With the aim of becoming a company capable of contributing to society through the creation of business, the Prestige International Group creates services that resolve social issues by endeavoring to solve social problems and contribute to local communities through business activities.
Accordingly, with the damage caused by global climate change and natural disasters worsening in recent years, the Group regards climate change as a top priority; therefore, the company decided to accurately assess the impact of climate change on the Prestige International Group and proactively promote a variety of different environmental measures, including the reduction of CO2 emissions.
In line with the TCFD framework, moving forward the Group will endeavor to analyze the risks and opportunities that climate change may bring to Prestige International, reflect these in the management strategies, and disclose information based on recommendations.
The Prestige International Group established a Sustainability Committee to consider issues related to the environment and society’s needs. The committee generally meets every quarter with ad hoc meetings held as necessary. The Sustainability Committee also examines the relationship between management activities and business risks as considered by the Risk Management and Compliance Committee by evaluating the possibility and frequency of such risks occurring and their potential impact in the event that they do occur, ascertaining their significance, and submitting reports to the Executive Board or the Board of Directors as necessary. Under the supervisory system overseen by the Board of Directors, these issues and risks are reflected and addressed the Group's strategies.
Corporate Governance System
Scope of Analysis
Prestige International Group Overall
Definition of Importance
In assessing the financial impact of climate change, the impact classification is based on the criteria for timely disclosure by the Financial Instruments Exchange in relation to revisions to earnings forecasts, differences between forecasts and financial results, and the damage caused by disasters or the damage incurred in the course of business operations; an anticipated 10% increase/decrease in consolidated net sales or 3% increase/decrease in consolidated net assets is regarded as "a significant impact" .
The quantitative information in the scenario analysis is based on the company’s judgment using reference scenarios. Although care has been taken to improve the accuracy of the analysis, it contains many uncertain factors.
||Ratio to consolidated net sales:
||10％ or higher
||4.6 billion yen or higher
|Ratio to consolidated net assets:
||３％ or higher
||1.0 billion yen or higher
||Ratio to consolidated net sales:
||5% or higher/less than 10%
||2.3 billion yen or higher/less than 4.6 billion yen
|Ratio to consolidated net assets:
||1.5％ or higher/less than 3%
||500 million yen or higher/less than 1 billion yen
||Ratio to consolidated net sales:
||less than ５%
||less than 2.3 billion yen
|Ratio to consolidated net assets:
||less than 1.5%
||less than 500 million yen
* Calculated on the basis of actual performance for the period ending March 2022.
Setting of Scenarios
When considering the scenario analysis, the company referred to materials published by the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC)—organizations that have high international credibility, are referenced in TCFD recommendations and are able to cover a wide range of business areas—and set the following two scenarios.
- *1 Timelines for full realization of risks and opportunities Short-term: 2025; Medium-term: 2030; Long-term: 2050
- *2 At this stage is difficult to collect sufficient information at this stage and assess the extent of the impact on business and finances.
- *3 In the less than 2°C scenario, it is anticipated that the frequency of natural disasters, such as typhoons, torrential rains, and floods, will increase, but there will be no natural disasters that directly affect business continuity at BPO centers.
- *4 In the 4°C scenario, the maximum impact would be one of the BPO centers flooding and operations being suspended.
- The Prestige International Group operates contact centers (BPO centers) mainly in the Tohoku region. The main sources of CO2 emissions in Scope 1 and Scope 2 are electricity and gas consumption at BPO centers and fuel consumption by service vehicles for roadside assistance services.
- In order to reduce CO2 emissions, the company will progressively introduce renewable energy and replace roadside assistance service vehicles with electronic vehicles (EVs). Reducing CO2 emissions not only reduces the company’s environmental impact but also mitigates the financial impact of carbon taxation.
- With regard to transition risks, the risk of increased costs from policies, laws, and regulations was identified in both the under 2°C and 4°C scenarios. However, the financial impact on the Prestige International Group envisioned for 2030 is shown in the table below, and the Group ascertained that the financial impact would be minor if the above measures were implemented.
- With regard to physical risks, the Group has ascertained that the financial impact on the company of the 4°C scenario would be significant, mainly because of the risk of flooding affecting BPO center operations as a result of the anticipated increase in the severity and frequency of natural disasters in addition to rising sea levels. The Group will continue to implement measures to minimize the impact on business continuity by further strengthening the backup system among BPO centers and adopting stricter location conditions for establishing new BPO centers. At the same time, in order to ensure employee safety, the Group will continue conducting disaster drills and reviewing stockpile contents and quantities.
- Customer needs related to electric vehicles (EVs) present both risks and opportunities for the Prestige International Group. The Group has a training facility, Toyama Training Field, which allows the company to efficiently and intensively conduct training mainly on roadside assistance services, and the Group recognizes that strengthening its response to EVs could bring opportunities.
Financial Impact on the Prestige International Group Envisioned for 2030
Based on FY 2020 emissions, the Group estimates that carbon tax for the Prestige International Group will be approximately 124 million yen. However, by systematically introducing renewable energy and electric vehicles (EVs) in order to achieve our company’s CO2 emissions reduction targets, the Group estimates that the carbon tax can be reduced to approximately 62 million yen.
|Carbon tax *1
||62 million yen
|Cost of introducing renewable energy
||11-25 million yen
|Cost of carbon offsetting *2
||7-98 million yen
- *1 Calculated based on the carbon price in developed countries in 2030. (USD130 (IEA NZE2050); Exchange rate JPY/USD 122.39) (March 31, 2022)
- *2 Calculated based on the average sales price of J-credits and the price of Green Power Certificates in April 2022.
Process for Identifying and Assessing Climate-related Risks
Within the Prestige International Group, the Sustainability Committee identifies issues and risks related to the environment and society’s needs and considers these along with the risks related to management and business activities that are considered by the Risk Management and Compliance Committee. The Sustainability Committee reviews the issues and risks considered by both committees and establishes their relationships by selecting risks and opportunities accompanying climate change that are important to the Group. The Committee then evaluates the significance of the selected climate change-related risks and opportunities based on the likelihood of their occurrence and their financial impact on business.
Process for Managing Climate-related Risks and Integration into the Risk Management System Overall
Conventionally, the Risk Management and Compliance Committee has been responsible for determining and developing the risk management policies of the Prestige International Group, formulating risk management regulations and verifying their operational status, responding to crises, and other matters related to risk management overall. With regard to climate change-related risks, in addition to the above, the Sustainability Committee—a body established for the purpose of discussing initiatives for solving environmental and social issues—identifies and considers climate-related risks related to business activities and identifies high-impact significant risks. Related transition risks and physical risks are identified and assessed, including scenario analysis, in accordance with the framework of TCFD recommendations. With regard to the identified risks, under the supervision of the Risk Management and Compliance Committee and the Sustainability Committee, the relevant departments formulate, implement, and report on measures to address climate change, and both committees work together to check the progress of these measures. In addition, the Sustainability Committee consolidates, discusses, and then summarizes the status of the Group's overall response, reporting important matters to the Executive Committee and the Board of Directors under the supervision of the CEO and reflecting and addressing these in the Company's strategies as corporate risks to the Group under the supervision of the Board of Directors.
Based on the results of the scenario analyses, the Prestige International Group has set CO2 emission reduction targets in order to reduce the risks accompanying climate change.
Past CO2 Emissions Performance and Targets for FY 2030 and FY 2050
||Emissions from gasoline and diesel oil
|Emissions from LPG, LNG, and city gas
|Total for Scope 1 emissions
||Total for Scope 2 emissions
|Total for Scope 1 and 2 emissions
* If the electricity consumption of some overseas subsidiaries is unknown, a rough estimate is calculated based on electricity rates, the country’s electricity rate market, and office floor area.
Initiatives to Reduce CO2 Emissions
The Prestige International Group will implement the following initiates aimed at achieving the CO2 emissions reduction targets in order to reduce the risks accompanying climate change.
Scope 1(Direct emissions from fuel combustion)
Of the Prestige International Group’s approx. 450 company cars, approx. 240 cars will be gradually replaced with EVs by 2030.
→Anticipated annual decrease in CO2 emissions by 2030: 1,000 t- CO2
City gas used at each BPO center will be gradually replaced with CN gas (carbon neutral gas) by 2030.
→Anticipated annual decrease in CO2 emissions by 2030: approx. 1,300 t- CO2
* First Phase is scheduled to begin at Toyama BPO Town in January 2023.
→Anticipated annual decrease in CO2 emissions: approx. 470 t- CO2
Anticipated decreases in CO2 emissions reductions if each measure is implemented by 2030
Response to Spread of Evs
Premier Assist Inc., a group company that provides roadside assistance services, will install approximately 25 recharging stations at major locations by the end of FY 2022 in order to construct an EV recharging service infrastructure in Japan. Furthermore, approximately 30 tow trucks equipped with power supply units will be deployed to provide roadside assistance services for EVs that have run out of power while traveling.
In addition, the Group will indirectly contribute to efforts to reduce CO2 emissions by building an infrastructure for power supply and recharging services in order to promote the spread of EVs in Japan, including the introduction of portable rechargers.
Scope 2(Indirect emissions from using electricity)
The Prestige International Group will implement the following measures with the aim of achieving a 100% renewable energy utilization rate at all BPO centers by 2030.
Environmental measures model facility "Iwate BPO Center” (tentative name)
Scheduled to open in 2024, the Iwate BPO Center (tentative name) will be positioned as a model facility for the use of 100% renewable energy and will serve as a benchmark for subsequent facility construction and facility renovation.
- At the time of construction, Prestige International partnered with an electric power company to use parking lot space the size of approximately 505 parking spaces for solar power generation using a Power Purchase Agreement (PPA). The generated power will be supplied to the Iwate BPO Center (tentative name) and excess power will be transmitted to other BPO centers through the power company.
Measures to be implemented at existing and newly established BPO centers
- Prestige International will progressively introduce the latest energy-saving equipment (lighting, air conditioning, communication equipment, etc.)
→Decrease in CO2 emissions of 10% from FY 2020 levels is anticipated.
- Prestige International will use Power Purchase Agreements (PPAs) to create an optimal power use model for all BPO centers.
- For existing large BPO centers, as well, Prestige International will partner with power supply companies and, as with the Iwate BPO Center (tentative name), use parking lot space (and other vacant land within the facility) for power generation for in-house consumption under the PPA model by transmitting excess electricity to company bases that are not suited to solar power generation in accordance with facility renovation and maintenance plans.
→Decrease in CO2 emissions of 35% from FY 2020 levels is anticipated.
In addition, Prestige International will use the carbon offset to offset CO2 emissions that cannot be reduced.
→Decrease in CO2 emissions of 55% from FY 2020 levels is anticipated.