Disclosures according to the Recommendations of TCFD

Amid the increasingly severe impacts of climate change around the world, the Financial Stability Board established the TCFD in December 2015 in response to a request from the G20. In June 2017, the TCFD issued the TCFD recommendations, which require companies and others to disclose information on the risks and opportunities that climate change may have on their company based on four themes.
In December 2021, KOITO has signed up to support the TCFD and is actively promoting activities to reduce CO₂ emissions and disclose related information in order to materialize carbon neutrality in FY 2050.

Items Recommended for Disclosure by TCFD and KOITO's compliance

Recommended Disclosures		Compliance
Governance	a)The board's oversight of climate-related risks and opportunities	The KOITO group considers climate change as one of its critical management issues and has designated "mitigation of global warming" as one of its key materiality (priority) issues. Through its business operations, the KOITO group is committed to reducing CO₂ emissions. These climate change-related issues are comprehensively addressed by its CN Committee, chaired by the Executive Vice President and attended by the Chairman, President, and relevant board members as well as executive officers, under the supervision of the Board of Directors, ensuring company-wide engagement in climate actions.
Governance	b)Management's role in assessing and managing climate-related risks and opportunities
Strategy	a)The climate-related risks and opportunities the organization has identified over the short, medium, and long term	Progression of climate change may affect the KOITO group's business activities in various ways, including an increase in typhoons/floods. While there are risks in the process of mitigating climate change, such as increased response costs, the KOITO group believes that it could also be a business opportunity to develop/expand sales of our low emission products. In light of the above considerations, the KOITO Group has identified, based on the TCFD recommendations, climate change-related risks and opportunities that can currently be reflected in our financial statements. Additional items will be incorporated into its financial statements once the scope of its climate change scenarios is revised or expanded, and calculations of impact amount become feasible in response to evolving factors. In analyzing the scenarios, the KOITO group referred to the "RCP8.5" (the 4°C scenario) of the Intergovernmental Panel on Climate Change (IPCC) and the "NZE" (the 1.5°C scenario) of the International Energy Agency (IEA). 【Items impacting the KOITO group】 Risks ･Increasing costs for CO₂ emissions (e.g. carbon tax/investments for carbon neutrality/renewable energy introduction costs, etc.) ･Increase in raw material costs (e.g. price shift of CO₂ reduction costs from suppliers, etc.) Opportunity ･Development and sales expansion of low emission products (e.g. revenue increase due to progress in the shift to LED headlamps beyond the plan, etc.)
	b)The impact of climate-related risks and opportunities on the organization's businesses, strategy, and financial planning
	c)The resilience of the organization's strategy, taking into consideration different climate-related scenarios, including a 2℃ or lower scenario
Risk Management	a)The organization's processes for identifying and assessing climate-related risks	The KOITO group primarily identifies, evaluates and manages climate change-related risks through the Sustainability Promotion Office, which serves as the secretariat department for the CN Committee. It monitors the progress of activities across various organizations and reports to the CN Committee and the Board of Directors as necessary.
	b)The organization's processes for managing climate-related risks
	c)How processes for identifying, assessing, and managing climate-related risks are integrated into the organization's overall risk management
Metrics and Targets	a)The metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process	In order to achieve carbon neutrality by 2050, the KOITO group promotes CO₂ reduction activities on a global scale and strives to achieve the reduction targets of each country, with the aim of mitigating global warming, which it has set as one of its materiality (priority) issues. The interim reduction target for FY 2030 is a 50% reduction compared to FY 2015. 【Monitoring metrics】･Scope 1 (direct) and Scope 2 (indirect) CO₂ emissions 【Target for FY 2030】･CO₂ emissions (Scope 1+2): 50% decrease from FY 2015 (decrease of 271,500 tons) 【Result for FY 2023】･CO₂ emissions (Scope 1+2): 326,700 tons
	b)Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks
	c)The targets used by the organization to manage climate-related risks and opportunities and performance against targets