Disclosure based on the TCFD Recommendations
Governance
Please refer to the following for an overview of the overall corporate governance structure.
Fundamental policies and action plans relating to Environment, Health & Safety (EHS) matters are positioned as an important issue in sustainability in which Astellas is engaged. Measures for implementing these decisions in specific form are examined by the EHS Committee. Please refer to “EHS Risk Management and Governance” under EHS Management for the structure related to climate change.
EHS Risk Management and Governance
Strategy
As a company, Astellas is committed to protecting our environment and will take proactive measures to conserve it by tackling issues such as climate change, environmental pollution, and waste disposal. To identify and prioritize the issues that are most important to society and our business, Astellas carries out a materiality assessment and uses it to guide our sustainability efforts. Under the Astellas Materiality Matrix, reviewed in the fiscal year ended March 2022, climate change and energy are recognized as “very important” in their significance for both society and Astellas.
Astellas’ Environmental Action Plan sets out short-term and medium-term targets for our activities regarding the key points of the company’s Environment, Health & Safety Guidelines. Astellas renews action plans on a rolling basis, by reviewing progress and conditions during the previous year and incorporating findings into the action plan for the following year. The plans will outline efforts put in place to reduce the environmental burden and ensure the company acts with integrity in reducing potential risks to protect enterprise value
An in-house cross-functional team for disclosures was established to conduct a scenario analysis. The team analyzed Astellas' business and climate-related risks and opportunities, on the assumption that transition risks would materialize under a 1.5 ℃ scenario for climate change and physical risks would materialize under a 4 ℃ scenario. A qualitative risk/opportunity analysis was conducted in the FY2021 review. In FY2022, the team conducted a quantitative analysis on some items. As the GHG emission reduction action plan changed from a 2°C target to a 1.5°C target in terms of temperature increase the transition risk scenario was also changed to a scenario that assumes global temperatures rise by 1.5°C. The results of the analysis were reviewed by the EHS Committee.
Analysis of risk and opportunities
| Climate-Related Risks | Potential Impacts | Financial Impacts | Affected Period | Astellas’ Resilience |
| Transition Risks (risk materializing at 1.5 ℃ increase) | ||||
| Policy and Legal | ||||
| Increased pricing of GHG emissions (costs if paying a carbon tax) | Business sites that have not introduced renewable energies may have to add payment of a carbon tax to their costs. | 1 billion yen in FY2030 assuming a carbon tax of $100 per ton | Medium to long-term |
Some of the electricity consumed at the business site is generated internally by using renewable energy sources such as wind power and solar power. Switch to purchasing energy derived from renewable sources at business sites (part of manufacturing and research sites and sales offices in Europe and the United States. Some manufacturing and research sites in Japan started purchasing electricity derived from hydroelectric power in fiscal year 2020.) Promote the purchase of renewable energy-derived electricity at other business sites in the future. Purchase credits (CO2 emission rights) to reduce Scope 1 emissions and measures to control costs associated with the purchase will be issues for consideration. |
| Purchased goods and services (Scope 3 Category 1) may be subject to carbon tax, which increases the burden when added to the procurement price. |
500 million – 2.3 billion yen in FY2030 assuming a carbon tax of $100 per ton |
Medium to long-term | Scope 3 Category 1: We will work on optimizing the use of raw materials. Scope 3 Category 3: We expect consumption to decrease due to proper use of energy and uptake of energy efficient equipment. Scope 3 Category 6: The reduction of business travel, company-wide, as a measure against COVID-19, contributed to the reduction of Scope 3 in 2020 and 2021. We will continue this effort. |
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| Obsolescence and impairment loss on existing facilities accompanying GHG emission regulations | Possibility of being asked to discard facilities due to strengthening of environmental regulations. Refrigeration equipment using freon gas. Vehicles that use fossil fuel may no longer be available in some countries after 2035. |
No significant impact | Medium to long-term |
There are no existing facilities that we are required to dispose of at this moment. Regarding freon gas, we will take appropriate measures that comply with laws and regulations. |
| Technology | ||||
| Costs to transition to lower emissions technology | Costs arise when investing in low emission equipment. | 600 million yen Based on past climate-change investment plan |
Near to long-term |
Select and invest in efficient investment projects to reduce the carbon tax burden. |
| Market | ||||
| Increased cost of energy and raw materials | Rising energy and raw material prices lead to higher costs exacerbated by inflation. | An increase of 10 yen per 1 kWh of electricity charges will increase the cost burden by 2.2 billion yen. | Near to long-term |
Increase of electricity and energy costs consumed at business sites due to regulatory changes would be an issue in the future. However, we do not envisage a significant increase in the cost of raw materials for drug production due to climate change. |
| Physical Risks (risk materializing at 4 ℃ increase) | ||||
| Acute | ||||
| Increased severity of extreme weather events such as floods | Operations halt at our business sites due to floods or other factors.Raw material and product supply is delayed due to damage in the supply chain caused by floods or other factors. | 500 million yen Referred to the flood countermeasures of the Toyama Technical Center. |
Near to long-term |
The following investment was planned for the Toyama Technical Center flood response and the investment amount was estimated at 500 million yen. |
| Chronic | ||||
| Changes in precipitation patterns
Rising mean temperatures |
Droughts will affect the operations of our plants and supply chain, resulting in delays in product shipments.
Rising average temperatures will have an impact on energy costs accompanying operation of air conditioners at business sites. |
No significant impact | Near to long-term |
According to IPCC AR6 SPM SSP3-7.0 scenario, global sea level change in 2050 relative to 1900 is less than 0.5m. This level of change has no significant business impact. |
| Climate-related opportunities | Potential Financial Impacts | Affected period | Astellas’ response | |
| Resource efficiency |
Use of more efficient production and distribution processes Use of recycling |
Reduced operating costs | Near to long-term |
In order to maintain a stable supply of pharmaceuticals even during pandemic of infectious disease or natural disasters such as earthquakes, storms, and flooding, three logistics centers are operated in Japan. In European countries and the United States, warehouses shared by multiple pharmaceutical manufacturers are being used to streamline the distribution process. |
| Energy source | Use of lower-emission sources of energy | Reduced exposure to GHG emissions and therefore less sensitivity to changes in cost of carbon | Near to long-term |
Shifted boiler fuel from liquid fuel to gaseous fuels. |
| Products and markets |
Development and/or expansion of low emission goods new products and services Access to new markets |
Increased revenues through access to new and emerging markets | Near to long-term |
For the spread of infectious disease in endemic areas due to temperature change and the need for new drugs for infectious disease treatment assumed by the problem of antimicrobial resistance, collaboration with the phage biologics researches Course at a university to create engineered bacteriophages, could be viable solution. |
We plan to continue with further examination to enhance the content of analysis.
Risk Management
Sustainability Division monitors risk management related to EHS and periodically reports to CEO who issues instructions as necessary. Please refer to “Promotion of Environmental Sustainability Risk Management and Governance” under EHS Management for risk management related to climate change.
Promotion of Environmental Sustainability Risk Management and Governance
Metrics and Targets
Astellas' GHG emission reduction action plan was approved by SBTi in 2018 based on the 2°C targets of the Paris Agreement. The SBT target, which is required to re-calculate every five years, was updated one year ahead of schedule, and the new reduction targets were set to achieve the Paris Agreement's 1.5°C target (Scope 1+2) and well-below 2°C target (Scope 3). The new target was approved by the SBT initiative as a science-based target. In February 2023, we have announced a new policy aiming to reduce greenhouse gas emissions through our business to achieve net zero by 2050.
The scenario analysis released in March 2022 was based on a 2°C scenario. Please refer to "Climate Change Measures" for Astellas' indicators and targets related to climate change.
Climate Change Measures
[Note]
1.5℃ scenario: Refer to IPCC 6th Assessment Report (AR6) Summary for Policymakers, “Global Warming of 1.5℃” (IPCC special report), “Net Zero by 2050” (IEA). To achieve significant reduction of greenhouse gas emissions, implementation of several measures such as carbon prices and the spread of EVs are assumed.
4 ℃ Scenario: Refer to SSP3-7.0 of IPCC 6th Assessment Report, Working Group I, Summary for Policymakers (SPM), released in August 2021. As extreme weather, we assumed an increase in the frequency of high temperatures, heavy rains, and droughts.