Fast Retailing Group Policy on Biodiversity
1. Basic understanding
Biodiversity is fundamentally important for a sustainable society. Fast Retailing’s operations also
rely on an ecosystem characterized by biodiversity, in areas such as: soil to grow crops
including cotton; water stored in forests and wetlands; pastures for grazing sheep for wool.
In the recent years, biodiversity has declined rapidly. In one example, about 68% of biodiversity
is reported to have been lost through a decline in wildlife populations from 1970 to 2016,
according to the World Wildlife Fund’s Living Planet Report. Fast Retailing recognizes its
responsibility to conserve biodiversity to leave a flourishing natural world for future generations.
The apparel industry impacts biodiversity through its use of water and land when grazing
livestock, and when farming, cotton, wool, and cashmere, as well as through wastewater frommanufacturing. Fast Retailing aims to avoid and minimize the impact of its business on
biodiversity, and works on initiatives to conserve and regenerate biodiversity. This policy setsout basic principles underlying Fast Retailing’s biodiversity-related initiatives and applies to allbrands of the Fast Retailing Group.
2. The connection with existing policies and guidelines
This policy describes Fast Retailing initiatives to preserve biodiversity based on the company’s
existing management strategy, Sustainability Statement and Environmental Policy. Biodiversity
is related to other environmental topics important at Fast Retailing, such as climate change,
water resources management, waste management, chemical management, and individual rawmaterial procurement policies such as Fast Retailing Policy on Wood-Derived Products andForest Materials. Accordingly, we aim to ensure consistency across these policies, and togenerate synergies.
3. Our goal
Biodiversity is critically important to people, so Fast Retailing is working to achieve a long-term
net positive impact on biodiversity*. Based on the results of a 2021 risk assessment, thecompany is working to minimize its impact on biodiversity across identified risk areas, while alsoconserving and promoting biodiversity throughout its value chain.
*Net positive impact on biodiversity: a state whereby positive impact on biodiversity exceeds negative impact.

4. Guidelines for action
4.1 Legal compliance and active participation in initiatives
Fast Retailing supports the Sustainable Developments Goals (SDGs) and the United Nations
Convention on Biological Diversity’s Post-2020 Global Biodiversity Framework and aims tocontribute to its success through its business.

Fast Retailing will thoroughly comply with the laws and regulations on biodiversity, throughout
the countries and areas where it operates, including its value chain. Fast Retailing will also
actively participate in initiatives related to the conservation of biodiversity.
4.2 Basic policy on promoting biodiversity-related initiatives◆ Application of the AR3T Framework
In conserving biodiversity, Fast Retailing will follow the AR3T framework (Avoid, Reduce,Restore & Regenerate, and Transform) proposed by the Initial Guidance of the sciencebased target for nature for reducing the impact on and advancing the conservation ofbiodiversity, specifically with the following approach.
Avoid the impact: Avoid negative impact on biodiversity to the extent possible by either notaffecting or preventing impact on areas with high conservation value.
Reduce the impact: Reduce impact on biodiversity, leveraging independent certification
schemes that protect biodiversity or promote substituted materials of low impact.
Restore & Regenerate: Offset negative impact on biodiversity by restoring andregenerating ecosystems, in cases where the impact on biodiversity is unavoidable.
Transform: Aim to transform Fast Retailing business for net positive impact on biodiversity,providing education to stakeholders its value chain and altering manufacturing andproducing processes.
◆Implementation of initiatives based on scientific findings
Fast Retailing will implement any initiatives for conservation of biodiversity based on thelatest scientific findings.

4.3 Understanding of the connection between our business and biodiversity
Fast Retailing recognizes its business impact on biodiversity and its dependencies oncertain aspects of the ecosystem. We conducted a risk assessment to fully understandthese impacts and dependencies.
Based on the risk assessment, Fast Retailing evaluated the highest risks as: land-use
change, pollution in cotton production, cashmere, rayon and raw materials. It also
evaluated dependencies on the ecosystem by each value chain process. High risk areas
are: water pollution caused from the use of pesticides in cotton production as well as
drainage from dyeing, processing and washing fabrics (including microplastics).
Fast Retailing acknowledges the impact of its business on biodiversity, and its
dependencies on the ecosystem, and will work towards conserving biodiversity especiallytowards the main impact on biodiversity and its significant dependence on the ecosystem inthe value chain process and will apply the result of risk assessment to Fast Retailing
initiatives to conserve and regenerate biodiversity as well as to avoid and reduce the impactin its business.

4.4 Specific initiatives
Fast Retailing strives to build a sustainable business compatible with the conservation ofbiodiversity and to achieve net positive impact on biodiversity through the following initiatives.
Details on the initiatives, targets and deadlines are to be determined in the implementationplans (4.5).
◆Enhancing and securing traceability, and collecting and recording data
Fast Retailing will enhance traceability of product origin to the farm level to fully understandthe impact of its business on biodiversity. Fast Retailing will organize a system to collectand record data and establish an information infrastructure to advance the conservation ofbiodiversity.

◆Avoiding procuring materials from high-risk areas on biodiversity
Fast Retailing will avoid procuring raw materials sourced from areas that present high risk
to biodiversity (including legally-protected areas and habitats of endangered species) andfrom areas that present unacceptable risk to a specific resource within an ecosystem, suchas water resources. Fast Retailing aims for zero deforestation and will avoid sourcing fromforests at risk of deforestation when procuring wood derived material.

◆Acquiring certification for raw materials with high-risk of degrading biodiversity
Fast Retailing will encourage its suppliers to switch to certified raw materials that consider
biodiversity, such as switching to cottons that have lower impact on biodiversity, and using
cashmere based on the explicit criteria we set out.

◆Reducing the impact of high-risk raw materials, and switching to low-risk substituteand regenerative materials
Fast Retailing will switch to substitute materials that have lower impact on biodiversity andwill increase the proportion of sourcing from regenerative farms. * Fast Retailing will also
actively research, develop and invest in advanced technologies and new materials.
* A farming method that aims not only to maintain healthy farmland soil, but also to restore and improve the soil, leading to the recovery of thenatural environment.

◆Developing and disclosing a standard for suppliers
Fast Retailing will develop its standard for suppliers with considerations on biodiversity andemploy and implement it throughout its supply chain.

◆Promoting initiatives on restoration and regeneration
Fast Retailing will promote initiatives to restore and regenerate ecosystems in areas that
may affect biodiversity, such as production areas of cotton and cashmere and areas
surrounding production factories.

◆Support suppliers through financing and education
Fast Retailing will provide financial support to farmers who conserve biodiversity and deploy
regenerative farming, and offer education to our suppliers on the importance of biodiversity.

4.5 Formulating action plans
Fast Retailing will formulate action plans to ensure implementation of its specific initiatives.
These action plans will include: quantitative KPIs; monitoring policies; and specific action plans
for the individual initiative, including regular review of the action plans based on the results ofmonitoring and individual actions, and the status of biodiversity.
4.6 Monitoring and information disclosure
Fast Retailing will regularly monitor the status of impacts and dependencies on biodiversity, as
well as the progress of biodiversity conservation efforts in collaboration with Fast Retailingstakeholders, and will actively disclose the results of monitoring on our website andsustainability reporting materials.
4.7 Raising biodiversity awareness through education both internally and externally
Fast Retailing will actively implement education programs for its employees, suppliers, andcustomers to raise awareness on the impact of biodiversity on society and business, as well as
its biodiversity protection initiatives.
4.8 Cooperation with stakeholders
Fast Retailing understands that its business is built on its relationships with various
stakeholders, and will cooperate with relevant stakeholders in its supply chain, including:
production factories, producers, local communities and people surrounding production sites,
indigenous people, external organizations, including NGOs and NPOs, and its customers, toconserve biodiversity.
4.9 Establishing our implementation framework
Fast Retailing positions biodiversity conservation as one of the key management issues. All
relevant departments involving our value chain such as the Sustainability, Production, Logistics,Sales, Marketing, and other departments will collaborate to implement and strengthen its
initiatives of conserving biodiversity.
The Fast Retailing Sustainability Committee, which consists of executive directors, statutory
auditors, an external expert, and executive officers, is tasked with promoting sustainability
activities including biodiversity, and ensuring that sustainability efforts including biodiversity areclosely integrated with overall management strategy and direction. The Committee debates all
manner of sustainability-related policies and measures including biodiversity, and advises,counsels, and supervises the departments that execute such measures.
To promote sustainability activities including biodiversity across the Fast Retailing Group, theSustainability Department has strengthened our management framework, cooperating daily
with relevant departments and executives responsible for global operations, and also
appointing sustainability personnel in its affiliates and subsidiaries.