E nvironmental Conservation and Climate Change Actions

Responding to business opportunities associated with climate changeWith the transition to a decarbonized society, customer demand for funds is expected to increase, and business restructuring and demand for
new financial instruments and services are expected to grow, creating more business opportunities for the Group. The Juroku Financial
Group will proactively work to provide various financing and solutions utilizing financial and non-financial functions to solve customers’
problems.

Disclosure Based on TCFD Recommendations<Governance>
Sustainability management structure

Opportunity

Main opportunities and risks

Timeframe

Products and services

Increase in business opportunities (e.g. offering investments, loans and consultation services to help Short- to long-term
customers transition to a decarbonized society)
Increases in public works projects for disaster management and the demand for customers’ capital Mid- to long-term
investment fundResource efficiency
Energy sources

Reduction in business costs through resource-saving, energy-saving, and new technology utilization

Increase in collaborative system development efforts with local governments and other organizations on
disaster preparedness/mitigation to strengthen local resilience
Resilience
Enhancement in corporate value by appropriately implementing and disclosing climate change initiatives
Deterioration in customers’ business performance associated with an increase and intensification in theseverity of abnormal weather, and degradation in loan asset value resulting from damage to collateral value
Acute risks
PhysicalWork suspension occurring as a result of emergencies affecting the Group’s sites or officers and employees
Degradation in loan asset value resulting from damage to collateral value; deterioration in customers’risksbusiness performance resulting from such factors as changes in precipitation and weather patterns, as well
Chronic risks
as higher average temperatures and sea levels
Degradation in loan asset value resulting from deterioration in customers’ business performance, associated
Policy / Law
with such factors as climate change policies and regulatory reinforcements
Degradation in loan asset value resulting from deterioration in customer’s business performance, associatedTechnologies
Transitionalwith failure to invest in and the transition costs for low-carbon technologies
Degradation in loan asset value resulting from deterioration in customer’s business performance, associatedrisksMarketwith such factors as changes in consumer behavior and rising raw material costs
Degradation in corporate value resulting from slow implementation and disclosure of appropriate climateReputation
related initiatives*Short-term = Around 5 years; Medium-term = Around 10 years; Long-term = Around 30 years

Green loan and green private placement bond
These financing products limit the use of funds to those that contribute tosolving environmental issues, such as the introduction of renewable energy
generation facilities or the switch to highly energy-efficient equipment. The
scheme of obtaining a second opinion from an external organization allows
the company to communicate its environmental initiatives to society andstakeholders.

Sustainability linked loan
This financing product sets sustainability performance targets (SPTs), which
are business goals related to SDGs and ESG, and offers preferential interest
rates and other loan terms based on the degree to which the SPTs areachieved. We support our customers’ efforts for carbon-neutral business
management by setting greenhouse gas emission reduction targets consistent
with the levels required by the Paris Agreement.

Offering

FY2021

FY2022

Total

Decarbonization consultation

47 cases

91 cases

138 cases

SBT certification support

2 cases

43 cases

45 cases

Decarbonization
consultation

Identifying the damage business
Identifying activities have done to the planet,
the status quo using an international standard
called the Greenhouse Gas Protocol
Identifying
Scope 1 and 2
emissions

Properly
disclosing
progressannually

Reducing/
Disclosing

Management integrated
emissions reduction/
disclosure activity

Setting thetargetSetting targets

Setting SBT
standard reduction (SBTi)targetPositive impact financeThis financing product comprehensively analyzes and evaluates the impact ofcorporate activities on either environmental, social, or economic aspects, andestablishes KPIs that contribute to creating positive impact and reducing
negative impact. We continue to support our customers’ efforts throughmonitoring of KPI achievement.

Furthermore, in February 2023, we began supporting the preparation of adecarbonization management transition plan, establishing an ongoingsupport system to help customers achieve carbon-neutral business
management.
*S BT stands for “Science Based Targets,” which are medium- to long-term
greenhouse gas emission reduction targets for companies that are consistent withthe levels required by the Paris Agreement and commit to a certain level of
reduction compared to a base year set by each company.

The Juroku Financial Group organizes climate change risk into four categories. For physical and transitional risks arising from climate

The Juroku Financial Group analyses risks and opportunities associated with climate change in the timeframes of “short term,” “mid-term”
and “long term.” The results of analyzing scenarios are used to organize active dialogue (Engagement) for supporting customers who are
working toward a decarbonized society, and reinforce financial support in the forms of sustainable financing and transition financing tocreate business opportunities and reduce risks.

Risk

We support carbon management by providing consultation services tohelp customers visualize their greenhouse gas emissions and set reduction
targets.
Since the service was launched in August 2021, we have provided
decarbonization consultation services to 138 companies.
We are also working to support our customers in obtaining SBT
certification (for SMEs), and 45 companies have been certified with thesupport of the Juroku Financial Group.

Examples of risks associated with climate change<Strategy>
Opportunities and risks associated with climate change

22

Supporting local companies to achieve carbon neutrality

We offer a full range of financing products to meet our customers’ financing
needs for carbon-neutral business management and green initiatives.
Board of Directors

As stated in the Sustainability Policy, the Juroku Financial Group
ReportSupervise
recognizes sustainability initiatives (e.g. on climate change) as anGroup Management Council
important management challenge. “The Juroku Financial Group
SDGs Declaration” lists “revitalization of the local economy,”
Sustainability Council Chaired by the President“sustainable development of the local community,”
ReportInstruct“environmental conservation and climate change actions,”“empowerment of diverse human resources,” and “advanced
Sustainability Management Office
governance” as key challenges.
ReportOversee
In order to address these challenges appropriately, the Group
Sustainable Business
Environmental Conservation
D&I
Climate Change andhas set up the Sustainability Council, which is chaired by theWorking Group
Working Group
Working Group
TCFD Working Group
Response to climate change /Business
CO2 emissions reduction /President and consists of Group Management Council members,
Diversity andDisclosure based on TCFD
opportunity
Environmental
work-style reform
recommendations
initiatives
conservation
Division General Managers and the head of the Sustainability
Management Office. The Council generally meets at least once
every 3 months to deliberate key challenges (e.g., drawing up a policy for implementing initiatives on climate change and othersustainability issues, setting targets and checking progress), and reflects the results to management strategies and risk management. Therealso is a system in place to have items deliberated at this Council to be reported periodically to the Board of Directors at least once a year for
appropriate supervision.
In addition, four working groups have been established under the Sustainability Council with responsibilities for Sustainable Business,
Environmental Conservation, D&I, and Climate Change and TCFD. The working groups are composed of cross-organizational members
from each Group company, including the executive director in charge, and generally meet at least once a month to discuss challenges thatline up with respective responsibilities and report details to the Sustainability Management Office.

Assessment item

Financing to solve environmental issues

change, the following examples are assumed.
Risk category

Credit risk

Short- to long-term
Short- to long-term
Short- to long-term
Short- to long-termMarket risk

Short- to long-termMid- to long-termMid- to long-termMid- to long-termMid- to long-term
Short- to long-term

Liquidity risk

Definition

Examples of physical risks

Risk of incurring losses due to the decrease orloss of asset value including off-balance assets
caused by deterioration of customers’
financial condition

Deterioration in customers’
business performance associatedwith an increase andintensification in the severity ofabnormal weather, anddegradation in loan asset value
resulting from damage tocollateral value

Short- tolong-term

Deterioration in investee
companies’ business performancedue to increased and more severe
extreme weather events, causing adecline in prices of securities
holdings

Short- tolong-term

Risk of incurring losses from the fluctuationof the value of assets and liabilities(including off-balance assets and liabilities),
as a result of changes in various market risk
factors such as interest rates, foreignexchange rates, and stocks, as well as the riskof incurring losses due to fluctuations in theincome generated from assets and liabilities
Risk of incurring losses due to difficulties insecuring necessary funds or being forced toraise funds at significantly higher interest
rates than usual because of a mismatch
between investment and financing periods or
unexpected outflow of funds as well as risk of
incurring losses due to the inability to tradein the market or being forced to trade at asignificantly unfavorable price than usual
because of market disruption
Risk of incurring losses due to inappropriate

Operational risk business processes, activities of officers andemployees, or systems, or external events

Deposit outflows due to theoccurrence of demand for funds
from customers affected byextreme weather events

Work suspension occurring as aresult of emergencies affecting theGroup’s sites or officers andemployees

Timeframe

Examples of transitionalrisks
Degradation in loan asset value
resulting from deterioration incustomers’ business performance,
associated with such factors as
climate change regulatory
reinforcements, failed investment
in low-carbon technologies, andchanges in consumer behaviors
Deterioration in investee
companies’ business performancedue to climate-related regulationtightening, failed investment in
low-carbon technologies, andchanges in consumer behaviors,
causing a decline in prices of
securities holdings

Timeframe

Mid- tolong-term

Short- tolong-term

Short- tolong-term

Deterioration in the financing
environment and outflow ofdeposits due to deterioration in
the Group’s creditworthinessresulting from delays inaddressing climate change risk

Short- tolong-term

Short- tolong-term

Losses from fines and lawsuits due
to inappropriate responses toclimate change, etc.

Short- tolong-term

23

Environmental Conservation and Climate Change Actions<Risk Management>
Climate change risk identification and assessment process

Scenario analysis
The Juroku Financial Group conducts scenario analysis on physical risks and transitional risks in order to identify how climate-related risks
would affect the Group.
Physical risksRain-prone Japan experiences heavy precipitations each year, causing rivers
to swell and triggering flooding. In recent years, the number of heavy
localized rainstorms has become more common, causing significant damage
to many areas including the Group’s sales territories.
In terms of physical risks, we have anticipated an increase in thefrequency of large-scale flooding due to climate change, and calculated theimpact of climate-attributable large flooding in Gifu and Aichi prefectureson the Group’s credit-related costs on the premise of the RCP8.5 scenario(4 °C scenario). The result points to a cost increase of approx. 7.0 billion
yen.

Transitional risks
Following a qualitative analysis of sectors with large credit exposure andthe carbon-related sectors defined in the TCFD recommendations, we haveidentified the “electric power sector” and “automotive sector” as sectors ofsignificant transitional risks for the Group.
In terms of transitional risks, on the premise of the RCP2.6 scenario (2°C scenario) and NZE scenario (1.5 °C scenario), we calculated the impact
on the Group’s credit-related costs in view of the increased cost oftransition into a decarbonized society such as the introduction of the carbon
tax, a decline of net sales and future market trends. The result points to a
cost increase of approx. 2.5 billion yen.

Physical risks
Scenario

IPCC/RCP8.5 scenario (4°C scenario)

Risk event

Analysis period

Large-scale flooding
Borrowers in Gifu/Aichi prefectures
Collateral of real estate (buildings) in Gifu/Aichi prefectures(excluding secured home loans)
Deterioration of business performance due to customers’
business suspension/stagnation
Damage to the Group’s real estate (buildings) collateral
Up to 2050

Analysis results

Increase of credit-related costs: Up to approx. ¥7.0 billion

Analysis target

Analysis content

Transitional risks
IPCC/RCP2.6 scenario (2°C scenario)
IEA/NZE scenario (1.5°C scenario)
Transition to a decarbonized society

The Juroku Financial Group considers risks that could have a significant impact on management to be top risks. From the perspectiveof probability and degree of impact, the Board of Directors selects the risk events that may have a significant impact on our financial
position and business performance, such as disrupting our business strategy and reducing profitability approximately within the nextyear, as top risks. Eleven top risks were selected by the Board of Directors in March 2023, one of which is the risk related to climatechange. The selection was made in light of the increase in extreme weather events and natural disasters and the growing international
momentum to address climate change, and we have implemented proactive management and risk control measures based on the risk
scenario of deteriorating business performance and business model obsolescence of the borrower due to delays in responding to climatechange and decarbonization.

Climate change risk management process
An integrated risk management framework is in place at the Group, categorizing into and managing the Group’s overall financial risks
as “credit risk,” “market risk,” “liquidity risk” and “operational risk.” Climate change risk is recognized as a driver of financial risk, andis managed with the framework for managing risks such as credit and operational risks.
We have also introduced a risk appetite framework (RAF) from the perspective of organically combining earnings, risk, and capitalto enhance corporate value through integrated management. With respect to climate change risk, we are working to manage itappropriately, with our Risk Appetite Policy stating that we will deepen our efforts and promote engagement.

Formulating an investment and lending policy

Electric power sector
Automotive sector

The Group has the Investment and Lending Policy for the Creation of a Sustainable Society.

Deterioration of customers’ business performance due to cost
increase and sales decline
Up to 2050
Increase of credit costs: Cumulative total of approx. ¥2.5
billionBasic
policyThe Juroku Bank Group strives to contribute to medium- to long-term enhancement of corporate value and sustainablegrowth of customers by vigorously supporting initiatives to resolve environmental and social issues through investment
and lending. Moreover, the Group strives to mitigate or avert the impact of investment and lending that may pose asignificant risk or have a negative impact on the environment and society by subjecting any such investment and lending*IPCC: Intergovernmental Panel on Climate Change*IEA: International Energy Agency

to meticulous consideration.

Analysis results are calculated under specific preconditions.
The impact on the Group’s finances has been found to be limited within the scope of this analysis, but we will continue to enhance

Sector-specific policies

the scenario analysis.

Carbon-related assets
For carbon-related assets for which the TCFD recommendations recommend disclosure, the following table shows the loan balanceby sector and the percentage of total sector loans.
Ratio of carbon-related assets against theloan balance(as of the end of March 2023)*L oan balance = Total of loans, foreign exchange,
acceptance and guarantee, etc.
*Electric power & utilities sector excludes the water andrenewable energy power sectors

SectorRatio

Oil & gas

34,9400.7%

Electric power & utilities

41,8080.9%

Air transportation

18,243

0.4%

Marine transportation

2,771

0.1%

Land transportation

114,570

2.4%

Automotive

76,628

1.6%

Metals & mining

101,992

2.1%

Chemicals

24,3450.5%

Construction materials & capital goods

224,654

4.7%

Real estate management & development

415,410

8.7%

Beverages & food

59,156

1.2%

Agriculture

2,614

0.1%

Paper & forestry

32,0980.7%

1,149,230

23.9%

Total

24

Loan balance (Millions of Yen)

Coal-fired thermal
power generation

The Group will not invest in or extend loans to projects that involve building new coal-fired thermal power stations
or expanding existing power generation facilities, while taking a prudent approach in considering exceptional casesin response to emergencies or in projects in line with the Japanese government’s energy policy.

Weapons

The Group will not invest in or extend loans to companies that manufacture weapons, regardless of fund usage, in view of
the inhumane nature of cluster bombs, anti-personnel landmines, and biological/chemical weapons.

Deforestation

The Group will not invest in or extend loans to projects that involve illegal logging or forest incineration.
Investment in / loan to projects whereby the fund is used for operations that involve deforestation will beconsidered carefully in view of their impact on the local economy and the environment.

25

Environmental Conservation and Climate Change Actions

Calculation of the CO2 emissions of investees and borrowers (scope 3 category 15)<Metrics and targets>
CO2 emissions results
The Juroku Financial Group has been working on the calculation of CO2 emissions, and from FY2022, it also calculates its supply chain
emissions (Scope 3) in addition to its own CO2 emissions (Scope 1 and 2).
CO2 emissions results (t-CO2)

CO2 emissions of investees and borrowers (Scope 3)
Calculation item

Scope 1

Direct emissions

Scope 2

Indirect emissions

FY2021

Total of Scope 1 and 2

Scope 3Since indirect emissions (Scope 3 Category 15) through investments and loans account for a large share of CO2 emissions of financial
institutions, it is important to promote efforts to calculate, monitor, and reduce these emissions. The Group utilizes the PCAF standard
calculation method to calculate CO2 emissions for loans to domestic corporate clients.
We will continue to work toward expanding the scope of CO2 emissions calculation and improving the data quality score.
The results of this calculation may change significantly in the future due to clarification of international standards, sophistication of
estimation, and other factors.

FY2022

Sector

1,375

1,369

Oil & gas

CO2 emissions (t-CO2)
107,352

6,504

6,020

Electric power & utilities

94,137

7,879

7,389

Air transportation

34,006

Category 1

Purchased goods and services

12,992

12,940Marine transportation

22,366

Category 2

Capital goods

5,005

3,615

Land transportation

254,592

Category 3

Fuel- and energy-related activities not included in Scope 1 and 2

1,548

1,507

Automotive

Category 4

Upstream transportation and distribution

1,695

1,672

Metals & mining

Category 5

Waste generated in operations

50

53

Chemicals

95,884

Category 6

Business travel

146

174

Construction materials & capital goods

249,616

Category 7

Employee commuting

3,106

2,908

Real estate management & development

3,665

Upstream leased assets——

Beverages & foodDownstream transportation and distribution——

Agriculture

Category 10

Processing of sold products——

Paper & forestry

131,547

Category 11

Use of sold products

—

—

Other

685,312Category 12

End-of-life treatment of sold products——

Category 13

Downstream leased assets

383

426

Category 14

Franchises——

Category 15

Investments—

Listed on p. 27

24,92523,295

Total of categories 1 to 14

2,166,565

Data quality score

Reference date

17,441

8,984,277

Coverage

The following targets are set on sustainable finances in order to support, through our core business, customers’ initiatives for solving
environmental issues and to contribute to achieving a decarbonized society.
Target amount for FY2030(cumulative for 9 years)

Amount provided in FY2022¥2 trillion¥234.8 billion

11.7%¥800 billion¥85.9 billion

10.7%

Sustainable finances provided

Progress rate

(t-CO2)

14,00013,00012,00011,00010,000
9,000
8,000
7,000
6,000
5,000
4,000

13,11012,892
12,218

11,873

11,733

Support for environmental initiatives

10,8099,836(43.6)%

9,452
7,879

FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

7,389

FY2022(50.0)%
6,555

FY2030Targets

Carbonneutrality
FY2050Targets

CO2 emissions in FY2022 were reduced by 43.6% compared to FY2013 and by 490 t-CO2 year on year. This was due to the effects of theintroduction of “Gifu Prefecture-generated CO2-free electricity” for use at Juroku Bank’s head office building in November 2021, in
addition to installing LED lighting in stores and replacing air-conditioning equipment with high-performance ones. We will continue ourefforts to reduce CO2 emissions by expanding the introduction of renewable energy electricity, introducing environmentally friendly stores,
and considering the conversion of company vehicles to hybrid vehicles (HVs) and electric vehicles (EVs).
The results for FY2021 have been verified by an independent third party after a review of the calculation method and refinement of thecalculation results.
26

Loan balance
As of March 31, 2023
Financial and emissions data of borrowers
Latest financial period data held by the Group as of March 31,
2023

Sustainable finances: investment and lending for SDGs / ESG initiatives that contribute to building a sustainable society
Environment-related finances: investment and lending for initiatives to reduce environmental impact

Halve CO2 emissions by FY2023 from the FY2013 level and achieve carbon neutrality by FY2025

CO2 emissions(Scope 1 and 2)

3.6

98.0%
(Loan balance of calculated
counterparty/total loan balance)of which, environment-related finances

Targets*Factors such as company-disclosed data and CDP data are used for eachborrower’s emissions. When the data is unobtainable, estimations are
made using regional and sectoral emission factors per unit of sales takenfrom the PCAF database.
*Contribution level = The Group’s balance of loans/The borrower’s total
funding

Sustainable finance targets

The Juroku Bank Group’s CO2 emissions reduction targets and results
The Group set the following reduction targets on CO2 emissions (Scope 1 and 2) generated by its energy use and is working to achieve a
decarbonized society.

CO2 emissions
calculation method

28,225

Category 8Loans to domestic corporate clients (excluding loans to borrowers
with insufficient financial data)
CO2 emissions = (Emissions of each borrower x Contribution of
the Group’s loans)

5,093,569

Category 9

Total

Applicable assets

Acquired a “B” rating in the CDP’s 2022
climate change questionnaire
The Company received a “B” rating, the third highest of eight levels, in
the CDP’s 2022 climate change questionnaire.
The CDP is a British non-governmental organization (NGO) foundedin 2000 that operates a global disclosure system to help investors,
companies, nations, regions, and cities manage their environmental
impacts. By 2022, more than 18,700 companies, or half of the world’s
market capitalization, were disclosing data through the CDP, setting a
global standard for environmental information disclosure.

Joined PCAF
The Company joined the Partnership for Carbon Accounting Financials(PCAF) in March 2023.
PCAF is an international initiative launched to standardize themeasurement and disclosure of CO2 emissions of investees and borrowers,
and in November 2020, it developed the first global standardized
methodology, the Global GHG Accounting and Reporting Standard for the
Financial Industry (PCAF Standard).
PCAF has more than 400 member financial institutions worldwide.

27