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Climate-related Risks and Opportunities

Risks Related to the Transition to a Low-carbon Economy

Type Major risks Main initiatives
Market/Reputation As majority of our shareholders is ESG-conscious, expansion of ESG related investment is likely to affect us. We will continue to work to improve our ESG initiatives in order to enhance corporate value.
Reputation There is a risk of lawsuit by customers who claim delayed delivery, which will be caused by likely heavy snowfall in our Headquarters Factories (Yamanashi Prefecture). In order to disperse risks, we have developed multiple manufacturing locations in the Mibu area (Tochigi Prefecture), the Tsukuba area (Ibaraki Prefecture), and the Hayato area (Kagoshima Prefecture) in addition to our Headquarters area (Yamanashi Prefecture).

Risks Related to the Physical Impacts of Climate Change

Type Major risks Main initiatives
Acute There is a risk that typhoons and floods will halt our service operations in the Call Center, and in delivery of maintenance components. In order to diversify risks, we have established a new service location, Nagoya Service Center in Komaki City, Aichi Prefecture in addition to the one at Hino Branch Office (Hino City, Tokyo).
Acute Due to the location of our Headquarters Factories (Yamanashi Prefecture) at the foot of Mt. Fuji (at an elevation of roughly 1,000 meters), there is a risk, for example, that the supply of kerosene will be cut off by heavy snowfall which may cause our factory to stop operation. By laying connecting gas pipeline to the main line, we are switching energy from kerosene to city gas.
In order to diversify risks, we have developed multiple manufacturing locations; Mibu Factory (Tochigi Prefecture), Tsukuba Factory (Ibaraki Prefecture), and Hayato Factory (Kagoshima Prefecture) in addition to our Headquarters Factories (Yamanashi Prefecture).
We are also working to minimize the impact of snowfall by purchasing snowplows and constructing multilevel parking lots.
Acute There is a risk of procurement delays of our suppliers caused by typhoons and floods. In order to reduce procurement risk by climate change, we are studying whether our suppliers have an ability to produce in multiple locations. If not, we will urge the suppliers to have multiple sites, or procure from multiple suppliers.
Chronic There is a risk of rising temperatures having negative impacts on our working and production  environments. Due to the cool-climate location (Yamanashi Prefecture) of our Headquarters, there used to be no needs for air-conditioning equipment in some buildings. However, as a result of recent climate change, it has become became necessary to have such equipment, while considering their efficiency.

Climate-related Opportunities

Type Major Opportunities Main initiatives
Products/Services The transition from internal combustion engines to EVs powered by electric motors, driven by measures taken by the automobile industry to combat climate change, may have a major effect on the market environment for our main products in the FA business. The transition to EVs is expected to expand the range of robot applications leading to an increase sales. Further, increased sales of sensors and cameras will favorably affect the sales of ROBOSHOT (electric injection molding machine). Furthermore, requirements for high-precision components (to be used in EVs), as well as demand for mold machining of such component, will result in a growth in demand for CNC along with machine tools.
Products/Services Stricter environmental regulations on resource conservation led by Europe, such as reducing greenhouse gas emissions and managing chemical substance, may lead to increased costs. Leading the development of energy-saving products and products with high energy efficiency will provide opportunities to expand sales of our products in developed markets such as Europe.
Products/Services Environments where factory equipment are used are expected to become harsher mainly due to the rise in temperature. In addition, impact of typhoons and rising temperature may deteriorate transportation conditions. There may be a greater demand for products that are capable of coping with such conditions. We have the ability to develop competitive products with high performance and reliability to further increase our sales even under harsh operating and transport conditions.
Products/Services There is a possibility of a growth in environment-conscious equipment wit With more than 270 service locations around the world, we offer maintenance services for as long our customers use the FANUC products.