Climate change is a critical issue that must be addressed to realize a sustainable society, and it is also one of the key management challenges for our company. Its impacts extend broadly across areas such as raw material supply and logistics, and we recognize that proactive environmental initiatives are essential to maintain sustainable business operations and competitiveness. Based on this understanding, we are disclosing information in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Through highly transparent disclosure, we aim to build trust with our stakeholders and enhance our corporate value.
Within our company and across the Yagi Group, responsibility for overseeing risks, opportunities, targets, and specific initiatives related to environmental issues, including climate change, rests with the President and Executive Officer, who manages and supervises the overall framework.
As part of our internal environmental governance, we have established the Sustainability Committee with the objective of promoting business activities that contribute to resolving key issues (materiality), including climate change, and ensuring stronger compliance. The Committee is chaired by the President and Executive Officer and consists of the Head of the Corporate Headquarters, division heads, department managers appointed by division heads, and representative directors and presidents of group companies. As a rule, the Committee convenes once a year and holds additional meetings as necessary.
The progress of climate-related initiatives discussed by the Sustainability Committee is reported to the Board of Directors. Acting as the supervisory body for climate change initiatives, the Board monitors targets and indicators related to climate issues, reflects them in our strategy, and approves key deliberations. Reports are made on a regular basis, and important matters relating to business execution are discussed in management meetings and other forums as appropriate, before being deliberated on and decided by the Board of Directors.
Within the Yagi Group, the Sustainability Committee takes the lead in the entire process of identifying, assessing, and managing risks, including those related to climate change. When identifying and evaluating risks, the Committee compiles reports from each department and utilizes scenario analysis methods to identify key issues based on the findings and results.
In addition, to ensure integration with our company-wide risk management framework, we are currently strengthening collaboration between the Sustainability Committee and the Risk Management Committee.
Decisions related to climate change issues are discussed by both committees before being reported to higher decision-making bodies such as the Board of Directors, where monitoring, integration into our strategy, and approval of deliberations take place.
To understand the potential future impacts of climate change on our business and to incorporate findings into our business strategy, we conduct scenario analyses.
As the premise for the scenario analysis conducted in 2025, we assumed two scenarios to comprehensively identify the risks and opportunities associated with climate change, using multiple scenarios published by external organizations: a world in which the average global temperature rises more than 4°C above pre-industrial levels, and a world under the Paris Agreement scenario, in which global warming is limited to within 1.5°C. For time frames, we defined short term as one year (the financial reporting period), medium term as three years (the period covered by our mid-term management plan), and long term as four years or more. The details of the scenarios used for this analysis are as follows.
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Selected Scenarios |
＜4°C Scenario＞ This scenario assumes a situation in which no stronger measures against global warming are taken and greenhouse gas emissions are not significantly reduced. Under this assumption, the average global temperature is projected to rise by approximately 4°C above pre-industrial levels by the end of the 21st century. In this scenario, the frequency and severity of extreme weather events, sea level rise, and ecosystem destruction are expected to increase, leading to heightened risks of serious socioeconomic impacts
Scenarios Used:
＜1.5°C Scenario＞ This scenario assumes the implementation of stricter countermeasures against global warming, aiming to limit the increase in the Earth’s average temperature to less than 1.5°C above pre-industrial levels by the end of the 21st century. By rapidly advancing the introduction of renewable energy and the utilization of decarbonization technologies, this scenario seeks to mitigate the severe impacts of climate change and realize a sustainable society.
Scenarios Used: |
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Time Frame |
・Short term : 1 year (financial reporting period) ・Medium term : 3 years (period of the mid-term management plan) ・Long term : 4 years or more |
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As for the risks and opportunities identified under each scenario, our Group recognizes the need to respond through both adaptation and mitigation. As shown in the List of Risks and Opportunities, we are examining and implementing specific countermeasures accordingly. The details of each item are provided below.
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Type |
Risks and Opportunities Anticipated in Our Business |
Response Measures |
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Major |
Medium |
Minor |
Risks |
Opportunities |
Area of Financial Impact |
Materiality Assessment ※3 |
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Transition Risks |
Policies & Regulations |
Carbon Pricing
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Increased procurement and transportation costs due to introduction of carbon taxes |
ー |
Expenditures |
Medium |
＜Policy Measures Related to Carbon Pricing＞
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Emissions Trading |
・Increased costs to purchase emission allowances |
If CO₂ emissions remain within allocated allowances, surplus can be sold for profit |
Expenditures Sales |
Medium |
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Plastic Regulations |
・Decline in sales due to declining demand for plastic-derived products ・Increase in procurement costs due to increased demand for biomass plastic products |
By handling alternative materials, we can maintain existing business relationships and meet new demand, thereby avoiding a decline in sales due to customer attrition, or even achieving an increase in sales |
Sales |
Major |
＜Resource Circulation Initiatives＞
＜Environmentally Friendly Product Initiatives＞ |
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Recycling Regulations |
・Decline in sales due to decreased demand for hard-to-recycle products ・Increase in procurement costs due to increased demand for easily recyclable products |
Increase in sales by handling easily recyclable products, maintaining ongoing business relationships and meeting new demand |
Expenditures Sales |
Medium |
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Changes in Customer Behavior |
・Decline in sales due to decreased demand for in-house products with high environmental impact |
Increase in sales due to increased demand for environmentally friendly products, such as those made from natural fibers |
Expenditures Sales |
Major |
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Renewable Energy Policies |
・Increase in electricity procurement costs due to rising renewable energy prices ・Increase in procurement costs due to suppliers' increased procurement costs for renewable energy |
ー |
Expenditures |
Medium |
＜Energy Efficiency / Renewable Energy Introduction＞ |
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Energy Efficiency Policies |
・Increase in capital investment costs for introducing energy-efficient equipment ・Increase in procurement costs due to suppliers' increased equipment investment costs |
ー |
Expenditures |
Medium |
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Forest Protection Policies |
・Reduced raw material yield and rising raw material costs, increasing procurement expenses |
ー |
Expenditures |
Minor |
＜Supply Chain Initiatives＞ |
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Fluctuations in Essential Product Prices |
Increase in procurement costs due to product development costs being passed on to prices |
Decrease in procurement costs due to improvements in recycling technology that reduce production-stage costs for recycled fiber products |
Expenditures |
Minor |
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Changes in Raw Material Costs |
Increase in procurement costs due to growing demand for natural fibers amid rising environmental awareness |
ー |
Expenditures |
Major |
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Disclosure Requirements |
Costs associated with emissions measurement and related compliance |
Enhanced reputation by strengthening disclosure related to certified products and increase in sales due to increased demand for our certified products |
Expenditures Sales |
Medium |
＜Information Disclosure/Information Collection＞ |
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Reputation |
Changes in Customer Perceptions |
Decline in sales due to perception that company products lack environmental consideration |
Increase in sales thanks to a favorable reputation for environmental consideration that makes our products more likely to be chosen |
Sales |
Medium |
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Changes in Investor Perceptions |
Decline in stock price or difficulty in fundraising due to perception of insufficient environmental efforts |
A favorable reputation for environmental consideration will contribute to higher stock prices and easier access to financing |
Sales |
Medium |
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Physical Risks |
Acute |
Severe Weather |
・Repair costs if sites are damaged |
ー |
Assets Expenditures Sales |
Major |
＜BCP Measures＞ |
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Drought |
・Increase in procurement costs due to reduced raw material yields in drought-prone areas |
ー |
Expenditures |
Medium |
＜Supply Chain Response＞
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Chronic |
Rising Average Temperature |
・Poor growth of raw materials due to rising temperatures may make it difficult to procure products from suppliers, leading to a decline in sales |
Increase in sales through higher procurement volumes due to increased customer demand for warm-weather products |
Expenditures |
Medium |
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Deteriorating Labor / Work Conditions |
Increase in procurement costs due to declining outdoor work productivity and reduced harvest volumes among suppliers from deteriorating work conditions |
ー |
Expenditures |
Major |
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The greenhouse gas (GHG) emissions of our company are as follows.
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Target Scope |
Emissions (tons) |
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Scope1 |
65t |
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Scope2 |
208t |
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Scope3 |
397,433t |
※Scope 1 and 2 represent emissions from Yagi & Co., Ltd. on a standalone basis. Scope 3 represents supply chain emissions (categories 1–7) from Yagi & Co., Ltd. on a standalone basis.
Since FY2022, our Group has been compiling actual GHG emission data, and we are working to reduce GHG emissions (Scope 1 and Scope 2) with the goal of achieving carbon neutrality by 2050.
Furthermore, to promote the reduction of GHG emissions across the entire supply chain, we will continue to review our GHG reduction targets through discussions at meetings of the Sustainability Committee mentioned earlier.
For specific metrics and targets used to manage other climate change-related risks and opportunities, we are advancing initiatives under the ESG Strategy, one of the key pillars of our Mid-term Management Plan 2026, “Heritage to the Future.” Details on our progress can be found on our corporate website under “Yagi Group’s SDGs – Performance Indicators and Numerical Targets.”
https://www.yaginet.co.jp/ja/sustainability/sdgs.html
Based on the results of this scenario analysis, we are in the process of establishing additional metrics and targets.