Response to Environmental Risks

Environmental Risk Management Structure

The Fujitsu Group built and operates a group-wide risk management system to identify, prevent, and mitigate a variety of potential risks, or prevent their recurrence, including issues related to climate change and environmental pollution. In addition to the Risk Management & Compliance Committee, which reports directly to the Board of Directors, and Risk Management & Compliance Officers at each Fujitsu division and Group company in Japan and overseas, we have regional Risk Management & Compliance Committees, to build a structure where these organizations cooperate with each other to promote risk management and compliance throughout the Fujitsu Group, both in terms of preventing potential risks and responding to risks that have emerged. The Committee identifies, analyzes, and assesses key risks associated with the business activities of each Fujitsu division and Group company in Japan and overseas (focusing on 33 risks considered to be important to the Group), and formulates and reviews the countermeasures for these risks after confirming the status of countermeasures for avoiding, mitigating, transferring, or retaining them. The Committee makes regular reports to the Board of Directors about key risks that have been identified, analyzed and assessed, using methods such as the creation of visualized rankings and maps which take the degree of impact and likelihood of occurrence into account. In addition, we have put response processes into place in the event that risks become tangible, despite the implementation of various measures. Each division and Group company will immediately report to the Risk Management & Compliance Committee about any key risks that become tangible, such as natural disasters, accidents, product accidents or failures, system or service problems, compliance violations such as fraud, information security incidents, or environmental problems.

We also leverage the group’s Environmental Management System (EMS), which is based on ISO14001, for minimizing risks to the environment through continuous improvements.

Efforts to Minimize Risks to the Environment

Dealing with Risks Related to Climate Change

There is a possibility of significant impacts on our business continuity from increases in the frequency and effects of natural disasters as a result of recent climate changes. For that reason, we have formulated a business continuity plan and are devoting effort to continually revising and improving the plan.

In addition to risks such as implementation of stricter regulations for greenhouse gas emissions and a carbon tax, there is demand from customers and society for contribution to carbon neutral. This creates a risk of increasing the energy cost incurred by the Fujitsu Group, as well as the cost required to comply with regulations related to measures for reducing greenhouse gas emissions. Additionally, if climate change countermeasures are insufficient, there is a risk of harm to our corporate reputation or a disadvantage at bidding.

In order to minimize these risks, we are conducting short-term, medium-term and long-term risk analysis/response within our company-wide risk management structure. As the trend toward carbon neutrality in the global community as a measure against climate change, we have obtained net-zero target certification from the Science Based Targets initiative (SBTi). We will further raise the 1.5°C level we acquired in fiscal 2021 and aim for net-zero by FY 2040.

In accordance with the recommendations issued by the Task Force on Climate-Related Financial Disclosures (TCFD) in 2017, the Fujitsu Group analyzes and discloses risks associated with climate change that may have an impact on its business and financial strategies. Refer to the table below for the major potential risks and responses currently identified.

Risks Associated with the Transition to a Low Carbon Economy, and Our Response to Them

Policy/Legal Risks

● Risks: Increase in cost in order to respond to the strengthened laws and regulations on greenhouse gas emissions and energy use (such as a carbon tax), and diminished corporate value in the event of a violation.
○ Response: Complete compliance with laws and regulations through EMS. Continual reduction of the amount of GHG emissions through steady implementation of Science Based Targets and the Environmental Action Plan.

Technology Risks

● Risk: Unrecovered investments and market share decline in the event that the company lags behind in a fierce competition in technological developments toward a carbon-free society (such as energy-saving performance and low-carbon services).
○ Response: Enhance development of energy-efficient products and energy-efficient enabling technologies, solutions, and services through steady implementation of Science Based Targets and our Environmental Action Plan.

Market Risks

● Risk: Losing business opportunities if products, solutions, and services do not meet energy-saving performance needs.
○ Response: Enhance development of energy-efficient products and energy-efficient enabling technologies, solutions, and services through steady implementation of Science Based Targets and our Environmental Action Plans.

Risks to Reputation

● Risk: Decreased corporate value and increased response costs associated with a negative stakeholder perceptions of the status of implementation of climate change mitigation efforts (e.g., improving renewable energy adoption rates).
○ Response: Enhance measures to counteract climate change and promote reduction of environmental footprint through steady achievement of the group's Science Based Targets and Environmental Action Plan.

Climate Change Related Risks in the Supply Chain, and Our Response to Them

Upstream Supply Chain

● Risk: A temporary suspension of the suppliers' business activities due to the occurrence of severe natural disasters such as large-scale floods, sudden heavy downpours, and lightning strikes, which affects the procurement of materials.
○ Response: Conduct surveys of the business continuity capabilities of suppliers and procure materials from multiple sources, as well as implement other measures.

Downstream Supply Chain

● Risk: Losing business opportunities due to the inability to obtain environmental labelling, which is a green procurement requirement of customers.
○ Response: Conduct trend surveys and risk assessments of the environmental labelling scheme. Develop and provide top-level energy-efficient products through steady implementation of Science Based Targets and our Environmental Action Plan.

RELATED INFORMATION

Assessing and Monitoring of Potential Water Risks

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Physical Climate Risk Adaptation

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  • Extreme heat events
    • Processes to ensure built-in redundancy of critical equipment and reliable operation of uninterruptable power sources in the event of grid-scale outages.
    • Ensuring equipment is designed to tolerate extreme temperatures.
    • Installing temporary cooling equipment (e.g. misting) to reduce ambient temperatures.
  • Bushfire
    • Updating site-based procedures to assess business critical activities and evaluate which activities can be performed remotely in the short term.
    • Turning off external air intakes to offices and data centers to limit smoke ingress.
  • Drought
    • Deployment and maintenance of rainwater storage tanks at some sites.
    • Use of recycled water where possible.
    • Installing real-time water loggers at all data centers to monitor consumption trends and help inform water usage efficiency projects.
  • Other
    • Climate risk (e.g. extreme heat modelling) incorporated into assessment of siting of new data centers

Within Europe the climate risk is different to Oceania and a number of measures to adapt to climate change risk have been undertaken at a cost of over £1million in one London location showing the seriousness that we consider Climate impact and the commitment that we take protecting our continued service.

  • Installing the infrastructure to enable the local water authority pumping equipment to use our data centers Uninterruptable Power Supply (UPS) in the event of a flood
  • Dredging the local lagoon to help it act as a water sink

Other examples of adaption based on Physical climate risk in specific locations

  • Philippines, the Business Continuity Planning includes natural disaster events such a typhoons and monsoons and other extreme weather events
  • Malaysia – Natural Disaster Prevention guidelines provides emergency contact details and advice for employees with their safety prevalent

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Flooding Damage Impact Assessments Through Hazard Maps and Measures Against Flooding

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[Assessment 2 Assumed maximum scale (Rainfall on a scale that occurs about once every 1000 years)]*2

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Results for Assessment 1 and Assessment 2 *Only sites with an impact rank of 4 are shown below.

  • Fujitsu
    • Fujitsu Solution Square(FSS)/ Assessment 1: Impact rank 4 / Assessment 2: Impact rank 4 / Final impact: Impact rank 4
    • Fujitsu Technology Park (former Kawasaki factory) / Assessment 1: No impact / Assessment 2: Impact rank 4 / Final impact: Impact rank 4
  • Group companies
    • No sites which fall under impact rank 4

Major Measures

FSS:
The site perimeter is protected by retaining walls and watertight panels

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Preventing Water Pollution

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Preventing Air Pollution

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Preventing Destruction of the Ozone Layer

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Preventing Pollution of Soil and Groundwater

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*3: Monitor impact of groundwater pollution on area outside of premises, which is the greatest risk of soil / groundwater water pollution

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Chemical Substance Control

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Appropriately Processing Waste

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Environmental Liabilities

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Conserving Biodiversity

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