For our Group, climate change is one of the critical issues impacting business continuity. Aligned with the disclosure framework of the Task Force on Climate-related Financial Disclosures (TCFD), we analyze the risks and opportunities climate change presents to our Group's business, incorporate these into our management strategy and risk management, and appropriately disclose our progress. We aim for further growth while contributing to the realization of a sustainable society.

We recognize that our core products, electronic components, are used in various fields and that manufacturing these products results in significant CO2 emissions throughout the entire supply chain.
Based on this understanding, we view climate change as one of the key issues for our Group to fulfill its social responsibilities and achieve sustainable development, and manage it through the Sustainability Committee. The Sustainability Committee, established by the Board of Directors as part of the corporate governance structure, is chaired by the President and CEO. It formulates sustainability policies, goals, and action plans; monitors and evaluates progress toward goals; deliberates on specific measures; and regularly reports and makes proposals to the Board of Directors, thereby driving sustainability initiatives.

Risks associated with climate change include those stemming from the transition to a decarbonized society, such as strengthened policies and regulations, technological advances, and shifts in markets and reputation. They also include those arising from the physical impacts of climate change, such as the intensification of acute extreme weather events and chronic temperature and sea level rise. Opportunities may include aspects such as improved resource efficiency, renewable energy adoption, enhanced product quality, and increased resilience.
To assess the significance of climate-related risks and opportunities, our Group evaluates impacts under the categories of "transition risks," "physical risks," and "opportunities." We assess the likelihood of occurrence and financial impact using a three-tiered scale, identifying significant risks and opportunities.For transition risks, physical risks, and opportunities, the Sustainability Project Team identified significant risks and opportunities, developed action plans and countermeasures, and submitted them for resolution by the Board of Directors.
Furthermore, we have proposed climate-related risks to the Risk Management Committee as one of the risks significantly impacting our Group's business strategy. The Committee reviews the management status of these risks across the entire company and reports to the Board of Directors.
The Board receives regular reports on the progress of plans addressing climate change and oversees their execution.

While countries transition to decarbonization infrastructure like EVs, solar power, and wind power, the impact of new technologies on decarbonization is limited. This leads to further temperature rise, increasing the frequency and severity of natural disasters caused by extreme weather.
Regarding the impact on our company, successive natural disasters disrupt supply chains, making stable production and supply difficult. Shortages become the norm, and inflation accelerates.