Climate Change
Basic Idea
Our Attitude and Initiatives towards Climate Change
Climate change has serious impact on global environment and human・corporate activities and our group regards 'climate change' as risk as well as new business opportunity. In our history of capturing times and working on solution of global issues, handling 'climate change' is one of the important management issues which closely connect to our company's purpose 'Engineer and fulfill the society's dream'. We will work on this issue by closely cooperating each other among group companies and by collaborating with wide range of stakeholders including government・companies・industry group aiming for contribution of achieving SDGs and the international goals set in Paris Agreement. Our company also supports Task Force on Climate-related Financial Disclosures (TCFD) and will work on the expansion of information disclosure along TCFD.
Coping with Recommendations of TCFD
Chiyoda agreed with TCFD (Task Force on Climate-related Financial Disclosures) in 2019. We participated in the 'scenario analysis support project on climate risks・opportunities along TCFD' promoted by Ministry of Environment and ran a trial of climate related scenario analysis. From now on, we will deepen our scenario analysis and reflect it on our management strategies and will show our initiative in expanding information disclosure based on the proposal from TCFD.
Please refer below about scenario analysis.
Governance
We think that now is the time to innovate business portfolio steadily when the transition to decarbonized society starts to accelerate ahead of realization of carbon neutral society in 2050 which our country aims for and it is our sustainability to aim to increase corporate value through contribution to development of sustainable society.
We set up Sustainability Committee in Apr 2022 under CSO (Chief Sustainability Officer, President serves as CSO) aiming for even deepening of our group's sustainability and towards increasing corporate value and achieving sustainable growth.
Setting sustainability keystone of management, intensive・continuous discussion has been conducted in Sustainability Committee on ESG themed handling climate change, human rights・supply chain management, initiative to diversification, health management etc. in a medium- and long-term perspective.
Sustainability Committee which is held twice a year in principle is an advisory body of CSO、and contents of deliberation will be reported to board of directors' meeting and the system has been built for board of directors' meeting to supervise it appropriately.
Sustainability Promotion System Diagram
Strategies
Premise of Scenario Analysis
| Premise of Analysis | Subject |
|---|---|
| Target | 2040 |
| Scenario | 2℃ scenario：promotion of measures against climate change（Example introduction of carbon tax etc.） 4℃ scenario：No measures against climate change Just go with the flow（Example no introduction of carbon tax etc.） |
| Analysis reference data | Data from WEO*1 2019（Other data used for any shortfall） |
| Analysis target sector | LNG ／Green energy EPC Non-EPC such as hydrogen, CCU*2, and decentralized composite utility |
| Financial data | Extension till 2040 based on the business plan till 2023 disclosed in Medium-Term Management Plan (Revitalization Plan) |
- "World Energy Outlook" released from International Energy Agency(IEA) every fall
- Carbon dioxide Capture and Utilization
Risk and Opportunity
Regarding the countermeasure policy based on preliminary calculation on impact, we will evaluate various risks and opportunities including climate change under Sustainable Committee established in Apr 2022 and mainly the relevant sections in the company will try to promote initiatives towards achievement of goal and manage progress, regarding the GHG(Greenhouse Gas) emissions management.
- 4℃ scenario：No promotion of low carbonization・carbon cycle and continuation of fossil-fuel dependence
- 2℃ scenario：Promotion of low carbonization・carbon cycle, Increase of demand for green energy facilities and introduction of hydrogen・CCU proceeds
| Preliminary calculation item （Impact to our company） | 2℃ | 4℃ | Countermeasure policy |
|---|---|---|---|
| LNG | ⇒ | ⇗ | Provide service corresponding to the change of business structure |
| Petroleum・fossil fuel plant | ⇘ | ⇒ | Responding to optimization of customers' assets utilizing digital AI technology |
| Hydrogen | ⇗ | - | Early entry to the market and secure market share as the needs of low carbonization・carbon cycle grow |
| CCU | ⇗ | - | |
| Green energy plant | ⇗ | ⇒ | Expanding utility business based on the future trend |
Transition Strategy
Indicators and Target
Carbon Neutral Declaration
Chiyoda is contributing to the realization of carbon neutrality
by 2050 via our integrated engineering with digital transformation
under the corporate vison
'harmony between energy and environment'.
| Target Year | Scope1、2 | Scope3 |
|---|---|---|
| FY 2030 Mid-term target | 50% reduction in GHG emission (FY2020 baseline) | We will contribute to carbon recycling and the realization of a decarbonized society through "recirculation" and "reduction" |
| FY 2050 Long term target | Net zero GHG emissions by 2050 |
- Greenhouse Gas
- Our FY 2030 medium-term target for Scope 1 and 2 will be achieved through internal endeavors in our Minato Mirai Headquarters and Koyasu Research Park office and by collaborating with clients, partners and suppliers on our domestic and international construction sites.
- We will cooperate with all stakeholders to reduce GHG emissions in Scope 3, contributing to carbon-recycling and the realization of a decarbonized society by optimizing the social implementation of innovative technology.
- GHG emission reduction plans will be regularly reviewed according to technological developments, economic conditions and policy/institutional support.