Response to the TCFD Proposal

Renesas’ purpose, “To Make Our Lives Easier,” is driven by our commitment to aligning our business and sustainability goals and making positive changes for all stakeholders. To identify top strategic priorities, we conducted a materiality assessment engaging various stakeholders.

One of the materiality topics analyzed is our “response to climate change, energy and emissions.” We are committed to improving our response to climate change, energy and emissions by reducing the climate change impact on our business, conducting environment-friendly activities, and creating opportunities that contribute to the environmental protection.

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Renesas has signed up to support the Task Force on Climate-related Financial Disclosure (TCFD) and joined the Japan-based TCFD Consortium (announced on April 15, 2021). As a way to demonstrate our support for TCFD recommendations, we have been examining the risks and opportunities that climate change poses to our business, and proactively disclosing information to stakeholders based on the TCFD framework, including “Governance,” “Strategy,” “Risk Management” and “Indicators and Targets.” We have also developed a business strategy that further takes climate change into consideration and made strategic decisions to reduce risks and maximize opportunities brought by climate change.


At Renesas, we recognize various opportunities and risks brought by climate change as important factors in business strategies. Thus, our CEO is responsible for all company-wide activities related to sustainability. Policies and important factors related to climate change, as well as risks and opportunities, are regularly discussed and reviewed by the CEO, an Executive Officer appointed by the CEO and the Sustainability Promotion Office, and are reported to the Board of Directors. In addition, under the CEO’s supervision, a corporate officer who manages Renesas’ group-wide environmental activities assesses, plans and establishes a system on a global basis.

library_books Sustainability Promotion Structure

library_books Environmental Management System


Climate change is a critical issue for Renesas. To understand the impact of climate-related risks and opportunities on Renesas Group’s business, strategy and financial planning, and to establish countermeasures, we conducted a scenario-based analysis using the following assumptions.

Assumptions for Scenario Analysis

For the analysis, we took all regions into consideration and the scope of our greenhouse gas (GHG) emission range was verified by a third party (more than 95% of total GHG emissions). We selected all businesses segments for the scope, consolidated accounts for the company scope, and 2030 as the time axis. Scenarios included SDS (Sustainable Development Scenario) by the IEA (International Energy Agency), IPCC RCP2.6, etc. as "below 2°C scenario," and the IEA STEP (State Policies Scenario) as "4°C scenario,” and RCP8.5 by IPCC (Intergovernmental Panel on Climate Change).

Item Scope of analysis, time axis, and selected scenarios
Region All Regions
Scope of GHG emission verified by a third party (95% or more of total GHG emissions)
Business scope Expected financial impact
Company scope Scope of consolidated financial statements
Time axis 2021 - 2030
Scenario selection Below 2℃ scenario: IEA SDS scenario (Sustainable Development Scenario), IPCC RCP2.6, etc.
4℃ scenario: IEA STEP (Stated Policies Scenario), IPCC RCP8.5, etc.

How We Conducted Scenario Analysis

First, we predicted social and regulatory trends as of 2030 and listed a wide range of climate change-driven risk and opportunity items that are likely to impact the Group based on the, using risks and opportunities exemplified in the TCFD recommendations as the basis.

Risks can be broadly classified into transition risks related to the transition to a low-carbon economy and physical risks related to physical changes due to climate change. Transition risks include policies and laws, markets, reputations (e.g., changes in reputations by customers and investors), etc. Physical risks include those with chronic occurrences (e.g., average temperature increase, changes in precipitation and weather patterns, rising sea levels) and acute ones (e.g., intensification of extreme weather). Opportunities were categorized in terms of resource efficiency, products and services, and new markets.

Next, based on our mid to long-term business plan, we narrowed down on the items that are expected to have a significant impact on our operations due to climate change. For these items, we collected parameters based on the below 2°C scenario and the 4°C scenario and extracted data regarding potential financial impact in 2023. Based on the results, we considered countermeasures to increase organizational resilience.

Hypothetical Events in below 2°C and 4°C Scenarios

Scenario Hypothetical events
Below 2°C
  • Carbon pricing will be introduced in Japan, the U.S., and emerging countries, and carbon prices will rise globally.
  • Stricter carbon regulations will increase procurement prices of energy and carbon-intensive raw materials.
  • Growing demand for products designed low-carbon and decarbonization technologies worldwide, including emerging countries.
  • Companies that are unable to respond to increasing demand for decarbonization from customers and investors will be weeded out.
  • The introduction of carbon pricing in Japan, the U.S., and emerging countries is slow.
  • Carbon regulations will not be strengthened, and the increase in procurement prices for energy and carbon-intensive raw materials will be limited.
  • Growing demand for products designed for low-carbon and decarbonization technologies will mainly increase in developed countries such as Europe.
  • Due to global delays in reducing GHG emissions, global warming will progress and abnormal weather (e.g., floods, droughts) will increase.
Reference: Global average temperature change forecast (Source: IPCC)
Source: IPCC AR5 SYR SPM Fig. SPM.2.1 Caption

Summary of Extracted Results from Scenario-Based Analysis

Based on this analysis, the primary risks and opportunities for the Group and countermeasures are as follows. We anticipate a major opportunity in case of the below 2°C scenario in particular, and will proactively promote measures to seize that opportunity in the future.

  • Due to the introduction of carbon pricing in countries we operate in, there are risks such as the cost increase for meeting requirements, cost increase of highly carbon-intensive raw materials, and production consignment fees.
  • There is a risk of lost sales opportunities or decreased sales if development delays occur in markets or products that require energy conservation, or if customers' demands for decarbonization cannot be fully met.
  • Increase in abnormal weather may affect manufacturing bases and distribution networks, leading to a decrease in sales and the risk of incurring recovery costs.
  • Opportunities for a significant increase in demand for products and solutions that address decarbonization and low carbonization. Especially in the automotive business, the demand for related products is expected to grow as the EV market expands, and in the industrial business, the demand for low-carbon and decarbonized technologies (e.g., wind power, FA) is expected to grow.
  • Opportunity to capture new markets by responding to changes in customer preferences and interests associated with climate change.
  • Respond to the risk of increasing carbon taxes by steadily implementing measures to achieve GHG emission reduction targets, establishing suppliers' GHG emissions, and promoting reduction measures.
  • Enable timely market introduction by accelerating the start of development through advance detection of changes in energy-saving standards in each country and by introducing development methods that enable flexible function changes.
  • Proactively disclose environmental information that promotes and accelerates environmental activities and communication in response to decarbonization efforts demanded by customers and investors.
  • Accelerate the development of highly energy-efficient products, such as expanding the lineup of products and solutions, and acquiring next-generation technologies that realize high speed, high functionality, and high efficiency.
  • Continue to invest in research and development to respond to new market expansion opportunities due to business diversification, changes in consumer preferences, etc.

Details of Analysis and Countermeasures

We assume when each risk and opportunity will materialize based on the scenario-based and other analysis, and disclose information over nine years from 2022 to 2030 by classifying them into “short-term,” “mid-term,” and “long-term.” We assume “short-term” to be within 3 years, “mid-term” over 3-6 years, and “long-term” over 6 years.

Financial Impact and Countermeasures for Risk Factors
Category Expected financial impact Period Countermeasures
Strengthening of laws and regulations Various laws and regulations will be strengthened toward decarbonization, and the cost to meet the needs will increase.
  • Carbon pricing (Scope 1-3)
  • PFC regulations, recycling regulations
  • Regulations related to energy conservation in emerging countries
Short to
  • Implement systematic measures to achieve mid to long-term GHG reduction targets
  • Understand emissions by suppliers and promote reduction measures
  • Continue 3R initiatives with a goal to “maintain a recycling rate of 90% or more” globally
Changes in technology and markets Sales opportunities will be lost due to delays in development in markets and products that require energy conservation, and our profits will decrease. As an example, it is assumed that sales of MCUs for ICE will decrease due to the decrease in gasoline-powered vehicles. Short to
  • Detect changes in energy conservation standards in advance, and accelerate the start of development
  • Introduce technology that enables flexible function changes
  • Continue to invest in R&D to develop energy efficient products
  • Concentrate development resources from ICE applications to xEV, ADAS application ICs, Discrete, and develop cross-domain MCUs
If the carbon tax imposed on our suppliers is reflected in the unit price of materials, we assume that production costs will increase. Mid-term
  • Understand and monitor CO2 emissions by suppliers
  • Share targets with suppliers and encourage them to promote reduction measures
Changes in stakeholder evaluation Sales will decrease if we are unable to meet customer demands for decarbonization in the supply chain. In addition, the expansion of ESG investment is expected to affect fund procurement. Mid-term
  • Promote and accelerate environmental activities that satisfy customers' environmental procurement regulations
  • Proactively disclose environmental information to stakeholders and promotion of communication for mutual understanding
  • Achieve progress toward environmental targets to meet executive evaluation
Increase in disasters due to extreme weather Due to an increase in disasters caused by abnormal weather, our own sites and supplier sites will be affected. Sales will decrease during the period until restoration, and restoration costs will be required. Mid to
  • Implement risk assessment and countermeasures for each site based on BCM
  • Continuously collect information including bases currently outside the hazard map
  • Continuously diversify procurement and consider/prepare alternatives
Financial Impact and Countermeasures for Opportunities
Category Expected financial impact Period Countermeasures
Efficient use of resources Efficient use of resources (energy, water) at business sites and production bases will be promoted and costs will be reduced. Short-term
  • Implement systematic energy-saving measures considering investment effect
  • Promote efficient use of water with a target water recycling rate of 35%
  • Expand PPA utilization bases
Low carbon emission products and services Expansion of xEV solution market As decarbonization progresses in the automotive sector, the xEV solution market expands. Short to
  • Accelerate the development and reduce power consumption of products for BMS
  • Expand product repertoire, such as monolithic/wireless
  • Provide development kits that shorten customer development time
  • Accelerate the development of products for xEV, enhance product portfolio with low power consumption, high efficiency, OTA support, etc.
  • Accelerate the development of products for AD/ADAS, improve functionality and performance
Expansion of industrial solutions market Decarbonization will progress in the industrial sector, and the related industrial solutions market will expand. Short to
  • Accelerate the development of products conforming to DDR5 and later DDR memory standards, and reduce power consumption and load
  • Accelerate the development of millimeter-wave beamformer solutions for 5G, achieve low power consumption and high efficiency
  • Accelerate the development of products for FA (mainly motor control ICs and MCUs/MPUs equipped with endpoint AI) and products for BA (mainly products for air conditioning systems and lighting), increase functionality, and strengthen RF functions
  • Accelerate the development of IGBTs, improve efficiency through advanced processes, and increase production capacity
  • Accelerate the adoption of next-generation power semiconductors
Respond to changes in customer preferences and interests Increase sales by responding to changes in customer interest (energy efficiency, IoT, sensors, advanced weather forecasts, etc.) associated with climate change. Short,
mid to
  • Promote product development to provide low-power consumption products and solutions that improve energy efficiency, and focus on R&D to create innovation
  • Expand product repertoire, improve speed, functionality, and efficiency
New market expansion New business Diversion of technologies developed in existing businesses to new industries in a low-carbon society Short to
  • Enhance security for products in the Automotive/IIOT field
Emerging markets "Sales of IGBTs and millimeter-wave beamformer solutions for 5G to emerging countries will increase as the decarbonization needs increase. Short to
  • Promote sales expansion in emerging markets, improve performance and efficiency of IGBTs

Risk Management

We have established a company-wide risk management system based on the “Renesas Electronics Group Risk and Crisis Management Regulations.” We regularly maintain our risk management system for possible risks that may occur, and for each one, a department will be put in charge of crisis management depending on the type of risk to conduct the day-to-day risk management. We also attempt to identify risks in advance by checking those that are represented realistically in our Risk Map. At the same time, we formulate contingency measures, systems, and response policies to prevent and respond to those risks. Furthermore, in the event of a company-wide emergency, we would establish an Emergency Response Headquarters (ERHQ) led by our CEO, which is designed to gather information, propose countermeasures, and implement measures to minimize losses.

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Indicators and Targets

Renesas Aims to Become Carbon Neutral by 2050 to Minimize the Impact of Climate Change

As an interim target, we have set a goal for 2030 to reduce greenhouse gas (GHG) emissions by 38% compared to 2021 levels, which is in line with the 1.5°C target (an effort to limit the increase in global average temperature to 1.5°C compared to pre-industrial revolution levels). This target has been certified as a science-based target by the Science Based Targets initiative (SBTi) (announced on August 25, 2022).


We plan to achieve our goal by reducing the emission of PFC gas – a greenhouse gas that heavily impacts the environment – and meeting the domestic electrical and electronics industry targets in Japan and the energy intensity reduction target in accordance with the Energy Conservation Law. These initiatives also include expanding the use of reusable energy at our manufacturing sites which consume significant amounts of energy.

Regarding Scope 3, we have also set a new target for reducing GHG emissions by 2026 by suppliers (including outsourced production companies) who account for 70% of GHG emissions in Category 1 of Scope 3. We will strive to meet those targets and reduce GHG emissions throughout the supply chain.

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Assumptions for Scenario Analysis
IEA International Energy Agency
SDS Sustainable Development Scenario
STEPS Stated Policies Scenario
IPCC Intergovernmental Panel on Climate Change
RCP Representative Concentration Pathways
Financial Impact and Countermeasures for Risk Factors
Scope 1 Scope 1 emissions refer to direct greenhouse gas (GHG) emissions that occur from sources that are controlled or owned by an organization. This includes all land-use emissions from companies that own or control land to produce agricultural and forest-risk commodities.
Scope 2 Scope 2 emissions refer to indirect GHG emissions associated with any purchases of electricity, steam, heat, or cooling.
Scope 3 Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly impacts in its value chain.
PFC Perfluorocarbon. A type of the alternative CFC Gas used for etching and cleaning in the manufacturing process of semiconductor manufacturing.
3R Reduce, Reuse, Recycle. Acronym for three initiatives to reduce waste.
ICE Internal Combustion Engine
MCU Micro Control Unit
xEV The generic name for electromotive vehicles such as a hybrid electric vehicles, plug-in hybrid electric vehicles and fuel-cell electric vehicles
ADAS Advanced Driver-Assistance Systems
BCM Business Continuity Management
Financial Impact and Countermeasures for Opportunities
PPA Power Purchase Agreement: A solar PPA, or power purchase agreement, is typically an off-balance sheet financial arrangement through which an energy consumer allows a third-party developer to develop, construct, operate and maintain a photovoltaic (PV) system on its property, at no cost. The energy consumer then agrees to purchase electricity from the system’s owner, over a predetermined period.
BMS Battery Management System
Monolithic Reconstruction of multiple ICs (Die) separated by function and integration into one Die for implementation.
Wireless Implement the Wireless (wireless communication) function.
OTA Over The Air: Sending and receiving data via wireless communication
DDR Double-Data-Rate: Advanced version of SDRAM, a type of memory IC.
Millimeter-wave beamformer solutions for 5G Learn more
FA Factory Automation
Endpoint AI Learn more
BA Building Automation
RF Radio Frequency
IGBT Insulated Gate Bipolar Transistor
IIOT Industrial Internet of Things
<Indicators and Targets>
Scope 3
Category 1
Includes GHG emissions from all purchased goods and services