Information Disclosure Based on TNFD Recommendations
TNFD is an international initiative that aims to establish a framework for appropriately assessing and disclosing business risks and opportunities related to natural capital. The taskforce’s final recommendations were published in September 2023.
The Company supports the aims and philosophy of TNFD, and was pleased to register as a TNFD Adopter in October 2025.
We began by conducting an initial survey and disclosure in accordance with the final TNFD recommendations. However, in the future, we plan to conduct surveys related to the importance of ecosystems at our main sites, and promote measures to address whatever risks and opportunities we identify. In addition, we will evaluate the progress of these measures and expand the range of information we disclose.
Governance
The Group Sustainability Committee was established to formulate the Group's policy on sustainability and, based on that policy, to promote action. The Sustainability Committee discusses and resolves important matters related to natural capital that impact biodiversity conservation, and reports directly to the Board of Directors. The Board supervises the Sustainability Committee, and also regularly discusses key matters related to materiality, including coexistence with Nature.
Promotion Structure
Roles
The Board of Directors
At least once a year, the Board of Directors receives a report from the Sustainability Committee summarizing the latter’s resolutions. The Board is responsible for overseeing the Group’s efforts to address issues and for monitoring progress. It also regularly discuss important matters related to natural capital.President (Supervisor of Natural Capital)
Important matters related to natural capital are supervised by the President, who serves as chairman of the Sustainability Committee. He is ultimately responsible for formulating the Group's sustainability-related policies, including important matters related to natural capital, and making all management decisions regarding sustainability-related activities.Sustainability Committee
The Committee is chaired by the President, who is ultimately in charge of managing the Group’s natural capital, and consists of full-time officers, including the officer in charge of sustainability promotion, and presidents of Group companies. Matters related to the Group's materiality, including important issues related to natural capital, are discussed and resolved at two regular meetings each year, and at extraordinary committee meetings whenever necessary, and the details of those resolutions are reported to the Board of Directors. The officer in charge of sustainability promotion plays a key role in developing and executing programs based on the Sustainability Committee’s decisions.
Strategy
We looked at the Group's main business fields objectively, with an eye to the entire value chain, and evaluated their dependence on natural capital and their impact thereon, as well as potential risks and opportunities that this presented.
In the future, we will follow the LEAP approach and deepen our efforts by identifying and assessing "priority areas."
Identification and Assessment of Dependencies and Impacts
Using ENCORE, an analytical tool that helps organizations understand Nature-related risks and impacts, we identified ecosystem services that are closely related to the activities of the key manufacturing businesses we target. We used a five-point scale to assess their dependency and impact on natural capital, and identified three levels that ranked at least medium or higher. The visualized heat map is shown here.
In terms of dependence, we found that the mining of metal minerals and the production and processing of raw materials upstream of the value chain may depend on ecosystem services such as rainfall pattern regulation and water purification, and downstream, transportation and disposal may depend on ecosystem services such as rainfall pattern regulation and solid waste purification. In terms of impacts, we have identified the possibility that the mining of upstream metal minerals may have an impact such as land modification of freshwater and marine areas, and water and soil pollution due to waste.
Identification and Assessment of Risks and Opportunities
Based on the assessment of the Group’s dependence on and impact on natural capital, we have identified specific risks and opportunities that may have a high financial impact on our business activities. We took a bird's-eye overview of the entire value chain of our main businesses, which allowed us to identify transition risks such as compliance with regulations and soaring procurement costs. On the positive side, we determined that there is room to increase the usage efficiency of resources such as raw materials and water. In the future, we will identify business sites that are highly dependent on and also have a high degree of impact on natural capital, and we will promote specific measures to address the risks and opportunities arising from these dependencies and impacts.
| Risk Classification | Details of Risks | ||
|---|---|---|---|
| Risk | Transition | Policies & Regulations | ・Increased cost of procured products due to restrictions on water consumption, tighter regulations on pollution and GHG emissions, tightening of the RoHS Directive, etc., and product development costs due to switching over to alternative products |
| Market | ・Decline in earnings due to inability to respond quickly to consumers’ shift toward more environmentally friendly products | ||
| ・Increased procurement and product development costs stemming from the changing customer preferences noted above | |||
| Technology | ・Increased procurement costs due to increasing costs for the development and deployment of new technology amid the ongoing transition to low-impact technologies | ||
| ・Decline in earnings due to delays in R&D activities to respond to the demand for low-impact technologies | |||
| Opportunity Classification | Opportunity Details | |
|---|---|---|
| Opportunities | Resource Efficiency | ・Cost reductions through the use of recycled raw materials, implementation of the 3Rs, and introduction of production technologies that help reduce GHG emissions
・Stable production and cost reductions by introducing equipment that promotes water conservation and water recycling |
| Market | ・Gain market recognition and increase revenue from products related to biodiversity conservation, such as forest conservation and marine conservation activities | |
Risk and Impact Management
In order to centrally manage risks that could have a significant impact on the Group's business, the Seiko Group Risk Management Committee, chaired by the President of the Seiko Group, plays a central role in developing and strengthening the Group-wide risk management system. In order to promote Group-wide risk management through close cooperation between Seiko Group Corporation (SGC) and its various Group companies, SGC established a Group Risk Management Committee, comprised of the presidents of each Group company, and also established a system to identify and share risks for the entire Group.
We conduct assessments of dependence on and impacts on Nature, as well as risks and opportunities arising therefrom, based on the TNFD's LEAP approach. In particular, the Sustainability Committee identifies and evaluates important dependencies, impacts, risks, and opportunities. It then drafts resolutions, and reports the details of those resolutions to the Board of Directors. In addition, risks addressed by the Sustainability Committee are reported to SGC's Risk Management Committee. In the future, we will consider specific measures to address dependencies and impacts, as well as risks and opportunities, and then make resolutions and promote them within the Sustainability Committee.
Group Risk Management Promotion System
Roles
Seiko Group Risk Management Committee ※1
Chaired by the President, the Committee is working to identify and respond to risks that need to be addressed across the Group. In addition, it receives reports from all the Group risk owners, including at SGC, and supports ongoing risk management at each company.Group Risk Management Committee ※2
Comprised of full-time officers and the presidents of Group companies, this Committee identifies and provides information about risks for the entire Group, monitors responses to key risks, and shares information among all participants.Risk Management Committees of Group Companies ※3
Each Group company promotes risk management autonomously, led by their own risk management committee.Sustainability Committee
The Committee discusses and decides on matters related to the Group's materiality, including Nature-related dependencies and impacts, as well as risks and opportunities, and reports the details of these decisions to the Board of Directors. In addition, it reports to the Seiko Group Risk Management Committee on the progress of measures to alleviate or eliminate risk.
Metrics and Targets
Among several sustainability indicators, the Group quantitatively measures water withdrawal, GHG emissions, waste emissions, recycling rates, and more.
We have set a goal of reducing water withdrawal by 5% in FY2026 (compared to FY2021) and maintaining the level of water withdrawal per unit of sales.
We have also set targets for GHG emissions — reducing Scope 1 and 2 emissions by 42% compared to FY2022, and reducing Scope 3 (Categories 1 and 11) by 25% compared to FY2022, with the aim of achieving net zero emissions by FY2050.
The Seiko Group aims to achieve a recycling rate of over 90% at all domestic sites by fiscal 2030.
While striving to achieve these targets, we will consider adopting additional Metrics and Targets in line with the TNFD disclosure indicators.
