Response to Climate Change (Initiatives Based on TCFD Recommendations)

TCFD-based disclosures

The Yamabiko Group recognizes climate change-focused initiatives as a major management issue and has announced its endorsement of the TCFD (Task Force on Climate-related Financial Disclosures).
Going forward, we will actively disclose information based on the framework of the TCFD recommendations and contribute to the creation of a sustainable society through business development.

1.Governance

The Board of Directors of the Yamabiko Group takes key decisions about the Group's management policies and management strategies and about the management guidance and supervision of Group companies.
Furthermore, we ensure that the Board of Directors engages in appropriate decision-making through the Management Strategy Council, chaired by the President, which deliberates matters thoroughly before referring them to the Board of Directors.
We have a supervision structure whereby the TCFD Committee, which generally meets every three months, acts as the main supervisor and coordinates across departments regarding the risks and opportunities posed by climate change, which are discussed by the Management Strategy Council and referred and reported to the Board of Directors. The risks and opportunities deliberated are also reflected in the relevant business plans.

2.Strategy

To understand the risks and opportunities posed by climate change to the Group and their impact, and to plan policies to achieve carbon neutrality in the short, medium and long term, the Yamabiko Group conducts scenario analyses and reflects identified risks and opportunities in the company's strategies.
In conducting these analyses, we referred to the 4°C scenario (note 1) and 2°C scenario (note 2) announced by the UN's Intergovernmental Panel on Climate Change (IPCC).
(Note 1) A scenario where the average global temperature rises by approximately 4°C compared to before the Industrial Revolution.
(Note 2) A scenario where the increase in the global average temperature is kept to below 2°C by the end of the 21st century compared to before the Industrial Revolution.

3.Risk management

In the Yamabiko Group, the Management Strategy Council considers and manages risks related to management decision-making, including those risks accompanying climate change.
Under our climate-related risk management process, the TCFD Committee, categorizes and identifies risks according to the severity of their financial and other effects and prioritizes them according to their assumed frequency of occurrence and impact, then instructs the relevant supervisory division to propose countermeasures.
After these efforts have been compiled, they are deliberated on by the Management Strategy Council and then referred and reported to the Board of Directors. The relevant departments in charge execute countermeasures for each risk.

4.Indicators and targets

(1) Indicators

To manage our climate-related risks and opportunities, we regularly calculate our greenhouse gas (GHG) emissions, including those in the supply chain, to serve as indicators.
Our GHG emissions are as follows.

*unit: t-CO2

(2) Targets

Yamabiko Corporation aims to be carbon neutral by 2050.
As a medium-term target, we have set a goal of reducing our Scope 1 and 2 GHG emissions by 50% by 2030 (compared to FY2020). The whole company will engage in efforts to reduce GHG emissions by means such as introducing renewable energy and environmentally-friendly production facilities. Additionally, for Scope 3 Category 11 (use of products sold), which compromises about 87% of the company's GHG emissions, we will determine a pathway for each segment and work to reduce GHG emissions.

GHG emissions reduction target
Target year/Base year	Target value
2030 (medium-term)/FY2020	Reduce Scope 1 and 2 by 50%.*
2050 (long-term)/FY2020	Make GHG emissions net-zero across the entire supply chain.

*Decreased by approximately 22% as of 2023

Initiatives to achieve carbon neutrality in each segment are as follows.

Outdoor power equipment (OPE)

We will keep striving to enhance our lineup of engine and battery products which have the high durability and work efficiency required to satisfy market needs while also conforming to environmental regulations. At the same time, as the manufacturer with the largest market share in chainsaws in Japan, we will speedily introduce products to the market in response to growing social demands for forest maintenance as a climate change countermeasure.
To achieve carbon neutrality with engine products as well, we will conduct verification testing on, and work to commercialize, carbon-neutral fuel.

Agricultural machinery

In agreement with the Green Food System Strategy formulated by the Ministry of Agriculture, Forestry and Fisheries, we are engaged in product development such as promoting electrification and enhancing our lineup of hybrid machines in order to both increase productivity and achieve sustainability through innovation in agriculture. We are striving to increase the development speed of products that are highly safe and incorporate labor and personnel-saving technology as well as environmental technology.

Industrial power equipment

We will work to reduce our GHG emissions by pursuing the electrification and hybridization of our products, by developing products equipped with fuel cells and hydrogen engines, and by developing environmentally-friendly power generation systems that incorporate renewable energy. Moreover, for generators and welding machines equipped with diesel engines supplied by engine manufacturers in Japan, we will encourage the use of fuels such as renewable diesel (paraffin fuel refined from waste cooking oil and animal or plant oils; RD), a biofuel.