Natural Capital（Biodiversity）

アンカーリンク

Policy / Basic Approach
Disclosure Based on TNFD Recommendations
Initiatives
External Collaboration

TOYOTA TSUSHO CORPORATION Sustainability Management Group, DFF Inc.

Policy / Basic Approach

Toyota Tsusho engages in sustainable business activities. The preservation of biodiversity is emphasized as a standard of sustainability.

We work to determine impacts of our business on biodiversity including the status of endangered species living in the vicinity of our business sites and specified information in protected areas, and in cases where there are negative impacts on ecosystems, we take measures to offset those impacts.

TOYOTA TSUSHO CORPORATION Sustainability Management Group, DFF Inc.

Disclosure Based on TNFD Recommendations

The Toyota Tsusho Group recognizes that natural capital, including biodiversity, is a prerequisite for the continuation of corporate activities. We acknowledge that our business activities, from raw material procurement through to manufacturing and sales in existing operations, as well as new investment and loan projects, both depend on and impact the blessings of nature. Our vision is to become a Leading Circular Economy Provider. To advance carbon neutrality, the circular economy, and nature positive in an integrated manner, we revised the Toyota Tsusho Group Environmental Policy in 2025. Guided by this policy, we will work to address environmental issues and contribute to the realization of a sustainable society.
As part of our integrated advancement of carbon neutrality, the circular economy, and nature positive, we conduct risk assessments for both new and existing businesses and ensure appropriate responses in line with the mitigation hierarchy and traceability. Through these efforts, we aim to conserve biodiversity while conducting business activities in alignment with the Kunming-Montreal Global Biodiversity Framework and help achieve nature positivity.
The Toyota Tsusho Group supports the principles of the TNFD and has been participating in the TNFD Forum, a stakeholder community that supports TNFD discussions, since 2023. As part of its initiatives toward nature positive, the Group is disclosing the following information based on version 1.0 of the TNFD recommendations.

*The website content is based on information available as of March 31, 2026.

General Requirements

[1] Application of Materiality

In this disclosure, we have adopted a double materiality approach that considers both financial materiality (the impacts of the environment and natural capital on business activities) and impact materiality (the impacts of business activities on the environment and natural capital).

[2] Scope of Disclosure

For this disclosure, we assessed the Group's dependencies and impacts on nature in both direct operations and upstream value chains across 40 representative businesses and conducted biodiversity significance assessments around major sites (excluding office functions considered to have relatively low dependencies and impacts on nature). We then selected seven priority businesses based on the assessment results, scale of revenue, and other factors, and evaluated and analyzed nature-related issues (dependencies, impacts, risks, and opportunities) at major direct-operation sites such as factories, power plants, warehouses, and stores in line with the LEAP approach.
To broaden the analysis to include value chains, we conducted scenario analysis and calculated financial impacts for the three highest-priority businesses among the seven priority businesses, which were assessed as having significant dependencies and impacts on nature in their upstream value chains, including site development processes.

[3] Regions with Nature-related Issues

For major direct-operation sites of the seven priority businesses, we assessed the surrounding natural conditions using multiple TNFD-recommended tools (IBAT^*1, Aqueduct^*2, and GFW^*3). For the value-chain analysis of the grain collection and logistics business, we used MapBiomas Brazil^*4 and priority area data for environmental conservation designated by the Brazilian government to gain a detailed understanding of natural conditions and changes in land use in Brazil, the business's main country of operation. We also used GIS^*5 to assess natural conditions in the municipalities where farms with which the Group does business are located.
We then combined the factors that could constitute risks for each business (dependencies and impacts), identified through the LEAP approach, with assessments of the surrounding natural conditions, and identified regions and sites that require particular attention considering their surrounding natural environments.

*1IBAT (Integrated Biodiversity Assessment Tool): A tool that analyzes geospatial data to identify areas of biodiversity importance
*2Aqueduct: A data tool for identifying and assessing water risks
*3GFW(Global Forest Watch): A tool that analyzes real-time global data on nature-related items, particularly those related to forests and agriculture/forestry
*4MapBiomas Brazil: Map data for long-term monitoring of land use and land cover in Brazil
*5GIS (Geographic Information System): A system for integrating, analyzing, and visualizing geographic information on maps

[4] Integration with Other Sustainability-related Disclosures

The Group is advancing carbon neutrality, the circular economy, and nature positive in an integrated manner, working to resolve environmental issues, and aiming to realize a sustainable society.
Because climate change and natural capital affect each other, this disclosure based on the TNFD recommendations places importance on alignment with climate-related disclosures based on the recommendations of the TCFD (Task Force on Climate-related Financial Disclosures). Specifically, we provide disclosures designed to ensure consistency between the two frameworks, including by defining and analyzing scenarios corresponding to the 1.5°C and 4°C climate change scenarios.
Going forward, we will continue to enhance integrated and consistent TCFD and TNFD disclosures, taking into account the interrelationship between climate and nature.

[5] Consideration of Target Periods

This disclosure sets FY2027 as the short-term horizon, FY2030 as the medium-term horizon, and FY2050 as the long-term horizon.

[6] Engagement with Indigenous Peoples, Local Communities, and Affected Stakeholders

The Group works to address social issues through its business activities. When launching new business operations, we conduct environmental impact assessments, engage in dialogue with local residents, and maintain regular relations with local communities after operations begin.
In response to the growing social importance of these issues, the Group renamed the former “Supply Chain CSR Guidelines” the “Supply Chain Sustainability Behavioral Guidelines” in 2022. In July 2025, we revised the “Toyota Tsusho Group Human Rights Policy” and the “Supply Chain Sustainability Behavioral Guidelines” to clarify the Group's approach to human rights and the environment. Upon revision, these Guidelines were re-communicated to approximately 6,000 suppliers of Toyota Tsusho and its domestic and overseas consolidated subsidiaries, encouraging their implementation in practice.

Governance

[1] The supervisory and managerial roles of the Board of Directors

The Group’s Board of Directors, comprising ten members including five outside directors, makes decisions on key management issues and monitors the execution of business by the directors. The Board of Directors meeting regularly discusses nature-related issues and progress on material issues through annual reviews and reports from the Sustainability Committee on the progress and outcomes of its initiatives, as well as through deliberations on investment and loan decisions several times a year. These processes ensure that the Board exercises appropriate oversight. In addition to nature-related matters, the Board also receives reports and exercises oversight, as appropriate, on other important sustainability issues such as climate change, human rights, and compliance.

The Group has established the Sustainability Committee as a key driver of Sustainability Management, including responses to nature-related issues. Chaired by the President & CEO, the committee comprises Executive Vice Presidents, sales division CEOs, and relevant corporate officers, with four outside directors serving as advisors and the Chairman, Vice Chairman, and full-time Audit & Supervisory Board Members serving as observers. The Sustainability Committee determines important sustainability-related policies, identifies social trends, and discusses and decides on Toyota Tsusho’s responses to them in annual meetings. Furthermore, the Sustainability Corporate Subcommittee, which convenes every two months and is composed of the heads of relevant corporate departments, discusses various issues at a general manager level to enable swift responses.

In addition, the Global Safety and Environmental Committee annually deliberates on and confirms the Group's responses to revisions to laws and regulations and new requirements concerning nature-related issues. The representatives of the sales divisions and group companies who make up the members of the conference incorporate the details of these deliberations into our business activities.

For details on the supervisory framework and current practices, please refer to the “Sustainability Promotion Structure.”

[2] Human Rights Policy and Engagement Activities with Stakeholders

As we conduct business around the world, we consider respect for human rights based on international standards to be a fundamental foundation of our activities. We support the International Bill of Human Rights, which includes the Universal Declaration of Human Rights; the Guiding Principles on Business and Human Rights; and the ILO Declaration on Fundamental Principles and Rights at Work issued by the International Labour Organization (ILO), and we are committed to respecting human rights. With regard to the rights of indigenous peoples, we recognize their unique cultures and histories in the countries and regions where they reside. Furthermore, we give due consideration to the rights of indigenous peoples as stipulated in the laws and regulations of those countries and regions, as well as in international norms such as the United Nations Declaration on the Rights of Indigenous Peoples.

In response to the growing social importance of these issues, the Group assessed human rights risks under the Toyota Tsusho Group Human Rights Policy. Having identified high-risk domains, we have been conducting human rights due diligence by administering questionnaires and carrying out on-site investigations, among other measures, to mitigate these risks. In addition, with respect to human rights risks in the supply chain, we have been advancing human rights due diligence for suppliers. We analyze human rights risks from the three perspectives of business nature (business sector), location (country), and merchandise we handle, as we do for our consolidated subsidiaries, utilizing international indicators and tools. We will conduct questionnaires and on-site audits as necessary for suppliers that are identified as high risk. Furthermore, we have established a consultation desk for all stakeholders—including business partners, suppliers, local community residents, and employees of Toyota Tsusho and its domestic and overseas consolidated subsidiaries—through which we receive consultations and reports related to human rights and labor issues (grievance mechanism). Through these efforts, we will identify negative human rights impacts and work to prevent or mitigate them.
The Toyota Tsusho Group supports the Keidanren Initiative for Biodiversity Conservation and promotes collaboration with external stakeholders to fulfill its corporate responsibility for biodiversity conservation. Specifically, the Group works with local governments in the regions where it operates on various initiatives that help to reduce the impact on ecosystems while conserving and restoring the natural environment. It also participates in the J-GBF Nature Positive Declaration and actively contributes to society-wide efforts to achieve nature positivity.

Strategy

[1] Priority Businesses for Assessment and Key Areas of Analysis

Dependencies and Impacts on Nature in the Group's Representative Businesses

The Toyota Tsusho Group operates a wide variety of businesses—including manufacturing, distribution, sales, and operations—across approximately 130 countries and regions worldwide. To select businesses for assessment, we undertook the Scoping Phase of the LEAP approach to gain a comprehensive understanding of the Group's interfaces with nature across its businesses and sites. Using ENCORE^*6, we assessed dependencies and impacts on nature in the upstream value chain and direct operations of the Group’s 40 representative businesses (Phase 1).
The ENCORE assessment found significant dependencies on ecosystem services such as mass stabilization and erosion control^*7, surface water, and groundwater, as well as significant impacts from GHG emissions, water use, and water pollution. It also found that dependencies and impacts were relatively significant in upstream value chains involving raw material extraction. Based on these findings, we selected businesses for assessment and decided to conduct detailed analyses in line with the LEAP approach.

*6ENCORE: A tool used to assess the materiality of nature-related dependencies and impacts in a company’s sector (as of end-May 2024).
*7Stabilization and erosion prevention of coastal areas, dunes, and other areas by vegetation, and prevention of avalanches, landslides, and similar events

ENCORE Assessment Results for Direct Operations and Upstream Value Chains of 40 Representative Businesses (by Division)

Division / Unit	Top Three Dependencies			Top Three Impacts			Representative Value Chains of Each Division / Unit *Upstream of direct operations
Metal+(Plus)	Climate regulation	Mass stabilization and erosion control	Groundwater	GHG emissions	Water use	Solid waste	Value chain related to coil processing Raw materials include iron ore, etc.
			Surface water
			Flow maintenance
Circular Economy	Climate regulation	Mass stabilization and erosion control	Groundwater	GHG emissions	Water use	Water pollution	Value chains related to automotive parts manufacturing, lithium hydroxide manufacturing, detergent manufacturing, iodine mining, tank operations, recovery of valuable materials, and industrial waste treatment Raw materials include iron ore, petroleum, sand and stone, groundwater, etc.
Supply Chain	Surface water	Groundwater	Mass stabilization and erosion control	GHG emissions	Water pollution	Water use	Value chains related to automotive parts manufacturing and installation, building rental, and logistics Raw materials include iron ore, wood, petroleum, sand and stone, etc.
Mobility	Mass stabilization and erosion control	Groundwater	Surface water	GHG emissions	Water use	Water pollution	Value chain related to automobile distribution and sales Raw materials include iron ore, petroleum, natural rubber, etc.
Green Infrastructure	Mass stabilization and erosion control	Climate regulation	Groundwater	GHG emissions	Water use	Water pollution	Value chains related to die manufacturing, automotive parts installation, distribution, and renewable energy generation Raw materials include iron ore, wood, petroleum, natural rubber, sand, etc.
Digital Solutions	Groundwater	Surface water	Climate regulation	GHG emissions	Water use	Water pollution	Value chain related to electronic product manufacturing Raw materials include iron ore, petroleum, aluminum, copper, etc.
Lifestyle	Mass stabilization and erosion control	Flood and storm protection	Surface water	Water pollution	GHG emissions	Soil pollution	Value chains related to apparel manufacturing, building leasing, warehouse operations, oil extraction, aquaculture, and food services Raw materials include iron ore, wood, petroleum, sand and stone, agricultural products, etc.
Africa	Mass stabilization and erosion control	Surface water	Groundwater	GHG emissions	Water use	Water pollution	Value chains related to pharmaceutical production, beer production, infrastructure development, facility management, mall operations, automobile sales, distribution, etc. Raw materials include iron ore, wood, petroleum, natural rubber, agricultural products, marine products, sand and stone, etc.
Administrative Unit	Mass stabilization and erosion control	Flood and storm protection	Climate regulation	GHG emissions	Water use	Water pollution	Value chain related to hydrogen stations Raw materials include natural gas

Selection of Businesses for Assessment

Overview of the Process for Selecting Businesses for Assessment

The Group operates a wide variety of businesses around the world and has extensive interfaces with nature throughout its value chains. Given this, we believe it is important to comprehensively consider our dependencies and impacts on nature and the scale of their effects on our business, identify priority businesses for assessment and action, and advance our initiatives.
Based on this approach, we first prioritized direct operations as the area for analysis and conducted evaluations and analyses in line with the LEAP approach. Specifically, based on the results of ENCORE evaluations and analyses of 40 representative businesses, scale of revenue, and other factors, we selected seven priority businesses for assessment and action. The specific businesses are listed below. After reviewing operations at their direct-operation sites, we organized their dependencies and impacts on nature and related risks and opportunities (Phase 2).

Scale of Business-Specific Dependencies and Impacts in Direct Operations by Division

Criteria for Selecting Businesses for Assessment

Seven Priority Businesses
Sheet Metal Processing for Automobiles Business/Iodine Mining Business/Logistics Business/Car Dealership Business/Wind Power Business/Grain Collection and Logistics Business/Hydrogen Station Business

Of the seven priority businesses, we expanded the scope of analysis for the three highest-priority businesses considered to have particularly significant dependencies and impacts on nature in their upstream value chains to include those upstream value chains (including site development processes) and conducted assessments in accordance with the LEAP approach and TNFD sector guidance (Phase 3).

Phase3

Three Highest-Priority Businesses	Reasons for Selection
Site Development Process for the Iodine Mining Business	Because iodine mining involves drilling deep wells to depths of 2,000–3,000 meters, it is considered important to assess the scale of impacts on nature during the site development process
Site Development Process for the Wind Power Business	While the business contributes to climate change mitigation, wind power facilities are often located in areas rich in nature, making it important to assess the level of impacts on nature from the site development process through operations
Upstream Value Chain of the Grain Collection and Logistics Business	Because the business handles soybeans and corn, which are High Impact Commodities, it is considered important to assess the level of its dependencies on natural capital, including provisioning services

Scenario Analysis

For the three highest-priority businesses, we conducted scenario analyses based on risks and opportunities identified in the Evaluate phase of the LEAP approach and assessed their future risks and opportunities. The TNFD recommends combining two axes – the degree of ecosystem service degradation and the consistency of regulations, policies, consumer preferences, and other factors – to create four quadrants. To understand risks arising from the interrelationship between climate and nature and consider appropriate response measures, we analyzed Quadrant 1 (Scenario 1) and Quadrant 3 (Scenario 3), envisioning specific world conditions in 2050. These quadrants correspond to the 1.5°C and 4°C climate change scenarios and were selected in consideration of alignment with the Group's TCFD disclosures. The analysis took the form of workshops involving relevant personnel from each business division and affiliated company, who discussed the likelihood and impact of risks and opportunities that could arise under envisioned world conditions.

World View

Scenario 1

Nature: Nature degradation is contained, with no significant change in the depletion of water, biological resources, or mineral resources
Regulations: Both global regulations and national regulations are strengthened
Prices: Although resource depletion is contained, prices rise due to tighter regulations. The value of sustainable products increases
Consumers: Consumers shift toward sustainability and accept higher prices
Technology: Technologies aimed at reducing environmental impacts and improving efficiency continue to advance

Scenario 3

Nature: Water and biological resources move toward depletion, while mineral resources remain available to some extent
Regulations: Establishing international frameworks and achieving coordinated responses under national laws become difficult
Prices: Procurement costs rise due to the depletion of biological resources, while prices of fossil fuels and mineral resources decline due to oversupply
Consumers: While some companies promote green procurement, individual consumers vary in their sustainability preferences and behavior, as well as in their willingness to accept higher prices
Technology: Efficiency-enhancing technologies improve, but the development of technologies to reduce nature degradation remains limited

▲ Scene from the scenario analysis workshop

Consideration of Response Measures

For the principal risks identified through the scenario analysis, we considered response measures based on the SBTN AR3T framework. After confirming measures already in place, we considered additional measures that could be effective and examined their feasibility. These measures are specifically designed to reflect the characteristics of each business and the local natural environment. We will continue to review and improve them to support sustainable business operations.

The above assessment results and response measures are summarized in [2] Assessing Nature-related Dependencies, Impacts, Risks and Opportunities.
For four of the seven priority businesses, namely the sheet metal processing for automobiles, logistics, car dealership, and hydrogen station businesses, the assessment results and response measures for direct operations are summarized below.

[2] Assessing Nature-related Dependencies, Impacts, Risks and Opportunities

Iodine Mining Business
Wind Power Business
Grain Collection and Logistics Business
Sheet Metal Processing for Automobiles Business
Logistics Business
Car Dealership Business
Hydrogen Station Business

Iodine Mining Business

The Group operates an iodine development business in Oklahoma, U.S., producing iodine that is essential for daily life and used in disinfectants, X-ray contrast media, and other applications. We conducted a LEAP analysis, including scenario analysis, of direct operations and site development processes for the iodine mining business.
The wells are located within a vast area of Oklahoma. During operations, iodine is extracted from brine (groundwater) pumped from underground, and ground stability is essential for stable iodine mining. Well drilling during site development uses drilling mud and passes through freshwater aquifers, so the Group recognizes the potential impact on the surrounding environment. To address these risks, it takes appropriate measures during drilling, including installing barriers, and returns the pumped brine underground to minimize impacts on the surrounding environment.

Dependencies and Impacts on Nature, Risks, Opportunities, and Response Measures

〈Principal Dependencies and Impacts〉

For the iodine mining business, we identified the following principal dependencies and impacts^* during operations and site development.

*Principal dependencies and impacts: Dependencies and impacts associated with risk items

Phase	Key Dependencies	Key Impacts	Overview (Operations with Interfaces with Nature)
During operations	Freshwater supply^*1 Water purification	Resource use	Continuous use of iodine-containing brine (groundwater resources)
	Air purification	Climate Change	Continuous CO₂ emissions from the use of electricity and fuel
	Air purification	Pollution	Continuous emissions of air pollutants from the use of combustion furnaces
	-	Pollution	Discharge of waste brine, use and storage of chemical substances, and generation of industrial waste
During site development	Freshwater supply Water purification	Resource use	Use of river water and groundwater in preparing drilling mud used in the drilling process
	Air purification	Pollution Climate change	Exhaust gas and CO₂ emissions from the operation of construction machinery
	-	Pollution	Use of chemicals in drilling mud during the drilling process, generation of industrial waste such as drilling cuttings, and installation and storage of diesel tanks

*1Described based on the TNFD definition. In practice, brine (groundwater), rather than freshwater, is withdrawn.
The “dependencies” and “impacts” in this table comprehensively identify the interfaces (potential impacts) between the Company’s business activities and the natural environment based on the TNFD framework. They do not indicate actual environmental pollution or other actual impacts.

〈Risks, Opportunities, and Response Measures〉

Based on the assessment of dependencies and impacts in the iodine mining business, we identified risks and opportunities related to nature in direct operations and site development processes and set out the corresponding response measures.

Risk

Iodine Mining Business (Risks)

Risk Category		Risk Overview	Direct Operations	Site Development Process	Financial Impact	Scenario #1 (Nature Stability and Coordination Scenario)		Scenario #3 (Nature Degradation and Fragmentation Scenario)		Response Measures
Risk Category		Risk Overview	Direct Operations	Site Development Process	Financial Impact	Time Horizon	Magnitude of Impact	Time Horizon	Magnitude of Impact	Response Measures
Physical risk	Acute	Decline in shallow groundwater levels and deterioration in water quality attributable to stakeholders during the site development process		●	Additional costs associated with changing procurement sources^*1	Short- to long-term	I	Short- to long-term	I	Secure alternative water sources
Physical risk	Chronic	Increase in natural disasters (wildfires) due to the progression of climate change	●		Increase in the duration of operational shutdowns^*2	Short- to long-term	II	Short- to long-term	II	Thorough vegetation control on Company premises
Transition risk	Policy	Tighter restrictions on the volume of water reinjected into aquifers other than the withdrawal aquifer due to changes in ordinances, standards, etc.	●		Decrease in production volume if the amount of water reinjected into aquifers other than the withdrawal aquifer is restricted^*3	Medium- to long-term	I	-	-	Conservation of water systems through underground reinjection of brine Circulation and reuse of water within the plant
		Tighter regulations governing the site development process under laws and regulations 【related to shallow groundwater, noise, and light pollution】		●	Additional costs if regulations result in an extension of the construction period^*4	Medium- to long-term	I	-	-	Circulation and reuse of drilling mud
		Tighter regulations due to changes in laws, standards, etc. 【related to air quality】	●		Additional costs for new measures if emissions regulations are tightened beyond the capabilities assumed for existing systems^*5	Medium- to long-term	I	-	-	Early identification of regulatory trends and actions to ensure compliance with standards
	Technology	Transition to technologies with less impact on nature	●		Additional costs associated with transitioning to production using equipment with lower impacts on nature^*6	Medium- to long-term	III	Medium- to long-term	III	Introduction and improvement of appropriate equipment in collaboration with equipment manufacturers
	Liability	Liability for damages associated with declines in shallow groundwater levels and water pollution during the site development process		●	Compensation costs, including the development of alternative wells^*7	Short- to long-term	I	Short- to long-term	I	Thorough implementation of the following measures, with the highest priority placed on a precautionary approach and prevention: Install barriers prior to drilling to minimize adverse impacts on shallow groundwater (freshwater aquifers) Adopt a double-wall design to prevent leakage from diesel tanks Conduct continuous monitoring for early detection of leaks If a leak is detected, contact the relevant state authorities and discuss and implement appropriate measures

Legend

Time Horizon: Short-term: through 2027; Medium-term: through 2030; Long-term: through 2050; –: Does not occur
Magnitude of Impact: I: up to ¥100 million; II: ¥100 million–¥1 billion; III: ¥1 billion or more; –: Not calculated

*Time horizons are based on workshop results. Magnitudes of impact are based on medium- to long-term assessments.

【Basis for Calculating Quantitative Financial Impacts】

*1Estimated based on “groundwater purchase cost – external procurement cost.”
*2Estimated based on “business revenue × duration of operational shutdown × disaster occurrence rate^*8.”
*3Estimated based on “business revenue × ratio of water reinjected into aquifers other than the withdrawal aquifer.”
*4Estimated based on “current construction cost per day × number of additional days.”
*5Estimated based on “initial equipment installation costs, including scrubbers.”
*6Estimated based on “capital expenditures + increase in manufacturing costs.”
*7Estimated based on “current cost of developing a drinking-water well × number of affected areas surrounding the developed wells.”
*8Based on the Net Zero 2050 and Current Policies parameters for the “number of days with extreme fire weather in the United States” in the Climate Impact Explorer.

During the assessment, we also considered risk items such as damage to the corporate brand caused by inadequate management of nature-related issues, litigation resulting from soil contamination, and impacts on the surrounding environment and ecosystems from land expansion. However, the scenario analysis indicated that these risks currently have limited impacts, so they are not included in the risk table.

Opportunity

Iodine Mining Business (Opportunities)

Opportunity Category		Opportunity Overview	Direct Operations	Site Development Process	Financial Impact	Scenario #1 (Nature Stability and Coordination Scenario)		Scenario #3 (Nature Degradation and Fragmentation Scenario)
Business Performance	Sustainability Performance	Opportunity Overview	Direct Operations	Site Development Process	Financial Impact	Time Horizon	Magnitude of Impact	Time Horizon	Magnitude of Impact
Products and services	Sustainable use of natural resources	Expansion of the iodine recycling business	●		Increase in sales resulting from expansion of the recycled iodine market and recycling collection channels^*1	Short- to long-term	II-III	Short- to long-term	II-III
Resource efficiency	Sustainable use of natural resources	Improvement in resource use efficiency by increasing the iodine recovery rate from brine	●		Increase in sales resulting from an improved iodine recovery rate^*2	Short- to long-term	I	Short- to long-term	I
Resource efficiency	Sustainable use of natural resources	Shift from propane gas to other energy sources as an initiative to reduce GHG emissions	●		Reduction in fuel costs by replacing propane gas with internally produced gas^*3	Short- to long-term	I	Medium- to long-term	I
Market	-	Increase in market demand Enhanced competitive advantage and brand value through mining and production in areas with lower impacts on nature Market expansion for existing producers if tighter regulations deter new market entrants Increased demand driven by growing needs for next-generation solar cells (perovskite solar cells) Increased demand driven by growing needs for medical applications (contrast media and disinfectants)	●		Increase in sales due to higher unit prices or transaction volumes^*4	Short- to long-term	III	Short- to long-term	III

Legend

Time Horizon: Short-term: through 2027; Medium-term: through 2030; Long-term: through 2050; –: Does not occur
Magnitude of Impact: I: up to ¥100 million; II: ¥100 million–¥1 billion; III: ¥1 billion or more; –: Not calculated

*Time horizons are based on workshop results. Magnitudes of impact are based on medium- to long-term assessments.

【Basis for Calculating Quantitative Financial Impacts】

*1Estimated based on “current sales of recycled iodine × growth rate of recycled iodine sales.”
*2Estimated based on “sales of virgin iodine (non-recycled) × improvement rate in the recovery rate.”
*3Estimated based on “current propane gas purchase cost × replacement rate.”
*4Estimated based on “current unit selling price × unit price increase rate × projected sales volume.”

Topic (Response)

Conservation of Water Systems through Underground Reinjection of Brine

In the iodine mining business, brine used as a raw material is reinjected underground to maintain the quantity and quality of water resources.
By conducting operations with due consideration for the balance of groundwater systems, we seek to minimize the impact on surrounding ecosystems and local water use and conserve natural capital.
We will continue operations while appropriately managing impacts on nature, including water resources.

Topic (Opportunity)

Iodine Recycling Business

The iodine recycling business is an initiative to reduce groundwater use and environmental impacts associated with new mining by recovering and reusing residual iodine generated by iodine users.
Through resource circulation, we aim to reduce dependencies and impacts on natural capital and contribute to achieving nature positive outcomes.
We will continue to expand this business as an opportunity to achieve both environmental value and business growth in the medical and next-generation technology fields, where demand is expected to increase.

Sites Requiring Attention Based on Surrounding Natural Environments

Using TNFD-recommended tools, we comprehensively assessed natural conditions around the factory and pumping wells in Oklahoma, U.S., including their proximity to protected areas (PAs) and Key Biodiversity Areas (KBAs), and physical risks such as water stress. We confirmed that none of these sites requires particular attention in light of the surrounding natural environment.

Assessment Results for the Value Chain (Direct Operations and Upstream, Including Site Development Processes)

Based on the ENCORE assessment, the production processes with the highest scores for dependencies and impacts were as follows.

Dependency: Iodine wholesaling
Impact: Iodine mining

Wind Power Business

The Group operates power generation businesses worldwide, including wind, solar, hydroelectric, geothermal, and biomass power, with Eurus Energy at the core. It is also focused on promoting development in Africa and emerging countries and expanding offshore wind power. For the wind power business, we conducted a LEAP analysis, including scenario analysis, covering direct operations and site development and decommissioning processes.
Eurus Energy operates wind power generation at 102 sites worldwide, located in areas with diverse natural characteristics, including mountainous areas, coastal areas, and grasslands. All of these sites depend on ground stability for stable operations. While wind power plays an important role in mitigating climate change, the Group recognizes concerns about the alteration of natural areas and the resulting impacts on surrounding ecosystems. It carefully conducts environmental impact assessments and follow-up monitoring and will continue working to reduce burdens on the natural environment by consulting nature experts while considering and introducing additional effective conservation measures.

Dependencies and Impacts on Nature, Risks, Opportunities, and Response Measures

〈Principal Dependencies and Impacts〉

For the wind power business, we identified the following principal dependencies and impacts^* during operations, site development, and decommissioning.

*Principal dependencies and impacts: Dependencies and impacts associated with risk items

Phase	Key Dependencies	Key Impacts	Overview (Operations that Interact with Nature)
During Site development / Decommissioning	Soil and sediment retention	-	Site development work on land with stable ground conditions
	-	Land use change	Modification of areas rich in nature
	Air purification	Pollution Climate change	Exhaust gas and CO₂ emissions from the operation of construction machinery
	Water purification	Pollution	Discharge of construction wastewater (turbid water) associated with rainfall during site development work
During operations	Other provisioning services	Resource use	Use of raw materials classified as High Impact Commodities in power generation components
	Noise attenuation	Pollution	Generation of noise from wind turbine operations
	Soil and sediment retention	-	Location on land with stable ground conditions
	-	Land use change	Location in areas rich in nature

*The “dependencies” and “impacts” in this table comprehensively identify the interfaces (potential impacts) between the Company’s business activities and the natural environment based on the TNFD framework. They do not indicate actual environmental pollution or other actual impacts.

〈Risks, Opportunities, and Response Measures〉

Based on the assessment of dependencies and impacts in the wind power business, we identified risks and opportunities related to nature in direct operations and site development and decommissioning processes and set out corresponding response measures.

Risk

Wind Power Business (Risk)

Risk Category		Risk Overview	Direct Operations	Site Development / Decommissioning Process	Financial Impact	Scenario #1 (Nature Stability and Coordination Scenario)		Scenario #3 (Nature Degradation and Fragmentation Scenario)		Response Measures
Risk Category		Risk Overview	Direct Operations	Site Development / Decommissioning Process	Financial Impact	Time Horizon	Magnitude of Impact	Time Horizon	Magnitude of Impact	Response Measures
Physical risk	Acute	Damage to site development / operating areas caused by natural disasters such as landslides	●	●	Restoration costs^1 Increase in insurance premiums due to an increase in natural disasters^2	-	-	Short- to long-term	III	Construction that avoids areas with a high risk of slope failure or soil runoff, together with stable design and construction
Transition risk	Policy	Tighter restrictions on land-use areas due to the expansion of conservation areas	●	●	Decrease in revenue due to a reduction in suitable sites^*3	Medium- to long-term	-	-	-	Diversification of business models
		Tighter regulations on operations under laws and regulations 【noise】	●		Increase in monitoring costs^*4	Medium- to long-term	I	-	-	Conduct monitoring based on environmental impact assessment results
		Tighter regulations on site development / decommissioning processes under laws and regulations 【related to wastewater (turbid water)】		●	Increase in costs for measures associated with increased soil volumes due to regulations such as the Embankment Regulation Act^*5	Short- to long-term	II	-	-	Conduct monitoring based on environmental impact assessment results
		Tighter regulations on site development / decommissioning processes under laws and regulations 【related to surplus soil】		●	Increase in costs for measures such as reinforcement of retaining walls at soil disposal sites^6 Increase in costs for measures associated with increased off-site transport of surplus soil^7	Short- to long-term	I	-	-	Early identification of regulatory trends and appropriate responses
		Unintended changes in procurement sources due to tighter procurement-related rules and regulations		●	Increase in financial burden associated with changes in procurement sources^*3	Short- to long-term	-	-	-	Promote the securing of alternative sources for raw materials Obtain FSC certification for balsa wood used in certain components
	Market	Shift in customer preferences more environmentally-friendly companies	●	●	Increase in costs associated with ecosystem conservation measures^*3	Short- to long-term	II	Short- to long-term	II	Consideration for migratory birds and surrounding ecosystems Promote employee understanding of biodiversity conservation and make donations to nature conservation funds Procure credits to offset forest loss caused by logging and undertake afforestation and forest maintenance and management Promote the use of environmentally conscious products for wind turbine components and in site development processes Promote blade recycling
	Reputation	Accountability for adverse impacts on the surrounding environment and ecosystems arising from site development / decommissioning processes^* *Land use, surplus soil, wastewater (turbid water), noise, hazardous substances such as oil		●	Increase in costs associated with ecosystem conservation measures^*3	Short- to long-term	II	Short- to long-term	II	Implement appropriate mitigation measures, including installation of alternative nesting and feeding sites for rare raptors and revegetation of slopes Carry out restoration after completion of the project in accordance with landowners’ preferences Promote greener construction and decommissioning processes Engage with local stakeholders
	Reputation	Accountability for adverse impacts on the surrounding environment and ecosystems arising from operations^ Land use, wastewater (turbid water), noise, and light pollution	●		Decrease in revenue due to operational shutdowns caused by bird strikes and similar events^*8	Short- to long-term	III	Short- to long-term	III	Carefully select project sites based on environmental impact assessments Improve visibility, suspend operations when birds approach, and conduct post-event surveys, among other measures, to reduce bird strikes

Legend

Time Horizon: Short-term: through 2027; Medium-term: through 2030; Long-term: through 2050; –: Does not occur
Magnitude of Impact: I: up to ¥100 million; II: ¥100 million–¥1 billion; III: ¥1 billion or more; –: Not calculated

【Basis for Calculating Quantitative Financial Impacts】

*1Estimated based on “restoration costa × average number of disaster occurrences^*a × increase in disaster occurrence frequency^*b.”
*2Estimated based on “current insurance premium c × rate of increase^*a.”
*3Financial impact was not calculated because parameters required for quantification were unavailable.
*4Estimated based on “monitoring costs × average number of newly commissioned projects × rate of increase.”
*5Estimated based on “current civil engineering costs ^*c × increase rate in mitigation costs^*a.”
*6Estimated based on “current slope construction costs^*c × increase rate in mitigation costs^*a.”
*7Estimated based on “current surplus soil disposal costs^*c × increase rate in mitigation costs^*a.”
*8Estimated based on “average power generation^*a × electricity selling price^*a × proportion of wind farms shut down^*a × number of shutdown days^*a.”

*aFigures calculated based on the Company’s past cases
*bBased on the “increase in the annual average frequency of landslide occurrence” in the International Journal of Disaster Risk Science (RCP4.5 scenario, 2031–2060: 7%)
*cCosts currently incurred by the Company

During the assessment, we also considered risk items such as a decline in consistent wind conditions due to climate change, tighter regulations on light pollution during operations, tighter regulations on noise and hazardous substances during site development, and potential liability arising from environmental impacts caused by wastewater (turbid water). However, the scenario analysis indicated that these risks currently have limited impacts, so they are not included in the risk table.

Opportunity

Wind Power Business (Opportunity)

Opportunity Category		Opportunity Overview	Direct Operations	Site Development / Decommissioning Process	Financial Impact	Scenario #1 (Nature Stability and Coordination Scenario)		Scenario #3 (Nature Degradation and Fragmentation Scenario)
Business Performance	Sustainability Performance	Opportunity Overview	Direct Operations	Site Development / Decommissioning Process	Financial Impact	Time Horizon	Magnitude of Impact	Time Horizon	Magnitude of Impact
Market	-	Expansion of the wind power business in response to climate change (including offshore wind power)	●		Increase in profit through business expansion^*1	Short- to long-term	Ⅲ	Short- to long-term	Ⅲ
Market / Products and services	-	Establishment of data centers that locally produce and consume electricity from renewable energy sources	●		Increase in profit through business expansion^*1	Short- to long-term	Ⅲ	Short- to long-term	Ⅲ
Resource efficiency	Sustainable use of natural resources	Resource circulation through the recycling of plastics, waste reduction, and other measures		●	Increase in profit from undertaking the recycling of components^*2	Medium- to long-term	Ⅰ	Long-term	Ⅰ
Products and services	-	Expansion of integrated solutions businesses combining electricity, energy storage, energy management, and other services	●		Increase in profit through business expansion^*1	Short- to long-term	Ⅲ	Short- to long-term	Ⅲ
Financing and funding	-	Use of green finance, subsidies, and other funding for the introduction of processes and equipment that contribute to environmental conservation	●		*Only likelihood of occurrence was considered because impact varies depending on the green finance or subsidy used	Short- to long-term	-	Short- to long-term	-
Reputational capital	Protection, restoration, and regeneration of ecosystems	Implementation of initiatives for biodiversity conservation and environmental considerations Consider migratory birds and surrounding ecosystems Promote employee understanding of biodiversity conservation Make donations to nature conservation funds Procure credits to offset forest loss caused by logging and undertake afforestation and forest maintenance and management Promote the use of environmentally conscious products for power generation components and in site development processes	●	●	*Only likelihood of occurrence was considered because impact varies by initiative	Short- to long-term	-	Short- to long-term	-

Legend

Time Horizon: Short-term: through 2027; Medium-term: through 2030; Long-term: through 2050; –: Does not occur
Magnitude of Impact: I: up to ¥100 million; II: ¥100 million–¥1 billion; III: ¥1 billion or more; –: Not calculated
*Items in parentheses are based on WS results

【Basis for Calculating Quantitative Financial Impacts】

*1Estimated based on “planned amount × profit growth rate.”
*2Estimated based on “input volume × recycling rate × unit price × profit margin.”

Topic (Response)

Initiative to Achieve 100% Blade Recycling at Eurus Odanosawa Wind Farm

Blades generated when wind power facilities are replaced are highly durable. However, as they are difficult to reuse, they have traditionally been disposed of in landfills, posing nature-related risks such as resource consumption and land use.
In this initiative, we achieved 100% recycling by working with a Group company and adopting a method of recycling waste blades as raw materials for cement.
Through waste reduction and resource circulation, this initiative reduces impacts on nature while helping to mitigate future disposal and regulatory risks, thereby contributing to nature-positive business operations and enhanced corporate value.

Topic (Opportunity)

Launch of Japan’s First Green Data Center Business Directly Connected to a Wind Power Plant

The data center business, which is directly connected to a wind power plant and utilizes “direct green electricity,” is an initiative to maximize the value of renewable energy while reducing impacts on natural capital.
We believe that the business also contributes to reducing indirect impacts on ecosystems by avoiding grid constraints, expanding the use of renewable energy, and enabling decentralized regional infrastructure.
We will pursue environmental value and business growth simultaneously by viewing the growing digital demand of the AI era as an “opportunity” to achieve both business growth and nature-positive outcomes.

Sites Analyzed and Assessed Considering Surrounding Natural Environments

Eurus Energy operates wind power generation at 102 sites worldwide that are located in areas with diverse natural characteristics.
For this TNFD analysis, to analyze by representative site characteristic (including coastal areas, grasslands, and mountainous areas), we selected five sites in Japan requiring attention in order to assess the wind power business's dependencies and impacts, risks, and opportunities.
When constructing wind power plants, the Group conducts environmental impact assessments, identifies matters requiring attention considering the natural environment around each site, and implements environmental conservation measures tailored to local natural characteristics. We will continue these initiatives and work to contribute to achieving nature positivity.

Assessment Results for the Value Chain (Direct Operations and Upstream, Including Site Development Processes)

Based on the ENCORE assessment, the production processes with the highest scores for dependencies and impacts were as follows.

Dependency: Manufacturing of various power generation components
Impact: Extraction of raw materials (petroleum, minerals, etc.) used in power generation components, and land development and construction

Grain Collection and Logistics Business

The Group operates a grain collection and logistics business. We conducted a LEAP analysis of direct operations at its warehouses, transshipment facilities, and port terminals in central and northeastern Brazil, as well as soybean and corn cultivation at farms in Brazil in the upstream supply chain.
The grain collection and logistics business handles soybeans and corn classified as High Impact Commodity. In the upstream supply chain, these grains are cultivated in Brazil's nature-rich regions, including the Amazon and Cerrado, and the Group recognizes concerns that this cultivation may contribute to deforestation. As the business also depends on soil stability and specific climate conditions in regions where farms are located to ensure stable grain collection, the inappropriate use of fertilizers and pesticides could affect the surrounding environment. The business has obtained RTRS certification and supports RTRS activities throughout the supply chain, thereby promoting sustainable operations.

Dependencies and Impacts on Nature, Risks, Opportunities, and Response Measures

〈Principal Dependencies and Impacts〉

For the grain collection and logistics business, we identified the following principal dependencies and impacts during operations and in the upstream supply chain.

*Principal dependencies and impacts: Dependencies and impacts associated with risk items

Phase	Key Dependencies	Key Impacts	Overview (Operations That May Interact with Nature)
Upstream SC	-	Land use change	Grain cultivation involving land conversion at supplier farms
	Flood mitigation/Soil and sediment retention/Soil quality regulation/Water purification/Water flow regulation/Storm mitigation	Land use change	Grain cultivation on stable land at supplier farms
	Global climate regulation/Local climate regulation/Rainfall pattern regulation	-	Grain cultivation at supplier farms dependent on optimal rainfall and other climatic conditions
	Freshwater Supply	Resource use	Use of irrigation water at supplier farms in certain regions
	-	Pollution	Use of fertilizers and pesticides at supplier farms
Direct Operations	Biomass supply/Other provisioning services	Resource use	Handling of grains classified as High Impact Commodity (purchasing, sales, etc.)
	Biomass supply	Resource use	Use of biofuels
	Air purification	Climate change	Continuous CO₂ emissions from electricity and fuel use
	-	Pollution	Storage of potentially combustible materials (dust, firewood, etc.)

〈Risks, Opportunities, and Response Measures〉

Based on the assessment of dependencies and impacts in the grain collection and logistics business, we identified risks and opportunities related to nature in direct operations and set out corresponding response measures.

Risk

Grain Collection and Logistics Business (Risk)

Risk Category		Risk Overview	Direct Operations	Upstream SC	Financial Impact	Scenario #1 (Nature Stability and Coordination Scenario)		Scenario #3 (Nature Degradation and Fragmentation Scenario)		Response Measures
Risk Category		Risk Overview	Direct Operations	Upstream SC	Financial Impact	Time Horizon	Magnitude of Impact	Time Horizon	Magnitude of Impact	Response Measures
Physical risks	Acute	Impacts such as destruction of operating areas caused by wildfires		●	Decrease in gross profit due to reduced collection volume^*1	Medium- to long-term	II	Short- to long-term	II-III	Diversification of procurement areas to spread risk Flexible contracts with logistics providers Mitigation of direct impacts due to the business's position as a trader
	Acute	Difficulty procuring biofuel due to resource shortages caused by natural disasters, etc.	●		Increased fuel procurement costs^*2	Short- to long-term	I	Short- to long-term	I	Secure alternative fuel options
	Acute / Chronic	Abnormal outbreaks of pests and other organisms due to climate-driven habitat shifts		●	Decrease in gross profit due to reduced collection volume^*3	Short- to long-term	II	Short- to long-term	II	Diversification of procurement areas to spread risk Use of pest outbreak forecast data, etc.
Transition risks	Policy	Irrigation water shortages due to strengthened water supply regulations under laws and regulations		●	Decrease in gross profit due to reduced collection volume^*4	Long-term	II	Medium- to long-term	II	Diversification of procurement areas to spread risk Plan: Develop more drought-resistant varieties
	Policy	Stronger legal and regulatory restrictions on the use of fertilizers, pesticides, etc.		●	Decrease in gross profit due to reduced collection volume^*5	Medium- to long-term	II	-	-
	Market	Increased procurement costs for certification and stringent purchasing standards	●	●	Increased procurement costs due to higher production and management costs^*6	Medium- to long-term	I^*	-	-	The following measures have already been implemented (1) Careful selection of suppliers using the Company’s contract farmer database and information from government agencies, etc. (2) Acquisition of RTRS certification *This risk is expected to be offset by higher premiums and pass-through pricing for grains that meet certification requirements and stringent purchasing standards.
	Market	Increased difficulty procuring grain due to growing demand for certified and environmentally friendly products	●		Decrease in gross profit due to higher procurement costs^*7	Short- to long-term		Short- to long-term		Diversification of procurement areas and supplier farms to spread risk
	Technology	Introduction of lower-impact technologies at directly operated sites	●		Costs for introducing technologies such as electric grain dryers^*8	Medium- to long-term		Medium- to long-term		Introduction and improvement of appropriate equipment in collaboration with equipment manufacturers
	Reputational	Accountability for deforestation at procurement sources		●	Litigation costs^*9	Short- to long-term		Short- to long-term		Procurement from farmers that comply with relevant regulations Tracing products to the furthest traceable point and using satellite imagery to assess farmland conditions Plan: Conduct afforestation activities
		Accountability for impacts on the surrounding environment caused by improper use of fertilizers and pesticides at supplier farms (deterioration of soil and water quality, downstream eutrophication, air pollution, and adverse impacts on surrounding ecosystems)		●	Costs of responding to exceedances of standards, etc.^*10	Medium- to long-term	I	Medium- to long-term	I	Strict concentration measurements from product receipt through delivery
				●	Decrease in sales due to reduced business following customer attrition^*11	Medium- to long-term	II	Medium- to long-term	II
	Liability	Liability for fires and impacts on the surrounding environment caused by leakage of potentially combustible materials, such as dust and firewood, stored at directly operated sites	●		Compensation costs for legal claims, etc.^*12	Short- to long-term		Short- to long-term		Capital investment, employee training, and audits

Legend

Time Horizon: Short-term: through 2027; Medium-term: through 2030; Long-term: through 2050; –: Does not occur
Magnitude of Impact: I: up to ¥100 million; II: ¥100 million–¥1 billion; III: ¥1 billion or more; –: Not calculated
*Parentheses indicate WS results

【Basis for Calculating Quantitative Financial Impacts】

*1Estimated as "Gross profit per ton × planned collection volume × percentage decrease in collections due to wildfires^*a × increase in wildfire frequency^*b."
*2Estimated as "Current fuel purchase price × annual consumption × price increase rate^*c."
*3Estimated as "Gross profit per ton × planned collection volume × percentage decrease in collections due to pest outbreaks^*d."
*4Estimated as "Gross profit per ton × planned collection volume × percentage decrease in collections due to insufficient irrigation water^*e."
*5Estimated as "Gross profit per ton × planned collection volume × percentage decrease in collections due to restrictions on fertilizer and pesticide use^*f."
*7Estimated as "Sales target × decrease in business rate^*g."
*7-9Financial impacts were not calculated because parameters required for quantification were unavailable.
*10Based on past comparable cases.
*11Estimated as "Sales target × decrease in business rate^*h."
*12Financial impacts were not calculated because parameters required for quantification were unavailable.

*aBased on past comparable cases at the Company.
*bBased on the parameters for "number of days with extreme fire weather in Brazil" under Net Zero 2050 and Current Policies in Climate impact explorer.
*cUses the Company's forecast values.
*dBased on an external study estimating crop losses in the southern Brazilian Amazon.
*eEstimated using data on irrigated farmland area as a share of supplier farms.
*fBased on an external study on organic farming in Brazil.
*gBased on an external study on B2B buyer purchasing behavior related to sustainability.
*hBased on past comparable cases.

During the assessment, we also considered risk items such as insufficient rainfall caused by climate change and liability for pollution resulting from leaks from diesel tanks at direct-operation sites. However, the scenario analysis indicated that these risks currently have limited impacts, so they are not included in the risk table.

Opportunity

Grain Collection and Logistics Business (Opportunity)

Opportunity Category		Opportunity Overview	Direct Operations	Upstream SC	Financial Impact	Scenario #1 (Nature Stability and Coordination Scenario)		Scenario #3 (Nature Degradation and Fragmentation Scenario)
Business Performance	Sustainability Performance	Opportunity Overview	Direct Operations	Upstream SC	Financial Impact	Time Horizon	Magnitude of Impact	Time Horizon	Magnitude of Impact
Products and services	Sustainable use of natural resources	Increased volume of certified grain and grain meeting stringent purchasing standards Environmentally-friendly grain (2BSvs corn and RTRS soybeans) RTRS certification obtained in 2023 Since 2015, the Toyota Tsusho Group has anticipated regulations by introducing stringent purchasing standards for products other than certified products Selection of appropriate procurement sources	●	●	Increase in profit due to higher grain selling prices^*1	Short- to long-term	I^*	Short- to long-term
Capital flow and financing	-	Generation of forest conservation-derived carbon credits (REDD+) Forest regeneration and conservation activities, including tree-planting in collaboration with farmers	●		Increase in profit due to higher credit prices^*2	Short- to long-term		Short- to long-term
Capital flow and financing	-	Use of green finance and various subsidies to introduce processes and equipment that support environmental conservation	●		*Only likelihood of occurrence was considered because impact varies depending on the green finance or subsidy used	Short- to long-term	-	Short- to long-term	-
Resource efficiency	Sustainable use of natural resources	GHG emission reduction initiatives Transition to renewable energy use in warehouse operations Transition to methods with lower environmental impact in logistics	●		*Only likelihood of occurrence was considered because impact varies by initiative	Medium- to long-term	-	-	-
Reputational capital	Ecosystem protection, restoration, and regeneration	Environmental conservation activities Contribution to environmental conservation and nature restoration through natural environment conservation activities	●		*Only likelihood of occurrence was considered because impact varies by initiative	Short- to long-term	-	Short- to long-term	-
		Establishing a procurement policy on deforestation Complying with laws and regulations on deforestation Verifying that directly contracted farms comply with forest conservation ratio requirements Confirming in business discussions and contracts with agricultural cooperatives and resellers that soybeans do not involve illegal deforestation Improving farm traceability		●	Preferential financing terms and lower interest rates^*3	Short- to long-term		Short- to long-term
		Stronger engagement with farmers through satellite monitoring (monitoring wildfires and checking forest conservation ratios)		●	Mitigation of sales decline caused by reduced collection volumes^*4	Short- to long-term		Short- to long-term
Market	-	Expansion of the traceability system to other companies	●	●	Sales growth through system sales^*5	Short- to long-term		Short- to long-term

Legend

Time Horizon: Short-term: through 2027; Medium-term: through 2030; Long-term: through 2050; –: Does not occur
Magnitude of Impact: I: up to ¥100 million; II: ¥100 million–¥1 billion; III: ¥1 billion or more; –: Not calculated

*Time horizon is based on the WS results. Impact is assessed over the medium to long term.

【Basis for Calculating Quantitative Financial Impacts】

*1-5Financial impacts were not calculated because parameters required for quantification were unavailable.

Topic (Response)

Satellite Monitoring

To ensure sustainability throughout the supply chain, we monitor the farmland where the grain we collect is produced using remote sensing technology and geographic information systems. We also carefully select suppliers by cross-checking our farmer database against information on environmental violations published by government agencies and other organizations.

(Key information cross-checked)

Names of producers found to have committed environmental violations, as published by the Brazilian Institute of the Environment and Renewable Natural Resources (IBAMA)
Whether producers have been involved in litigation over environmental violations in state or federal courts
Whether sites are registered as environmental protection areas or Indigenous territories

Obtaining RTRS Certification

RTRS is an international initiative that provides certification for responsible soybean production and distribution.
NovaAgri has obtained certification to deliver RTRS value throughout the supply chain and supports RTRS-related activities.

Obtaining 2BSvs Certification

2BSvs certification is a European certification standard for sustainable biomass and biofuels. NovaAgri obtained 2BSvs certification in May 2022 and sells grain produced and collected in an environmentally responsible manner.

(Main certification requirements and management items)

Farmers must be located more than 10 km outside Amazon protected areas, including Indigenous territories
Records of herbicides, insecticides, fungicides, seeds, fertilizers, diesel, and electricity used in cultivation must be reported

Through these efforts, we have worked to obtain certification early and carefully select suppliers using our contracted farmer database and information from government agencies. We believe the risk of higher procurement costs associated with certification and stringent purchasing standards is limited and expect such increases to be offset through pass-through pricing and other measures. We will continue working to secure market access in response to demand for sustainable grain.

Topic (Opportunity)

Generation of Forest Conservation-Derived Carbon Credits (REDD+)

We aim to create new business opportunities by generating forest conservation-derived carbon credits.
We believe that this initiative goes beyond simply generating carbon credits.
By halting ecosystem degradation in production areas and putting natural capital on a recovery trajectory, it directly contributes to becoming nature positive. The Group aims to strengthen business resilience by simultaneously conserving biodiversity and building a sustainable procurement base while creating new revenue opportunities.

Sites Analyzed and Assessed Considering Surrounding Natural Environments

We assessed 187 municipalities in 10 Brazilian states where farms with which the Group does business are located, and obtained the following results.

Areas requiring attention in relation to deforestation: Parts of Bahia, Maranhão, Piauí, and Tocantins
Areas requiring attention for impacts of fertilizer and pesticide use on the surrounding environment: Parts of Maranhão and Tocantins
Areas requiring attention for future water depletion risk: Parts of Goiás and Pará (limited areas only)

We also assessed three direct-operation sites in Brazil, consisting of warehouses, transshipment facilities, and port terminals, and identified the port terminal in São Luís, Maranhão, as a site requiring particular attention considering the surrounding natural environment.

Four States Identified as Areas Requiring Attention for Deforestation-Related Issues

Value Chain Assessment Results (Direct Operations and Upstream, Including Site Development Processes)

ENCORE assessment results showed that the following production process had the highest dependency and impact scores.

Dependency and impact: Grain cultivation (soybeans and corn)

Sheet Metal Processing for Automobiles Business

The Group sells, distributes, and processes metal materials for a wide range of industries, including steel sheets, nonferrous metals, and other materials for mobility, as well as materials for the energy and infrastructure sectors. Within these operations, we conducted a LEAP analysis focusing on the mobility sheet metal processing business, which has a large number of operating entities.

Dependencies and Impacts on Nature, Risks, Opportunities, and Response Measures

〈Principal Dependencies and Impacts〉

For the sheet metal processing for automobiles business, we identified the following dependencies and impacts during operations.

Key Dependencies	Key Impacts	Overview (Operations that Interact with Nature)
Air purification	Climate change	Ongoing CO₂ emissions from electricity use
Air purification	Pollution	Ongoing emissions of air pollutants from the use of diesel forklifts
-	Pollution	Fuel storage and generation of industrial waste
Noise attenuation	Pollution	Use of noise-generating equipment
-	Introduction of invasive non-native species	Handling of goods transported over long distances

〈Risks, Opportunities, and Response Measures〉

Based on the assessment of dependencies and impacts in the sheet metal processing for automobiles business, we identified risks and opportunities related to nature in direct operations and set out corresponding response measures.

Risk

Sheet Metal Processing for Automobiles Business (Risk)

Risk Category		Risk Overview	Negative Impacts on Business	Response Measures
Physical risks	Acute	Impact on surrounding environment and ecosystems due to pollution	Losses resulting from temporary suspension of operations Increased financial burden associated with ecosystem conservation measures (mitigation)	[CO₂ emissions] Introduce solar power generation systems, purchase electricity from renewable sources, and implement energy-saving measures [Air pollutants] Promote the switch to EV forklifts [Waste] Properly select contracted industrial waste processors and conduct regular visits to intermediate treatment facilities [Hazardous materials] Regularly inspect storage areas (diesel fuel stands) and conduct emergency response drills for leaks [Noise] Conduct regular noise monitoring [Invasive species] Train employees to promptly notify the public health center when abnormalities are found
	Acute	Impact on surrounding environment and ecosystems due to invasion of non-native species	Increased financial burden associated with non-native species eradication
	Chronic	Intensification of natural disasters caused by continuous CO₂ emissions and climate change	Increased costs for natural disaster countermeasures Losses resulting from suspension of operations due to natural disaster damage
Transition risks	Policy	Strengthening of regulations on CO₂ emissions and pollution by laws and ordinances	Increased business costs and new facility costs in response to strengthened regulations Increased financial burden due to relevant taxes and strengthened monitoring
	Market	Shift in customer preferences toward companies with stronger environmental considerations	Decrease in business volume due to customer attrition Decrease in employee retention and recruitment rates
	Reputational	Accountability for negative impacts on the surrounding environment and ecosystems caused by business operations	Deterioration of relationships with surrounding stakeholders Reduction in business volume due to customer attrition Decrease in employee retention and recruitment rates
	Technology	Transition to low-environmental-impact technologies	Increased costs for the introduction of new facilities with low environmental impact
	Liability	Occurrence of liability for compensation due to impacts such as pollution on surrounding environment and ecosystems	Costs incurred for legal claims and compensation for damages

Opportunity

Sheet Metal Processing for Automobiles Business (Opportunity)

Opportunity Category		Opportunity Overview
Business Performance	Sustainability Performance	Opportunity Overview
Market	-	Long-term increase in revenue by gaining access to new markets through the expanded use of green steel products that help conserve the environment
Capital flow and financing	-	Securing new fund procurement channels through green finance and various subsidies
Resource efficiency	Sustainable use of natural resources	Contribution to nature restoration, enhanced stakeholder recognition, and long-term reduction in operating costs through GHG emissions reduction initiatives, including solar power system installation and other factory-greening measures
Resource efficiency	Sustainable use of natural resources	Contribution to nature restoration, enhanced stakeholder recognition, and long-term reduction in operating costs through initiatives such as expanding the use of container vanning technology (CVT) to reduce packaging material waste
Reputational capital	Ecosystem protection, restoration, and regeneration	Improved stakeholder recognition through environmental preservation programs and contributions to environmental conservation and nature restoration via business activities

Sites Analyzed and Assessed Considering Surrounding Natural Environments

After selecting and assessing 30 sites in Japan and overseas, we found that 22 require particular attention considering their surrounding natural environments.

Value Chain Assessment Results (Direct Operations and Upstream)

ENCORE assessment results showed that the following production processes ranked among the highest in terms of dependency and impact scores.

Dependency: Extraction of iron ore and other raw materials
Impact: Metal processing

Logistics Business

The Group has local subsidiaries and operating entities worldwide and uses its sites and logistics networks to establish optimally integrated parts logistics systems, thereby building a global automotive parts supply chain. Within these operations, we conducted a LEAP analysis of the warehouse business of Toyotsu Logistics Service Co. Ltd., the principal business of which is logistics.

Dependencies and Impacts on Nature, Risks, Opportunities, and Response Measures

〈Principal Dependencies and Impacts〉

For the logistics business, we identified the following dependencies and impacts during operations.

Key Dependencies	Key Impacts	Overview (Operations that Interact with Nature)
Air purification	Climate change	Ongoing CO₂ emissions from electricity use
Air purification	Pollution	Ongoing emissions of air pollutants from the use of diesel forklifts
-	Pollution	Storage of alkaline detergents and fuels, generation of industrial waste, and use of plastic packaging materials
-	Introduction of invasive non-native species	Handling of goods transported over long distances
-	Land-use change	Site expansion and development

〈Risks, Opportunities, and Response Measures〉

Based on the assessment of dependencies and impacts in the logistics business, we identified risks and opportunities related to nature in direct operations and set out corresponding response measures.

Risk

Logistics Business (Risks)

Risk Category		Risk Overview	Negative Impacts on Business	Response Measures
Physical risks	Acute	Impact on surrounding environment and ecosystems due to pollution	Losses resulting from temporary suspension of operations Increased financial burden associated with ecosystem conservation measures (mitigation)	[CO₂ emissions] Install solar power systems, electrify forklifts, and reduce compressor pressure [Air pollutants] Electrify forklifts [Hazardous materials] Ensure proper management; plan: conduct simulation drills in accordance with procedures [Waste] Regularly inspect intermediate waste treatment facilities [Plastics] Ensure proper treatment and sorting and implement measures to prevent scattering [Invasive species] Train employees to promptly notify the public health center when abnormalities are found; plan: implement consistent measures across all sites [Land use] Submit documentation to government authorities when expanding
		Impact on surrounding environment and ecosystems due to invasion of non-native species	Increased financial burden associated with non-native species eradication
		Impact on surrounding environment and ecosystems due to land use and expansion	Losses resulting from temporary suspension of operations and construction work Increased financial burden associated with ecosystem conservation measures (mitigation)
	Chronic	Intensification of natural disasters caused by continuous CO₂ emissions and climate change	Increased costs for natural disaster countermeasures Losses resulting from suspension of operations due to natural disaster damage
Transition risks	Policy	Strengthening of regulations on CO₂ emissions and pollution by laws and ordinances	Increased business costs and new facility costs in response to strengthened regulations Increased financial burden due to relevant taxes and strengthened monitoring
	Policy	Strengthening of land use restrictions due to expansion of conservation areas	Increased financial burden due to strengthened environmental impact assessment systems Increased financial burden from relevant taxes and rising land acquisition costs
	Market	Shift in customer preferences toward companies with stronger environmental considerations	Decrease in business volume due to customer attrition Decrease in employee retention and recruitment rates
	Reputational	Accountability for negative impacts on the surrounding environment and ecosystems caused by business operations	Deterioration of relationships with surrounding stakeholders Decrease in business volume due to customer attrition Decrease in employee retention and recruitment rates
	Technology	Transition to low-environmental-impact technologies	Increased costs for the introduction of new facilities with low environmental impact
	Liability	Occurrence of liability for compensation due to impacts such as pollution on surrounding environment and ecosystems	Costs incurred for legal claims and compensation for damages

Opportunity

Logistics Business (Opportunities)

Opportunity Category		Opportunity Overview
Business Performance	Sustainability Performance	Opportunity Overview
Capital flow and financing	-	Securing new fund procurement channels through green finance and various subsidies
Resource efficiency	Sustainable use of natural resources	Contribution to nature restoration, enhanced stakeholder recognition, and long-term reduction in operating costs through GHG emissions reduction initiatives such as installing solar power systems and considering obtaining ISCC certification
Resource efficiency	Sustainable use of natural resources	Contribution to nature restoration, enhanced stakeholder recognition, and long-term reduction in operating costs through material recycling and thermal recovery initiatives such as collecting plastic packaging bags and stretch film for conversion into recycled pellets, and reusing corrugated cardboard by reinforcing it with chemicals
Reputational capital	Ecosystem protection, restoration, and regeneration	Improved stakeholder recognition through environmental preservation programs and contributions to environmental conservation and nature restoration via business activities

Sites Analyzed and Assessed Considering Surrounding Natural Environments

After selecting and assessing 13 warehouse sites in Japan, we found that eight require particular attention considering their surrounding natural environments.

Value Chain Assessment Results (Direct Operations and Upstream)

ENCORE assessment results showed that the following production processes ranked among the highest in terms of dependency and impact scores.

Dependency: Timber harvesting for materials used in warehouse construction
Impact: Extraction and manufacture of raw materials for warehouse construction, and land development

Car Dealership Business

The Toyota Tsusho Group exports passenger and commercial vehicles manufactured in Japan and overseas by automobile and transportation equipment manufacturers, primarily Toyota Group companies, to countries around the world. We also operate import distributors and dealerships through our global network spanning 150 countries. As part of these operations, we conducted a LEAP analysis of local dealership businesses.

Dependencies and Impacts on Nature, Risks, Opportunities, and Response Measures

〈Principal Dependencies and Impacts〉

In the car dealership business, we have identified the following dependencies and impacts during operations.

Key Dependencies	Key Impacts	Overview (Operations that Interact with Nature)
Freshwater supply Water purification	Resource use Pollution	Water use and wastewater discharge during vehicle washing
Air purification	Climate change	Ongoing CO₂ emissions from electricity and fuel use
-	Pollution	Storage of hazardous materials and generation of industrial waste
Noise attenuation	Pollution	Use of noise-generating equipment
-	Land-use change	Site expansion

〈Risks, Opportunities, and Response Measures〉

Based on the assessment of dependencies and impacts in the car dealership business, we identified risks and opportunities related to nature in direct operations and set out corresponding response measures.

Risk

Car Dealership Business (Risk)

Risk Category		Risk Overview	Negative Impacts on Business	Response Measures
Physical risks	Acute	Drought over a wide area of water sources and their surroundings Deterioration of water quality caused by other stakeholders	Losses resulting from temporary suspension of operations Decline in production volume due to difficulty in water intake Increased financial burden due to changes in water sources	[Water supply] Secure alternative water sources [Wastewater] Respond promptly to accidental leaks [CO₂ emissions] Install solar power systems [Hazardous materials] Ensure proper storage and management and implement leak prevention measures [Waste] Ensure proper treatment and conduct regular monitoring [Noise] Conduct regular monitoring and install soundproofing equipment [Land use] Conduct prior studies before expansion
		Impact on surrounding environment and ecosystems due to pollution	Losses resulting from temporary suspension of operations Increased financial burden associated with ecosystem conservation measures (mitigation)
		Impact on surrounding environment and ecosystems due to land use and expansion	Losses resulting from temporary suspension of operations and construction work Increased financial burden associated with ecosystem conservation measures (mitigation)
	Chronic	Intensification of natural disasters caused by continuous CO₂ emissions and climate change	Increased costs for natural disaster countermeasures Losses resulting from suspension of operations due to natural disaster damage
Transition risks	Policy	Strengthening of water supply regulations by laws and ordinances	Losses resulting from temporary suspension of operations due to water supply restrictions Increased business costs and new facility costs in response to strengthened regulations Increased operating costs due to relevant taxes and rising water charges
		Strengthening of regulations on CO₂ emissions and pollution by laws and ordinances	Increased business costs and new facility costs in response to strengthened regulations Increased financial burden due to relevant taxes and strengthened monitoring
		Strengthening of land use restrictions due to expansion of conservation areas	Increased financial burden due to strengthened environmental impact assessment systems Increased financial burden from relevant taxes and rising land acquisition costs
	Market	Shift in customer preferences toward companies with stronger environmental considerations	Decrease in business volume due to customer attrition Decrease in employee retention and recruitment rates
	Reputational	Accountability for negative impacts on the surrounding environment and ecosystems caused by business operations	Deterioration of relationships with surrounding stakeholders Decrease in business volume due to customer attrition Decrease in employee retention and recruitment rates
	Technology	Transition to low-environmental-impact technologies	Increased costs for the introduction of new facilities with low environmental impact
	Liability	Occurrence of liability for compensation due to impacts such as pollution on surrounding environment and ecosystems	Costs incurred for legal claims and compensation for damages

Opportunity

Car Dealership Business (Opportunity)

Opportunity Category		Opportunity Overview
Business Performance	Sustainability Performance	Opportunity Overview
Market	-	Increased business volume driven by growing demand for hybrid and electric vehicles
Capital flow and financing	-	Securing new fund procurement channels through green finance and various subsidies
Resource efficiency	Sustainable use of natural resources	Reduced water use through wastewater recycling at effluent treatment plants (ETPs), contribution to nature restoration, lower long-term operating costs, and enhanced recognition from local stakeholders
Resource efficiency	Sustainable use of natural resources	Contribution to nature restoration and lower long-term operating costs through GHG emissions reduction initiatives such as installing solar power systems, and enhanced stakeholder recognition through initiatives such as carbon offsetting
Products and services	Sustainable use of natural resources	Long-term revenue growth, enhanced stakeholder recognition, and contribution to nature restoration by selling products that support sustainable procurement, including working with Toyota Motor Corporation to discuss offering vehicles suited to each market, such as hybrid vehicles, based on fuel conditions, the proportion of paved roads, and other local road conditions
Reputational capital	Ecosystem protection, restoration, and regeneration	Improved stakeholder recognition through environmental preservation programs and contributions to environmental conservation and nature restoration via business activities

Sites Requiring Attention Based on Surrounding Natural Environments

Using natural resource assessment tools, we analyzed the surrounding environments of multiple business sites and confirmed that some sites are located near areas considered important for biodiversity conservation. We will continue to appropriately assess impacts on the natural environment and advance initiatives to mitigate risks.

Value Chain Assessment Results (Direct Operations and Upstream)

ENCORE assessment results showed that the following production processes ranked among the highest in terms of dependency and impact scores.

Dependency: Natural rubber harvesting for vehicle raw materials
Impact: Extraction of petroleum, iron ore, and other materials used as vehicle raw materials or fuels

Hydrogen Station Business

The Toyota Tsusho Group operates hydrogen stations in anticipation of growing hydrogen demand accompanying the wider adoption of fuel cell (FC) commercial and passenger vehicles. As part of these operations, we conducted a LEAP analysis of the hydrogen station business.

Dependencies and Impacts on Nature, Risks, Opportunities, and Response Measures

〈Principal Dependencies and Impacts〉

In the hydrogen station business, we have identified the following dependencies and impacts during operations.

Key Dependencies	Key Impacts	Overview (Operations that Interact with Nature)
Other provisioning services	Resource use	Use of hydrogen derived from natural gas
Air purification	Climate change	Ongoing CO₂ emissions from electricity use
—	Pollution	Discharge of cooling water into rivers

〈Risks, Opportunities, and Response Measures〉

Based on the assessment of dependencies and impacts in the hydrogen station business, we identified risks and opportunities related to nature in direct operations and set out corresponding response measures.

Risk

Hydrogen Station Business (Risks)

Risk Category		Risk Overview	Negative Impacts on Business	Response Measures
Physical risks	Acute	Resource scarcity caused by natural disasters, etc.	Losses resulting from temporary suspension of operations Increased financial burden due to changes in raw materials or procurement sources	[CO₂ emissions] Use of renewable energy [Hot water discharge] Discharge via an on-site storage tank [Resource (raw material) supply] Plan: Use green hydrogen once it becomes available
	Acute	Impact on surrounding environment and ecosystems due to pollution	Losses resulting from temporary suspension of operations Increased financial burden associated with ecosystem conservation measures (mitigation)
	Chronic	Intensification of natural disasters caused by continuous CO₂ emissions and climate change	Losses resulting from suspension of operations due to natural disaster damage Increased costs for natural disaster countermeasures
Transition risks	Policy	Unintended change of procurement sources due to strengthened procurement-related regulations	Losses resulting from temporary suspension of raw material procurement and associated suspension of operations Increased financial burden due to changes in procurement sources
	Policy	Strengthening of regulations on CO₂ emissions by laws and ordinances	Increased business costs and new facility costs in response to strengthened regulations Increased financial burden due to relevant taxes and strengthened monitoring
	Reputational	Decline in corporate brand value due to transactions with procurement sources that engage in inappropriate nature management	Decline in sales due to damaged corporate brand Increased financial burden due to changes in procurement sources
	Reputational	Accountability for negative impacts on the surrounding environment and ecosystems caused by business operations	Deterioration of relationships with surrounding stakeholders Reduction in business volume due to customer attrition Decrease in employee retention and recruitment rates
	Technology	Transition to low-environmental-impact technologies	Increased costs for the introduction of new facilities with low environmental impact
	Liability	Occurrence of liability for compensation due to impacts such as pollution on the surrounding environment and ecosystems	Costs incurred for legal claims and compensation for damages

Opportunity

Hydrogen Station Business (Opportunities)

Opportunity Category		Opportunity Overview
Business Performance	Sustainability Performance	Opportunity Overview
Market	-	Increased demand for the hydrogen station business as the use of hydrogen-powered vehicles grows
Capital flow and financing	-	Securing new fund procurement channels through green finance and various subsidies
Resource efficiency	Sustainable use of natural resources	Contribution to lower GHG emissions through 100% use of electricity from renewable energy sources, long-term reduction in operating costs, contribution to nature restoration, and enhanced stakeholder recognition
Reputational capital	Ecosystem protection, restoration, and regeneration	Contribution to reduced CO₂ emissions from transportation through wider adoption of hydrogen vehicles (FCV), and enhanced stakeholder recognition for contributing to nature restoration

Sites Requiring Attention Based on Surrounding Natural Environments

After selecting and assessing two hydrogen station sites in Japan, we found that one require particular attention in light of its surrounding natural environment.

Value Chain Assessment Results (Direct Operations and Upstream)

ENCORE assessment results showed that the following production processes ranked among the highest in terms of dependency and impact scores.

Dependency: Hydrogen production and natural gas extraction
Impact: Natural gas extraction

[3] Strategic Initiatives

Toyota Tsusho is committed to “passing on a better Earth to the children of the future” as its mission. To this end, the company is broadening its perspective from carbon neutrality (CN) to nature positive (NP), aiming to create more comprehensive environmental value.

This “CN&NP” initiative lies at the core of the Toyota Tsusho Group’s sustainable growth strategy and underpins all of its business activities. In particular, the circular economy (CE), including renewable energy and resource recycling, in which the Group excels, is a source of value creation through our CN&NP initiatives. In its role as “the world’s leading circular economy provider,” the Group promotes co-creation with diverse stakeholders, including those in supply chains, consumers, and local communities. Through five Working Groups (5WGs) that integrate internal and external capabilities, the Group generates value from both environmental and economic perspectives, offering attractive growth opportunities to society.

Going forward, as a good corporate citizen, the Group will continue to advance CN, CE, and NP in an integrated manner, strive to resolve environmental issues, and contribute to the realization of a sustainable society, fulfilling its responsibility to pass on a better Earth to the children of the future.

Risk and Impact Management

[1] Process for Identifying Dependencies, Impacts, Risks, and Opportunities

As the Toyota Tsusho Group operates a diverse range of businesses around the world, the degree of dependency and impact on nature, as well as the magnitude of their effects on business, varies depending on the characteristics of each region and business. We therefore take a Group-wide perspective to understand the relationship between our businesses and nature, identify businesses with significant dependencies and impacts, and determine key risks and opportunities.

Initiatives for Direct Operations

To identify dependencies and impacts on nature, as well as risks and opportunities, in the Group’s direct operations, in Phase 1 we used ENCORE as part of the Scoping phase to assess the significance of biodiversity and the state of physical water stress around major business sites for 40 representative businesses and evaluated their dependencies and impacts on nature. In Phase 2, based on the Phase 1 results and factors such as scale of revenue, we narrowed the scope of analysis of direct operations to seven priority businesses and conducted detailed assessments and analyses of their operations in line with the LEAP approach.

[Steps of the LEAP Approach for Direct Operations Analysis]

Scoping

Set the scope and subjects of assessment

Assess dependencies and impacts on nature using ENCORE for the upstream value chains and direct operations of the 40 businesses subject to assessment
Based on the above results and factors such as scale of revenue, narrow down the businesses considered priorities for assessment and action by the Group, and select seven businesses for analysis in line with the LEAP approach

next (arrow)

Locate

Analyze the state of nature at the sites of assessed businesses

Select sites for assessment from among the business sites of each business, taking into account factors such as scale of revenue, and assess the state of nature surrounding each site
Use IBAT, Aqueduct, and Global Forest Watch for all businesses to identify the characteristics of, and points requiring attention regarding, the state of nature surrounding each site based on four criteria: “biodiversity importance,” “ecosystem integrity,” “rapid decline in ecosystem integrity,” and “physical water risk.”

next (arrow)

Evaluate

Assess dependencies and impacts on nature

Investigate the operations of each business through questionnaires or interviews
Identify dependencies and impacts on nature, as well as risk factors anticipated from those dependencies and impacts

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Assess

Identify risks and opportunities

Combine the dependencies, impacts, and risk factors identified in “Evaluate” with the assessment of the surrounding state of nature conducted in Locate, assess the degree of each risk factor at each target site, and identify sites with one or more risk factors assessed as “high” as “sites requiring attention based on the surrounding state of nature.”
Based on the identified risk factors and other considerations, identify opportunities for each business from the perspectives of both business performance and sustainability performance

next (arrow)

Prepare

Consider responses

For the identified risks and opportunities, define issues that need to be addressed in order to mitigate risks and capture further opportunities, and consider appropriate responses

Initiatives for the Value Chain

To identify dependencies and impacts on nature, as well as risks and opportunities, across the Group’s value chains, in Phase 1 we used ENCORE as part of the Scoping phase to assess dependencies and impacts on nature for 40 representative businesses, including those in the upstream value chain. Based on the results of Phase 2, in which seven priority businesses were selected from the 40 representative businesses, we designated three businesses as the highest-priority businesses: the iodine mining business and wind power business, which are considered to have significant impacts on nature during site development processes, and the grain collection and logistics business, which handles High Impact Commodities and is considered to have particularly significant dependencies and impacts on nature among the Group’s businesses. In Phase 3, we identified and assessed dependencies and impacts on nature, as well as risks and opportunities, in the upstream value chains of these businesses.
To identify dependencies, impacts, risks, and opportunities, we use the TNFD-recommended LEAP approach, as in the analysis of direct operations, and conduct scenario analysis to assess risks and opportunities over medium- and long-term time horizons.

[Steps of the LEAP Analysis for the Upstream Value Chain]

Locate

Analyze the state of nature at the sites of assessed businesses

Confirm the distribution and overlap of PA^*8 and KBA^*9 areas identified around the business sites in Phase 2, as well as protected areas and habitats of important species in OklahomaIodine
Select five domestic sites with different environmental conditions, such as forested areas, grasslands, and coastal areas, and confirm the distribution and overlap of PAs and KBAs identified around the business sites in Phase 2Wind Power
Collect information on municipalities in Brazil where contracted farms cultivating soybeans and corn are located, and analyze the area of PAs and nationally designated Priority Areas, the amount and proportion of land conversion, and future water scarcity risk in those municipalitiesGrain

next (arrow)

Evaluate

Assess dependencies and impacts on nature

Conduct interviews regarding site development operations and initiatives such as contracts with, and monitoring of, contracted farmsIodineWind PowerGrain
Organize the impacts described in environmental impact assessment reports and identify dependencies that can be inferred from the reportsWind Power
Assess nature-related dependencies and impacts based on sector guidanceIodineWind PowerGrain

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Assess

Identify risks and opportunities

Combine the Locate results to identify areas requiring attention from the perspectives of deforestation, pesticide and fertilizer use, and future water scarcity riskGrain
Based on the identified dependencies and impacts, conduct scenario analysis, identify nature-related risks and opportunities over short-, medium-, and long-term time horizons, and organize the key risks and opportunitiesIodineWind PowerGrain

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Prepare

Consider responses

For the identified risks and opportunities, define issues to be addressed in order to mitigate risks and capture further opportunities, and consider appropriate responsesIodineWind PowerGrain

*8PA (Protected Area): A natural conservation area protected and managed by national or local governments or other entities through legal or other effective means.
*9KBA (Key Biodiversity Area): An area recognized as being important for the global persistence of biodiversity based on IUCN global standards, regardless of whether it is legally protected.

For details of the results of the LEAP analysis above, please refer to “Strategy [2] Assessing Nature-related Dependencies, Impacts, Risks and Opportunities.”

[2] Risk Management Process

Integrated Risk Management Committee

As part of the Group’s global risk management framework, environmental management is positioned as one of the ten risk items requiring particular focus and is incorporated into the company-wide risk management process. While closely monitoring global trends in environmental risk management, we update management items as appropriate and are working to revise the environmental risk management process to incorporate biodiversity perspectives.
When the Integrated Risk Management Committee determines that risks and opportunities need to be reviewed, it discusses revisions to those risks and opportunities considering changes in the internal and external environment. The Committee also monitors progress in addressing sustainability-related risks and opportunities that could reasonably be expected to affect the Group’s outlook. The Board of Directors supervises the effectiveness of risk management through deliberations and reports on material risks identified by the Integrated Risk Management Committee.
Nature-related risks identified through this analysis are discussed at the Sustainability Committee and the Safety and Environment Conference, and the outcomes of these discussions are reflected in the formulation of business strategies and the activities of each division and are properly managed.

Environmental Management System

Toyota Tsusho has obtained ISO 14001 certification, the international standard for environmental management systems, and conducts environmental internal audits by headquarters once every three years at domestic and overseas consolidated subsidiaries covered by the integrated certification.

For details of the Group’s risk management framework, please refer to the website below.

Risk Management | Toyota Tsusho Corporation

Investments and Loans

Toyota Tsusho’s officers participate in various meetings to confirm the impacts that our investment activities have on ESG: The executive vice presidents, CSO, and CFO^*10 take part in the Investment and Loan Committee; the deputy CSO and deputy CFO in the Investment and Loan Meeting; and the president & CEO, executive vice presidents, CSO, CFO, and general manager of the Corporate Planning Department in the Investment Strategy Meeting. Projects that meet or exceed certain requirements and are submitted to the Investment and Loan Committee or the Investment and Loan Meeting are required to undergo a preliminary assessment of their impacts on natural capital. Using TNFD-recommended tools such as Global Forest Watch and Aqueduct, the assessment covers conditions related to surrounding biodiversity, as well as soil contamination, air pollution, water pollution, water risks, noise and vibration, odors, industrial waste, flammable hazardous materials, toxic chemical substances, and other relevant items.

*10CFO：Chief Financial Officer

Metrics and Targets

[1] Global Core Disclosure Metrics under the TNFD

The Toyota Tsusho Group is working to enhance the disclosure of indicators, including the use of quantitative KPIs for material issues related to sustainability, including nature-related challenges. With regard to the global core disclosure metrics defined by the TNFD, they are as follows.
Going forward, the Group will continue to expand disclosure of relevant indicators and enhance transparency around its targets and progress toward achieving them.

Dependencies and Impacts on Nature

Metric no.	Drivers of Nature Change	Metrics	Contents of Disclosure	Scope of Disclosure	Current Disclosure / Response Status
－	－	GHG emissions	GHG emissions (Scope1,2,3)	Toyota Tsusho Group companies in Japan and overseas	ESG Data＞Climate Change
C2.1	Pollution, pollution removal	Wastewater discharges	1Total 2Concentration of key pollutants in discharged wastewater (total BOD)	Toyota Tsusho, domestic and overseas consolidated subsidiaries	ESG Data＞Pollution Prevention
C2.2		Waste generation and disposal	1Incineration 2Landfill 3Other	Toyota Tsusho (Head Office, branches, sales offices, and representative offices) and domestic consolidated subsidiaries	ESG Data＞Effective use of resources
C2.2		Waste generation and disposal	Industrial waste: Recycled and non-recycled volumes	Toyota Tsusho (excluding waste sold for value and construction waste as contractor)	ESG Data＞Effective use of resources
C2.4		Non-GHG air pollutants	1Nitrogen oxides (NO₂, NO, NO₃) 2Volatile organic compounds (VOC/NMVOC) 3Sulfur oxides (SO₂, SO, SO₃, SOx)	Data from specific subsidiaries 1Toyota Chemical Engineering 2Toyotsu Energy Corporation 3Toyota Chemical Engineering	ESG Data＞Pollution Prevention
C3.0	Resource use and resource replenishment	Water withdrawal and consumption from areas of water scarcity	Water usage (facilities with significant impacts)	Scope of aggregation: See the relevant section under “Aqueduct 3.0 Country Rankings”	ESG Data＞Water Resources

Nature-related Risks and Opportunities for the Organization

Metric no.	Category	Metrics	Contents of Disclosure
C7.2	Risks	Details and amounts of significant fines, penalties, and litigation incurred during the fiscal year due to negative nature-related impacts	No fines, penalties, or litigation have occurred

[2] Company-wide Metrics and Targets

The Toyota Tsusho Group supports the Paris Agreement and, in July 2021, established reduction targets for its own emissions (Scopes 1 and 2) as a specific policy for contributing to the transition to a decarbonized society. In August 2025, the Group updated these targets and newly established a reduction target for supply chain emissions (Scope 3). Accordingly, the Group aims to reduce Scope 1 and 2 emissions by 50% and Scope 3 emissions by 27.5% by 2030 compared with 2019 levels, and to achieve net-zero emissions across the entire value chain, including its own operations and supply chain (Scopes 1, 2, and 3), by 2050.

Climate Change

The Toyota Tsusho Group has also identified four material issues toward realizing a sustainable society. For one of these material issues, “Contribute to the transition to a decarbonized society by reducing CO₂ emissions from automobiles, factories / plants through the use of clean energy and innovative technologies,” the Group has set “Achieve carbon neutrality by 2050” as its long-term target.

Materiality Issues

Future Outlook for TNFD

Going forward, as a trading company engaged in a diverse range of businesses, the Group will further enhance disclosures in line with the TNFD recommendations and further advance initiatives toward becoming nature positive.

Appendix: TNFD Disclosure Recommendations Reference Table

Disclosure Recommendation	Recommended Disclosure	Corresponding Section in This Disclosure
Governance	ADescribe the Board of Directors’ oversight of nature-related dependencies, impacts, risks, and opportunities.	Governance: [1]The supervisory and managerial roles of the Board of Directors
	BDescribe management’s role in relation to nature-related dependencies, impacts, risks, and opportunities.	Governance: [1]The supervisory and managerial roles of the Board of Directors
	CDescribe the organization’s human rights policies and engagement activities with Indigenous Peoples, local communities, and affected stakeholders in its assessment of and response to nature-related dependencies, impacts, risks, and opportunities, as well as oversight by the Board of Directors and management.	Governance: [2]Human Rights Policy and Engagement Activities with Stakeholders
Strategy	ADescribe the nature-related dependencies, impacts, risks, and opportunities identified by the organization over the short-, medium-, and long-term horizons.	Strategy: [1]Priority Businesses for Assessment and Key Areas of Analysis [2]Assessing Nature-related Dependencies, Impacts, Risks and Opportunities
	BDescribe the effects of nature-related dependencies, impacts, risks, and opportunities on the organization’s business model, value chain, strategy, and financial planning, as well as its transition plans and analyses.	Strategy: [2]Assessing Nature-related Dependencies, Impacts, Risks and Opportunities [3]Strategic Initiatives
	CDescribe the resilience of the organization’s strategy to nature-related risks and opportunities, taking into consideration a range of scenarios.	Strategy: [2]Assessing Nature-related Dependencies, Impacts, Risks and Opportunities
	DDisclose the locations of assets and activities in the organization’s direct operations and, where possible, in its upstream and downstream value chains that meet the criteria for priority locations.	Strategy: [2]Assessing Nature-related Dependencies, Impacts, Risks and Opportunities
Risk and Impact Management	A(i) Describe the organization’s processes for identifying, assessing, and prioritizing nature-related dependencies, impacts, risks, and opportunities in its direct operations.	Risk and Impact Management: [1]Process for Identifying Dependencies, Impacts, Risks, and Opportunities
	A(ii) Describe the organization’s processes for identifying, assessing, and prioritizing nature-related dependencies, impacts, risks, and opportunities in its upstream and downstream value chains.	Risk and Impact Management: [1]Process for Identifying Dependencies, Impacts, Risks, and Opportunities
	BDescribe the organization’s processes for managing nature-related dependencies, impacts, risks, and opportunities.	Risk and Impact Management: [2]Risk Management Process
	CDescribe how the processes for identifying, assessing, and managing nature-related risks are integrated into the organization’s overall risk management.	Risk and Impact Management: [2]Risk Management Process
Metrics and Targets	ADisclose the metrics used by the organization to assess and manage material nature-related risks and opportunities in line with its strategy and risk management processes.	Metrics and Targets: [1]Global Core Disclosure Metrics under the TNFD
	BDisclose the metrics used by the organization to assess and manage dependencies and impacts on nature.	Metrics and Targets: [1]Global Core Disclosure Metrics under the TNFD
	CDetail the targets and goals used by the organization to manage nature-related dependencies, impacts, risks, and opportunities, and its performance against them.	Metrics and Targets: [1]Global Core Disclosure Metrics under the TNFD

TOYOTA TSUSHO CORPORATION Sustainability Management Group, DFF Inc.

Initiatives

Toyota Tsusho Group companies conduct business in accordance with the Environmental Policy.

New Business

With regard to new investment projects, we conduct research and assessments prior to investment to assess the overall environmental impact of the project including preservation of forests and biodiversity and the effective use of resources, energy and water. We take action to protect the environment and reduce environmental burdens and achieve compatibility between biodiversity and business activities.

See "Use of Thinned Trees for Biomass Power Generation"

Existing Business

In order to mitigate pollution risks pertaining to our existing businesses, we have introduced an environmental risk assessment framework under which we quantitatively assess both pollution risks for each facility and management levels at each work site. We also conduct risk assessments including biodiversity of existing businesses by performing internal audits of environmental management systems, which are a part of our ISO 14001 activities. We conduct environmental compliance evaluations twice yearly and double-check the state of priority environmental compliance status through both internal and external audits.

Use of Thinned Trees for Biomass Power Generation

Case Study 1: Biomass power generation

Ehime Forest Generation, LLC, established by Ene-Vision Co., Ltd., a Group company, constructed and commenced commercial operation of the Matsuyama Biomass Power Plant, a wood biomass power plant, on April 1, 2018. The power plant was constructed on an approximately 30,000 m2 site in Matsuyama City, Ehime Prefecture. It is the first wood biomass power plant in Ehime Prefecture and uses only wood biomass to generate 12.5 MW of electric power for sale using the Feed-in Tariff (FIT) system. The power plant cooperates with local forestry cooperatives to procure raw materials from trees that were thinned to support healthy forest development. The use of energy that is clearly traceable and is generated locally for local consumption achieves stable supplies and contributes to the preservation of biodiversity. In combination with Gotsu Biomass Power Plant, operated by Shimane Forest Generation, LLC in Gotsu City, Shimane Prefecture, total biomass power output is 25.2 MW.

Toyota Tsusho is also promoting business that contributes to global environmental conservation, forestry and regional revitalization through the production of saplings.

Sapling production, which was 1.3 billion saplings each year at its peak, has currently declined sharply to 60 million per year. As a result, Japan's reforestation rate is around 50%.

In partnership with the Miyakonojo Forest Owners Association, in a district of Kyushu where the shortage of saplings is particularly acute, the company has set up a system for production of local mountain saplings (cedar saplings) in the region in Miyakonojo city, Miyazaki Prefecture. For fiscal year 2026, we aim to establish an annual production capacity of 250,000 cedar saplings.

The company also promotes wood chip biomass fuel supply business. It is contributing to Japan's reforestation rate through sapling production, and making efforts to build a sustainable supply chain in biomass energy.

Participation in Biodiversity-Related Certification Programs

The Toyota Tsusho Group systematically assesses biodiversity risks using ISO 14001 environmental management systems and environmental management rule books and takes action to mitigate identified risks.

We also participate in biodiversity-related certification programs as a part of those efforts.

Case Study 2: Tuna Dream Goto Receives SCSA Certification

In conjunction with recent global economic growth, demand for bluefin tuna has been increasing rapidly, and overfishing resulted in bluefin being considered for inclusion on the Red List.

Toyota Tsusho partnered with Kinki University, which created the world's first successful complete bluefin tuna cultivation, to establish and operate Tuna Dream Goto, the world's first commercial complete bluefin tuna cultivation venture.

The business has acquired certification under the nursery stock certification program of the Seedlings Council for Sustainable Aquaculture (SCSA), a nonprofit organization.

The SCSA conducts on-site confirmations and peer viewings by experienced academics and obtains public comments on assessment reports to prepare a final report and make a determination whether certification can be granted.

With SCSA certification, Tuna Dream Goto can state to consumers that its fish are cultivated using artificial stocks in order to preserve natural fish (a natural resource). In addition, complete histories from parent to egg, fingerling, fry, and adult fish are maintained, making it possible to ensure traceability and safety right up to the products.

Toyota Tsusho has also acquired chain of custody (COC) certification from the SCSA as the distributor of Tuna Dream Goto Bluefin tuna.

Mitigating Loss of Biodiversity

Toyota Tsusho engages in sustainable business activities. The preservation of biodiversity is emphasized as a standard of sustainability.

We work to determine impacts of our business on biodiversity including the status of endangered species living in the vicinity of our business sites and specified information in protected areas, and we undertake business development with risk mitigation in mind. We see the preservation of biodiversity as a positive and the loss of biodiversity as a negative, and we conduct environmental risk assessments to mitigate losses. In cases where there are negative impacts on ecosystems, we take measures to offset those impacts.

Case Study 3: Eurus Energy Holdings Corporation
Responses to Biodiversity Risks in the Wind Power Business

Eurus Energy Holdings Corporation, a renewable energy power generation business in the Toyota Tsusho Group, conducts environmental assessments at the pre-project stage and selects sites for the installation of power generating facilities based on the assessment results and projected impact on biodiversity. Environmental protection measures have also been taken, including efforts to avoid bird strikes (birds colliding with windmills) based on expert advice (such as by increasing wind turbine visibility for birds), and transplanting of precious plants. Furthermore, following the start of operations, Eurus Energy Holdings conducts thorough post-operation surveys and environmental monitoring to confirm the validity of the environmental assessment results and verify the effectiveness of the environmental conservation measures.

Case Study 4: Afforestation in Brazil

Amid the great concern over deforestation in Brazil, we have contributed to afforestation on our own land and nearby private land as part of our community activities. We have planted 1,000 trees every year since 2007, reaching 20,000 trees in total.

Case Study 5: Initiatives toward handling of soybeans in the Amazon biome and stopping destruction of Brazil's forests

As international concern about environmental conservation in the Amazon increases, to maintain and expand business, it is essential to avoid dealing in goods that are produced in conjunction with deforestation and other such practices.

NOVAAGRI INFRA-ESTRUTURA DE ARMAZENAGEM E ESCOAMENTO AGRÍCOLA S.A. (NovaAgrí), a Toyota Tsusho group company operating grain infrastructure businesses such as grain warehouses, rail transshipment facilities, and export terminal operations in central and northeastern Brazil, conducts its business in Brazil under a policy aimed at preventing deforestation while maintaining an environment enabling sustainable soybean production.

Names of producers that have committed environmental violations, published by the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA)
Whether there are any lawsuits for environmental violations against the producers in local and federal courts
Whether the area is registered as an environmental protection area or indigenous settlement

TOYOTA TSUSHO CORPORATION Sustainability Management Group, DFF Inc.

External Collaboration

Support of the Keidanren Initiative for Biodiversity Conservation

Toyota Tsusho Corporation supports the Keidanren Initiative for Biodiversity Conservation*.
* The Keidanren Initiative for Biodiversity Conservation is a group of companies and organizations that are working on several of the seven items listed in the “Declaration of Biodiversity by Keidanren and Action Policy (Revised Edition)” or that support the whole idea and purpose of the initiative. Logos and future activity policies/examples of supporting companies and organizations are posted on a special website (Japanese/English) to introduce and promote them domestically and overseas.

Participation in the J-GBF (Japan Committee for Kunming-Montreal Global Biodiversity Framework) Nature Positive Declaration

Toyota Tsusho supports the "J-GBF Nature Positive Declaration" and has adopted the following Nature Positive Declaration:

[Nature Positive Declaration]

Based on our mission of "passing on a better Earth to the children of the future", the Toyota Tsusho Group contributes to carbon neutrality and nature positive as a Leading Circular Economy Provider.
Recognizing that natural capital-including biodiversity-is a prerequisite for the continuation of corporate activities, the Toyota Tsusho Group works towards no-deforestation, no-conversion of natural ecosystems, and no-development on peatlands.
We collaborate with stakeholders on a global and long-term basis to conserve biodiversity on land and underwater.
We conduct risk assessments for both new and existing businesses and ensure appropriate responses in line with the mitigation hierarchy and traceability. Through these efforts, we aim to conserve biodiversity while conducting business activities in alignment with the Kunming Montreal Global Biodiversity Framework and help achieve nature positivity.
We promotes understanding through dialogue with local residents, indigenous peoples, institutional investors, and NPOs, and strengthens stakeholder engagement and capacity building on environmental issues by deepening our endorsement and collaboration with initiatives.

CDP (Forests)

Since 2017, we have been responding to the CDP questionnaire on forests (soy and timber), a global information disclosure program regarding corporate timber. Since 2018, we have further expanded the scope of disclosure to include soy, timber, and palm oil, and are actively working to disclose information.

Toyota Tsusho Group undertake various measures in cooperation with local governments, NPOs, companies, and other stakeholders to reduce the loss of biodiversity.

Case Study 1

In April 2026, Toyota Tsusho Europe supported "Zasaď život," an environmental initiative dedicated to forest restoration in the Czech Republic. Aiming to contribute to biodiversity conservation and carbon footprint reduction, the company sponsored tree-planting activities in state-owned forests.

As part of its support for this project, Toyota Tsusho Europe purchased saplings and organized tree-planting activities on a designated work afternoon, traveling to a planting site outside the city. The result was the planting of 1,000 new trees.

Case Study 2

Participation in Cleanup Campaign in Fujimae-Higata, a registered site under the Ramsar Convention

TOYOTA TSUSHO CORPORATION Sustainability Management Group, DFF Inc.

Environment