Disclosure Based on TCFD Recommendations

Background of Initiatives

As the global transition to a carbon-free society progresses, the realization of sustainable management is becoming increasingly important for companies. The SG Holdings Group recognized its responsibility as a group of logistics companies handling social infrastructure, and expressed support for the Task Force on Climate-Related Financial Disclosures (TCFD) in 2019. Seeing climate change to be a serious issue for the Group, the Group began scenario analysis based on TCFD recommendations in July 2021. The purpose of the analysis is to ascertain the risks and opportunities related to climate in business continuity, and to take measures based on the assumption of a variety of situations. In future, such efforts will continue in line with changes in social conditions and advancements in technology, and be linked to business strategy, included in risk management processes and utilized to engage in deeper internal and external communication.

Reference sites

Results of FY2021 Analysis

The governance, strategy, risk management and indicators & targets for the Delivery Business and the Logistics Business that are the Group's main businesses were organized in line with TCFD recommendations. Among these, for the strategy portion that is the center of scenario analysis, we identified the financial impact of important risks and considered measures to take in response.

The Group evaluated the "increased costs due to carbon tax" as being one of the important risks with a large impact in the transition risks of the 1.5°C scenario because there are many CO2 emissions originating from fossil fuels as a result of the Group’s business being centered on the Delivery Business using trucks. As a result of estimating the effect based on measures to address climate change, the amount of carbon tax avoided due to reducing CO2 emissions exceed the expenses pertaining to measures to address climate change such as energy conversion required for measures and capital investment costs, and it was found that promoting measures to address climate change has a positive impact on the Group's business. The results of analysis are disclosed for each of the TCFD recommendations as follows.

*This analysis is a simulation using forecasting data published by the International Energy Agency (IEA), and the like, and is not an assurance of the realization of the scenarios. Furthermore, it may vary in the event the assumed data is revised or modified.

See the PDF file below for the data used as a reference.

Results of detailed analysis here

[Revision history]
1st Edition : 30/03/2022
2nd Edition : 15/06/2022 Updated "impact of temporary staff being affected by disasters," and "restrictions on outdoor work due to rising temperatures" (Page 8)