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Environmental Management

Environmental Risks and Opportunities

Environmental Management

In 2018, we deduced environment-related risks and opportunities pertinent to our company, including climate-related risks. The process involved taking in feedback and opinion from experts within and outside of the company, based on prediction of the society in year 2050.

The deducted environment-related risks and opportunities are evaluated, organized, and analyzed from the two viewpoints of degree of impact on business and likelihood of occurrence. Based on this, environmental issues that our group company must pay attention to for year 2030 have been drawn.

Among environment-related risks and opportunities, Daikin takes measures in accordance with TCFD recommendations and discloses information in dealing with climate change because it considers this to be the issue with the greatest impact on its management.

Environment-related risks and opportunities and potential impact

Category Impact on Daikin's business Probability of occurrence Potential financial impact
Climate related
Risks Transition Stricter regulations on refrigerants
If regulations on refrigerants become too strict, there is a possibility that existing air conditioners no longer compliant with these regulations will become obsolete
High Large
Tight supply and demand for electricity
There is a possibility that the spread of air conditioners in emerging countries will increase electricity usage and make it difficult to increase sales of air conditioners due to electricity shortages
High Large
Physical Damage to production bases
There is a possibility that flooding caused by typhoons could cause our plants to shut down or stop the supply of parts due to the shutdown of suppliers
Medium Medium
Opportunities Transition Stricter regulations on refrigerants
Companies without technologies compliant with regulations on refrigerants will be weeded out, resulting in increased sales of air conditioners using refrigerants with lower global warming potential, which is our strength
High Large
Stricter regulations on energy efficiency
Companies without technologies compliant with stricter regulations on energy efficiency will be weeded out, resulting in increased sales of air conditioners with high energy efficiency, which is our strength
High Large
Stricter regulations on the use of fossil fuels
Regulations on the use of fossil fuels continue to become stricter, and since gas-combustion heating will be subject to them, there will be an increase in sales on growing demand for heat-pump heating, which is our strength
High Large
Environment-related other than climate-related
Risks Enhanced regulation on the use of plastics
Demand (regulation) created for reducing amount of plastics used as environmental pollution, including ocean pollution, worsens
High Medium
Depletion of raw material resources
Resources for raw material deplete, affecting business operation
High Large
Depletion of water resources
Water resources deplete, affecting business operation
Medium Medium
Environmental pollution from production bases
Chemical substance management at production bases not functioning, and harmful substances released causing regional environmental pollution
Medium Small
Conservation of ecosystem
Response demanded as a member of the society to address the losing balance of the ecosystem
Medium Small
Opportunities Increased awareness toward air quality
As air pollution becomes more serious, the needs for quality air increases
High Large

Identification, evaluation and management process of environment-related risks and opportunities

We gather information on environment-related risks and opportunities, including those related to the climate, from business bases of each region around the world. Information gathered is then evaluated, organized and analyzed for their degree of impact on business and likelihood of occurrence, and used for identifying climate-related risks and opportunities of important relevant to our Group. The program policy and measure to address these risks and opportunities are then developed and deliberated by the CSR Committee, followed by proposal to the President and CEO and report to the Board of Directors.

Program policy and measures are reflected in the mid-term management plan, and carried out at each business division.

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