The Covid-19 pandemic has caused a serious public health and economic crisis throughout the world. With no end to the pandemic in sight, we are starting to see the effect on the electric industry. Energy providers need to continue operating even amidst a pandemic, and manage core infrastructure. At current time, the TEPCO Group has not experienced any serious power supply hindrances caused by the pandemic, and we will continue to fulfill our social responsibilities while engaging in risk management based upon future forecasts and implementing measures to mitigate the various impacts on our business activities.
Discussions by the Board of Directors (FY2020)
- Examination of long-term plans upon examining changes to economic structures brought upon by the Covid-19 pandemic
- Examination of measures to handle the Covid-19 pandemic
- Forecast power demand if there was to be the next coronavirus pandemic and reflect those forecasts in profit plans
- Discussion of the mid and long-term impacts of the Covid-19 pandemic, including revising our business model based upon changes to the structure of the energy industry and ESG-related social trends.
ICGN Statement of Shared Governance Responsibilities
The International Corporate Governance Network (ICGN) has released a statement of shared governance responsibilities for investors and corporations as “common issues for handling unprecedented issues and ushering in a new era of future governance.” TEPCO Group data corresponding to “governance priorities for companies” mentioned in the statement is as follows.
|ICGN’s Governance Priorities for Companies||The Impact on, and Response by, the TEPCO Group||Future Outlook and Living in a Post-Covid-19 World|
|1. Social Responsibility||Companies should treat the workforce equitably to ensure the health and well-being of all staff, both permanent employees and contractors.||Continue business upon ensuring the health and well-being of permanent employees and contractors through crisis management (BCP plans) and risk management that can handle novel influenza pandemics.||Promote work reforms to adapt to our new lifestyles. Root new work styles that leverage DX in order to be flexible and resilient.|
|2. Executive Remuneration||Executive pay policy should reflect the experience of the overall workforce, particularly in relation to staff redundancies, furlough programs, pay level reductions or bonus awards.||No impact
||At current time we do not expect any financial impact that would have an effect on employee jobs, pay level or executive remuneration.|
|3. Dividends||The importance of dividend payments during the Covid-19 pandemic should not be underestimated.||No impact
||Needs to be discussed in consideration of the financial situation, and TEPCO Group’s historical payments and future outlook regarding compensation and decommissioning, in tandem with the method of collection for public funds by the Nuclear Damage Compensation and Decommissioning Facilitation Corporation.|
|4. Capital Raising||ICGN supports regulatory efforts to enable capital raising, notwithstanding that the preference is for any new capital raisings to be offered to existing shareholders.||No impact
||Efficient capital raising plans shall be deliberated upon detailed assessment of the future financial impact.|
|5. Annual General Meetings||We encourage companies to continue to engage with investors, even through virtual AGM’s, to ensure questions can be properly addressed||The annual shareholders’ meeting was held on June 29, FY2021. Shareholders were encouraged to vote via mail or the Internet.||We are deliberating ways to engage with shareholders that fits with our “new lifestyles.” In FY2022 and onward we will continue to deliberate methods for meeting|
|6. Corporate Reporting||Companies are encouraged to publicly disclose how they are dealing with the Covid-19 pandemic, preferably in the annual report.||Details are disclosed in this report.||The impacts of the Covid-19 pandemic on our business will be conveyed as suitable not only through annual reports but also our website.|
Responsibilities as an Energy Provider
On April 7, 2020, a “declaration of a state of emergency due to the Covid-19 pandemic” was issued in accordance with Article 32.1 of the Act on Special Measures for Combating Novel Influenza. On the same day, the Basic Policy on Novel Coronavirus Countermeasures was revised, and infrastructure operators, such as electric and gas companies, etc., were deemed “operators for which the continuation of business is required during the declaration of a state of emergency.” On April 8, the government requested that designated public corporations and designated local public corporations, which applies to electricity and gas operators, make every effort to ensure safety in the field and maintain a stable supply of electricity and gas.
In accordance with the TEPCO Group social mission of maintaining infrastructure needed for the stable supply of energy, we are not only complying with the government’s requests, but also taking meticulous action through our business activities to address mid and long-term issues faced by our stakeholders.
Requests Made by the Government
- Along with the sure and steady implementation of business plans, operators shall make every effort to ensure safety in the field and maintain a stable supply of electricity and gas in the event that workers at important facilities, such as power stations, central power supply command centers and gas manufacturing facilities, etc., test positive for the virus through the thorough implementation of business continuity plans (BCP). These BCP shall include ① Meticulous personnel plans that include methods for securing substitute personnel; ② Responsive actions that include the use of substitute facilities; and, ③ Measures for procuring required materials and equipment in a stable manner, such as using alternate vendors in anticipation of long-term confusion in the supply chain.
- Operators needed to ensure safety in the field and maintain a stable supply of electricity and gas, such as contractors, equipment maintenance and inspection operators and security companies, etc., are requested to continue operations as usual.
- It is requested that steps be taken to revise or postpone inspections or other construction work in accordance with law to an extent that does not hinder safety or stable supply.
- Ministry of Economy, Trade and Industry shall be immediately notified if employees test positive for the virus and measures, such as public disclosure of such information, etc., shall be implemented.
Stakeholder Engagement and Issues Pertaining to Stakeholders
|All Offices||Retail||Financial Departments||Corporate||Office Siting Locations|
|Short-term||Issues||Health management and measures for preventing infection in consideration of the fact that all employees are not able to work from home.||Difficulties with paying electricity and gas bills||Concerns over performance forecasts||Requests to ensure safety in the field and maintain a stable supply of energy||Preventing spread of the virus Requests to cooperate with regional measures|
|Response||Handling in accordance with the BCP (redesign shifts to adapt to work conditions, including the creation of work environments)||Special measures, such as payment extensions (to be offered as needed in light of the latest circumstances)||Disclosure of financial impact of suitable times
Authorization of midterm business plan (August 2021)
|As a result of handling the pandemic based on the BCP, Covid-19 has not hindered supply.||Initiatives to reduce the risk of infection by limiting domestic/overseas business trips by employees and travel to and from the Tokyo metropolitan area.|
|Long-term||Issues||Adapting to our “new lifestyles”||Prolonged economic blow||Investment decisions based on mid/long-term outlook||Additional requests made to infrastructure operators in conjunction with changing circumstances||Requests made to infrastructure operators in conjunction with changing circumstances|
||Disclose information on actual performance and performance forecasts through financial result disclosures, integrated reports and engagement||Strengthen initiatives to improve power infrastructure resilience in order to better deal with not only the pandemic but also natural disasters.||Implement countermeasures as much as possible based on the situations in each region.|