Governance

The HIMACS Group has identified responsible action on climate change as a material environmental issue. The Sustainability Committee, an advisory body to the President and CEO, reviews and confirms company-wide issues and initiatives related to climate change and other sustainability matters.

Matters reviewed by the Sustainability Committee are reported to the Board of Executive Officers, where they are discussed from a company-wide management perspective. The Committee then reports regularly to the Board of Directors, which provides appropriate oversight.

The Committee reviews and deliberates policies related to climate change, identifies climate-related risks and opportunities and corresponding response measures, and considers related targets. It also monitors and evaluates progress against those targets and reports to the Board of Directors at least twice a year.

Climate Change Governance Structure

Roles and Meeting Frequency of Governance Bodies Related to Climate Change

Governance Body	Role	Frequency per Year
Board of Directors	Receives regular reports from the Sustainability Committee on material matters related to climate change and other sustainability issues, as well as the details of discussions at the Board of Executive Officers, and exercises oversight.	2 times
Board of Executive Officers	Receives regular reports from the Sustainability Committee on material matters related to climate change and other sustainability issues, and discusses company-wide management measures.	2 times
Sustainability Committee	Reviews and confirms measures to address company-wide issues related to climate change and other sustainability matters. Reports the results of these reviews regularly to the Board of Executive Officers and the Board of Directors.	2 times

Strategy

Scenario Analysis

The HIMACS Group conducted scenario analysis for 2030 and 2050, covering the entire Group and assuming global temperature increases of 1.5°C and 4°C. In assessing the significance of climate-related risks and opportunities, we referred to scenarios published by the following government agencies and research organizations.

Risks and Opportunities

The climate-related risks and opportunities expected to have a particularly significant impact on the HIMACS Group and a high likelihood of occurrence are as follows.

Category		Drivers of Risks and Opportunities	Description	Impact Level	Time Horizon	Resilience
						Initiatives	Description
Transition Risks	Policy and Regulations	Strengthening of GHG emissions reporting obligations	Increased costs associated with establishing response structures and using external services in response to stronger and broader disclosure requirements	Medium	Short–Medium	Strengthening GHG Emissions Management	Strengthening GHG Emissions Management
		Expansion of carbon pricing	Margin pressure due to higher outsourcing fees as carbon costs associated with the introduction of a carbon tax are passed on by partner companies	Low	Medium–Long	Reduction of GHG Emissions	Increase the adoption rate of renewable energy Strengthen collaboration with supply chain partners Promote energy conservation internally
			Increased offset costs resulting from difficulties in reducing Scope 2 emissions due to delays in the introduction of renewable energy at tenanted buildings	Low	Medium–Long
	Technology	Replacement of existing products and services with lower-carbon options	Increased costs related to securing and developing technical talent as DX initiatives accelerate further	Medium	Short–Medium	Development of DX Human Resources	Identify target business domains and accelerate DX Accelerate and improve the efficiency of human resource development through classroom training and OJT, while expanding internal courses to increase the number of employees with relevant knowledge
	Market	Changes in consumer behavior	Loss of contracts and business opportunities if the Group’s efforts to reduce GHG emissions are insufficient to meet customers’ decarbonization policies	Medium	Short–Medium	Co-creation with Customers	Proposal-based sales aligned with customers’ environmental targets Expand environmentally responsible services
	Reputation	Criticism of the relevant sector	Decline in investor evaluations and reduced corporate value due to delays in ESG initiatives and information disclosure	Medium	Short–Long	Strengthening ESG Information Disclosure	Continue to disclose the status of responses to the TCFD recommendations and initiatives such as GHG emissions reductions
			Reduced competitiveness due to a decline in student applications and employee turnover resulting from delays in ESG-related responses	Medium	Short–Long
Physical Risks	Acute	Increased severity and frequency of extreme weather events such as typhoons and floods	Business stagnation due to damage to facilities and disruptions to the value chain caused by weather-related disasters	Low	Short–Medium	Enhancing the Resilience of Business Activities	Maintain and expand development environments to facilitate telework Discuss and promote initiatives with business partners to prepare for potential disruption to business activities
	Chronic	Extreme fluctuations in weather patterns and a rise in average temperatures	Increased equipment maintenance and replacement costs and higher cooling expenses due to power outages associated with natural disasters and an increasing number of extremely hot days	Low	Medium–Long
Opportunities	Products and Services	Development and expansion of lower-carbon products and services	Expanded business opportunities from providing related solutions in response to cloud migration and IT infrastructure renewal undertaken as part of climate change initiatives	Medium	Short–Long	Responding to New Business Opportunities Related to Climate Change	Promote responses to climate-related issues by strengthening collaboration with business partners
			Expanded opportunities to provide DX-related services driven by growing needs for operational efficiency and resource conservation using digital technologies
	Reputation	Shifts in stakeholder perceptions	Enhanced recruitment competitiveness as ESG-focused management gains support from diverse talent pools with strong awareness of environmental and social issues	Medium	Short–Long	Continuous Promotion of ESG Management and Stronger Communications	Communicate the Company’s environmental and social initiatives internally and externally through transparent information disclosure

Risk Management

The Sustainability Committee reviews the HIMACS Group's sustainability-related materiality at least once during each medium-term management plan cycle and, as necessary, in response to changes in social conditions, the business environment, and other relevant factors.

In particular, with regard to climate-related risk management, the Sustainability Committee promotes the examination and implementation of measures to reduce GHG emissions, reports to the Board of Executive Officers and the Board of Directors on these initiatives, including their progress, and implements the necessary measures.

Metrics and Targets

The Group has established the following metrics and targets for each material issue.

Material Issues	Indicators	Boundary	FY2026 Target	FY2025 Results
1. Responsible Action on Climate Change	Scope 1 and 2 reduction rate vs. base year (FY2020) Note: Market-based	Consolidated	FY2030: 42% reduction FY2050: Net Zero	84% reduction
	Renewable energy adoption rate (Including FIT non-fossil energy certificates)	Consolidated	FY2030: 100%	82%
	CDP Score	Consolidated	Score B	Score B
	Number of BCP Drills Conducted	Non-consolidated	2 times per year	3 times
	Number of BCM-Related Training Sessions	Non-consolidated	5 times per year	4 times

In particular, the Group has set the following greenhouse gas emissions reduction targets for Scope 1 and 2, using FY2020 Scope 1 and 2 emissions of 128 t-CO₂ as the baseline:

・FY2030: 42% reduction
・FY2050: net zero

The Group also estimates CO₂ emissions across its entire supply chain (Scope 3) and will work to reduce those emissions through measures including stronger collaboration with supply chain partners.