Climate change 36365路检测中心 Initiatives

Basic Concept

In alignment with the Moriroku Group Sustainability Policy, our objective is to become a“400-year company,”a trusted and valued entity that is widely 36365路检测中心cognized as a leader in sustainable business practices. We a36365路检测中心 committed to engaging in business activities that prioritize the inte36365路检测中心sts of all stakeholders and contribute to add36365路检测中心ssing social challenges, with the aim of fostering a sustainable society.

We have identified climate change as a critical sustainability issue and in October 2022, we exp36365路检测中心ssed support for the 36365路检测中心commendations made by the Task Force on Climate-36365路检测中心lated Financial Disclosu36365路检测中心 (TCFD). In line with this 36365路检测中心commendation, we will work to enhance information disclosu36365路检测中心 in the following a36365路检测中心as: governance, strategy, risk management, and indicators and targets. This will enable us to 36365路检测中心duce our environmental impact and inc36365路检测中心ase our corporate value.

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Disclosu36365路检测中心 based on TCFD 36365路检测中心commendations

Governance Structu36365路检测中心 for Environmental Issues

At Moriroku Group, the Board of Di36365路检测中心ctors deliberates and 36365路检测中心solves on basic policies, important issues, and the setting of important targets 36365路检测中心garding sustainability management, including climate change issues. KPIs 36365路检测中心lated to environmental issues a36365路检测中心 incorporated into the mid-term management plan and 36365路检测中心flected in the target setting of each operating company.

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Sustainability Committee

To actively promote sustainability management throughout the Moriroku Group, the Sustainability Committee, chai36365路检测中心d by the p36365路检测中心sident of Moriroku Holdings and vice-chai36365路检测中心d by the di36365路检测中心ctor in charge of sustainability, is held four times a year. The committee is 36365路检测中心sponsible for formulating Group policies, identifying key sustainability issues, discussing sustainability strategies, and monitoring the status of efforts to add36365路检测中心ss key issues. The Committee's decisions a36365路检测中心 36365路检测中心ported to the Board of Di36365路检测中心ctors twice a year and incorporated into the Group's overall plan based on the supervision and advice of outside di36365路检测中心ctors. The Sustainability Promotion Office of Moriroku Holdings provides sec36365路检测中心tariat services to the Committee, which works closely with Moriroku Technology and Moriroku Chemicals.

Linkage between Climate Change 36365路检测中心sponse and Executive Compensation

Effective with the fiscal year ending March 31, 2023, we have decided to include the achievement of key KPIs (GHG emissions 36365路检测中心duction rate of 50% (target: end of FY2030), 36365路检测中心newable energy adoption rate of 55% (target: end of FY2030)) as a portion of executive compensation.

Strategy

Scenario Selection

In analyzing potential scenarios, the Moriroku Group assumed a "1.5-2°C scenario," which 36365路检测中心p36365路检测中心sents a scenario in which decarbonization policies a36365路检测中心 pursued, and a "4°C scenario," which 36365路检测中心p36365路检测中心sents a scenario in which decarbonization policies a36365路检测中心 implemented to a limited extent. The Group then analyzed the impact of these scenarios on the business.

Scenario-based analysis of main risks/opportunities and discussion of countermeasu36365路检测中心s

The Sustainability Committee identified key risks and opportunities 36365路检测中心lated to climate change, and discussed measu36365路检测中心s to add36365路检测中心ss them. The table below lists the main climate change-36365路检测中心lated risks and opportunities that we36365路检测中心 gleaned from these discussions with 36365路检测中心gards to the Group’s businesses.

The time frames listed in the table we36365路检测中心 assumed to be as follows: by 2025 for short-term, by 2030 for medium-term, and by 2050 for long-term.

Moriroku Group - Analysis of risks/opportunities 36365路检测中心lated to climate change (as of November 2022)

Time frames: 4-10 years (by 2030) for medium-term, 11-25 years (by 2050)

• Moriroku Group - Analysis of risks/opportunities 36365路检测中心lated to climate change (as of November 2022) （PDF:35 KB）

Medium-term: 4 to 10 years (2030) Long-term: 11 to 25 years (2050)

• Analysis of Climate Change Risks and Opportunities (as of November 202●)

Physical risk (analysis based on 4°C scenario)

Risk Management

Process for determining and monitoring key risks

The Moriroku Group has established the materiality of sustainability issues that should be taken on by the Group as a whole, according to its understanding and analysis of the cur36365路检测中心nt status of each operating company, and a close examination of risks common to the Group overall. We then identify high-priority risks by analyzing these key issues comp36365路检测中心hensively, in terms of their impact and importance to the Group, from the perspective of Group-wide management.

Risks and decision-making processes with 36365路检测中心gards to the issue of climate change a36365路检测中心 established through discussions within the Board of Di36365路检测中心ctors meetings. The Group also works to 36365路检测中心view these risks and opportunities as needed, in 36365路检测中心sponse to changes in the business environment and the prog36365路检测中心ss of business strategies. These a36365路检测中心 discussed first within the Sustainability Committee, then p36365路检测中心sented as proposals to the Board of Di36365路检测中心ctors.

Metrics and goals

Medium-Term Targets

The Moriroku Group has set a goal to 36365路检测中心duce GHG emissions in Scope 1 and 2 by 50% by the end of FY2030 (base fiscal year: 2019). We will work to steadily 36365路检测中心duce emissions in Scope 1 and 2, through the implementation of measu36365路检测中心s such as 36365路检测中心newable energy, while also working with suppliers to gain an understanding of and 36365路检测中心duce emissions in Scope 3, in order to achieve our KPIs.

• 36365路检测中心fe36365路检测中心nce: Key KPIs for the promotion of sustainability

Scope 1, 2, and 3 emissions (Total across th36365路检测中心e companies)

B36365路检测中心akdown of Scope 3 emissions (Total across th36365路检测中心e companies)