Addressing Climate Change

Recognizing that the sustainability of society is a key item in its business activities, the Bandai Namco Group has established a framework that enables it to make decisions and implement sustainability initiatives more swiftly, and is actively advancing initiatives.

We formulated the Bandai Namco Group Sustainability Policy in April 2021 because addressing climate change is essential to realizing a sustainable society and ensuring the continued growth of our business. We also agree with the aim of the Paris Agreement to “keep a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius.” In order to further accelerate our efforts to reduce greenhouse gas (GHG) emissions, we have established medium- to long-term targets for the transition to a decarbonized society. In addition, in 2021, we began disclosing information in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). In September 2023, we officially announced our support for these recommendations. We also participate in the TCFD Consortium and strive to collect the latest information on climate change.

In fiscal 2024, we upgraded our scenario analysis to provide a more detailed understanding of the impacts of climate change on the Group. Specifically, in addition to future forecasts from external institutions, we used activity data from each business unit to assess the future impact on the Group for each of these units. Based on the results of this analysis, we will pinpoint the risks and opportunities that the Group should prioritize and strengthen our response going forward.

Our response to the TCFD recommendations

Climate Transition Plan

Main initiatives

Based on the recommendations of the TCFD, we explain the systems and policies for initiatives from the perspectives of governance, strategy, management, and indicators and targets, for the risks and opportunities that climate change poses to our business.

Governance Strategy Risk Management Indicators and Targets

Governance

We established the Group Sustainability Committee, chaired by the president and representative director, to serve as the decision-making body for our sustainability initiatives, including measures to address climate change.

The committee meets semi-annually (twice a year) to discuss our response to climate change as one of its key agenda items and to consider various measures. Based on the results of these meetings, each Group company implements measures. The details of these discussions and the status of activities are regularly reported to the Company’s Board of Directors, which deliberates on and oversees them. Approximately half of the directors on the Board of Directors, including the president and representative director who serves as chair, have experience or expertise in sustainability.

Details on the Group Sustainability Committee: Corporate Governance

Additionally, the Group Sustainability Subcommittee has been established as a subordinate organization under the committee, headed by a director of Bandai Namco Holdings. The subcommittee promotes activities in line with the Group’s Sustainability Policy and materiality. The Sustainability Policy, based on the key strategies of the Group’s Mid-term Plan, aims to advance activities for realizing a sustainable society together with fans. Under this policy, each Group company takes actions centered on the material issues set out for sustainable activities. Furthermore, sustainability projects for each business unit are implemented after information sharing and policy considerations within each unit, based on information sharing and discussions by the Group Sustainability Committee and Group Sustainability Subcommittee.

Strategy

We conducted scenario analysis to understand the impacts of risks and opportunities arising from climate change.

Method of Scenario Analysis

To clarify the impacts of climate change on the Group’s business, we conducted a scenario analysis for 2030 using the following two scenarios. This time, we adopted the 1.5°C scenario, in which temperature increases are held in check by aggressive decarbonization policies, and the 4°C scenario, in which temperature increases progress due to limited decarbonization policies. As we performed analysis using each scenario, we referred to Representative Concentration Pathways (RCP) scenarios reported by the Intergovernmental Panel on Climate Change (IPCC) and scenarios reported by the International Energy Agency (IEA). RCP scenarios were used to analyze the physical impacts of climate change, such as disasters, while IEA scenarios were used to analyze the impacts of the transition to a decarbonized economy, such as the introduction of carbon taxes.

Climate Change Scenarios Referenced in Our Scenario Analysis
		1.5°C scenario	4°C scenario
		A world where proactive climate action is implemented to limit temperature increases	A world where decarbonization policies are limited and temperature increases and climate change progresses
Overview		A scenario in which the temperature increase is limited to 1.5°C from the late 19th century to 2100. The impacts (transition risks) of the transition to a decarbonized society, such as the introduction of a carbon pricing system, become obvious. The impacts of physical risks are relatively small compared to the 4°C scenario.	A scenario in which the temperature increases by nearly 4°C from the late 19th century to 2100. The physical impacts (physical risks) of climate change, such as disasters, become obvious. Since regulations on climate change are not tightened, the impacts of the transition risks are small.
Referenced scenarios	Transition risks	IEA Net Zero Emission by 2050 (NZE), IEA Announced Pledges Scenario (APS), IEA Sustainable Development Scenario (SDS)	IEA Stated Polices Scenario (STEPS)
Referenced scenarios	Physical risks	IPCC RCP 1.9 IPCC RCP 2.6	IPCC RCP 8.5

Note: In cases where there was no information on the 1.5°C scenario, reference scenarios classified as the 2°C scenario were used.

Results of Scenario Analysis on All of Our Business Units

1.5°C scenario

In the 1.5°C scenario, various impacts are expected from the transition to a decarbonized society, including the introduction of carbon taxes and increased demand for low-carbon energy and products. The risks with the greatest potential impact on the Group are rising raw materials procurement costs due to restrictions on the use of fossil fuel-derived plastics and surging demand for metal resources as decarbonization technologies become more widespread. In addition, a common risk across all business units is higher operating costs resulting from carbon taxes on greenhouse gas (GHG) emissions from energy use, such as electricity.

On the opportunity side, promoting initiatives to reduce environmental impacts may lead to improved evaluations from stakeholders, including investors, as all of the Group’s businesses involve providing services to end consumers. This also offers an opportunity for enhancing corporate value.

Given these circumstances, and in response to plastic regulations and rising raw materials prices, we are implementing initiatives to reduce the use of petroleum-derived plastics through product design innovations, such as by developing products that utilize recycled materials (e.g., recycled eco-capsules made with recycled resin and stuffed toys made with recycled stuffing), introducing alternative materials, and developing resource-saving products (e.g., capsule-less Gashapon and products certified as sustainable).

Additionally, in response to carbon taxes, we are promoting the transition to electricity derived from renewable energy sources at our major Group locations (including the purchase of FIT Non-Fossil Fuel Certificates). We are also introducing solar power generation systems at our domestic locations to self-generate a portion of the electricity consumed.

At our amusement facilities, we are working to improve energy efficiency, including introducing environmentally conscious arcade game machines (Eco-Amusement Machines). We are also advancing other initiatives such as reducing electricity usage at live event venues, promoting eco-driving and modal shift in our logistics division, and introducing low-emission vehicles. We believe that these efforts not only contribute to reducing risks but also to enhancing corporate value through appropriate disclosure of climate-related information.

Details of each Company’s initiatives: Initiative Search

4°C scenario

The 4°C scenario predicts acute physical impacts, such as intensifying extreme weather due to climate change, as well as greater chronic impacts due to rising average temperatures. Risks facing the Group in this scenario include the suspension of business activities due to damage such as flooding at our business sites and supply chain bases. In addition, sales of outdoor events and services are expected to decrease due to changes in weather patterns, such as more days of extreme heat and heavy rain.

As opportunities, it was assumed that changing weather patterns would increase sales of home video games and toys and sales of indoor events/services due to more time spent at home and indoors.

As an initiative to mitigate risk, we have formulated the Basic Policy on Business Continuity Planning and are conducting drills in preparation for contingencies. In addition, by holding virtual events, we are developing services that are unaffected by extreme heat or rainy weather. These initiatives are also expected to contribute to the acquisition of opportunities, and in the future, we will develop a variety of services so that customers can use entertainment content regardless of the weather.

Transition risks and opportunities
Items			Anticipated scenario	Time horizon	Importance	Relevance with risks/opportunities for each business unit ●：Relevance　○：Partial relevance　－：No relevance
Risks and opportunities	Category	Subcategory	Anticipated scenario	Time horizon	Importance	Digital	Toy and Hobby	Visual and Music	Amusement	Affiliated business companies
Transition risks	Government/regulations	Introduction of carbon pricing	Increase in operating costs resulting from the introduction of carbon pricing (carbon taxes and emissions trading schemes), including taxes based on GHG emissions and obligations to purchase credits	Medium to long term	Medium	○	○	○	●	●
		Regulations on the use of fossil fuels	Increased costs for reducing fossil fuel use in company vehicles and logistics providers’ transportation operations in line with stricter regulations on fossil fuel use	Medium to long term	Low	ー	○	ー	ー	○
		Regulations on plastics and resource recycling	Increased toy manufacturing costs due to stricter plastic regulations requiring the use of lower-impact materials such as bioplastics and recycled plastics Incurrence of compliance costs in manufacturing and disposal as stricter recycling regulations make plastics and metals in toys and game consoles subject to restrictions	Medium to long term	High	○	●	○	○	ー
		Renewable energy and energy conservation policies	Increase in demand for renewable energy and soaring electricity costs due to the expansion of renewable energy policies Growing necessity for technological investment to adhere to energy conservation regulations	Short to long term	Medium	○	○	○	●	○
		Obligation of information disclosure	Incurrence of costs associated with disclosing information such as carbon footprints due to mandatory disclosure requirements	Medium to long term	Low	ー	○	ー	ー	ー
	Markets	Fluctuations in raw material costs	Increase in manufacturing costs due to the soaring price of plastics and metals used in toys, arcade machines, etc.	Medium to long term	High	○	●	○	○	○
Opportunities	Markets	Changes in customer behavior	Acquisition of new customers through digital content and toys (environmental education) created based on the theme of the environment, resulting from the growing importance of environmental awareness among customers	Short to long term	Low	○	○	○	○	ー
Opportunities	Evaluation	Changes in investor evaluation	Improvement in the Company’s evaluation as a result of being perceived by investors to be sufficiently aware of the environment, leading to increased share prices and new opportunities for fundraising	Medium to long term	High	●	●	●	●	●

Physical risks and opportunities
Items			Anticipated scenario	Time horizon	Importance	Relevance with risks/opportunities for each business unit ●：Relevance　○：Partial relevance　－：No relevance
Risks and opportunities	Category	Subcategory	Anticipated scenario	Time horizon	Importance	Digital	Toy and Hobby	Visual and Music	Amusement	Affiliated business companies
Physical risks	Acute	Intensification of abnormal weather (typhoons, heavy rains, landslides, storm surges, etc.)	We anticipate the following issues to occur due to an increase in wind and flood damage resulting from the intensification of abnormal weather: Increase in disaster prevention/repair costs at Group business sites Difficulties in procuring raw materials and selling products, resulting in operational interruptions Decline in sales in the live events and store operations businesses due to a lower desire to go outside Occurrence of physical injuries to employees Increase in insurance costs	Short to long term	Medium	○	○	○	●	○
	Acute	Droughts	Delays in the manufacturing of toys and arcade game machines due to decreased semiconductor production Delays in the delivery of company vehicles	Short to long term	Low	○	○	○	○	ー
	Chronic	Rise in the average temperature	We anticipate the following issues to occur due to summer heatwaves caused by a rise in the average temperature: Sales decline in the live events and store operations businesses due to a lower desire to go outside among people Increase in air-conditioning costs and other operational costs Occurrence of health issues among employees	Short to long term	Medium	○	○	○	○	○
		Changes in rainfall and weather patterns	Decline in sales of outdoor services in the event of an increase in rainy days brought about by changing weather patterns, such as the timing of rainy seasons	Short to long term	Low	ー	ー	○	○	ー
		Impact on raw material cultivation due to a rise in the average temperature	Higher procurement costs due to an anticipated surge in prices in the event that there are shortages in wheat flour and other raw materials used in candy toys	Medium to long term	Medium	ー	○	ー	ー	ー
		Rising sea levels	Incurrence of restoration costs due to flooding at business sites, such as amusement facilities and logistics bases, located in coastal areas, caused by rising sea levels	Medium to long term	Low	○	○	○	○	○
		Increase in infectious diseases	Decrease in visitors to live events and amusement facilities as an increase in infectious diseases reduces opportunities for people to go out	Medium to long term	Medium	ー	ー	○	●	ー
Opportunities	Chronic	Rise in the average temperature	Increased demand for digital content at home due to reduced opportunities to go outside as average temperatures rise	Short to long term	Medium	●	○	●	○	ー
		Changes in rainfall and weather patterns	Increased sales of indoor services when rainy days increase due to changes in weather patterns such as the rainy season	Short to long term	Medium	○	ー	○	ー	ー
		Increase in infectious diseases	Increased sales of entertainment content at home, as an increase in infectious diseases reduces opportunities to go out	Medium to long term	High	●	ー	●	ー	ー

Time horizon
Short-term: 0–1 year; medium-term: up to 5 years (around 2030); long-term: medium term and beyond
Importance
High: impact of ¥5 billion or more; medium: impact of ¥100 million to less than ¥5 billion; low: impact of less than ¥100 million
Relevance
●: 1% or more of operating profit by business; ○: less than 1%; ー: no relevance

Risk Management

The Group Sustainability Committee discusses risks and opportunities related to sustainability, identifies material issues that the Group should address, and promotes sustainability activities throughout the Group.

When identifying and assessing climate change-related issues in our business, we conduct scenario analysis and assessments of future financial impacts. In this assessment process, we calculate the impact for the entire Group and for each business unit for each risk and opportunity based on future forecasts provided by external organizations such as the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC), as well as our own data on business activities. Based on the calculation results, we compare the impact of each risk and opportunity with the operating profit of each business unit to assess the degree of relevance for each business unit. Additionally, we determine the importance from a company-wide perspective, taking into account the impact on the entire Group.

To promote sustainable activities, the Group Risk Management Committee, which oversees the Group’s crisis management, the Group Compliance Committee, and each Group company work closely together.

Details of the risk and crisis management system: Risk Management

Each Group company implements measures tailored to the characteristics of its business in line with our material issues. In turn, the results for each fiscal year—both for the Group as a whole and for each business segment—are analyzed, leading to improvements in measures for the following fiscal year and beyond. The Group Sustainability Committee discusses the results of this analysis and then reports them to the Board of Directors, which deliberates and oversees the results as necessary.

Indicators and Targets

To evaluate and manage the progress of its ESG management and the impacts of policy risks on climate change, the Group has set greenhouse gas (GHG) emissions as an indicator and has established a medium-term target of reducing GHG emissions at its sites by 50% compared to fiscal 2019 by 2030 and by 65% compared to fiscal 2019 by 2035.
Furthermore, our target for 2050 is to reduce the amount of GHG emissions at Group business sites (offices, own plants, directly operated amusement facilities, etc.) to net zero. We will further promote energy-saving measures and introduce renewable energy to achieve these targets.

Medium- to Long-term Targets for Decarbonization

A diagram providing a summary of the Bandai Namco Group’s GHG emissions targets and initiatives.

Bandai Namco Group GHG Emissions

A graph showing the Bandai Namco Group’s GHG emissions, which totaled 66,272 tons in fiscal 2019 and decreased to 52,564 tons as of fiscal 2024, a 20.7% reduction.

Note: Total of Scope 1 and Scope 2 emissions (Net emissions)

GHG Emissions
				FY2021	FY2022	FY2023	FY2024	FY2025
CO₂ emissions	Scope 1 (t-CO₂)			5,540	6,131	7,882	7,794	7,454★
	Scope 2 (t-CO₂) (market-based)			50,978	49,272	44,580	45,760	39,642★
	Scope 1 + Scope 2 (t-CO₂) (market-based)			56,517	55,403	52,462	53,554	47,095★
	Carbon offsetting (t-CO₂)			-	-	-	990	2,000★
	Net emissions (Scope 1 + Scope 2) (t-CO₂) (market-based)			-	-	-	52,564	45,095★
	Reference: Scope 2 (t-CO₂) (location-based)			-	-	-	-	54,953★
	Scope 3 (t-CO₂)			-	1,091,255	1,202,209	1,325,924	1,907,270
		Category 1	Purchased goods and services	-	576,512	636,698	677,843	1,044,129
		Category 2	Capital goods	-	95,884	110,312	159,552	201,732
		Category 3	Fuel- and energy-related activities not included in Scope 1 and 2	-	5,758	5,490	6,113	8,477
		Category 4	Upstream transportation and distribution	-	10,399	9,174	12,629	23,586
		Category 5	Waste generated in business operations	-	2,669	2,931	4,184	6,101
		Category 6	Business travel	-	5,158	8,817	9,102	14,591
		Category 7	Employee commuting	-	710	837	902	1,567
		Category 8	Upstream leased assets	-	Not applicable	Not applicable	Not applicable	Not applicable
		Category 9	Downstream transportation and distribution	-	3	2	4	4
		Category 10	Processing of sold products	-	Not applicable	Not applicable	Not applicable	Not applicable
		Category 11	Use of sold products	-	21,792	12,284	5,979	8,377
		Category 12	End-of-life treatment of sold products	-	372,368	415,664	449,616	598,706
		Category 13	Downstream leased assets	-	Not applicable	Not applicable	Not applicable	Not applicable
		Category 14	Franchises	-	Not applicable	Not applicable	Not applicable	Not applicable
		Category 15	Investments	-	Not applicable	Not applicable	Not applicable	Not applicable

Notes:

1. The amount of renewable energy used (purchased) prior to fiscal 2021 is included in the total for non-renewable energy.

2. For figures for fiscal 2025 denoted with a “★,” limited assurance or review by a third party has been conducted.

3. Past figures may be retroactively revised based on a thorough examination of tabulation results.

4. From fiscal 2025, the Scope 3 targets have been expanded to include all Bandai Namco Group companies (consolidated basis) both in Japan and overseas. The scope of companies until fiscal 2024 was Bandai, Bandai Spirits, Bandai Namco Entertainment, Bandai Namco Filmworks, Bandai Namco Experience, and Bandai Namco Amusement.

5. The Scope 2 figures for fiscal 2025 are calculated after deducting the equivalent amount of non-fossil fuel certificates.

6. We began calculating Scope 2 (location-based) emissions from fiscal 2025.

7. Waste data is compiled by treatment method starting from fiscal 2024.

【Calculation method for Scope 3 CO₂ emissions】

Category 1:Amount procured multiplied by the emission factor (excluding internal transactions)

Category 2:Amount of capital investments multiplied by the emission factor (Groupwide)

Category 3:Amount of each type of energy consumed multiplied by the emission factor

Category 4:Amount of transportation services purchased multiplied by the emission factor

Category 5:Amount of each type of waste generated multiplied by the emission factor for each processing method

Category 6:Travel expenses paid for each mode of transportation multiplied by the emission factor. For Bandai Namco Entertainment only, number of employees multiplied by the emission factor

Category 7:Travel expenses paid multiplied by the emission factor for the case in which all travel was on passenger railways

Category 9:Calculated by multiplying transport distance by transport weight and by truck transport emission factor (Bandai Namco Experience)

Category 11:For products that use batteries, with an assumption that batteries are changed twice, product sales volume, number of batteries used, and amount of electricity consumed based on average battery lifespan are calculated and multiplied by the emission factor (Bandai)
Calculated by multiplying the annual usage time, derived from the sales quantity of game machines, power consumption, average operating hours, and number of operating days of game centers, by the emission factor (Bandai Namco Experience and Bandai Namco Amusement)

Category 12:Weight of sold products multiplied by the emission factor. However, for Bandai and Bandai Spirits, the average weight of products accounting for 10% of sales for each division is used; for Bandai Namco Filmworks, the average weight of the top 10 products by sales volume is used; and for Bandai Namco Experience, only game machines are considered.

Notes:

・Categories 8, 10, 13, 14, and 15 are not applicable.

・For Scope 3 calculations, we use the emission intensity values listed in the Database of Emissions Unit Values for Accounting of Greenhouse Gas Emissions by Organizations Throughout the Supply Chain (Ver. 3.6). Regarding Scope 3 Category 1, starting in fiscal 2025, we switched the monetary-based emission intensity values (producer price basis) to those listed in “5 (Reference) Input-Output Table Database (New).”

Our response to the TCFD recommendations

Climate Transition Plan

Main initiatives