Selection of scenario
The Group has selected the "less than 1.5℃/ 2℃ scenario," in
which the impacts on the transitional side become apparent, and
the "4℃ scenario," in which the impacts on the physical side
become apparent, as published by the Intergovernmental Panel
on Climate Change (IPCC) and the International Energy Agency
(IEA). For the time frame, we selected 2030 for the medium term
and 2050 for the long term.
In conducting the scenario analysis, in order to ascertain the
impact on the entire AEON delight Group, the analysis covered all
domestic businesses (excluding certain support businesses),
which comprise approximately 90% of the Group's sales.
Deliberation process
Significant risks/opportunities and their impact
As a result of the scenario analysis, while there are various risks and opportunities, such as transition risks and physical risks assumed
with climate change, we identified the following as important risks and opportunities for our Group.
Transition risk
Physical risk
* For transition risk, "SDS" (IEA WEO2020, less than 2℃ scenario), "NZE" (IEA Net Zero by 2050, 1.5℃ scenario), SSP1-1.9, SSP1-2.6 (IPCC AR6, less than 2℃ scenario)
(equivalent to RCP2. 6 of AR5) are referenced for less than 1.5℃/ 2℃ scenarios. For physical risk, SSP2-7.0 (IPCC AR6, 4℃ scenario) (equivalent to RCP8. 5 of AR5) as
4℃ scenario. 6), and for physical risks, SSP2-7.0 (IPCC AR6, 4℃ scenario) (equivalent to RCP8.5 of AR5) and STEPS (IEA, 4℃ scenario) are referenced for 4℃
scenarios.
Introduction of carbon tax and increased costs
In order to achieve carbon neutrality by 2050, a carbon tax is
expected to be introduced in Japan, the AEON delight Group's
primary base of operations. Based on our calculations, we
assume that even if a carbon tax is introduced, the additional
cost will be limited to less than 1% of the Group's net income. We
will continue our efforts to conserve energy in order to reduce the
impact on our business.
Increase in renewable energy procurement costs
In order to achieve the AEON Decarbonization Vision 2050, the
AEON delight Group may switch the procuring electricity to
renewable energy sources. Even if we replace 100% of our
electricity with renewable energy, the additional cost is expected
to be limited to less than 1% of our Group's net income.
Growing demand for decarbonization and
services for energy saving
The AEON delight Group provides a variety of services that help
combat global warming, including installation of energy-saving
equipment, energy-saving operations of various facilities,
fluorocarbon management services based on the Fluorocarbons
Emission Control Law, and proposing environmentally friendly
materials.
Going forward, we will provide solutions to fully support our
customers' decarbonization efforts by adding renewable energy
procurement support and other services to these solutions.
Proposing energy reduction in facilities
We propose energy-saving air conditioning equipment and
large-scale facilities, including LED lighting, which can significantly
reduce electricity consumption, in addition to introducing BEMS
(Building and Energy Management System) , an energy
management system that monitors, controls, and visualizes
electricity consumption in buildings and other structures.
Implementing an open network system
We propose the introduction of an open network system that
networks the various equipment in a facility and enables
centralized management in real time. This system allows
customers to operate their facilities efficiently by making full use
of remote operations and also contributes to energy saving in the
facilities.
Providing fluorocarbons management services
We provide simple and periodic inspections for Class 1 Specified
Products*, as well as administrative services on behalf of
customers based on the Act on Rational Use and Appropriate
Management of Fluorocarbons, which requires maintenance and
the creation of a database. We also actively propose to our
customers the introduction of fluorocarbon-free refrigerated
showcases, which are more energy-efficient and have a very low
GWP (Global Warming Potential).
* Class 1 Specified Products: Refers to products such as commercial air
conditioners and commercial refrigeration and freezing equipment in which
chlorofluorocarbons are used.
Developing renewable energy-related businesses
We provide electricity services to commercial facilities, office
buildings, medical institutions, and other special high-voltage and
high-voltage electricity using facilities, supplying electricity at
reasonable prices and with the same quality and stability as in the
past. At the same time, we are working together with our
customers to prevent global warming by offering "CO2 emission
reduction plans" combined with non-fossil fuel energy certificates*
and "100% renewable energy plans" such as solar power, wind
power, and biomass.
In addition, we are developing solar power generation businesses
at Kikugawa Ishiyama Solar Ltd. and Kikugawa-Horinouchiya Solar
Co., Ltd. (in Kikugawa City, Shizuoka Prefecture), both of which are
equity method affiliates.
* Non-fossil fuel energy certificates: Certificates of the environmental value
provided by electricity generated from renewable energy sources that do not
emit CO2.
Occurrence of major disasters caused by
climate change
Following the occurrence of a major or wide-area disaster,
including natural disasters caused by climate change, the AEON
delight Group has supported its customers' crisis management
by setting up a disaster response headquarters immediately after
the disaster, utilizing its nationwide network of service bases and
its own internal and external networks to restore damaged
facilities, dispatch support personnel, coordinate with relevant
government agencies (fire departments, police departments,
water authorities, etc.), and procure disaster response materials,
equipment, and supplies. The AD Solution Center (Osaka City,
Osaka Prefecture and Komaki City, Aichi Prefecture), a disaster
prevention center that plays a central role in responding to
disasters, constantly collects and analyzes disaster information
and remotely monitors managed facilities for abnormalities in
order to prepare for risks caused by disasters. From August 2021,
we further strengthened our disaster resilience by assigning our
head office in Chiyoda-ku, Tokyo with backup functions for the
AD Solution Center. In addition to our own business continuity
plan (BCP), we will continue to work on the development of
disaster prevention and mitigation systems, including BCPs for
our customers.
Examples of Past Support Activities
Earthquake off the coast of Fukushima Prefecture (February 13, 2021)
Hokkaido Eastern Iburi Earthquake (September 6, 2018)
July 2018 Torrential Rain (June 28 to July 8, 2018)
Operational Impact
The AEON delight Group has distribution centers located across
Japan. Although the risk of river flooding may increase due to
more severe extreme weather events in the future, which may
cause flooding risk to some distribution centers, we estimate that
the amount of damage, such as inventory losses, will be minor. In
addition, measures are in place to deliver replacement goods
from other distribution centers in the event that a distribution
center is shut down due to a power outage or disaster.
Advancement of scenario analysis going forward
Through scenario analysis, we have reaffirmed the magnitude of
the risks and opportunities that climate change presents to our
business. The risks are not necessarily enormous, and we
confirmed that we have already taken measures to address
certain key risks.
At the same time, we have confirmed that the AEON delight Group's climate change countermeasures and crisis management contribute to risk avoidance and to improving climate change risk resilience not only for ourselves but for our customers as well. We will continue to strengthen our decarbonization services and crisis management to help reduce climate change risks in society.