Response to climate change

The VECTOR Group is working to reduce greenhouse gases (GHGs) and eliminate waste through its business activities. We will continue to strive to lower the emissions and the environmental impact generated from our main offices in Japan and overseas, and we will make efforts to enhance business efficiency while reducing total CO2 emissions.

GHG emissions reduction targets and measures

GHG emissions reduction targets (1.5°C)

The VECTOR Group has set the targets of reducing Scope 1 and 2 emissions to net zero by 2030 and reducing Scope 3 emissions by 50% by 2030 compared to the base year of 2021. To achieve the emission targets, we are working to reduce Scope 3 emissions by 3,155 t CO2 in the 9-year period that commenced in 2021.

Specific GHG reduction measures (1.5°C)

●Scope 1 and 2

The VECTOR Group is implementing the following initiatives to reduce Scope 1 and 2 emissions by 307 t CO2 by 2030.
We will reduce direct emissions (Scope 1) by switching our current company car fleet from gasoline cars to EVs. In addition, indirect emissions (Scope 2) associated with the use of electricity will be reduced by increasing the percentage of electricity we use from renewable energy. We will also offset CO2 emissions by purchasing non-fossil fuel certificates and renewable energy credits. By implementing and continuing these initiatives, we aim to achieve carbon neutrality.

●Scope3

The VECTOR Group is implementing the following initiatives to reduce Scope 3 emissions by 3,155 t CO2 by 2030.
We will reduce emissions through streamlining work processes that the Group has outsourced by performing some of them in-house in the future. By supporting SDGs/ESG initiatives through PR to boost awareness, we will also encourage decarbonization and the reduction of emissions, working to reduce emissions throughout the entire supply chain.

By implementing these initiatives, the VECTOR Group will strive to reduce its GHG emissions by 30%.

GHG emissions

Internal GHG emissions (Scope 1 and 2)

Note: The increase in Scope 2 emissions in FY2022 compared to FY2021 can be attributed to an increase in commuters following the easing of measures for COVID-19.

Category		Unit	Result
			FY '21	FY '22	FY '23
GHG emissions （Scope1、2） GHG emissions Greenhouse Gas	Total	t-CO2eq	207.49	614.888	566.562
	Scope1	t-CO2eq	31.218	28.672	20.267
	Scope2	t-CO2eq	176.272	586.216	546.295

Comparison of Scope 1, 2, and 3 GHG emissions
FY ’23

GHG emissions in the entire supply chain (Scope 3)

Category		Unit	Result
			FY '21	FY '22	FY '23
GHG emissions （Scope3） GHG emissions Greenhouse Gas	Total	t-CO2eq	6,226.712	6,310.722	8,689.349
	Upstream total	t-CO2eq	6,094.510	6,310.722	8,689.349
	1. Raw materials	t-CO2eq	5705.92	5,751.205	7,588.313
	2. Capital goods	t-CO2eq	0.000	0.000	0.00
	3. Electricity/heat	t-CO2eq	34.918	97.553	100.150
	4. Transportation/delivery (upstream)	t-CO2eq	0.000	0.000	0.00
	5. Waste disposal	t-CO2eq	0.000	0.000	0.00
	6. Business trips	t-CO2eq	202.586	315.653	847.330
	7. Employee commuting	t-CO2eq	151.082	146.311	153.556
	8. Leased assets	t-CO2eq	0.000	0.000	0.00
	Downstream total	t-CO2eq	132.202	0.000	0.00
	9. Transportation/delivery (downstream)	t-CO2eq	0.000	0.000	0.00
	10. Processing of sold products	t-CO2eq	0.000	0.000	0.00
	11. Use of sold products	t-CO2eq	0.000	0.000	0.00
	12. Disposal of sold products	t-CO2eq	0.000	0.000	0.00
	13. Leasing (downstream)	t-CO2eq	0.000	0.000	0.00
	14. Franchises	t-CO2eq	0.000	0.000	0.00
	15. Investments (11 companies)	t-CO2eq	132.202	0.000	0.00

Scope 3 breakdown
FY ’23

Note: Category 1, “raw materials,” is mainly comprised of outsourcing expenses among Group companies.

Climate change related risks and opportunities

1.5°C scenario analysis

The VECTOR Group examines, evaluates, and analyzes climate change related risks and opportunities at meetings of the Sustainability Committee. The current 1.5°C scenario analysis has been divided into risks in society (transition risk and physical risk) and business opportunities in case of a 1.5°C rise in the earth's temperature.

●Table of assumed risks and opportunities

●Risks

・Transition risk

It is assumed that a range of technological innovations and lifestyle changes will arise with the tightening of GHG emission regulations. While price rises for raw materials and electricity are expected to have a negative effect in the short and medium term, it is forecast that risk can be mitigated for both of these in the long term by addressing change.

・Physical risk

It is assumed that the negative effects of physical risks from climate change can be controlled to a certain extent through the tightening of GHG emissions regulations and technological and lifestyle changes. Due to this, significant risk is not expected over the short, medium, and long term.

●Opportunities

・Business opportunities

It is expected that facility and distribution efficiency improvements, the switch to low-carbon energy, and the use of new technologies will continue.
In the medium term, it is anticipated that the cost of low-carbon fuel will decrease and that the telecommunications industry will be significantly benefited.
In addition, opportunities are expected to increase for our digital signage and digital transformation (DX) businesses, which are environmentally friendly as they help to reduce the circulation of material goods.

Based on the above scenario analysis, we will examine measures to address identified risks in future meetings of the Sustainability Committee.

Reducing environmental impact by engaging in cooperative purchase and eliminating paper

Our Head Office in Tokyo and subsidiaries jointly purchase stationary items to ensure the effective utilization of resources and the separation of waste. In addition, we are eliminating the use of paper by using projectors and monitors as the standard way of sharing materials and data at our internal meetings and conferences. Furthermore, opportunities to carry out meetings and presentations with clients online have increased due to the COVID-19 pandemic, allowing us to expand paperless work throughout the business. (Use of paper reduced by 55% in FY2021 compared to FY2020.)

Launch of “New Standard Virtual Presentations” and “Brand News”―Corporate PR solutions that allow client companies to maximize the benefit of their presentation opportunities

In July 2021, we launched Virtual Presentations, a solution that utilizes computer graphics (CG) to effectively present a brand’s philosophy, and Brand News, which allows companies to deliver news themselves on the day of their presentations.
Recently, the holding of press conferences and PR events online has become a firmly established practice in communication industry, and this trend is expected to continue even in the post-COVID era. Virtual Presentation and Brand News fully harness the advantages of being online solutions. By recording in a green screen studio and utilizing approximately 100 types of CG venue designs, we are able to create presentations in the virtual space.