Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced CO2 emissions (Nippon COMSYS) by 14.3% year on year
• Reduced industrial waste (Nippon COMSYS) by 12% year on year

Social Achievements

• Increased hiring of non-Japanese employees (+5 year on year)
• Reduced work-related accidents (31; down 3 year on year)
• Reduced accidents involving equipment and human-initiated failures (22; +2 year on year)
• Reduced accidents involving vehicles (100; down 21 year on year)

Governance Achievements

• Transitioned to a “Company with an Audit and Supervisory Committee”,
• Designated five outside directors to make up one-third of the 15-member Board of Directors

Climate Goals & Targets

Environmental Challenges

• Decreasing capital expenditures by telecommunications carriers
• Slow labor productivity
• Intensifying competition from new players
• Shift to non-telecommunications business
• COVID-19 impact on investments and delays in construction

Mitigation Strategies

• Increasing the ratio of business targeting customers other than telecommunications carriers
• Introducing new systems to increase work efficiency
• Promoting diversity and expanding activities targeting new business
• Streamlining procurement, reviewing relationships with partner companies, promoting Group collaboration, streamlining business bases and structures, and introducing ICT in construction and management divisions

Supply Chain Management

Responsible Procurement

• Evaluation and vendor registration based on management status, construction-related licenses, and status of corporate insurance

Climate-Related Risks & Opportunities

Opportunities

• Expanding renewable energy business

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards (2016), International Integrated Reporting Council (IIRC); International Integrated Reporting Framework, Ministry of Economy, Trade and Industry; Guidance for Collaborative Value Creation

Certifications: ISO 9001

Awards & Recognition

• Highest grade in the Ministry of Health, Labour and Welfare’s “Eruboshi” system (Nippon COMSYS)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance
• Safety
• Human Rights
• Community Engagement

Environmental Achievements

• Switched to green power at several sites, aiming for ~30% renewable energy share by FY2023.
• Installed solar panels on rooftops of some facilities.
• Started using diesel oil combustion accelerators to reduce oil consumption in business vehicles.
• Planned to switch ~280 vehicles to BEVs and HEVs by FY2023.
• Achieved SBT certification in October 2023 for GHG emission reduction targets.

Social Achievements

• Increased ratio of female new graduate hires to 21.6% in April 2023 (target 30% by March 2025).
• Increased percentage of male employees taking childcare leave to 83% in FY2022.
• Hired 10 non-Japanese employees by May 2023.
• Employs artists with disabilities through a work-from-home program.
• Implemented training to foster awareness of respect for LGBTQ and other human rights.

Governance Achievements

• Increased the share of outside directors to 40% (including one female outside director).
• Reduced the number of directors to 10 to strengthen oversight and enable strategic decision-making.
• Established a Sustainability Committee in July 2022.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions (rising raw material prices, material shortages).
• Declining capital investment by telecommunications carriers.
• Uncertain future outlook due to rapid changes in the business environment.
• Low PBR (below 1.0x at times).
• Low ratio of women in management positions (2.5% as of May 2023).

Mitigation Strategies

• Re-set FY2023 targets to focus on increasing revenue and profits in growth businesses.
• Expanding peripheral business areas (IT-related field services).
• Strengthening order-taking capabilities through virtual companies.
• Maximizing the use of group resources.
• Strengthening area management system to improve productivity.
• Actively engaging in IR activities to improve market valuation.
• Implementing measures to strengthen national resilience and the construction and renewal of social infrastructure.
• Actively pursuing M&A opportunities in growth areas.

Supply Chain Management

Responsible Procurement

• Thorough implementation of the Group’s Code of Conduct, including the supply chain.

Climate-Related Risks & Opportunities

Physical Risks

• Increased restoration costs due to natural disasters.
• Longer construction periods due to frequent natural disasters.
• Decreased productivity due to heat stress.

Transition Risks

• Higher electricity costs due to switch to renewable energy.
• Increased operating costs due to carbon tax.

Opportunities

• Growing renewable energy business demand.
• Increased demand for facilities with high environmental performance.
• Opportunities to receive orders for disaster prevention and mitigation projects.

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards (2016), International Integrated Reporting Framework, TCFD

Certifications: ISO 9001 (multiple workplaces), ISMS (multiple companies), PrivacyMark (multiple companies), SBT (October 2023)

Sustainable Products & Innovation

• SAVREQ TeamSports (IoT cloud service for sports).

Awards & Recognition

• Excellent Construction Award (Tokyo Metropolitan Government)
• Excellence Award in the Image Enhancement Competition (Tokyo Metropolitan Government)

Environmental Metrics

ESG Focus Areas

• Contributions to local communities through engineering prowess and innovation
• Human resource utilization and work-style reform (improvement of engagement)
• Pursuit of safety and security and compliance
• Measures to protect the environment
• Strengthening of corporate governance

Environmental Achievements

• GHG emissions Scope 1+2: 79kt-CO2 (down 21kt-CO2 year on year)
• Scope 3: 1,531kt-CO2 (down 199kt-CO2 year on year)
• 10.2 GWh of green power usage (25% of total usage)
• Successfully completed the construction of Japan’s first optical fiber cable route for telecommunications connecting across the Port of Tokyo.

Social Achievements

• Ratio of male employees taking childcare leave 67%
• Increased the number of new graduates and mid-career hires by 1.5 times
• Launched solutions utilizing robots, IoT, and AI

Governance Achievements

• Transitioned to a company with an Audit and Supervisory Committee
• Increased the ratio of outside directors from 36% to 40%
• Appointed a female outside director

Climate Goals & Targets

Environmental Challenges

• Shrinking demand for new optical fiber lines, limiting costs in maintenance processes, and restrained investment by mobile telecommunications carriers
• Decline in capital investment by NCCs
• Gradual decline in construction volume due to the termination of the FIT system and drastic changes in the business environment
• Manpower shortages in the face of rapidly-growing demand for data center construction
• Japan’s construction industry is facing the “2024 problem” as the grace period for the overtime work limit expires in March 2024.

Mitigation Strategies

• Expanding peripheral businesses by maximizing the strength of local brands, strengthening sales capabilities to acquire new customers in areas such as the infrastructure sharing business, and aiming for total optimization for the entire COMSYS Group
• Establishing an efficient and high-quality business operation structure through synergistic effects by integrating organizations handling individual telecommunications carriers and operating them as a single Carrier-Related Business
• Creating a centralized telecommunication infrastructure business and further expanding the scope of operations to incorporate on-site operations in the IT Solutions Business and Social System-Related Businesses
• Securing field managers for large electrical facilities, utilizing large-scale solar engineers and Carrier-Related Business engineers, and cultivating talent by mobilizing personnel among Group companies
• Systematically preparing for the “2024 problem” for some time, developing measures to optimize working hours and raising awareness among employees

Supply Chain Management

Responsible Procurement

• Nippon COMSYS Supply Chain Sustainability Promotion Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Increased damage due to more severe natural disasters
• Increased disaster preparedness and mitigation needs
• Reduced productivity due to heat stress
• Summer labor constraints due to more extremely hot days

Transition Risks

• Introduction of carbon tax
• Significant decrease in fossil fuel power generation
• Higher electricity costs due to switch to power from renewable energy sources

Opportunities

• Growing demand for renewable energy business
• Growing demand for facilities with high environmental performance
• Growing renewable energy business (solar, wind, etc.) demand
• Growing equipment demand as a result of development of new environmental technologies (hydrogen and CO2 recovery)

Reporting Standards

Frameworks Used: GRI Standards, ISO 26000, MSCI, TCFD

Certifications: SBTi

Third-party Assurance: Sustainability Accounting Co., Ltd.