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ESG

Fujikura Group’s Value Creation

Long-term climate change response

The Fujikura Group established Fujikura Group Long-term Environmental Vision 2050 in 2016 as our long-term vision on responding to climate change. We are working on four challenges aimed at minimizing negative environmental impact by the future target of 2050.

Fujikura Group Policy on Responding to Climate Change

The response of the Fujikura Group began with the establishment of the Fujikura Group Global Environmental Charter in 1992. It specifies our policy on environmental activities that are consistent with our management strategy, which we formulated by referencing the forecasts of external institutions. In 2016, the Fujikura Group performed a scenario analysis using the Intergovernmental Panel on Climate Change (IPCC) RCP 2.6* (a scenario of a 2℃ increase in temperature) and established Fujikura Group Long-term Environmental Vision 2050. We are working on four challenges aimed at minimizing negative environmental impact by the future target of 2050.

  • ※1RCP 2.6: The Fifth Assessment Report of the IPCC (published in 2014) details four scenarios of how much the average temperature will rise over the next 100 years. This is the lowest temperature increase among the four scenarios.* RCP 2.6: The Fifth Assessment Report of the IPCC (published in 2014) details four scenarios of how much the average temperature will rise over the next 100 years. This is the lowest temperature increase among the four scenarios.v

History of Climate Change Initiatives

History of Climate Change Initiatives

The Four Challenges in Fujikura Group Long-term Environmental Vision 2050

フジクラグループ環境長期ビジョン2050の4つのチャレンジ

Disclosure of climate change-related information according to the TCFD statement

The Fujikura Group indicated support of the statement published by the Task Force on Climate-Related Financial Disclosures (TCFD) in 2017.
We contribute to realizing a sustainable society by analyzing the risks and opportunities created by climate change and disclosing these to stakeholders.

気候関連財務情報開示タスクフォース(TCFD)

Climate Change Governance and Risk Management (including CSR management)

Climate change governance in the Fujikura Group is overseen globally by the Global Environment Committee (chaired by the officer in charge of the environment), which is an environmental subcommittee in the Sustainability Strategy Council.
The Global Environment Committee is the deliberative and decision-making body for environmental management, including climate change. It formulates goals for each fiscal year as well as medium-term goals and monitors progress on activities while also reporting to the Fujikura Group Sustainability Strategy Council, upon approval of the officer in charge of the environment. The committee establishes specialty subcommittees for key themes, formulates measures and rolls out countermeasures cross-organizationally, and provides various other kinds of support.

気候変動ガバナンス

FY2020 Initiatives

  • Consideration of medium-term ESG targets by the Sustainability Strategy Council
  • Formulation of annual and mid-term goals by the Global Environment Committee
  • Installation of roof-mounted solar panels at FETL's Ayutthaya Plant 1 and Navanakorn Plant 3 in Thailand
  • Purchase renewable energy and environmental value (J-credits) to achieve RE100 goals
  • Holding of new energy strategy working groups (every other month)
  • Holding monthly meetings to exchange information on renewable energy

Specifying Climate Change-Related Risks and Opportunities

We are analyzing what kind of impact climate change will have on growth of Fujikura Group businesses, based on the long-term forecasts of international research institutions (OECD, IPCC), social concerns, and requests for response to climate change from customers.
The specified risks are reviewed as appropriate.

Risks

Type Climate Change Risks Future Response
2℃ Scenario
(Migration Risk)
Short Term/Medium Term
[Policy/Legal Risk]
• Stricter CO2 emissions regulations in various countries through the introduction of a carbon tax, etc.
- Trial calculation of financial impact from a carbon tax
• Demands from customers and the countries Fujikura operates in and obligation to reduce greenhouse gas emissions and our carbon footprint[Policy/Legal Risk]
• Stricter CO2 emissions regulations in various countries through the introduction of a carbon tax, etc.
- Trial calculation of financial impact from a carbon tax
• Demands from customers and the countries Fujikura operates in and obligation to reduce greenhouse gas emissions and our carbon footprint
• Following the road map to 100% renewable energy, move forward with extensive use of energy savings, introduction of renewable energy, credits, and other tools based on Fujikura Group Environmental Long-term Vision 2050
• Pursuing use of renewable energy in business activities (at head office, plants, etc.)
• Strengthening response by joining the RE100 and affirming TCFD, and regularly monitoring and responding to ESG rating indicators
[Technology Risk]
• Disruption of existing technology
• Demand to minimize energy consumption during product manufacturing or use renewable energy
[Market Risk]
• Changes in demand for products and services
• Temporary increase in capital investment cost from climate change countermeasures requested by customers or the community
• Rising raw material prices and diversification of suppliers from climate change-related factors
[Reputation Risk]
• Demands for information disclosure on and response to climate change by customers, investors, and various rating organizations
4℃ Scenario
(Physical Risk)
Short Term/Medium Term
[Acute Risk]
• Impact on operations from flooding, a large typhoon, or other natural disaster
- Impact on business results if a production facility is damaged and this reduces operating capacity or requires equipment restoration, etc.
- Impact on production plans due to partial severance of the supply chain
→Fujikura Group companies suffered massive damage from flooding in Thailand in 2011, and it took five years to recover
• Disaster preparedness/prevention response for affected locations
- We used the lessons learned from the damage caused by the 2011 flooding at FETL in Thailand and implemented measures such as diversifying locations and building a floodwall near the business, from the perspective of BCP.
• Slope face maintenance around office sites and response to high tides and tsunami at plants near the ocean
*Domestic locations that would be impacted by flooding and a rise in sea level
Head office, Fujikura Engineering Ltd., FUJIKURA HIGH OPT Co., Ltd. (Kiba, Koto-ku, Tokyo), Suzuki Giken Co., Ltd. (Tajiri, Ichikawa-shi, Chiba Prefecture), Numazu Copper Refining and Rolling Co., Ltd., Nishi Nippon Electric Wire & Cable Co., Ltd. (Kasugaura, Oita-shi, Oita Prefecture)
*Researched the hazard maps of the various local governments
[Chronic Risk]
• Health considerations for employees who work in the area of operation due to a rise in the temperature, or other changes
• Securing the safety of employees due to an increase in the amount of rainfall
• Impact on operations from a future rise in sea level

Opportunities

Individual Businesses Social Trends Opportunities
Power • Increase in demand for power, especially electric power demand, mainly in developing countries due to economic growth, urbanization, population growth, and other factors
• Power supply stabilization, increased efficiency, and progress on energy savings under the 2℃ scenario through the use of digital technology
• Diversification of both power supply and demand for companies, individuals, etc., and increase in renewable energy use under the 2℃ scenario
• Increased concern over natural disasters under the 4℃ scenario
• Response to the Act on Promoting the Elimination of Utility Poles (disasters, etc.)
[Market]
Proliferation and expansion of renewable energy
[Products/Services]
Expansion of Green products
[Energy Sources]
Products related to highly efficient electrical power systems
• Promotion of digital technology use
[Resilience]
Strengthening the resilience of social infrastructure such as electrical wire and cable
Telecommunication Systems • Exponential growth in data distribution, storage, and analysis volume due to the advancement of digitalization
• Rapid expansion in new service businesses that use digital technologies such as big data, IoT, 5G, and AI
• Advancement in CASE/MaaS
• mmWave (wireless communication)
• Concerns over response to natural disasters under a 4℃ scenario
[Products/Services]
Roll out of solutions mainly for high density, small-diameter optical cable (SWR®/WTC®)
[Markets]
Expansion of Green products (FY2018: ¥21 billion)
• Products for highly efficient IT systems
• Promotion of digital technology use
• Strengthening the resilience of communication lines as social infrastructure
Electironics • Increase in industrial robots
• Entrance into medical products
• Increase in automotive electronic components
• Increase in mmWave-capable components
• Pursuit of R&D for CASE
• Promotion of digital technology use
• Expansion in Green products (FY2018: ¥16.5 billion)
• Increase in demand for industrial and automotive connectors
Automotive Products CASE advances
• Increase in wire harnesses accompanying increase in electronic components
• Advancement of move to electric vehicles under a 2℃ scenario
• Increase in demand for lighter wire harnessesv
• Lighter wire harnesses
• Pursuit of R&D to respond to CASE
• Combining knowledge of the automotive products business with the telecommunication systems, power, and other businesses to generate new businesses related to electric vehicles
• Strengthen response to automotive components other than wire harnesses and electric vehicles
• Expansion of Green products (FY2018: ¥70.2 billion)
Real Estate Promotion of digital technology use
• Need to consider the positive environmental impact of ZEB and other measures, etc.
• Securing and maintaining tenants that demand environmental friendliness

Risk Management

The Fujikura Group Global Environment Committee chaired by the Sr. Vice President in charge of Environment approves and makes decisions on response to specified risks and future considerations. In addition to reporting on the results of activity plans specified in the CSR Priority Measures, the Fujikura Group Global Environment Committee shares information, and considers and approves response proposals. It reports to the Fujikura Group Sustainability Strategy Council.
The committee also enters, evaluates, and analyzes data on the electricity usage, water usage, and waste generated by each location of the Fujikura Group. The results are confirmed at Fujikura Group Global Environment Committee meetings twice a year and plans are revised.

Expansion of Environmentally Friendly Products

The Fujikura Group specified implementing initiatives that contribute to both the environment and society and working to enhance corporate value as one of the basic policies of the 2020 Mid-Term Business Plan and specifies strengthening initiatives in ESG, including response to climate change.
We are developing environmentally friendly products (Green products) to contribute to the achievement of a low-carbon society by reducing resource use, saving energy, and other measures, which contributes to profitability.
The Green Product Management Committee screens Green products using the product environmental assessment check sheet submitted by each business division, and registers products that meet or exceed the standards as Green Mind products. The product environmental assessment check sheet was codified in 2011 and is updated regularly. The Green Product Management Committee is chaired by a member of the Corporate R&D Unit, and committee members are selected from each Company.
The goal for registering Green products is set at 60 products or more a year.
In FY2019, there were 68 Green product registrations, amounting to 40% of net sales.

グリーン関連製品

Product One: 6912-core WTC®

Applications: FTTx and optical cables for large-scale data centers.
Environmentally Friendly: 6912-core WTC® (Wrapping Tube Cable®) cable, composed of SWR® (Spider Web Ribbon®) with 200 μm Φ fiber, has been newly registered as a green product. 6912 optical fibers are contained in this ultra high-density cable. The new product is thin and lightweight, with an outer diameter of 35.0 mm and a mass of 765 kg/km. Compared to the conventional 2 x 3456-core optical cable using 250 µm Φ fiber, the weight and outer diameter have been reduced by more than 30%. In addition to saving resources by reducing the number of materials used, the new cable is expected to contribute to CO2 reduction by improving product manufacturing efficiency and transportation efficiency.

Product Two: Thin Substrates with Built-in Components (WABE Package®)

Applications: Low-profile component-embedded boards (ultra-compact electronic modules) with built-in IC chips for use in wearable devices and medical/healthcare equipment.
Environmental Considerations: The volume of the module has been reduced by 50% by embedding the IC, which has the largest area among the components, in the substrate and mounting the other components on the surface. In addition to minimizing the amount of materials used, an environmentally friendly manufacturing process is employed that reduces the use of chemicals and high temperature processing. This product has been certified as a green product.

Product Three: Wire Harnesses with Retainerless Connectors

Application: Automotive wiring harnesses
Environmentally Friendly: By adopting retainer-less connectors, the weight is reduced by 10% and the man-hours required for connector assembly are halved compared to conventional products. The weight reduction and improved workability contribute to the promotion of energy conservation during product manufacturing.

Product Four: Superconducting wire for high-field nuclear magnetic resonance (NMR) systems

Applications: Superconducting magnets (industrial, academic, medical)
Environmentally Friendly: Rare-earth high-temperature superconducting wires have excellent critical current characteristics in high magnetic fields and are mainly used in magnet applications. By applying high-temperature superconductivity, it is expected that superconducting magnets will become smaller, lighter, and have higher current density, thereby contributing to a reduction in environmental impact.

Ascertaining the Financial Impact

In FY2018, we did not see any direct impacts on our business from phenomena considered to be caused by climate change. Fujikura made the following investments to prepare for the risk of suffering future damage.
Fujikura’s Sakura Works experienced slope failure due to torrential rain in the past. In recent years, the number of torrential rain events has increased due to climate change, and we performed slope face maintenance from FY2016 to FY2018 (at a cost of ¥380 million). We are anticipating around ¥200 million in maintenance costs in FY2019 on top of this.
The Oita plant of Nishi Nippon Electric Wire & Cable faces Oita Bay and carries the risk of suffering damage from high tides and tsunami during typhoons. To address this risk, we built a new office building capable of serving as an evacuation center for 500 people in FY2017 (at a cost of ¥460 million).

Slope face construction at Sakura Works

佐倉事業所の法面工事

Tsunami evacuation tower at Nishi Nippon Electric Wire & Cable

西日本電線の津波避難タワー

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