Responding to the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)

The Yamato Group recognizes that risks related to the environment, particularly climate change, may have long-term effects on the business activities of the Company and its stakeholders and that it is thus important to set different periods appropriately and examine risks for each period separately. The Group examines transition risks caused by the introduction of policy regulations by the government and changes in market needs, among other factors, and physical risks caused by extreme weather resulting from climate change and other factors for the period from FY2021 to FY2023, the implementation period of the Medium-Term Environmental Plan 2023, for the period up to FY2030, the year for which we have set our medium-term target, referring to the greenhouse gas (GHG) emissions reduction target set by the Japanese government, and for the period up to FY2050, the year for which we have set our long-term target. The Group will reflect the risks and opportunities that it examines in its strategies.
The Group has evaluated physical risks as short-term risks, including suspension of business caused by more frequent and severe extreme weather events and an increase in repair costs arising from the damage to, and loss of, facilities and equipment. As for medium to long-term risks, the Group has evaluated the transition risk, that is, increases in expenses caused by changes to policies and laws resulting in a full-scale introduction of a carbon tax. With regard to opportunities, the Group has concluded that climate change has great potential for positive financial effects, such as a decrease in expenses due to energy conversion and an increase in efficiency to reduce carbon emissions, and an increase in revenue attributable to environmentally conscious customers' support for active actions to mitigate or adapt to climate change.

The Yamato Group has approximately 55,000 vehicles and about 210,000 employees nationwide. Any carbon tax on GHG emissions from the Group's vehicles and facilities may have a significant impact on its finances. Failure to respond to requests for reducing carbon emissions and GHG emissions may lead to a decline in revenue due to changes in customer needs against the backdrop of increasing environmental awareness, which may have a significant impact on the Group's finances. For this reason, the Group thinks that it needs to take steps to achieve low-carbon transport to reduce GHG emissions. To this end, we will take measures including introducing 20,000 EVs), installing 810 solar power systems, designing operational methods that do not use dry ice, and replacing the electricity used with electricity derived from renewable energy sources by FY2030. To address physical risks, the Group makes good use of hazard maps when opening sales offices and updates the BCP manual regularly to avoid a suspension of business as well as damage to, or the loss of, facilities and equipment caused by more frequent and severe extreme weather events.
The Group will continue to conduct impact evaluations of other risks while creating other opportunities.

The Yamato Group refers to energy-related metrics, including carbon prices forecast in the IEA's World Energy Outlook, as metrics used in managing its response to climate change, and particularly in managing transition risks.
To manage physical risks, the Group identifies changes in risk trends, referring to materials related to climate change, including information on the frequency of floods, published by the Ministry of Land, Infrastructure, Transport and Tourism, the Ministry of Education, Culture, Sports, Science and Technology, and the Japan Meteorological Agency.