環境（Environment）Environment

Response to Climate Change (Information Disclosure Based on TCFD Recommendations)

As a leading company in the payment industry, we are promoting payment services such as cashless billing that eliminates the need for cash, paperless transfer forms, and digitization of billing. We are also working to reduce GHG emissions in our business and supply chains by promoting the introduction of effectively renewable enegy into data center power that processes transaction data and supplier engagement. We will strive to reduce the environmental impact of our customers and society through such environmentally friendly business operations, and aim to shift to a decarbonized society and realize a sustainable society.
In January 2023, we announced our support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Based on the TCFD recommendations, we will continue to expand our disclosure of information on climate change.

Governance

The person responsible for climate change issues on the Board of Directors is the Director Executive Vice President in charge of planning and is responsible for reflecting all environment-related issues in the Company's Management Strategy and management objectives. The management team, including President & Chief Executive Officer and Director Executive Vice President, discusses policies related to sustainability activities, including climate change, deliberates on plans, reviews progress, and reports the progress of operations to the Board of Directors, and promotes measures based on the feedback received. In addition, the Board of Directors receives regular reports on the results of discussions and verifications by the Risk Management Committee, and monitors climate-related issues related to the entire company, their impact on business, and the status of responses.

strategy

Using the scenario analysis method recommended by the TCFD recommendations, we identify risks and opportunities that future climate change may affect our business. Referring to scenarios from IPCC, IEA, and other organizations, we have set scenarios that assume changes in the natural and social environment surrounding our company, and have identified risks and opportunities related to climate change.

Hypothetical scenario

1.5°C Scenario
・Rapid progress toward reducing CO2 emissions due to the transition to a decarbonized society
・Tightening of regulations on carbon pricing, etc.
・Changes in needs based on increased environmental awareness among stakeholders

4.0°C Scenario
・Progress of global warming due to the lack of progress in strengthening laws and regulations for climate change countermeasures
・Intensification of natural disasters due to rising temperatures, increase in sea level rise, and increase in abnormal weather

Risks and Opportunities Related to Climate Change

classification		Risks and Opportunities	period	Mitigation
Transition Risks	Policy & Laws and regulations	・Increase in business costs due to the introduction of a carbon tax	Long term	・Introduction of effectively renewable enegy to major data center power
	Markets & service	・Loss of business opportunities due to inability to meet customer needs for reducing environmental impact	Long term
	reputation	・Decline in reputation from stakeholders due to inadequate response to climate change issues, increase in recruitment and financing costs	Short- and medium-term	・Promote disclosure of ESG information
Physical Risks	chronic	・Increase in electricity costs due to an increase in air conditioning load at data centers due to a rise in average temperature	Long term	・Improving the efficiency of data centers
	chronic	・Impact on business operations due to the spread of storm and flood damage and infectious diseases due to the rise in average temperature	Long term	・Selection of data center locations that are less susceptible to damage ・Redundancy of system configurations, multiplexing and decentralization of data centers ・Formulation of business continuity plans
	acute	・Suspension of operations and services due to the collapse of data centers, loss of data, and human damage due to abnormal weather or natural disasters	Short- and medium-term
opportunity	Markets & service	・Due to the growing social demand for environmentally friendly management, there is an increase in demand for services provided by the Company that promote online, cashless, and paperless operations.	Long term	・Implementation of current strategies such as DX support
opportunity	reputation	・Improvement of stakeholder recognition and corporate value through active involvement in climate change issues	Short- and medium-term	・Promote disclosure of ESG information

Risk Management

In recent years, as the issue of climate change has become more serious, our services may also have an impact on global resources and the climate due to CO2 emissions associated with electricity energy consumption. Through the activities of the Risk Management Committee, we conduct integrated consideration and response to disaster risks, including climate change.
In order to incorporate climate-related risks into our company-wide risk management and implement them effectively and efficiently, we hold a Risk Management Committee meeting once a quarter. Risk events are evaluated numerically on six levels on two scales, namely the degree of impact and frequency of occurrence on a monetary basis, and after assessing and selecting assumed risks and general risks across the company by certain executives within the company, risk events that exceed a certain level are considered to be serious risks, and countermeasures are considered and implemented in each department.
Measures to deal with serious risks examined and implemented in this flow are examined by the department in charge based on the opinions of external experts, inspected and discussed by the Risk Management Committee, and reported to the Board of Directors.

Metrics and Targets

In order to contribute to the realization of a sustainable society, we are promoting initiatives to reduce GHG emissions. In the fiscal year ended September 2022, we introduced effectively renewable enegy to power our major data centers, which consume the majority of electricity in our business, and achieved our goal of reducing the GHG emissions (Scope 1 and 2) of our operations, including other data centers and offices, to effectively zero in the fiscal year ending September 2023. As we move toward the fiscal year ending September 2030, we will continue to implement GHG emissions (Scope 1 and 2) effectively zero.
In terms of GHG emissions (Scope 3) derived from our supply chain, we have set a target of reducing Scope 3 emissions (Categories 1 and 11) per new payment handset by 55% by the fiscal year ending September 2030 compared to the fiscal year ended September 2021. These targets are in line with the Paris Agreement.
In order to achieve our targets, we are engaged with suppliers to reduce GHG emissions (Categories 1 and 11) related to the purchase and use of payment handset products and GHG emissions (Category 2) related to software development, which are required to provide Card Present Transactions, which accounts for the majority of GHG emissions (Scope 3).
Specifically, we are engaged in dialogue with payment handset manufacturers to appropriately measure and reduce power consumption during GHG emissions and Card Present Transactions related to handset manufacturing.
Similarly, we are engaged in dialogue with our business partner system development company to appropriately measure and reduce GHG emissions (Category 2) related to software development.

In May 2024, our GHG reduction targets were certified by the SBT Initiative, a global organization that encourages companies to set science-based climate targets, as being consistent with the 1.5°C target. As a result, our GHG reduction targets have been proven to be scientifically consistent with the "1.5°C target" of the Paris Agreement, which was adopted as a new international framework for reducing greenhouse gas emissions from 2020 onward, which aims to limit the increase in the global average temperature to 1.5°C above pre-industrial levels.

Goals for which we received this certification
・Scope 1 and 2: Achieve GHG emissions effectively zero continuously until the fiscal year ending September 2030
・Scope 3: Reduce GHG emissions * per payment new handset in operation by 55% by the fiscal year ending September 2030 compared to the fiscal year ended September 2021.

*Covers the majority of our Scope 3 payment Refers to purchased goods and services (Category 1) and the use of sold products (Category 11) related to terminal products.

GHG emissions

(Unit: t-CO2)		Fiscal Year Ended September 2019	Fiscal Year Ended September 2020	Fiscal Year Ended September 2021	Fiscal Year Ended September 2022	Fiscal Year Ending September 2023
Scope1 ^*1		0	0	0	0	0
Scope2 ^*2	Market Criteria	1,559	1,736	1,883	308	0
Scope2 ^*2	Location Criteria	-	-	-	929	1,032
Scope3 ^*3		-	-	24,015	22,462	23,616
	Category 1: Purchased products and services	-	-	15,178	10,240	15,846
	Category 2: Capital goods	-	-	5,181	8,439	2,044
	Category 3: Fuels and Energy-related activities	-	-	Not applicable	41	0
	Category 4: Transportation and distribution (upstream)	-	-	15	15	14
	Category 5: Waste from business activities	-	-	0	13	9
	Category 6: Business Trips	-	-	92	104	107
	Category 7: Employer commuting	-	-	156	183	189
	Category 8: lease assets (upstream)	-	-	Not applicable	Not applicable	Not applicable
	Category 9: Transportation and distribution (downstream)	-	-	11.2	Not applicable	Not applicable
	Category 10: Processing of sold products	-	-	Not applicable	Not applicable	Not applicable
	Category 11: Use of sold products	-	-	3,344	3,418	5,405
	Category 12: Disposal of sold products	-	-	Not applicable	Not applicable	Not applicable
	Category 13: lease assets (downstream)	-	-	Not applicable	Not applicable	Not applicable
	Category 14: franchise	-	-	Not applicable	Not applicable	Not applicable
	Category 15: Investments	-	-	35	9	2

*Calculated based on the power consumption of data centers and offices of our major companies
*1 Scope 1: Emissions emitted by the company itself GHG emissions
*2 Scope 2: Indirect GHG emissions of purchased electricity, heat, etc.
*3 Scope 3: GHG emissions of other companies related to the Company's activities

GHG emissions Trends

Third-Party Assurance

In order to ensure the reliability of the content of the GHG emissions reports, we have received third-party assurance from SOCOTEC Certification Japan.

・Scope 1 and 2 (Actual for the fiscal year ending September 2023)

・Scope 3 (Actual for the fiscal year ending September 2023)

Energy-Saving Initiatives

Data Centers
We incorporate power-efficient CPU selection, server architecture, server virtualization, rack location, and air conditioning airflow to ensure efficient power consumption and efficient space utilization. In addition, from the fiscal year ended September 2022, we have improved our operations to measure actual power consumption and recognize accurate power consumption.

Office buildings
We have introduced control management of lighting and air conditioning in the office, such as turning them off automatically depending on the time, and an outside air system to reduce the loss of cold and heated air, which leads to energy conservation. In winter, when the outside air temperature is higher than the indoor temperature setting, the outside air cooling system is used to reduce the power consumption of the air conditioner by taking in outside air instead of from the air conditioner, thereby reducing the environmental impact by saving power.

Contributing to the decarbonization of society

Promotion of cashless payments with low environmental impact

Through the promotion of cashless payments, we will contribute not only to the reduction of GHG emissions from our business, but also to the reduction of GHG emissions in society as a whole. Cash payment emits CO₂ in the manufacturing, payment, use, and disposal processes of banknotes, coins, ATMs, etc. According to an analysis published by the Cashless Promotion Council, to which we are a member, the CO₂ emissions of cashless payment are estimated to be about one-third of that of cash payment, confirming that cashless use has a lower environmental impact. Similarly, in the United Kingdom and the Netherlands, research results have been published that CO₂ emissions can be reduced by promoting cashless payments.

Cashless Roadmap 2023 / From the Cashless Promotion Council
At payment per 1,000 yen, cashless CO2 emissions are 0.34g

In this edition of the Cashless Roadmap 2023, we used a variety of publicly available data to estimate the carbon footprint of cashless and cash use.
Since the calculation was made without sufficient data, it cannot necessarily be said that it is an accurate value, but at least in this estimate, we were able to obtain the result that the carbon dioxide emissions related to cash use were "1.06g" for 1,000 yen payment, while "0.34g" for cashless use. Based on this calculation, we were able to confirm that cashless use has a lower environmental impact in daily payment. As a result, we were able to confirm that using cashless is a more environmentally friendly action.

Comparison of carbon dioxide emissions of cash and cashless (per 1,000 yen)

Source: Cashless Roadmap 2023 / Cashless Promotion Council

生物多様性

Promoting Paperless Payments

We support merchants to go paperless through the digitalization of invoice and other services.

東京電力エナジーパートナー株式会社が推進する電気料金支払い等のデジタル化を支援「GMO後払い」、紙請求書を必要としない「電子バーコードタイプ」を拡充利用から請求まで完全WEB完結のBNPLサービス「アトカラ」を提供開始

対面領域における環境負荷に配慮した業務運営

・各決済端末利用時に、使用されるレシート（ロール紙）における再生紙の利用
・レシート（ロール紙）の削減につながる売上票の電子保管サービスの提供

Response to climate change (information disclosure based on TCFD recommendations)

As the leading company in the payment industry, the Company promotes payment services such as cashless migration to make cash payments unnecessary, digitalization of invoices to achieve paperless payment slips, etc. In addition, initiatives are underway to reduce GHG emissions in the Company's own businesses as well as in the supply chain by implementing what is effectively renewable energy for electricity used in data centers that process the payment data and through supplier chain engagement activities. The Company aims to realize a sustainable and decarbonized society by working to reduce the environmental burden of our customers and society through business operation that are environmentally mindful.
In addition, the Company has endorsed TCFD recommendations on January 2023 and will work to expand its information disclosure regarding climate change based on TCFD recommendations.

Governance

The executive vice president, overseeing planning and operations, bears responsibility for climate change issues at the Board and to reflect/incorporate all environment related issues to the Company's management strategy and management targets. The management team including the president and executive vice president carries out deliberations on policies related to sustainability activities, reviews the progress, evaluates plans, reports the progress to the Board and compiles measures to reflect the feedback received. In addition, the Board receives periodic reports from the Risk Management Committee on its discussions, verifications and findings to help the Board monitor the responses and impact of climate related issues on the overall Company.

Strategy

Based on scenario analysis methods recommended by the Task Force on Climate Related Financial Disclosures (TCFD), the Company identifies those potential risks and opportunities arising from future climate change. By referring scenarios presented by the Intergovernmental Panel on Climate Change (IPC) and International Energy Agency (IEA), we have identified the climate change related risks and opportunities based on scenarios related to changes in natural and social environments.

Estimated scenario

1.5℃ scenario
• Rapid progress in the reduction of CO2 emissions arising from the transition to a decarbonized society
• Regulatory tightening from carbon pricing, etc.
• Changes in needs from heightened environmental awareness by stakeholders

4.0℃ Scenario
・Exacerbation of global warming caused by the lack of progress in strengthening laws and regulations on climate changes.
・Increase in abnormal weather, rise in sea levels and occurrence of catastrophic natural disasters caused by the rise in temperature.

Risks and Opportunities Associated with Climate Change

Classification		Risks and opportunities	Timeline	Initiatives
Transition risk	Policy, laws/ regulations	・Increase in cost of business from implementation of carbon tax	Medium-to long term	・Implementation of what is effectively renewable energy Market, at major data centers
	Market, services	・Loss of business opportunity from inability to fulfill the client's needs for reducing environmental burden	Medium-to long term
	Evaluation	・Increase in fund procurement cost, recruitment cost and negative evaluation from stakeholders from being regarded as insufficiently responding to climate change issues	Short-to medium term	・Promote ESG-related information disclosure
Physical risk	Chronic	・Increase in electricity cost from higher burden on air-conditioning caused by the rise in average temperatures	Medium-to long term	・Improve efficiency at data centers
	Chronic	・Impact to operations from spread of infectious diseases and wind/water disasters due to rise in average temperatures	Medium-to long term	・Select data center locations less impacted by natural disasters ・Redundancy configuration of systems, dispersion and multiplexing of data centers ・Compilation of business continuity plans (BCP)
	Acute	・Suspension of operations and services due to personnel loss, data loss and/or damage to data centers caused by abnormal weather and natural disasters	Short-to medium term
Opportunity	Market, services	・Increase in demand for the Company's services that enables online, cashless and paperless migration due to the increase in social demand for environmentally conscious management	Medium-to long term	・Pursue current strategy of DX support
Opportunity	Evaluation	・Rise in corporate value and improved evaluation from stakeholders from aggressive involvement to tackle climate change problems	Short-to medium term	・Promote ESG-related information disclosure

Risk Management

Recent years have seen a worsening of climate change issues, and services offered by the Company may also be impacting the climate and natural resources through CO2 emissions from electric power consumption. To combat this issue, the Risk Management Committee comprehensively undertakes an assessment of and response to natural disaster risks, including climate change.
The Company convenes the Risk Management Committee once every quarter to implement measures effectively and efficiently by incorporating climate related risks into the overall risk management. Risk incidents are classified into six categories according to the quantitative evaluation based on two metrics of monetary impact and frequency of occurrence. The foreseeable risks and general risks are evaluated and selected across the Company by employees above a certain position. Of those, risk incidents that exceed a certain threshold are designated as material risk, and each Division must consider and implement responses.
Consideration and response to the material risk is further deliberated by the relevant Division after incorporating the opinions of external experts. This is examined and debated at the Risk Management Committee and reported to the Board.

Indicators and Targets

The Company is promoting initiatives to reduce GHG emissions to contribute to realizing a sustainable society. In FY2022, the Company implemented what is effectively renewable energy for its major data centers that consume the bulk of electricity in the business. As a result, the Company achieved what is effectively zero GHG emissions from its own operations, including offices and all other data centers (Scope 1 and 2) in FY2023. The Company intends to maintain its effective zero GHG emission up to FY2030.
In order to tackle GHG emissions from the supply chain, the Company has established a target to reduce Scope 3 (Category 1 and 11) emissions for newly operating payment terminals by 55% per terminal by FY2030 against the baseline of FY2021. This target aligns with the Paris Agreement.
The Company is undertaking engagement with the supply chain to reduce GHG emissions related to the purchase and usage of payment terminals (Scope 1 and 11), which are essential to provide CP payments and account for the bulk of Scope 3 emissions, as well as GHG emissions related to software development (Category 2).
More concretely, the Company is engaging with payment terminal manufacturers to implement appropriate measurement and reduction of GHG emissions during manufacturing and electric power consumption during the usage of the terminals.
Similarly, the Company is engaging with system development companies to appropriately measure and reduce GHG emissions (Category 2) related to software development.

In May 2024, the Company's GHG emissions reduction target was certified as aligned with the 1.5 deg. Celsius scenario of SBT Initiative, the global organization that enables corporates to set targets based on climate science. This verifies that the Company's GHG emissions reduction targets are scientifically aligned to the 1.5 deg. Celsius scenario to limit the rise in global temperature to 1.5 deg. Celsius compared to pre-Industrial levels, as ratified by the new international framework of the Paris Agreement on greenhouse gas emissions reductions beyond 2020.

Targets certified by SBT Initiative
・Scope 1 + 2: To maintain an effectively zero GHG emissions continuously up to Fiscal Year ending September 2030.
・Scope 3: Reduce GHG emissions by 55% per terminal for newly operating payment terminals by Fiscal Year ending September 2030 compared^* to Fiscal Year ending September 2021.

* Refers to Category 1 (purchased goods and services) and Category 11 (use of sold products) emissions that are related to payment terminals which accounts for the bulk of Scope 3 emissions.

GHG Emissions

(Unit:t-CO2)		FY2019	FY2020	FY2021	FY2022	FY2023
Scope1 ^*1		0	0	0	0	0
Scope2 ^*2	Market-based	1,559	1,736	1,883	308	0
Scope2 ^*2	Location-based	-	-	-	929	1,032
Scope3 ^*3		-	-	24,015	22,462	23,616
	Category1: Purchased goods and services	-	-	15,178	10,240	15,846
	Category2: Capital Goods	-	-	5,181	8,439	2,044
	Category3: Fuel-and energy-related activities	-	-	N/A	41	0
	Category4: Upstream transportation and distribution	-	-	15	15	14
	Category5: Waste generated in operations	-	-	0	13	9
	Category6: Business travel	-	-	92	104	107
	Category7: Employee commuting	-	-	156	183	189
	Category8: Upstream leased assets	-	-	N/A	N/A	N/A
	Category9: Downstream transportation and distribution	-	-	11.2	N/A	N/A
	Category10: Processing of sold products	-	-	N/A	N/A	N/A
	Category11: use of sold products	-	-	3,344	3,418	5,405
	Category12: End-of-life treatment of sold products	-	-	N/A	N/A	N/A
	Category13: Downstream leased assets	-	-	N/A	N/A	N/A
	Category14: Franchises	-	-	N/A	N/A	N/A
	Category15: Investments	-	-	35	9	2

* Note: Compiled from electric power usage at offices and data centers of major GMO-PG consolidated companies
*1 Scope 1: Direct emissions from owned or controlled sources
*2 Scope 2: Indirect emissions from the generation of purchased electricity, heating and cooling, etc.
*3 Scope 3: All other indirect emissions that occur related to the Company's activities

Trend of GHG Emissions

Third Party Certification

In order to ensure the reliability of GHG Emission, the Company has obtained an independent third-party certification from SOCOTEC Certification Japan.

・Scope1 and 2 (FY2023)

・Scope3 (FY2023)

Energy Conservation Initiatives

Data centers
The Company is implementing various strategies to improve power consumption efficiency and optimize space usage, such as selecting energy-efficient CPUs, optimizing server architecture, virtualizing servers, positioning racks effectively, and managing airflow for cooling. Also, we improved our operations in the fiscal year ending September 2022 to accurately measure and recognize actual power consumption.

Office building
A control management system that automatically turns off the air conditioning and the lighting in the office based on the hours, and an outdoor air-cooling system that minimizes the loss of warm or cold air have been adopted, leading to the conservation of energy. In winter, with an outdoor air-cooling system, the power consumption of air-conditioning systems is controlled by bringing in outside air (not from air-conditioning systems) when the outside air temperature is higher than indoor temperature settings, conserving power and reducing environmental impact.

Contributing to Society's Decarbonization

Promoting cashless, a low environmental footprint payment

The Company will contribute not only to reducing GHG emissions from its businesses but also to reduce GHG emissions for overall society by promoting cashless migration. Cashbased payments emit CO2 at each step of the process, from the printing / minting of paper bills and coins, manufacture of ATMs, etc., to the payment, usage and disposal of cash.
The analysis disclosed by Payments Japan Association to which we belong as a member showed a calculation result that CO2 emissions for cashless payments is one-third that of cash payments, confirming that cashless usage has a smaller environmental impact. Similarly, research done in the UK and Netherlands also showed that promoting cashless migration can reduce CO2 emissions.

Cashless Roadmap 2023 released by Payments Japan Association
CO2 emission for cashless for a ¥1,000 payment is 0.34 grams

The latest Cashless Roadmap 2023 presented an estimation of CO2 emission for cash and cashless payments by utilizing various publicly available data.
Although these values may not be accurate given that the estimates were calculated without all data being available, it was possible to estimate that the CO2 emissions for a ¥1,000 payment is 1.06 grams for cash use compared to 0.34 grams in the case of cashless use. This estimation confirms that using cashless in daily life has a lower environmental impact. As a result, this confirms that cashless usage is a more environmentally friendly behavior.

Comparison of CO2 emission for cash and cashless (for \1,000 use)

(Source) Payment Japan Association, "Cashless Roadmap 2023."

Biodiversity

Promote paperless migration

The Company supports the merchant's migration to paperless operations by providing services to digitalize invoices.

Support the digitalization of electric bill payment promoted by TEPCO Energy Partner Co., Ltd. Expansion of "GMO Payment After Delivery" and "Electronic Barcode Type" that do not require paper invoice BNPL service of complete web completion from use to billing "atokara" launched

Business operations that consider environmental impact in Card Present transaction

・Use of recycled paper for receipts (roll paper) when using each payment terminal
・Provision of electronic slip service as an alternative to receipts (rolled paper)