Transition and Physical Risks from Climate Change and Environmental Opportunities

「During the interim consolidated accounting period, there were no new business or other risks and no material changes to the business or other risks described in the annual securities report for the previous fiscal year.」

「Transition risks Higher costs resulting from the introduction of a carbon tax and other measures Higher material costs due to carbon pricing and higher overall costs required to maintain business operations. Decline in demand due to higher costs of complying with environmental building regulations Lower demand resulting from higher construction costs caused by selecting materials and equipment to comply with stricter environmental regulations for buildings. Lower customer evaluations due to delays in addressing environmental requirements. Higher costs of switching to new technologies and equipment Higher costs associated with adapting properties to environmental requirements and lower building values for properties that do not comply. Physical risks Higher risk of building damage and business disruption due to intensifying natural disasters Higher damage and restoration costs when disasters occur, as well as delays and additional costs caused by interruptions to on-site work due to typhoons, floods and torrential rain. Higher operating costs due to rising average temperatures Higher operating expenses to address rising temperatures at construction sites during summer and lower productivity resulting from higher average temperatures.」