Engagement with the TCFD Recommendations｜Environment｜ESG｜Sustainability

Basic approach

The Group considers environmental problems such as climate change to be important issues for management to address. Based on this awareness, we defined practicing ESG management as one of the challenges in our 2030 Vision announced in May 2021, and set environmental, social, and governance KPIs respectively as well as specific targets in Medium-Term Management Plan (2021–2025), which we are working systematically and continuously to achieve.

We will actively engage in eco-friendly business practices, which include reducing greenhouse gas emissions, while also working actively to contribute toward solutions for climate-related social issues through businesses such as renewable energy.

Additionally, in December 2021 we declared our support for the recommendations of the TCFD (Task Force on Climate-related Financial Disclosures) and also joined the TCFD Consortium. The Group is making information disclosures according to the TCFD Framework.

Addressing the TCFD recommendations

(Updated June 2025) （446KB）

* Previous files are at the bottom of the page.

TCFD published its final report in June 2017 and recommended that companies disclose the following information pertaining to their governance, strategies (risks and opportunities, financial and other impacts, handling), and other initiatives.

Governance	Strategy	Risk management	Metrics and goals
Monitoring systems and the role of the management team pertaining to climate-related risks and opportunities	Identifying climate-related risks and opportunities and their impacts on the organization’s businesses, strategy, and financial planning	The processes used by the organization to identify, assess, and manage climate-related risks	The metrics and goals used to assess and manage relevant climate-related risks and opportunities

Governance

The EXEO Group has established the Sustainability Committee chaired by the President and CEO and has established the Sustainability Promotion Office in the General Affairs Department as a dedicated organization for sustainability, primarily for taking measures against climate change. The aims of these actions are to help achieve a sustainable society, and to bolster efforts toward the continued growth of the EXEO Group.
The Sustainability Committee was established as an advisory body to the Management Council. It discusses the direction of sustainability, material issues, target setting and other subjects. It monitors the status of activities and reports the details of its deliberations to the Management Council and the Board of Directors.
The Sustainability Promotion Office within the General Affairs Department operates as the administrative office of the Sustainability Committee. It also plays a role in setting the EXEO Group's targets and managing the progress of various sustainability measures mainly addressing climate change, human rights and natural capital in cooperation with Group companies.

Meeting Body	FY	Details
Board of Directors (Management Council)	2023	Formulation of the Human Rights Policy and the Procurement Policy Annual efforts to improve sustainability (of the environment)
Board of Directors (Management Council)	2024	Obtaining SBT certification and Actual GHG emissions in FY2023 CDP2024 Assessment Results and Climate Change Initiatives to Date
Sustainability Committee	2023	Formulation of the Human Rights Policy and the Procurement Policy Actual GHG emissions in FY2022, training for employees and actions to protect biodiversity
Sustainability Committee	2024	Actions to protect biodiversity and participation in industry workshops on decarbonization, etc. Emission reduction roadmap, development of reduction measures and formulation of environmental policy, etc.

*This information is for the most recent two years.

Strategy

We use scenario analyses to anticipate what the world will be like in 2030 to ascertain the impact that climate change will have on our Group’s business. The primary information sources for our analyses were the 1.5°C scenario by the International Energy Agency (IEA), and the 4°C scenario by the Intergovernmental Panel on Climate Change (IPCC).

Scenario analysis steps

Key hypotheses

No.	Key hypotheses used in scenario analysis		2030	2050	Source
1	Introduction of the carbon tax	Carbon tax value	140 USD/t-CO₂	250 USD/t-CO₂	IEA WEO2024 (figures of developed countries in the NZE scenario)
2	Emissions controls	Carbon tax value	140 USD/t-CO₂	250 USD/t-CO₂	IEA WEO2024 (figures of developed countries in the NZE scenario)
3	Emissions controls	Penalties under the EU Emissions Trading System (EU- ETS)	100 EUR/t-CO₂	100 EUR/t-CO₂	EU ETS Handbook
4	Emissions controls	EU-ETS trading price	70.28 EUR/t-CO₂	70.28 EUR/t-CO₂	Average trading price under the EU-ETS in the last twelve months
5	CO₂ reduction cost	Renewable energy certificate purchase price	1.2 yen/kWh	3.2 yen/kWh	Estimated by the Company based on materials published by the Agency for Natural Resources and Energy's System Consideration Working Group
6	Progress in energy saving and renewable energy technologies	Working-age population	70.67 million people	55.29 million people	National Institute of Population and Social Security Research: Population Projections for Japan
7	Intensification of extreme weather	Frequency of flooding	1.5 times higher	2.33 times higher	Estimated by the Company based on materials published by the Ministry of Land, Infrastructure, Transport and Tourism's study meeting on technologies for flood control plans in view of climate change
8	Temperature rise	Work loss rate	2.71%	3.23%	Estimated by the Company based on data published by the International Labour Organization (ILO) (on lost working hours due to heat stress)
9	Products and services	Offshore wind power generation market size	2.2 times larger	5.0 times larger	Agency for Natural Resources and Energy: FY2030 energy supply and demand forecast (title tentatively translated) Ministry of Economy, Trade and Industry: Japan’s power generation amount (2050) (title tentatively translated)
10	Services for climate change mitigation and adaptation	Market size of ZEB	¥5,020.0 billion	¥6,820.0 billion	Ministry of the Environment: Estimation of market size and employment in the environmental industry (title tentatively translated)

Scenario analysis results

1.5°C scenario (scenario in which the necessary measures were taken to keep temperature rises to 1.5°C compared to pre-industrial levels)

Type	Climate change factor	Impact on the Group	Timeline of impact^*1	Level of impact^*2		Key response measures
Type	Climate change factor	Impact on the Group	Timeline of impact^*1	2030	2050	Key response measures
Risks	Introduction of the carbon tax	Increase in taxation such as instituting a carbon tax (taxed according to CO₂ emissions from business activities)	Medium / Long	▼8	▼0	Shift to the use of renewable energy for the electric power used in business activities (Switching to the renewable energy menu, purchasing renewable energy certificates, PPA, etc.), switching to eco-friendly cars Efforts to save energy in business activities (switching to LED lights, setting proper temperatures for air conditioners, promoting eco-driving, use of accelerants, etc.)
	Emissions controls	Increase in cost to buy credits for CO₂ emissions (emissions quotas) that fail to reduce enough volume	Medium / Long	▼0	▼2	Achieve reduction targets by implementing the CO₂ emissions reduction measures shown above
	CO₂ reduction cost	Soar renewable energy certificate purchase price	Short / Medium / Long	▼1	▼2
	Surging raw materials prices	Increased cost of stocking materials made from natural resources	Short / Medium / Long	-	-	Efforts to save energy in business activities (switching to LED lights, setting proper temperatures for air conditioners, etc.) Strive to mitigate risk of cost increases by passing them on prices for construction work
	Obligation to disclose information	Increase in costs to comply with expanded obligations to disclose information related to greenhouse gas emissions	Short / Medium / Long	▼1	▼1	Avoid increased costs to handle emissions calculations by implementing DX in the calculation operations
	Progress in energy saving and renewable energy technologies	Decline in earnings due to restrictions on the reception of orders because of an engineer shortage	Short / Medium / Long	▼▼14	▼▼95	Mutually complementing resources acquired through M&A activities, business alliances and the like to address a decline in earnings due to restrictions on the reception of orders due to an engineer shortage.
	Changing customer preferences	Preferences shift toward companies that have done more for the environment, and declining sales for those who miss this trend due to business relationships being severed or losing market share to other companies	Short / Medium / Long	-	-	Increase our business value with activities to decarbonize our Group from within and with social contributions through our business (improve our assessments from environmental ratings agencies)
	Stakeholder assessments	Business value (stock price) falls due to negative assessments of measures against climate change (insufficient information disclosures, failure to reach CO₂ emissions targets, etc.), making it harder to raise funds and secure human resources	Short / Medium / Long	-	-
Opportunities	Construction work related to renewable energy	Expansion of construction of self-owned power lines due to increased demand for renewable energy such as offshore wind power generation Expansion of energy storage plant construction and maintenance business due to increasing needs for storage batteries Expansion of solar sharing business to use land at sites where solar power plants are installed as agricultural land	Short / Medium / Long	▲▲	▲▲	Actively pursue business in renewable energies such as solar power, offshore wind power generation and biomass, and expand orders for EPC projects (mutually complementary resources through business partnerships, expand construction domains through capital contributions, etc.)
	Market expansion	Growing demand for disaster prevention and mitigation, and building national resilience The IoT business market amid increasing flood risks due to rapid climate change Markets for the development of infrastructure such as networks as urban digitalization advances Markets for the refurbishment of equipment in the scenario where measures to establish a circular economy are accelerated.	Short / Medium / Long	▲	▲	Expand our urban infrastructure and refurbishments businesses
	Services to mitigate and adapt to climate change	Expansion of the urban infrastructure business due to the underground installation of utility lines and the construction of net zero emission buildings (ZEBs) to mitigate climate change	Short / Medium / Long
	Adaptation to climate change	Stronger resilience by switching to telecommuting and other flexible work styles not dependent on location, in response to climate change	Short / Medium / Long			Make further efforts toward flexible work styles
	Stakeholder assessments	Decarbonization efforts lead to higher business value, more opportunities for low- interest financing from financial institutions and the business growth that entails, create opportunities to receive orders from new clients, and create opportunities to secure talented human resources	Short / Medium / Long	-	-	Increase our business value with in-house decarbonization activities and with social contributions through our business (improve our assessments from environmental ratings agencies) Raise funds through means such as Sustainability-Linked Loans

4°C scenario (scenario in which measures to counter climate change are insufficient, and temperatures rise by approximately 4°C compared to pre-industrial levels)

Type	Climate change factor	Impact on the Group	Timeline of impact^*1	Level of impact^*2		Key response measures
Type	Climate change factor	Impact on the Group	Timeline of impact^*1	2030	2050	Key response measures
Risks	(Acute) Intensification of extreme weather	Emerging risk of flood damage to residential and other buildings as well as the commensurate increase in damage insurance premiums, worsening work environments Supply chain disruptions due to intensified weather, interruptions to procurement and deliveries, lost chances to make proposals to customers or receive orders from them	Medium / Long	▼7	▼▼19	Better BCP preparedness in the event of a disaster, regular hazard risk assessments for properties owned
Risks	(Chronic) Temperature rise	Worsening labor shortages in construction due to increased health risks (heatstroke, etc.) and worsening work environments at outdoor construction sites Lower work efficiency, delayed completion of construction, and increased cost of provisions due to heat stress	Medium / Long	▼▼12	▼▼16	Ensure and improve operating efficiency of worksites by taking thorough measures against heatstroke (Distribution of heatstroke prevention kits, WBGT value measurement, installation of ice machines, etc.) and advancing digital transformation (DX) of work sites Secure sufficient construction periods

*1 Timeline of impact: Short time line: 3 years or less, Medium time line: Over 3 and up to 10 years, Long time line: Over 10 years

*2 Financial impact (profit) on business activities of the Group in fiscal 2030 and in fiscal 2050 is calculated assuming certain conditions and expressed in billions of yen. Anticipating the relative magnitudes, risks are expressed as “▼▼▼ (large), ” “▼ (medium) ” and “▼ (small) ” and opportunities as “▲▲▲ (large), ” “▲▲ (medium) ” and “▲ (small). ” Impact scale in financial terms is (large): ¥10.0 billion or more, (medium): From ¥1.0 billion to less than ¥10.0 billion, and (small): Less than ¥1.0 billion.

Risk management

For our Group’s risk management system, we have formulated the Risk Management Rules that specify the basic points involved in risk management and have established risk categories in addition to the Risk Management Division that handles them. We have also established the Business Risk Management Committee as the Group-wide risk manager, as we build and operate systems to identify and evaluate risks on a Group-wide level.

Risks associated with climate change are chiefly identified and assessed by the Sustainability Committee. Information is also shared and coordinated in deliberations on individual matters in the Business Risk Management Committee, which includes verifying climate-related risks.

Based on the Risk Management Rules, these are also integrated into Group-wide processes and matched against risks that have been assessed and identified in environmental management systems based on the ISO14001 international standard, and occupational health and safety management systems based on the ISO45001 international standard.

Metrics and goals

The Group has defined and is monitoring the following metrics and goals for managing climate-related risks and opportunities.

Roadmap: Reduction targets and performance trends

In-house emissions (Unit: thousand t-CO₂)

In-house emissions (Unit: thousand t-CO2)

Emissions from other companies related to business activities (Unit: thousand t-CO₂)

Emissions from other companies related to business activities(Unit: thousand t-CO2)

Sub-metrics

	FY2020	FY2022	FY2023	FY2024	Targets for FY2025	Scope of data
Switch to electricity from renewable energy sources	ー	73.2%	77.8%	94.5%	100％	Company-managed sites of Exeo Group, Inc.
Adoption of EVs and other low-emission vehicles	91.4%	96.1%	96.7%	96.8%	100％	Sales vehicles of Exeo Group, Inc.

	Targets for FY2030	Scope of data
Substantial renewable energy conversion of rental properties	100％	Consolidated
Introduction of fuel efficiency improvers (company)	100％	Consolidated Construction vehicles

GHG emissions by Scope (units: t-CO₂, scope of data: consolidated)

	Base year (FY2020)	FY2023	FY2024	Difference	% change
Scope 1 (Direct emissions)	86.3	71.7	66.9	−19.4	−22.4%
Scope 2 (Indirect emissions)	60.4	60.6	58.8	−1.6	−2.6%
Total (Scopes 1 & 2)	25.9	11.1	8.1	−17.8	−68.8%
Scope 3 (Supply chain)	1,757.0	1,264.4	1,164.9	−592.2	−33.7%
Category 1 (Purchased products)	275.9	173.7	212.3	−63.6	−23.0%
Category 2 (Capital goods)	41.5	70.2	72.3	30.8	74.3%
Category 3 (Fuel- and energy-related activities)	12.7	13.0	12.8	0.2	1.2%
Category 5 (Waste generated in operations)	2.4	4.6	3.9	1.5	60.4%
Category 6 (Business travel)	1.9	2.2	2.2	0.4	20.1%
Category 7 (Commuting)	3.4	4.0	4.1	0.7	20.1%
Category 11 (Use of sold products)	1,418.4	995.8	837.8	−580.6	−40.9%
Category 13 (Downstream leased assets)	0.9	0.8	19.4	18.5	1,987.1%

* Difference and % change are calculated in t-CO₂ units.

* The greenhouse gas emitted by the Group is carbon dioxide (CO₂).

* Numerical values for the base year could be subject to change if applicable scope or calculation methods change as we make these calculations more sophisticated going forward, or if an event that exceeds the course of our business growth occurs.

Implementation of reduction measures

Previous initiatives

External evaluation

We declared our support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) while also joining the TCFD Consortium, consisting of companies and financial institutions that agree with the recommendations.
In order to further strengthen our efforts to combat climate change, we have joined the Japan Climate Leaders Partnership (JCLP), an organization that supports companies in their efforts to combat climate change.

Sustainability Website

Engagement with the TCFD Recommendations

Basic approach

Governance