Disclosure based on the TCFD
and TNFD Recommendations

TCFD (Climate Change)

[Scenario analysis]

Analyze transition risks and opportunities assuming a complete transition to a Net zero society under the 1.5/2°C scenarios

Analyze physical risks and opportunities assuming continued global temperature rises and worsening impact under the 4°C scenario

[Results of scenario-based analyses]

Transition risks

Increase of costs due to the imposition of carbon taxes

Impact estimated in FY2030
Without GHG reduction measures: Approx. 2.0 billion yen
With GHG reduction targets achieved: Approx. 1.0 billion yen
*For Scopes 1 and 2

Physical risks

Analysis of risks to plants owned by ITO EN, Group companies and their contractors and to logistics warehouses related to wind and flood damage

Impact on harvest volume and quality of raw materials for mainstay products (i.e., green tea, barley and coffee beans)
*The list of risks and key opportunities for the business is published in the TCFD and TNFD Report “Strategies”.

[Transition plan]

For Scopes 1 and 2 reduction measures, create a roadmap and KPIs centered on three pillars—switching to electric sales vehicles, promoting energy conservation, and transitioning to renewable energy—then promote initiatives

For Scope 3, promote reductions through using lighter weight contaniners and packaging, transition to sustainable materials, and strengthening engagement and partnership with suppliers
*The list of current and future measures for addressing risks is published in the TCFD and TNFD Report “Strategies”.

TNFD (Natural capital and biodiversity)

［Scoping: Selection of targets for analysis and evaluation in all businesses］

Analysis of business activities and their relationship to biodiversity conservation and natural capital on the scope of direct operations in the Tea Leaves and Beverages Business and all its value chains

Selection of green tea, which is the raw ingredient for our main products, and coffee, which is heavily impacted by climate change and biodiversity conservation, as targets for analysis and evaluation

［Locate: Discovery of points of contact with nature］

Material regions: Areas considered important for business
(Green Tea)
Newly cultivated tea-producing regions under the “Tea-Producing Region Development Project”: 7 prefectures, 9 districts, and the project's sole overseas tea plantation in Australia
Additionally, green tea processing plants, beverage manufacturing plants, packaging material suppliers, our sales offices, and logistics warehouses with significant impact
(Coffee)
In-house farms (Costa Rica) and countries with a high handling volume
Only the domestic distribution is roughly the same as for green tea above

Regions requiring special attention: Weak areas from the viewpoint of biodiversity
conservation and natural capital
（Green tea）
Tea farms, in-house factories, and contracted factories scattered throughout Japan
（Coffee）
Main coffee-producing regions, in-house factories, and contracted factories

* Disclosure of key locations for green tea operations and coffee raw ingredients in the TCFD and TNFD Report “Strategies”

[Evaluate: Diagnosis of dependencies and impacts]

Understand the high degree of dependence and impact on nature at the cultivation stage Recognize dependence on the abundance of water, climate, and pests In addition, recognize the high impact on nature of packaging materials such as plastic bottles, along with cultivation

[Assess: Evaluation of risks and opportunities]

Analyze business risks and opportunities diagnosed during “Evaluate” to identify the ideal state. Then, formulate present and long-term countermeasures to achieve the ideal state

*The list of risks and key opportunities for the business and current and future measures for addressing risks is published in the TCFD and TNFD Report “Strategies”.

［Prepare: Future initiatives and activities］

Organize future initiatives and activities to reduce risks regarding the risks and opportunities identified during “Assess.” In addition, clarify indicators and targets regarding risks and opportunities

*The TCFD and TNFD Report “Metrics and targets” contains a list of Global Core Disclosure Metrics and measurement metrics, along with targets, concerning dependence on and impacts on nature.

Going forward, we will aim to expand the scope of application and enhance the analytical content.

Matter that the TCFD (climate change) and TNFD (natural capital and biodiversity) both address

In accordance with the Global Core Disclosure Metrics advocated by TNFD, we have established measurement metrics and targets concerning dependencies and impacts.
*A list is published in the TCFD and TNFD Report “Metrics and targets”

The targets are as follows
GHG emission reduction rate*1 * Compared to FY2018
FY2030 Scopes 1 & 2：▲50% reduction in total Scope 3：▲30% reduction in total
FY2050 Net zero
Area developed through the Tea-Producing Region Development Project
FY2030 2,800 ha
Reduction in water usage in beverage manufacturing
FY2030 Consumption rate of water usage*2 ：3.0 m³/kl or less
Water source recharge rate relative to water intake at each plant*3
FY2030 100% or more
Percentage ratio of recycled materials used for all PET bottles
FY2030 100%
Foodstuff recycling rate
ITO EN：Maintain 90% or more annually

Other aspects, including effectiveness evaluation, will be continuously reviewed going forward.