For the EnvironmentResponse to Climate Change and TCFD Endorsement

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Initiatives to Address Climate Change

Under Tokyo Century Group’s management philosophy, the Group “will work alongside customers in pursuit of their growth as a highly specialized and unique financial services company and will contribute to the creation of an environmentally sound, sustainable economy and society.” We have recognized that addressing climate change is important for creating an environmentally sound, sustainable economy and society, identified materiality (key issues) linked to the SDGs, and have been working on these issues.

Tokyo Century announced its endorsement of the recommendations of the Task Force on Climate-related Financial Disclosures* (TCFD) in April 2021. In addition, based on a risk materiality assessment related to climate change, we identified climate change risks and opportunities under multiple scenarios and conducted qualitative and quantitative business impact assessments for the environment and energy businesses (solar power generation) (May 2021) and the aviation business (aircraft leasing) (April 2022) in line with TCFD recommendations.

Going forward, we will further consider how to address risks and seize opportunities as well as expand businesses subject to scenario analysis while also improving the accuracy of the analysis. In addition, we will contribute to the realization of a decarbonized society by promoting sustainability management through our business activities, including renewable energy businesses such as solar power generation.

* Task Force on Climate-related Financial Disclosures(TCFD)
Established by the Financial Stability Board (FSB) at the request of the G20 to review how climate-related information should be disclosed and how the financial sector accounts for it. In June 2017, it published recommendations on corporate disclosure of climate change initiatives.

Governance

In the governance system of Tokyo Century Group, the Sustainability Committee, responsible for planning, promoting, and overseeing Group-wide sustainability activities, deliberates the sustainability management strategy on climate risks and opportunities. Key issues are submitted to and discussed at the Management Meeting and the Board of Directors Meeting.

The Sustainability Committee is chaired by the president of the Corporate Planning Unit and composed of relevant directors and the presidents of each unit. The Sustainability Management Division in the Corporate Planning Unit serves as the secretariat, and the committee meets in principle twice a year. It works under the supervision of the Board of Directors to strengthen the PDCA cycle for sustainability management.

The following link provides more information on the structure for promoting sustainability management.

Strategy

Tokyo Century Group uses a materiality map to verify the importance of issues from the perspectives of Tokyo Century and its stakeholders and determines the five areas of materiality (key issues), which include climate change measures, that correspond with the SDGs. The Group then pursues sustainability management to promote businesses that contributes to the sustainable development of society in collaboration with partner companies.

Materiality (Key Issues) and the SDGs

Materiality (Key Issues) and the SDGs

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The Tokyo Century Group recognizes climate change as one of the most important social issues facing global society; therefore, it is a key management issue in its materiality as a “contribution to a decarbonized society.” As a result of the risk materiality assessment of risks and opportunities by industry and by business segment, we conducted scenario analyses for the environment and energy businesses (solar power generation) (May 2021) and the aviation business (aircraft leasing) (April 2022).
Regarding the environment and energy businesses (solar power generation), we recognize the physical risks of urgency due to abnormal weather such as typhoons and heavy rain, and the transition risks such as introducing a carbon tax and strengthening laws and regulations. With regard to the aviation business (aircraft leasing), we recognize the physical risks that will be incurred due to the impact of severe extreme weather events and the transition risks such as carbon emission targets in each country and regulations unique to the airline industry.
We conduct the scenario analysis in accordance with TCFD recommendations following the four processes below.

Materiality (Key Issues) and the SDGs

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[Scenario Analysis Details]

Please refer to the link below for details by business subject to scenario analysis.

Risk Management

Tokyo Century Group has established the Basic Risk Management Policy and set up its Comprehensive Risk Management Committee to identify and evaluate Group-wide risks that may significantly impact management and to appropriately address both qualitatively and quantitatively as necessary to implement comprehensive risk management.

Regarding climate change risk as an operational risk in a non-financial risk category, we have a system in place to report monitoring results to the Board of Directors twice a year through the Comprehensive Risk Management Committee as a risk indicator for non-financial information.

The following links provide more information on our governance system, risk management, and environmental management system.

Metrics and Targets

Based on its Basic Environmental Policy, Tokyo Century Group is working to reduce its environmental load by adopting an ISO 14001-certified environmental management system (EMS).

We have set targets for contributing to environmental well-being through our business activities, including office activities and renewable energy business, and continuously manage these activities by calculating annual CO2 emissions. In fiscal 2020, electricity consumption* was 11,746,000 kWh, CO2 emissions were approximately 5,521 t-CO2, annual power generation through the solar power generation business (Kyocera TCL Solar LLC and 2 other companies) was 414,000 MWh, and contribution to reductions in CO2 emissions was 173,000 t-CO2.
*The target companies were those within the scope of the EMS plus domestic core affiliates.

The following link provides additional environmental performance information related to the metrics and targets.

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