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Climate Change

In order to realize a sustainable society, the DIT Group recognizes that resolving climate change issues is an international priority toward conserving the global environment.The Japanese government ratified the 2015 Paris Agreement, which set the two global shared long-term goals of "holding the increase in the global average temperature to well below 2℃ above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5℃ above pre-industrial levels," and "reach global peaking of greenhouse gas emissions (GHGs) so as to achieve a balance between emissions and absorption volume in the second half of the century." Accordingly, it has committed to reducing Japan's GHG emissions by 46％ of 2013 levels by 2030 and achieving carbon neutrality by 2050.As a group that aims to contribute to the realization of a sustainable society, we also recognize that the transition to a decarbonized society is an important issue that we have a responsibility to address.

Governance

Under the Group's governance framework concerning sustainability, the Board of Directors, which is chaired by the Representative Director and President, manages and oversees the handling of sustainability issues, including the management and assessment of climate change-related risks and opportunities.Additionally, in September 2024, we established a Sustainability Committee comprising members from business and administration divisions, with the Vice President serving as chair.Going forward, this committee will gather a wide range of information related to sustainability and formulate, develop, and manage the progress of sustainability measures, as well as advance control activities that aim to strengthen risk management and ensure opportunities are used effectively.

Strategy

The Group is closely monitoring rises in average temperature caused by climate change, as well as changes in the social landscape and disaster risks that accompany these rises, and we are establishing relevant countermeasures.As part of these efforts, we are identifying short, medium, and long-term climate change-related risks and opportunities and carrying out scenario analysis accordingly.We are using a 1.5℃ scenario and a 4℃ scenario as references for this analysis.This takes into account the international requirement of keeping the increase in the global average temperature to within 1.5℃ above pre-industrial levels, as seen in the Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report and the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP).Using forecasts in reports issued by governments and international organizations as references, this analysis comprehensively assessed climate change-related transition risks (policy and legal, market, reputation), physical risks (acute, chronic), and opportunities arising from initiatives to appropriately address climate change (products and services, market, resilience).

Assumptions for scenarios

Risk Types	Scenario	Reference Scenarios	Overview
Transition risks	1.5℃ scenario	International Energy Agency (IEA) "World Energy Outlook 2022" Net Zero Emissions by 2050 Scenario (NZE Scenario)	This scenario assumes that the rise in average temperature is kept within 1.5℃ throughout the 21st century.Bold policy and technological innovation will emerge in order to realize sustainable development, and it is highly probable that the social change accompanying this transition to a decarbonized society will impact business.
Physical risks	4℃ scenario	Intergovernmental Panel on Climate Change (IPCC) "IPCC Sixth Assessment Report (AR6) SSP5-8 Scenario"	This scenario assumes the average temperature will rise by around 4℃ throughout the 21st century.No social changes are made as climate change is basically allowed to run its course, and it is highly probable that abnormal weather and disasters caused by climate change will impact business.

Scope of scenario analysis

Items	Scope of scenario analysis
Region	Within Japan
Scope of businesses affected	All businesses
Organizational scope	Consolidated companies
Definition of timeframes	Short-term: Up to around 2025, medium-term: Up to around 2030, long-term: Up to around 2050

Scenario analysis results

Risks

Category	Risk	Timeframe	Impact
Policy and legal	Introduction of carbon taxes	Medium-term	Risk of an increase in costs accompanying the levying of a carbon tax on Scope 1 and 2 emissions
Policy and legal	Increased capital investments	Medium-term	Risk of an increase in capital investments accompanying measures to make our facilities and offices energy efficient in accordance with efforts to lower GHG emissions
Technology	Damage to corporate image	Medium-term	Risk of damage to our corporate brand image if our efforts to carry out technological development related to decarbonization, including the development and provision of services, is perceived to be insufficient
Market	Increase in renewable energy costs	Medium-term	Risk of an increase in the cost of electricity accompanying the switching of offices and data centers to renewable energy
	Selection by business partners	Medium-term	Risk of major business partners switching to competitor companies if we are slow to respond to climate change
	Increase in demand for EV compatibility	Medium-term	Risk of a decline in market share if we are slow to acquire software technologies that are compatible with the spread of EV as a means of reducing CO2 emissions
Reputation	Decline in reputation among stakeholders	Medium-term	Risk of increase in recruitment and fund procurement costs if our reputation among stakeholders, including customers, investors, financial institutions, and employees, were to decline due to our response to climate change being perceived as insufficient
Acute physical	Disruption of supply chains	Medium/long-term	Risk that business equipment handled by subsidiaries cannot be delivered due to the disruption of supply chains
	Damage caused by floods and typhoons	Medium/long-term	Risk of losses due to physical damage to hardware, such as business equipment inventories used in the provision of services
	Paralyzed transportation	Medium/long-term	Risk of suspensions of operations if employees are unable to travel to customer companies due to energy supply disruptions and paralyzed transportation
Chronic physical	Increase in cost of air conditioning	Medium/long-term	Risk of increase in electricity costs due to the increased operation of cooling equipment at offices and data centers
Chronic physical	Spread of infectious disease	Medium/long-term	Risk of a decline in sales caused by a decrease in employees able to work due to the spread of an infectious disease

Opportunities

Category	Opportunity	Timeframe	Impact
Effective use of resources	Effective use of energy	Medium/long-term	Increase in demand for ICT-based services to reduce GHG emissions and realize more efficient energy usage
Products and services	Advancement of cloud-consciousness	Medium/long-term	Increase in demand for cloud services as people become more conscious of the cloud
Market	Increase in remote work	Medium/long-term	Increase in demand for security products due to changes in the working environments at client companies, such as the spread of remote work and workations accompanying global warming
	Advancement of BCP measures and DX	Medium/long-term	Increase in demand for systems accompanying the development of BCP measures and DX at companies
	Reputation among stakeholders	Medium/long-term	Strengthening of trust received from major clients and end users due to a proactive approach to environmental matters
Resilience	Increase in demand for EV compatibility	Medium/long-term	Increase in sales opportunities through the use of software technologies that are compatible with the spread of EV as a means of reducing CO2 emissions

Risk Management

We work to manage the various risks and opportunities that surround our business, including business continuity risks.We have formulated Risk Management Regulations to facilitate the precise implementation of this management, and we promote and practice comprehensive Group-wide risk management through a Risk Management Committee established based on these regulations.The Risk Management Committee is chaired by the Director in charge of the corporate planning division and its members are the personnel responsible for risk management at each business department. In addition to regular meetings, it holds additional meetings regarding material risks as necessary to confirm and assess risk events and decide response policies, among other matters.Furthermore, in September 2024, we created a new Sustainability Committee to discuss sustainability risks, including climate change, and we have established a framework for sharing the contents of these discussions with the Risk Management Committee.

Main Initiatives

Identification of greenhouse gas (GHG) emissions

We calculate carbon dioxide emissions based on the volume of electricity consumed by our head office. Going forward, we will continue to monitor emission volumes and consider initiatives to reduce them.

	Fiscal year ended June 30, 2023	Fiscal year ended June 30, 2024
Electricity consumption (A)	234,563kWh	339,418kWh
Emission factor (B)	0.000434	0.000457
CO2 emissions (A×B=C)	101.80t-CO2	155.11t-CO2

※１. Emissions factors were set with reference to the emissions factors by electric utility business operator (for calculating the greenhouse gas emissions of specified emitters).
※２. The main reason behind the year-on-year increase in emissions is the renting of the fourth floor as part of an increase in the floor space of our head office.

Paperless promotion

We identify unnecessary paper documents and what files can be converted to data mainly in back-office departments. We promote paperless initiatives whenever possible.In addition to this, the use of our products, including our electronic contact outsourcing service DD-CONNECT, is encouraging paperless operations at Group companies and clients.

Engagement with building management company as a tenant

As a tenant, we think it is important to be conscious of electricity consumption and greenhouse gas emissions in relation to electricity use at the offices we rent. Therefore, we interviewed the company that manages the building about targets and initiatives for reducing greenhouse gas emissions and received the following response.

Reduction targets	* In accordance with its goal of reducing energy consumption, it has set a short-term target of reducing energy intensity by 1% per year. * In accordance with its goal of reducing energy consumption, it has set a medium- to long-term target of reducing energy intensity by 5% over a five-year period from 2021 to 2025.
Initiatives	<Initiatives as a building owner> * Using LED fixtures for lighting in communal areas * Using LED fixtures for lighting in private use areas * Upgrading air conditioning equipment <Encouraging action by tenants> * Encourage electricity saving by providing detailed electricity consumption volumes in monthly invoices
Use of renewable energy	Currently, it is not using renewable electricity

Reduction targets

* In accordance with its goal of reducing energy consumption, it has set a short-term target of reducing energy intensity by 1% per year.
* In accordance with its goal of reducing energy consumption, it has set a medium- to long-term target of reducing energy intensity by 5% over a five-year period from 2021 to 2025.

Initiatives

* Using LED fixtures for lighting in communal areas
* Using LED fixtures for lighting in private use areas
* Upgrading air conditioning equipment

* Encourage electricity saving by providing detailed electricity consumption volumes in monthly invoices

Use of renewable energy

Currently, it is not using renewable electricity

Others

We keep employees at our offices thoroughly informed regarding appropriate temperature management and electricity saving (such as turning off lights in unused spaces).

TCFDTask Force on Climate-related Financial Disclosures