Residential Customers

Japanese

Addressing Decarbonization

Disclosure based on TCFD framework

We communicate our initiatives on climate change in line with the TCFD* framework. In March 2023, we pledged support for the TCFD recommendations.

Governance

We have established addressing a decarbonized society and CO2 emissions reduction as an essential task. The Nomination and Remuneration, Environmental, etc., Committee (NR&E Committee), which is an advisory committee of the Board of Directors and comprises a majority of outside officers, discusses from an objective perspective the assessment of risks and opportunities related to climate change, sets targets, and reviews progress. These discussions are reported and proposed to the Board of Directors at least once a year, where they are debated and policy decisions are made.

Strategies

We will evolve our business into Energy Solutions that provide optimal energy use to our customers, and share our LPG operations, that halve CO2 emissions compared to other companies’ conventional operations, with other companies. Through these initiatives, we aim to reduce the emissions in the whole industry, enhance corporate value in the medium- to long-term, and strive for net zero CO2 emissions by 2050.

<Roadmap towards net zero CO2 emissions by 2050>

Risk management

Scenario analysis

We identified risks and opportunities related to climate change, assuming business environments for each scenario, through NR&E Committee and then specified them at a meeting of the Board of Directors.

4℃ scenario
1.5℃・2℃ scenario
Scenario premises
Scenario based on the extension of current initiatives. Energy regulations are limited and CO2 emissions do not significantly decline, leading to an average temperature increase of +4°C by 2100.
Significant progress in energy regulations is assumed. Efforts towards decarbonization accelerate, with stronger regulations and technological innovations, limiting the average temperature rise by 2100 to +1.5°C to +2°C.
Risks
・Decrease in gas demand due to rising temperature ・Increasing costs due to more frequent disasters ・Surge in fossil fuel prices
・Increasing costs due to carbon tax implementation ・Decrease in fossil fuel demand due to rising environmental awareness
Opportunities
・Sales of Energy Solutions ・Sales of distributed energy equipment ・Industry consolidation ・Sharing of the Platforms
・Widespread adoption of Energy Solutions ・Increase in sales of distributed energy equipment ・Acceleration of industry consolidation ・Accelerated sharing of Platforms
Financial impact
  • Increasing costs due to the introduction of carbon taxes, etc. (transition risk) Gross profit: 500 million yen

With the strengthening of regulations such as carbon taxes, there is the possibility that the procurement cost of fossil fuels such as LP gas will increase. If the profit margin for household gas and electricity decreases by ¥1/kg and ¥0.1/kWh respectively, this could lead to a combined gross profit decrease of approx. 500 million yen. We are promoting the procurement of non-fossil energy by acquiring carbon-neutral gas and non-fossil fuel certificates.

  • Impact on business due to increasing natural disasters (physical risk) Gross profit: 500 million yen

If the Company were unable to supply gas to all households for 3 days, the sales volume would decrease by approx. 5,000 to 6,000 tons (calculated based on annual sales volume), leading to a gross profit decrease of approx. 500 million yen. While we consider the likelihood of a simultaneous gas supply stoppage to all households to be nearly nil, we are thoroughly training our employees and preparing for emergencies.

  • Decrease in gas demand due to rising temperature (physical risk) Gross Profit: 2.2 billion to 2.7 billion yen per 1°C increase

As the average temperature rises, demand for gas in appliances such as water heaters decreases. An 1°C increase in the annual average temperature could lead to approx. a 5% decrease in household gas sales volume (based on past trends), resulting in an annual gross profit decrease of approx. 2.2 billion to 2.7 billion yen.

KPI and targets

We have set the following CO2 emissions reduction targets to be achieved by 2030.

Target①
CO2 emissions from the LP gas industry Approx. 50% reduction
Reduction of CO2 emissions through high-efficient LP gas operations (halving emissions compared to other companies). Sharing our operations with other companies to aim for a halving of CO2 emissions across the industry.
Target②
CO2 emissions per household Approx. 50% reduction
Reduction in NICIGAS’ CO2 emissions due to each household’s energy optimization and non-fossil electric power sources. Targeting CO2 emissions per household when using LP Gas and Electricity provided by NICIGAS (Scope1,3). This target includes the benefits of CO2 emission reduction through efficient operations (Scope1).
Target③
Reduction contribution Approx. 1,450 thousand t-CO2 (by 2030)
Reduction in CO2 emissions through high-efficient LP gas operations (halving emissions compared to other companies), as well as the reduction due to each household’s energy optimization and non-fossil electric power sources.