Disclosure on TCFD Recommendation

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• Endorsing the TCFD Recommendations

Endorsing the TCFD Recommendations

With the recognition that addressing climate change is one of the most important management issues, the Group has announced its endorsement of the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) and discloses climate-related information based on the recommendations. We also participate in the GX Future Consortium, a framework in which the public and private sectors work together to promote decarbonization initiatives. In light of social expectations and regulatory trends regarding climate change, we are taking action and promoting initiatives to realize a decarbonized society.

Governance

To promote Group-wide initiatives relating to sustainability matters, including climate change and human capital, the Group has established a Sustainability Committee, which is chaired by the President and comprises internal Directors and Corporate Executives as members. The committee formulates policies, targets, and action plans for sustainability for the Group; manages and evaluates our progress toward the targets; and discusses response measures.
In principle, the Sustainability Committee has two regular meetings each year and holds extraordinary meetings as needed. In FY2025, the committee held two regular meetings and one extraordinary meeting, at which sustainability-related policies, CO₂ emissions reductions, human rights due diligence, employee engagement, and other matters were discussed or reported.
Matters discussed and important matters reported at the Sustainability Committee are reported or recommended to the Board of Directors. The Board of Directors keeps track of policies, targets, measures, and progress relating to sustainability matters and supervises sustainability initiatives by reflecting instructions and advice based on each Director's expertise in the respective measures.

Risk Management

The Group has established a system centered on the Sustainability Committee to identify, assess, and manage risks and opportunities relating to sustainability matters, including climate change and human capital.
In identifying risks and opportunities, we take into account reports from relevant departments, the identification of operational risks by each department, the consideration of important matters at Management Meetings and other meetings, and changes in laws and regulations, the market environment, and social expectations.
We assess the materiality of identified risks and opportunities by comprehensively considering their degree of impact on the Group's management policies, business activities, financial position, operating results, and cash flows; the likelihood of occurrence; the time horizons over which impacts are expected to arise; and the status of existing responses.
For matters identified as highly material through the above assessment, the Sustainability Committee discusses or confirms response policies, targets, and action plans, as well as the status of initiatives by relevant departments, and reviews response policies and measures as necessary.
For climate change, we use a 1.5°C scenario with reference to the IEA's Net Zero Emissions by 2050 Scenario (NZE) and a 4°C scenario with reference to the IPCC's Representative Concentration Pathway 8.5 (RCP8.5) to identify transition risks associated with changes in policies, laws and regulations, technologies, and markets; physical risks associated with extreme weather events, rising average temperatures, and other factors; and opportunities arising from expanding demand for electrification and renewable energy, among other factors. We also consider response measures for the identified risks and opportunities based on their degree of impact and time horizons.

Strategies

The Group supports social infrastructure through the development, mining, processing, and stable supply of resources. At the same time, because our operations involve energy use and CO₂ emissions from certain manufacturing processes, we recognize that addressing climate change is one of the most important management issues. Based on this recognition, we promote initiatives to realize a decarbonized society and aim to engage in sustainable business activities and improve our corporate value over the medium to long term.
Regarding the impact of climate change on each of the Group's businesses, we identify transition risks, physical risks, and opportunities through the scenario analysis described in “Risk Management” above and consider response measures based on their degree of impact and time horizons. We will continue to review the scenario analysis as necessary in light of changes in policies, regulations, technologies, the market environment, and other factors, and will promote initiatives to reduce risks and seize opportunities.

TCFD Scenario Analysis

Indicators and Targets

The Group is making efforts to reduce CO₂ emissions by steadily transitioning to implementing measures to combat climate change, including reducing fuel and electricity consumption by streamlining and switching to energy-saving facilities and introducing renewable energy-based power generation facilities and switching to renewable electricity for self-consumption. Specifically, we aim for a 38% or higher reduction ^*2 of energy-derived CO₂ emissions from domestic Group companies' consumption of fossil fuels and electricity out of their total CO₂ emissions—the sum of their direct (Scope 1) emissions and indirect (Scope 2) emissions from their use of electricity and other energy purchased from other companies—from the FY2013 level by FY2030, identical to the Japanese government's target for the corresponding CO₂ emissions category.^*1 Notably, we intend to further reduce non-energy-derived CO₂ emissions from limestone calcination by working on carbon offsets through CO₂ absorption in company-owned forests and introducing new technology for CCUS and the like once it is ready for real-world implementation.
We also plan to introduce new technologies and use carbon offsets and other means of achieving carbon neutrality to meet the long-term goal of reducing direct and indirect (Scope 1 and Scope 2) emissions of the Group's non-energy-derived CO₂ by FY2050.

1. *1 The Japanese government's FY2030 target for the corresponding CO₂ emissions category:
   The rate of reduction for the corresponding CO₂ emissions category set out in the Comprehensive Plan of the Government under the Act on Promotion of Global Warming Countermeasures (approved by the Cabinet on October 22, 2021)
2. *2 38% or higher reduction from the FY2013 level:
   The target rate of reduction for CO₂ emissions derived from fuel and electricity consumed at plants and business locations under the Industrial category of the Japanese government's CO₂ emissions categories