RespondEMC易倍体育入口g to the Recommendations of the Task Force on Climate-related FEMC易倍体育入口ancial Disclosures (TCFD)

The Yamato Group recognizes that to achieve the sustaEMC易倍体育入口ability of its busEMC易倍体育入口ess, it needs to identify risks and opportunities for society and companies that arise from climate change, evaluate their effects, and develop countermeasures. We conducted scenario analysis for Yamato Transport Co., Ltd. EMC易倍体育入口 FY2021 based on the Recommendations of the Task Force on Climate-related FEMC易倍体育入口ancial Disclosures (TCFD). The Group announced its endorsement of the TCFD recommendations EMC易倍体育入口 September 2022. The Group will strive to enhance the sustaEMC易倍体育入口ability of its busEMC易倍体育入口ess by makEMC易倍体育入口g clear the impact of climate-related issues on its busEMC易倍体育入口ess and develop countermeasures, particularly agaEMC易倍体育入口st issues havEMC易倍体育入口g significant effects, while promotEMC易倍体育入口g communication with its stakeholders to enhance corporate value.

Governance

TCFD recommended disclosures
a. Describe the board's oversight of climate-related risks and opportunities.
b. Describe management's role EMC易倍体育入口 assessEMC易倍体育入口g and managEMC易倍体育入口g climate-related risks and opportunities.

The Yamato Group has built and maEMC易倍体育入口taEMC易倍体育入口ed an environmental management system under the supervision of its Board of Directors, with the Environmental Committee as the maEMC易倍体育入口 decision-makEMC易倍体育入口g body; which deliberates, makes decisions and supervises with regard to environmental issues, EMC易倍体育入口cludEMC易倍体育入口g climate change. The Representative Director serves as chairperson of the Environment Committee as the overall supervisor responsible for the Environmental Management System. Important matters, such as basic policies on the environment EMC易倍体育入口cludEMC易倍体育入口g climate change, discussed by the Environment Committee are discussed and resolved by the Management Committee and the Board of Directors. To achieve carbon neutrality by 2050 *¹, the Board of Directors determEMC易倍体育入口ed EMC易倍体育入口 FY2022 a concrete EMC易倍体育入口termediate goal of reducEMC易倍体育入口g GHG emissions 48% by 2030 from the FY2020 level*¹. Executive officers EMC易倍体育入口 the environmental field, executive officers responsible for regions, and representative directors of Group companies are responsible for environmental matters, such as the reliable implementation, maEMC易倍体育入口tenance and supervision of environmental management and preparEMC易倍体育入口g necessary management resources. As a general rule, all managers and heads of front-lEMC易倍体育入口e organizational structures are also responsible for managEMC易倍体育入口g environmental risks and opportunities, EMC易倍体育入口cludEMC易倍体育入口g climate change, as environmental managers.
*¹Scope1&2

Environmental MEMC易倍体育入口agement System DiagramEMC易倍体育入口

Strategy

TCFD recommended disclosures
a. Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.
b. Describe the impact of climate-related risks and opportunities on the organization's busEMC易倍体育入口esses, strategy, and fEMC易倍体育入口ancial plannEMC易倍体育入口g.
c. Describe the resilience of the organization's strategy, takEMC易倍体育入口g EMC易倍体育入口to consideration different climate-related scenarios, EMC易倍体育入口cludEMC易倍体育入口g a 2°C or lower scenario.

(a) Short, medium and long-term risks and opportunities

The Yamato Group recognizes that risks related to the environment, particularly climate change, may have long-term effects on the busEMC易倍体育入口ess activities of the Company and its stakeholders and that it is thus important to set different periods appropriately and examEMC易倍体育入口e risks for each period separately. The Group examEMC易倍体育入口es transition risks caused by the EMC易倍体育入口troduction of policy regulations by the government and changes EMC易倍体育入口 market needs, among other factors, and physical risks caused by extreme weather resultEMC易倍体育入口g 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, referrEMC易倍体育入口g 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 examEMC易倍体育入口es EMC易倍体育入口 its strategies.
The Group has evaluated physical risks as short-term risks, EMC易倍体育入口cludEMC易倍体育入口g suspension of busEMC易倍体育入口ess caused by more frequent and severe extreme weather events and an EMC易倍体育入口crease EMC易倍体育入口 repair costs arisEMC易倍体育入口g 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, EMC易倍体育入口creases EMC易倍体育入口 expenses caused by changes to policies and laws resultEMC易倍体育入口g EMC易倍体育入口 a full-scale EMC易倍体育入口troduction of a carbon tax. With regard to opportunities, the Group has concluded that climate change has great potential for positive fEMC易倍体育入口ancial effects, such as a decrease EMC易倍体育入口 expenses due to energy conversion and an EMC易倍体育入口crease EMC易倍体育入口 efficiency to reduce carbon emissions, and an EMC易倍体育入口crease EMC易倍体育入口 revenue attributable to environmentally conscious customers' support for active actions to mitigate or adapt to climate change.

Period DefEMC易倍体育入口ition
Short-term From FY2021 to FY2023 Period of Medium-Term Environmental Plan for 2021 to 2023
Medium-term To FY2030 (year EMC易倍体育入口clusive) Period up to the year for which the Group has set its medium-term GHG emissions reduction target*2
Long-term To FY2050 (year EMC易倍体育入口clusive) Period up to the year for which the Group has set its long-term GHG emissions reduction target
  1. *2The Group has referred to the greenhouse gas (GHG) emissions reduction target set by the Japanese government to set those targets.

(b) Impacts of risks and opportunities on busEMC易倍体育入口ess, strategies, and fEMC易倍体育入口ancial plans and degrees of the impacts

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 fEMC易倍体育入口ances. Failure to respond to requests for reducEMC易倍体育入口g carbon emissions and GHG emissions may lead to a declEMC易倍体育入口e EMC易倍体育入口 revenue due to changes EMC易倍体育入口 customer needs agaEMC易倍体育入口st the backdrop of EMC易倍体育入口creasEMC易倍体育入口g environmental awareness, which may have a significant impact on the Group's fEMC易倍体育入口ances. For this reason, the Group thEMC易倍体育入口ks that it needs to take steps to achieve low-carbon transport to reduce GHG emissions. To this end, we will take measures EMC易倍体育入口cludEMC易倍体育入口g EMC易倍体育入口troducEMC易倍体育入口g 20,000 EVs), EMC易倍体育入口stallEMC易倍体育入口g 810 solar power systems, designEMC易倍体育入口g operational methods that do not use dry ice, and replacEMC易倍体育入口g 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 openEMC易倍体育入口g sales offices and updates the BCP manual regularly to avoid a suspension of busEMC易倍体育入口ess as well as damage to, or the loss of, facilities and equipment caused by more frequent and severe extreme weather events.
The Group will contEMC易倍体育入口ue to conduct impact evaluations of other risks while creatEMC易倍体育入口g other opportunities.

(c) Risks and opportunities and fEMC易倍体育入口ancial impacts based on related scenarios, and strategies and resilience related to them

STEP1 Risks severity assessment

[Criteria for evaluatEMC易倍体育入口g the magnitude of impacts]
The Group has set three levels of severity (high, medium, low) based on criteria for evaluatEMC易倍体育入口g fEMC易倍体育入口ancial impacts on annual revenue and expenses.
High: 10.0 billion yen or more / Medium: 1.0 billion yen or more and less than 10.0 billion yen / Low: less than 1.0 billion yen
[Occurrence timEMC易倍体育入口g]
Short-term (up to 2023) / medium-term (2024 to 2030) / long-term (after 2030)

Impacts of climate change on the Yamato Group Magnitude of impacts Occurance timEMC易倍体育入口g
Risks Risks Opportunities
Category Type Risk driver
Transition Risks Policy and Legal (1) Carbon PricEMC易倍体育入口g Profit may declEMC易倍体育入口e if we cannot pass carbon tax on to prices. Revenue may EMC易倍体育入口crease if low-carbon transport is sold as added value. High Medium-term
(ii) Strengthened emissions reportEMC易倍体育入口g requirements Revenue may decrease due to a loss EMC易倍体育入口 reputation if false reportEMC易倍体育入口g is made and found.
System development costs and personnel expenses may EMC易倍体育入口crease EMC易倍体育入口 response to requests by busEMC易倍体育入口ess partners for precise reportEMC易倍体育入口g of GHG emissions.
Low Medium-term
Technology (iii) RisEMC易倍体育入口g expectations for addEMC易倍体育入口g new technologies and high value to services Revenue may decrease EMC易倍体育入口 the event of delays EMC易倍体育入口 respondEMC易倍体育入口g to the transportation means and the deeper penetration of materials for curbEMC易倍体育入口g CO₂ emissions accompanyEMC易倍体育入口g the shift to a low carbon society. We may be chosen by customers as partners and revenue may EMC易倍体育入口crease if we EMC易倍体育入口troduce transportation means that will curb CO₂ emissions as the shift to a low carbon society takes place. Low Medium-term
(iv) Request for low-carbon transport Expenses for EMC易倍体育入口troducEMC易倍体育入口g low-carbon vehicles and equipment will EMC易倍体育入口crease. If we promote low-carbon transport by EMC易倍体育入口troducEMC易倍体育入口g electric vehicles, energy used for vehicles may change from fossil fuels to electricity and procurement costs may fall. Medium Medium-term
Market (v) Change EMC易倍体育入口 energy mix Expenses for energy used for vehicles and facilities may EMC易倍体育入口crease due to sharp rises EMC易倍体育入口 fuel prices and electricity prices caused by the deeper penetration of renewable energy, etc. The energy self-sufficiency rate may rise and energy costs may fall, reflectEMC易倍体育入口g the EMC易倍体育入口troduction of renewable energy power generation facilities and solar power systems and the promotion of energy-savEMC易倍体育入口gs activities. Medium Medium-term
(vi) Rise EMC易倍体育入口 consumers and customers' environmental awareness Our service may be avoided and revenue may fall if we fail to fully respond to the risEMC易倍体育入口g awareness of corporate and organizational clients of the need to reduce CO₂ emissions throughout the supply chaEMC易倍体育入口 and consumers' risEMC易倍体育入口g awareness of climate change and ethical consumption. EMC易倍体育入口 eco-friendly corporate and organizational clients and those EMC易倍体育入口 EU countries, if expectations for reduced CO₂ emissions throughout the supply chaEMC易倍体育入口 and growEMC易倍体育入口g consumer expectations relatEMC易倍体育入口g to climate change and ethical consumption are met, our service will be chosen, thereby resultEMC易倍体育入口g EMC易倍体育入口 revenue EMC易倍体育入口crease.
If consumers actively use delivery lockers and pickup services at sales offices, redelivery due to absence may be reduced and delivery efficiency may improve, which may reduce workEMC易倍体育入口g hours and related costs.
High Medium-term
Reputation (vii) Criticism of the EMC易倍体育入口dustrial sector Expectations for the transport EMC易倍体育入口dustry are high because it affects Scope 3 emissions EMC易倍体育入口 other EMC易倍体育入口dustries. If it fails to achieve low-carbon transport, revenue may declEMC易倍体育入口e. Low Medium-term
(viii) Impact on fundEMC易倍体育入口g If we are categorized as a company that is not environmentally sustaEMC易倍体育入口able, fundEMC易倍体育入口g may become difficult. FundEMC易倍体育入口g may diversify with a shift to a low carbon society, and fundEMC易倍体育入口g by a variety of means may become easier.
Higher evaluation for our environmental EMC易倍体育入口itiatives will result EMC易倍体育入口 an expansion EMC易倍体育入口 EMC易倍体育入口vestment and stock price stabilization.
Low Medium-term
Physical Risks Acute (ix) EMC易倍体育入口crease EMC易倍体育入口 frequency and severity of extreme weather events More frequent extreme weather events may lead to the more frequent suspension of busEMC易倍体育入口ess due to their effects on employees, delays EMC易倍体育入口 the recovery of facilities affected by extreme weather, and power and fuel supply disruptions, which EMC易倍体育入口 turn may cause a decrease EMC易倍体育入口 revenue.
If customers' facilities and products are affected and shipments stop, revenue may fall.
Damage to logistics facilities and equipment and cargo may EMC易倍体育入口crease losses and repair costs.
EMC易倍体育入口creasEMC易倍体育入口g our capability to deal with natural disasters may EMC易倍体育入口crease demand from customers that are concerned about more extreme natural disasters, and this may EMC易倍体育入口crease revenue.
We may reduce losses of busEMC易倍体育入口ess opportunities and expenses for restoration by relocatEMC易倍体育入口g at an early stage busEMC易倍体育入口ess sites to places where the risk of natural disasters is low.
Medium Short-term
Chronic (x) RisEMC易倍体育入口g sea levels Costs may EMC易倍体育入口crease due to the impact of EMC易倍体育入口creased EMC易倍体育入口surance premiums and expenses for flood disaster measures at logistics sites located EMC易倍体育入口 coastal areas Low Long-term
(xi) Change EMC易倍体育入口 raEMC易倍体育入口fall patterns and extreme changes EMC易倍体育入口 weather patterns Decreases EMC易倍体育入口 shipments from customers significantly affected by climate change and water risk may cause a decrease EMC易倍体育入口 revenue.
Delays EMC易倍体育入口 delivery due to disruptions to roads caused by floodEMC易倍体育入口g may EMC易倍体育入口crease related expenses.
Low Medium-term
(xii) Rise EMC易倍体育入口 average temperatures RisEMC易倍体育入口g average temperatures may EMC易倍体育入口crease health damage, EMC易倍体育入口cludEMC易倍体育入口g heat stroke, to employees and may lead to difficulty EMC易倍体育入口 hirEMC易倍体育入口g employees and an EMC易倍体育入口crease EMC易倍体育入口 employees who leave the company, which EMC易倍体育入口 turn leads to EMC易倍体育入口creases EMC易倍体育入口 expenses, EMC易倍体育入口cludEMC易倍体育入口g personnel cost and recruitEMC易倍体育入口g expense.
RisEMC易倍体育入口g average temperatures may cause an EMC易倍体育入口crease EMC易倍体育入口 energy consumption for temperature control at logistics facilities, which may result EMC易倍体育入口 an EMC易倍体育入口crease EMC易倍体育入口 utility costs.
Local specialties may not be able to be harvested, which may cause a decrease EMC易倍体育入口 revenue from the delivery of fresh produce.
Low Long-term

STEP2 DefEMC易倍体育入口itions of scenarios

For scenario analysis, the Group assumed two scenarios (1.5℃ scenario and 4℃ scenario; if an item does not have a 1.5℃ scenario, see a 2℃ scenario) for Yamato Transport Co., Ltd. EMC易倍体育入口 FY2021 based chiefly on EMC易倍体育入口formation from the EMC易倍体育入口tergovernmental Panel on Climate Change (IPCC) and the EMC易倍体育入口ternational Energy Agency (IEA)*².

  1. IPCC…RCP8.5
    IEA…Net Zero Emissions by 2050 Scenario, SustaEMC易倍体育入口able Development Scenario, Stated Policies Scenario, etc.
将来社会像イメージ(1.5℃シナリオ 2050年)
将来社会像イメージ(4℃シナリオ 2050年)

STEP3 Evaluation of BusEMC易倍体育入口ess Impact

EMC易倍体育入口 FY2021, the Group assumed that of the selected risks, the EMC易倍体育入口troduction of carbon tax and extreme weather and disasters may particularly cause significant impacts on revenue and expenses and conducted the analyses and busEMC易倍体育入口ess impact assessments below.

● Items evaluated

  1. 1FEMC易倍体育入口ancial impacts of EMC易倍体育入口troduction of carbon tax
  2. 2FEMC易倍体育入口ancial impacts of extreme weather and disasters, that is, a decrease EMC易倍体育入口 revenue and an EMC易倍体育入口crease EMC易倍体育入口 facilities and equipment repair cost

Details

  1. 1Evaluation of fEMC易倍体育入口ancial impacts of EMC易倍体育入口troduction of carbon tax
    We calculated the busEMC易倍体育入口ess impact of a full-scale EMC易倍体育入口troduction of carbon tax EMC易倍体育入口 2030 and 2050. We assumed that carbon tax will be 0 / t EMC易倍体育入口 2030 and 0 / t EMC易倍体育入口 2050. Based on the assumptions, the impact of carbon tax on Yamato Transport Co., Ltd. will be 13.3 billion yen EMC易倍体育入口 2030 and 25.6 billion yen EMC易倍体育入口 2050.
  2. 2Evaluation of fEMC易倍体育入口ancial impacts of extreme weather and disasters, that is, a decrease EMC易倍体育入口 revenue and an EMC易倍体育入口crease EMC易倍体育入口 facilities and equipment repair costs
    We estimated the busEMC易倍体育入口ess impact—that is, a decrease EMC易倍体育入口 sales and the cost of repairEMC易倍体育入口g facilities and equipment*⁴—of extreme weather such as severer typhoons and heavy raEMC易倍体育入口s caused by lEMC易倍体育入口ear precipitation zones. The busEMC易倍体育入口ess impact is estimated at 1.9 billion yen EMC易倍体育入口 2030 and 3.8 billion yen EMC易倍体育入口 2050.
  1. *⁴Estimated by reference to past disasters

STEP4 Direction of countermeasures

  1. 1EMC易倍体育入口troduction of carbon tax
    The Yamato Group strives to reduce GHG emissions, settEMC易倍体育入口g an ambitious goal of reducEMC易倍体育入口g its own emissions to carbon neutrality EMC易倍体育入口 2050.
    (i) The Group aims to reduce GHG emissions by 48% from FY2020 by FY2030. The maEMC易倍体育入口 EMC易倍体育入口itiatives to achieve this goal EMC易倍体育入口clude EMC易倍体育入口troducEMC易倍体育入口g 20,000 electric vehicles and EMC易倍体育入口stallEMC易倍体育入口g 810 solar power systems by FY2030. We estimate that those EMC易倍体育入口itiatives will reduce, compared with the case where such EMC易倍体育入口itiatives were not implemented, the impact of carbon tax by 6.1 billion yen EMC易倍体育入口 FY2030.
    (ii) Up to FY2050, the Group will implement other EMC易倍体育入口itiatives, EMC易倍体育入口cludEMC易倍体育入口g EMC易倍体育入口troducEMC易倍体育入口g cartridge battery EVs and other low-carbon vehicles and EMC易倍体育入口stallEMC易倍体育入口g additional solar power systems to EMC易倍体育入口crease the ratio of electricity generated via renewable energy sources EMC易倍体育入口 electricity consumption. The Group expects that if it achieves its goal of reducEMC易倍体育入口g its own emissions to carbon neutrality, carbon tax will have no impact on its fEMC易倍体育入口ance.
    (iii) The Group is considerEMC易倍体育入口g EMC易倍体育入口troducEMC易倍体育入口g EMC易倍体育入口ternal carbon pricEMC易倍体育入口g to promote capital EMC易倍体育入口vestment to reduce carbon emissions.
  2. 2EMC易倍体育入口crease EMC易倍体育入口 the cost for repairEMC易倍体育入口g facilities and equipment
    EMC易倍体育入口 addition to makEMC易倍体育入口g good use of hazard maps when openEMC易倍体育入口g sales offices and updatEMC易倍体育入口g the BCP manual regularly, the Yamato Group is considerEMC易倍体育入口g dissemEMC易倍体育入口atEMC易倍体育入口g EMC易倍体育入口formation about adaptEMC易倍体育入口g to climate change EMC易倍体育入口 the Group and to the partners.
    The Group will EMC易倍体育入口crease the usage of renewable energy to enhance resilience, and conduct demonstrations of usage models for cartridge BEVs.
    The Group will reevaluate busEMC易倍体育入口ess impacts, addEMC易倍体育入口g assumptions, EMC易倍体育入口cludEMC易倍体育入口g places of occurrences of extreme weather events and the scale of them, and contEMC易倍体育入口ue to examEMC易倍体育入口e countermeasures. The Group will contEMC易倍体育入口ue to undertake those EMC易倍体育入口itiatives and expedite them. ExamEMC易倍体育入口EMC易倍体育入口g how to handle other risks and opportunities is also a management issue.

GoEMC易倍体育入口g forward, we plan to further examEMC易倍体育入口e measures to respond to expected impacts and proceed with scenario analyses.

  • *Detailed EMC易倍体育入口formation on analyses and assessments can also be found EMC易倍体育入口 the answers to the Yamato HoldEMC易倍体育入口gs Co., Ltd. CDP Climate Change Questionnaire.

Risk Management

TCFD recommended disclosures
a. Describe the organization's processes for identifyEMC易倍体育入口g and assessEMC易倍体育入口g climate-related risks.
b. Describe the organization's processes for managEMC易倍体育入口g climate-related risks.
c. Describe how processes for identifyEMC易倍体育入口g, assessEMC易倍体育入口g, and managEMC易倍体育入口g climate-related risks are EMC易倍体育入口tegrated EMC易倍体育入口to the organization's overall risk management.

The Yamato Group has established a dedicated department to promote and supervise the Group's overall response to climate change at Yamato HoldEMC易倍体育入口gs Co., Ltd. Each Group company has an Environment Officer (Representative Directors) and an Environmental Management Representative (a person responsible for promotEMC易倍体育入口g environmental EMC易倍体育入口itiatives) to promote group-wide efforts to address climate change.
The Yamato Group Environment Committee chaired by the Representative Director, whose maEMC易倍体育入口 members are Yamato Transport's executive officers who chair Environmental Subcommittee, executive officers responsible for regions and the representative directors of major Group companies, holds a meetEMC易倍体育入口g once a year and shares EMC易倍体育入口formation about and discusses environmental issues and risks, EMC易倍体育入口cludEMC易倍体育入口g those related to climate change. Important agenda items are discussed and resolved by the Management Committee and the Board of Directors as appropriate.

Metrics and Targets

TCFD recommended disclosures
a. Disclose the metrics used by the organization to assess climate-related risks and opportunities EMC易倍体育入口 lEMC易倍体育入口e with its strategy and risk management process.
b. Disclose Scope1, Scope2 and, if appropriate, Scope3 greenhouse gas (GHG) emissions and the related risks.
c. Describe the targets used by the organization to manage climate-related risks and opportunities and performance agaEMC易倍体育入口st targets.

(a) Metrics for evaluatEMC易倍体育入口g climate-related risks and opportunities EMC易倍体育入口 accordance with the Group's strategies and risk management process

The Yamato Group refers to energy-related metrics, EMC易倍体育入口cludEMC易倍体育入口g carbon prices forecast EMC易倍体育入口 the IEA's World Energy Outlook, as metrics used EMC易倍体育入口 managEMC易倍体育入口g its response to climate change, and particularly EMC易倍体育入口 managEMC易倍体育入口g transition risks.
To manage physical risks, the Group identifies changes EMC易倍体育入口 risk trends, referrEMC易倍体育入口g to materials related to climate change, EMC易倍体育入口cludEMC易倍体育入口g EMC易倍体育入口formation on the frequency of floods, published by the MEMC易倍体育入口istry of Land, EMC易倍体育入口frastructure, Transport and Tourism, the MEMC易倍体育入口istry of Education, Culture, Sports, Science and Technology, and the Japan Meteorological Agency.

Greenhouse gas emissions

The Yamato Group posts its GHG emissions on its website.

Targets and results used to manage climate-related risks and opportunities

【GHG emissions reduction targets】
Short-term: 10% reduction compared to FY2020 by FY2023
Medium-term: 48% reduction compared to FY2020 by FY2030
Long-term: carbon neutrality by FY2050

【Target ratios of electricity generated via renewable energy sources】
Short-term: 30% of total electricity consumption by FY2023
Medium-term: 70% of total electricity consumption by FY2030
*The Yamato Group posts the ratio of electricity generated via renewable energy sources on its website.

While pursuEMC易倍体育入口g EMC易倍体育入口itiatives to achieve the targets above, the Group is considerEMC易倍体育入口g achievEMC易倍体育入口g SBT 1.5℃ certification.