Environment

Governance

Attitude towards addressing climate change

In line with our group purpose, " Sustainable Growth for More Companies " we are taking steps to address climate change based on our revised Basic Environment Policy , which was established in 2023.

Governance System

Our group, with the Representative Director as the highest-ranking officer, and centered around the Sustainability Officer and the Sustainability Promotion Office, and in collaboration with Funai Consulting Inc. , evaluates and manages the financial impact of climate change risks and opportunities on our business. We also consider Basic Environment Policy and targets such as GHG emissions, and promote, manage the progress of, and disclose various responses. Sustainability Promotion Office reports its considerations and progress to the Sustainability Committee, an advisory body to the Board of Directors, for deliberation. The results of the deliberation by the Sustainability Committee are reported to the Board of Directors as appropriate, and monitoring is conducted. In addition, Sustainability Promotion Office has established four thematic promotion groups ( Environment , Human Capital, Information Security, and Business), and at monthly Sustainability Promotion Office meetings, the entire group discusses the progress of activities and future Initiatives .

[Governance Structure Chart]

[Defining Roles in the Governance System]

strategy

Business Strategies in Climate Change

Our group is working towards realizing our group purpose, " Sustainable Growth for More Companies " by expanding our business to provide end-to-end services to address companies' management challenges, and aiming to become a comprehensive X (Transformation) Consulting Group focused on mid-sized mid-market leaders , and rising stars companies, as outlined in our group vision.

Furthermore, based on "5. Initiatives Through Business Activities " of Basic Environment Policy , our group is committed to reducing Environment impact not only within our own group's activities but also through consulting and services, Initiatives together with our customers to address climate change, Prevention of Environmental Pollution , and Promotion of Resource Recycling .

Risks and opportunities

Our group is committed to understanding the impacts of climate change risks and opportunities, and is implementing the necessary strategies to realize a sustainable society .

【risk】

Classification		Risk assessment	Main countermeasures
Transition risks	market	Climate change and for Society as a whole and for our clients Increased awareness of decarbonization	Amid growing Society concern over climate change, our group's main clients, small and medium-sized enterprises (SMEs), are also shifting towards decarbonization and Environment conscious management. In this context, our group provides consulting services, including decarbonization support.
	reputation	Decreased reputation among stakeholders and reduced trading due to insufficient explanation.	With demands from stakeholders such as clients and investors rapidly increasing regarding climate change, a passive or delayed response by our company could risk damaging our brand and lowering Society standing. Furthermore, we anticipate a risk of increased difficulty in attracting talent due to the growing sense of crisis among younger generations regarding climate change.
Physical risks	acute	Increased risk of economic stagnation due to the intensification of natural disasters and floods. Risks such as data loss due to damage to business premises	If our group's offices suffer physical damage or disruptions to transportation networks, it will affect our face-to-face consulting business, and ensuring the safety of our group employees will be essential. We have implemented a safety confirmation system. Furthermore, due to the risk of data loss (support recipient data, personal data) in the event of damage to our facilities, we are working with the Information Security Management Department and the Risk Management Committee to strengthen our system infrastructure.

【opportunity】

Classification		Risk assessment	Main countermeasures
opportunity	Products and Services	Provision of Environment friendly services	As interest in Sustainability increases from Society , the market, and clients, we anticipate that the demand for consulting services from our group will also increase. Our group will expand the provision of climate change-aware and Environment conscious services within the consulting services we offer across various industries. Initiatives of each company 【Funai Consulting Inc.】 - ZEB/ZEH construction business in Housing, real estate sector • TCFD compliance by carbon neutrality support group • CDP response • SBT certification • Decarbonization roadmap development • Carbon neutrality support solutions - Holding of the Decarbonization Management Workshops * * A membership-based study group for business executives and Sustainability managers promoting carbon-neutral management. [ Funai Soken Logistics Inc. (company name changed to Funai Soken Supply Chain Consulting Inc. from January 2026)] - Distribution of a guide to implementing ESG practices in Logistics . - Support for implementing ESG Logistics

The risks and opportunities described above will be reported and shared with the Risk Management Committee and Sustainability Committee, as described later, and appropriate countermeasures will be considered and implemented.

Funai Consulting Inc. 's Initiatives

Offering carbon neutrality management support and sustainable management support menus.

We provide sustainable management support to listed companies, including assistance with international initiative compliance (TCFD compliance, CDP responses, SBT certification), and development of decarbonization management roadmaps and reduction of GHG emissions for medium-sized and large companies.

Seminar on developing new business models in the decarbonization market

Funai Consulting Inc. is supporting small and medium-sized enterprises (SMEs) in their decarbonization efforts by holding seminars on decarbonization-related topics tailored to specific industries. These seminars cover industry trends in response to the transition to a low-carbon Society , and provide industry-specific solutions based on concrete success stories.

Regular study sessions to promote carbon-neutral management

In August 2022, Funai Consulting Inc. launched the "Decarbonization Management Workshops " a membership-based study group for managers and sustainability leaders of small and medium-sized enterprises. It serves as a platform where the latest information from across Japan is gathered, covering topics from CO2 emission calculations and specific reduction methods to lectures by special guest speakers, information exchange among members, and commentary on current trends by expert consultants.

Publication of a book on carbon neutral management

In December 2022, Funai Consulting Inc. published a book for managers and sustainability officers of small and medium-sized enterprises (SMEs) explaining how to Initiatives decarbonization management. The book includes information on the meaning of decarbonization, specific Initiatives , case studies, and other know-how for decarbonization management.

Funai Soken Logistics Inc. ' Initiatives ( Funai Soken Logistics Inc. changed its name to " Funai Soken Supply Chain Consulting Inc. " in January 2026.)

Development of ESG Logistics for logistics companies and logistics departments

Funai Soken Supply Chain Consulting Inc. Co., Ltd. offers a comprehensive service to support the introduction of ESG Logistics aimed at reducing Environment and labor burdens in Logistics . Based on the results of the implementation assessment, logistics consultants analyze progress and challenges, consider strategies, and provide support for the implementation of ESG Logistics .

Future Initiatives

As part of our support for decarbonization management for small and medium-sized enterprises (SMEs), in addition to our efforts in Initiatives solutions tailored to various industries, such as ZEH (Zero Energy Housing), we are now also promoting a new decarbonization management diagnostic service in cooperation with Financial institutions . Moving forward, starting with the decarbonization management diagnostic, we will provide support for calculating Scope 1, 2, and 3 GHG emissions, developing a roadmap for achieving decarbonization management based on GHG emission data, and implementing decarbonization management at the operational level. Furthermore, our Management Workshops plans to launch a new membership organization focused on decarbonization management. Currently, decarbonization management presents significant hurdles for SMEs, but we will continue to provide support, believing that pursuing Society responsibility will lead to increased profitability and corporate value.

Risk Management

Approach to climate change

Based on "6. Dialogue and Information Disclosure " of Basic Environment Policy , we are committed to working towards the continuous improvement of global environmental issues , including climate change, through Information Disclosure and dialogue with stakeholders.

Management System

Our group recognizes that identifying, assessing, and managing business risks that affect corporate management and business continuity are critical issues. Therefore, our Risk Management Committee appropriately manages these risks and implements countermeasures. Furthermore, the Sustainability Committee is responsible for risk management related to climate change countermeasures, and it collaborates with the Risk Management Committee.

The Sustainability Committee, primarily managed by Environment Management Group, reports on the results of risk assessments and risk analyses conducted regularly and in response to changes in the internal and external Environment . Risks deemed to require countermeasures related to Environment are shared with the Risk Management Committee, and the Sustainability Promotion Office, which serves as the secretariat, submits a report to the Board of Directors. The Board of Directors then evaluates the relationship with other risks, decides on the necessary countermeasures, and implements them.

Indicators and targets

In our newly established Medium-Term Management Plan 2026-2028, we have set a Sustainability target of reducing GHG emissions (Scope 1 and 2) by 75% compared to FY . Furthermore, we aim to achieve carbon neutrality by 2030 and will promote Initiatives including a 100% renewable Energy procurement rate at our domestic business sites.

Cut off measures

Procurement of renewable Energy

By 2030, we aim to achieve a 100% renewable Energy procurement rate at our domestic facilities, thereby realizing net-zero Scope 2 emissions.

Scope 2 (electricity use) emission reduction

To achieve our 2030 target, we are proceeding with the switch to renewable energy plans at each of our business locations, and the ratio of renewable Energy procurement to total electricity consumption has changed as follows: ( FY : approximately 13.4%, FY : 22.8%, FY : 24.1%, FY : 21.9%)

Future RE100 (In our case, because the scale of our electricity usage is small, RE In light of our membership in Action, we will recruitment electricity plans that utilize additionality-based, trackable non-carbonized stone certificates (limited to Environment value of renewable energy power plants built within the last 15 years) for electricity derived from renewable energy sources.

Reduction of GHG emissions

Promoting in-house education and awareness-raising regarding climate change and waste management.

To ensure that Initiatives regarding climate change and waste reduction are implemented throughout the entire group, we launched a "Climate Change and Waste Management Training" program in FY 2026, using original content tailored to the specific characteristics of our business. The participation rate in May 2026 was 99.1% (for all group employees, with 1,745 participants).
We will continue to provide ongoing education to deepen each employee's understanding of Environment issues and translate that understanding into concrete actions.

Scope 3 Cat.1 (Reducing emissions from purchasing copy paper, printing and mailing direct mail for seminars)

We will promote paperless operations by further advancing digitalization. In the medium to long term, we will seek the understanding of our suppliers and consider promoting Environment friendly printing and recruitment Environment conscious postal and logistics companies.

Furthermore, we will implement emission calculations based on primary data, rather than on unit intensity.

(For your reference)

Paper usage (office paper) ※A4 x 1 sheet 4g conversion
2019 figures: 35 tons → 2024 figures: 10 tons

Scope 3 Cat.6 (Business Trip) Funai Consulting Inc. Business Trip Expenses

Due to the rapid increase in remote work since 2020 as a measure against COVID-19, the number of employees compared to 2019 was on a downward trend. Currently, we are maintaining the quality of communication with customers by appropriately combining remote work and business trips.

Capital expenditures related to Environment measures

Our group calculates shadow costs as expenditures related to Environment measures in order to visualize the effects of Environment considerations in our business activities. We believe that the main shadow costs include the installation of telephone booths, which reduces Environment impact of employee travel such as business trips; the installation of dual monitors, which promotes a paperless environment; and the development and use of Management Workshops database, which reduces or avoids the impact on service quality of remote work as an alternative to business trips. Going forward, we will continue to improve the accuracy of visualizing the effects of Environment considerations in our business activities through the calculation of shadow costs.

Main Shadow Costs
- Installation of telephone booths: Approximately 49 million yen (2024, Tokyo Head Office (Yaesu) and Osaka Head Office)
- Dual monitor setup: Approximately 7 million yen (2023-2024, same as above)
• Management Workshops Database: Approximately 58 million yen (2018-2025, by providing member companies with a database of Management Workshops 's texts, the digitization of texts that were previously printed on paper was achieved.)

Initiatives to collaborate with external parties and promote efforts to reduce pollution, waste, and resource use.

● Signing the United Nations Global Compact (GCNJ) (starting in 2023)

I participate in the GCNJ Environment Management Subcommittee and the GCNJ Circular Economy Research Subcommittee, striving to gather information and collaborate with external organizations ( Funai Consulting Inc. , Carbon Neutral Team).

●Regarding waste management, our goal is to implement continuous monitoring and maintain a recycling rate of 50% or higher. In FY 2024, the recycling rate reached 62%.

Funai Soken Group ESG Data ( Environment ): https://hd.funaisoken.co.jp/sustainability/#evaluation

● Reducing Environment impact through trial use of reusable cups, raising employee awareness, and collaborating with companies (chemical manufacturers) located in our Tokyo headquarters (Yaesu).

As a new Initiatives related to "making Sustainability commonplace ( Sustainability built-in)," we conducted a trial use of reusable cups.

(Implementation period) A trial period of approximately one month, from October 1st to 30th, 2024, with nearly 200 users per day.

(Objective) To reduce Environment impact by reducing the use of disposable cups, to raise reuse awareness among group employees, and to verify the challenges and effects of introducing reusable cups (by conducting a survey).

◾ Actual reusable cup used for trial

Capacity: 360ml
Weight: 86g
Size: Diameter 95mm, Height 130mm, Base Diameter 60mm
　　　　Available hot or cold.