3.2 ｜ Climante Change Response Strategy 3.2.4 Strategy For scenario analysis based on the TCFD recommendations, we have set and evaluated two types of climate-related scenarios—1.5°C and 4°C—in reference to low-carbon 2°C scenario (2DS) based on the Representative Concentration Pathways (RCP) 2.6 through 8.5 described in the report of the Intergovernmental Panel on Climate Change (IPCC) and the IEA (International Energy Agency) ETP (Energy Technology Perspectives). One is the 1.5°C scenario in which more rigorous measures are implemented to build a decarbonized society and effectively keep the rise in temperatures by the year 2100 to 1.5°C compared with the level during the Industrial Revolution. The other is the 4°C scenario in which the temperature rises by 3.2°C to 5°C over the Industrial Revolution level as a result of failing to implement measures that surpass those currently in place. For further detail on scenario analysis, please refer to TCFD Report. [Scenario analysis overview] 1. 4°C Scenario Measures surpassing those in place at present are not implemented, resulting in the average temperature rising by the year 2100 by 3.2°C to 5°C over the level during the Industrial Revolution. Natural disasters will increase in intensity and irreversible ecological changes will occur. (1) Business risks (Physical risks) ① I mpact on production facilities due to extreme weather conditions, suspension of supply of raw materials for products and factory shutdowns due to power outages [ Countermeasures] Promote measures such as the decentralization of production bases and raw material suppliers by formulating business continuity plans (BCP) and securing a stable power supply. ② Instability and soaring prices of plant-derived raw materials due to ecological changes caused by climate change [ Countermeasures] Reduce the amount of raw materials used by producing thinner films made from plant-derived raw materials and promoting the recycling (reuse) of multifunction devices in the area of business innovation. (2) Business opportunity ① Developing resilience of social infrastructure against disasters ● Highly sensitive camera products that can monitor rivers and sea surfaces at night and in stormy weather ● Deterioration diagnosis technology for bridges, levees, etc., using high-precision image analysis and AI technology ● Digitalization of local governments’ disaster response processes to help residents quickly rebuild their lives after a disaster. ② Securing drinking water and water for agriculture ● Desalination of brine and seawater using ion exchange membranes and other filtration technologies ③ Reducing the burden on healthcare professionals and improving access to healthcare ● Global deployment of medical IT, medical diagnostic imaging and AI technologies that help reduce the workload on healthcare professionals and contribute to remote diagnosis 2. 1.5°C Scenario Rigorous measures are implemented to build a decarbonized society, keeping temperature rises by the year 2100 down to 1.5°C in comparison with the level during the Industrial Revolution. (1) Business risks (Transition risks) Laws and regulations for carbon pricing systems will be introduced in each country/region, which will be a cost-increasing factor. Assuming that the Fujifilm Group itself emitted 980,000 tons of Scope 1 + 2 CO in fiscal 2022 and that the carbon 2 tax per ton of CO emitted was ¥12,000, the financial risk is estimated to be approximately ¥11.7 billion. 2 [Countermeasures] Accelerate capital investment for decarbonization by utilizing an internal carbon pricing system. (2) Business opportunity Help solve energy issues and achieve a decentralized society based on fundamental and core technologies. ① Energy conservation ● Data archive storage systems using high-capacity magnetic tape to reduce CO emissions during data storage 2 ● Multifunction devices with enhanced power-saving performance 74 FUJIFILM Holdings Corporation Sustainability Report 2023