Disclosure based on the TCFD
and TNFD Recommendations
Basic Concept
The ITO EN Group believes that, as a company whose operations are centered on naturally derived products, protecting the global environment shared by all humans and passing it on to the next generation is one of its most important tasks. In 2023, it was said that the world shifted from global warming to global boiling. The temperature is increasing and extreme weather is occurring around the world. Natural disasters such as heat waves, droughts and floods occur and biodiversity is being lost at an unprecedented speed. We believe that it is essential to work to address climate change and conserve and restore natural capital and biodiversity to ensure that we can continue to enjoy the blessings of nature in the future.
The ITO EN Group has identified material risks and opportunities that impact its business activities. To study measures and step up initiatives, in FY2020 we embarked on a climate change scenario analysis focused on green tea produced in Japan, the raw material of the Group's mainstay products. We expanded the scope of this analysis from ITO EN's value chain in FY2021 to the group companies in the Tea Leaves and Beverages Business in FY2022 and to ITO EN's logistics warehouses and commissioned warehouses in Japan in FY2023.
In addition, we understand that an integrated approach is necessary, given that climate change and issues regarding natural capital and biodiversity are closely interlinked. In light of this, in its first efforts to disclose nature-related information for FY2024, the Group referenced the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations version 1.0 and carried out analyses regarding its green tea business from the perspective of natural capital and biodiversity. Since measures to address climate change may conflict with measures regarding natural capital or biodiversity, we will make comprehensive decisions considering the findings of our analyses and implement appropriate actions.
We will continue to analyze risks and opportunities from the perspective of the relationships between climate change and natural capital and biodiversity and comprehensively respond to increase the sustainability of the ITO EN Group and society.
The ITO EN Group stated its support for the Task Force on Climate-related Financial Disclosures (TCFD) recommendations in April 2022 and for the TNFD recommendations in April 2024. It also participates in the TNFD Forum.* In accordance with both the TCFD and TNFD recommendations, we will continue to expand the scope of the information we disclose and enhance our analyses.
- *
- The TNFD Forum is a group of stakeholders who support the TNFD’s discussions,The group is composed of companies, institutions and organizations aligned with the philosophy of the TNFD.
Response to the TCFD and TNFD Recommendations (Summary)
Climate change, natural capital and biodiversity are not concepts that are independent from each other. They are closely related and the ITO EN Group understands that it is necessary to take comprehensive actions. For this reason, we provide integrated descriptions of our governance and management of the risks we are exposed to and their impact, which is something that the two recommendations have in common, while separately detailing actions regarding strategies, metrics and targets.
| Item | Details and actions |
|---|---|
| Governance |
Matter that the TCFD (climate change) and TNFD (natural capital and biodiversity) both addressThe Sustainability Promotion Committee chaired by ITO EN's President and Executive Officer discusses policies, strategies and actions for addressing climate change, natural capital and biodiversity issues. Significant matters are reported to the Board of Directors and to the Executive Board so that they will be discussed and decisions will be incorporated into management strategies. The Chief Sustainability Officer (CSO) leads efforts to strengthen the system for efforts to address environmental issues centering on climate change and on the conservation and restoration of natural capital and biodiversity. The results of ESG ratings by external rating agencies, which cover climate change, are reflected in assessments of directors' compensation. Develop a system for implementing initiatives led by the Risk Management Committee, which is an advisory body to the Board of Directors chaired by ITO EN's President and Executive Officer, with the Chief Human Rights Officer (CHRO) being responsible for these initiatives. Carry out due diligence activities regarding raw material suppliers and construct a grievance mechanism for indigenous peoples, local communities and other stakeholders affected by business activities in accordance with the ITO EN Group Human Rights Policy and the ITO EN Group Fundamental Supplier Policy. |
| Strategies |
TCFD (Climate Change)[Scenario analysis] Analyze risks and opportunities associated with the transition to a decarbonized society assuming the transition in the 1.5 °C/2 °C scenario is implemented. Analyze physical risks and opportunities assuming the continued rise of global temperatures and the continuing exacerbation of the adverse impact of this temperature rise as detailed in the 4 °C scenario. [Results of scenario-based analyses] Transition risks Increase of costs due to the imposition of carbon taxes Impact estimated in FY2030 Physical risks Analysis of risks to plants owned by ITO EN, Group companies and their contractors and to logistics warehouses related to wind and flood damage Impact on harvest volume and quality of raw materials for mainstay products (i.e., green tea, barley and coffee beans) [Transition plan] Regarding measures to reduce Scope 1 and 2 emissions, create a roadmap and determine KPIs with a focus on replacing the vehicles used in business with electric vehicles, efforts to conserve energy and transition to renewable sources of energy and accelerate these initiatives. Accelerate the reduction of Scope 3 emissions by reducing the weights of containers and packages, transitioning to sustainable materials and engaging and collaborating with suppliers. |
TNFD (Natural capital and biodiversity)[The LEAP approach] Confine the scope of the measures to the green tea business, which is important to our operations, and carry out analyses referencing the locate-evaluate-assess-prepare (LEAP) approach. [Locate] The cultivation process has the greatest dependencies and impact on natural capital and diversity in the value chain of the green tea business. Analyze the state of tea fields with which the ITO EN Group contracts for the cultivation of tea. [Evaluate] Among others issues, GHG emissions and soil deterioration (or contamination) are recognized as having a high or very high impact on the Group and on things the Group is dependent on. [Transition plan] Implement measures to properly manage fertilization and soil with an awareness of their importance in addressing potential environmental impact. |
|
| Risk and Impact Management |
Matter that the TCFD (climate change) and TNFD (natural capital and biodiversity) both addressThe Risk Management Committee, which is an advisory body to the Board of Directors chaired by ITO EN's President and Executive Officer, manages climate change risks and efforts to conserve and restore natural capital and biodiversity, which are recognized as significant risks, through an integrated Group-wide risk management system. |
| Metrics and targets |
TCFD (Climate Change)[GHG emission reduction targets]* Compared to FY2018 FY2030 Scopes 1 & 2: 50% reduction in total, Scope 3: 20% reduction in total FY2050 Carbon neutrality [Targets for the measures' KPIs] Percent of energy used by the whole Group that is renewable energy: 100% in FY2030 Percent of the Group's vehicles that are electric: 50% in FY2030 TNFD (Natural capital and biodiversity)Tea-Producing Region Development Project Targets Tea-Producing Region Development Project cultivation area: 2,800 ha in FY2030 Organically cultivated production volume: 500 tons in FY2030 Percent of sites that maintain implement operations in line with good agricultural practices (GAP) certifications obtained through the Tea-Producing Region Development Project: 100% *Note: Other measures, including the assessment of effectiveness, will be continuously considered. |