Sustainability
Disclosing Nature-related Information based on TNFD Recommendations

In line with its Environmental Vision 2050, Fuji Electric aims to realize a society in harmony with nature. Through its energy and environment businesses, Fuji Electric is working to reduce environmental impact and contribute to the conservation of natural capital, including biodiversity. With the adoption of the Kunming-Montreal Global Biodiversity Framework in 2022, societal momentum toward a nature-positive world is building.
In light of this, Fuji Electric followed the framework of the Taskforce on Nature-related Financial Disclosures (TNFD) to evaluate its dependence on natural capital and the impact of its business activities on natural capital, as well as the risks and opportunities in its operations. We will continue our efforts to reduce environmental impact, which include global warming countermeasures, resource recycling, and chemical substance management, as well as initiatives to contribute to the conservation of biodiversity.

Governance

Fuji Electric regards protecting the global environment as a key management priority.
Twice a year, the executive officers of Fuji Electric's business, sales, and corporate divisions discuss and assess key sustainability-related challenges at the Sustainability Committee (formerly the SDGs Promotion Committee). These challenges include the advancement of Environmental Vision 2050, which includes measures to address natural capital issues, and the promotion of human rights and human resource engagement. Key items discussed by this committee are finalized by the Executive Committee and reported to the Board of Directors.

Strategy

We conduct assessments of nature-related risks and opportunities in line with the LEAP approach recommended by the TNFD. This year, we evaluated our major businesses—energy, industry, semiconductors, and food distribution—by identifying the nature-related dependencies and impacts associated with in-house manufacturing, as well as risks and opportunities.

Evaluation Process Under the LEAP Approach

Evaluation Process Under the LEAP Approach

Evaluating Priority Regions ("Locate”)

Based on five criteria recommended by the TNFD, including physical water risk, conservation priority, and ecosystem integrity, we evaluated 44 domestic and overseas manufacturing sites using data obtained through external tools.

Evaluation results External tools and processes used
Physical water risk Overseas locations in areas with high water stress and drought risk were identified. However, the water withdrawal at these bases is not high. Evaluated using Aqueduct data provided by the World Resources Institute
Conservation priority, ecosystem integrity（Note 1）, etc. The number of bases in areas of high conservation priority or ecosystem integrity is small.
However, as some bases were confirmed to be adjacent to protected areas or KBAs（Note 2）established by the relevant country or region, we will make efforts to reduce the impact on nature in those regions.
In addition, there are no bases in close proximity to areas managed by Indigenous peoples and local communities.		 Conservation Priority:
Assessed proximity to areas of high conservation priority (protected areas and KBAs) using IBAT

Ecosystem Integrity:
Assessed using the Biodiversity Intactness Index

Rapid Degradation of Ecosystem Integrity:
Assessed using the WWF Biodiversity Risk Filter based on pressures on biodiversity, an indicator of the magnitude of the impact on nature

Ecosystem Service Priority:
Assessed proximity to Indigenous peoples and local communities using Global Forest Watch

(Note 1)　

Ecosystem Integrity: An indicator of changes in species populations known as the Biodiversity Intactness Index. Higher values indicate areas with less human impact.

(Note 2)　

KBA: Key Biodiversity Area: A key area for biodiversity conservation, selected based on globally standardized criteria for the conservation of rare species and ecosystems.

Results of Evaluations of Fuji Electric Manufacturing Sites

Evaluation of Physical Water Risk and Conservation Priority by Manufacturing Base

Evaluation of Physical Water Risk and Conservation Priority by Manufacturing Base

Evaluating Dependencies and Impacts ("Evaluate”)

We identified nature-related dependencies and impacts in our electrical equipment manufacturing business and evaluated their magnitude.
We used ENCORE, a tool recommended by the TNFD, to conduct evaluations, and organized the results in the form of a heat map.
Based on the results, we conducted an evaluation in light of the characteristics of our business.

(Note 1)
Volatile organic compounds
(Note 2)
A law for preventing environmental pollution caused by chemical substances, requiring business operators to report to the government the amount of chemical substances released and transferred

Assessing Risks and Opportunities (“Assess”)

Based on the assessment results of dependencies and impacts, we classified risks arising from the deterioration of the natural capital on which we depend as physical risks, while risks arising from social transformations toward greater emphasis on reducing negative impacts on nature and conserving biodiversity are classified as transition risks. We also identified opportunities in our areas of focus, through which we aim to achieve a recycling-oriented society and a society in harmony with nature, as stated in Environmental Vision 2050.
Going forward, we will consider measures to address these important risks and opportunities, and expand the scope of our assessments to encompass the entire value chain.

Classification Dependencies and impacts as factors Possible risks and impacts for Fuji Electric
Physical risks Acute Mitigation of floods and storms Decreased earnings associated with the impacts of frequent and severe extreme weather events on production, and increased costs to address them
Chronic Supply and purification of water resources Delays in production processes that use large amounts of water due to decreased amounts of available water resources and increased costs to address the issue
Transition risks Policies and regulations Water resource use/pollution Increased costs associated with stricter regulations on water use, pollution, and other environmental impacts
Overall impact Increased costs associated with stricter regulations on environmentally conscious product design (eco-design regulations, etc.)
Reputation Water resource use/pollution Decline in reputation due to adverse impacts on ecosystems caused by water use, pollution, and other environmental impacts
Technology Overall impact Increased costs to develop technologies that contribute to resource recycling and lost opportunities due to development delays
Classification Areas of Focus Opportunities for Fuji Electric to gain and contribute
Opportunities Products and services Resource recycling efforts Capturing new demand by using recycled materials and shifting to environmentally friendly products
Products and services that help resolve environmental and social issues Capturing new demand by developing products and services that help conserve and generate energy, and helping reduce the environmental impact of society as a whole
Capturing new demand and resolving environmental and social issues by developing products and services related to emission control for pollutants and disaster prevention and mitigation
Biodiversity conservation Nature and environmental protection activities Restoring and conserving biodiversity and ecosystem services in regions where bases are located, including forest conservation activities and ocean and river conservation

Managing the Impact of Risks

In line with the Fuji Electric Risk Management Rules, each division and affiliate of Fuji Electric systematically and organizationally manages risks, and annually assesses and evaluates risks associated with business activities. Topics of evaluation include climate change and environmental pollution. The evaluated risks are subject to an interim follow-up after the end of the second quarter and a final assessment at the end of the fiscal year.

Indicators and Targets

Fuji Electric carries out monitoring based on indicators it has established pertaining to water resources, on which we are highly dependent, as well as pollution, which involves significant impact. In addition, we have set targets for indicators that we consider important.

Indicators

Monitoring item Relevant dependencies and impacts KPI FY2024 results
Water resources Dependency: Water resource supply services
Impact: Water resource utilization		 Water consumption 10.14 million m3
Volume of water recycled 2.689 million m3
Promotion of a recycling-oriented society Impact: Pollution Ratio of waste sent to landfill 0.15 ％
Volatile organic compound (VOC) emissions 509 t

Targets

Established targets Relevant dependencies and impacts KPI FY2030 targets
Reduction of water consumption Dependency: Water resource supply services
Impact: Water resource utilization		 Water intake per unit of net sales 1,200 m3 per 100 million yen
Reduction of waste discharge Impact: Pollution Ratio of waste sent to landfill Less than 0.5%
Reduction of harmful substance discharge Impact: Pollution Volatile organic compound (VOC) emissions 800 t or less
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