SEGA SAMMY Group’s Efforts Towards the ‘Environment’

(b) Management’s Role in Assessing and Managing Climate Change-Related Risks and Opportunities

The President and Group CEO/Representative Director also serve as Chairman of the Group Sustainability Subcommittee, which has the highest responsibility for climate-related initiatives. The Subcommittee discusses general sustainability issues, policies, and plans for achieving sustainability goals and monitors the progress of the Group’s initiatives. Discussions by the Subcommittee are reported to and approved by the Board of Directors before proceeding with initiatives.

In addition, under the Group Sustainability Subcommittee, the Group Sustainability Promotion Meeting has been established as a forum for discussing, verifying, and sharing sustainability-related measures.

The Group Sustainability Promotion Meeting is held twice a year. It consists of executives in charge of sustainability at major Group companies, including SEGA CORPORATION and Sammy Corporation, which account for 90% of the Group’s sales. The General Manager of the Sustainability Division manages the meetings and monitors the status of the promotion of initiatives at each operating Company.

Under this system, the Group discloses its policies and manages the progress of each operating Company through its environmental policy. On the other hand, as a factor affecting the environment, we compile greenhouse gas emissions and disclose this information in our integrated report and on our corporate website. While compiling the disclosed information, the Group Sustainability Subcommittee meets to receive reports and instructions from management.

In this way, management’s monitoring of climate change issues effectively implements plans and monitors performance to achieve our goals.

■ SEGA SAMMY HOLDINGS INC. Integrated Report

https://www.segasammy.co.jp/ja/ir/library/printing_annual/

■ SEGA SAMMY HOLDINGS INC. Corporate Website Sustainability ESG Environment

https://www.segasammy.co.jp/ja/sustainability/esg/esgenvironment/

Recommended Disclosure Item: Strategy

(a) Climate Change-Related Risks and Opportunities Identified by the Organization in the Short, Medium, and Long Term

In order to understand the risks and opportunities that future climate change may have on our business activities and financial impact, we have conducted an analysis using scenario analysis methods and the framework proposed by TCFD to predict changes in the external environment.

We disclose the results of our scenario analysis based on three axes: short-term (within 2 years), medium-term (over 2 years to within 10 years), and long-term (over 10 years) for the timing of the emergence of climate change-related risks and opportunities that are expected to significantly impact the Group.

[Definition of the Timing of Emergence of Climate Change-Related Risks and Opportunities in the Sega Sammy Group]

(b) The Impact of Climate Change-Related Risks and Opportunities on the Organization’s Business, Strategy, and Financial Planning
<Analysis Method and Assumptions>
Based on the requirements of the TCFD recommendations and with the advice of external experts, our Company conducted a scenario analysis for the following purposes:
　・Understand the risks, opportunities, and impact of climate change on the Group
　・The resilience of the Group’s strategy for the world between 2030 and 2050 and the need for further measures

In our scenario analysis, we referred to multiple existing scenarios published by the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC). We assumed two worlds: one in which the goal of the Paris Agreement to limit the global average temperature rise to 1.5°C compared to pre-industrial levels is achieved (the “below 1.5°C scenario”), and another in which greenhouse gas emissions increase from current levels due to the absence of new policies and regulations and the achievement of existing policies and regulations (the “4°C scenario”).

Source: IPCC AR6 WG1 SYR Figure SPM.8

Scenarios referenced

1.5°C scenario: “Net Zero Emissions by 2050” (IEA (*1), 2022), “SSP1-1.9” (IPCC (*2), 2021)
4°C scenario: “Stated Policy Scenario (STEPs)” (IEA, 2022), “SSP5-8.5” (IPCC, 2021)

*1 IEA: The International Energy Agency is an autonomous organization established in 1974 within the framework of the OECD (Organization for Economic Cooperation and Development) after the first oil crisis. It provides information such as medium- to long-term supply and demand outlooks necessary for energy policy.
*2 IPCC: The Intergovernmental Panel on Climate Change is an intergovernmental organization established in 1988 by the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP). It provides scientific information necessary for climate change policies of governments of various countries.

Recommended Disclosure Item: Indicators and Targets

(a) Metrics Used by the Organization to Assess Climate Change-Related Risks and Opportunities in Line with its Strategy and Risk Management Process

The Group has established greenhouse gas emissions (Scope 1, 2, 3) as a metric for managing climate change-related risks and opportunities.

(b) Scope 1, Scope 2, and, if Applicable, Scope 3 Greenhouse Gas Emissions and Related Risks

The Group has been working on calculating the greenhouse gas emissions of the entire group since the fiscal year ending March 2015.

For the fiscal year ending March 2023, the Group has obtained third-party assurance from SOCOTEC Certification Japan for Scope 1, 2, and 3 greenhouse gas emissions.

[SEGA SAMMY Group Scope 1, 2, and 3 Greenhouse Gas Emissions Performance for the Fiscal Year Ending March 2023]

*1 Third-party assurance obtained by SOCOTEC Certification Japan

(c) Goals and Performance against Goals Used by the Organization to Manage Climate Change-Related Risks and Opportunities

[Regarding Scope1 and 2]

We are working towards achieving carbon neutrality by setting a deadline.

　・Achieve carbon neutrality by 2030 in the Entertainment Content and Pachinko & Pachinko Machines businesses, our core businesses

　・Achieve carbon neutrality by 2050 group-wide

SEGASAMMY Colorful Carbon Zero

“SEGASAMMY Colorful Carbon Zero” is the name of the Group’s action to promote efforts to reduce greenhouse gas emissions. The word “Colorful” implies achieving carbon zero through various measures.

[SEGA SAMMY Group Scope1, 2 Comparison Table of Greenhouse Gas Emissions Targets and Performance]

(As of March 31, 2024)

<Examples of Initiatives>

The Group has significantly reduced energy consumption through energy-saving initiatives and the consolidation of offices into high-environmental-performance buildings. To conserve the environment and further reduce CO2 emissions, we have established a scheme in cooperation with Sumitomo Real Estate Development Co., Ltd. and Tokyo Electric Power Energy Partners, Inc. to introduce raw green power “derived from newly constructed solar power plants” to the exclusive areas of tenants in our office buildings, which will directly contribute to increasing the total amount of renewable energy sources in Japan. The scheme has been in place since December 2021 in the exclusive areas of the Group’s head office.
In addition, by utilizing non-fossil certificates for the nighttime hours when solar power generation is not available, the Group can convert virtually 100% of the electricity used at its head office to green power.

[About Scope 3]

SEGA CORPORATION and Sammy Corporation, the Group’s leading operating companies, aim to achieve a reduction of approximately 22.5% or more, which meets the SBT level, by 2030, and are implementing initiatives such as increasing engagement with suppliers through supplier surveys and other means.

Note: The 2030 target includes figures for SEGA FAVE Corporation’s AM business, which was split off from SEGA CORPORATION on April 1, 2024.

[SEGA SAMMY Group Scope3 Comparison Table of Greenhouse Gas Emissions Targets and Performance]

Note: The 2030 target includes figures for SEGA FAVE Corporation’s AM business, which was split off from SEGA CORPORATION on April 1, 2024

<Examples of Initiatives>

[Supplier Surveys]
The Group aims to reduce Scope 3 greenhouse gas emissions and, as part of this effort, has been conducting surveys since the fiscal year ending March 2022 for suppliers that have a significant impact on greenhouse gas emission reductions in order to compile greenhouse gas emission data, set reduction targets, and ascertain the status of reduction activities. In addition to increasing engagement with suppliers, the results obtained are used to reduce greenhouse gas emissions in the supply chain. In the fiscal year ending March 2024, the suppliers surveyed are expanded to 59 companies.

[Number of Suppliers Surveyed]

[Briefing on Supplier Survey]
The Group held a hybrid briefing, which involved both online and in-person attendees, on the supplier survey in the fiscal year ending March 2024, with 53 companies participating. At the briefing, we explained the importance of the survey and the calculation status of individual companies so that everyone, from companies that are new to the survey to companies that have conducted the survey multiple times, could deepen their understanding of the survey content.

[Sustainability Workshops for Suppliers]
In order to promote climate change-related measures in cooperation with suppliers, workshops and question-and-answer sessions were held for suppliers with which surveys were conducted on the Group’s de-carbonization policy on climate change and case studies, and business and human rights as risks in the supply chain. In the fiscal year ending March 2024, 53 suppliers participated in the workshop.

[Individual Meeting with Suppliers]
In the fiscal year ending March 2024, the Group began individual meetings with its suppliers to promote efforts to reduce greenhouse gas emissions through interactive communication. Face-to-face, direct communication on greenhouse gas emissions calculation methods and issues related to reduction measures promoted mutual understanding. We will continue this communication in the future.

[Number of Briefings, Workshops, and Individual Meetings Held with Suppliers]