NSD recognizes that the conservation of the earth's environment is one of the issues for management. The Group has established an Environmental Policy in an effort to limit our impact on the environment, and will systematically and continuously work to reduce energy consumption derived from our business activities. To achieve this goal, we will contribute to a better, more prosperous global environment in collaboration with our customers and business partners across various industries.

In order to address the increasingly serious issue of global climate change, NSD has positioned climate change and energy management as one of its material issues, and is working to reduce greenhouse gas (CO₂) emissions by setting medium- to long-term targets in line with the framework of the Paris Agreement.

We conduct business with customers in a wide range of industries, and so we recognize the importance of predicting the impact that climate change, which brings more abnormal weather, storms and flood damage, will have on our business activities. Based on this understanding, we will analyze the risks and opportunities that climate change poses to our business and we will disclose all such information.

NSD’s main business is software development, and it belongs to an industry with relatively low direct greenhouse gas emissions compared with manufacturers, shipping operators, and other energy-intensive industries. Our main source of emissions is electricity use at offices. For this reason, we are working to reduce GHG emissions by promoting energy saving initiatives and switching to electricity from renewable energy sources.

With respect to Scope1 and Scope2 emissions, we have set and are working towards long-term targets of a 42% reduction by FY2030, and net-zero emissions by FY2044 (compared to FY2020 levels).
Furthermore, with respect to Scope3 emissions, we have set and are working towards long-term targets of a 25% reduction by FY2030, and net-zero emissions by FY2050 (compared to FY2020 levels).

Scope1+2 reduction targets

Scope3 reduction targets

Greenhouse gas emissions of Scope1 and Scope2 in FY2025 were 1,553 t-CO2, approximately 35% reduction compared to FY2020 (base year) levels.

Scope1+2 reduction targets

1. *1Scope: the Company and all its subsidiaries.
2. *2CO₂ emissions calculation formula: Electricity, gas, and gasoline consumption at each site x Emission factor at each site (Emission factors are based on those disclosed by the Ministry of the Environment)
3. *3FY2025 figures are preliminary. We will publish the final figures after obtaining third-party verification from an external auditing organization.

Greenhouse gas emissions of Scope3 emissions in FY2025 were 55,019 t-CO2, approximately 63% increase compared to FY2020 (base year) levels.
The increase compared to the base year is due to the rise in procurement and outsourcing operations resulting from the expansion of business activities.
Going forward, we will strengthen collaboration with key suppliers and promote the use of primary data to improve the accuracy of emissions calculations and identify opportunities for reduction.

Scope3 emissions (FY2025)

Categories	Details	Results	Ratio
Category1	Purchased goods and services	49,897	91%
Category2	Capital goods	1,558	3%
Category3	Fuel- and energy-related activities	484	1%
Category4	Upstream transportation and distribution	52	0%
Category5	Waste generated in operations	669	1%
Category6	Business travel	594	1%
Category7	Employee commuting	1,662	3%
Category8	Upstream leased assets	101	0%
Category9	Downstream transportation and distribution	0	0%
Category10	Processing of sold products	0	0%
Category11	Use of sold products	0	0%
Category12	End-of-life treatment of sold products	0	0%
Category13	Downstream leased assets	0	0%
Category14	Franchises	0	0%
Category15	Investments	0	0%
Total		55,019	100%

1. *FY2025 figures are preliminary. We will publish the final figures after obtaining third-party verification from an external auditing organization.
2. *For past Scope3 emissions data, please refer to the Targets and Results page.

With the objective of improving the reliability and transparency, NSD obtained third-party verification for its Scope 1, 2, and 3 GHG emissions in compliance with GHG protocols and internal standards. We will continue to work on improving data accuracy and enhancing information disclosure.

NSD has few in-house facilities with many of its offices rented in office buildings. Since it is difficult for us to introduce renewable energy and LED lighting by ourselves when implementing initiatives in our offices, we are making requests to the building management companies at each of our sites to switch to renewable energy CO₂-free energy tariffs and to change to LED lighting.
We have already switched to renewable energy power at our head office and Osaka branch office and Nagoya branch office. LED lighting has also been introduced at several business sites, including our head office.