Information Disclosure Based on TCFD Recommendations

b.Strategy

We evaluated the importance of climate change risks and opportunities from the perspectives of likelihood and magnitude of impact. For high-priority risks that could be quantified, we calculated the financial impact on our Group by the year 2030 (short-term), 2050 (medium-term), and 2100 (long-term).
Our Group is investigating and implementing countermeasures to mitigate particularly important risks and seize opportunities, confirming that we have sufficient resilience against both 1.5°C/2°C and 4°C scenarios.

• Importance Evaluation Method

  We determine importance using a matrix that evaluates Likelihood (based on external reports, past impacts, and our plans/policies) against Magnitude of Impact (for risks: severity of impact, affected departments, scope of impact; for opportunities: market size, production capacity, competitive advantage).

  

• Scenario Analysis and Response Measures

  Key Risks & Opportunities			Business Impact	Business Division ※1	Importance※2		Timing of Impact Occurrence	Relationship with Material Issues※3	Key Response Measures
  					1.5℃/2℃ Scenario	4℃ Scenario
  Transition Risks	Policy & Regulatory Risks	Expansion of carbon taxes/levies and emissions trading systems	Increased operational costs in logistics business (outsourcing fees to carriers, emissions trading costs).	Logistics	Medium-High ★		Short-Medium Term	(1)	・Improving logistics efficiency ・Promoting CO₂ reduction activities (introducing EV vehicles)
  		Stricter regulations on adoption of renewable energy and Zero Energy Building (ZEB) conversion	Costs will be incurred for installing renewable energy generation facilities and ZEB compliance for company buildings, warehouses, and real estate.	All Business Divisions	Medium-High			(1)	・Introducing renewable energy (installing solar panels) ・Actively utilizing renewable energy in real estate
  		Stricter regulations to increase the use of small electric trucks	Business opportunities will be lost as customers demand adoption of environmentally friendly vehicles (electric vehicles (EV), hybrid (HV) trucks, hydrogen vehicles, etc.).	Logistics	Medium-High			(1)	・Introducing environmentally friendly vehicles (EVs)
  	Market Risks	Growing environmental awareness among customers and consumers regarding climate change	Business opportunities will be lost as customers’ procurement standards and bid participation requirements become stricter.	All Business Divisions	High			(1) (5)	・Promoting environmentally conscious business activities
  Physical Risks	Acute Risks	Increased frequency and severity of weather-related disasters such as typhoons, heavy rains, and floods	Production delays at client companies (shippers) will lead to decreased storage and warehousing operations, resulting in reduced revenue. Additionally, production delays will create compressed work schedules, increasing labor costs.	Logistics		Medium-High	Medium-Long Term	(2)	・Implementing labor-saving operations
  			There will be logistics business disruptions due to transportation network failures and compensation payment obligations. We will incur additional fuel and labor costs due to delivery route changes.	Logistics		High		(2)	・Implementing labor-saving operations
  			At both company-owned and contracted logistics warehouses, disruption of utilities (electricity, water, gas) and lost sales opportunities will lead to declines in revenue.	Logistics Food		High ★		(6)	・Promoting disaster prevention/mitigation and BCP-related measures
  			Damage to upstream supply chain including rice paddies will affect rice procurement, reducing product procurement and sales volumes, resulting in decreased revenue. Logistics costs will also go up due to changing procurement sources.	Food		Medium-High		(5)	・Expanding procurement areas and diversifying procurement routes
  	Acute Risks	Increased frequency and severity of weather-related disasters such as typhoons, heavy rains, and floods	Increased flood risk for company-owned properties will lead to higher insurance premiums and renovation costs for resilience improvements. When flooding occurs, revenue loss from business interruption and repair costs will arise.	All Business Divisions		High ★	Medium-Long Term	(6)	・Relocating logistics facilities ・Promoting disaster prevention/mitigation and BCP-related measures (utilizing hazard maps, installing flood barriers)
  			Damage to downstream supply chain (client stores) will lead to lost sales opportunities and a decline in revenue.	Food		High		(6)	・Promoting BCP measures across supply chain companies
  	Chronic Risks	Rising temperatures	Changes in suitable production areas and quality decline for agricultural, marine, and livestock products used as raw materials will increase procurement costs and reduce profit margins.	Food		High		(4) (5)	・Developing new varieties and products based on climate change risks and changing consumer needs
  			Equipment failures due to rising temperatures in rice mill factory and other facilities will lead to repair costs. Revenue losses will occur during business interruption periods as well.	Food		High		(5)	・Proper equipment maintenance ・Maintenance and renovation
  			Increased risk of heat stroke and tropical infectious diseases will cause employee health issues and staffing shortages, reducing revenue. Decreased dining-out opportunities will also reduce revenue.	All Business Divisions		Medium-High		(6)	・Implementing labor-saving logistics operations ・Thorough health management, promoting telework
  		Rising sea level	Logistics operations at high flood-risk ports will be disrupted, reducing revenue.	Logistics Food		High ★		(2) (6)	・Relocating logistics facilities ・Promoting disaster prevention/mitigation and BCP-related measures (utilizing hazard maps, installing flood barriers)
  Opportunities	Market	Stricter regulations on reuse and recycling	Expanding demand for reverse logistics will create market entry opportunities, leading to the acquisition of new customers and increasing revenue.	Logistics	Medium-High		Short-Medium Term	(1)	・Advancing the 3Rs based on reverse logistics
  	Products and Services	Customer behavioral changes to reduce greenhouse gas (GHG) emissions	Introducing low-GHG vehicles and equipment will attract customers committed to reducing GHG emissions, increasing revenue.	Logistics	Medium-High			(2)	・Selecting focus areas based on energy mix
  			Developing low-GHG products will attract customers committed to reducing GHG emissions, increasing revenue.	Food	High			(1) (4) (5)	・Developing new varieties and products based on climate change risks and changing consumer needs
  			PR activities highlighting climate change initiatives will improve investor evaluations and increase investment.	All Business Divisions	Medium-High			(6)	・Systematically implementing climate change risk response measures and actively disclosing them (TCFD disclosure, CDP Climate Change response)
  		Rising temperatures	Developing heat-resistant varieties and strengthening partnerships with future rice production areas will enable stable rice procurement, increasing revenue.	Food		High	Medium-Long Term	(2) (4) (5)	・Developing new varieties and products based on climate change risks and changing consumer needs
  			Quick response to fishing ground changes due to climate change will increase sales opportunities and revenue.	Food		High		(2) (6)	・Deepening partnerships with suppliers to understand environmental changes
  	Products and Services	Increased frequency and severity of typhoons, heavy rains, and floods	Growing demand for disaster-resilient optimal transportation systems will increase revenue when accommodated by service provision.	Logistics		Medium-High	Medium-Long Term	(2)	・Collaborating with shippers and supply chain players to streamline and advance logistics
  	Resilience		Relocating company-owned data centers and logistics bases to low disaster-risk areas will ensure business continuity and increase revenue.	Information, Logistics		Medium-High		(2) (6)	・Relocating logistics facilities and data centers
  			Installing renewable energy generation facilities for power outage response will reduce electricity costs and generate power sales revenue.	All Business Divisions		Medium-High		(2) (6)	・Installing renewable energy facilities (solar power generation)
  			Securing multiple suppliers, adjusting lead times, and optimizing suppliers to address procurement instability will ensure business continuity and increase competitive advantage, leading to more business opportunities.	Food		High		(2) (6)	・Strengthening supply chain resilience

  1. ※1　All Business Divisions indicates company-wide impact
  2. ※2　★indicates risks with calculated financial impact
  3. ※3　Numbers correspond to the following material issues in the Management Basic Policy:
     (1) Promoting environmentally conscious business activities, (2) Improving product and service quality, (3) Promoting diversity and engagement of human resources, (4) Developing local communities, production areas, and agriculture, (5) Promoting sustainable rice procurement, (6) Deepening corporate governance

• Scenario Group Definitions

  For transition risks, we targeted additional costs from carbon tax introduction; for physical risks, we targeted additional costs and damage from facility flooding during floods and storm surges. Our scenario analysis assumed 1.5°C/2°C and 4°C temperature increases based on climate change-related information from the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA).

  Scenario Groups Used

  Temperature Increase Band (Year 2100)	IEA WEO	IPCC RCP	IPCC RCP
  4°C increase		RCP8.5	SSP5 (Fossil-fueled development)-8.5
  2°C increase	APS (All net-zero declaration countries achieve goals)	RCP2.6	SSP1 (Sustainability)-2.6
  1.5°C increase	NZE (Achieving net zero by 2050)		SSP1 (Sustainability)-1.9
  Financial Impact Calculations Used	Carbon tax introduction	Floods, rice	Storm surge

  Global Average Temperature Change from 1850-1900 Baseline

  

  Source: Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report (AR6) Working Group I Report Climate Change 2021

• Impact Assessment

  For high-priority, quantifiable risks, we calculated additional costs from carbon tax introduction as a transition risk, and additional costs/damage from facility flooding during floods and storm surges as physical risks.

  1. (1) Transition Risks

     Based on International Energy Agency (IEA) information, we calculated additional costs from taxes on greenhouse gas emissions from energy consumption at domestic business sites (including consolidated entities). Under the 1.5°C scenario, additional costs increase significantly, with impacts in 2050 estimated at approximately ¥480 million, representing up to about 15% of FY2023 ordinary income.

     Risk	Scenario	Financial Impact (Amount (millions of yen))		Financial Impact (vs. Ordinary Income (%))		Financial Impact (vs. Sales (%))
     		2030 (Short-term)	2050 (Medium-term)	2030 (Short-term)	2050 (Medium-term)	2030 (Short-term)	2050 (Medium-term)
     Carbon tax introduction	1.5°C increase	267.79	478.19	8.41	15.02	0.42	0.74
     	2°C increase	258.22	382.55	8.11	12.01	0.40	0.59

     • ● Calculation Method
       Current CO2 emissions x Future carbon tax price
     • ● Future Carbon Tax Price Scenarios Used
       We have adopted the following scenarios from the World Energy Outlook 2023 published by the IEA (International Energy Agency):
       ・1.5°C increase: NZE Scenario (Net Zero Emissions by 2050 Scenario)
       ・2°C increase: APS (Announced Pledges Scenario)

  2. (2) Physical Risks

     Using future projection data from the Intergovernmental Panel on Climate Change (IPCC), we calculated the additional costs of securing alternative offices needed for business continuity, lost sales and rental income from business interruptions, and asset damage from flooding if our domestic offices, warehouses, and real estate properties suffer flood or storm surge damage. The 4°C increase scenario showed the greatest financial impact, with impacts in 2100 estimated at approximately ¥3.5 billion, representing about 108% of ordinary income.

     Risk	Scenario	Financial Impact (Amount (millions of yen))			Financial Impact (vs. Ordinary Income (%))			Financial Impact (vs. Sales (%))
     		2030 (Short- term)	2050 (Medium- term)	2100 (Long- term)	2030 (Short- term)	2050 (Medium- term)	2100 (Long- term)	2030 (Short- term)	2050 (Medium- term)	2100 (Long- term)
     Flooding at facilities from floods and storm surges	1.5°C increase (Storm Surges)	0	1,067	2,069	0.00	33.52	51.04	0.00	1.65	2.52
     	2°C increase (Floods/Storm Surges)	37	1,482	2,265	1.16	46.53	71.12	0.06	2.30	3.51
     	4°C increase (Floods/Storm Surges)	368	2,069	3,450	11.56	64.97	108.36	0.57	3.21	5.35

     • ● Calculation Method
       Calculating additional costs and damage from natural disasters (future - present)
       Additional costs and damage are calculated by determining flood depths at each facility during floods and storm surges using publicly available data, then estimating office replacement costs, sales losses, rental income losses, and asset damage for each location following national calculation methods based on actual flood damage records.
     • ● Future Flood Depth Scenarios Used
       We have adopted the following scenarios from the IPCC (Intergovernmental Panel on Climate Change):
       ・Floods: RCP scenarios from AR5 (Fifth Assessment Report) (equivalent to 2°C and 4°C increases)
       ・Storm surges: SSP scenarios from AR6 (Sixth Assessment Report) (equivalent to 1.5°C, 2°C, and 4°C increases)