Climate Action

Initiatives to combat climate change
(information disclosure based on TCFD recommendations)

The OYO Group (hereinafter "our Group") recognizes that addressing environmental issues, including climate change and the exacerbation of natural disasters due to climate change, as one of the most important management challenges.

Our Group expressed its support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) of the Financial Stability Board (FSB) in December 2019. We will disclose significant financial information related to climate change in line with the TCFD recommendations.

Governance (System)

Our sustainability management system is as follows:

The "Sustainability Management Committee" discusses policies and measures related to sustainability efforts, including actions against climate change (including TCFD compliance), deliberates on things such as risk management in relation to ESG management, and reports to the Board of Directors about twice a year.

In 2022, to address TCFD compliance, we organized two sub-committees under the Sustainability Management Committee: the "Sustainability Consideration Subcommittee 2022" and the "Subcommittee for Consideration of Materiality-Related Commercialization" to examine climate-related risks and opportunities. Table 1 summarizes the main roles of each organization and their achievements from 2022 to 2024.

The role of the Sustainability Management System and its achievements from 2022 to 2024

Sustainability Management Committee

Table-1 Roles and Achievement of the Sustainability Management Committee

	FY2022	FY2023	FY2024
Committee Chairperson	Executive in Charge of Sustainability (Chief of Corporate planning headquarters)	Representative Director, President & CEO
Committee Members	12 in attendance including Business Managers and General Managers	Heads from each Headquarters, 7 persons in total
Number of times held	6	2	1
Main roles	Discuss policies and measures related to the Group's sustainability initiatives, including climate action (response to the TCFD recommendations, etc.) Deliberate risk management on ESG management, etc. Reports to the Board of Directors about twice a year
Discussion topics	Environmental Policy, Carbon Neutral Declaration Recommendations made by the Sustainability Consideration Subcommittee 2022 and the Subcommittee for Consideration of Materiality-Related Commercialization	Deliberated on the OYO Sustainability Vision 2030 Regarding human rights due diligence, reported on fact-finding survey on non-consolidated and domestic Group companies and part of their supply chains, and discussed future measures	Discussion on methods for reducing CO₂ emissions (Scope1 and 2)

Subcommittees established in 2022

Table-2 Roles and Achievement of the Subcommittees established in 2022 (These activities were only in FY2022)

	Sustainability Consideration Subcommittee 2022	Subcommittee for Consideration of Materiality-Related Commercialization
Committee Chairperson	Business Manager class (Manager of the Domestic Group Office from Corporate Planning Headquarters)	Executive Officer (Division Manager)
Committee Member	8 persons in attendance including General managers and Section managers	10 persons in attendance including Business managers from the Domestic Group
Number of times held	9	8
Main roles	Consider risks and responses related to climate change Made recommendations to the Sustainability Management Committee based on consideration	Examined specific initiatives (climate change-related opportunities) regarding 4 Materiality items below: Development of smart social infrastructure Mitigation of natural disaster damage and development of resilient community Creation of a decarbonized society and a sustainable recycling-oriented society Realization of a society in harmony with nature Made recommendations to the Sustainability Management Committee based on consideration
Discussion topics	Examined the scenarios of 1.5°C, 2°C, 4°C for years 2030 and 2050 The environment our Group would be in including Risks and responses Financial impacts Indicators / Targets (KPIs / KGIs)	The identification of opportunities for each Materiality The vision, what our group aims to be by 2030 Commitments Indicators / Targets (KPIs / KGIs)

Sustainability Management Department

Table-3 Roles and Achievement of the Sustainability Management Department

	FY2022	FY2023	FY2024
Main roles	Sustainability-related policy formulation, promotion, and disclosure of information Coordination between departments on monitoring indicators, gathering / organization of information Sharing best practices of SDGs with the Group and ensuring its continuity Improving employee awareness of SDGs and implementing educational training
Achievements	Examining risks and opportunities related to climate change Proposing ideas and running the "Sustainability Management Committee", "Sustainability Consideration Subcommittee 2022", and "Subcommittee for Consideration of Materiality-Related Commercialization" Organizing the "Sustainablity Awards 2022" Soliciting and disseminating excellent sustainability initiatives with the Group	Reviewed the OYO Sustainability Vision 2030 Regarding human rights due diligence, conducted fact-finding survey on non-consolidated and domestic Group companies and part of their supply chains Collected ESG data and calculated GHG emissions (of the entire Group) Held Sustainability Management Committee meetings Responded to questionnaires from ESG evaluation organizations Held the "Sustainability Awards 2023" Solicited entries of the OYO Group's sustainability initiatives and communicated the best ones across the Group	Evaluation of contributions to CO₂ emission reduction Collected ESG data and calculated GHG emissions (of the entire Group) Held Sustainability Management Committee meetings Responded to questionnaires from ESG evaluation organizations Held the "Sustainability Awards 2024" Solicited entries of the OYO Group's sustainability initiatives and communicated the best ones across the Group

Strategy (philosophy)

The OYO Group considered and assumed events that will occur in 2030 and 2050 in the three scenarios shown in Table 4, as well as the risks and opportunities that will have an impact on the Group. As a result, for both the risks and opportunities, we decided that their impact will be the biggest around 2030 in the 1.5°C scenario for the transition risks and around 2050 in the 4°C scenario for the physical risks.

Table-4 Examined Scenarios

Scenarios	Overview
1.5°C Scenario	This scenario has been made under the assumption of a world where strong policies and regulations have been put in place to achieve a decarbonized society, represented by the IPCC's RCP1.9 scenario and IEA's NZE2050 scenario, leading to carbon neutrality by 2050.
2°C Scenario	This scenario has been made under the assumption of a world where policies and regulations have been implemented to achieve a decarbonized society, as represented by the IPCC's RCP2.6 scenario and IEA's APS scenario, resulting in carbon neutrality by the late 21st century.
4°C Scenario	This scenario has been made under the assumption of a world where regulations for addressing climate change do not progress significantly, as represented by the IPCC's RCP8.5 scenario (and the STEPS scenario that is closest to the RCP8.5 scenario among the IEA's scenarios), leading to frequent climate-related disasters.

Defining the period and impact levels when considering climate change-related risks and opportunities

The timing and degree of financial impact are as shown in Tables 5 and 6 when considering these climate change-related risks and opportunities.

Table-5 Period of time that would be affected

Short term	Less than 3 years
Medium term	3 to 10 years (including 2030)
Long term	Over 10 years (including 2050)

Table-6 The extent of financial impact

Extent of influence	Definition	Sum
Extremely Significant	Enough impact to stop / downsize / expand business operations	More than 1 billion yen
Fairly Significant	Impact an area of business operations	100 million yen to 1 billion yen
Relatively Insignificant	Almost no impact	Less than 100 million yen

Risks and responses to business activities based on climate change-related scenarios

We examined and summarized the results for climate change-related risks assumed under the 1.5°C and 4°C scenarios, including risks and primary responses as shown in Table 7. As a result, we have determined that there will most likely be no "significant and unmanageable risks." For the potential financial impact also indicated in Table 7, however, we have judged it will be "Extremely significant." For the "Changes in business style for GHG (greenhouse gas) reduction," we assume that it could be addressed through the adoption of environmentally friendly equipment and technologies.

Opportunities and responses for business activities based on climate change-related scenarios

Our business activities are deeply involved in sustainability and will be contributing to the mitigation of climate change-related risks. Based on climate change-related scenarios, we have conducted assessments of business opportunities and services (initiatives) as shown in Table 8.

Table-7 Risks related to climate change and the potential of financial impacts and their responses

Type		Expected Events	Risks	Potential Financial Impact	Period of Impact / Influence	Key Responses
1.5°C Scenario : Transition risks	Policy and Legal	Introduction of carbon tax (carbon pricing)	Increased energy procurement costs due to the internalization of carbon pricing, etc. Increased costs from carbon taxation and carbon credit procurement.	Fairly Significant	Short to Long	Promoting the use of energy derived from non-fossil fuels, such as renewable energy procurement
	Technology	Changes in business style for GHG (greenhouse gas) reduction	Limitations on conventional operations that use fossil fuels (such as borehole surveys).	Extremely Significant	Short to Long	Introduction of facilities and technologies with low environmental impact Transition of vehicles to electric (EV) and the installation of charging stations Replacement of home appliances with energy-efficient alternatives Electrification of drilling machines Replacement of fossil fuels with synthetic fuels Carbon footprint management Support for renewable energy projects, activities to promote and achieve carbon neutrality
	Market and Reputation	Growth in demand for renewable energy	Delays in structural reforms in transitioning to decarbonization. Declining business performance due to decreased societal demand. Increased costs in procuring renewable energy.	Fairly Significant	Medium to Long
4°C Scenario : Physical risks	Acute	Increase in floods and landslide disasters due to abnormal weather	Business continuity disruptions, telecommunication system failures, opportunity losses from office function disruption and staff casualties resulting from disasters. Increased costs for recovery and disaster management.	Relatively Insignificant	Short to Long	Evaluation of relocation options for offices / branches to address disasters such as floods Strengthening of Business Continuity Planning (BCP)
	Chronic	Environmental changes due to mean temperature increase and the occurrence of heat waves	Increased electricity and water usage due to rising temperatures. Increased costs due to resource price hikes, such as water and energy.	Relatively Insignificant	Short to Long	Promoting the use of energy derived from non-fossil fuels

Table-8 Climate change related opportunities, potential financial impacts (contribution to the growth of revenue) and key services (initiatives)

Type		Expected Events	Opportunities and key services (initiatives)	Potential Financial Impact (contribution to the growth of revenue)	Period of time that would be affected
1.5°C Scenario : Transition risks	Policy and Legal	Introduction of the carbon tax and carbon pricing	Increased demand for non-destructive surveys and maintenance services using low carbon emission geophysical exploration Automation and decarbonization of geological survey techniques	Extremely Significant	Medium to Long
	Technology	Changes in business style for GHG (greenhouse gas) reduction	Expansion of GHG (Greenhouse Gas) storage projects, forest management, GHG absorption by forest preservation and tree planting, and Carbon Offset Business	Extremely Significant	Medium to Long
	Services / Market	Growth in demand for renewable energy	Increased support for the transition to renewable energy as the primary power source Increased support for decentralized renewable energy initiatives, including site selection and provision of solutions for other energy sources such as wind, hydropower, geothermal developments Increased support for the establishment of regional circular symbiotic communities	Extremely Significant	Medium to Long
4°C Scenario : Physical risks	Acute	Increase in floods and landslide disasters due to abnormal weather	Expansion of operational support for infrastructure maintenance and inspection services Expansion of measures to reduce damage from natural disasters and increased aid for disaster prevention / mitigation utilizing ecosystems Increased support to create a sustainable and resilient (resource circulating) society Increased support for companies' responses to natural disaster risks	Extremely Significant	Medium to Long
4°C Scenario : Physical risks	Chronic	Environmental changes due to mean temperature increase and the occurrence of heat waves	Increased demand for environmental impact assessments due to the conservation and restoration of natural ecosystems and the ever changing environmental conditions Expansion of support for the coexistence of human activities and nature Increase in measures to combat specified alien species, chemical pollution and pest control Expansion of measures for the early detection of soil and groundwater contamination to prevent damages to health, and land utililization	Fairly Significant	Medium to Long

Risk management (system)

The OYO Group has established a risk management system. Complying with the risk management regulations, the risk general manager (Representative Director, President & CEO of the Company) oversees the OYO Group to extract, share, and monitor risks that may affect the Company's management performance, stock price, and financial position, and reports them to the Board of Directors as appropriate. After recognizing the possibility of the occurrence of these risks, the OYO Group strives to prevent them from materializing as much as possible, and if they should materialize, take appropriate measures.

Under the risk management system, the Sustainability Management Committee plays a central role in managing risks related to sustainability, including endeavors on climate change.

Indicators and Targets

We have adopted total GHG emissions as the indicator for climate change mitigation and adaptation. In the Carbon Neutrality Declaration, we have established the goals to reduce Scope 1 and 2 emissions to net zero by 2030. To accomplish this, we set a reduction target of 3,000 t-CO₂ or more (compared with 2023 levels) by 2026 in the OYO Medium-Term Business Plan 2026 announced in February 2024.

We are also considering setting and managing GHG avoided emissions that contribute to creating a decarbonized society.

Initiatives to reduce GHGs

Medium to long-term GHG reduction goals

We have set a goal to achieve net-zero Scope 1 and 2 emissions by 2030 and carbon neutrality for Scope 1, 2, and 3 including the emissions from all suppliers involved in the Group's business by 2050 to keep global warming within 1.5°C ("Carbon Neutrality Declaration"). For more details, please refer to the Carbon Neutrality Declaration page.

Carbon Neutral Declaration

Tables 9, 10, 11 and 12 show the recent GHG emissions of OYO Corporation, its domestic Group companies, its international Group companies and the entire OYO Group companies.

Table-9 GHG Emissions (OYO Corporation alone)

(unit: t-CO₂)
Type	2020	2021	2022	2023	2024
Scope 1	513	486	451	415	704
Scope 2	1,458	1,368	1,293	942	864
Scope 1 + 2 subtotal	1,971	1,854	1,744	1,357	1,569
Scope 3	6,878	6,508	12,482	17,866	16,031
Scope 1 + 2 + 3 total	8,849	8,362	14,226	19,223	17,599

Table-10GHG Emissions(Domestic Group companies)

(unit: t-CO₂)
Type	2022	2023	2024
Scope 1	959	1,086	1,331
Scope 2	1,126	1,134	1,301
Scope 1 + 2 subtotal	2,085	2,220	2,632
Scope 3	11,986	14,836	17,578
Scope 1 + 2 + 3 total	14,071	17,056	20,209

Table-11 GHG Emissions (International Group companies)

(unit: t-CO₂)
Type	2023	2024
Scope 1	408	385
Scope 2	366	361
Scope 1 + 2 subtotal	774	746
Scope 3	8,262	9,481
Scope 1 + 2 + 3 total	9,036	10,227

Table-12 GHG Emissions (Entire OYO Group)

(unit: t-CO₂)
Type	2023	2024
Scope 1	1,909	2,420
Scope 2	2,442	2,526
Scope 1 + 2 subtotal	4,351	4,946
Scope 3	40,964	43,089
Scope 1 + 2 + 3 total	45,315	48,035

Refer to the "Green Value Chain Plant" website by Japan's Ministry of the Environment for the calculation of GHG emissions, Scope 1, 2, and 3 emissions, and other information.
In Scope 2, on a non-consolidated basis, alongside reducing electricity usage, we have purchased non-fossil certificates for part of our electricity use since 2022.
GHG emissions on a non-consolidated basis and domestic Group companies increased in 2023 and 2024 due mainly to the expansion of businesses such as offshore wind power generation support services.

Third-Party Verification of GHG Emissions

The OYO Group believes it essential to disclose highly reliable data on GHG emissions, and is preparing to receive a third-party validation by 2026.

Results Climate Change Assessment by CDP

CDP, an international non-profit organization, assesses corporate initiatives for climate change and water globally. The assessment is made based on eight scores of A, A-, B, B-, C, C-, D, and D-.

OYO Corporation was scored as B- in CDP Climate Change 2022 and 2023, and as B in CDP Climate Change 2024, CDP Water Security 2023 and 2024 on a non-consolidated basis.