Climate Change
Our disclosure of sustainability information is done in accordance with the TCFD*1 declaration and the sustainability disclosure standards being developed by the ISSB*2 and addresses the four topics of governance, strategy, risk management, and indicators and targets.
*1: TCFD is the abbreviation for Task Force on Climate-related Financial Disclosures
*2: ISSB is the abbreviation for International Sustainability Standards Board
Governance
Through our business activities, the Socionext Group is working to create a sustainable society. Recognizing that we have a duty as a global corporation to fulfill our social responsibilities, we are responding to global-scale societal challenges by addressing human rights issues and environmental problems, especially climate change, at all steps along our supply chain. We take serious action on these challenges through measures that include human resource development, workforce diversity, and quality and service improvement.
The Socionext Group is putting measures in place for acting on sustainability in ways that are coordinated across our organization, including the establishment in April 2022 of an ESG Office to facilitate ongoing management-level discussion of medium-to-long-term challenges. This organizational structure provides a framework for action under the direction of the Management Committee. The Board of Directors, meanwhile, debates and approves policies and action plans for important sustainability challenges while also acting in a supervisory role, including by monitoring progress.
Board of Directors
The board has responsibility for making decisions on sustainability activities. It debates and approves the associated policies, strategies, and actions and also regularly monitors the progress of these actions.
Management Committee
The committee drafts sustainability policies, strategies, actions, and other plans for subsequent consideration by the board. It is also responsible for ensuring that actions are carried out, issuing instructions for doing so to the operational divisions with the board’s approval.
To implement these actions, the ESG Office provides support for drafting policies, strategies, actions, and other plans and for putting these into practice. It also tracks the progress of this work and reports back to the Management Committee.
Strategy
The Socionext Group believes that it can facilitate the transition to a sustainable society by using the SoCs we supply to help our customers achieve ongoing reductions in their GHG emissions. By collaborating on development with key customers who are leaders in their global markets, our goal is to reduce the power consumption of customer products while delivering higher levels of miniaturization and integration, achieving this through the development of high-performance custom SoCs that leverage our proprietary multicore design techniques and AI engines and accelerators with low power consumption. In the fiscal year ended March 31, 2023, we identified the following climate change risks and opportunities in our group business activities. In the future, we intend to use scenario analysis to calculate the financial and business impacts of these risks and opportunities and devise and implement more effective measures for addressing them.
Main climate change risks and opportunities
| Category | Impact of climate change on Socionext | Action by Socionext | ||
| Risks | Transition risk | Government policy and regulation | Increased costs due to action on improving energy efficiency and reducing GHG emissions (Higher energy costs due to carbon pricing, higher costs due to adoption of energy-efficient equipment, etc.) |
Timely identification of global trends and regulatory changes along with systematic investigation, implementation, and evaluation of actions. Also, determine GHG emissions in the supply chain and continue working with suppliers to reduce them. |
| Technology | Higher R&D spending to maintain and improve competitiveness in the market Higher production costs to maintain and improve competitiveness in the market |
Develop and distribute energy-saving and space-saving eco-friendly devices and solutions in partnership with customers and suppliers. | ||
| Market | Falling sales due to changes in customer demand Regulation-driven increases in cost of materials, electricity, and other inputs |
Develop and distribute products and services that help overcome environmental challenges Review choice of parts and materials. Investigate adoption of renewable energy. |
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| Physical risks | Acute | Disruptions to outsourced production due to growing severity of abnormal weather (including in-house development and logistics) | Regular revision of business continuity plans allowing for shutdowns or other disruptions at contract manufacturing suppliers. Study of potential cost savings through more efficient use of electric power at workplaces and data centers. |
|
| Chronic | Disruptions to outsourced production due to water shortages Higher air conditioning costs at data centers and other facilities due to rising air temperatures |
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| Opportunities | Efficient resource use | Lower costs through more efficient use of resources (energy and water) at data centers and other workplaces | Lower costs through more efficient SoC development (use of proprietary multicore design techniques and AI engines and accelerators with low power consumption) | |
| Products and services | Higher demand, especially for products with low power consumption that help customers reduce GHG emissions and use energy more efficiently | Development and distribution of energy-saving and space-saving eco-friendly devices and solutions | ||
| Market | Higher revenue by leveraging low-power-consumption technologies to expand into new businesses | Leverage low power consumption and miniaturization to expand into new businesses, especially SoCs for ADAS/AD and data centers | ||
Risk Management
To mitigate and reduce management and business risks, the Socionext Group conducts a bi-annual company-wide risk management review. Sustainability risks such as climate change, human resources, and diversity are treated as important elements in this framework, which involves risk assessment, the formulation and implementation of actions, and the assessment of outcomes on a regular basis.
Indicators and Targets
GHG emissions (Scope 1*1 and Scope 2*2) by the Socionext Group for the fiscal year ended March 31, 2023 year were approximately 8,534t-CO2. Although emissions rose year-on-year due to business growth, emissions per unit of sales revenue fell. We have set a goal for the group of becoming carbon neutral by 2050 in terms of both Scope 1 and Scope 2 emissions, and we are continuing to investigate and implement reduction measures that will help us achieve this goal.
*1: Direct greenhouse gas (GHG) emissions by the organization
*2: Indirect GHG emissions associated with consumption of electric power, heat, or steam supplied by other companies
[GHG Emissions]
| FY ended March 31, 2022 (t-CO2) |
FY ended March 31, 2023 (t-CO2) |
|
| Scope1 | 318 | 235 |
| Scope2 | 6,971 | 8,299 |
| Total | 7,289 | 8,534 |
[GHG Emissions per Unit of Sales Revenue]
| FY ended March 31, 2022 (t-CO2) |
FY ended March 31, 2023 (t-CO2) |
|
| Scope1,2 | 6.23 | 4.43 |