Currently, the loss of biodiversity is progressing at an unprecedented rate globally, causing a wide range of social issues through the degradation of ecosystem services. Our Group considers the resolution of these social issues, including biodiversity loss, as one of our Key Management Priorities. Furthermore, under our medium- to long-term environmental vision, "Eco Vision 2030," we analyze the impacts of our business and products on society as well as on our own operations, and we are currently working on 13 prioritized issues identified as having significant impacts. Towards achieving a Nature-Positive society, we will further evolve our initiatives by incorporating the core principles of the TNFD recommendations.

General Requirements

The TNFD recommendations require organizations to disclose "General Requirements" consisting of six items as premises and basic understandings common to the entire disclosure report. Our Group's position on these items is explained below.

1. Application of Materiality

Our Group adopts a "double materiality" perspective when identifying Key Management Priorities (materiality). In assessing nature-related issues, we also applied "double materiality" to evaluate both directions: the impacts our business has on nature and the financial impacts our business receives from nature.

• Key Management Prioritie

2. Scope of Disclosure

In this assessment, we identified nature-related risks for representative products in our three core businesses (Automotive business, Ceramic business, and New business), covering their respective value chains. This ensures that the scope of disclosure encompasses the primary domains of our business activities. The scope of disclosure based on this assessment applies commonly across all areas of this report, including the "General Requirements," Governance, Strategy, Risk and Impact Management, and Metrics and Targets. In addition, we will regularly review and update the scope of this assessment and the identified risks and opportunities in line with the progress of the portfolio optimization promoted by Our Group.

Table: Scope of Assessment

3. Location of Nature-Related Issues

In this disclosure, we conducted assessments for Our Group's production sites (15 sites in Japan and 16 sites overseas). For Niterra Materials, which newly joined the group in June 2025, we will proceed with assessments sequentially.

4. Integration with Other Sustainability-Related Disclosures

In this disclosure, we report on Our Group's nature-related issues in line with the TNFD recommendations. Meanwhile, we recognize climate change as one of our critical management issues and have already disclosed information based on the TCFD recommendations. Given that nature-related issues and climate change are inextricably linked and critical environmental challenges, we plan to provide an integrated disclosure of climate change and nature-related issues in our 2026 Integrated Report.

5. Time Horizons Considered

In alignment with the time horizons set under the TCFD, we have defined the periods as follows:

• Short-term: Until around 2027
• Medium-term: Until around 2030, aligned with the target year of the Long-Term Management Plan
• Long-term: Until around 2040, aligned with the vision of the Long-Term Management Plan

6. Engagement with Indigenous Peoples, Local Communities, and Affected Stakeholders in the Identification and Assessment of Nature-Related Issues

Our Group recognizes that our business activities impact nature, and that Indigenous Peoples, local communities, and affected stakeholders are involved within these processes. To engage in meaningful collaboration during the identification and assessment of nature-related issues, we conducted a study targeting our global production sites to assess their proximity to areas where nature, biodiversity, and ecosystem services are of vital importance to Indigenous Peoples and local communities.
Under our Human Rights Policy, Our Group promotes human rights due diligence for our stakeholders. Regarding our response to stakeholders concerning nature-related issues, we will strive to understand situations as necessary and promote sincere engagement based on this fundamental stance of respecting human rights.

Governance

Recognizing that all business activities of Our Group depend on and impact the environment and the underlying biodiversity, we promote environmental initiatives guided by our Environmental Policy and Biodiversity Guidelines. We have established the Central Environmental Committee (with regular meetings twice a year and extraordinary meetings as necessary), which is chaired by a corporate officer appointed by the Chief Environmental Officer (President). The Central Environmental Committee reviews the progress of Eco Vision 2030 and Our Group's environmental issues to pursue continuous improvement. Furthermore, material matters decided by the Central Environmental Committee are reported to the Board of Directors via the Management Committee, which deliberates, decides, and supervises important executive matters, ensuring oversight by the Board of Directors.

We also recognize that Our Group's business activities and biodiversity conservation efforts can affect the human rights of local communities and Indigenous Peoples. Based on our Human Rights Policy, each department and specialized committee handles human rights issues within their respective domains. For initiatives respecting human rights, the Human Rights Subcommittee, established under the Compliance Committee, continuously monitors human rights due diligence and deliberates/evaluates related issues. Important matters from these activities are reported and submitted to the Board of Directors through the Management Committee, establishing an effective promotional structure under the supervision of the Board of Directors.

• Corporate Governance System

• Sustainability Promotion System

• Environmental Management

• Respect for Human Rights

Strategy

Dependencies and Impacts Through Our Group's Business

To grasp the complete picture of nature-related dependencies and impacts in Our Group's business activities, we conducted an assessment covering the entire value chain using "ENCORE," a global evaluation tool for nature-related risks. For the upstream segment, we analyzed the industrial and sector classifications to which our primary raw materials belong. For direct operations, we linked our specific manufacturing processes as a manufacturer to the evaluation items in ENCORE. For the downstream segment, in addition to evaluating the logistics (transportation) sector, we analyzed the dependencies and impacts during the use of final products equipped with our components in the Automotive business, which accounts for 80% of Our Group's net sales. We organized these results into a heatmap and identified high-stakes dependencies and impacts within Our Group's value chain (where the dependency level is "High (H)" and the impact level is "Very High (VH)" or "High (H)").

• Please refer to Appendix ① for the details on the heat map.

• Appendix①　Details of Dependency and Impact Assessment by Business Unit (Heat Map)

Table: Dependencies and Impacts across the Value Chain

Identified Risks and Opportunities and Their Impact Assessment

Based on the evaluation results of dependencies and impacts, we identified risks and opportunities related to natural capital. Regarding risks, we structured their impact levels and likelihood using scenarios. Out of the four qualitative scenarios recommended by the TNFD based on a four-quadrant matrix, we evaluated "Scenario I: A World of Accelerated Transition and Restored Ecosystems" and "Scenario III: A World of Stalled Transition and Degraded Ecosystems," identifying risks of moderate level or higher.

（1）Scenario Analysis Process

In accordance with the process proposed in the TNFD Guidance on Scenario Analysis, we utilized four qualitative scenarios based on two axes: ecosystem degradation (physical risk) and alignment of market/non-market drivers (transition risk). Next, to make the scenarios effective for examining risks and opportunities, we specified the direction of changes in external environmental drivers surrounding Our Group under each scenario. We then analyzed the nature-related risks and opportunities in Our Group's business under these projected external environments.

(２) Risks Identified by Our Group and Their Priorities (Assessment Results)

Scenario I: A World of Accelerated Transition and Restored Ecosystems

Scenario III: A World of Stalled Transition and Degraded Ecosystems

• Environmental Management

• Conservation of Biodiversity

• Risk Management

• Proper Procurement

*1 Impact levels are as follows. Evaluated based on the highest impact in business continuity, trust/brand, and economics.

*2 Likelihood/Urgency levels are as follows. Evaluated based on the higher impact factor between the likelihood of occurrence and the timing of occurrence.

*3 Evaluation of Priority:

The priority of each identified nature-related risk is qualitatively and quantitatively classified into four levels from 1 (highest priority) to 4, based on a risk matrix combining "Impact Level" and "Likelihood / Urgency". Regarding the blank areas in the matrix (e.g., where the impact level is 'Medium' or 'Small' and the likelihood/urgency is 'Low'), we have determined that their impact on business management and the natural environment is extremely minor at present.

Identification of Priority Locations

Based on the assessment process recommended by the TNFD, Our Group extracted locations for nature-related assessments as "Sensitive Locations" and "Material Locations." The collective term for locations falling into either or both categories is identified as "Priority Locations." For Sensitive Locations, we conducted evaluations using international databases such as IBAT and WRI Aqueduct, based on the four perspectives indicated by the TNFD: "biodiversity importance," "ecosystem integrity," "importance of ecosystem service provision," and "water physical risk."

• Please refer to Appendix ② for the detailed process, including the indicators and databases used for the identification.

• Appendix②　Identified Sensitive Locations（Detailed Process）

Table: Identified Highest-Priority Sites

Detailed Assessments and Future Actions at Highest-Priority Sites

To increase the resolution of nature-related risks and opportunities and implement more effective response measures, we are sequentially proceeding with further detailed assessments for these identified highest-priority sites. The results of the detailed nature-related dependency and impact assessment conducted ahead of others at the Satsuma Plant, along with specific risk response measures based on those results, are disclosed in detail in Appendix ③. Moving forward, we will progressively advance similar detailed assessments for our sites in Brazil, Thailand, and Indonesia.

• Disclosure of Detailed Risk Assessment Results for Priority Locations (Satsuma Plant)

Risk and Impact Management

Process for Identifying and Assessing Nature-Related Issues

To properly comprehend nature-related dependencies, impacts, and associated risks and opportunities, Our Group is conducting analysis and evaluation based on the "LEAP Approach" (Locate, Evaluate, Assess, Prepare) recommended by the TNFD.
As practical steps, we have defined the following five "Action Processes" and implemented a systematic approach:

① Understanding the Big Picture (Scoping, Screening of Dependencies and Impacts)
We defined the scope of Our Group's business model and entire value chain, performing an initial screening of points of contact with nature, as well as dependencies and impacts.

② Identifying Priority Sites (Extraction of Sensitive Locations)
We identified the highest-priority sites by overlaying Sensitive Locations that require careful management from an environmental perspective (such as nature importance and water physical risks) with the business materiality of Our Group (For details, refer to "Strategy" and Appendix ②).

③ Identifying Material Risks (Measurement and Prioritization of Risks and Opportunities)
Focusing on the identified priority sites, we identified and assessed the materiality of potential risks and opportunities for Our Group's business activities arising from nature degradation and the tightening of domestic and international laws and regulations (For details, refer to "Scenario Analysis").

④ Investigation and Detailed Assessment of Priority Sites (Strategy and Resource Allocation Plan)
To increase the resolution of specific dependencies and impacts unique to each location against the identified material risks, we formulated a roadmap for detailed assessments (detailed investigations based on the LEAP approach) and are promoting stepwise, in-depth studies.

⑤ Disclosure (Reporting and Publication)
Through this report, we transparently disclose the insights gained through this series of assessment processes, the identified risks and opportunities, and Our Group's resilience (response measures) to our stakeholders.

Management Process for Nature-Related Issues

The Central Environmental Committee will set targets and KPIs, as well as manage performance for material nature-related risks and impacts extracted through the above processes.

Integration of Nature-Related Risks into Enterprise Risk Management

As Our Group operates globally across multiple fields and faces various risks and opportunities unique to each business, we grasp and respond to these risks and opportunities on a business-by-business basis. Regarding environmental risks and opportunities, including biodiversity conservation, we will monitor regulatory trends, evaluate their specific impacts on our business, and implement appropriate responses.
The Risk Management Committee analyzes and evaluates risks from an enterprise-wide perspective to determine whether they significantly affect business continuity or target achievement, based on their impact level, likelihood, and status of countermeasures. Risks evaluated as requiring focused responses are designated as "Priority Risks," with a supervising department assigned, and the Risk Management Committee monitors the progress of mitigation activities. We also evaluate ESG-related risks, including environment and human rights, and will include biodiversity-related risks in our evaluations moving forward. Meanwhile, material opportunities are reviewed by the Sustainability Committee and, where necessary, reflected in our business strategies and Priority Management Issues.

• Risk Management

Metrics and Targets

Our Group conducts monitoring and sets targets using quantitative and qualitative metrics to assess and manage nature-related dependencies, impacts, risks, and opportunities. In this disclosure, we report our performance along two pillars: the "Global Core Metrics" recommended by the TNFD and the targets set forth in Our Group's "Eco Vision 2030."

Disclosure of Performance Data Based on TNFD Global Core Metrics

To accurately grasp the impacts of our business activities on the environment, Our Group collects environmental performance data across 9 domestic companies and 21 overseas companies (covering all 60 sites), including our headquarters and sales offices. Our Group's response and disclosure status regarding the TNFD Global Core Metrics are as follows.

Disclosure of Management Metrics and Performance Data under Eco Vision 2030

Our Group has formulated the medium- to long-term environmental targets "Eco Vision 2030" toward achieving a sustainable society. Centering on the following "four important issues" which are deeply connected with nature-related issues, we are promoting initiatives by defining our long-term vision (targets) for 2030. We have set quantitative targets for climate change response, water resource conservation, and waste management, and we are continuously monitoring their progress.

• Eco Vision

• Sustainability Data (Non-Financial Information)

Future Outlook

Moving forward, after advancing detailed assessments (in-depth investigations based on the LEAP approach) of nature-related risks and opportunities at the identified highest-priority sites (Satsuma, Brazil, three Thai companies, and Indonesia), we will further consider appropriate metrics and targets to manage Our Group's material nature-related dependencies, impacts, risks, and opportunities with higher precision.