Environment Disclosure Based on TCFD Recommendations

• OAM handles OJR’s response to climate-related issues, with the President of OAM assuming responsibility. OAM has established a “Sustainability Committee” consisting of the President and executive officers (including all directors), where climate change and other ESG issues are deliberated and reported. Specific decisions are made by OAM’s Board of Directors or the President based on the results of these deliberations and following approval standards.
• OAM’s directors also serve as members of the Sustainability Committee, where they formulate transition plans, set targets for addressing climate change issues, and monitor progress.
• Revisions to ESG policy and related guidelines, as well as annual activity plans and budgets, are deliberated by the Sustainability Committee and decided by the Board of Directors.
• Matters related to ESG initiatives, including climate change, are regularly reported by OAM to OJR’s Board of Officers.
• OAM’s directors are responsible for activities based on the ESG policy, while the executive officers promote initiatives regarding ESG-related matters as an organizational mission for their respective departments.

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• OAM is advancing its analysis of risks and opportunities posed by climate change for OJR and their potential future impacts on strategies and plans.
• Specifically, analyses are being conducted using multiple scenarios (1.5°C–2°C and 4°C scenarios) based on TCFD recommendations to assess how resilient OJR’s climate change measures are to the transition to a low-carbon economy aligned with the Paris Agreement and to the physical risks expected to increase in the future. Verification efforts using tools such as CRREM^*1 and ClimateVaR^*2 are also underway. A transition plan for achieving net zero by 2050 has been formulated.

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• OAM identifies and evaluates risks, including climate change risks, and reviews these annually. Risk management is conducted under the “Risk Management Rules.” Specifically, a “Risk Library” is created according to the “Risk Management Implementation Guidelines,” categorizing risks, describing their details, and assessing their frequency and importance. Based on this, the “Risk Management Supervisor” (the executive officer overseeing the Risk and Compliance Department) identifies issues requiring action as significant risks and formulates a response plan as part of the “Risk and Compliance Program.” This plan is implemented following approval by the Board of Directors.
• For climate change risks, OAM conducts risk and opportunity identification and scenario analysis to understand financial impacts in alignment with TCFD recommendations.

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• OAM is working toward a long-term goal of achieving net zero in its asset management activities for OJR by 2050. Additionally, as a medium-term goal for 2030, OAM aims to reduce GHG emissions by 42% compared to FY2021 for areas under OJR’s management authority and reduce GHG emissions intensity by 42% compared to FY2021. The goal also includes achieving a green building certification acquisition rate of 80% or more by floor area by 2030.
• The medium-term goal for 2030, “GHG emissions reduction by 42% compared to FY2021,” is based on scientifically grounded targets aligned with the 1.5°C goal.
• Indicators related to climate change, including energy consumption, greenhouse gas emissions (Scope 1, 2, 3), green building certification status, waste weight and recycling rate, and water usage, are regularly monitored and disclosed.
• Regarding internal carbon pricing, risk analysis based on TCFD scenario analysis assumes a future carbon tax of 13,650 yen (130 USD; converted using an exchange rate of 105 yen as of November 20, 2020, when the analysis was conducted). This is used as a reference indicator for projecting future cost increases and making investment decisions.

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