We recognize that responding to climate change issues is not only a risk which could jeopardize corporate sustainability, but also an important management issue that leads to an expansion of profit opportunities. In November 2022, we agreed with TCFD※1 and decided to disclose "Governance," "Strategy," "Risk Management," and "Indicators and Targets" based on a medium to long-term perspective towards 2030/2050, in line with the recommendations published by TCFD.

※１ TCFD refers to the Task Force on Climate-related Financial Disclosures, which was established by the Financial Stability Board (FSB) at the request of G20. TCFD recommends that companies disclose items related to climate change risks and opportunities.
TCFD Website：https://www.fsb-tcfd.org/

Governance

We have established the promotion of environmental conservation as one of our sustainability priorities, and our Sustainability Committee oversees initiatives related to climate change. Our Sustainability Committee is chaired by the President and CEO with an outside director (vice-chairperson) and managers of relevant divisions (committee members). The committee promotes our sustainability measures and monitors the progress of these measures to ensure continuous improvement.
The Executive Committee receives regular reports from the Sustainability Committee on the status of activities and plans, discusses and decides on important issues related to climate change, and monitors progress.
The Board of Directors receives regular reports on important issues determined by the Executive Committee and provides instructions and supervision.

Strategy

After identifying our risks and opportunities for the impacts of climate change, we conducted our analyses on the possible impacts, reviewed our strategies in response to those scenarios, and verified our resilience.

The degree of financial impact on business is qualitatively assessed in three stages: large, medium, and small, as it is difficult to assess the business impact quantitatively at this point. While continuously analyzing scenarios to improve the accuracy of our financial impact analyses, we will strengthen our ability to respond to risks and opportunities associated with climate change and strive to raise the level of sustainability management.

Risk Management

In order to respond to various changes in the external environment related to climate change, our Sustainability Committee quantitatively analyzes and evaluates the financial impact of risks and opportunities in three stages: large, medium, and small, and considers countermeasures. Risks and opportunities that have a large financial impact are reported to the Executive Committee and the Board of Directors, and appropriate measures are deliberated and decided from the perspective of company-wide risk management. In this way, we promote strategies to minimize risks and maximize opportunities. Going forward, we will continue to strengthen governance and risk management in climate change.

Indicators and Targets

To reduce the environmental impact of its business activities, the TOYO Corporation Group has set specific targets to reduce greenhouse gas emissions. For Scope 1 and Scope 2 emissions, we will expand our reporting to include both domestic and overseas consolidated subsidiaries, starting in October 2025. Furthermore, we have advanced our net-zero target from 2050 to 2033 to accelerate our efforts. This new target aligns with the 1.5°C pathway mandated by the Paris Agreement and aims to reduce emissions by 60% by 2030, reaching net-zero by 2033, using 2024 as the baseline.

We plan to measure Scope 3 emissions from Categories 11 and 12 by the end of 2026. With this information and a better understanding of our overall supply chain impact, we will set reduction targets accordingly.