DISCO Corporation fully endorses the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD)*.
Based on the TCFD’s framework, DISCO will appropriately assess and manage climate-related risks and opportunities and proactively communicate with the general public.
*Task Force on Climate-Related Financial Disclosures (TCFD)
The Financial Stability Board (FSB) created the TCFD in 2015 at the G20’s request in order to consider and discuss corporations’ disclosure of information regarding climate change in order to support financial institutions. It recommends that corporations disclose their governance, strategy, risk management, and metrics and targets regarding climate change-related risks and opportunities.
TCFD Official Website:https://www.fsb-tcfd.org/
DISCO recognizes that climate change is an important management issue, and has implemented a Company-wide Environmental Committee, in which the Managing Executive Officer acts as the Chief Environmental Officer, and the Representative Executive Officer/President and Executive Vice President are committee members. This Company-wide Environmental Committee is held periodically, the risks and opportunities affecting business activities in the mid-to-long term are identified and assessed, countermeasures are considered, and important themes are discussed and reported to the Executive Committee and Board of Directors. In addition, a environmental departments have been established at the head office and at all manufacturing sites to promote the relevant measures.
Referring to the scenarios of the Intergovernmental Panel on Climate Change (IPCC) and International Energy Agency (IEA), two scenarios were selected: a 2℃ or lower (1.5℃) scenario and a 4℃ scenario. The trends of these two scenarios as of 2030 were forecast, but no large differences were observed between the two scenarios.
In the 2℃ or lower (1.5℃) scenario, the climate change countermeasures of each government will be strengthened and transition risks will be high. However, based on our assessment, there will be no major impact on finances as of 2030. On the other hand, our assessment indicated an increase in semiconductor demand and further expansion of business opportunities in a decarbonized society.
Based on the 4℃ scenario, it is likely that the physical risks will increase as the weather becomes more extreme. However, this risk was not high as of 2030, and thus, the assessment revealed no major impact on finances.
In both scenarios, it was identified that the financial impact from business opportunities that contribute to greenhouse gas reduction will be larger than that due to the risks from climate change.
DISCO assessed the risks and opportunities regarding how climate change will impact our business activities in future based on multiple scenarios. The degree of impact on business activities has been evaluated in 3 stages: “large,” “middle,” and “small.”
|Factors||Expected Major Effects||Impact|
|Risks||Transitional||Carbon price||Manufacturing and R&D costs increase due to carbon tax and/or emissions trading||Small|
|Energy saving, regulations||Handling costs including for green electricity purchases increase due to the demand to switch to renewable energy||Small|
|Price increase for parts and materials||Procurement costs increase from an increase in demand for materials (rare-earth elements, aluminum, etc.) due to electrification and a shift to EV||Small|
|Physical||Extreme weather conditions||Costs increase for BCM support and restoring production facilities||Small|
|Sales decline due to a decline in factory operation rates||Small|
|Sales decline due to procurement delays||Small|
|Opportunities||Social needs||An increase in the importance of semiconductors due to decarbonization using digital technology||Large|
|Increased demand for power semiconductors due to energy efficiency and a shift to EV||Large|
|Customer needs||An increase in competitiveness due to an improvement in the energy-saving capabilities of DISCO products||Middle|
|An increase in the competitiveness of DISCO products by providing solutions corresponding to decarbonization needs||Large|
Promotion of Company-Wide Energy-Saving Activities
As a part of activities implemented with the goal of carbon neutrality, DISCO promotes energy-saving activities in each division and individual. These activities are company-wide; reduction targets are set for each division depending on their energy consumption (greenhouse gas emission), and points are given depending on the achievement level. These points are reflected in the employees’ bonuses, promoting behavior modification in each individual and creating a system that achieves self-autonomy.
Proactive Implementation of Energy Creation
In order to reduce the environmental load from business activities, DISCO has installed solar power generation systems at each factory and affiliate office around the globe. Recently, in addition to the existing 140 kW solar power generation system, a system with a maximum power generation capacity of 1,054 kW was installed at Chino Plant, Nagano Works, allowing for megawatt-class power generation. In addition, the capacity of Kure Plant and Kuwahata Plant at Hiroshima Works was also increased (460 kW). With this, the company-wide power generation capacity has reached a maximum of 3,323 kW.
Promoting Carbon Neutral Literacy
At DISCO, training is provided to employees every year with the aim of promoting awareness and understanding for energy-saving practices. This training includes social trends, the risks if we do not work on decarbonization and the opportunities if we do, and how to calculate the reduction effects of energy-saving activities. The training is implemented company-wide for the entire global DISCO Group using the internal e-learning system.
Improvement Activities to Achieve Carbon Neutrality
DISCO views activities focused on achieving carbon neutrality as opportunities to become stronger. As part of the monthly improvement activity reports, a theme for improving energy-saving/carbon neutral practices is also included. This improvement report is carried out in a 1-minute presentation battle format. The points acquired from winning the battle affect employees’ bonuses, making it a system that promotes proactive involvement from employees.
Business Continuity Management (BCM) was established in 2003 at DISCO, and in 2012 we became the first Japanese company to acquire ISO 22301. In addition to establishing and operating a BCM Committee comprised of executives with the President as the chairman, a designated department for BCM was also established. In order to improve business continuity that eliminates the effects of a wide range of external factors, all employees work towards implementing regulations and strengthening facilities.
The heavy rain in Western Japan in July 2018 caused severe damage in Kure, Hiroshima, where DISCO’s manufacturing site is located. At the Kure Plant, where blades and wheels are manufactured, there was a water outage for both daily and industrial water, and logistics operations were severely impacted due to the fragmentation of the surrounding roads. Despite this, DISCO was able to fulfill its supply responsibilities without any issues because of its daily BCM activities.
Semiconductors are widely used not only in smartphones and PCs, but also in air conditioners, automobiles, and industrial devices. To give a recent example, the amount of electricity consumed by air conditioners can be reduced by approx. 60% by using an inverter. A large amount of semiconductors are required when switching to inverters. In ways such as this, semiconductors have contributed to energy saving for mankind, and they need to continue to be applied in order to realize a sustainable society. Therefore, it is thought that DISCO’s business opportunities will continue to expand steadily moving forward.
Even within semiconductors, in order to save more energy, the importance of power semiconductors, which realize effective electricity supply, is expected to increase. It is predicted that the materials used for power semiconductors will not only be limited to the current mainstream silicon, but will also expand to materials in the next-generation semiconductor market such as SiC (silicon carbide), which has high resistivity, high heat dissipation, and high energy-saving capabilities. DISCO has developed and sells the KABRA process*, which drastically improves the productivity of the SiC wafer manufacturing process, and intends to meet the demand for SiC which will increase in the future.
*KABRA Process: An ingot slicing method where a separation layer (KABRA layer) is formed at a specified depth by continuously irradiating an ingot with a laser, allowing the ingot to be peeled off from the KABRA layer to form wafers.
DISCO’s environmental departments at the head office and all manufacturing sites collaborate and identify the risks (transitional risks and physical risks) that could impact business activities in the mid-to-long term. In order to respond to the identified risks, the Company-wide Environmental Committee assess the impact, proposes countermeasures, and monitors the situation in order to strengthen the risk countermeasures management system.
DISCO considers taking countermeasures against climate change its social responsibility, and we have reduced emissions of greenhouse gases associated with our business activities. In 2021, the following mid- and long-term objectives were set as new targets for the reduction of greenhouse gases.
“To achieve carbon neutrality for all emissions produced as a result of business activities (Scope 1 and 2) by 2030”
“To achieve carbon neutrality for all emissions produced as a result of the entire supply chain (Scope 1, 2, and 3) by 2050”
DISCO also views the CO2 emitted in the use of our products as very important, and we promote various activities with the aim of designing products that reduce CO2 emissions.
In order to realize a sustainable society, DISCO strives to reduce toward greenhouse gas emissions, conserve resources, and reduce waste.
More environmental data and details regarding DISCO’s efforts can be found here.