INVESTOR BRIEFING
13 April 2022

Mitsubishi Corporation (JP: 8058)
Shareholder proposals to align with net zero by 2050 commitment
Executive summary
Despite its net zero emissions by 2050 commitment, Mitsubishi Corporation (Mitsubishi) is undermining
this goal with its pursuit of new gas production and infrastructure projects.
The International Energy Agency (IEA) finds in its Net Zero Emissions by 2050 Scenario (NZE2050) there is noroom for new oil and gas fields, significant stranded asset risk for liquefied natural gas (LNG) facilities, and thatgas use for power must rapidly decline. Yet Mitsubishi is pursuing new projects to significantly expand its LNG
and gas power operations, and has no policies to rule out or in any way restrict their development, effectively
betting shareholder capital against the net zero by 2050 energy transition it claims to support.
The company has also set a mid-term emission reduction target that fails to manage the significant exposure totransition risk represented by its Scope 3 emissions. Without effective and comprehensive short and medium
term emission targets covering Scope 1, 2 and 3 emissions, and a capital allocation framework aligned with thecompany’s own net zero by 2050 commitment, Mitsubishi is at significant risk of contradicting the goal and thetimeline of net zero emissions by 2050, which it claims to support.
Extensive engagement with Mitsubishi by Market Forces, Kiko Network, and Friends of the Earth Japan (among
others) has not led to adequate changes from the company. As a result, shareholder proposals (see full details
on pages 8 and 9) making the following requests of Mitsubishi have been filed:
1. Adopt and disclose short-term and mid-term greenhouse gas (GHG) emission reduction targets alignedwith the climate goals of the Paris Agreement.
2. Disclose an assessment of how a net zero by 2050 pathway would affect the assumptions, costs,
estimates, and valuations underlying capital expenditure investments in the development of new
upstream, midstream and downstream oil and gas assets.

Contacts
Megu Fukuzawa: megu.fukuzawa@marketforces.org.au
Sachiko Suzuki: sachiko.suzuki@marketforces.org.au
Ayumi Fukakusa: fukakusa@foejapan.org
Yasuko Suzuki: suzuki@kikonet.org
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We urge investors to vote for these proposals at Mitsubishi’s June 2022 shareholder meeting and advise
Mitsubishi and the broader public of this intention. The co-filers also urge investors to engage with
Mitsubishi directly to encourage the production of disclosures requested by these proposals.

LNG expansion plans undermine climate commitments
Despite the company’s net zero by 2050 commitment, the table below shows Mitsubishi’s targets andplans are out of line with the Paris Agreement and NZE2050. NZE2050 should be regarded as bullish on
future fossil fuel demand as it aims for only a 50% chance of limiting global warming to 1.5°C and relies
heavily on unproven negative emissions technology.

NZE2050 conclusions compared with Mitsubishi policies and practice
NZE2050 conclusions

Mitsubishi policies

Mitsubishi practice“Beyond projects alreadycommitted as of 2021, there are
no new oil and gas fields
approved for development inour pathway”.

No policy to rule out
or in any way restrict
development of newoil and gas fields.

Along with project partners, Mitsubishi
plans to develop the new Udabari gas field
and raise output at the Vorwata gas field to
expand the Tangguh LNG project inIndonesia.

“Also not needed are many ofthe liquefied natural gas (LNG)
liquefaction facilities currently
under construction or at theplanning stage”.

No policy to rule out
or in any way restrict
development of new
LNG projects.

・Plans to increase LNG liquefaction
capacity (on an equity share basis) byroughly 20% from 12mtpa currently to
14.6mtpa by the mid 2020s.
・Plans to build an LNG terminal in Port
Qasim, Pakistan. Local NGOs have raised
concerns that the project will disrupt fishingcommunities and harm vital mangrove
forests.
・Recently received a loan to develop LNG
Canada, a major polluting LNG terminal,
objected to by the First Nations people
whose traditional lands this project would
impact.

Absolute emissions from oil and Scope 3 emissions
gas fall by 23% from 2020-2030 target does not apply(oil 27%, gas 17%).
to use of soldproducts, therefore
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Currently bidding on or sponsoring two
import terminals and three proposed LNG topower projects in Bangladesh and Vietnam.1
With an expected life of 25 years, these

According to financial subscription sources and news reports, in Bangladesh, Matarbari Summit LNG power plant, Matarbari Summit LNG
terminal and Matarbari LNG terminal and in Vietnam, Bac Lieu power plant and Long Son power plant2

does nothing to
restrict emissions
from the end use of
its oil and gas
products.

projects will be emitting carbon andprocessing carbon-intensive LNG to 2050
and beyond.

Analysis of some of Mitsubishi’s LNG investments demonstrate the projects risk failing to recoup
investment costs under the NZE2050 scenario. Under NZE2050, lower-than-anticipated LNG demand
would hurt the profitability of Mitsubishi’s LNG investments.

Breakeven prices for LNG projects in the NZE2050 vs planned Mitsubishi LNG projects
Gas demand in the NZE2050

LNG Canada

Tangguh train 3 (Indonesia)

LNG projects with a breakeven
price in excess of $5/mmbtu
would be at risk of failing torecoup their investment costs.

Recent analysis by IEEFA
suggests LNG Canada, underideal circumstances, would
deliver LNG to Asian markets at
a breakeven cost of$7-8/mmbtu.

Research by the Oxford Institutefor Energy Studies placed thebreakeven cost of Tangguh train
3 in Indonesia at around$7/mmbtu.

Analyses pointing to the stranded asset risk of additional LNG capacity in Asia are mounting. Emerging
Asia markets cannot be expected to replace the demand falls expected under any credible Paris-aligned
scenario. Even before taking climate policy into account, IEEFA analysis examining the proposed pipelineof LNG-to-power projects in Vietnam, Thailand, the Philippines, Cambodia, Myanmar, Pakistan and
Bangladesh has found 62% of proposed LNG import terminal capacity and 61% of proposed gas-fired
power capacity is unlikely to be built due to unfavourable project and country market fundamentals, andfinancial market constraints.
Analysis from Oil Change International shows switching from coal to gas for power generation will not cut
carbon emissions enough to meet the Paris climate goals. Imported LNG can be as polluting as coal whenaggregating emissions from extracting, processing, storing, and transporting the gas, as well as burning it.
Mitsubishi is no stranger to LNG investments going sour. The company holds a 7.2% stake in the
Woodside-led Browse project off north-west Australia, having bought this stake for US$1bn in 2012. Thismammoth US$30bn project was first shelved in 2013, prompting a US$100m redesign effort only to be
shelved again in 2016. At the time, Mitsubishi took a 60bn yen pre-tax impairment on the project, cutting
its value on the balance sheet in half.

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To reduce its exposure to stranded asset risk, Mitsubishi must evaluate its material capital
expenditures in the energy sector for consistency with a credible net zero emissions by 2050
scenario. The company should disclose the assumptions (long-term commodity demand, long-term
commodity and carbon prices, asset lives, future asset retirement obligations, capital expenditures andimpairments) underpinning material capital expenditures so investors can be confident Mitsubishi isadequately considering and managing financial risks climate change poses to its business.

No disclosed pathway to meet climate commitments
An update on the Task Force on Climate-related Financial Disclosures (TCFD) guidance published in 2021
also reflects such investor concerns and recommends companies set and disclose clear metrics andtargets, and sound transition plans, to support and guide their management of climate change transition
risks. Although Mitsubishi has committed to reach net zero emissions by 2050, it lacks disclosure of key
elements required to show it has a viable pathway to meet this goal. Specifically, Mitsubishi:●

Has set a mid-term target (to halve emissions by 2030) that only includes Scope 3 “investment
emissions”, excluding Mitsubishi’s most material Scope 3 emissions, which are those from the end
use of its fossil fuel commodities●

Has set no other short or mid-term emission targets●

Fails to disclose its assumptions around unproven technologies such as plants co-firing ammonia
and CCUS●

Discloses scenario analysis that only includes high level descriptions of future trends and lacks
robust quantitative measures required to evaluate transition risk.

Lack of short and mid-term targets
Mitsubishi has not set any short-term emission reduction targets (by 2025), and its mid-term target(2030) is entirely inadequate to ensure alignment with a net zero by 2050 pathway and managetransitional climate risk, as it excludes the most significant proportion of the company's Scope 3
emissions.
In Japan, disclosures based on the TCFD recommendations are required for Tokyo Stock Exchange Prime
Market-listed companies from April 2022 onwards, which would include Mitsubishi. The TCFD updated
guidance states that companies “should describe their key climate-related targets such as those related to
GHG emissions... and in line with anticipated regulatory requirements or market constraints or othergoals.” The Paris Agreement and net zero by 2050 commitments by countries including Japan should be
regarded as key “anticipated regulatory requirements” envisaged by the TCFD recommendations. The UN
Principles for Responsible Investment (PRI)’s Inevitable Policy Response (IPR) forecasts that governments

4will be forced to accelerate policy responses to climate change, particularly between 2023 and 2025. As
major changes in countries' policies and markets are required in the near term in order to achieve the Parisclimate goals, companies, including Mitsubishi, must set adequate short and mid-term targets toavoid exposure to abrupt regulatory and market shifts caused by rapidly developing climate policy.
The call for short and mid-term targets is consistent with the asks of major investor initiatives. Climate
Action 100+ has stated there is a critical need for long-term ambitions “to be backed by clearer strategies
and robust short- and medium-term targets.” The initiative makes clear that these targets are necessary“to deliver ambitious emissions reductions within the next decade.” Recognising this need, investors
themselves are being asked to adopt short-term targets. For example, the UN-convened net zero Asset
Owner Alliance expects members to set 2025 interim targets for reduction of portfolio CO2 equivalentemissions.
At present, Mitsubishi’s reduction targets rely on asset sales and fuel switching to hydrogen or ammonia.
The former moves emissions off the books of one company to another, unless the sale is clearly for the
purpose of the buyer intending to manage down the asset early. The latter, where the hydrogen orammonia used are generated by burning fossil fuels, merely creates emissions at a different stage in theprocess. Neither of these approaches are in keeping with the global goal of net zero emissions by 2050.

Lack of Scope 3 emission targets
As a company heavily involved in the sale of carbon intensive products, Scope 3 emissions
represent significant transition risk to Mitsubishi. However, the company currently has no Scope 3
emission targets related to the use of its products.
As the Science Based Target initiative (SBTi) notes, “Scope 3 emissions are the largest source of acompany’s emissions in most sectors, often accounting for several times the impact of its scope 1 and 2
emissions.” Recent research from Columbia University also shows that Scope 3 can account for around
75% of LNG lifecycle emissions.
Countries, including most recently the US, are increasingly requiring listed companies to disclose Scope 3
emissions as a part of climate-related disclosures. In March 2022, the US Securities and Exchange
Commission (SEC) proposed changes for registrants to disclose Scope 1, 2 and Scope 3 emissions “ifmaterial or if the registrant has set a GHG emissions target or goal that includes Scope 3 emissions” forinvestors to assess companies’ management of climate-risk, and “in particular transition risks.”
Mitsubishi currently discloses only Category 15 Scope 3 ‘investment emissions’ (emissions associatedwith the company’s investments). According to the GHG protocol’s Technical Guidance for Calculating

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Scope 3 Emissions “Category 15 is designed primarily for private financial institutions (e.g., commercial
banks), but is also relevant to public financial institutions (e.g., multilateral development banks, export
credit agencies) and other entities with investments not included in scope 1 and scope 2.” Mitsubishi does
not disclose other categories of Scope 3 emissions including its likely significant Category 11: emissions
from the use of sold products, such as coal or oil and gas.
In order to satisfy investor expectations and demonstrate appropriate climate risk management,
Mitsuibishi must not only disclose the full breadth of its Scope 3 emissions, but also set targets to
reduce them in line with the climate goals of the Paris Agreement.

No disclosure on critical new technology assumptions
Mitsubishi’s net zero by 2050 plan partly relies on coal fired plants co-firing ammonia and CCUS, but thecompany fails to disclose its assumptions relating to these technologies. For companies that havesignificant exposure to climate-related financial risks, the TCFD guidelines recommend disclosure ofassumptions relating to “technology responses and timing (eg. evolution of products/services, thetechnology used to produce them, and costs to implement).” Given that ammonia co-firing and CCUS arelargely unproven, uneconomical, and not currently commercially scalable, it is critically important for
Mitsubishi to disclose its assumptions relating to these technologies if the company wants investors tobelieve these technologies are at all viable to contribute significantly to its net zero by 2050 commitment.
Mitsubishi’s reliance on these unproven technologies is concerning, especially given the opportunity costthis creates for the rollout of renewable technology. Wind and solar power are already faster to build andcheaper to operate than conventional thermal power in all of Mitsubishi’s major target markets.

Scenario analysis disclosure inadequate to evaluate risk
Mitsubishi’s March 2022 analysis against the IEA’s NZE2050 scenario lacks any serious sensitivity analysis
for key financial assumptions or variables related to transition risk. Instead, the company only provides
high-level descriptions of future demand trends related to each business segment. Without the disclosureof a robust sensitivity analysis with quantitative measures, investors are unable to understand the impactof a net zero by 2050 pathway on the company's financial performance, such as impacts on earnings,
cash flow, and the useful life of assets. This lack of disclosure makes it impossible for investors to
grasp the true extent of the company’s exposure to transition risk and compare it with othercompanies.
Mitsubishi’s risk assessment also makes unexplained departures from the NZE2050 scenario, notably by
assuming LNG demand in Asia to remain “firm for the time being," an assumption which lacks any basis in6the NZE2050 report. As noted above, Mitsubishi is also bidding to build infrastructure which would be
expected (with an estimated life of 25 years) to run past 2050. If Mitsubishi does not disclose its
assumptions regarding LNG demand and price forecasts, investors are unable to assess if the company isminimizing its exposure to climate-related financial risk in order to protect their capital.
The GHG emissions targets and assumptions being requested in the proposal are based on investor
expectations as outlined in the TCFD, Climate Action 100+ and other investor initiatives (see details
in Table 3). Moreover, companies are already providing disclosure on the targets and assumptions
being sought from Mitsubishi.

Engagement has not led to adequate changes
Market Forces and partner NGOs have engaged with Mitsubishi directly since 2019 to raise issues
regarding climate risk management. These issues have been raised in formal letters to, as well as inmeetings with Mitsubishi. This engagement has failed to demonstrate that Mitsubishi has a plan to align its
business strategy with the climate goals of the Paris Agreement or to meet its own net zero by 2050
commitment.
We urge investors to vote for the below proposals at Mitsubishi’s June 2022 shareholder meeting
and advise Mitsubishi and the broader public of this intention. The co-filers also urge investors toengage with Mitsubishi directly to encourage the production of disclosures requested by these
proposals.

Details of shareholder proposals
The proposals seek disclosure of how Mitsubishi plans to align its strategy with its own net zero by 2050
commitment. This improved disclosure is necessary for shareholders to be in a position to evaluate thesecurity of their capital invested in Mitsubishi as the world moves to meet the climate goals Mitsubishi
claims to support. The proposals are similar to others that have received significant investor support
around the world such as BP (99% support in 2019), General Electric (98% support in 2021) andExxonMobil (49% support 2021).
The structure of the proposals ensures they do not limit the company’s powers to set or vary its strategy,
and the proposals do not request the release of commercially confidential information. They provide
Mitsubishi broad scope as to how it achieves its plans in light of business relationships and commercial
interests in a manner consistent with its own climate commitments.
While the text submitted to Mitsubishi is in Japanese, we provide an English translation below:

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Proposal 1: Partial amendment to the Articles of Incorporation (adoption and disclosure of short-term andmid-term greenhouse gas emission reduction targets aligned with the goals of the Paris Agreement)
Details of the proposal
It is proposed that the following provision be added to the Articles of Incorporation:
Chapter: “Decarbonized Society”
Clause: “Adoption and disclosure of a business plan with short-term and mid-term greenhouse gas emission
reduction targets aligned with the goals of the Paris Agreement”
1. To maintain and promote the long-term value of the Company, given the risks and opportunities
associated with climate change, and in accordance with the Company's support for the Paris Agreement,
the Company shall adopt and disclose a business plan with short-term and mid-term greenhouse gas
emission reduction targets aligned with Article 2.1(a) of the Paris Agreement (the “Paris goals”).
2. The targets shall cover scope 1, 2 and 3 greenhouse gas emissions and disclose on each scope
separately.
3. The Company shall report on its progress on an annual basis.
Proposal 2: Partial amendment to the Articles of Incorporation (disclosure of how the company evaluates theconsistency of each new material capital expenditure with its net zero greenhouse gas emissions by 2050
commitment)
Details of the proposal
It is proposed that the following provision be added to the Articles of Incorporation:
Chapter: “Decarbonized Society”
Clause: “Disclosure of how the Company evaluates the consistency of each new material capital expenditure witha net zero by 2050 pathway”
1. To maintain and promote the long-term value of the Company, given the risks and opportunities
associated with climate change, and consistent with the Company's commitment to the goal of net zero
greenhouse gas emissions by 2050, the Company shall include annually in its corporate reporting anassessment of how a net zero by 2050 pathway would affect the assumptions, costs, estimates, andvaluations underlying new material capital expenditure investments and planned future investments in thedevelopment of new upstream, midstream and downstream oil and gas assets.
2. Omitting proprietary information, the disclosures shall include key assumptions and estimates, including
those related to long-term commodity demand, long-term commodity and carbon prices, asset lives,
future asset retirement obligations, capital expenditures and impairments.

Shareholder resolutions in Japan & Amendments to Company Articles of Incorporation●

The proposal to amend the company’s articles of incorporation in part is the most commonly usedapproach to make shareholder proposals in Japan, and the approach taken in this proposal. Around
two-thirds of the shareholder proposals filed in 2021 took this form.

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●
●

Under Japanese corporate law, the sole legal pathway for a shareholder proposal on climate change is
via an amendment to a company’s articles of incorporation.
The legal effect of such shareholder proposals is the same as the “special resolutions” on climate change
filed and passed at UK companies including Barclays, BP, Royal Dutch Shell, Rio Tinto and Anglo
American, which take binding effect as part of the companies’ constitutions.
-- Client Earth

Investor expectations on disclosure: climate proposals in the energy sector
and demands for disclosure
Similar requests for disclosures around the world have seen strong investor support. The tables below
show some recent examples of shareholder resolutions and investor initiatives, including the TCFD, which
encourage the disclosure of GHG emissions and related targets, as well as key assumptions including
those related to long-term commodity demand, long-term commodity and carbon prices, asset lives,
future asset retirement obligations, capital expenditures and impairments. Table 3 also provides examples
of companies making these disclosures.

Table 2: Examples of climate resolutions seeking disclosure in various jurisdictions
Company

Year

Country

StatusResolution Text

Exxon

2022

USA

Filed

Seeking an audited report assessing how applying theassumptions of the IEA Net Zero by 2050 pathway would
affect the assumptions, costs, estimates, and valuations
underlying its financial statements, including those related
to long-term commodity and carbon prices, remaining
asset lives, future asset retirement obligations, capital
expenditures and impairments.

Duke Energy

2022

USA

Resolution
Withdrawn,
Agreement
ReachedShareholders request that Duke revise its net zero by 2050
target, and any relevant interim targets, to integrate Scope
3 value chain emissions consistent with guidelines such as
the CA100+ and SBTi, or publish an explanation of why theCompany does not view inclusion of those emissions as
appropriate.

GE

2021

USA

98% vote

Shareholders request the Board of Directors issue a report,
at reasonable expense and excluding confidential
information, evaluating and disclosing if and how thecompany has met the criteria of the Net Zero Indicator, or
whether it intends to revise its policies to be fully
responsive to such Indicator.

Chevron2021

USA

47.8% vote

Seeking an audited report to shareholders on whether andhow a significant reduction in fossil fuel demand,envisioned in the IEA Net Zero 2050 scenario, would affectits financial position and underlying assumptions.

BP

2019

UK

BP
recommended
shareholders

Include in its Strategic Report and/or other corporate
reports, as appropriate, for the year ending 2019 onwards,
a description of its strategy which the Board considers, ingood faith, to be consistent with the goals of Articles 2.1(a)9vote for the
resolution;
99% vote

and 4.1 of the Paris Agreement (the ‘Paris Goals’) as wellas capital expenditure...and metrics and targets….

Table 3: Investor expectations of disclosure of GHG targets and assumptions, andexamples of disclosure from other companies’ reporting
Shareholder proposal
disclosure requests

Investor expectations

Other companies disclosure

GHG emissions targets

Scope 3 GHG emissions are
increasingly understood as animportant indicator of risk, as risk isembedded in buying inputs or
selling products that are carbon
intensive, as stated in the recent
TCFD update in 2021. The TCFD
update includes setting a reductionin Scope 1, 2 and 3 targets as an
example of quantified climate
related targets.

According to TCFD analysis of 2,500
organizations within the MSCIAll Country World Index (ACWI Index)
from 2017–2019, organizations disclosing
Scope 3 GHG emissions grew from 28% to34%.

Climate Action 100+, an investor
initiative of 700 investors
representing $68 trillion in assets,demands companies take action to
reduce greenhouse gas emissions inlinewith the Paris Agreement. It
assesses companies on their shortterm (up to 2025), medium term
(2026 to 2035) and long term (2036
to 2050) GHG reduction targets,
including Scope 3.
The Net Zero Framework of the Paris
Aligned Investment Initiative, a
global collaboration supported byfour regional investor networks –AIGCC (Asia), Ceres (North
America), IIGCC (Europe) and IGCC
(Australasia), lists “Short & medium
term emissions reduction targets(scope 1, 2 and material
scope 3)” and “quantified plan todeliver targets” as key metrics forassessing the alignment of assets(such as investee companies) with a
net zero emissions by 2050
pathway.

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BP has set a target to reduce the lifecycle
emissions intensity of sold energy products(including physically traded products andmarketing sales) by 5% by 2025 from 2019
levels, and 15-20% by 2030.
Eni has set a target to reduce net scope 1-2
emissions by 65% by 2025 from 2018 levels.
The company is also targeting a 35%
reduction in scope 1-3 emissions fromupstream, midstream and downstream by2030.

Long-term commodity
demandThe Institutional Investors Group on
Climate Change (European investor
group) discuss the importance of
disclosure of assumptions related toassets based on accounting
standards in their Investor
Expectations for Paris-aligned
Accounts: “Accounting assumptions
or estimates that ignore structuralchanges to demand that come from
Paris-alignment will tend tomisrepresent companies’ economic
position.”
The updated TCFD guidance states:“Disclosure of the amount andextent of an organization’s assets orbusiness activities vulnerable toclimate-related transition risks
allows users to better understandpotential financial vulnerability
regarding issues such as possible
impairment or stranding of assets,
effects on the value of assets andliabilities, and changes in demandfor products or services.”

Long-term commodity andcarbon prices

The TCFD update discusses theimportance of internal carbon prices
for:“Performance measurement – For
example, determining
carbon-adjusted earnings per
share, estimating expected
profitability, incentivizing energy
saving, identifying revenue
opportunities and risks, managing
procurement and supply chains
Position management – For
example, valuation of assets
Investment decisions – For
example, identifying low-carbon,
high-return investment
opportunities, planning capital
investments, determining
cost-benefit and net present value of
projects”

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Equinor presents net present value
sensitivities under four IEA scenarios against
the company’s central planning scenario,
allowing investors to gauge the company’s
own demand expectations. Santos discloses
a similar analysis.
Shell presents its commodity priceprojections alongside projections fromexternal scenarios, which allows investors to
broadly understand the level and direction of
the company’s demand assumptions.
Eni specifies that it views the IEA’s
Sustainable Development Scenario as its“main reference for assessing the risks andopportunities associated with energy
transition”.

Disclosure of long-term commodity priceassumptions is commonplace among energy
companies.
Shell discloses a comparison between its
future oil price assumptions and a range ofother scenarios.
Equinor discloses its long-term commodity
price assumptions, and states clearly thatthese are not consistent with achieving the
IEA NZE or SDS.
BP and Eni both disclose long-term
commodity price assumptions as well.

Asset lives and future asset
retirement obligations, andimpairments

IIGCC’s Investor Expectations for
Paris-aligned Accounts discuss theimportance of disclosure ofassumptions related to asset lives
based on accounting standards:● “disclosure of the key
assumptions on which cash
flow projections have been
based and management’s
approach to determining thevalue assigned to these key
assumptions...Where
climate-related risks could
significantly affect therecoverable amount of acompany’s assets, information
about how the effect has beenfactored into recoverable
amount calculations would be
relevant.”● “...companies to disclose key
assumptions used where assets
are recognised at fair value. Fairvalue measurements may
incorporate a number ofpossible scenarios. When thefair value of an asset is affectedby climate-related risks
including the effect of andpotential changes to laws andregulations with respect tomanaging such risks, acompany may need to disclose
how it factors climate-related
risk into the calculations.”● “Companies are required toprovide a brief description of
the nature of any contingent
liability, and where practicable,
an estimate of its financial
effect and an indication of theuncertainties relating to theoutflow of resources for settling
the obligation”

Eni discloses the potential impact ofclimate-related risks and opportunities on anorganization’s financial position in terms offair value of assets. “In order to verify the
resilience of Eni’s asset portfolio, asensitivity analysis was also carried out on
all CGUs (Cash Generating Units) in the
upstream sector. The stress test, performed
under the IEA SDS scenario, showed thatthe overall book values of the assets werestable with a reduction in fair value ofaround 11%, or around 5% in the event ofcontractual and fiscal recoverability of thecosts of direct CO2 emissions.”

Capital expenditures

The TCFD update suggests as a
metric “the amount of capital
expenditure, financing, orinvestment deployed toward
climate- related risks andopportunities.”

BP provides a target for capital allocation“by 2025, more than 40% of our capital
expenditure will be in our transition growthbusinesses, and around 50% by 2030.”

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Disclaimer
Informational purposes only – This communication is provided solely for informational purposes only andis not, and should not be construed as, investment advice or investment recommendations for the
purposes of the Financial Instrument Exchange Act of Japan.
No joint-exercise of voting rights – Nothing in this written communication, nor in any related oral
discussion, is intended to be, nor should it be construed as, an offer, an acceptance or a consent, to enter
into an agreement for the joint exercise of voting rights or any other shareholder’ rights for the purposes of
the Financial Instrument Exchange Act and Foreign Exchange and Foreign Trade Act of Japan. If needs be,
it is hereby emphasised that each shareholder exercises its shareholder’s rights independently based uponits own decision and shall not be held liable for its exercise of its shareholder’s rights in any event or in any
result, as a breach of any discussion between the shareholders.
No proxy solicitation – Nothing in this written communication, nor in any related oral discussion, isintended to be, nor should it be construed as, a “solicitation for proxies” for the purposes of the Financial
Instrument Exchange Act of Japan. The shareholder is not soliciting or seeking any authorization by anyother shareholders to exercise their voting rights or any other shareholders’ rights on their behalf or as
their agent at the annual shareholders’ meeting.

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