Ad-sol Nissin's Sustainability Ad-sol Nissin's Sustainability

Sustainability

Climate Change Initiatives

Basic Approach

With the impact of climate change on lifestyles and businesses, such as natural disasters and extreme weather events, becoming a global issue in recent years, the use of renewable energy, etc., has come under scrutiny as part of efforts to achieve a decarbonized society.

We provide ICT systems and solutions to social infrastructure-related companies such as major electric power and gas companies that are promoting energy system reforms, as well as to the manufacturing companies that supports Japan's monozukuri (manufacturing).
Toward the realization of a sustainable society, we see climate change as one of the challenges facing society, and through the provision of ICT systems and solutions, we are committed to co-creating value with our stakeholders and promoting environmental management.

In addition, based on the scenario analysis recommended by the Task Force on Climate-related Financial Disclosures (TCFD), we intend to be proactive in understanding the financial impact of the "risks" and "opportunities" associated with climate change, and in developing business strategies and risk management, as well as in disclosing these risks and opportunities.

Addressing the Recommendations of the TCFD

The TCFD requires disclosure regarding the following four items in order for investors to accurately understand the risks and opportunities of climate change and make appropriate investment decisions.

●Disclosure content in line with TCFD recommendations

Theme Outline Our Disclosure Pages
Governance The organization's governance around climate-related risks and opportunities.
Strategies The actual and potential impacts of climate-related risks and opportunities on the organization's businesses, strategy, and financial planning where such information is material.
Risk Management How the organization identifies, assesses, and manages climate related risks.
Metrics and Targets The metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.


●Governance

In order to promote group-wide sustainability activities, the Ad-Sol Nissin Group has established a sustainability governance structure centered on the Sustainability Committee, which is chaired by the President, and is working to address issues surrounding sustainability under this structure.
The Sustainability Committee identifies risks and opportunities related to climate change and promotes measures to address them. The Board of Directors receives regular reports from the Sustainability Committee on risks and opportunities related to climate change and the progress of response measures, supervises the progress toward targets, and directs actions as appropriate.
In addition, the Environmental Committee, a company-wide organization, formulates environmental policies and targets every year in light of changes in the external environment, and the Board of Directors makes decisions after deliberations by the Management Conference, whose members include directors and general managers. We have a system in place to regularly report to management on the status of our initiatives.


アドソル日進 サステナビリティ推進体制


●Strategies

To address the impact of climate change on our business, we have identified risks and opportunities with particularly large financial impacts on all our businesses, including those upstream and downstream in the value chain, based on scenarios published by external organizations such as the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC).
The scenarios referenced are as follows.

1.5℃ scenario IPCC RCP 1.9
IEA Net Zero Emissions by 2050 Scenario（NZE）
4℃ scenario IPCC RCP8.5
IEA Stated Policies Scenario(STEPS)
Risks
Scenario Category Major Risks Time Span Main Initiatives
1.5℃ Transition Risks
Reputation		 Loss of reputation due to delayed climate change-related responses
  • Loss of reputation among stakeholders due to delays in climate change initiatives and reporting, resulting in lost business opportunities, difficulty in recruiting personnel, and increased credit risk and cost of equity capital
 Short to
medium term
 As one of the management enhancement strategies in our medium-term management plan, we have stated our commitment to sustainability and are working to enhance our ESG information disclosure, including climate change issues.
We will continue to enhance information disclosure by publishing a sustainability data book, posting sustainability information on our corporate website, and responding to various sustainability surveys.
1.5℃ Transition Risks
Policy and Legal		 Introduction of carbon pricing
  • Increase the cost burden for CO2 emissions from the introduction of carbon pricing (e.g. carbon tax)
 Medium to
long term		 We are promoting decarbonization through carbon emission reductions by energy conservation, the introduction of renewable energy, and the transition to low-carbon products such as LED lighting. We will continue to advance our efforts towards decarbonization and aim to reduce business costs in the medium to long term.
1.5℃ Transition Risks
Policy and Legal		 Stricter GHG emissions reporting and reduction obligations
  • The realization of carbon neutrality by 2050 is expected to become a social consensus, leading to increased demands on companies to comply with laws and regulations, resulting in higher business costs
 Medium to
long term		 We are currently calculating and disclosing our total GHG emissions (Scope 1 and 2). Our ongoing efforts aim to reduce these emissions, and we are exploring the possibility of obtaining third-party verification and establishing and disclosing reduction targets.
1.5℃ Transition Risks
Market		 Increase in renewable energy procurement
  • Increase in costs associated with the introduction of renewable energy facilities, switching to electricity derived from renewable energy, and purchasing environmental value certificates
 Medium term We will continue to promote energy conservation while exploring methods for procuring renewable energy. Our aim is to reduce the risks associated with renewable energy procurement and lower costs in the medium to long term by diversifying our procurement methods.
1.5℃ Transition Risks
Market		 Transition to technologies and services that enable decarbonization
  • Failure to respond to changes in the demand and supply of decarbonization services and provide appropriate services will reduce our competitiveness in the energy (electricity and gas) field, which is one of our core businesses
 Medium term As part of our medium-term management plan, we have identified "next-generation energy" as one of our growth businesses. In addition to our offerings for energy companies, we have begun providing specific decarbonization services to large energy consumers. To advance this initiative, we will establish a dedicated organization focused on understanding customer needs through active engagement and tailored solutions.
We will also enhance our systems, technology, and partnerships to deliver services that effectively respond to societal changes and evolving customer demands.
4.0℃ Physical Risks
Acute		 Increased risk of disasters due to extreme weather
  • Physical damage to offices due to extreme weather events (such as typhoons, floods, and storm surges)
  • Decrease in net sales due to reduced operating days caused by transportation shutdowns during typhoons and other extreme weather events
  • Disruption of the supply chain due to damage to our business partners
 Short to
medium term		 We recognize the risk of business continuity disruption due to natural disasters as a critical concern and are committed to maintaining and strengthening our crisis management system by continuously reviewing and updating our Emergency Business Continuity Plan.
To prepare for potential transportation disruptions, we promote flexible work arrangements that are not tied to specific locations.
Additionally, when selecting partner companies, we aim to diversify risks by avoiding reliance on specific firms or regions.
4.0℃ Physical Risks
Chronic		 Increase in air conditioning load due to an increase in extremely heat days related to rising temperatures
  • Increase in electricity costs in offices
 Short to
medium term		 We are promoting carbon emission reductions through the introduction of energy-saving equipment and efficient operation of facilities in use.
Opportunities
Scenario Category Main Opportunities Time Span Main Initiatives
1.5℃ Products/Services Increased need for next-generation systems in energy companies
  • Increase in net sales resulting from the shift from thermal power generation to renewable energy sources such as wind, solar, hydro, geothermal, and nuclear power, as well as increased needs for the development of related systems.
  • Increase in net sales driven by the development of new renewable energy sources such as hydrogen and methanation, which will increase the need for the development of related systems.
  • Increase in net sales driven by higher profit margins for electric power companies due to the introduction of nuclear power, along with increased willingness to invest in ICT.
 Short to
medium term		 In our medium-term management plan "New Canvas 2026," we have formulated a framework for the medium-term business strategy.
The outline is as follows:
→　New Canvas 2026

■ Base load
　Enterprise DX/Modernization
  • We are developing services and solutions, including "CloudLeap," that enhance business efficiency and drive transformation. To expand our service lineup, we are strengthening our efforts in product development and forming strategic business alliances.

■ Growing businesses (1)
　Next-generation Energy
  • Building on the business know-how cultivated through our work with energy companies since our founding, we support for the next generation of existing energy infrastructure--such as digitalization and data utilization--and efforts towards decarbonization.
  • Additionally, we are exploring new markets aimed at consumers, including microgrids, Virtual Power Plants (VPP), and energy management solutions.

■ Growing businesses (2)
　Smart Infrastructure/Life
  • Promote initiatives in the business themes that will lead to the digitalization and smartification of cities and lifestyles.
・ Smart Resilience
　→ City Planning, Resilience
・ Smart Mobility
　→ Mobility (automobiles, railways etc.,),
Logistics
・ Smart Energy
　→ Environment/Energy

As part of the management sophistication strategies outlined in our medium-term management plan, we are dedicated to enhancing sustainability and improving ESG information disclosure.
This includes addressing climate change issues. We will continue to strengthen our information disclosure efforts by publishing sustainability data books, posting sustainability information on our corporate website, and responding to various sustainability surveys.
1.5℃ Products/Services Expansion of opportunities to provide consumers with energy conservation solutions.
  • Increase in net sales due to the growing opportunities to provide energy-saving and decarbonization solutions, such as energy management systems.
  • Increase in net sales due to the growing need to build systems for local energy production and consumption, such as virtual power plants (VPPs) and microgrids, as storage batteries become more widely used.
 Short to
medium term
1.5℃ Products/Services ncrease in need for resilient cloud services.
  • Increase in net sales of cloud-shifting and lifting support services, such as "CloudLeap," due to the impact of large-scale disasters caused by extreme weather conditions.
 Short to
medium term
1.5℃ Products/Service Growing demand for smart cities and smart infrastructure / life to enable green transformation
  • Increase in net sales to meet the growing demand for related systems due to the spread of MaaS, which will promote the use of more efficient means of transportation (modal shift) and optimize transportation methods.
  • Increase in net sales arising from the growing percentage of EVs and the need for related systems that utilize the latest technology.
  • Increase in net sales of solutions for digital transformation to optimize delivery routes and methods in the logistics industry.
 Medium term
4℃ Products/Service Expanding demand for solutions that contribute to countermeasures against natural disasters.
  • Increase in net sales associated with the growing demand for system construction that contributes to reducing damage from natural disasters, such as observation solutions that utilize space and satellite data.
  • Increase in net sales in line with the growing demand for the construction of energy networks that are highly resilient to natural disasters and for the development of systems that contribute to rapid recovery in the event of a disaster.
  • Increase in net sales of related systems based on the growing demand for distributed energy systems and off-grid solutions.
 Medium to
long term
4℃ Products/Service Increase in the need for energy-efficient air conditioning equipment due to rising temperatures.
  • Increase in net sales from opportunities to provide energy management systems and other solutions to save energy and reduce electricity power costs.
 Medium to
long term

●Risk Management

The Group's Sustainability Committee identifies climate-related risks and discusses and determines countermeasures by taking into account the external environment, initiative status, and information from service provision departments and other relevant factors. The identified risks and the progress of countermeasures are reported to the Board of Directors as appropriate.
The identified climate-related risks are integrated into the overall risk management structure by incorporating them into the risk management process at the Risk Compliance Meeting, which manages risks for the Group.


●Metrics and Targets

We use greenhouse gas emissions and financial impact as metrics for evaluating climate-related risks. For evaluating climate-related opportunities, we use market scale, sales and other factors as reference values to assess opportunities.
We will continue to consider the targets to be used for managing climate-related risks and opportunities.

The following is a chart of GHG emissions in our group.

Unit FY'21/3 FY'22/3 FY'23/3 FY'24/3
Scope1 t-CO2e 1.3 1.0 1.4 1.4
Scope2
Market based		 t-CO2e 448.4 502.0 407.5 398.3
Scope2
Location based		 t-CO2e 478.4 508.8 473.5 442.4
Scope1+2
Market based		 t-CO2e 449.7 503.0 468.9 399.7
Emission intensity（Scope1+2 /net sales）
Scope2: Market based		 t-CO2e/¥ million 0.033 0.041 0.037 0.028

■Calculation period
All fiscal years: From April 1 to the end of the following March

■Scope of calculation
Offices, Subsidiaries and data center as of the end of March
FY'21/3:Tokyo Head Office, Kansai Branch, Kyushu Branch, Sendai Development Center, Ad-Sol Asia Corporation, Data Center
FY'22/3:Tokyo Head Office, Kansai Branch, Kyushu Branch, Sendai Development Center, Ad-Sol Asia Corporation, Data Center
FY'23/3:Tokyo Head Office, Kansai Branch, Kyushu Branch, Nagoya Office, Sendai Development Center, Ad-Sol Asia Corporation, Data Center
FY'24/3:Tokyo Head Office, Kansai Branch, Kyushu Branch, Nagoya Office, Sendai Development Center, Ad-Sol Asia Corporation, Data Center
※Adsol-Nissin San Jose R&D Center, Inc. is excluded from the scope of calculation because its GHG emissions are immaterial.
※TechZen Co., Ltd. and are excluded from the scope of calculation because they are not our consolidated companies in the financial reporting.

■Targeted activities
Greenhouse Gas (GHG) Emissions from Business Activities
　Scope1: Use of city gas in offices
　Scope2: Use of electricity and hot/cold water heaters in offices and data centers

■Calculation method
・GHG emissions (CO2 equivalent) are calculated by referring to the GHG Protocol.
・Emission Factors for Calculation
　　- List of Calculation Methods and Emission Factors for Greenhouse Gas Emissions in the Calculation, Reporting and Publication System
・The following is the other reference in the calculations.
　　-Manual for Calculating and Reporting Greenhouse Gas Emissions



Environmental Management

Initiatives based on ISO14001 Certification

In 2004, we acquired certification for our environmental management system (ISO14001:2015/JISQ14001:2015).
Since then, we have been continuously improving our environmental initiatives through planning, implementation, operation, inspection, and management review using the PDCA cycle based on the environmental management system.

Environmental Management System

Environmental Management System

Number of establishments certified for ISO 14001 (as of March 2024)

As of end of March, 2024, the number of offices that have acquired ISO 14001 environmental management system certification is as follows.br />

  • Tokyo Head Office
  • Kansai Branch
  • Kyusyu Branch
  • Sendai Development Center
    (Percentage of certified offices: 100%)

Environmental Objectives and Action Plans (FY'24/3)

We promote climate change initiatives by establishing environmental objectives and action plans for each fiscal year.

Environmental Objectives

  1. Strengthen initiatives in business activities
    Develop ICT systems and provide solutions that contribute to the realization of a sustainable society
  2. Reduce environmental impact through further digitization of internal systems
    Continuation of efforts to improve operational efficiency and labor saving, and further expansion of paperless and stampless operations
  3. Ensure compliance
    (Education) Regular environmental education using e-learning
    (Inspection) Check compliance with environmental laws and regulations
    (Surveys) Survey suppliers on their environmental activities
  4. Strengthen environmental promotion system
    Enhance and upgrade promotion members

Environmental Action Plan

  1. Initiatives for diverse social contribution activities
    1. New initiatives for social contribution activities
    2. Addressing Sustainability-Related Requirements
  2. Strengthen response to decarbonization and climate change
    1. Separate emissions, recycling, waste reduction
    2. Reduction of electricity consumption, energy conservation
    3. Timely data collection and enhanced analysis of performance data
    4. Reduction of total office paper emissions
    5. Management of industrial waste generation