April 25, 2024
Integrated Design & Engineering Holdings Co., Ltd.

On Our Efforts to Commit to Climate Change
In September 2023, Integrated Design & Engineering Holdings Group (hereinafter referred to asthe “ID＆E Group”) announced its support for the TCFD recommendations as Integrated Design& Engineering Holdings Co., Ltd. (hereinafter referred to as “ID&E”), and is proceeding withinformation disclosure based on the TCFD recommendations. In addition, the ID＆E Group willcontribute to solving social issues related to climate change and natural capital/biodiversity
conservation through human resource development and technological development.

i. Governance
Aiming to contribute to the environment and society through our business, ID ＆ E Groupestablished the “Sustainability Committee” in September 2021, and the “Sustainability PromotionCouncil” at ID&E in July 2023 with the aim of promoting sustainability throughout the ID&E Group.
The “Sustainability Promotion Council” is chaired by the President of ID&E. It consists of (1)presidents of major consolidated group companies (Nippon Koei Co., Ltd., Nippon Koei Urban
Space Co., Ltd., BDP Holdings Limited (hereinafter “BDP”), Nippon Koei Energy Solutions Co., Ltd.,and Nippon Koei Business Partners Co., Ltd.); and (2) Director Generals of Nippon Koei BusinessPartners Co., Ltd., who are responsible for providing management services to the ID&E Group.
The Council deliberates and monitors policies, measures and implementation related to groupʼssustainability promotion.
Important policies are discussed and decided by the Board of Executive Officers and the Board ofDirectors.
Major group companies have established “Sustainability Promotion Committee” that is chaired byeach company's president in principle and works together with ID&E's “Sustainability PromotionCouncil” to promote sustainability in the respective segment within the ID&E Group.

Figure 1 Sustainability related Governance Setup

1ii. Strategy
Definition of Scenarios
ID＆E Group has selected "SSP1-1.9 (under 1.5°C scenario)" and "SSP5-8.5 (4°C scenario)" inthe "United Nations Intergovernmental Panel on Climate Change" (IPCC) as baseline for scenario
analysis.

Figure SPM.8 in IPCC, 2021: Summary for Policymakers. In: Climate Change 2021: The Physical Science Basis. Contribution of Working Group Ito the Sixth Assessment Report of the Intergovernmental Panel on Climate Change [Masson-Delmotte, V., P. Zhai, A. Pirani, S.L. Connors, C.
Péan, S. Berger, N. Caud, Y. Chen, L. Goldfarb, M.I. Gomis, M. Huang, K. Leitzell, E. Lonnoy, J.B.R. Matthews, T.K. Maycock, T. Waterfield, O.
Yelekçi, R. Yu, and B. Zhou (eds.)]. Cambridge University Press, Cambridge, UK and New York, NY,USA, pp. 332, doi:
10.1017/9781009157896.001 .]Figure 2 Changes in Global Average Temperature from 1850 to 1900

Under 1.5°C scenario assumes that decarbonization is promoted to the maximum extent possible,
by strengthening environmental policies and regulations, introducing carbon tax, and using
renewable energy as a main power source to the aim of achieving carbon neutrality in 2050 under
the sustainable development.
On the other hand, 4°C scenario assumes that climate sustainability measures such as reductionof greenhouse gas emissions are not introduced under the fossil fuel-dependent development andthe scale and frequency of natural disasters are expected to increase significantly compared to
the 1.5°C scenario.
Based on these scenarios, we analyze the medium- to long-term risks and opportunities regarding
the climate change factors affecting our business and disclose summarized information on therisks and opportunities as high priority for ID＆E Group.
In this scenario analysis (Tables 1 to 3), the coverage is ID&E and the five major consolidated
group companies listed below. The sales of these five companies account for approximately 71%
of ID&E Holdings' sales (for FY20231).
・Nippon Koei Co., Ltd.
・Nippon Koei Urban Space Co., Ltd.
・BDP Holdings Limited・Nippon Koei Energy Solutions Co., Ltd.
・Nippon Koei Business Partners Co., Ltd.

1ID＆E Groupʼs fiscal year “FY June 2023 (starting from July 2022 and ending in June 2023)”. The other fiscalyear indicated in this document refers to ID&E Groupʼs fiscal year.

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Table 1 Risks caused by Climate Change and their Countermeasures
Type of risk
Transition
risk

Physical
risk

*
*
*
*

policy(as wellas)
Laws andregulatio
nschronic

Contents of risk

Timeline

Business andfinancial
impact
1.5℃
4℃

 Increase in energy
procurement costs suchas fuel costs due toinclusion of carbon pricelong termsmall- Increase in carbon credit
procurement costs

long term

small-

 Increase in utility andvehicle costs due tointroduction of carbon
pricelong term

small-

 Increase in operating
costs due to introductionof carbon pricelong term

small-

 Increase in indirect
operational costs due tothe enforcement ofpolicies and regulations

long term

small-

 Increase in electricity andwater usage due to risingtemperaturessuper
long term

smallsmall Failure of employees toaccess offices andbusiness sites due toabnormal weather

super
long term

MediumMediumCountermeasure Promote conversion torenewable energy and inhouse production(NKRE100)
 Comprehensive promotion ofenergy conservation
measures Design and construction
management with due
consideration for carbon
footprint
 Promoting research anddevelopment related toreducing environmental
impact Promote conversion torenewable energy and inhouse production(NKRE100)
 Promote switching toenergy-saving equipment
and equipment, reduce
utility costs by reducing
energy usage
 Reduction of vehicle cost
increase due to introductionof EV Streamlining operations byintroducing AI・Capital investment thatcontributes to improving
energy efficiency
 Introduction of water-saving
equipment Utilizing remote work・Continuation of work byusing satellite offices andremote work・Improvement of BCP・Reducing risks in the eventof inability to access the site
by including work delays due
to abnormal weather inadvance planning

Timeline: short term (2024), medium term (~2027), long term (~2030), super long term (2030~)
Impact on business and finance: Small (~10 million yen), Medium (10 million yen to 100 million yen),
Large (100 million yen~)
Regarding transition risk, we examined items that would affect our company due to Government
policies and market changes of various countries to keep temperature rise below 1.5℃ (transition risk
in 4℃ scenario is not assumed)
Regarding physical risks, we examined items that would affect our company due to temperature rise(for physical risks in the 1.5℃ scenario and 4℃ scenario, we conducted a qualitative assessment of
the impact on business in 2030 and 2050, assuming that differences in temperature and impact on
business will be seen in 2100)

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Table 2 Opportunities arising from Climate Change and their Countermeasures
Businessandfinancial
impact
1.5℃
4℃

Type of opportunity

Contents of opportunity

Timeline

Resource efficiency

 Reducing the burden ofenergy-related costs byintroducing a subsidy
systemMediumterm

small-

Products and services

 Expanding renewableenergy investment
opportunities

Mediumterm

Big-Physical opportunity

 Expanding support forbuilding regional circularand symbiotic zones thattake advantage of local
characteristics

Mediumterm

Big- Further promotion ofdecarbonization support intown development
 Applying our own know-how
and technology in town
development to supporting“regional circular andsymbiotic spheres”
 Expansion of smart city related
services Expanding orders forrenewable energy-related
workMedium
termBig-

 Understanding demand forrenewable energy equipment
 Strengthen sales structure tocapture demand in response toincreasing demand forrenewable energy equipment
 Promotion of renewableenergy technology
development

 Increasing demand forinfrastructure
construction,
maintenance and repair
for disaster prevention,
mitigation, recovery andreconstruction due tonatural disasters and sealevel rise.

long term

BigBig Proactive support forinfrastructure development
needs related to disasterprevention, mitigation,recovery, and reconstruction
overseas Understanding changes indemand due to national
resilience policies and building
a rapid response system Increasing orderopportunities due toreinforcement of power
generation andtransmission related
facilities

long term

BigBig Increasing need tolong term

BigBig Strengthen sales system tocapture demand in response toincreased demand forequipment Promoting the introduction ofrenewable energy in Japan byacquiring cutting-edge
information and technology
from overseas
 Manufacture and development

Market4Countermeasure Reducing the cost of
renewable energy
facilities/energy-saving
facilities through subsidies,etc. associated with GX
promotion
 Enhancing information
disclosure in response todisclosure requests required
when using subsidies
 Promotion and development ofhydroelectric power generation
business (small hydropower
generation/pumped storage
power generation business) Promote businessdevelopment using storage
battery-related technology(development and operation of
supply and demand
adjustment system)

Type of opportunity

Contents of opportunity

Timeline

Businessandfinancial
impact1.5℃
4℃

develop new products orservices through research& development andinnovation

*
*
*
*

Countermeasureof decarbonizedproducts/services byleveraging new technologies
 Reducing manufacturing costs
by utilizing new technology

 Improving profitability
due to an increase in newenvironment-related
service needs resulting
from diversification ofconsumer behavior andimproved customer
awareness regarding
environmental issues

long term

BigBig Understanding environmentrelated demand Expansion of current
GX/sustainability related
business Promotion of green
infrastructure/renewableenergy business anddevelopment according todemand Branding using in-houseefforts and achievements
 Keep an eye on trends byparticipating in the GX League

 Increasing customer
preference by helping
customers reduce their
GHG emissions withdecarbonization-related
serviceslong term

BigBig Promoting investment anddevelopment of low-carbon
technologies in green
infrastructure and policy
support Strengthen our ability to makeproposals to client companies
and local governments thatare proactive in responding toclimate change

Timeline: short term (2024), medium term (~2027), long term (~2030), super long term (2030~)
Business and financial impact: determined using the same scale as risk
In terms of opportunities, we examined items that will affect our company due to policies and market
changes around the world to keep temperature rise below 1.5℃ (we do not assume the risks andopportunities of transition to the 4℃ scenario).
In this section, we will consider items that will affect our company due to rising temperatures.

5Going forward, we will continue to consider the impact of climate change related risks andopportunities on our finances as well as the specifics of countermeasures, and work to further
expand information disclosure.
Table 3 Financial Impact of Risks and Opportunities arising from Climate Change that can be
Quantitatively EvaluatedType of risk
Transition
risk

Physicalrisk

Policies(and) laws
andregulations

chronic

Type of opportunity
Products and services***

Contents of risk

Financial impact

Financial impact amountcalculation method

1.5℃

4℃

Increase in energy
procurement costs suchas fuel costs due toinclusion of carbon
price
Increase in utility andvehicle costs due tointroduction of carbon
price

FY2023 Scope 1(energy source origin)x growth rate x
carbon price

0.5 million
yen/year ~4.3 million
yen/year-

FY2023 utility costs(electricity) x growthrate x rate of change
in electricity prices

9.7 million
yen/year-

Failure of employees toaccess offices andbusiness sites due toabnormal weather

Total past maximum
damage amount x
Growth rate x
Probability ofoccurrence

3.5 million
yen/year - 15
millionyen/year

7 million
yen/year - 30million
yen/yearContents ofFinancial impact

Opportunity

calculation method

1.5℃

4℃

Expand orders forrenewable energyrelated work

Renewable energyrelated sales amountin FY2023 x(parameters as of2030 - growth rate)
Infrastructure-related
sales amount in 2023
× (parameters as of2030 - growth rate)

1,500 million
yen/year 2,200 million
yen/year-

8,700 million
yen/year-

Sales amount related
to power generationand transmission in
2023 x (parametersas of 2030 - growthrate)

2,100 million
yen/year 5,500 million
yen/year-

Demand forinfrastructure
construction,maintenance andrepair for disasterprevention, mitigation,recovery andreconstruction isincreasing due tonatural disasters andsea level rise.
Increase in orderopportunities due toreinforcement ofpower generation andtransmission related
facilities

Financial impact amountThe financial impact amount is the amount that can be assumed as of FY2030 (risk is risingcost, opportunity is increased sales)
Target organizations: 5 major consolidated group companies that conducted scenario
analysis
Main parameters used: Our long-term business strategy (growth rate), IEA Net Zero
Emissions by 2050 Scenario, IPCC RCP2.6 scenario, IPCC RCP8.5 scenario

6Countermeasures against Risks
In view of the risk of future increases in carbon prices, ID&E group aims to use 100% renewableenergy. ID&E group started a trial project “NKRE100” in July 2023 by supplying electricity fromour own hydroelectric power plants to three locations in Japan, including our headquarters. Taking
advantage of this opportunity, ID&E will expand the procurement of electricity derived fromrenewable energy according to regional characteristics, including the deployment of NKRE100 to
our group's bases in Japan, and our services such as introduction of renewable energy power
generation equipment.
In the future, ID&E group will provide services such as aggregating renewable energy powersources from other companies, supplying locally produced and locally consumed renewableenergy power sources, supply and demand management, and power trading.

iii. Risk Management
ID&E group considers the risks (including opportunities) caused by climate change to be an
important management issue. The risks related to climate change; natural capital/biodiversity isregarded as important as financial risks. Thus, centered on the Sustainability Promotion Council
within the group, collects and analyzes related information and contributes to formulating action
policies and plans for IF&E Group.
The Sustainability Promotion Council identifies and evaluates risks in a broad sense, and examines
risks that have a negative impact on business activities (possibility of losses due to events thathinder the Group's ability to achieve its business objectives). Risks (risks in a narrow sense) are
reported to the Risk Management Council and integrated into the company-wide risk management
process based on the Group Risk and Crisis Management Regulations.
Identified and assessed risks are addressed at each group company with support of theSustainability Promotion Office.
Regarding the management of identified and assessed risks, the Sustainability Promotion Council
compiles the response status, which is then discussed by the Executive Officers' Meeting and thenby the Board of Directors Meeting.

Figure 3 Risk Management Process related to Climate Change
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iv. Metrics and targets
In order to monitor greenhouse gas emissions from business activities and evaluate the impacton management, the ID&E Group monitors greenhouse gas emissions from its five major
consolidated group companies (Nippon Koei Co., Ltd., Nippon Koei Urban Space Co., Ltd., BDP
Holdings Limited, Nippon Koei Energy Solutions Co., Ltd., Nippon Koei Business Partners Co., Ltd.),
calculating Scope 1, Scope 2, and Scope 3 CO2 emissions. We will gradually expand the scope of
calculation and work to reduce emissions.
Table 4 ID&E Holdings Major Consolidated Group Companies Greenhouse Gas Emissions
Classification

FY2023 emissions (t-CO2)

Scope1

188.3 t-CO2
market-basedemissions sLocation-based
emissions amarket-based
emissions
Location-based
emissions

Scope2

Scope1/2 total

4,442.0 t-CO2
4,668.0 t-CO2
4,630.3 t-CO2
4,856.3 t-CO2

Scope364,963.0 t-CO2

Classification
Scope3 (BDPonly)***

FY2020 emissions (t-CO2)
45,500.0 t-CO2

Scope 3 of BDP Holdings Limited is FY2020 data, all others are FY2023 data. Therefore, Scope 3
emissions in FY2023 are Nippon Koei Co., Ltd., Nippon Koei Urban Space Co., Ltd., Nippon Koei EnergySolutions Co., Ltd. Figures for 4 companies of Nippon Koei Business Partners Co., Ltd.
Market-based emissions calculate emissions using coefficients for each power company.
Location-based emissions calculate emissions using factors for each country.

Transition Plan (to a low-carbon economy)
ID&E sets have set reduction targets for Scope 1 and Scope 2 emissions to the same level as
SBT (Science-based Targets) by FY2030 for five major consolidated group companies. In thefuture, we will move forward with SBT certification and commitment to reduction targets,
expand the number of offices where renewable energy is introduced, and promote Scope 2
emissions reductions.

Classification
Scope1
Scope2
Scope1/2 total

Table 5 FY2030 Reduction Target based on Transition Plan
Base year (FY2023)
Emissions in FY2030
Reduction rateemissions(annual average
reduction rate)
188.3 t-CO2
109.2t-CO2
42% (6%)
4,442.0 t-CO2
2,576.4 t-CO2
42% (6%)
4,630.3 t-CO2
2,685.6 t-CO2
42% (6%)

Going forward, we will work to further information disclosure based on the four core elements
required by the TCFD recommendations.
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***
*
*

Figure 4 Migration Plan
Each line indicates the allowable emissions when achieving the same level of reduction asSBT.
In FY2030, a 42.0% reduction in Scope 1+2 is required compared to the base year FY2023,
and the annual average reduction rate is 6.0%. Since SBT requires a linear reduction, thediagram of our transition plan also assumes a linear reduction.
Regarding Scope 1, we assume the use of electrification and J credit certificates, etc.
Regarding Scope 2, it is expected that it will be possible to achieve it by making efforts toexpand NKRE100.
This time, we are setting reduction targets for Scope 1 + Scope2, so the more reductions in
Scope 2, the less reductions in Scope 1, so we recognize that progress in introducing
renewable energy is an important factor.

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