Takara Group’s Sustainability

Disclosures based on the TCFD framework

The Takara Group positions the harmonization of its business activities with global environmental preservation as oneof its key challenges, and is actively implementing these initiatives. Recognizing that climate change is an important
issue that has an impact on the sustainability of business, the Group supports the recommendations of the Task Forceon Climate-related Financial Disclosures (TCFD) and has joined the TCFD Consortium. We will continue to assess andrespond to risks and opportunities related to climate change in accordance with the TCFD framework, disclose relevant
information, and engage in dialogue with stakeholders.

Business Risks and Opportunities due to Climate Change in the Domestic Business andOverseas Alcoholic Beverages Business■ Risk       Content

Increase in energy costs due tocarbon tax

GovernanceTakara Group Sustainability Promotion Committee
ChairMembers

President of Takara Holdings

Takara Holdings: Directors, Audit & Supervisory Board Members, Executive Officers
Takara Shuzo: Directors Takara Shuzo International: Directors
Takara Bio: President, Directors in charge, Executive Officers in charge

Increase in costs of containers
and packaging materials

Medium-term

River flooding (flood damage)Long-term

Coastal flooding (flood damage)Long-term

Impact*2

1.5°C
Scenario

2.0°C
Scenario

MediumMediumMediumMedium

Executive Office of Sustainability Promotion Committee
Members

Measures• Promoting initiatives to reduce CO2 emissions and increasing theratio of renewable energy• Promoting modal shifts (in Japan)• Promoting the use of renewable energy (installation of solarpanels, etc.)• Converting company vehicles to EVs• Switching to recycled containers and low-carbon alternativecontainers• Obtaining certification for paper and cardboards (e.g. FSC, PEFC)• Use of biomass materials for soft packaging materials and printing• Reducing weight of packaging materials (making bottles and canslighter and abolishing labels and stickers)

Principal Division:
Sustainability Management OfficeGroup companiesin Japan

Takara Bio
GroupTakara Shuzo
InternationalGroupThe Takara Group had included in its scope Takara Shuzo Co., Ltd., which was analyzed in fiscal year 2021, and theOverseas Alcoholic Beverages Business of Takara Shuzo International Co., Ltd. analyzed in fiscal year 2022. In fiscalyear 2023, the Takara Group expanded its scope to include the Japanese Food Wholesale Business of Takara Shuzo
International Co., Ltd., and conducted a scenario analysis to understand the impact of climate change risks andopportunities on the business and consider countermeasures to be taken.
In this analysis, we referred to RCP 2.6 (below 2°C scenario) and RCP 8.5 (4°C scenario) based on AR5 of IPCC
(Intergovernmental Panel on Climate Change) for physical risks, APS scenario (below 2°C scenario), Sustainable
Development Scenario (SDS; below 2°C scenario) and NZE2050 scenario (1.5°C scenario) based on WEO of IEA(International Energy Agency) for transition risks to analyze and examine the impact of climate change.
Transitionrisk

As the temperature rise is limited to less than 2°C and strict environmental regulations are introduced toachieve carbon neutrality, the adoption of carbon tax will force up the prices of containers and packaging
materials and increase energy costs, causing an impact on our business.

Physicalrisk

As the temperature rise will be about 4°C, damage due to storm surges and floods caused by sea level rise
will have a significant impact on our operations. In addition, it has been found that the amount of yield ofcrops, which are raw materials, is greatly affected by rising temperatures.
We think that the reduction of operating costs through promotion of energy conservation efforts such as
the introduction of energy-saving equipment as well as increased demand for ethical consumption andeco-friendly products will become business opportunities for us.

Going forward, we will continue to review risks and opportunities and give shape to measures to be taken, and reflect
them in our medium- to long-term management strategies, thereby striving to improve the resilience of our strategies.
Target company: Takara Shuzo Co., Ltd.
Takara Shuzo International Co., Ltd.  Overseas Alcoholic Beverages Business (Takara Sake USA Inc., Takara Shuzo Foods Co., Ltd., and The Tomatin
Distillery Co. Ltd)
Japanese Food Wholesale Business (Mutual Trading Co., Inc., Tazaki Foods Ltd, FOODEX S.A.S., Cominport
Distribución S.L., and Nippon Food Supplies Company Pty Ltd)* For disclosures on Takara Bio Inc. based on the TCFD framework, please visit Takara Bio’s website.

4.0°C ScenarioLargeImpact on crop yields(see below for details)*1 Medium-term until around 2030
*2 Impact on financial indicators• Decentralization of production sites in Japan• Survey and examination of countermeasures for sites wherelarge-scale flooding is expected• Consideration and formulation of BCP(See below for details)

Transition risk is the impact on consolidated operating income, and physical risk is the impact on
consolidated net sales, consolidated property, plant and equipment, and consolidated inventories

until around 2050
5% or more Medium 1–5%Long-term
Large■ Opportunities       ContentOpportunities

Strategy and Scenario Analysis

Physical risk

Assistant:Public Relations & Investor Relations
Dept., Business Management Division

The Takara Group identified risks and opportunities for Takara Shuzo Co., Ltd. and Takara Shuzo International Co., Ltd.
(Overseas Alcoholic Beverages Business and Japanese Food Wholesale Business). As a process to identify them, we
extracted potential risks and opportunities for transition risks and physical risks by referring to experts’ opinions andpublished reports, and selected risks and opportunities that are expected to have a significant impact over the short-,
medium-, and long-term period, taking into account the likelihood and magnitude of impact. The Takara Group
Sustainability Promotion Committee reports to the Board of Directors on the details of identified risks andopportunities and the countermeasures.

Oppor­tunities

Medium-term

Transition risk

Board of Directors, Takara Holdings

Takara Shuzo

Risk Management

Governance Structure

Takara Holdings
corporatedepartments

The Takara Group has established the Takara Group
Sustainability Promotion Committee chaired by theRepresentative Director and President of Takara Holdings,
under the supervision of the Board of Directors. The
committee assesses the risks and opportunities thatclimate change poses to business, formulates strategies,and discusses targets, etc. In addition, as a subordinate
organization of the Takara Group Sustainability Promotion
Committee, the Executive Office of Sustainability
Promotion Committee has been established to deal withclimate change issues. The Executive Office ofSustainability Promotion Committee sets out andimplements specific activities for each Group company
based on decisions made by the Takara Group
Sustainability Promotion Committee.
These sustainability initiatives, including climatechange issues, are reported to the Board of Directors by
the Takara Group Sustainability Promotion Committee.

Period*1Measures

Impact on cost of switching to energy-saving equipment• Installing low-carbon equipment (converting the heavy oil boiler to a naturalgas boiler)• Using a biomass boiler at Tomatin

Impact of energy conservation promotion on costreduction• Installing energy-saving equipment that reduces operating costs• Considering the promotion of the reuse of waste heat (use of heat pumps, etc.)

Increase in demand for eco-products (demand for ethicalconsumption)• Product development consistent with ethical consumption (Takara CRAFT,SHOCHIKUBAI SHIRAKABEGURA “NEND”, etc.)• Initiatives for environmentally friendly products and certified products

Impact on crop yields
In addition to Takara Shuzo Co., Ltd., which we have analyzed up until now, we have expanded our scope to include theOverseas Alcoholic Beverages Business of Takara Shuzo International Co., Ltd. (Takara Sake USA Inc., Takara Shuzo Foods
Co., Ltd., and The Tomatin Distillery Co. Ltd), and analyzed the impact of temperature rise on yields for four items thataccount for a large proportion of raw material use.
Global average temperature rise (°C) and changes in impact since pre-industrial times
Item

Major countryof origin

Sugarcane (yield)

BrazilCorn (yield)

United States

Paddy rice (yield)

Japan

Paddy rice (yield)

China

Paddy rice (yield)

United States

Barley (yield)

UK

2.0℃

4.0℃

Measures• Continue stable procurement throughcooperation with producers• Surveying and diversifying suppliers to reduce
procurement risk
• Survey and examination of raw materials
compatible with climate change─[Changes in impact]–/+30% or above／

15% to less than 30%／Less than 15%／

No change
No data─Business Risks and Opportunities due to Climate Change in the Japanese Food Wholesale Business■ Risk       Content

Increase in productprocurement costs due toimplementation of carbon tax

Period*1

Medium-term

Impact*2

1.5°C
Scenario

2.0°C
Scenario

Small

SmallMeasures• Understanding carbon tax and other carbon pricing trends• Studying and switching to products using sustainablecontainers and packaging materials

Metrics and Targets
The Takara Group has set CO2 emissions reduction targets in its Takara Group Sustainability Vision. Takara Shuzo andTakara Shuzo International Group have set CO2 emissions targets in Scope 1+2 for their production sites.

■ Targets and Progress for FY2023
Year
achieved

2030

Transition risk

Increase in distribution andstorage costs due to
implementation of carbon tax

Increase in storage costs due torising electricity prices

Medium-term

Small

Medium-term

Small—

Small• Introducing EVs and electric trucks• Understanding renewable electricity trends in various
countries• Promoting the use of renewable energy (installation of solarpanels, etc.)• Considering and promoting energy conservation measures(Converting lighting to LEDs and those with automatic
sensors, utilizing heat pumps for air conditioning, etc.)

2050

Scope

Indicators and targets

FY2023 results

Takara Shuzo/Takara Shuzo
International Group

Reduce CO2 emissions at production sites by 46%
compared with FY2018.

Compared to FY2018: 18% reduction
CO2 emissions: 85,186 (t-CO2)

Takara Bio Group

Reduce CO2 emission intensity (CO2 emissions per netsales) by 50% compared with FY2018.

Compared to FY2018: 11% reduction

Takara Shuzo (Distribution)

Reduce CO2 emission intensity (CO2 emissions per salesvolume) from shipping by 10% compared with FY2018.

Compared to FY2018: 18% reduction

Entire GroupNet zero CO2 emissions―Scope 1 and Scope 2 Total CO2 Emissions of Takara Shuzo and Takara Shuzo International Group* Production sites of Takara Shuzo and Takara Shuzo International Group

103,696

99,53399,247

98,51388,64085,112

55,96646%

18%

Rise in procurement prices due
to decline in raw material yields

MediumMedium-term(Qualitativeevaluation)

Netzero• Considering and selecting alternative procurement sources• Studying and procuring alternative products

20182019(Base year)

River flooding (flood damage)Long-term

Physical risk

4.0°C Scenario
Small

Coastal flooding (flood damage)• Consideration and formulation of BCP(Countermeasures involving site facilities, inventory,
distribution routes, delivery volume to customers, drills, etc.)• Consideration of site location and floor height of facilities
taking flood risk into account

2020

2021

2022

2023

until around 2050
5% or more Medium Medium 1–5%

FY2022

Transition risk represents the impact on consolidated operating income, and physical risk
represents the impact on consolidated net sales, consolidated property, plant and equipment,
and consolidated inventories – Scenario data unavailable.

94,512
Scope1

71,908

Scope2

22,604

Category

Opportunities

Increase in transactions due to switch to environmentallyfriendly products and packagingMeasures• Selecting and offering a lineup of environmentally friendly products
and packaging• Building cooperative relationships with suppliers for procurement
Upstream

Increase in demand for ethical consumption(FY)

Unit: t-CO2e

Scope3■ Opportunities       Content2050

Takara Holdings, Takara Shuzo, and Overseas Alcoholic Beverages Business of Takara Shuzo International Co., Ltd. calculate
Scope 1, Scope 2, and Scope 3 greenhouse gas (GHG) emissions. We will work to grasp our Group-wide GHG emissions.

Long-termLong-term
Large

2030

G HG Emissions of Takara Holdings, Takara Shuzo, and Overseas Alcoholic Beverages Business of Takara
Shuzo International Co., Ltd. in FY2022

Scope1+Scope2*1 Medium-term until around 2030
*2 Impact on financial metrics
Small Small Less than 1%0 (t-CO2)• Strengthening the lineup of plant-based vegan products and otherproducts as substitutes for beef to help curb rising temperatures• Providing information to consumers regarding product features andproduct certification

Downstream

FY2022

Calculation method

857,879
Category 1

Purchased goods and services

629,825

Calculated for procured raw materials, containers,
and packaging materials

Category 2

Capital goods

10,698Calculated for purchased facilities and instruments

Category 3

Fuel- and energy-related activities notincluded in Scope 1 and 2

19,190Calculated based on the amount of fuel andelectricity used

Category 4

Upstream transportation and distribution

122,895

Calculated for the logistics of procured raw materials,containers, and packaging materials

Category 5

Waste generated in operations

Category 6

Business travel258

Calculated for employee business travels

Category 7

Employee commuting

654

Calculated for employee commuting

Category 8

Upstream leased assets—

Not included in the calculation

Category 9

Downstream transportation and distribution

13,867

Calculated for shipping logistics

Category 10

Processing of sold products—

Not included in the calculation

Category 11

Use of sold products—

Not included in the calculation

Category 12

End-of-life treatment of sold products

51,690Calculated for waste from products soldCategory 13

Downstream leased assets

6,291

Calculated for instruments leased to outside parties

Category 14

Franchises—

Not included in the calculation

Category 15

Investments—

Not included in the calculation

Scope1+Scope2+Scope3

2,511

Calculated for weight of waste

952,391

Scope 1: Direct emissions of greenhouse gases by the business itself (fuel combustion, industrial processes)
Scope 2: Indirect emissions associated with the use of electricity, heat, and steam supplied by other companies
Scope 3: Indirect emissions other than Scope 1 and Scope 2 (emissions by other companies related to the activities of the business)