Sustainability Site

Addressing Climate Change

The Bandai Namco Group believes that measures to address climate change are essential for the realization of a sustainable society and for the sustainable growth of its businesses. Accordingly, we established medium to long-term targets for the transition to a decarbonized society, along with the formulation of the Bandai Namco Group Sustainability Policy in April 2021. Also 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.

We will continue to conduct scenario-based analysis of the impacts of climate change on our business and related risks and opportunities, strengthen our response to these risks and opportunities, and work to further disclose information.

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

The official TCFD logo. TCFD stands for the Task Force on Climate-Related Financial Disclosures.

Governance

Recognizing the importance of societal sustainability for its business activities, the Group has established the Group Sustainability Committee, chaired by the president and representative director, to determine and implement sustainability-related activities more quickly.

The committee meets semi-annually (twice a year) to discuss climate change countermeasures as one of the important agendas. After considering each measure, each Group company implements measures. In turn, the results are regularly reported to the Board of Directors, which deliberates and supervises them. In addition, the Group Sustainability Subcommittee, which is a subordinate organization under the Group Sustainability Committee, is working to promote activities in line with the Bandai Namco Group Sustainability Policy and the Group’s material issues.

In March 2023, we approved the Group’s target KPIs for fiscal 2023 to promote under these systems.

Sustainability Promotion System Diagram

A diagram of Bandai Namco Holdings’ sustainability promotion system. We have a Group Sustainability Committee that reports directly to the Board of Directors. Under this committee is the Group Sustainability Subcommittee, which is linked to the sustainability projects of each unit.

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
  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
1.5°C scenario 4°C scenario
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)
Physical risks 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

1.5°C scenario

In the 1.5°C scenario, impacts of the transition to a decarbonized society are expected, such as the introduction of carbon taxes and regulations on the use of fossil fuels. Risks to our business included an increase in operating costs due to the introduction of carbon pricing (carbon taxes and emissions trading schemes), an increase in the cost of complying with plastics regulations in the toy business, and an increase in procurement costs due to soaring raw materials prices. On the other hand, opportunities included increased productivity through improvements in energy-conservation technologies and acquiring new customers by providing environmentally friendly content.

In order to address these issues, we are, for example, working to introduce renewable energy such as solar power generation and reduce power consumption at amusement facilities and live event venues, as well as promote eco-driving activities and introduce low-emission vehicles in logistics divisions. In response to plastics regulations and soaring raw materials prices, we are not only using recycled materials, but also introducing substitute materials and developing resource-saving products (capsule-less Gashapon, Eco-Amusement products, and Eco Medal certified products) and taking other initiatives to reduce the amount of plastics used through innovative product designs. Details of each measure can be found on the “Our Initiatives” page.

4°C scenario

In the 4°C scenario, physical impacts of climate change, such as more extreme weather events, are expected. As risks, the analysis showed the suspension of business activities due to damage at our business sites and supply chain. In addition, changes in weather patterns, such as extreme heat and increased rainfall, are expected to reduce sales of outdoor events/services. 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.

To reduce risks, we have formulated the Basic Policy on Business Continuity Planning and are conducting drills to respond to disasters. 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
Evaluation
of
impact
Risks
and
opportunities
Category Subcategory
Risks Government
/
regulations
Introduction of carbon pricing
  • Introduction of tax on GHG emissions and obligation to purchase credits due to the introduction of carbon pricing (carbon taxes and emission trading schemes), resulting in higher operational costs
Large
Regulations on the use of fossil fuels
  • Incurrence of costs associated with efforts to reduce the use of fossil fuels for Company-owned vehicles and transportation vehicles of logistics companies due to the tightening of regulations on the use of fossil fuels
Small
Regulations on plastics and resource recycling
  • Necessity to use eco-friendly bioplastics and recycled plastics due to the tightening of regulations on plastics, leading to higher manufacturing costs of toys
  • Incurrence of costs associated with manufacturing and disposal measures as plastics and metals used in toys and arcade machines become subject to recycling regulations due to the tightening of such regulations
Large
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
Large
Obligation of information disclosure
  • Incurrence of costs associated with measures to disclose information due to requirements for information disclosure on carbon footprint and other matters
Medium
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.
Large
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
Large
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
Large
Physical risks and opportunities
Items Anticipated
scenario
Evaluation
of
impact
Risks
and
opportunities
Category Subcategory
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 suspended operations
  • Sales decline in the live events and store operations businesses due to a lower desire to go outside among people
  • Occurrence of physical injuries to employees
  • Increase in insurance costs
Large
Droughts
  • Delays in the manufacture of toys and amusement machines stemming from a decline in semiconductor manufacturing volumes
  • Delays in the delivery of Company vehicles
Medium
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
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
Medium
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
Rising sea levels
  • Flooding of business sites, such as amusement facilities and logistics bases, in coastal areas due to the impact of rising sea levels, resulting in the incurrence of repair costs
Small
Increase in infectious diseases
  • Decrease in visitors to live events and amusement facilities due to a decline in opportunities to go outside among people stemming from an increase in infectious diseases
Medium
Opportunities Chronic Rise in the average temperature
  • Increase in demand for digital content that can be viewed at home due to a decrease in opportunities to go outside among people following a rise in the average temperature
Medium
Changes in rainfall and weather patterns
  • Increase in sales of indoor services in the event of an increase in rainy days brought about by changing weather patterns, such as the timing of rainy seasons
Medium

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. In this process, the committee cooperates with the Group Risk Compliance Committee, which oversees the Group’s risk and crisis management system. Each Group company is implementing measures tailored to the characteristics of its own business in accordance with its material issues. The results are analyzed for each fiscal year, for the entire Group and for each business segment, leading to improved measures for the following fiscal year and beyond. The results of analyses are discussed by the Group Sustainability Committee, and then reports are made to the Board of Directors, which deliberates and supervises 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 emissions as an indicator and has established a medium-term target of reducing energy-derived CO2 emissions at its sites by 35% by 2030 compared to fiscal 2019. Furthermore, our target for 2050 is to reduce the amount of energy-derived CO2 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 carbon dioxide emissions targets and initiatives.

*Offices, own plants, directly operated amusement facilities, etc.

Bandai Namco Group CO2 Emissions

A graph showing that the Bandai Namco Group’s carbon dioxide emissions totaled 66,272 tons as of fiscal 2019. As of fiscal 2023, carbon dioxide emissions totaled 49,441 tons, a 25.4% reduction compared to fiscal 2019.

Note: Total of Scope 1 and Scope 2 emissions

(t-CO2)

Greenhouse Gas Emissions
(t-CO2)
  FY2019 FY2020 FY2021 FY2022 FY2023
CO2 emissions Scope 1 (t-CO2) 6,271 6,039 5,540 6,131 7,882
Scope 2 (t-CO2) 60,001 51,878 50,978 49,272 41,558
Scope 1 + Scope 2 (t-CO2) 66,272 57,916 56,517 55,403 49,441
Scope 3 (t-CO2) - - - 1,091,255 1,202,209
  Category 1 Purchased goods and services - - - 576,512 636,698
Category 2 Capital goods - - - 95,884 110,312
Category 3 Fuel- and energy-related activities not included in Scope 1 and 2 - - - 5,758 5,490
Category 4 Upstream transportation and distribution - - - 10,399 9,174
Category 5 Waste generated in business operations - - - 2,669 2,931
Category 6 Business travel - - - 5,158 8,817
Category 7 Employee commuting - - - 710 837
Category 8 Upstream leased assets - - - Not
applicable
Not
applicable
Category 9 Downstream transportation and distribution - - - 3 2
Category 10 Processing of sold products - - - Not
applicable
Not
applicable
Category 11 Use of sold products - - - 21,792 12,284
Category 12 End-of-life treatment of sold products - - - 372,368 415,664
Category 13 Downstream leased assets - - - Not
applicable
Not
applicable
Category 14 Franchises - - - Not
applicable
Not
applicable
Category 15 Investments - - - Not
applicable
Not
applicable

Notes:
・The amount of renewable energy used (purchased) for fiscal 2021 is included in the total for non-renewable energy.
・For figures excluding Scope 3 emissions, limited assurance or review by a third party has been conducted.
・The Scope 3 targets include Bandai Namco Entertainment, Bandai, Bandai Spirits, Bandai Namco Filmworks, and Bandai Namco Amusement.
・Past figures may be retroactively revised based on a thorough examination of tabulation results.

【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 using the ton-kilometer method for the transportation weight of game machines. (Bandai Namco Amusement)

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 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 Amusement, only game machines are considered.

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

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