*ESG Committee

The purpose of the committee is to formulate and propose management strategies (ESG management strategies) to promote corporate governance reform, fulfill social responsibilities, and encourage environmental conservation activities in a unified (co-progressive) manner. Based on the recommendations of the committee, the Company has realized a broadening and diversification of its management strategies, creating corporate value over the medium to long term through rich relationships with employees, customers, society, and the natural environment.

The committee is chaired by the CEO & President, and the majority of its members are Independent Outside Directors.

Committee meetings are held about four times a year, and the ESG Promotion Department is in charge of the secretariat.

pre-industrial levels, and to limit the increase to 1.5°C.

Using references such as the Intergovernmental Panel on Climate Change (IPCC)’s Sixth Assessment Report and the International Energy Agency’s World Energy Outlook, we began examining physical and transitional risks associated with business management based on a “scenario based on current policies”, “below 2°C scenario”, and “1.5°C scenario” around 2030. In the “1.5/2°C scenarios”, where climate change measures are progressing, policy regulations are strengthened to achieve carbon neutrality, and society as a whole proactively takes measures to combat climate change. In these scenarios, demand for environmentally-friendly products is expected to increase, opportunities for new markets are created, and production and raw material procurement costs are expected to rise due to the introduction of a carbon tax.

In the “4°C scenario”, decarbonization measures are not sufficiently promoted, increasing the possibility of being impacted by more frequent and severe natural disasters such as floods.

In assessing risks and opportunities related to climate change, we considered their relative importance to our company and stakeholders. The timing of occurrence is defined as either “medium term”, which is up to 2030, the final year of the medium-term management plan (Phase 3), or “long term”, which is from 2031 onward. The degree of impact is in terms of the frequency of occurrence and monetary impact, and is evaluated as “small”, having little to no impact, “medium”, having a partial impact on business, or “large”, being serious enough to stop or significantly shrink or expand business.