The table below summarizes the process of how we identified and assessed the climate-related risks and opportunities and how we analyzed their business imapcts in order to consider measures.

1	Define analysis extent	Select the region and business category to analyze. Select timescale to refer to.
2	Identify risk and oppoprtunity Assess business imapcts	Identify what will imapct business continuity in reference to the TCFD recommendations including four transition risk categories, two physical risk categories, and five opportunity categories. Rate the likelihood and siginificance of each concept to recognize material issues.
3	Scenario analysis	Calculate financial impacts that the recognized risks and opportunities may cause to our business under two scenarios in which future temperature rise are supposed to be more or less than 2℃.
4	Responsive measure	Consider how we should prepare for the presumed impacts.

To identify risks and opportunities, to assess business impacts

We rated the likelihood and significance of those risks and opporunities to understand material imapcts.

Transition and physical risks and opportnuties related to climate change

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Source: Recommendations of the Task Force on Climate-related Financial Disclosures (June 2017）

Scenario Analysis

	IEA - Transition Risks	IPCC - Physical Risks
4℃ Scenario	STEPS　(Stated Policies Scenario） ・Based on current policy settings and policies announced by 2020 including Nationally Determined Contributions (NDC, what each country pledged to do aiming to reduce GHG emission) under the Paris Agreement. ・The temperature rises by 2.7℃ as of 2100.	RCP 8.5 ・ Supposes the maximum GHG emission as of 2100. ・The temperature rises by 4.4℃ as of 2100 with a feasible maximum value of GHG concentration in the future.
2℃ Scenario	SDS　（Sustainable Development Scenario） ・Completely aligned with the Paris Agreement.（Limits the warming by less than 2℃, or 1.5℃ if possible) ・Achieves net zero CO2 emission by 2070. ・The temperature rises by 1.5℃ as of 2100. (by 1.65℃ as of 2070)	RCP 2.6 ・Supposes to hold the warming by less than 2℃ with the minimum GHG emission ・The temperature rises by 1.8℃ as of 2100.
＊RCP Scenario	RCP for Representative Concentration Pathways / It supposes four different levels of greenhouse gas concentration and is used in climate model predictions in the IPCC's Fifth Assessment Report.

＊Source：
Ministry of the Environment "Overview of IPCC's Fifth Assessment Report - Working Group 1 (The Physical Science Basis)- （Dec 2014)"
IPCC "Firth Assessment Report" , RCP8.5 scenario and  RCP2.6 scenario
IEA "World Energy Outlook 2021", SDS scenario, STEPS scenario

Analysis Results

Categories *This table can be scrolled horizontally.			Risk / Opportunity	Major Potential Impact	Financial Impacts as of 2030		Time-scale	Responsive Measures
					4℃	2℃
Transition	Policy /Legal	GHG goals Carbon pricing	Energy/electricity cost rises with carbon tax introduced or the tax rate increased	Direct costs increase	Small	Small	Mid to Long	・Set forth a GHG reduction goals and plans to achieve it
	Market	Increased cost of raw materials	Energy/electricity cost rises	Indirect costs increase	Medium *Reflects recent cost hike only due to long-term price rise being difficult to predict		Short to Long	・Constrain increase of operating costs by saving and creating energy
	Reputation	Delay in TCFD disclosure/reporting	Resignation rate up Recruitment numbers down	Indirect costs increase	Small		Long	・Efforts to tackle climate change ・Report the efforts timely and adequately
Physical	Acute	Extreme weather *Floods, typhoons	Operation suspends when production/logistics base damaged	Production capacity declines and sales drop	Medium	Small	Mid to Long	・Enhance the business continuity plan
			Supply chain disrupted	Production capacity declines and sales drop Costs increase by changing suppliers	Large if maximum			・Enhance the business continuity plan ・Study where to procure alternative materials
					Small if minimum	Small if minimum
Opportunity	Products / Services	Low-carbon products/services develop and expand	Profits grow as demand for digital on-demand printing increases	Sales increase due to growing demand for products and services	Large		Short to Mid	・Cacth the trends in terms of climate change to develop satisfactory products ・More promotions for low-carbon products ・Strengthen products in preparation for demand hike

* Analysis extent：Domestic bases / Machine units (printers and plotters)
* Financial impact：Small … Less than 50 million yen / Medium … 50 to 500 million yen / Large … More than 500 million yen
* Timescale：Short : less than three years / Medium : three to ten years / Long: more than ten years

How we stay resilient

　The scenario analysis specified three significant indications related to climate change. Firstly, costs, including the expense to address conceivable understaffing caused by reputation risk, will increase in the future. Next, extreme weather events can bring about procurement difficulties. Meanwhile, demand for digital on-demand printing is expected to grow.

　Specifically, price rises of materials and energy due to carbon tax will directly affect products. Our ongoing initiative to reduce the cost and resource consumption will be addressing this problem. For instance, we have cut as much plastic and cardboard as possible off from inks and parts packaging. Minimizing the package helps reducing the number of shipping containers, which decreases CO2 emission in logistics. We are also reducing machine parts during the designing process. Moreover, we have adopted CO2-free electricity and energy-efficient facilities in major domestic sites. Besides, we are developing cutting-edge technologies catering to resource circulation and mitigation of environmental impacts. We are striving for materializing the idea of “use only as much as necessary” by thoroughly saving energy and resources, just like how our inkjet printer operates by consuming only as much ink as necessary.

　Additionally, we will prepare for unprecedented situations including climate disasters on daily basis so the organization will always be capable to flexibly react to any emergency. To reach this stage, we are determined to identify materiality and to implement plans to achieve our goal.

　To mitigate reputation risks, we are going to demonstrate our commitment to climate change. Concretely, we will communicate internally and externally about how our technologies contribute to environment and what our company achieve in terms of ESG.

　Lastly, our strength, the inkjet printers resolve the challenges of analog printing. Conventional methods often involve mass production using plates, followed by the risk of surplus inventory and the need for warehouse management. However, these concerns can be eliminated by utilizing digital on-demand printing. This technology contributes to moving away from mass production and mass consumption. Given the urgency of climate change response is emphasized, we anticipate that the value of this technology will continue to increase. Our inkjet printers not only support customers’ businesses, but also assist reducing environmental impact and managerial burdens. Expanding this convenience worldwide will be of assistance to resolve the social issues.

　We believe that our efforts to underpin sustainability in customers’ digital printing business and to integrally enhance our own sustainability will lead to reinforced resilience of the whole company.

Risk Management

Members from each division consisted a project team to identify and assess the climate-related risks and opportunities. The risks and opportunity have been controlled through SDGs promotion meeting in which CEO and directors, some of exective officers, and some of general managers attend and have been reported to the Board of Directors when necessary.

Identify risks and opportunities	Assess and Analyse	Controll and take action
Discuss what climate-related risks and opportunities may occur in domestic sites which handles machines, referring to recommendations and announcements from TCFD and other organizations.	Rate the presumed impacts from the identified risks and opportunity. Calculate the financial imapcts from significant issues.	Discuss how we should mitigate the identified risks and levarage the opportunity. Report to the SDGs promotion meeting and the Board of Directors. Given the board's approval, integrate the responsive measures into actual risk management and BCPs. Set forth a goal and plans to achieve it and reflect these into management strategy. Repeat the PDCA cycle monthly through the SDGs promotion meeting.

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