August 31th, 2022

Information Disclosure Aligned with TCFD Recommendations
Support for TCFD

GovernanceFollowing the adoption of the Paris Agreement, activities
targeting progress toward a de-carbonized society extended
around the world. The frequency and severity of natural
disasters has increased in recent years, and this trend isthought to be related to climate change. Business activities
have been significantly affected.
In February 2021, the Company announced its support for therecommendations of TCFD, which was established by theFinancial Stability Board.
JR Kyushu performed the scenario analysis of climate risks
and opportunities in alignment with the TCFD. The Company’soperations involve large volumes of CO₂ emissions, and theCompany conducted scenario analysis regarding the influence ofclimate change on the railway business, which is affected byincreasingly frequent/severe natural disasters.
We will continue to disclose information according to TCFD
recommendations and implement environmental initiatives tocontribute to the building of a sustainable society.

The JR Kyushu Group has established an ESG Strategy Committee asa deliberative body to strengthen and further implement corporateESG initiatives. Realizing a de-carbonized society has beenannounced as one of the JR Kyushu Group's material issues.
The ESG Strategy Committee will confirm that business activities
are being advanced in line with the basic philosophy and basic
policies about environmental issues such as climate change,
confirm the status of progress in regard to voluntary targets forsupporting the resolution of the climate change issue, formulate
risk management.
In addition, when necessary, the Board of Directors receives
reports about important matters that have been discussed at theESG Strategy Committee and provides instructions.

1August 31th, 2022

Information Disclosure Aligned with TCFD Recommendations
Strategy
１ Climate change-related Risks and Opportunities
The risks associated with climate change are classified as risks related to the transition to a lower-carbon society (transition risks)and physical impacts (physical risks).
The following is a review of the impacts of climate-related risks and opportunities on the organization's business, strategy, andfinancial planning for the railway business.
Type
Policy/regulation

Increase in carbon tax(Increase in carbon price)

Regulations related to carbon
emissions and the use offossil fuels

MarketTechnologies

Transition

Change in energy mix
Change in energy prices

Evaluation

Large

Moderate

Large

Risks
(Medium to long term)• Energy procurement cost increase• Materials procurement cost increase due to rise in price of iron and steel• Decrease in sales due to passing of procurement costs on to wages

Opportunities(Medium to long term)• Insignificant influence on energy procurement costs from measures to address trend toward energy saving andde-carbonization(Medium to long term)• Increase in development/manufacturing costs for rolling stock to address regulations(Long term)• Difficulty in operating diesel rolling stock if unable to address regulations(Medium to long term)• Increase in sales accompanying maintenance of environmental superiority of railways resulting from early
adoption of de-carbonization(Medium to long term)• Energy procurement cost increase• Decrease in sales due to passing of energy procurement costs on to wages(Medium to long term)• Lower costs and higher sales due to introduction/expansion of renewable energy businesses accompanying
advances in photo-voltaic power generation and electricity storage technologies(Medium to long term)• Decline in sales due to decrease in environmental superiority of railways resulting from adoption ofelectric vehicles, etc.
• Failure of investment in new technologies for environmentally friendly rolling stock, etc.
(Long term)• Decrease in sales following loss of railway superiority due to adoption of self-driving technologies forautomobiles, etc.

(Short to medium term)• Lower costs due to adoption of self-driving technologies for railways(Medium to long term)• Decrease in costs due to efficient inspection operations accompanying advances in weather forecasting• Increase in sales accompanying active use of public transportation due to adoption of MaaS(Long term)• Decrease in maintenance costs and increase in environmental superiority due to introduction of nextgeneration rolling stock, increase in sales due to increased environmental superiority

Reputation
Acute
Chronic

Physical

Adoption of next-generation
technologies

Large

Changes in customer
preferences

Large(Short to medium term)• Decline in sales if the environmental superiority of railways decreases, resulting from a shift toalternative means of transportation due to higher environmental consciousness among customers(Short to medium term)• Increase in sales if the environmental superiority of railways is maintained, resulting from a shift to theuse of railways due to higher environmental consciousness among customers

Change in reputation amonginvestors

Small(Short to medium term)• Decline in reputation among investors if environmental measures are not considered to be aggressive(Short to medium term)• Attraction of ESG investment due to shift to low-carbon, environmentally friendly businessesLarge(Short term)(Medium to long term)• Decrease in sales due to disaster recovery cost increases and service suspensions accompanying increased or Decrease in disaster restoration costs and increase in sales due to operation of a railway business that islonger incidents of rain/strong winds
disaster resilient.
(Short to medium term)• Influence on business continuity due to supply chain interruption• Decline in asset value in regions with high disaster riskLarge(Short term)• Increase in air-conditioning costs• Increase in costs to address heatstroke• Increase in costs due to breakdown of electrical equipment and other railway assets and to rail buckling(Short to medium term)• Decline in sales due to trend toward refraining from going out

Increased frequency/severityof natural disasters

Rise in average atmospherictemperature⁻2August 31th, 2022

Information Disclosure Aligned with TCFD Recommendations
Strategy
２ Scenario Selection
We analyzed the effect of climate change on our railway
business, based on 2℃ to 4℃ scenarios outlined by specialist
institutions, such as the IPCC (Intergovernmental Panel on
Climate Change) and IEA (International Energy Agency).
Additionally, in August 2022, we conducted an analysis
reflecting the 1.5°C scenario and calculated the financial
impacts of some elements.

<Calculation of increase in financial impact associated with risks, etc.>
We calculated the increase in financial impact that is likely to
be caused in 2050 by the qualitative risks that are expected to havethe biggest impact and for which we have parameters for future
predictions.
Transition risks were calculated by estimating emissions in 2050
from emission coefficient predictions for each scenario andmultiplying these emission volumes by carbon costs.
<Major scenarios used in scenario analysis>
For physical risks, we referred to hazard maps provided by theUsed primarily to analyze transition risks
IEA: NZE, SDS, STEPS, DRS
Ministry of Land, Infrastructure, Transport and Tourism, establishedthe risk level for each site (stations, areas between stations,Used primarily to analyze physical risks
IPCC: RCP1.9, RCP2.6, RCP8.5etc.) and estimated the costs likely to be incurred as a result of*1
<Future prediction parameters related on transition and physical risks based on each scenario >disasters at each risk level based on past costs. We also calculated
increases in facility damage costs that are likely to occur inFuture prediction parameters (2050)
future based on the likelihood of disasters in each scenario.
Risk
Parameter
Unit

Transition

PhysicalIncrease incarbon tax
Increasedfrequency/
severity ofnatural
disasters*3

Emissioncoefficient*2

g-CO2/kWhAt
present

4℃

2℃

1.5℃

463

282

67-5

<Calculations of increase in financial impact in 2050 based on each scenario>
RiskCarbon price*2$/t-CO2－－Probability ofslope failure*4%

101212Flood frequency*5times

142160Expectations

250*1 Parameter values are based on partial estimations.
*2 Refer to World Energy Outlook 2020 and World Energy Outlook 2021 (IEA).
*3 The 1.5°C scenario was analyzed using parameters for the 2°C scenario, as sufficient future
prediction parameters are not available for the 1.5°C scenario.
*4 Refer to the Climate Change Adaptation Information Platform (A-PLAT).
*5 Refer to Recommendations on water control plans based on climate change (Technical review committee
on flood control plans based on climate change)

Increase in financial impact(billions of yen/year)
4℃

2℃

1.5℃

+ approx.
1.5+ approx.
1.0Transition

Increase incarbon tax

Costs due to introduction ofcarbon tax based on decreasein emission coefficient－Physical

Increasedfrequency/
severity ofnaturaldisasters

Costs incurred by damage tofacilities due to increase innatural disasters+ approx.
15.0+ approx.
7.53

August 31th, 2022

Information Disclosure Aligned with TCFD Recommendations
Strategy
3. Results of Scenario Analysis and Future Policies andInitiatives
Under the 2℃ scenario, which anticipates an increase incarbon taxes and cost increases due to the adoption ofrenewable energy, if the environmental superiority ofrailways can be maintained, then there will be a shift ofcustomers from other means of transportation, and we will
be able to secure opportunities to increase sales.
Additionally, we predicted that while aiming for the1.5°C scenario will mean a higher carbon tax, decreasing
the overall emission coefficient will reduce costs
associated with carbon tax.
In addition, under the 4℃ scenario, due to theincreasing frequency/severity of natural disasters causedby climate change, there will be damage to railway assets
and an increase in maintenance costs, as well as a decline
in sales due to the suspension of operations.
We will work to further expand our scenario analyses andthe details we disclose, taking measures such as reflecting
future prediction parameters that are available, taking
into account the external data that is being disclosed.
For society and for the Company, The Group will work toadvance initiatives for the achievement of the 2℃
furthermore 1.5℃ world to facilitate the realization of asustainable society.

（１）Results of Scenario Analysis （Global outlook under2℃, 1.5℃ scenario (2050)）

CO24

August 31th, 2022

Information Disclosure Aligned with TCFD Recommendations
StrategyRisk Management(2) Future policies and initiatives
The JR Kyushu Group has established the Road-map
toward the realization of a de-carbonized society in theJR Kyushu Group Medium-Term Business Plan 2022- 2024
(announced March 2022) based on transition risks andphysical risks. In addition to working actively onmeasures to mitigate these risks, such as reducing ourenergy consumption and switching to renewable energy, weare also working on adaptive measures such as measuresfor handling heavy rain.

The Group’s ESG Strategy Committee, which is chaired by thePresident and CEO, plans, formulates, and manages the progressof measures to reduce CO₂ emissions. In addition, to identify
and evaluate the influences of climate change on the Group’sbusinesses, we analyze climate change risks and opportunities,
and in the ESG Strategy Committee, reports are made at least
once per year. In addition, reports are made to the Board ofDirectors as necessary.

Metrics and Targets
The JR Kyushu Group has announced that it is aiming for netzero CO₂ emissions by 2050. We have also designated therealization of a de-carbonized society as one of our material
issues, and have set non-financial KPIs in the JR Kyushu Group
Medium-Term Business Plan 2022-2024, including intermediary
goals for 2030.
We will continue working on Groupwide initiatives to reduce
CO2 with the aim of realizing a de-carbonized society.

5August 31th, 2022

Information Disclosure Aligned with TCFD Recommendations<Reference: Emissions in the supply chain of JR Kyushu alone>
Scope

CO₂ emissions[Thousand t-CO₂]
FY2020/3

FY2021/3

Calculation Method

FY2022/3

Scope１49

41

43―

Scope２209

208

216

―

Scope３573

435

558

―
Costs of services and goods other than purchased assets were multiplied
by a standard unit.
Costs of non-consolidated facility investments were multiplied by astandard unit.
The total volume of purchased electricity and fuel was multiplied by astandard emission unit.
Not calculated as Scope 3 emissions are calculated from operationalcosts, including transportation costs and similar, in Category 1.
Multiplied by a standard emission unit specific to each type ofindustrial waste. General waste was calculated by multiplying the waste
disposal costs by a standard unit.
Calculated by multiplying the non-consolidated number of employees by astandard unit.
Fare revenue for each type of transport was multiplied by a standard
emission unit.

Category１

Purchased goods and services

203

172

170

Category２

Capital goods

316

214

339

Category３

Fuel-and-energy-related activities (notincluded in scope 1 or 2)

51

46

46

Category４

Upstream transportation and distribution

Category５

Waste generated in operations

111

Category６

Business travel000

Category７

Employee commuting

000

Category８

Upstream leased assets

―

―

―

Not relevant—already calculated and reported in Scopes 1 and 2.

Category９

Downstream transportation and distribution

―

―

―

Not calculated as our railway business is our main business.

Category１０

Processing of sold products

―

―

―

Not calculated as our railway business is our main business.

Category１１

Use of sold products

―

―

―

Not calculated as our railway business is our main business.

Category１２End-of-life treatment of sold products

―

―

―

Not calculated as our railway business is our main business.

Category１３

Downstream leased assets

―

―

―

Not relevant as JR Kyushu does not engage in leasing.

Category１４

Franchises

―

―

―

Not relevant as JR Kyushu is not a franchiser.

Category１５

Investments

―

―

―

Not calculated as JR Kyushu does not invest for profit.

―

―

―

*1 Calculated according to Basic Guidelines for Calculation of Greenhouse Gas Emissions Throughout Supply Chains(Ministry of the Environment, Ministry of Economy, Trade and Industry)*2 “-” means not relevant or not calculated*3 “0” means less than 1,000t-CO26