Climate Change

1) Strategy

The Group recognizes that climate-related risks and opportunities represent a critical management issue with the potential to significantly impact our financial performance in the future.
In addressing climate change issues surrounding the Group, we identify significant climate-related risks and opportunities that are expected to have a high level of impact on both the Group and its stakeholders. To mitigate each identified risk and to capture related opportunities, we will proceed with the initiatives described below.
In addition, while closely monitoring trends in international sustainability disclosure standards, we are advancing the development of our internal disclosure framework and are examining ways to enhance the sophistication of our disclosed information in the future.

Classification		Description	Key Initiatives
R i s k	Transition Risks	Increased costs due to carbon taxes	Emission reduction activities aligned with FY2030 CO₂ reduction targets Monitoring and consideration of decarbonization policies and emerging renewable energy technologies
		Rising costs from renewable energy surcharges and implementation	Improving energy efficiency Promoting energy usage monitoring and optimization
		Loss of investment or business opportunities due to insufficient disclosure	Obtaining third-party certifications Ensuring transparency through regular publication of sustainability reports
	Physical Risks	Disruption of business operations and supply chains due to increased natural disasters	Development of Business Continuity Plans (BCPs) Diversification of production sites
	Physical Risks	Increased water stress and difficulty securing water resources at factory sites	Improving water use efficiency Preserving water quality and preventing pollution
Opportunities		Growing customer demand for environmentally friendly products	Promoting R&D of energy-efficient, environmentally compliant products Expanding markets through enhanced competitiveness and brand value
Opportunities		Rising semiconductor demand driven by energy-saving technologies, EVs, servers, automation, and energy circulation	Expanding production capacity and strengthening supply chains Advancing innovation and R&D

2) Indicators and Targets (CO₂ Emissions Reduction)

As a key indicator for assessing our response to climate-related risks, our Group has set a target to reduce CO₂ emissions (Scope 1 + 2) by 35.1% by FY2030, compared to FY2017 levels.
We are actively promoting a variety of initiatives aimed at reducing emissions generated through our business activities.