Disclosure Based on TCFD Recommendations

4℃ scenario

While policies and regulations such as the strengthening of climate change measures, as well as transition risks related to technology, market, and reputation, are considered limited, we assume that acute risks from intensified extreme weather and chronic risks from rising temperatures and expanding water stress areas may arise. Based on the recovery cost of 770 million yen incurred in FY2019 due to the heaviest rain with emergency warning in the past decade, we estimated the potential financial impacts that could occur in the future.

• Physical risk (acute)

  Due to the decline in forest disaster prevention functions caused by loss of biodiversity, we recognize potential risks such as increased costs for disaster preparedness and recovery of communication facilities like base stations due to the frequent and severe natural disasters exacerbated by global warming. This includes impacts on procurement due to disruptions in the value chain, business opportunity losses, and potential neighborhood damage caused by affected facilities. We used past incurred costs within our company as benchmarks to evaluate the potential financial impacts anticipated in the future.
  As a result, we have found that it is difficult to completely eliminate the risk of increasingly frequent and severe climate disasters, even if we implement measures to strengthen communication facilities primarily in high-risk areas. We anticipate this as a long-term risk with a high likelihood of occurrence, and if large-scale events occur, it could lead to disruptions in communication services and social responsibilities.

  To address this, we utilized flood inundation data provided by the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) and conducted a physical risk assessment for all outdoor base stations (excluding rooftop installations). As a result, we have confirmed that the risk is particularly high in coastal and riverine areas in the Kanto and Chugoku-Shikoku regions. For example, when Typhoon No.19 hit in October 2019, record-breaking rainfall caused rivers to overflow and landslides over a wide area, including the Kanto region, leaving more than 100 people dead or missing, and many of our base stations were flooded or suffered power outages and other extensive damage, resulting in areas where communication was not possible.
  As a measure to adapt to the increasing frequency of flood damage due to the rise in typhoon and linear precipitation occurrences, we invested approximately 2.1 billion yen in FY2023 to mitigate equipment damage risks and ensure stable service continuity during widespread power outages, primarily by implementing the following measures. In FY2023, there were no incidents leading to significant area hindrances.

  • Strengthening of Disaster Base Hospitals and Remote Island Office Cover Stations Batteries
  • Enhancement of Satellite antenna
  • Strengthening of wired drone wireless relay system
  • Periodic replacement of batteries
  • Maintenance of portable generators

• Physical risk (Chronic)

  We considered the impacts of water stress such as floods and droughts due to the effects of global warming and biodiversity degradation, as well as the procurement impacts from semiconductor supply delays. Additionally, we assessed the implications related to securing business water supply, including server cooling water for data centers.
  As a result, we found that minimizing the possibility of occurrence through supply chain reassessment and efficiency improvements in water use is feasible. However, water risk remains a global issue, particularly challenging to eliminate completely in Japan, which is highly dependent on overseas water sources. We believe that if such risks occurs, the financial impact, such as supply disruptions, could be significant.

1.5℃ scenario

While acute or chronic physical risks from climate change that would impact our business are not expected to arise, we examined the potential impacts of strengthened policies and regulations, including enhanced climate change measures, as well as transition risks related to technology, market, and reputation.

• Transition Risk (Market / Reputation)

  As the demands for ambitious goals for companies increase year by year to meet the targets of the Paris Agreement, we have examined the potential impacts on our sales, stock prices, and brand image if our efforts are deemed insufficient, as well as the business impacts associated with the depletion of natural capital and economic effects resulting from social instability.
  As a result, we recognize that actively disclosing information based on the TCFD recommendations and promoting activities that contribute to achieving carbon neutrality are priority matters for enhancing corporate value. Accordingly, we endorsed the TCFD in April 2020 and established “Contributing to the Global Environment with the Power of Technology” as one of our materiality focus areas.
  In the long term, we anticipate rising costs of raw materials due to resource depletion and increased market demand. To effectively utilize resources, the Company has set KPIs under our material issues to monitor and achieve goals related to the reuse/recycling of used mobile phones, the recycling rate of decommissioned base station communication equipment, and the recycling rate of industrial waste.

• Transition Risk (Policy and legal)

  Assuming that policies and regulations related to climate change mitigation (such as taxes for global warming countermeasures and laws promoting global warming countermeasures) are strengthened, we estimated the impact if a carbon tax of approximately 16,000 yen per ton of CO2 equivalent were imposed in the FY2030. At present, we believe the likelihood of such developments occurring in Japan is low, but if they do occur, they could have a certain level of financial impact. We will keep a close eye on the future development of the carbon levy as a domestic regulation. As a countermeasure, we are promoting a plan to become carbon neutral by 2030, which means that all energy used in our business activities, including electricity, will be renewable energy by the year 2030. In light of the expected rapid increase in power demand for data centers due to the spread of generative AI (Artificial Intelligence), the Company^* concluded long-term renewable energy procurement contracts and set a new target of procuring at least 50% of its electricity from renewable energy sources by FY2030.

  [Note]

  1. *
     SoftBank Corp. and Wireless City Planning, Inc.

• Transition Risk (Technology)

  We have evaluated the potential impact on business operations due to insufficient technology to comply with regulations. While we currently consider the likelihood of this happening to be low, there is a concern that any discrepancy in service levels compared to other companies could lead to a decrease in competitiveness.

Risk response measures, opportunities

Actions taken to reduce business risk can also be significant business opportunities. It is said that by utilizing cutting-edge technologies such as AI, IoT, and Big Data, and by analyzing vast amounts of environmental data through AI's learning function, it is possible to predict the impact on the global environment. The use of cutting-edge technology in environmental issues is attracting attention around the world because it enables us to take various countermeasures based on such predictions. We are striving to maximally utilize cutting-edge technologies such as AI and IoT, and synergies between group companies to achieve power efficiency in our facilities and equipment and implement measures to contribute to the conservation of biodiversity.

• Zero CO2 emissions “Shizen Denki”

  The Company offers a household electricity plan called “Shizen Denki,” which achieves a 100% renewable energy ratio and zero CO2 emissions by combining designated non-fossil fuel certificates for renewable energy. In FY2023, through the provision of “Shizen Denki,” we achieved an annual reduction of approximately 39,000 tons of CO2 emissions.

• Japan's largest household electricity-saving service, “Eco Denki App”

  We provide the “Eco Denki App” free of charge to customers who subscribe to our electricity service. The “Eco Denki App” is a service that encourages customers to save electricity through a smartphone application, utilizing patented technology, including proprietary AI from EnCored Japan Corporation. In addition to checking and forecasting electricity bills from the application, users can also check the status of electricity savings and CO2 reductions. If you succeed in saving electricity, you will receive PayPay points the next day. This service not only allows you to save money on electricity while reducing your electricity bills, but also contributes to decarbonization by changing your behavior.

• “Cloud Carbon Management” to support decarbonization management

  This is a cloud service that calculates and visualizes GHG emissions and is based on Zeroboard, a cloud service that calculates and visualizes GHG (greenhouse gas) emissions developed and provided by Zeroboard, Inc and optimized with the aim of integrating with corporate solutions provided by the Company. By leveraging the knowledge and expertise that Zeroboard possesses in decarbonization, we aim to contribute to our corporate clients' decarbonization efforts and the realization of a sustainable society. At the same time, we will actively utilize “Cloud Carbon Management” within our Company to enhance the accuracy of GHG emission calculations, reduce labor efforts, and strengthen the group's overall initiatives towards carbon neutrality.

• “HELLO CYCLING”, an IoT-based bicycle sharing system

  Our Group company, OpenStreet Corp. provides an environmentally friendly shared mobility service that allows people to use mobility as a means of transportation without owning mobility vehicles. Through the bike-sharing platform “HELLO CYCLING” and the multi-mobility sharing service ‘HELLO MOBILITY,’ we are developing ‘Multi-Mobility Stations’ that allow for the rental of bicycles, scooters, and micro-EVs from a single location. We are collaborating with local governments and partner companies to expand this initiative. This initiative not only improves the convenience of urban transportation but also contributes to achieving a low-carbon society by supplying part of the electricity used for each vehicle with renewable energy. Moving forward, we aim to promote the use of electric mobility powered by renewable energy and continue working towards a society that coexists with the global environment.

• “HAPS”, a stratospheric communication system unaffected by natural disasters

  We are advancing efforts to commercialize the stratospheric communication system “HAPS (High Altitude Platform Station)”, which provides communication networks from the stratosphere, approximately 20 kilometers above the ground. This system will enable the establishment of stable internet connectivity in areas and regions where communication networks are not well-developed, such as mountainous regions, remote islands, and developing countries. Additionally, because it is unaffected by ground-based disturbances, it can provide a stable communication network, which is expected to contribute significantly to rescue and recovery efforts during large-scale natural disasters. In January 2022, we issued ESG bonds (HAPS Bonds) with funds specifically allocated for the HAPS project, raising 30 billion yen.

• Building a Distributed AI Data Center

  We believe that the development of a next-generation society that coexists with AI and cooperates with AI autonomously requires the construction of a next-generation social infrastructure that enables the generation and processing of vast amounts of data. Currently, most data centers are located in Tokyo and Osaka, with data processing and power consumption concentrated in urban areas. If data processing and power consumption continue to increase at this rate, the risk of power outages in urban areas will increase. Therefore, we plan to distribute data centers (Brain Data Centers) with large-scale computing capacity in about four locations throughout Japan. In 2023, we were selected for a public solicitation project by the Ministry of Economy, Trade and Industry, and will receive national subsidies to build a large-scale data center with extensive computing infrastructure in Tomakomai City, Hokkaido (scheduled to open in FY2026). Then, we will place data processing bases (Regional Brain) in regions where green energy is being developed and stable electricity can be procured. Furthermore, by utilizing MEC (Multi-access Edge Computing) at points in proximity to devices such as smartphones, a distributed AI data center can be built. The practical application of decentralized AI data centers aims to distribute and process the rapidly growing volume of data, enhance overall computing power, and optimize power consumption.

• Optoelectronic coupling networks

  With an eye on Beyond 5G/6G, we aim to meet the growing demand for data communications while achieving carbon neutrality. We have completed the nationwide rollout of an All optical communication network using Fujitsu's next-generation optical transmission equipment as of October 2023. The all-optical network that we have completed nationwide utilizes optical technology across all areas of the communication network. By connecting with all-optical technology-compatible equipment and applying water-cooling transponder technology, we have reduced power consumption by up to 90% compared to conventional systems^*. In addition, even when connected to conventional facilities, the latest photoelectric conversion technology has achieved a power consumption reduction of approximately 50%^* compared to conventional systems^*, making this an environmentally friendly network that can demonstrate high power efficiency in any connection environment. The new system also improves communication performance, using a pair of optical fibers to achieve high-capacity, high-speed transmission of up to 48.8 Tbps, approximately twice the speed of conventional systems^*.

  [Note]

  1. *
     Comparison with conventional systems: Comparison with equipment conventionally used by SoftBank

Scope 1 and 2 emissions reduction

• Energy-saving measures using the latest technology

  • Promote energy efficiency in telecommunications facilities
  • Smart building of offices using AI and IoT
  • Nationwide development of optoelectronic coupling networks using next-generation optical transmission equipment
  • Improving Energy Consumption Efficiency through the Construction of Ultra-Distributed Computing Infrastructure (xIPF)

• Transition to Renewable Energy

  • Sequentially convert all electricity use to renewable energy
  • Switch 50% of electricity to electricity generated from renewable energy sources (SoftBank Corp. and Wireless City Planning, Inc.)
  • Promote distributed AI data centers
  • Realization of local production for local consumption of energy

Scope3 emissions reduction

• Collaboration with Stakeholders

  • Implementing emissions reduction guidelines for business partners
  • Collaborative emissions reduction with business partners (Category 1 and 2)
  • Provision of energy-saving services
  • Introduction of environmentally-friendly vehicles

Others

• Utilization of cutting-edge technologies and offsets

  • Realization of low-environmental-impact communication infrastructure “HAPS”
  • Considering the use of neutralization credits and CCUS (Carbon Capture, Utilization, and Storage) as measures for residual emissions

Obtained SBT net-zero certification

Our greenhouse gas emission reduction targets, including Scope 3, have been certified by the international climate change initiative SBTi (Science Based Targets initiative) as scientifically based “SBT (Science Based Targets)”.
For more information on SBT targets, please click here