Information Disclosure Based on the TCFD Recommendations
June 26, 2024
Sun Frontier Fudousan Co., Ltd.
Sun Frontier Fudousan Co., Ltd. (“the Company”) established the “Sustainability Committee” on October 1, 2021, tomore strongly promote activities of contributing to the resolution of social issues, the realization of a sustainable society, andaim to improve mid- to long-term corporate value corporate value based on its mission and corporate philosophy. On the“Sustainability Committee,” the Company established the “Sustainability Vision,” and sets forth specific measures and KPIs
in response to each important issue and promotes sustainability management.
■ Sustainability Vision
We will contribute to the realization of a sustainable society through our business activities while respecting the heart ofaltruism, the company policy.
■ Important Sustainability Issues (Materiality)
Important issues that we should addressed to realize our Sustainability Vision
Environmental Protection, Regional Revitalization, and Human Resource Development
This document explains the items related to climate change and the environment among the Company's sustainability
activities in accordance with the “Information Disclosure Recommended by the TCFD Recommendations.” TCFD
Recommendations recommends that information shall be disclosed in line with four disclosure elements of “governance,”“strategy,” “risk management,” and “metrics and targets,” to accurately understand how risks and opportunities associatedwith climate change affect corporate management including fiscal management. The Company will work to further expand
information disclosure based on these four disclosure elements recommended by the TCFD Recommendations.
ⅰ．Governance
The Company recognizes addressing climate change and environmental issues as a critical management priority
at our company. In coordination with Risk Verification Committee, Sustainability Committee compiles information ofrisks and opportunities associated with climate change, examines response measures, and makes periodic report to theBoard of Directors. The Board of Directors oversees the progress of initiatives related to climate change issues discussed
and reported by executive departments, and discussed issues related to these initiatives at least once a year.
The President Representative Director receives reports on the status of initiatives related climate change from theadvisory bodies, the Sustainability Committee, and the Risk Verification Committee, and assumes the highest
responsibility for risk assessment and management including risks of climate change.
System of Sustainability Promotion

1Meetings and Roles in the System of Sustainability Promotion
Organizations andcommittees

Roles

Board of Directors

Receiving reports from the Sustainability Committee on the status of the risk management
related to climate change and overseeing the progress of measures.

President Representative
Director

Receiving reports on the status of overall sustainability activities, including the one related
to climate change, from the Sustainability Committee as an advisory body. Assuming thehighest responsibility for risk assessment and management including risks of climatechange.

Risk Verification
Committee

As an advisory body to the President Representative Director, discussing assessment ofcomprehensive risk, including climate change. Examining the risks reported by Risk
Management Committee and instructing the business divisions to take measures through theRisk Management Committee.

Risk Management
Committee

Discusses comprehensive management and measures against risks in operations, including
climate change. Meetings held once a month.

Sustainability Committee

As an advisory body to the President Representative Director, promoting sustainability
activities including climate change countermeasures. In coordination with the Risk
Verification Committee and the Risk Management Committee, summarizing risks andopportunities related to climate change, etc. from each division and group company,
considering measures shall be taken, and making periodic reports to the Board of Directors.
Meetings held four times a year.

ⅱ．Strategy
Based on the TCFD recommendations, we analyzed scenario of risks and opportunities related to climate change.
Through the scenario analysis, we defined 1.5°C and 4°C scenarios based on scientific evidence from IEA (InternationalEnergy Agency) and assessed the importance of risks and opportunities related to climate that might affect operations asof 2030.
Definition of Scenarios
Scenario
1.5℃ scenario
configuration
World view
The Japanese government will promotesevere measures against climate change,
including the introduction of a carbon tax,
which will lead to drastic social changes, andregulations on plastic and climate changerelated information disclosure will berequired.
Damage from natural disasters such as
flooding is limited.
Reference scenario IEA The Net-Zero Emissions by 2050
Scenario (NZE) / IEA World Energy Outlook
2021/ IEA World Energy Outlook 2018/ IPCC
AR6 SSP1-1.9
Characteristics
Transition risks related to policies, etc. arelikely to become apparent.

24℃ scenario
There will be no climate action by the government
beyond current measures and no climate change
action is required.
Abnormal weather such as droughts and floods
due to rising temperatures will become apparent,
sites will be damaged, and response costs andrecovery costs at the time of the disaster areexpected.
IEA World Energy Outlook 2021/ IEA WorldEnergy Outlook 2018/ IPCC AR6 SSP5-8.5

Physical risks associated with abnormal weather,etc. are likely to become apparent.

Identification and assessment of risks and opportunities
We assessed the impact of transition and physical risks related to climate change on our Real Estate Revitalization
Business, Real Estate Service Business, Hotel and Tourism Business. Regarding the transition risks, we considered a variety
of items from policy and legal regulations to market changes such as acute risks and chronic risks for physical risks. We will
respond to these risks and opportunities that judged as particularly significant impact on our company.
ScopeImpact: Real Estate Revitalization Business, Real Estate Service Business, Hotel and Tourism Business: High : Very significant impact (> 19% of net sales): Medium : Significant (10-19% of net sales): Small : Limited impact (<10% of net sales)
Term of risk occurrence: Short term
: Within one year
Term of risk occurrence: Medium term
: Within 1 to 5 years
Term of risk occurrence: Medium to long term : Within 5 to 10 years
Term of risk occurrence: Long term
: Over 10 years
List of risks and opportunities
The list includes the risks and opportunities recognized by the Company whose impact on the business is “medium” or above.
Impact on business andTiming ofMain
Subfinancialresults
Details of risks and opportunities
risk
category
category
occurrence
1.5℃
4℃
Company-wide
Transition
risk

Reputation

Stakeholder Concerns about Passive ESG
Responses

Medium－Medium tolong term

Real Estate Revitalization BusinessTransition
risk

Policyregulation

Additional capital investment costs due toincreased energy efficiency standards to be metin repairs

Medium－Short term

Physicalrisk

Chronic

Increase in cost of air conditioning equipmentand increase in energy cost at owned properties

Small

MediumMediumterm

Opportunity

ProductsandServices

Increase in selling price to property owners andbuilding owners by improving theenvironmental performance of properties inredevelopment

MediumMediumShort term

Medium－Mediumterm

MediumMediumMediumterm

Hotel and Tourism BusinessTransition
risk

Policyregulation

Opportunity

ProductsandServices

Increased trend toward trial construction ofbuildings with high environmental performance,
shortages of materials with high environmental
performance and rising labor costs due to theconcentration of construction work
Contribute to the local community byconserving and coexisting with nature in thearea where the hotel is located, thereby
improving the image of the hotel and increasing
the number of guests

3Financial impact
The list includes the results of calculating the financial impact of the risks and opportunities recognized by the Company.
Calculation method
Financial impact*Base year is fiscal 2022.
Degree2030 (billion yen)
Risk /
Business impact*The impact in 2030 is calculated byofOpportunity
reflecting the CAGR (Compound Annualinfluence
1.5 ° C
4°CGrowth Rate)

Carbon tax

Carbon tax

Increased tax burden due
to large increase incarbon tax[Company-wide]
Company's CO2 emissions x
carbon price per unit of emissions[Real Estate Revitalization]
Input cost of raw materials* x
Large increase in carbon
emission intensity of raw
tax leading to higher costs materials x carbon price perfor raw materials withemission*For cement and ready-mixed concrete with highlarge unit emissions

3.23

－

Small

1.93

－

Small－－

emission intensity, the amount of input iscalculated from the total floor area of properties
sold in the base year using an LCA tool.

[Real Estate Revitalization]
Sales losses
due to natural
disasters

Sales loss due tointerruption of businessactivities because ofdamage to a business sitecaused by a natural
disaster(*Not calculated as the impact on rent income isdifficult to calculate)[Hotel Management]
Daily sales loss x maximum daysof downtime* x damage ratio**Determined by investigating the flood depth levelat the time of the occurrence of a storm surge at thehotel－1.97

1.97

Probability ofoccurrence:1.4%

Probability ofoccurrence:2.8%

Small－－－[Real Estate Revitalization]

Flood damage
due to sea
level riseOccurrence of flood
damage to owned realestate due to high tides
and heavy rains caused byrising sea levels(*Not calculated because the properties owned arelocated in Tokyo and the impact of storm surge isminimal.)[Hotel Management]
Repair cost by flood depth level
due to sea level rise x amount ofreal estate owned*

0.62

0.62

Probability ofoccurrence:1.4%

Probability ofoccurrence:2.8%

Small

0.81

0.81

Small

*Determined by investigating the flood depth levelat the time of the occurrence of a storm surge at thehotel (owned property).

Improvementof selling
prices ofproperties

Improving the selling
price to the wealthy andbuilding owners by
improving theenvironmental
performance of theproperty[Real Estate Revitalization]
Total floor area of BELS certified
properties (*1) x difference inrent between BELS certified andordinary properties (*2)(*1) Total floor area of BELS certified properties
in the base year(*2) Difference in unit price per tsubo between theBELS certified property in the base year and theCompany's RP property in the vicinity as of March31, 2024

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ⅲ．Risk management
In order to establish a sustainability system, the Company has established the “Sustainability Committee” torespond to overall sustainability issues, including climate change issues, as well as regulations on company-wide riskmanagement. For risks related to climate change, the Risk Verification Committee evaluates the risks reported by theRisk Management Committee. The identified and assessed risks are examined by the Sustainability Committee, and thebusiness divisions and Group companies then respond to those risks. In addition, the Board of Directors receives a reportfrom the Risk Management Committee on the status of and responses to comprehensive risk management, including
climate change risks.

ⅳ．Metrics and Targets
The Company calculates greenhouse gas emissions as an indicator for evaluating climate change-related risks andopportunities. In fiscal 2021 and 2022, Scope1 “Fuel use (CO2)”, Scope2 “Use of electricity supplied by others (CO2)”,
and Scope3 “Other indirect emissions (CO2)” were included in the calculation. We will continue to monitor ourgreenhouse gas emissions in the future and will establish a system and set targets so that we can expand the scope ofmonitoring and reduce CO2 emissions in our activities.
Greenhouse Gas Emissions(Consolidated)
Fiscal 2021 annual
emissions (t-CO2e)

Fiscal 2022 annual
emissions (t-CO2e)

Fiscal 2023 annual
emissions (t-CO2e)

Scope1 *1

4,088.5

3,237.9

3,391.9

Scope2 *2

6,692.5

7,633.7

7,281.2

Scope3 *3

194,929.0

152,744.0

148,333.7(Non-consolidated)
Fiscal 2021 annual
emissions (t-CO2e)

Fiscal 2022 annualemissions (t-CO2e)

Fiscal 2023 annualemissions (t-CO2e)

Scope1 *10.0

0.0

0.0

Scope2 *2

196.3

195.1

88.0

Scope3 *3

194,929.0

152,744.0

148,333.7*1 Emissions from gas and gasoline use *2 Emissions from electricity use *3 Other indirect emissions
Calculation period: FY 2021 (April 2021 to March 2022), FY 2022 (April 2022 to March 2023), FY 2023 (April 2023
to March 2024)
To be disclosed: domestic and international consolidated subsidiaries (Scope1 and 2), Real Estate Revitalization Business(Scope3)
Calculation method: market-based*Calculation methods are based on location (calculated using the average emission intensity for Japan as a whole) andmarket (calculated using the emission intensity of each electric power company). We adopted the latter market-based
method.,Emission factors used in Scope2: 2020 and 2021 emissions factor result for each electric utility
5Greenhouse gas emissions reduction target (compared to fiscal 2022)
Total of Scope 1and Scope 2

2030

2050

Fiscal 2023 Results

22% reduction(annual reduction of 2.7%)

Carbon neutral

1.8% reduction

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