Response to the TNFD

Toyota Boshoku group formulated the 2050 Environmental Vision in fiscal 2017. And we reviewed the Toyota Boshoku group's past activities and our future target and in fiscal 2024 drew up three key initiatives. We analyzed nature-related risks and opportunities to understand nature dependencies and impacts of our group business and further three priority actions: measures to global warming prevention in response to climate change, circular economy in response to the depletion of natural resources, and co-existence with nature in response to the biodiversity crisis. In future, we will disclose our information based on Taskforce on Nature-related Financial Disclosures (TNFD) framework. We aim to further contribute to global environmental conservation.

Governance

Concrete measures related to climate change, the depletion of natural resources, the biodiversity crisis and other environmental issues are decided upon by the Board of Directors and implemented. Then the progress of these measures is reported at the Corporate Strategy Meeting, the Corporate Planning Meeting, and the Corporate Management Meeting.
Policies and plans to respond to environmental issues discussed and decided at the Board of Directors, the Corporate Strategy Meeting, and the Corporate Planning Meeting are shared at the Environment Promotion Meeting, which is held three times annually, and is connected with implementation planning and progress management for environmental issues affecting the Toyota Boshoku group. Additionally, KPIs are defined based on implementation planning, and these are reported and subjected to management review at monthly Corporate Management Meetings.
Matters reported and discussed upon at the Environment Promotion Meeting are reported to the Board of Directors as needed, whose decisions and supervision allow such matters to be incorporated into group strategy.
Also, because environmental impact is directly connected to local communities and the rights of the people living there, we also focus on the aspect of human rights. In concrete terms, the Human Rights Working Group is conducting activities, with the Chief Strategy Officer (CSO) in charge of Corporate Planning Segment as the leader. The Corporate Planning Division serves as the secretariat, and members are elected from the HR, purchasing, general administration, legal, and safety-related divisions.
The Human Rights Working Group organizes the approach to human rights, identifies human rights risks, and discusses initiatives, etc. Reports on the Group’s activity plans, progress, and results are made to the CSV Promotion Meeting, and presented to and supervised by the Board of Directors, chaired by the Chairman.

Corporate Governance

Respect of Human Rights

Strategy

Analysis process

We analyzed by LEAP approach of TNFD framework.

LEAP Approach

Locate Identify priority region	Evaluate Grasp dependencies and impacts	Assess Assess risks and opportunities	Prepare Prepare action and disclosure
We narrowed down priority region of direct operations based on TNFD five standards. (Conservation significance, Ecosystem integrity, Low integrity, Water stress, Nature dependencies and impacts)	We identified the key items of nature dependencies and impacts for each supply chain, including upstream, direct operations and downstream using The TNFD recommended tool ENCORE^*.	We identified and assessed risks and opportunities of each supplychain including upstream, direct operations and downstream based on identified dependencies and impacts by two factors: impact and potential.	We connect our group business strategy and action with identified risks and opportunities. Then we organized it. This time we disclosed the analyzed result.

Exploring Natural Capital Opportunities, Risks and Exposure: The assessment tool of nature-related which is developed by The UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC） and Natural Capital Finance Alliance (NCFA） etc.

Analysis result

We wrote high assessment result of nature-related risks and opportunities in the table below.

Causes	Impact stage	Classification	Risks / Opportunities	Actions
Increased importance of sustainable raw material procurement	Procurement	Risk	Increase in raw material procurement cost by legislation of raw material procurement step.	Development of products for improvement of recyclability and substitution of sustainable material.
	Procurement	Opportunity	Improvement of product value by sustainable procurement.	Improvement of raw material traceability precision. Enhancement of raw material management by further tightening raw material-related requirements.
Enhancement of nature-related policy	Direct operation	Risk	Increase in operation cost by enhancement of Environmental legislation (Soil, Air, Water quality, Waste).	Introduction of highly efficient equipment to promote environmental impact reduction and promotion of the development of new methods. Enhancement of organization for circular economy.
Enhancement of nature-related policy	Direct operation	Opportunity	Improvement of corporate value by water resources impact reduction.	Promotion of initiatives for further water resource impact reduction based on a model zero-wastewater plant that uses water recycling.
Change in evaluation by customers and the consumer value standard (raised environmental awareness, etc.)	Product demand	Risk	Decrease demand by not being able to meet customer requirements regarding to circular economy.	Development of products for improvement of recyclability and substitution of sustainable material.
	Product demand	Opportunity	Increase in demand for plant-derived products and lightweight products. Enhancement of competitiveness by developing technology to improve recyclability.	Planning and development of plant-derived products and lightweight products. Improvement of recyclability and promotion of simple disassembly design.
Worsening of extreme weather, including shortage of water and flooding	Procurement	Risk	Decrease in sales due to the impact of supplychain disruption on production.	Risk management using a system to manage the range of supplier impact. Selection of logistics routes that minimize the impact of disaster.
	Direct operation	Risk	Decrease in sales due to factory shutdown.	Enhancement of the BCP system (Creation of manuals and establishment of an information collection/sharing system).

Risk Management

Nature-related risks are identified at the Risk Management Promotion Meeting, with the Chief Human Resources Officer (CHRO), head of the Human Resources & General Administration Segment, acting as chairperson.
The Risk Management Promotion Meeting receives reports from various departments, and discusses risks of all kinds, such as environmental pollution and nature disasters. Judgments are made concerning the relative severity of risks, with consideration made to the relationship between various risks. Finally, risks which affect the Toyota Boshoku group are identified.
Identified risks are reported to the Board of Directors, under the management of the Chief Risk Officer (CRO) who is also the President.

Risk Management

Metrics and targets

Classification	TNFD core metrics(Disclosure unit)	Contents	FY25 Results	FY26 Targets	FY31 Targets
Land-use change	Total spatial footprint (km²)	Number of trees planted	Cumulative 760 thousand	Cumulative 640 thousand	Cumulative 770 thousand
	Extent of land/freshwater/ocean-use change (km²)	Water withdrawal reduction ratio (compared to FY2014)	▲42%	▲6%	▲8%
	Extent of land/freshwater/ocean-use change (km²)	Water withdrawal^*1	3,012 thousand m³	-	-
Pollution	Pollutants released to soil split (t)	Quantity of substances falling under PRTR^*2	1,207 t	-	-
	Waste generation and disposal (t)	Waste emissions reduction ratio (compared to FY2012)	▲10%	▲14%	▲20%
		Waste overall volume^*1	28,392 t	-	-
		Waste basic unit^*1	3.46t/thousand units	-	-
		Reverse compensation recycling^*1	18,006 t	-	-
		Incinerated waste^*1	4,053 t	-	-
		Direct landfill waste^*1	6,333 t	-	-
		Wrapping, packaging materials used^*1	2,003 t	-	-
	Non-GHG air pollutants (t)	NOx^*1	18.0 t	-	-
		SOx^*1	0 t	-	-
		Quantity of substances falling under PRTR^*3	1,207 t	-	-
		VOC substances^*1	304 t	-	-
Resource use	Water withdrawal and consumption from areas of water scarcity (m³)	Water withdrawal^*1	3,012 thousand m³	-	-

Please see detail on ESG Data page
Pollutant Release and Transfer Register
Volatile Organic Compounds (100 substances designated by the Ministry of the Environment)