Economic Indicators and Efforts for Sustainability
Efforts for Sustainability I-2 _ Scenario Analysis
Physical Risks
Occurrence of flood damage caused by climate change
Financial impacts on
business borrowers
Direct damage
Decrease in sales
due to suspension
of operations
Transition Risks
Tightening of regulations on restrictions of carbon emissions/
introduction of carbon tax
Damage on real-estate
collateral
Impact on B/S
Impact on P/L
Impairment of
collateral value
Increase in capital
investment related
to renewable energy
Increase in
borrowings
Decrease in sales
Occurrence of
carbon costs
Increase in credit-related expense upon occurrence of flood damage
Increase in credit-related expense following a transition to a decarbonized society
•
Scenarios
RCP 2.6 Scenario (2°C Scenario) and RCP 8.5 Scenario (4°C Scenario) publicized by the
Intergovernmental Panel on Climate Change (IPCC)
Scenarios
Analysis
target
•
The Bank's business borrowers
Analysis
target
•
Analysis
method
Calculate an increase in credit-related expenses in consideration of financial impacts
on business borrowers and damage on real-estate collateral upon occurrence of flood
damage and damage on real-estate collateral, as well as the probability of flood
damage for each of the climate change scenarios.
Analysis
method
Below 2°C Scenario (2°C Scenario) and Net Zero 2050 Scenario (1.5°C Scenario)
publicized by the Network for Greening the Financial System (NGFS)
Electricity generation companies and gas service companies among the Bank's
business borrowers (excluding renewable energy related)
Calculate an increase in credit-related expenses by calculating impacts of tightening of
regulations on restrictions of carbon emissions and introduction of carbon tax
following a transition to a decarbonized society on an individual company basis, and
estimating future financial forecast until fiscal 2050
Analysis
period
•
Until 2050, based on data as of March 31, 2021
Analysis
period
Until 2050, based on data as of March 31, 2021
Analysis
Analysis
•
A total of ¥4.6 billion to ¥7.5 billion increase in credit-related expense
result
result
2°C Scenario: A total of ¥0.08 billion increase in credit-related expense
1.5°C Scenario: A total of ¥2.6 billion increase in credit-related expense
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