TCFD

I-NET Corporation, its subsidiaries, and its affiliates (collectively referred to as the “I-NET Group” or “the Group”) see contribution to society through ESG management as critical to achieving our corporate philosophy: “To create new systems and values using information technology and contribute to the realization of a prosperous, happy society.”
As the Group consumes a lot of electricity at its own data centers, addressing environmental issues including climate change is one of our important management challenges.
The Group analyzes and evaluates the risks and opportunities that climate change presents to the Group under multiple scenarios based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The results are reflected in the Group’s environmental strategy after reporting to, discussion in, and decision-making by a dedicated council established within I-NET Corporation—the parent company overseeing the Group—and the Board of Directors.

The I-NET Group has established governance policies and an execution structure to address environmental issues including climate change.
This allows us to deliberate and decide on important policies and measures for responding to climate change, leading to improvements and new initiatives.

In April 2022, the Group established an SDGs Promotion Office within I-NET to further advance ESG management.
We have also established an SDGs Promotion Council chaired by our Representative Director and Executive President.
The Council meets twice a year to report on and discuss SDG activities, working actively on SDG initiatives across the Group.
The SDGs Promotion Council discusses and decides on initiatives, risks, opportunities, policies, and disclosures related to climate change. It also monitors progress and reports resolutions and progress status to the Board of Directors.
The SDGs Promotion Office operates the SDGs Promotion Council and conducts specific examinations of group-wide initiatives, risks, opportunities, policies, and disclosures. It then extends resolutions into business activities through each business division and follows up on their implementation.

The Group has conducted scenario analysis in medium-term and long-term timeframe in order to examine the impact of climate change-driven societal transformations, policy and regulatory changes, and market changes on the Group.

In conducting scenario analysis, we examined two scenarios—the 2°C scenario and the 4°C scenario—with reference to data published by organizations such as the International Energy Agency (IEA), based on the TCFD recommendations.
Until 2030, temperature changes progress similarly under these scenarios, but the difference between them is expected to widen after 2030. Under each scenario, we conducted our analysis considering transition risks (risks related to transition to a low-carbon economy) that are expected to manifest by 2030 and physical risks (risks related to physical changes caused by climate change) that are expected by 2050.

Risks for the Company’s businesses under 2℃/4℃ scenarios

Information Processing Services and System Development Services account for about 96% of net sales in the Group’s businesses.
In FY2022, we conducted scenario analysis for 2°C and 4°C temperature rises based on the TCFD recommendations, looking at Information Processing Services, which includes data center operations that are more susceptible to the impact of climate change.
As 99% of the Group’s electricity usage comes from data centers, we only analyzed Information Processing Services.

Transition Risks: Risks related to transition to a low-carbon economy; Physical Risks: Risks related to physical changes caused by climate change

Risk Identification and Assessment Process

Through scenario analysis based on our TCFD declaration, the Group identifies important climate change-related risks and opportunities, and grasps and assesses the situation. In addition, the SDGs Promotion Office, as the department in charge, assesses and makes decisions on operational risks that are closely related to climate change risks in the Risk Management Committee, which holds monthly meetings to manage operational risk.

Risk Management Process

The SDGs Promotion Council, meeting twice a year, reviews overall risks, grasps the status of countermeasure implementation, and reflects insights into the environmental strategy for the entire Group. In addition, the SDGs Promotion Office works with relevant departments and divisions to address the risks identified by the SDGs Promotion Council.

Risk Control in Management

When risks or issues arise, the officer in charge of SDGs and the SDGs Promotion Office grasps the content and promptly reports it to the executive management team. Executive management and the Board of Directors oversee and control these reports, and give instructions and orders as needed to respond to risks and issues.

Response to Scope 3: Plan to determine response policy by end of FY2023 through investigation into emissions across the Group’s entire value chain.

* PUE (Power Usage Effectiveness): Indicator showing DC electricity usage efficiency. The total electricity consumption of the data center divided by the electricity consumption of ICT equipment such as servers.