Disclosure in accordance with the TCFD Framework

Policy Addressing climate change (information disclosure based on TCFD recommendations)Case Studies

Policy

We believe that a healthy global environment is essential for the lives of plants and animals, including humans, as well as for sustaining HIS Group's business.
Accordingly, we work to conserve resources and reduce the environmental footprint of our business activities.
Moreover, we consider it our mission to provide opportunities for people to experience and learn about our planet's rich environment and biodiversity as something we can do for a sustainable world as a company with a heritage in the tourism industry.

Climate-related Financial Disclosure Task Force (TCFD) Logo

Disclosure in accordance with the TCFD Framework

The HIS Group has expressed its support for the recommendations of the Climaterelated Financial Disclosure Task Force (TCFD) and joined the TCFD consortium to understand the impact of climate change-related risks and opportunities on HIS' business activities through (1) governance, (2) strategy, (3) risk management, and (4) indicators and targets.
We will continue to promote and improve our disclosure in line with the TCFD recommendations.

Addressing climate change
(information disclosure based on TCFD recommendations)

1.Governance

In accordance with the value we strive to consistently provide to society, our code of conduct, and the HIS Group Philosophy which represents our founding spirit, HIS Group is working to establish and utilize internal governance mechanisms toward the aims of strengthening sustainability promotion systems, increasing corporate value, and being the preferred company of choice.
Under the leadership of the Sustainability Promotion Committee chaired by the representative director and president, the Risk Compliance Committee, operational divisions, and foreign and domestic subsidiaries are coordinating to discuss key initiatives and policies, as well as monitoring progress toward goals, etc., and promoting sustainability efforts. Furthermore, to enhance effectiveness on materialities (critical issues), we established the Sustainability Promotion Project, DEIB Promotion Project, Human Rights Project, and HIS Americas Sustainability Promotion Committee as subordinate organizations of the Sustainability Promotion Committee composed of the members of operational divisions, engaging in regular activities under the oversight of this committee. In addition, this committee presents or reports important matters to the board of directors, and receives appropriate instructions and advice.

Sustainability Promotion Structure

2.Strategy

The HIS Group has conducted a climate change scenario analysis in accordance, and has compiled climate change risks, opportunities, associated impacts, and corresponding measures that are relevant to its businesses.
We will promote priority measures for items with high risk significance and long-term impact.

Physical Risk

Impact	Item of risk/opportunity	Measures	Period
High	Increasing frequency of typhoons, heavy rains, heat waves, etc. and increasing severity of damage	Customer response based on crisis management manual Enhancement of Pre-travel support services (cancellation support) Providing safety and security using a global network (DX promotion) Thorough disaster prevention manuals and disaster prevention training for owned facilities and vehicles Improvement of stockpiles and evacuation system	Short-Long
Medium	Suspension or delay in service provision due to data center (DC) damage caused by natural disasters	Review data center configuration Migrate servers to the cloud Redundancy of critical data	Short-Medium

Transition risk

Impact	Item of risk/opportunity	Measures	Period
High	Changes in customer behavior and preferences due to increased interest in climate change	Reducing plastic products and promoting paperless use Providing environmental protection experience programs Promoting the conversion of owned buses and vehicles to EVs, FCVs, etc. Promoting the conversion of owned buses and vehicles to EVs, FCVs, etc. Providing new experience value Introduction of environmentally friendly means of transportation Proactive information disclosure	Short-Long
Medium	Cooling consumer sentiment due to rising service prices due to soaring fuel prices	Promotion of micro tourism Stimulating demand for travel Providing new experience value	Short-Long
Medium	Decline in services due to environmental changes such as rising temperatures and sea levels, and the enactment of new regulations, laws, and ordinances	New product development/destination development Development of products aimed at protecting the natural environment (in collaboration with tourism bureaus and local governments) Expansion of businesses other than travel industry	Medium-Long
Medium	Decrease in corporate value and decrease in investment and business partners when climate change efforts are judged as insufficient	Proactive information disclosure Investment in renewable energy	Short-Long
Low	Increase in business operating costs due to restrictions on vehicle operation and taxation according to emissions because of stricter regulations on GHG (greenhouse gas) emissions	Promoting the conversion of owned buses and vehicles to EVs, FCVs, etc. Investing in and introducing environmentally friendly means of transportation Understanding supplier GHG emissions and considering sustainable procurement	Medium-Long
Low	Increase in business operating costs due to the introduction of carbon pricing	Energy saving and introduction of renewable energy Promoting the conversion of owned buses and vehicles to EVs, FCVs, etc. Reducing plastic products and promoting paperless use	Long

Short (~FY2024), Medium (FY2025~FY2026), Long (FY2027~FY2030)
*01 December 2023

3.Risk management

Within the HIS Group, the Sustainability Committee and the Risk / Compliance Committee collaborate to identify, evaluate, and manage climate-related risks. The Risk Management Office collects information on business risks for the Group as a whole, including risks related to climate change, and shares its findings with the Risk / Compliance Committee. The committee develops a management system for identifying, analyzing, evaluating, and responding to potential risks, and conducts activities to prevent risks from materializing. The Sustainability Committee engages in activities such as ascertaining risks associated with climate change, analyzing them in accordance with the framework of the TCFD recommendations, discussing important policies and measures related to the environment, and monitoring progress toward targets. It provides reports to the Board of Directors as deemed necessary.

The Risk Management Office collects information on business risks for the Group as a whole, including risks related to climate change, and shares its findings with the Risk / Compliance Committee.
The committee develops a management system for identifying, analyzing, evaluating, and responding to potential risks, and conducts activities to prevent risks from materializing.

4.Indicators and Targets

At HIS Group, one of our materialities (critical issues) is preserving the global environment, and we are also advancing efforts on climate change. In FY 2024, we introduced a system to calculate CO2 emissions based on the GHG Protocol in order to compute Scope 1, 2 and 3 for HIS, and Scope 1 and 2 for the two main group companies in Japan. Using this as a standard, we will set CO2 targets and implement efforts to reduce emissions.

*HIS Hotel Holdings, Kyushu Sanko Group

HIS Co., Ltd.

CO2 Reduction Target

H.I.S. Co., Ltd. aims to achieve net-zero CO2 emissions (carbon neutrality) across all business activities (Scope 1, 2, and 3) by FY2050 for a sustainable future.

Medium-Term Goals	Achieve net-zero CO2 emissions from our own operations (Scope 1 and 2) by FY2030
Long-Term Goals	Achieve net-zero CO2 emissions across our entire value chain, including our supply chain (Scope 1, 2, and 3), by FY2050

Breakdown of CO2 emissions (unit: t-CO2)

CO2 emissions in FY2024 were approximately 1.15 million t-CO2, with Scope 3* accounting for 99.9% of the total emissions of Scope 1 to 3. In addition, 98.6% of Scope 3 emissions were from category 11 (use of sold products), and 75.5% of category 11 was from jet fuel for domestic and international aircraft use.
*For Scope 3, we calculate all applicable categories (categories 1 to 7, 11, and 13) in our business activities.

	Scope1	Scope2	Scope3
HIS Co.,Ltd.	8	1,665	1,148,478

Reduction Efforts

Regarding Scope 1 and Scope 2, the Scope 2 of 99.4% is high, and this is due to electricity use by business offices. As many business offices are tenants unable to choose their own power sources, etc., we are investigating promoting the reduction of electricity usage and emissions through the use of non-fossil fuel certificates. Regarding Scope 3, which accounts for the majority of total emissions, in order to reduce Category 11 (Use of Sold Products), we will collaborate with business partners, invest in new decarbonization services, and advance efforts to reduce emissions through providing sustainable options to customers, etc. In addition, to reduce emissions from Scope 3 Category 1 (Purchased Goods and Services), at HIS we are promoting reduction efforts toward the goal of reducing the usage of plastic products and copier paper at HIS by 70% (compared to FY 2019) by FY 2026.

Major domestic group companies (2 companies)

Breakdown of CO2 emissions (unit: t-CO2)

	Scope1	Scope2
H.I.S. Hotel Holdings Co., Ltd.	2,599	6,489
Kyushu Sanko Group	98,710	7,180

Reduction Efforts

At HIS Hotel Holdings, we performed trial installations of the PowerGuard, a solution to reduce waste of electricity, and successfully reduced electricity usage by roughly 10% at one hotel. Going forward, we plan to expand the number of hotels equipped with this device. Moreover, at Kyushu Sanko Group, we are promoting eco-friendly driving in the bus business via installing idling and starting systems to cut the engines, and using digital tachographs. At Kyushu Sanko Landmark and Kyushu BM Service, we use groundwater in the cooling tower equipment for the Kumamoto Sakuramachi Building to reduce radiant heat, and we are working to reduce carbon dioxide emissions.