Disclosure Based on TCFD Recommendations

The COLOWIDE Group, guided by our corporate philosophy of "All for our Customers and Employees," have expanded our business field from our original business of izakayas to restaurants, delivering food and services to our customers. As the impacts of climate change grow increasingly severe each year, the international community is accelerating its efforts toward building a low-carbon and decarbonized society, heightening the importance of the role that corporations must play. In 2021, we established our "Basic Sustainability Policy" and identified materiality (key issues) to prioritize in our initiatives. We selected "Contribution to the Environment" as one of the key focuses and have been implementing various measures to contribute to the realization of a decarbonized society.

The Group recognizes the importance of climate-related financial disclosures and is promoting the disclosure of information on climate change and its financial impacts through the use of the framework recommended by the Task Force on Climate-related Financial Disclosures(TCFD), which was established by the Financial Stability Board (FSB). We will continue to review our disclosures in alignment with the TCFD recommendations, ensuring that our reporting evolves in line with these guidelines.

Governance System

Under the supervision of the responsible officer, the Sustainability Promotion Office plans and formulates sustainability promotion initiatives. These initiatives are implemented in collaboration with sustainability promotion personnel from each business department and Group subsidiary, advancing the Group's overall sustainability efforts.
With regard to addressing climate change, the Sustainability Promotion Office takes the lead in driving initiatives such as scenario analysis, examining countermeasures for identified risks and opportunities, reducing CO2 emissions, and minimizing food waste.

Strategy

Scenario Analysis

In considering scenario analysis, we referred to the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC) to identify key factors that could significantly impact the Company. These include climate change, natural disasters, delays in ESG management efforts, and supply chain issues.

Classification of risks and opportunities			Summary of potential risks and opportunities	Impact over business and finance
Risks	Transition risks	Policy and law	・Increase in business operation costs due to introduction of carbon tax ・Increase in operating costs due to stricter regulations on CO2 emissions ・Increase in business operation costs due to stricter regulations ・Increase in investment costs for stores, etc. due to stricter regulations ・Compliance with the Plastic Resources Recycling Law	Very large
		Reputation	・Loss of credibility among stakeholders due to delay in addressing environmental issues ・Damage to brand value ・Franchisee defections	Very large
		Market and technology	・Increase in foodstuff procurement costs ・Increase in procurement costs due to the shift to renewable energy sources ・Increase in costs due to the replacement of plastic containers and packaging into renewable resources ・Changes in demands due to changes in consumer preferences	Large
	Physical risks		・Loss of business opportunities due to store closures following major natural disasters ・Increase in procurement costs due to supply chain disruptions ・Increase in electricity consumption at stores and factories	Very large
Opportunities	Energy / Technology		・Reduction of electricity consumption costs through promotion of energy conservation ・ Reduction of waste by supplying waste cooking oil as a raw material for SAF (Sustainable Aviation Fuel) ・Reduction of transportation costs by improving logistics efficiency ・Procurement of next-generation food materials	Large
Opportunities	Market		・Gaining empathy from stakeholders by promoting sustainability ・Increase revenues by developing environmentally friendly products and services ・Develop products and services that meet changing tastes and preferences due to rising temperatures ・Provide food aid in times of disaster	Large

Results of Scenario Analysis

As a result of the analysis, we recognize that the impact on our business and finances in the transition to a decarbonized society will be significant, primarily due to stricter CO2 emission regulations and the potential introduction of carbon taxes, which are expected to increase operational costs. On the other hand, changes in consumer preferences are anticipated to create new demand and expand markets, presenting opportunities for technological development and efficiency improvements.

Risk Management / Indicators and Targets

Risk Management

Regarding risk management, we identify, assess, and categorize risks to prepare for any emergencies that may impact our business. Centered around our Risk Management Regulations, we establish specific rules and response procedures to address various internal and external risks. Through these measures, our group aims to prevent losses and minimize potential damage in the event of an incident.
Risks related to sustainability, including climate change, are identified and assessed by the Sustainability Promotion Office, which regularly reports to the Board of Directors. To minimize the identified risks, the Sustainability Promotion Office collaborates with relevant departments within our company and the sustainability divisions of our group subsidiaries to implement various initiatives.

Indicators and Targets

To address identified risks related to CO₂ emissions, the Colowide Group has set the following CO₂ emission reduction target. The entire group is working together on various initiatives to achieve this goal.

CO2 Emission Reduction Target : 50% reduction in intensity*1 by FY2031 compared to FY2021.

FY2021 performance：135,687 t-CO2*2(unit of revenues 0.547)
FY2024 performance：122,037 t-CO2*2(unit of revenues 0.399)
^*1：Emissions per million yen of revenues
^*2：Scope 1 and 2 from our domestic Group companies

Disclosure Based on TCFD Recommendations