We recognize addressing climate change as one of our key management priorities and announced our support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in June 2022. In line with the TCFD recommendations, we are promoting enhanced disclosure based on the four pillars of Governance, Strategy, Risk Management, and Metrics & Targets.

In fiscal year 2025, we are preparing to disclose our Scope 1 and Scope 2 greenhouse gas emissions, as well as Scope 3 emissions. In addition, we are working to improve the quality of our climate-related disclosures through our responses to CDP questionnaires.

Our Group participates in the GX Future Consortium, the successor organization to the TCFD Consortium.
The GX Future Consortium (formerly the TCFD Consortium) was established in 2019 with the aim of promoting effective corporate disclosure based on the TCFD recommendations and facilitating the appropriate use of disclosed information by financial institutions and other stakeholders in their investment decision-making.
Through our participation in the GX Future Consortium (formerly the TCFD Consortium), we will continue to enhance the quality and transparency of our disclosures while contributing to the realization of a virtuous cycle of decarbonization and economic growth.

^※ In April 2026, the TCFD Consortium was reorganized as the GX Future Consortium, integrating certain functions of the GX League and establishing a framework through which the public and private sectors collaborate to promote Green Transformation (GX).
(GX Future Consortium website: https://gx-future-consortium.go.jp/en/)

We recognize sustainability-related issues as important management priorities and established the ESG & SDGs Project in January 2021, led by the Representative Director & Chief Executive Officer as Project Leader. Discussions and decisions made by the Project are reported to the Board of Directors, which provides approval as well as necessary direction and oversight. In addition, the progress of non-financial KPIs is reported to the Board of Directors four times a year, enabling continuous monitoring. Any revisions or changes to KPIs are reviewed and approved through the appropriate governance bodies.
In April 2023, we established our Sustainability Basic Policy and related policies to strengthen compliance and enhance our governance framework. By integrating ESG perspectives into our management practices, we are promoting initiatives aimed at contributing to the realization of a sustainable society.

The Company views the risks and opportunities associated with climate change as one of the key considerations in formulating its business strategy. Using 2050 as the time horizon, the Company analyzed two scenarios: a 1.5℃/Below 2℃ Scenario, which assumes that the goals of the Paris Agreement are achieved by limiting the increase in global average temperature to well below 2℃ above pre-industrial levels while pursuing efforts to limit it to 1.5℃, and a 4℃ Scenario, which assumes that greenhouse gas emissions continue at the current pace. Based on these scenarios, the Company identified climate-related risks and opportunities, including transition risks, physical risks, and opportunities arising from appropriate responses to climate change, in line with the recommendations of the TCFD.

Under the 4℃ Scenario, the Company's business may be significantly affected by the increasing frequency of extreme weather events, such as droughts and heavy rainfall. Acute physical risks could result in damage to or temporary closures of logistics centers, data centers, and stores, as well as reduced demand for winter-related products. To mitigate these risks, the Company has minimized physical risks to its logistics centers and data centers through geographic diversification and the establishment of backup systems. In addition, the Company believes that physical risks to its stores can be reduced through flood risk mitigation measures, including site selection and structural design based on business continuity planning (BCP) considerations. With respect to merchandise, the Company is working to minimize potential losses resulting from reduced demand for winter-related products by expanding offerings that align with changes in temperature patterns and consumer behavior.

Under the 1.5℃/Below 2℃ Scenario, technological innovation and increasingly stringent regulations aimed at mitigating global warming are expected to accelerate social and economic transformation, making transition risks more prominent. The Company anticipates increased costs arising from the introduction of carbon taxes, mandatory adoption of standard specifications for ZEBs (Zero Energy Buildings), and rising electricity prices. To mitigate these risks, the Company promotes energy-efficiency initiatives throughout its operations.

In addition, developments such as the introduction of carbon taxes and emissions trading schemes, preferential policies for ZEV (Zero Emission Vehicle) manufacturers, and stricter regulations on internal combustion engine vehicles are expected to accelerate the shift toward ZEVs. While sales of internal combustion engine vehicles may decline significantly, the Company expects increased revenue from the growing adoption of ZEVs. Furthermore, the Company will seek to expand sales opportunities by proactively developing and enhancing infrastructure that supports the widespread use of ZEVs.

As the impacts of climate change are likely to become more evident over the medium to long term, the Company will continue to periodically review its analysis and assessment of climate-related risks and opportunities, taking into account changes in the external environment. The Company will also further develop specific response measures and incorporate the results into its medium- to long-term management strategies.

- Subject of analysis
[Business]    Domestic AUTOBACS Business, Consumer Business, Wholesale Business, and Expansion Business
[Scope]    In Japan (Business locations, directly managed stores and stores of subsidiaries, logistics bases)
[Period]    Present until 2050 (short term: no more than one year; medium-term: until 2030; long-term: until 2050)

- Steps in analysis
(1)    Systematically identify potential impacts of each climate-related risk and opportunity factor to the scope of analysis targets.
(2)    Take a bird’s eye view of results of (1) and identify risks with higher probability of occurrence
(3)    Based on a scenario applied (physical risk: Representative Concentration Pathways (RCP) 2.6 and RCP8.5, Transition risk: net  zero energy (NZE) and the Stated Policy Scenario (STEPS)), inspect impacts on business and calculate financial impacts under the 2℃ (or lower) and 4℃ scenarios.
(4)    Examine measures to respond to results of (3).

- Reference documents
Climate change monitoring report 2020 (Japan Meteorological Agency (JMA)); Climate change in Japan 2020 (Ministry of Education, Culture, Sports, Science and Technology and JMA); MLT Hazard Map Portal Site (Ministry of Land, Infrastructure, Transport and Tourism); Global Hybrid & Electric Vehicle Forecast (LMC Automotive); IPCC (Intergovernmental Panel on Climate Change)’s Sixth Assessment Report (AR6) and Working Group 1 (WG1) Report; International Energy Agency World Energy Outlook 2021; Outlook for electrification of vehicles (Bureau of Taxation, Tokyo Metropolitan Government), etc.
 

Physical risks: Risks caused by climate change, such as intensification of climate-related disasters

Transition risks: Risks caused by transition to low-carbon economy associated with regulations concerning greenhouse gas emissions, etc.
 

The Company has established the Risk Management Committee, chaired by the Representative Director & Chief Executive Officer, as the organization responsible for overseeing company-wide risks. The Committee regularly identifies risks inherent in the Company's business activities and determines material risks based on their potential impact and likelihood of occurrence. For risks deemed particularly significant, the Committee prioritizes the development of appropriate countermeasures to strengthen preventive risk management.

The status of material risks is reported to the Board of Directors, and concrete support measures, including the implementation of risk mitigation actions, are provided to the relevant departments.

With regard to sustainability-related risks and opportunities, the ESG & SDGs Project plays a central role in collecting information from each business division and identifying risks and opportunities. In addition, climate change-related risks and opportunities are assessed by the TCFD Team, which evaluates their financial impacts through scenario analysis.

The results of these assessments are reported to the Risk Management Committee and integrated into the Company's overall risk management framework.

The Company has established greenhouse gas (GHG) emissions reduction as a key performance indicator and has set a target of reducing GHG emissions intensity per unit of net sales by 40% from the FY2024 level by FY2030. In FY2024, GHG emissions intensity was 18.3 t-CO₂ per ¥100 million in net sales, and the target level for FY2030 is 11.0 t-CO₂ per ¥100 million in net sales.

In addition, the Company is promoting various initiatives aimed at achieving carbon neutrality by FY2050.

- FY2024
Scope: Domestic business sites, directly operated and subsidiary stores, logistics hubs (223 locations)
Calculation Period: April 1, 2024 to March 31, 2025

- FY2025
Scope: Domestic business sites, directly operated and subsidiary stores, logistics hubs (307 locations)
Calculation Period: April 1, 2025 to March 31, 2026

Scope 1: All direct greenhouse gas emissions from fuel combustion, industrial processes and other emissions generated by businesses themselves.
Scope 2: Indirect emissions resulting from the use of electric power, heat and steam supplied by other companies

Note: Scope 3 emissions data is scheduled to be disclosed in August 2026.