The safety and security of our daily lives are being threatened by climate change and the resulting increase in the frequency and severity of natural disasters. These change brought produced a major movement toward decarbonization that began with the Kyoto Protocol and continued with the adoption of the U.N. Sustainable Development Goals (SDGs) and the Paris Agreement. This movement has had a major impact on policies in Japan and other countries around the world, and also increased expectations for the role that companies should play in this effort.
The Taisei Group regards the impact of climate change on its business as a crucial management issue. In July 2020, we endorsed the TCFD recommendations, and since May 2021 we have been disclosing information in accordance with the recommendations. In response to the partial revision of the Annex to the TCFD Recommendations in October 2021, we identified risks and opportunities under the 1.5°C scenario and conducted a study of the climate-related indicators related to the recommendations, and partially updated our disclosed information.
Taisei's Environmental Policy was revised in March 2023 to clearly state in "Fundamental Concept"
achievement of the Group's long-term environmental targets as its responsibility, and contribution to the realization of a decarbonized society, a recycling-oriented society, and a nature-co-existing society through its business activities.
Environmental Policy (excerpted)
- Fundamental Concept
Based on the Taisei Group Philosophy “To create a vibrant environment for all members of society” and our Fundamental Policy on Sustainable Development, the Taisei Group strives to build good quality social capital through corporate activities centered on construction business in harmony with nature.
As the Group having construction as its core business, we aim for the “Realization of a Sustainable and Environmentally Friendly Society” by recognizing environmental issues as our significant sustainability tasks and fully understanding the impacts of our business activities on the environment, and environmental impacts on our business activities. It is our mission to achieve our Group’s long-term environmental targets in compliance with environment-related laws and regulations.
In addition, we will identify the “Environment-Related Risks and Opportunities” including climate change in particular, develop and promote environment-related technologies and services, and contribute to the realization of a decarbonized, recycling-oriented, and nature co-existing society through our business activities.
- Group’s Long-Term Environmental Targets
The Taisei Group established a long-term environmental target (TAISEI Green Target 2050) to achieve the “Realization of a Sustainable and Environmentally Friendly Society” as outlined in the Fundamental Concept above. We will work with the whole supply chain, together with the stakeholders to achieve these environmental targets by defining our “Responsibilities”, “Contributions Through Our Business”, and “Achievements” to confront the three types of societies as “Decarbonized Society”, “Recycling-Oriented Society”, and “Nature Co-Existing Society”, and to address the two individual issues as “Forest Resources/Forest Environment” and “Water Resources/Water Environment”.
- Continuous Implementation of Environmental Due Diligence
Toward the “Realization of a Sustainable and Environmentally Friendly Society” as outlined in the Fundamental Concept above, we will establish and continuously implement environmental due diligence system following the international standards such as the “OECD Due Diligence Guidance for Responsible Business Conduct”. Throughout its operation, the measures are reviewed and improved as appropriate.
We make efforts to conduct dialogues and consultations with our stakeholders as appropriate, by utilizing the expertise of external professional institutions regarding the impact of our business activities on environment.
Group's Long-Term Environmental Target: TAISEI Green Target 2050
The Three Types of Society
|CO2emissions (compared to FY2019)
|CN: Achieving and deepening carbon neutrality
|Emissions per sales
|Reduction of final disposal rate of construction waste:
3.0% or less
|CE: Achieving and deepening Circular Economy
|Nature Co-existing Society
|Proposals that contribute to Nature Positive, implementation of products
|NP: Achieving and deepening Nature Positive
The Two Individual Issues
A Sustainability Committee and an Sustainability Promotion Committee have been established as an organization to debate issues relating to climate change.
At the Sustainability Committee, which is a committee of the Board, important policies and measures relating to all aspects of environment, society and governance (ESG) are deliberated. At the Sustainability Promotion Committee, which is an advisory body to the Management Committee, basic policy and medium- to long-term targets relating to environmental management are deliberated.
To incorporate a variety of perspectives, the Sustainability Committee is consisted of six directors including the President (of which two are External Members of the Board) Matters are discussed within this committee, after which they are deliberated and resolved at the Board.
Matters deliberated and resolved at the Board of Directors meeting are notified to individual business divisions within Taisei Corporation as well as Group companies, and are reflected in their management plans and business operations. The resolution is also reflected in a specific implementation agenda at construction work offices, and the cooperation of subcontractors and suppliers is also requested.
Organizational Chart of Climate-Related Governance
Executive Officer for Climate-Related Issues
To clarify where the responsibility for promoting sustainability management including climate-related issues lies, a Chief Sustainability Officer (CSO) position, the highest executive officer in charge of sustainability issues, was created under the President, and the CSO was appointed the head of the Sustainability Division (Integrated). The CSO is responsible for promoting sustainability management in business execution, including activities on climate-related issues that have been decided by the Board. The CSO also serves as the Vice Chairperson of the Sustainability Promotion Committee.
Recent Major Environment-Related Discussions at the Board
- -2021 February:Revision of Long-term Environmental Targets
- -2022 February:Formulation of Group Environmental Targets
- August:Publication of "Taisei Group Annual Report 2022"
- -February 2023: Revision of Environmental Policy, etc.
There are thought to be two types of risks and opportunities associated with climate change. One is the result of "transitions" that include market changes and the tightening of regulations to minimize temperature rise. The other is the result of "physical changes" such as acute abnormal weather occurring due to temperature rise.
To devise business strategies that can deal flexibly with climate change, multiple scenarios are used to identify risks and opportunities and evaluate the impact on business, and then business strategies are formulated and reflected in the Medium-Term Business Plan and the like.
Main Reference Scenarios
|International Energy Agency (IEA)
World Energy Outlook sustainable development scenario (SDS)… 2°C scenario
“Net Zero by 2050 (NZE)”… 1.5°C scenario
|Intergovernmental Panel on Climate Change (IPCC)
“Representative Concentration Pathway scenario (RCP8.5)” ... 4°C scenario
|Market shrinkage and increase
in construction cost due to the
introduction of carbon pricing
and tightened CO2 emission
|Increase in demand for renewal
|Increase in demand related to
energy-saving and renewable
|Increase in average
temperature during summer
|Rise in severity and
frequency of natural disasters
|Increase in severity and frequency of natural disasters
|Sea level rise
Note: Expected impacts on business were categorized into “High,” “Medium” or “Low.”
Measures have been planned to reduce the risks and expand the opportunities accompanying climate change that have been identified through scenario analysis. These measures are reflected in the TAISEI VISION 2030 and the Medium-Term Business Plan (2021–2023).
A roadmap for achieving decarbonization and sustainable growth has also been formulated in order to realise the TAISEI Green Target 2050 which constitutes the Group's long-term environmental targets.
Measures to deal with climate change
|Response to the market shrinkage and construction cost increase due to the introduction of carbon pricing and the tightening of laws and regulations
|Response to the increase in demand related to renewal, energy-saving and renewable energy
|Response to the reduced productivity of construction worksites due to abnormal weather
|Response to abnormal weather, increase in the severity and frequency of disasters and sea level rises
Environment-Related Research and Development Investment
Demand for ZEB buildings is expected to increase in preparation for the achievement of the Japanese government's target of "ensuring energy performance that meets the ZEB standard for newly constructed buildings in 2030". Moreover, demand for environmentally friendly concrete, wooden architecture and other low-carbon and decarbonized construction materials is also expected to increase.
As the market is expected to increase, TAISEI will proactively invest in research and development to secure a market ahead of competing general construction contractors and construction material manufacturers in terms of tschnology development.
As noted in the Medium-Term Business Plan (2021–2023), we plan to invest JPY 60 billion in environment-related efforts over a period of three years, of which JPY 42 billion is for technology development that contributes to industrial fields where growth is expected through a virtuous cycle between the economy and the environment, and with a competitive advantage. Approximately JPY 23 billion had been executed as of September 2022.
In addition, we raised funds through green bonds and sustainability-linked loans that comply with the green financing framework, and are allocated to investment capital.
Internal Carbon Pricing (ICP)
In 2021, TAISEI introduced the Internal Carbon Pricing system with the expectation of the following three effects. Based on the "Net Zero by 2050 (NZE)" of the International Energy Agency (IEA) etc. the ICP price is currently set at JPY 8,000, and is to gradually increase until 2050.
- Visualize the results and effects of investment and measures that contribute to decarbonization, by converting CO2 emission reductions into monetary values through the introduction of ICP.
- By using the ICP system as an incentive for action that contributes to decarbonization and as a guide for investment decisions, capital investment and technology development that contribute to decarbonization and activities that reduce environmental burden will be promoted, and thus activities toward the achievement of carbon neutrality will be accelerated.
- Recognize the potential impact of carbon pricing and prepare for the introduction of a carbon tax, etc.
Based on our Risk Management Policy and the basic regulations for risk management, TAISEI established an overall systematized risk management system under the supervision of the Board. We set up an appropriate management system that also addresses major ESG-related risks such as quality, compliance, information, safety and the environment.
Group-Wide Risk Management
Promotion of Group-wide risk management
Taisei has established a risk management system with the President as chief executive and the general manager of the Business Administration Div. as Chief Risk Management Officer (CRO), and works to ensure ongoing operation of the risk management system to appropriately determine and manage risks relating to business operations. Every year, based on the risks that materialized in that fiscal year, the risk management content for the following fiscal year is reviewed, and the plan-do-check-act (PDCA) cycle is operated and the effectiveness of the risk management organization is verified.
Company-Wide Risk Management System
Risks that may have a significant impact on company operations are reported to the Management Committee and the Board, and the response policy with respect to those risks is studied and determined in a comprehensive manner and reported in "Business Risks" in the Annual Securities Report.
Risk Associated with Climate Change
One of the "Business Risks" is "Risks Associated with Climate Change." The Taisei Group identifies and assesses risk that corresponds to the TCFD Recommendations. A company-wide, cross-sectoral TCFD Working Group (TCFD WG) has been established to identify climate change risks pertaining to the operations of each division and analyze the degree of impact on operations, and to conduct a comparative assessment with risks other than climate change risks and confirm that the necessary countermeasures have been devised. Risks analyzed by the TCFD WG are discussed in the Sustainability Committee and reported to the Board.
These risks are consistent with the risks identified and assessed in the Environmental Management System (EMS) based on the ISO 14001 international standard.
CO2 Emissions Reduction Targets (as compared to FY 2019)
(Intensity: t-CO2 / 100 million yen ｜ Total emissions: 1000 t-CO2)
|TAISEI Green Target 2050
|Emissions intensity Reduction rate
|Total emissions Reduction rate
|Emissions intensity Reduction rate
|Total emissions Reduction rate
CO2 Emissions for Taisei Group in FY 2021
- More than 90% of Taisei Group CO2 emissions are Scope 3.
- Within Scope 3, the majority of emissions are Category 1 and Category 11.
- Category 1: CO2 emitted during the manufacture of steel materials such as steel frames and steel reinforced bars, cement, and concrete
- Category 11: Calculated by multiplying the annual estimated CO2 emissions by the service life of the buildings delivered during that year.
As the service life varies between 30 and 60 years depending on building use, the result becomes an extremely large figure.
(Unit: 1,000 t-CO2)
Of Scope 3, Category 1 and Category 11