Main content Main content

Information Disclosure Based on TCFD Framework
Scenario Analysis and Results

Scenario analysis and results

In FY2019, we continued to conduct scenario analysis as we did in the previous year. The business risks and opportunities for infectious diseases related with climate change have been added to the scenario analysis assessment, especially since COVID-19 is having an enormous global impact. In assessing business risks, we assumed that epidemics of mosquito-borne diseases have occurred every 10 years in the past, and that an epidemic would occur in Asia, where Ricoh's sales are the largest among the three regions, where many infections have occurred, of Africa, Asia, and Latin America. Because our production BCP was functioning despite the COVID-19 epidemic, we estimated the financial impact based on the amount of lost sales opportunities because of COVID-19.
In addition, a cross-organizational workshop was held to discuss the risks and possible responses to the increasing number of natural disasters that occur every year, and to examine the risks and countermeasures for our supply chain, including our own sites.
Furthermore, while working on environmental sustainability management for many years, we have reorganized the opportunities that we have obtained by actively responding to climate variability and the opportunities that are expected to grow in the future, and summarized the results and future outlook for fiscal 2019.

As a result of scenario analysis, we see that global climate change has progressed, abnormal weather has become frequent and severe, and it has become an urgent issue for Ricoh that a large business impact may occur if we fail to take measures. Although the risk of infectious diseases related with climate change is not urgent, once it does occur, it will cause a large financial loss, so it was confirmed that it is necessary to continue to strengthen BCP.
Meanwhile, active response to climate change mitigation and adaptation will provide opportunities in the printing business to provide products and solutions that support customers' decarbonization by utilizing energy-saving and resource-saving technologies and services. We also reconfirmed that solutions against infectious diseases bring new value to new normal working styles and have great potential for business expansion and creation of new businesses in the environment and energy fields.

Based on the above results, we reviewed the environmental goals for 2030, and in March 2020, we set a new GHG reduction target in line with the SBT 1.5°C standard that requires a higher reduction rate. By developing measures based on the GHG emissions reduction roadmap to 2030, we are ready to respond without delay to a carbon tax and changes in consumer and investor behavior that will accompany an early transition to a zero-carbon society.
We will continue to promote our climate change initiatives by conducting scenario analysis periodically to identify and promptly address climate change risks and assess opportunities. We will also continue to discuss the theme with our stakeholders to improve our approach and information disclosure.

Scenario analysis processes

We annually carry out analysis and evaluation according to the scenario analysis review processes. The scope of the analysis includes our own operations, upstream and downstream activities. As for the analysis on our own operations, we evaluated the impact on major assets.

In fiscal 2019, we reviewed risks and opportunities based on the opinions by experts in various fields regarding our disclosure in fiscal 2018.

Scenario analysis processes

Implemented scenarios

When conducting the scenario analysis, as for impacts on the we set two scenarios by referring to the United Nations Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) as the impact on the Ricoh Group as of 2030.
In the Scenario 1, we mainly assumed transition risks toward a zero-carbon society, and in the Scenario 2, we mainly evaluated the physical risks due to climate change.

[Reference]

scenario1
scenario2

Risk assessment and actions for natural disasters

In recent years, natural disasters have been increasing all over the world.

We therefore held a cross-organizational workshop with the Sustainability Management Division, the General Affairs Department, the Risk Management and Legal Center, the Corporate Planning Division, the Procurement Division, the Production Division, etc., and examined the physical risks that may affect our business. For domestic business sites, we examined flood risks based on the hazard maps of each municipality. For overseas business sites, we confirmed flood risks of rivers by the "Aqueduct Water Risk Atlas" of the World Resources Institute (WRI), an international environmental NGO.

As a result, Ricoh's production and R & D sites where risks are concerned are as follows.

  • Japan: 7 sites out of 15 have potential risks (8 sites have no risk)
  • Outside Japan: 6 sites out of 17 have potential risks (11 sites have no risk)

For business sites in Japan where flood risks are concerned based on the analysis results, we are taking individual risk reduction measures such as constructing a defensive wall at high risk site. For measures including investment, all-hazard-friendly BCP reconstruction is scheduled to be implemented by FY2022.

In addition, for measures that require large investments such as relocation of important equipment, we take measures based on decisions at the management level while considering the return on investment.

  • Examples of countermeasures:
    • Multiple Purchasing
    • Optimization of production sites
    • Securing alternative distribution routes
    • Protection of important assets
    • Review of inventory management (for reducing inundation effects)
    • Increase stock of parts and products
    • Logistics / non-life insurance
    • BCP measures in collaboration with suppliers

Risk assessment and actions for natural disasters(Outside Japan)Risk assessment and actions for natural disasters(Japan)