Toppan recognizes the scale of the impact of climate change on the Company’s business operations and considers climate change to be an important management issue. In 2019, Toppan announced its support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which was established by the Financial Stability Board. In 2020, Toppan commenced scenario analysis based on the recommendations.

Basic Approach to Climate Change

In 1992, Toppan formulated the Toppan Printing Declaration on the Global Environment, which set out the Company’s basic philosophy on environmental conservation activities. In April 2009, Toppan revised the declaration to create the Toppan Group Declaration on the Global Environment, a basic philosophy for Groupwide activities. Based on this declaration, Toppan has taken a more proactive approach to advancing business activities with consideration for environmental conservation.

In November 2019, Toppan formulated the TOPPAN SDGs STATEMENT and announced that the Company would integrate the SDGs into management. Toppan aims to support the realization of “fulfilling, sustainable living” through SDG initiatives. Toppan has set out Companywide Materiality, which supports the business foundation, and Business Materiality, in which initiatives are addressed through business operations. For each, Toppan has selected environmental issues, including climate change. In this way, Toppan is advancing initiatives to address climate change from both Companywide and business perspectives.

Addressing the TCFD

The Task Force on Climate-related Financial Disclosures (TCFD) was established in 2015 by the Financial Stability Board at the request of the G20. It considers how climate-related information should be disclosed and how it should be handled by financial institutions. The final report issued by the TCFD in June 2017 recommended that companies and other organizations disclose information about risks and opportunities related to climate change in four thematic areas—governance, strategy, risk management, and metrics and targets. In particular, the report recommends disclosure of the resilience of the organization’s strategies in an easy-to-understand manner.

Toppan announced its support for the TCFD in 2019. From 2020, the Company has implemented scenario analysis based on the recommendations, and has started to disclose information based on that analysis. In the future, based on the disclosed information, the Company will continue to drive a cycle in which feedback from stakeholders is linked to strengthening management strategy pertaining to climate change.

Governance Structure for Climate Change

In its Medium Term Plan, which takes fiscal 2021 as its first year, Toppan has announced “expanding ESG initiatives” as one of its priority measures under the concept of “Digital & Sustainable Transformation,” and the Company is strengthening governance related to ESG issues, including climate change.

The Board of Directors has delegated the handling of climate-related issues to the Sustainability Promotion Committee, which is chaired by the President & Representative Director. The Sustainability Promotion Committee has established multiple working groups and coordinates climate-related issue assessments and countermeasures. Through the Management Committee, the Board of Directors receives reports from the Sustainability Promotion Committee regarding the assessment and status of climate-related issues as well as target management. The Board of Directors implements comprehensive decision-making with regard to such matters as management strategy, taking climate-related issues into account.

Risks that could have an especially significant impact on management are identified as “significant risks” by the Risk Management Working Group (administered by the Compliance Department of the Legal Affairs & Intellectual Property Division). With regard to climate change, Toppan identifies significant risks, and in coordination with Companywide risk management activities, the responsible head office divisions spearhead efforts to formulate countermeasures and implement comprehensive management measures. Information regarding the status of those measures is collected and reported to the Board of Directors to ensure appropriate supervision by the Board of Directors.

Sustainability Promotion Structure for Addressing Climate Change and Other ESG Issues

Scenario Analysis

For the implementation of scenario analysis, Toppan has established the TCFD Working Group under the Sustainability Promotion Committee, which is chaired by the President & Representative Director. Related head office departments participate in this working group, which has identified important climate-related risks and opportunities and evaluated impacts, primarily financial impacts.

This was Toppan’s first implementation of scenario analysis, and the Company utilized two scenarios: the 2ºC scenario (partially incorporating a 1.5ºC scenario), where the increase in the global average temperature at the end of the century is limited to 2ºC in comparison with pre-industrial levels, and the 4ºC scenario, in which the increase is approximately 4ºC. The scenarios were applied to the entire value chain, including R&D, procurement, production, and product supply, centered on Japan, where the majority of Toppan’s operations are conducted, and long-term forecasts up to 2050 were considered.

Under the 2ºC/1.5ºC scenario, Toppan reconfirmed that there are risks of increased costs accompanying the introduction of a carbon tax and higher prices for purchased energy, and that there are opportunities for increased sales of low-carbon-emission products and services, based on changes in consumer consciousness, and for gains in corporate value.

Under the 4ºC scenario, it is possible that higher atmospheric temperatures could lead to such risks as an increase in wind and flood damage, resulting in a stoppage at major plants supporting operations, or pollution from chemical substance discharge. However, Toppan is advancing countermeasures, such as BCP formulation.

This analysis and the examination and implementation of countermeasures were implemented based on the discussions of the Sustainability Promotion Committee, which received reports from the TCFD Working Group.

By continuing to implement scenario analysis, Toppan will increase accuracy and further advance integration with management strategies, thereby increasing resilience in an uncertain future.

Climate Change: Opportunity/Risk Evaluation and Countermeasures
2℃ (partially incorporating 1.5℃) Scenario
There will be impacts such as regulations and new tax burdens, but new business opportunities will be created by needs arising from the increase in people’s environmental consciousness.
Expected situation Item Impact Countermeasures
Transition
risks
  • Introduction of
    carbon tax on fossil
    fuels, introduction of
    carbon border tax,
    and discontinuance
    of subsidies as a
    result of
    strengthened policies for the
    transition to a
    low-carbon society
  • Increase in
    manufacturing costs
    due to imposition of
    carbon tax on CO2
    emissions from the
    utilization of energy
    derived from fossil
    fuel use

Medium


(Estimating Scope 1 + Scope 2
financial impact of
approximately 4.7
billion yen/year in
fiscal 2030*1)
  • By fiscal 2030, advance energy-saving measures and achieve 6.5% ratio of electricity derived from renewable energy sources
    (Estimating that the Scope 1 + Scope 2 financial impact resulting from these countermeasures will be a reduction of approximately 200 million yen/year in fiscal 2030*1)
    ▶ Toppan Group medium-and-long-term environmental targets for fiscal 2030
  • By fiscal 2050, achieve 100% ratio of electricity derived from renewable energy sources, together with other measures achieve virtually zero Scope 1 + Scope 2 CO2 emissions
    ▶ Toppan Group Environmental Vision 2050
  • Monitoring of systems and renewable energy technologies from long-term viewpoint
  • Increase in
    manufacturing costs
    due to imposition of
    carbon tax on
    thermal recycling of
    waste (plastic) arising
    in manufacturing
Small
  • By fiscal 2030, achieve material recycling ratio of 65% for waste plastic from production processes
    ▶ Toppan Group medium-and-long-term environmental targets for fiscal 2030
  • Monitor systems and recycling markets from long-term viewpoint
  • Increase in
    procurement costs
    as suppliers pass the
    cost of adapting to a
    low-carbon society on
    to selling prices
Small
  • Research suppliers, develop new suppliers, research/consider alternatives
  • Monitor systems and markets from long-term viewpoint
  • Increase in electricity
    prices due to increase in
    adjustability resulting
    from rise in renewable energy ratio
  • Increase in manufacturing
    costs due to rise in
    purchased energy prices
Medium
  • Advance energy-saving measures and expand introduction of renewable energy for self-consumption
Expected
situation
Item Impact Securing
opportunities
Transition
opportunities
  • Growing needs for eco-friendly
    products due to increase
    in people’s environmental
    consciousness,
    shift in consumer
    awareness from owning
    to sharing
  • Increased sales opportunities
    through the provision of
    low-carbon-emission
    products and
    services
Large
  • Reduction in CO2 emissions due to customer digital transformation and reductions in
    movement, operational burdens, and time resulting from Toppan DX “Erhoeht-X™️” initiatives
  • Reduction in CO2 emissions through the provision of sustainable
    packaging suitable for reduce/reuse/recycle initiatives
  • Reduction in CO2 emissions through the provision of eco-friendly materials and schemes
    that make a strong contribution to reducing greenhouse gas emissions and the
    provision of solutions for energy saving and energy creation
  • Promotion of climate
    change initiatives and
    related information
    disclosure
Medium to large
  • Recognition as a “Digital & Sustainable Transformation” company
  • Increase in corporate value due to ESG recognition
  • Increased profit through
    the creation of
    environmental process
    innovation technologies
    for printing processes
Small to medium
  • Cost reductions and granting of licenses due to VOC
    technology development in the printing business

*1. Financial impact based on assumption of carbon price of 10,500 yen/t

4℃ scenario
World in which the effect of regulation is small, and there is a possibility of rising risk of natural disasters
Expected
situation
Item Impact Countermeasures
Physical
risks
  • Increasing frequency
    and intensity of wind
    and flood damage due to
    rising atmospheric
    temperature
  • Halt in production
    at plants due to
    water and flood
    damage, etc.
Large
  • Reduce the risk of a halt in production by formulating a business continuity plan that addresses
    flooding, diversifying the supply chain, installing facilities to minimize damage,
    implementing advance measures for facilities, and using alternatives for chemical
    substances that have the potential to cause pollution
  • Chemical substance
    discharge pollution
    due to torrential
    rain, floods, etc.
Medium
  • Consider the possibility of leakage of chemical substances, formulate and implement countermeasures
  • Utilize casualty insurance for the purpose of dealing with damage
  • Monitor anticipated risks
Expected
situation
Item Impact Securing
opportunities
Physical
opportunities
  • Need for BCP
    due to increased
    frequency and
    intensity of wind and
    flood damage
  • BCP support
    business utilizing
    ICT
Medium
  • Supporting operational DX initiatives that address BCP by
    combining digital technologies with advanced operational know-how

Metrics and Targets

Companywide Materiality (Environmentally Friendly & Sustainable Production)

Toppan has formulated the Toppan Group Environmental Vision 2050, which sets out the policy for long-term initiatives to address climate change and other global environmental issues. Based on backcasting from the vision for 2050, Toppan has also set the Toppan Group Medium-and-Long-Term Environmental Targets for Fiscal 2030, which focus on the target year for achievement of the SDGs.

  • Toppan Group Environmental Vision 2050

    As a member of international society, the Toppan Group aims to enable “fulfilling, sustainable living” by contributing to decarbonization, resource circulation, and the optimal use of water through forward-looking activities with consideration for preservation of the global environment.

    ① Contributing to Decarbonization
    Aiming for virtually zero Scope 1 and 2 greenhouse gas emissions.

    ② Contributing to Resource Circulation
    Aiming for zero waste emissions.

    ③ Optimal Water Use
    Reducing water consumption and contributing to improved water quality by preventing pollution.

  • Toppan Group Medium-and-Long-Term Environmental Targets for Fiscal 2030

    ① Contributing to Decarbonization
    Reduce Scope 1 and 2 greenhouse gas emissions by 32.5% (446 kt-CO2e) compared to the fiscal 2017 level (1,373 kt- CO2e). (Renewable energy ratio of 6.5%)
    Reduce Scope 3 greenhouse gas emissions by 20% (1,224 kt- CO2e) compared to the fiscal 2017 level (6,122 kt-CO2e).

    ② Contributing to Resource Circulation
    Reduce final landfill waste disposal by 60% (4,444 t) compared to the fiscal 2017 level (7,407 t).
    Increase waste plastic material recycling rate by 12 percentage points (to 65%) compared to the fiscal 2017 level (53%).

    ③ Optimal Water Use
    Reduce water consumption, improve water efficiency, and avoid water pollution risks.
    (Quantitative targets will be set going forward.)

Business Materiality (Sustainable Global Environment)

Based on TOPPAN Business Action for SDGs, a blueprint announced in 2020, Toppan has specified three areas of focus—creating a circular economy, decarbonizing, and expanding eco-friendly products and solutions—and is taking on the challenge of addressing climate change-related issues through its business.