For the Global Environment

Based on our recognition that the Group’s business activities can contribute directly to global environmental conservation, we will actively develop our business and contribute to the creation of a carbon-neutral and recycling-oriented society by reducing CO2 emissions that exacerbate climate change and by working on energy-saving and resource-saving solutions through instrumentation engineering.

Strategies

The Group conducted a scenario analysis in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) to identify risks and opportunities related to climate change in the value chain of each business segment, and to evaluate business impacts and formulate countermeasures. Each of the Group’s business segments, the air conditioning instrumentation-related business and the industrial systems-related business, followed the steps shown below to conduct the scenario analysis.

STEP1 Evaluation of the importance of risks and opportunities: Listing of risks and opportunities; Qualitative evaluation of business impacts; Evaluation of the importance of risks and opportunities. STEP2 Definition of the scenario groups: Selection of scenarios; Acquisition of future information on relevant parameters; Organizing the world view with stakeholder awareness. STEP3 Evaluation of business impacts: Identification of financial items affected by risks and opportunities; Examination of calculation formulas and estimation of financial impacts; Identification of gaps with financial indicators in the business as usual. STEP4 Definition of countermeasures: Understanding the Company’s response to risks and opportunities; Consideration of future countermeasures for risk response and opportunity acquisition.

Scenario analysis

The Group chose the scenario of limiting the global average temperature rise to less than 1.5°C compared to pre-industrial levels in line with the framework of the Paris Agreement, and the 4°C scenario that predicts that global warming will progress without intervention. Under each scenario, transition risks related to policies, regulations, and market trends, and physical risks from natural disasters, etc. were analyzed.

Description of worldview Reference scenario
1.5°C scenario A scenario that significantly reduces greenhouse gas emissions, rapidly advances the transition toward decarbonization, and mitigates the rise in temperatures

From the International Energy Agency (IEA)’s transition scenarios

  • Net Zero Emissions by 2050 Scenario

From the Intergovernmental Panel on Climate Change (IPCC)

  • SSP1-1.9 scenario
  • SSP1-2.6 scenario
4°C scenario A scenario in which emissions are not reduced sufficiently, leading to continued temperature rise and a worsening of climate-related disasters and physical impacts

From the International Energy Agency (IEA)’s transition scenarios

  • Stated Policies Scenario
  • Current Policies Scenario
  • Energy Technology Perspectives 2026

From the Intergovernmental Panel on Climate Change (IPCC)

  • SSP3-7.0 scenario

Results of scenario analysis

The results of the Group’s scenario analysis are as follows. The financial impacts were also quantitatively estimated and qualitatively assessed. The criteria for quantitative and qualitative assessments are defined.
Note that, based on the emission volumes for each Scope as shown below, the Group does not have an energy consumption of reportable level (crude oil equivalent of 1,500 kL) under the Act on the Rational Use of Energy. As the volumes of Scope 1 and Scope 2 emissions are not large, the Group recognizes that the climate change-related risks are relatively low.
In addition, through the scenario analysis, it became clear that the air conditioning instrumentation-related business affects the energy consumption of customers, and that the expansion of this business segment, which centers on energy conservation proposals, represents a major business opportunity.

Risk and opportunity

Classification Item Overview Risk/
Opportunity		 1.5°C
scenario		 4°C
scenario		 Countermeasure
Short
-term		 Medium
-term		 Long
-term		 Short
-term		 Medium
-term		 Long
-term
2027 2030 2050 2027 2030 2050
Transition Policy
and law		 Increase in operational costs due to energy prices and the introduction of carbon pricing
  • Impact on the Company’s operational and raw material procurement costs due to carbon pricing
  • Fluctuations in operational costs due to changes in energy prices
 Risk
Small
Medium
Medium
Small
Medium
Medium
  • Reduce the Company’s GHG emissions
  • Request for GHG emission reductions to suppliers
Increase in order opportunities through the use of subsidies from national and local governments
  • Acquisition of projects stemming from GX-related initiatives by national and local governments
 Opportunity Medium Medium
  • Strengthen sales activities
Technology
market		 Risk of opportunity loss in acquiring new markets due to insufficient technical capabilities
  • Opportunity loss due to a shortage of in-house engineers and inability to improve technical skills, resulting in failure to meet customer demands
 Risk Large Large
  • Strengthen human capital management to enhance in-house technical capabilities
  • Invest in internal DX and acquire of new technologies
Market Increase in demand and expansion of opportunities to provide ZEB and environmental solutions
  • Business opportunities through the acquisition of projects created alongside GX-related needs such as ZEB and energy-saving
 Opportunity
Large
Large
Large
Small
Small
ー
  • Acquire markets
Reputation Increase in financing costs due to insufficient information disclosure and unmet targets
  • Risk of being disadvantaged in financing due to lack of progress in non-financial information disclosure
 Risk Small Small
  • Enhance ESG disclosure
Physical Chronicity Reduction in workforce and decrease in productivity due to deteriorating working conditions (such as heatstroke)
  • Labor costs anticipated due to deteriorating working conditions and restricted working hours as a result of rising temperatures
 Risk ー ー ー ー
Medium
Medium
  • Undertake efforts to secure workforce
Supply shortages due to supplier shutdowns and transportation delays
  • Risk of supplier disruption due to rising sea levels
  • Operational shutdown of supplier companies due to flooding
 Risk Large Large
  • Research on suppliers
Increase in orders for disaster response, BCP measures, and resilience solutions
  • Construction projects such as the relocation of underground facilities due to rising sea levels
 Opportunity Medium Medium
  • Strengthen sales activities
Acuity Natural disaster
  • Damage to the Company’s facilities and impact on operations due to natural disasters, including torrential rain
 Risk
Large
Large
Large
Large
Large
Large
  • Respond to sites with risks

Criteria for quantitative and qualitative assessments

Impact level Qualitative Risk Opportunity Quantitative
Large Risks that could have a significant impact on the continuation of the business
Opportunities that could have a significant impact on the expansion of the business
Large
Large
Those with a financial impact of ¥1,000 million or more
Medium Risks that could have a moderate impact on the continuation of the business
Opportunities that could have a moderate impact on the expansion of the business
Medium
Medium
Those with a financial impact of ¥100 million to ¥1,000 million
Small Risks that could have a minor impact on the continuation of the business
Opportunities that could have a minor impact on the expansion of the business
Small
Small
Those with a financial impact of less than ¥100 million

Reference information

Indicators and targets

The Group’s greenhouse gas emissions (Scopes 1, 2, and 3) are as follows. The Group has set CO2 reduction targets and received SBT certification in May 2026.

CO2 reduction targets for FY2031/3 (compared to FY2024/3)

Scopes 1 and 2 (42.0)%
Scope 3 (25.0)%

(Unit: t-CO2)

FY2024/3 FY2025/3 FY2026/3
Scope 1 650 630 589
Scope 2 (location-based) 544 556 571
Scope 2 (market-based) 573 614 2
Scope 3 Category 1 Purchased goods and services 25,292 28,435 20,120
Category 2 Capital goods 1,008 1,734 1,642
Category 3 Fuel- and energy-related activities
(not included in Scope 1 or Scope 2)		 237 241 265
Category 4 Upstream transportation and distribution 1,553 1,782 1,668
Category 5 Waste generated in operations 126 100 138
Category 6 Business travel 554 538 785
Category 7 Employee commuting 325 396 436
Category 9 Downstream transportation and distribution 132 208 173
Category 11 Use of sold products 150,815 111,145 95,788
Category 12 End-of-life treatment of sold products 24 28 18
Scope 3 total 180,065 144,607 121,033
Grand total (location-based) 181,259 145,793 122,193
Grand total (market-based) 181,288 145,851 121,623

(Notes)

  1. Calculations of Scopes 1, 2, and 3 for FY2024/3 and FY2025/3 include the Company and its consolidated subsidiary Jupiter Advanced Systems Co., Ltd.
  2. Calculations of Scopes 1, 2, and 3 for FY2026/3 include the Company, its consolidated subsidiary Jupiter Advanced Systems Co., Ltd., and its non-consolidated subsidiaries ND Tech Co., Ltd. and ND Tech Services Co., Ltd.
  3. The Group has obtained third-party assurance for GHG emissions for FY2024/3, FY2025/3, and FY2026/3.

Third-party assurance

The Group is committed to enhancing the reliability of our greenhouse gas emissions data. To achieve this, we conduct third-party verifications on an annual basis and receive an independent assurance statement from BSI Group Japan K.K., the verifying body. Through this process, we aim to provide our stakeholders with more reliable and transparent data disclosures.
We have conducted a third-party verification of our greenhouse gas emissions data for the fiscal year ended March 31, 2026 based on the international standard ISO 14064-3:2019 and have received an independent assurance statement.

Independent assurance statement Open PDF