Environment— Environment —
- Sustainability Top
The VT Holdings Group expends massive amounts of resources and energy in our business activities, as well as activities related to automobiles and housings that we have sold.
In order to minimize our environmental impact as much as possible, we will do our part in contributing to achieving a sustainable society in continued efforts to solve climate change and energy challenges and initiatives to achieve carbon neutrality.
Climate Change Activities by the VT Holdings Group
As a public entity of society, the VT Holdings Group considers climate change is an important issue. This is shown by the Group creed, “Through youth, ideas, and ceaseless efforts, we shall provide safe and reliable services to our customers, contribute to the local community, and endeavor to develop our businesses,” which serves as our guiding principle. In line with the recommendations of the TCFD (Task Force on Climate-related Financial Disclosures), we have reviewed the four recommended disclosure items, which are (1) Governance, (2) Risk management, (3) Strategy, and (4) Metrics and targets.
- Support for the
- Risk Management
- Metrics and Targets
- Future initiatives
Support for the TCFD recommendations
In July 2022, VT Holdings Co., Ltd. announced support for the recommendations of the TCFD.
Based on the recommendations of the TCFD, as we move forward, we will analyze risks and opportunities related to climate change, and endeavor to proactively disclose information on our response to these.
The Company recognizes that climate change-related initiatives are one of the important management issues for the VT Holdings Group. The Risk Management Committee, chaired by the Officer in charge of risk management, mainly handles risks, and the Sustainability Committee, chaired by the president of the Company, mainly examines opportunities related to climate change in addition to matters not related to climate change. Details on specific initiatives, goals, and progress are prepared by the working groups of both committees, and reported to the Company’s Board of Directors for discussions and decisions.
Based on the “Risk Management Rules” established by the Company, risks related to climate change are managed in the same manner as other risks. A response policy is then determined according to that impact after evaluating the degree of impact on the business. Once the response policy is determined, through the Risk Management Committee working group, which is composed of the heads of major departments, we request the necessary organizations of each Group company to take measures, and monitor the progress of their implementation.
We consider the various risks and opportunities connected with climate change are important elements of our business strategy and have conducted scenario analysis according to the TCFD framework.
Assumptions for scenario analysis
We have selected two scenarios and analyzed their impacts as of 2030 based on reports related to future projections by governments and international organizations such as the IEA “World Energy Outlook.” These are the “less than 2℃ scenario” and “more than 4℃ scenario.”
With each scenario, we identified climate change-related risks and opportunities targeting the automobile sales business in Japan, which accounts for 80% to 90% of the VT Holdings Group’s overall operating profit. From the standpoint of “Policies and regulations for a decarbonized society,” “Changes in consumer preferences,” and “Increased severity of extreme weather events,” which are considered to be highly relevant to the business of the VT Holdings Group, risks and opportunities considered especially important were extracted, and we then qualitatively evaluated their financial impact on the target project and studied response measures.
We also assumed the following worldviews for the “less than 2°C scenario” and “more than 4°C scenario” respectively.
Less than 2℃ scenario (Transition risk: large / Physical risk: small) Reference: IEA SDS, IEA2DS, RCP2.6
Transition risks as we move toward a decarbonized society include the introduction of laws and regulations such as carbon taxes and border carbon adjustment measures, which will increase energy costs and in turn affect commodity prices.Customer preferences for products and services will also change, and companies that do not respond properly to climate change will be exposed to risk of damage to their brand image and the loss of customers. With regards to physical risks, as various regulations aimed at a decarbonized society progress, rising temperatures will be suppressed, and the frequency of hot summers, heavy rains, typhoons and other adverse events will not increase significantly. This will help suppress a major increase in natural disasters and health hazards compared to the present.
More than 4℃ scenario (Transition risk: small / Physical risk: large) Reference: IEA STEPS, RCP8.5, CPS
Various efforts toward a decarbonized society such as legal regulations are progressing in developed countries, even though these are not as significant as in the less than 2℃ scenario. Regulations in developing countries are not sufficient to achieve greenhouse gas emissions reduction targets. This would result in a rise in temperature of about 4℃, causing natural disasters such as heavy rains and typhoons to occur more widely than at present. There is also concern about health hazards caused by infectious diseases and heatstroke.
Extraction and evaluation of climate change-related risks and opportunities
Scenario Type Impact on business of the VT Holdings Group Impact 2℃ Transition Legal regulations
1Decline in sales if automobile manufacturers delay development of ZEVs (Zero Emission Vehicles) because of restrictions on the sale of new and used vehicles that use fossil fuel engines
Large 2℃ Transition Legal regulations
2Increased investment costs for renovating stores due to mandatory ZEB (Zero Energy Building) standards by the government
Medium 2℃ Transition Technology
3Increased investment costs for charging equipment as EVs become more common
Large 2℃ Transition Market
4Increased operating costs due to increased demand for electricity and rising electricity rates associated with investment in power generation that does not use fossil fuels
Medium 2℃ Transition Reputation
5Decline of reputation among customers and investors if adequate environmentally conscious measures are not taken due to environmental awareness rising in society
Medium 4℃ Physical Extreme weather
6Damage to stores and other locations and loss of business opportunities caused by typhoons and heavy rain (Although the frequency and intensity increase compared to the present in the 2℃ scenario, these would be further accelerated in the 4℃ scenario)
Scenario Type Climate-related business opportunities Impact 2℃ Resource efficiency
1Decreased operating costs due to improved efficiency with stores and offices
Large 2℃ Source of energy
2Reduced operating costs by using low-emission energy based on higher efficiency and low-carbon technologies at stores and offices, and by converting to decentralized energy sources
Large 2℃ Products and services
3Increased earnings due to a higher demand for low-emission products such as ZEVs
Large 2℃ Market
4Enlarged earnings through the provision of services based on new marketing that utilizes customer vehicle data obtained from IoT including charging equipment, etc.
Large 2℃ Resilience
5Improved corporate image through resilience strategies
No Countermeasures Risk Opportunities 1
- Stable offerings of ZEVs, etc., by establishing a group system that does not rely on specific brands (manufacturers)
- Utilization of subsidies through active investment in ZEBs, and reduced costs by converting stores to ZEBs
- Providing new services associated with the collection of vehicle information via IoT when charging equipment is used for ZEVs, etc.
- Considering the introduction of decentralized energy and VPPs (Virtual Power Plants) of a new technology
1 2 6 4
- Response by communicating resilience strategies
- Sales and services for ZEVs as low-carbon emission products
- Communicating carbon neutral measures such as ZEB initiatives
- Reviewing and strengthening the business continuity plan (BCP)
- Store designs that take into consideration the environment and disasters through cooperation with construction companies within the Group
Results of scenario analysis
Regarding transition risks, ZEV targets set by each automobile manufacturer handled by the VT Holdings Group are higher in the less than 2℃ scenario than in the more than 4℃ scenario, which will cause the selling price of vehicles to rise temporarily. However, the selling price will decrease as the new technologies become more widespread. Coupled with fuel cost reductions from electricity, we believe it will be possible to ensure a certain level of sales volume and sales.
Also, costs for installation of charging equipment as ZEVs become more common, and capital investment for conversion of buildings (stores, etc.) to ZEBs are expected to increase. We concluded that these risks can be mitigated by utilizing government subsidies through the making of more proactive investments in ZEBs in the early stages and by reducing running costs such as utility costs. We also believe that the financial impact of transition risk will be smaller with the more than 4℃ scenario.
Regarding physical risks, while it can be assumed that natural disasters will become more severe under the more than 4℃ scenario, we believe that we can reduce risks from natural disasters by working with the construction companies of the VT Holdings Group to build stores that take disasters into consideration. We will also review and strengthen our BCP so that business activities can continue even in the event of a disaster. Although we believe that the impact will not be as great as in the more than 4℃ scenario, we will promote the above measures since natural disasters are expected to occur even in the less than 2℃ scenario.
Metrics and Targets
We have established Scope 1, 2, and 3 emissions for greenhouse gases as indicators for managing climate-related risks and opportunities. We have been working since FY2020 to calculate the Group’s overall greenhouse gas emissions . The VT Holdings Group’s FY2020 Scope 1 and 2 emissions of greenhouse gas were 19,110 t-CO2, and Scope 3 emissions were 1,372,448 t-CO2. Based on the current state of greenhouse gas emissions, the VT Holdings Group has set a target to reduce Scope 1 and 2 greenhouse gas emissions by 42% by FY2030 for achieving the less than 2℃ target. Going forward, the entire VT Holdings Group will promote reductions in emissions to achieve our goals.
- Scope 3 greenhouse gas emissions are calculated by limiting the scope to our Company and car dealers in Japan. We are currently considering calculation methods for other businesses and regions, and plan to gradually expand the calculation scope in the future.
Results for the VT Holdings Group Scope 1 and 2 Greenhouse Gas Emissions
|Fiscal year 2020
|Fiscal year 2021
|Scope 1 and Scope 2 Total||19,110||18,393|
- Market standards are used to calculate Scope 2.
Results for the VT Holdings Group Scope 3 Greenhouse Gas Emissions
|Categories||Category name||Fiscal year 2020
|Fiscal year 2021
|Category 1||Purchased Goods and Services||351,770||372,036|
|Category 2||Capital Goods||13,604||11,457|
|Category 3||Fuel-and Energy-Related Activities Not Included in Scope 1 or Scope 2||2,779||3,523|
|Category 4||Upstream Transportation and Distribution||6,595||6,891|
|Category 5||Waste Generated in Operation||883||868|
|Category 6||Business Travel||249||262|
|Category 7||Employee Commuting||939||923|
|Category 8||Upstream Leased Assets||0||0|
|Category 9||Downstream Transportation and Distribution||2,054||1,984|
|Category 10||Processing of Sold Products||0||0|
|Category 11||Use of Sold Products||990,275||985,942|
|Category 12||End-of-Life Treatment of Sold Products||1,299||1,293|
|Category 13||Downstream Leased Assets||2,002||2,092|
|Scope 3 Total||1,372,448||1,387,272|
- Scope 3 greenhouse gas emissions are calculated by limiting the scope to our Company and car dealers in Japan.
The automobile industry is entering a period of great change as represented by the term “CASE.” One element of CASE is “Electric,” which is closely related to climate change and is an issue that must be addressed globally.
We believe that shifting from vehicles powered by fossil fuels to electric vehicles is an effective way to navigate the wave of big changes in the automotive industry and minimize its negative impact both on the planet and people’s lives. Under the supervision of the Board of Directors and other committees, the entire Group will engage in activities and capital investment in order to promote the diffusion of electric vehicles, design and use environmentally friendly buildings, reduce greenhouse gas emissions, and strengthen resilience.
Collecting and properly disposing of chlorofluorocarbons
Appropriately collecting chlorofluorocarbons used in vehicle air conditioning with a dedicated collector for recycling and refilling helps reduce environmental impact in efforts to achieve sustainable consumption and production.
Waste water management at maintenance facilities and use of oil-water separator tanks to prevent oil leaks
Passing waste water through an oil-water separator tank at maintenance facilities and leveraging the characteristics of oil makes it rise to the top so that it does not leak outside of the facilities (into sewage water, etc.). In addition, periodically processing accumulated sludge in oil-water separator tanks and testing waste water help preserve water resources.
Condominium designs that assist in carbon neutral efforts
Energy saving and energy creating elements are incorporated into various housing facilities to help reduce society’s impact on the environment.
Power-assisted bicycles for cycle sharing
Solar charging panels installed on condominium rooftops supplying electricity to common areas
EV charging system installation
High-strength (100 year) concrete for improved building durability
We have introduced and are actively using web conferencing for conferences, meetings, and hiring interviews, etc. In the past, attendees from across the country would gather at a single venue for meetings, however, introducing a web conferencing has cut travel time and costs, improved work efficiency, and contributed to reduced CO2 emissions.