Disclosures Based on the TCFD Recommendations

As people are becoming more aware of increasing climate change and natural disasters being urgent global issues, the importance of corporate actions to create a sustainable society to resolve climate change issues is growing by capitalizing on the opportunity of the adoption of the Paris Agreement by the United Nations.

The Ryobi Group has established "Lightening the load worldwide" for our medium-term objectives to express our desire to reduce the burden of the various issues that society faces as we implement various measures such as contributing to reducing the weight of automobiles by applying our die cast technologies in order to achieve carbon neutrality and a circular economy. Additionally, we are utilizing the framework of recommendations of the TCFD (Task Force on Climate-related Financial Disclosures) for our climate-related financial disclosures. We have taken actions to realize the identified opportunities and perform risk management according to the TCFD recommendations as we pursue the goals of contributing to achieving carbon neutrality and the sustainable development of our company.

Governance

Under the supervision of our Board of Directors, the Ryobi Risk Management Committee deals with climate change-related risks and, to this end, integrates these risks into company-wide risks to manage them robustly. Meanwhile, the Corporate Operating Committees are tasked with opportunity management, including the establishment of management strategy and management of progress.

The Ryobi Risk Management Committee, chaired by the President and CEO, has been established in accordance with our risk management regulations in order to supervise and manage risk. The Committee performs tasks such as evaluating and managing risks related to climate change and other company-wide risks, as well as planning responses and monitoring the progress of implemented measures. In addition, on an annual basis it provides the Board of Directors with a risk report covering climate-change related risks that Ryobi has identified as particularly important and the status of measures taken in response. Rounding out this risk management system, the Board of Directors provides supervision and advice to the Ryobi Risk Management Committee while incorporating the input from the latter into business management.

The Corporate Operating Committees meet once a month or more with the President and CEO serving as the chair of all meetings. Among these, management strategy planning meetings are held once or more a year and management strategy progress meetings are held once or more a quarter, both with the participation of members of the Board of Directors, at which climate-change issues are considered as an important element in the comprehensive discussions and decisions made in these meetings.

Strategy

In accordance with the framework advocated for by the TCFD, we identified the risks and opportunities related to climate change among our die castings, builders’ hardware, and printing equipment businesses while considering which matters should be addressed company-wide and which should be addressed by specific businesses. In order to analyze these risks and opportunities, we have assumed a 2℃ scenario and a 1.5℃ scenario to make transitional impacts apparent, and a 4℃ scenario to make physical impacts apparent, and then performed corresponding scenario analyses.

Set scenarios and social aspects		Main reference scenarios
4℃ scenario: No climate change measures beyond those currently enacted are implemented and the impacts of physical risks become apparent.	Physical	Representative Concentration Pathway (RCP6.0, 8.5), IPCC^*1
	Transition	Stated Policies Scenario (STEPS), IEA^*2
2℃ and 1.5℃ scenarios: Climate change measures beyond those currently enacted are implemented and the impacts of transition risk become apparent.	Physical	Representative Concentration Pathway (RCP1.9, 2.6), IPCC^*1
	Transition	Sustainable Development Scenario (SDS), IEA^2 Net Zero Emissions by 2050 Scenario (NZE), IEA^2

*¹ IPCC: Intergovernmental Panel on Climate Change
*² IEA: International Energy Agency

The following table shows the important short, medium and long-term* climate related risks and opportunities identified by Ryobi, and the medium-term impacts and corresponding strategic responses in the future.

*Short-term: 1 year or sooner, Medium-term: estimated for 2030, Long-term: estimated for 2050

Transition Risks

Cause	Financial impacts	Impact severity^*		Countermeasures
Cause	Financial impacts	1.5, 2℃	4℃	Countermeasures
Policies and regulations	Increased raw materials costs due to introduction of carbon tax	Large	Small	Time frame: Medium- to long-term Weight reduction and materials replacement during product design, improving materials recycling rate, reduction in raw materials used by decreasing product defect rate
	Increased energy costs due to introduction of carbon tax	Large	Small	Time frame: Medium- to long-term Implementing energy conservation measures such as improving the combustion efficiency of die cast melting furnaces and transitioning to non-fossil fuels at these facilities Production energy reduction by making smaller die cast products, improving production efficiency and processes by using digital technology, improving production technology, and selecting optimal materials Implementing use of renewable energy (such as solar and hydroelectric equipment) in factories Introduction of internal carbon pricing and energy efficiency evaluation when determining capital expenditures
	Increased transportation costs due to introduction of carbon tax	Medium	Small	Time frame: Medium- to long-term Decreasing transportation costs by improving efficiency such as selecting production facilities appropriate to demand and improving cargo loading efficiency
Policies and regulations Technology Market	Decreased sales of die cast products for ICE (engine blocks, transmission cases, etc.) due to transition to ZEV and low carbon vehicles	Large	Large	Time frame: Medium- to long-term Expanding sales of lightweight parts (body and chassis) and electric car parts: Set targets and shift product composition to obtain a 41% sales composition ratio of these parts as strategic products by 2027
Technology	Decreased sales of die cast products because of decreased aluminum demand due to change to low carbon materials (plastic, low-carbon steel, bio-materials)	Large	Larage	Time frame: Medium- to long-term Beginning research on products made with low carbon and recycled resources that use kneaded resins incorporating bioplastics and cellulose nanofibers
Market	Drastic price increases and increased procurement costs due to increased demand of raw materials	—	—	Time frame: Medium- to long-term Selecting suppliers appropriate to demand and performing risk management in relation to procurement of raw materials Weight reduction and materials replacement during product design, improving materials recycling rate, reduction in raw materials used by decreasing product defect rate
Market	Decreased printing equipment business sales due to the acceleration of digitalization caused by drastic price increases of printing materials and reduced energy consumption	Medium	Medium	Time frame: Medium- to long-term Automation of printing presses, labor savings, and shift to smart factories through equipment collaboration with other companies

*Medium-term impacts estimated for 2030

Physical Risks

Cause	Financial impacts	Impact severity^*		Countermeasures
Cause	Financial impacts	1.5, 2℃	4℃	Countermeasures
Acute	Decreased sales because of supply chain disruptions and reduced productivity of production facilities due to disasters caused by abnormal weather (typhoons, flooding, heavy rain, etc.)	Medium	Medium	Time frame: Short- to long-term Performing flood risk analysis and monitoring at all production facilities, establishing flood control plans and manuals, and carrying out flooding drills Improving business continuity plans (BCPs) Strengthening supply chains by decentralizing and diversifying suppliers
Chronic	Increased energy costs because of increased use of electricity due to rising temperatures	Medium	Medium	Time frame: Medium- to long-term Mainly by countermeasures for "Increased energy costs due to introduction of carbon tax"

*Medium-term impacts estimated for 2030

Opportunities

Cause	Financial impacts	Impact severity^*		Countermeasures
Cause	Financial impacts	1.5, 2℃	4℃	Countermeasures
Energy sources	Reduction in the cost of introducing renewable energy in production facilities due to decreases in the prices of renewable energy equipment, etc.	Medium	Small	Time frame: Medium- to long-term Implementing the use of renewable energy (such as solar and hydroelectric equipment) in factories
Products and services	Increased sales of die cast products due to increased demand for ZEV and low carbon vehicles (batteries and lightweight parts) and ongoing replacement of materials with sustainable aluminum die castings Increased sales of die cast products, reflecting increasingly diverse needs for parts created through multi-material connecting technology (i.e., use of aluminum and other lightweight materials)	Large	Large	Time frame: Medium- to long-term Strengthening product development with the goal of increasing sales of lightweight parts (body and chassis) and electric car parts (i.e., functional enhancement that leverages laser welding and other connecting technologies)
	Increased sales of electric automatic door controllers due to increased demand for highly airtight buildings	Small	Small	Time frame: Medium- to long-term Strengthening marketing and product development with an eye to increasing sales of electric automatic door controllers
	Increased demand for digital printing presses as well as in peripheral businesses due to the accelerating transition to digital printing	Medium	Medium	Time frame: Medium- to long-term Responding to digitalization through product development using the strengths of collaboration with other companies
	Increased sales of die cast products by meeting needs for large integrated aluminum products	—	—	Time frame: Medium- to long-term Accumulation of technologies for lower casting pressure and downsizing casting machines for orders of integrated aluminum products Establishment of manufacturing and die technologies for large die casting parts via the introduction of ultra-large casting machines

*Medium-term impacts estimated for 2030

Risk Management

Guided by our basic risk management policy, the Ryobi Risk Management Committee identifies climate-related and company-wide risks, including medium- to long-term risks, that require the involvement of our management, presents response policies, and instructs the applicable departments and group companies to take appropriate measures. A review of risk identification and evaluation is performed once a year across the entire group for the corresponding risks based on such factors as impact severity and the frequency of occurrence and a report is made to this Committee. If any of the identified major risks poses a critical situation that requires urgent action, our risk management framework, headed by the crisis task force, is mobilized in accordance with crisis management regulations.

Metrics and Targets

Metrics for evaluating risks related to carbon tax

We are utilizing the "Scope 1 + 2 Emissions" as metrics in order to evaluate the risks and opportunities related to carbon tax introduction, identified as a climate-related risk. One of Ryobi's materiality issues is addressing climate change, and the company aims to achieve carbon neutrality by 2050.

CO2 reduction targets and results

Ryobi has implemented various energy conservation measures to reduce CO2 emissions as we aim to achieve carbon neutrality by 2050 by moving forward with our implementation of energy-saving equipment and the use of renewable energy (solar power, hydroelectric power, etc.).

Long-term target: Achieve carbon neutrality by 2050
Medium-term target: Reduce CO2 emissions to at least 47% of FY2018 levels by 2030 (both in Japan and overseas)
Results for the year ended December 31, 2023: 22.3% reduction from FY2018 levels

*CO2 reductions represent the absolute emissions for Scope 1 and Scope 2

Actual CO2 emissions in 2023

(Unit: t-CO2)

	Japan	Overseas	Total
Scope 1	41,400	83,200	124,600
Scope 2	77,200	128,600	205,800
Scope 1 + 2	118,600	211,800	330,400

Metrics for evaluating risks and opportunities related to transitioning to ZEV and low-carbon vehicles

We are utilizing the "Sales composition ratios of lightweight parts (body and chassis) and electric car parts" in the die castings business as metrics in order to evaluate risks and opportunities related to the transition to ZEV and low-carbon vehicles, identified as climate related risks. Note that consolidated net sales of our die castings business are 87.6% out of total sales (fiscal year ended December 31, 2023), making it an essential business segment for our company.

Target for sales composition ratio of lightweight parts (body and chassis) and electric car parts and results

Target for the fiscal year ending December 31, 2027: 41%
Results for the fiscal year ended December 31, 2023: 17.4%