achieve carbon neutrality.
Together with the government targets, Kamigumi has identified the medium-term target to be achieved by FY2030 of reducing CO₂ emissions (domestic Scope 1 + Scope 2 emissions) by 46% vs. 2013 levels.
We will continue to consider long-term targets (FY2050) from the perspective of efficacy, reflecting the understanding that achieving carbon neutrality is a global goal.
In addition, because we began calculating Scope 3 emissions in FY2024, we will consider Scope 3 reduction targets going forward.

・Target for FY2030: 46% reduction
・Target for FY2050: Carbon neutral (under review)

■ Climate change-related results

Our CO₂ emissions data are as follows.

Climate change-related results

Breakdown of Scope 3 CO₂ emissions (FY2023)

Notes:

• *Categories 4 and 12 are currently uncalculated due to difficulties in data collection.
• *Category 8 includes vehicle leases, but fuel is accounted for under Scope 1.
• *Category 9, we do not sell products, so there is no related transportation and delivery.
• *Category 10, we do not sell products, so there is no processing of sold products.
• *Category 11, we do not sell products, so there are no emissions when they are used.