Decarbonization

Policies and Approach

Please see the following page:

• Environmental Management
• Disclosures in Line with TCFD Recommendations

Organization for Implementation

Please see the following page:

• Environmental Management
• Disclosures in Line with TCFD Recommendations

Targets and Performance

(1) 2040: Carbon neutrality across the entire NTT Group
Target for fiscal 2024: 2.39 million

(2) 2040: Net zero across the entire supply chain
40% reduction by 2030 (compared to fiscal 2018)

We are working to improve the energy efficiency of our business. (EP100, environmental target 2030) ¹
2025: Power efficiency (compared to FY2017)
Two time
2030: Power efficiency (compared to FY2013)
10x

¹In October 2018, NTT was the first telecommunications carrier to become a member of the Climate Group's EP100 and EV100 initiatives. EV100 aims to achieve a 100% EV ratio for passenger vehicles by 2030.

Electricity consumption accounts for over 90% of greenhouse gas emissions of NTT Group's business activities--the Group consumes the equivalent of 1% of the power generation throughout all of Japan.

To combat this, the NTT Group has been working on Group-wide energy conservation activities dubbed the "TPR (Total Power Revolution) Campaign." By promoting efficient energy management at buildings owned by NTT and installing energy-efficient electrical power units, air conditioning systems and telecommunications equipment, we managed to continue to reduce electricity usage across the NTT Group by approximately 300 million kWh from projected levels in fiscal 2022.

Furthermore, the NTT Group is pushing for greater electricity usage efficiency with the aim of reducing the risk of business disruptions and helping to mitigate climate change. The fiscal 2025 target for power efficiency per data transmission in our telecommunications business, including data centers, has been set to double (EP100) that of fiscal 2017, and for fiscal 2030 the target has been set to ten times (environmental target 2030) that of fiscal 2013 In fiscal 2022 we achieved 8.0x of the former and 2.2x of the latter, reaching the 2x energy efficiency target three years earlier than planned. This is the first such achievement by a Japanese company that is a member of the international EP100 initiative.

The volume of Internet traffic in Japan has been growing rapidly, especially since 2020, due to the increase in work-from-home and remote meetings to prevent the spread of COVID-19. At the NTT Group we are continuing to enhance our telecommunications and network facilities to keep pace with advances in telecommunications technology and increases in traffic volume.

While this is accompanied by an associated increase in the energy usage of NTT Group, in the above mentioned energy-saving activities for the TPR Campaign we are working to save as much energy as possible and curb the increase in power consumption through analyses of electricity usage by each business and its yearly change, annual target setting, performance management, formulation of measures, and implementation management.
We have continually made improvements in energy efficiency each year through these activities.

Developing and expanding the use of renewable energy

Increase the use of renewable energy, and reduce the NTT Group's greenhouse gas emissions¹ compared to outcome².

The NTT Group is increasing its use of renewable energy³ as part of efforts to achieve its Environment and Energy Vision. The NTT Group is pushing ahead with development of renewable energy sources with the aim of generating around half of its renewable energy target from its own facilities by fiscal 2030.

During fiscal 2022, a total of 2.7 billion kWh of power consumed (or 33% of power consumption, around 150% year-on-year) throughout the entire NTT Group was switched over to renewable energy sources.

In 2020, the NTT Holdings head office and four facilities of NTT Laboratories made the switch to effectively 100% renewable energy⁴.

¹GHG Protocol: for Scope 1 and 2

²The introduction of effectively 100% renewable energy (including actual renewable energy through non-fossil fuel certificates) will have the optimal types of energy determined on the basis of each country's energy composition, etc. Approximately half of the domestic renewable energy usage is anticipated to be from energy sources owned by NTT (FY2030).

³Includes actual renewable energy through non-fossil fuel certificates.

⁴Refers to power generated from actual renewable energy that includes specified renewable energy through non-fossil fuel certificates.

Creation of innovative environment and energy technologies

The NTT Group is creating innovative technologies aimed at addressing a range of issues related to the environment and energy such as climate change. In July 2020, we established the NTT Space Environment and Energy Laboratories for regenerating the global environment and achieving a sustainable and inclusive society. We will create technologies that will drive innovation in the field of smart energy, including next-generation energy, and for the future of the global environment.

Alleviation Efforts

Providing new services that contribute to carbon neutrality

Provide new services designed with the environment in mind, such as the development of services that use renewable energy, and visualization of the reduction in greenhouse gas emissions.

In addition to the Green of ICT, which will curb the environmental impact of NTT Group by introducing IOWN technologies and increasing the use of renewable energy, we will also work on Green by ICT, which will contribute to reducing the environmental impact of society as a whole.

Energy-Saving Data Centers

NTT Communications offers data centers with a PUE¹ of less than 1.2, and NTT COMWARE offers data centers with a PUE of less than 1.1, which are at the top worldwide for energy efficiency. We are striving to enhance PUE for our other data centers as well, introducing five-star equipment with the highest level of energy efficiency in accordance with the NTT Group Energy Efficiency Guidelines. NTT FACILITIES has been developing technology for reducing the electricity consumption of data centers by incorporating higher efficiency technology for electrical power units and air conditioning systems as well as central air conditioning control systems.

¹Power Usage Effectiveness: PUE is calculated by dividing the total power consumption of a data center by the power consumption of the computing equipment it houses. It is a figure larger than 1, with higher efficiencies represented by values approaching 1.

Pursuing Initiatives across the Industry for Energy-Efficient ICT Devices

NTT is a member of the Telecommunications Carrier Association (TCA) and in that capacity, participates in the ICT Ecology Guideline Council¹, an organization that seeks to enhance the energy efficiency of telecommunications- related products. The council formulates guidelines on the criteria for evaluating the energy efficiency of telecommunications devices, and NTT has contributed to the technical aspect of this effort. The NTT Group's Energy Efficiency Guidelines are based on the guidelines created by this council. In August 2010, eight NTT Group companies² acquired the Eco ICT Logo on submitting self-evaluations of their CO2 emissions reduction efforts, including the establishment of Energy Efficiency Guidelines.

The Eco ICT Logo was created by the ICT Ecology Guideline Council to signify efforts by telecommunications service providers to reduce CO2 emissions. We will continue to drive the development and procurement of energy-efficient equipment, and work with the ICT Ecology Guideline Council to help bring both vendors and carriers together to promote the industry- wide procurement of energy-efficient equipment. We will ensure that vendors are consistently provided with requirements for NTT Group specification processes, and include energy efficiency information disclosure and our corporate stance on energy efficiency in our criteria for selecting vendors.

• Eco ICT Logo
• Environmental Guidelines

¹ICT Ecology Guideline Council: An organization established jointly by the Telecommunications Carriers Association, Telecom Services Association, Japan Internet Providers Association, Communications and Information Network Association of Japan and ASP-SaaS-IoT Cloud Consortium to drive industry-wide efforts to address the issue of global warming.
ICT Ecology Guideline Council (Japanese only)

²The eight NTT Group companies are NTT, NTT East, NTT West, NTT Communications, NTT DOCOMO, NTT DATA, NTT FACILITIES, and NTT COMWARE.

Introduction of Internal Carbon Pricing System

To achieve carbon neutrality, a resolution was passed at the Executive Committee meeting in May 2022 to gradually implement an "Internal Carbon Pricing System" within Group companies. This system encourages reducing our impact on the environment by virtually converting CO₂ emissions into costs, and is used for decision making on procurement and other matters.

■Internal carbon price
6,500 yen/t-CO2
Set based on future predicted carbon pricing and past performance

■Example Applications ¹
•Acquisition of telecommunications devices when renewing company telecommunications equipment, etc.

¹Currently applied to Scope 1 (direct emissions) and Scope 2 (indirect emissions)

Contributing to reduced greenhouse gas emissions from society

At the NTT Group, we have set a target for fiscal 2030 which states that the amount of greenhouse gas emissions from society that can be reduced through the provision of our services and technology should be at least 10 times greater than the NTT Group's own emissions.

The aim of this target is to curb greenhouse gas emissions generated through our business and to contribute to the reduction of emissions from society as a whole by providing services and technologies.

The utilization of telecommunications, which is expanding every year with the spread of high-speed, high-capacity networks via smartphones and Hikari Collaboration, requires energy. However, on the other hand, the utilization of telecommunications contributes to the reduction of greenhouse gas emissions from society as a whole by reducing the environmental burden even more than the energy consumption required for the telecommunications, in the form of increased efficiency in society and reduction of physical items through digitalization.

^*The volume of contribution to the reduction of greenhouse gas emissions from society is quantified in terms of the amount of greenhouse gas emissions from energy savings achieved through ICT services and other means. To quantify the energy-saving effect, we refer to the calculation methods of the Telecommunication Technology Committee (TTC) standard "Environmental Impact Assessment Methodology for ICT Products, Networks, and Services (JT-L1410)" and the Life Cycle Assessment Society of Japan's "LCA for Organizations of Information and Communication Technology (ICT) Businesses" study group.

^*Examples of energy-saving effects that can be attained through the introduction of ICT services include energy management to reduce energy consumption in homes, companies, factories, etc., avoiding traffic congestion by analyzing traffic jam and public transportation operation data, and reducing energy consumption by streamlining and optimizing transportation schedules.

^*The NTT Group's own greenhouse gas emissions include emissions of facilities required for other telecommunications companies and data center operators to deploy services.

Power efficiency of telecommunications business

As a target for fiscal 2030, the NTT Group has set a goal of power efficiency per data transmission in our telecommunications business, including data centers, of at least 10x1¹ that of fiscal 2013 levels. Electricity is essential for the continuation of telecommunications business and also accounts for more than 90% of our Group's greenhouse gas emissions. We have set increasing the efficiency of electricity usage as a target, based on the two perspectives of mitigating business continuity risk and alleviating climate change. Based on green procurement standards, we are introducing equipment with high energy-saving performance and improving the efficiency of network configurations.

Furthermore, in October 2018, we became the first telecommunications carrier to join EP100², an international initiative on energy efficiency launched by The Climate Group. By participating in such an international initiative, we will announce NTT Group's environmental initiatives to the world and demonstrate our commitment to international environmental issues.

In addition, we have achieved the EP100 target in our fiscal 2022 performance (doubling energy productivity by fiscal 2025 compared to fiscal 2017)

¹Power efficiency per data transmission in our telecommunications business covers our five domestic businesses: NTT East, NTT West, NTT Communications, NTT DOCOMO, and NTT Data.

²An international initiative whose member companies set their sights on improving the power efficiency of their businesses (e.g., a 50% improvement in energy savings).

Development of Renewable Energies

Renewable energy like solar power, wind power, geothermal, and biomass do not generate greenhouse gases when producing power, an advantage that makes developing and expanding the use of renewable energy an essential part of initiatives aimed at achieving a decarbonized society. The NTT Group established NTT Anode Energy in June 2019 with the aim of delivering smart energy solutions that leverage the technology, expertise, and resources of the NTT Group. Focused on achieving a decarbonized society and the promotion of local energy production for local consumption, NTT Anode Energy operates on three core approaches: (1) Providing customers with green energy solutions; (2) Promoting NTT's own decarbonization efforts; and (3) Utilizing battery farms to increase use of renewable energy.

NTT Anode Energy is working together with various partners to develop renewable energy power plants in order to meet the green energy requirements of NTT Group companies. With a primary focus on sustainability, the company advancing development that takes into consideration ecosystems and living environments.

Expanding the Use of Renewable Energy

Together with the development of renewable energy sources, the NTT Group is also expanding its concept of local energy production for local consumption to stabilize the power grid, by charging and discharging its constructed battery farms.

There are some 7,300 NTT buildings located around Japan, housing around 4 million kWh of battery storage capacity that the NTT Group uses to maintain communications in the event of power outages. The group will develop battery farm operations around Japan by utilizing these battery farms to increase the use of renewable energy and help stabilize the power grid. With these businesses, NTT Anode Energy will partner with subsidiaries ENNET and NTT Smile Energy to help overcome various challenges on the way to developing a carbon-free environment for all of society. This is achieved through a corporate PPA (Power Purchase Agreement), where customers use the electrical power generated from renewable energy power plants constructed on their sites or in remote locations.

Leading companies focus on the "Additionality" concept, where companies are encouraged to make investments in renewable energy projects as their selected source of financing, as a way of displacing the use of fossil fuels. NTT Anode Energy projects comply with the "Additionality" framework, so customers are able to use power generated from renewable energy via a corporate PPA.

NTT DOCOMO Green 5G

In September 2021, NTT DOCOMO announced "2030 Carbon Neutral Declaration," committing to the reduction of the greenhouse gas emissions arising from its business activities effectively to zero by 2030.

Fiscal 2022 performance was 1.1 million tons, an 8% reduction compared to performance in fiscal 2021, when the Carbon Neutral Declaration was made.
NTT DOCOMO Group Sustainability Report 2023

In addition to its own business activities, DOCOMO has devised the slogan "Saving Our Planet With You" to help achieve carbon neutrality throughout the whole of society, together with its customers and partner companies. DOCOMO provides Green 5G as part of its service aimed at achieving carbon neutrality.

While the power used to recharge smartphones and other mobile devices may be the first thing one thinks of when it comes to the power that these devices use, a significant amount of power is actually consumed by mobile network communications that operate base stations and exchanges.

The majority of electricity in Japan still uses fossil fuels for power generation, thus resulting in greenhouse gas emissions like CO2 that is one of the causes of global warming. DOCOMO is making the switch to power sources free of greenhouse gas emissions, by using solar-powered green base stations and renewable energy (corporate PPA¹) generated by solar panels installed specifically for DOCOMO.The ratio of actual renewable energy² out of DOCOMO's total power consumption is higher than the ratio of 5G subscribers out of the total number of subscribers, which means the Green 5G service is provided effectively free of greenhouse gas emissions.

¹PPA, an abbreviation of Power Purchase Agreement, is a scheme in which electricity users (DOCOMO) conclude contracts with power generation business operators to procure renewable energy over the long term.

²Achieves effectively 100% renewable energy, including non-fossil fuel certificates for specified renewable energy.

Greenhouse Gas Emissions Visualization Platform

To achieve carbon neutrality throughout society as a whole, the NTT Group has been providing a greenhouse gas emissions visualization platform.

In recent years, visualization of greenhouse gas emissions has been a prerequisite for companies' efforts in this area, but with so many different calculation methods available, choosing the best method has proven to be a difficult task. The most common method that companies use to calculate their emissions uses the formula "Amount of activity (quantity and value of raw materials and products)" x "Emissions intensity (fixed emissions set for that product (industry average))." The problem with this method is that the calculation results do not show any effects of reduction even when switching from older products to green products or services in order to reduce the amount of emissions.

The platform NTT provides utilizes primary data on the emissions of supplier companies and products to offer a calculation method that incorporates the results of emissions reduction efforts into the same reductions of procuring companies. This allows for efficient and effective visualization of emissions according to the company's efforts.

C-Turtle®, which is provided by NTT Data, a company implementing reduction support in addition to visualization, calculates emissions intensity by company based on the global company emissions and sales data provided by CDP, an international NGO. This is an effective way to collect and reflect data from suppliers who are already disclosing their own emissions appropriately.
NTT DATA is the only company in Japan licensed to use CDP's corporate emissions data.

On the other hand, CO2MOS, which is provided by NTT COM, is characterized by its ability to collect data directly from business partners through supplier engagement, and its ability to calculate product carbon footprints, which is in high demand especially in the manufacturing industry. We are promoting partnerships with companies in various industries for the purpose of business-to-business collaboration.
Example:Collaboration with Marubeni-Itochu Steel Inc.
Started offering "MIeCO2"

Energy network technologies

Indoor direct-current power supply technology--a field that the NTT Group excels at--is being developed for outdoor use with the aim of achieving a high-resilience, autonomous, decentralized, and coordinated energy network to link NTT buildings and consumers in the surrounding area with direct current supply, for a flexible and efficient power supply system that is also reliable when disasters strike. Research is being conducted into technology that simulates information on energy demand, generation and storage capacities in cyberspace in an integrated manner, and applies the optimal figures to control the actual grid and achieve an ideal balance between supply and demand.

Another field of study is focusing on technology for the spatial and temporal reallocation of communications traffic between multiple regions or calculations and other information processing capabilities for more efficient use of renewable energy, which is prone to fluctuations due to weather conditions.

Sustainable systems technologies

Practical applications of technology that reduces CO2 in the atmosphere or water are being developed, covering artificial photosynthesis (based on an electrochemical approach) achieved with semiconductor technology and catalyst technology, as well as technology that maximizes the capabilities of plants and algae (based on a biological approach).

The electrochemical approach utilizes materials informatics to test combinations of materials that would not have been possible to discover using traditional experimental techniques or existing concepts. The biological approach involves research using digital twins, where various cultivation environments are recreated in cyberspace to test the effects of genome editing or climate control, before applying them to the real world for additional testing.

Proactive environmental adaptation technologies

We are focusing our efforts on research topics enabling society to take a proactive stance and adapt physically to extreme weather or environmental conditions. Lighting is an example of research being conducted on weather control.

We have developed advanced technologies as a means of protecting communications facilities from lightning strikes, and we are now expanding our research in this field to develop lightning control and lightning charging technologies.

More specifically, this research involves high-precision forecasting of areas prone to lightning strikes, employing lightning control technology so that drones trigger lightning strikes, and then lightning charging technology to store the energy from that lightning. The future goal is to develop floating lightning energy absorption systems that operate autonomously using natural energy including that from lightning strikes to absorb energy before the lightning strikes the ground.

Adaptation Efforts

The NTT Group is moving forward with initiatives for the adaptation of the NTT Group and of society to play our part in adapting to climate change, and in developing and disseminating examples of adaptation.

Contributing to Adaptation to Climate Change

Disaster-resilient telecommunications networks and equipment

The NTT Group is striving to develop disaster-resilient telecommunications networks and equipment. These initiatives are disaster mitigation measures to continue providing telecommunications services in the event of a disaster as well as adaptation measures for disasters caused by climate change.

Adaptation of Society by Providing ICT

Installation of Wi-Fi and Storage Batteries in Public Phone Booths

We are installing backup power sources for Wi-Fi access points set up inside public phone booths to secure a means of communication during prolonged power outages. The initiative mitigates damages from disasters and serves as an adaptive measure against disasters caused by climate change.

Backup Power Supply Service based on Distributed Power Technology

The NTT Anode Energy Group provides renewable energy along with backup power for equipment needed during a power outage by installing distributed power systems including solar power generators and storage batteries at facilities that serve important functions at times of a disaster, such as shelters, with the aim of bolstering disaster prevention capacity of local communities. The company is also conducting verification tests to develop backup services with even higher resilience against disasters by using the direct-current power supply technology it accumulated through storage batteries installed at NTT station buildings and telecommunications businesses.