Disclosure Based on TNFD Recommendations

Tokyo Tatemono established the Sustainability Committee, chaired by our president, as a group-wide framework to promote crossfunctional and continuous sustainability initiatives, including those addressing nature-related issues, along with the Sustainability Promotion Committee as a subordinate organization.
The Sustainability Committee, like the Executive Committee, Risk Management Committee and Internal Control Committee, is under the direct control of the president. It meets, in principle, at least twice a year to deliberate, discuss and report matters related to the formulation of policies for promoting the Group's sustainability initiatives, the development of organizational structure, the setting of indicators and targets, and the monitoring and evaluation of progress. With regard to nature-related matters, the Committee deliberates, discusses, and reports key issues including the assessment of dependencies and impacts on nature, the identification of nature-related risks and opportunities, the establishment of monitoring indicators, targets, and corresponding action policies, as well as the status of related initiatives. The Committee also deliberates and discusses important matters related to supply chain management^*, including the response policy and implementation status, based on the Group's Sustainable Procurement Standards established commonly across the Group. Important matters deliberated and discussed by the Committee are brought up for discussion or reported to the Board of Directors. The Board oversees the advancement of the Group's sustainability initiatives by making decisions on important sustainability-related matters and monitoring their progress. And the Sustainability Promotion Committee, itself a subordinate organization of the Sustainability Committee, is a cross-sectional organization composed of corporate departments and business divisions. It facilitates the sharing of Sustainability Committee decisions, conducts preliminary discussions for consideration, communicates and assesses the Group's sustainability measures, and discusses and reports the progress of the Group's sustainability initiatives.

* Details of the Group's Supply Chain Management initiatives are available in the Tokyo Tatemono Group Sustainability Report under Supply Chain Management.

Tokyo Tatemono has structured the Group's nature-related strategy in accordance with the LEAP Approach recommended by TNFD.
This structuring takes into consideration the extent of the Group's dependencies and impacts on nature, as well as the scale of nature-related risks and opportunities associated with its operations. It is based on the assumption that these operations are conducted through facilities located both domestically and internationally by the Group's Commercial Properties Business, Residential Business, Parking Lot Business, Leisure Business, Overseas Business, and New Business segments. In fiscal 2024, the sales of the business segments within this scope are expected to account for over 90% of the Group's total revenue.

To better its ability to address dependencies and impacts on nature, as well as nature-related risks and opportunities, Tokyo Tatemono maintains a clear understanding of the locations of facilities involved in its in-scope businesses and has evaluated the condition of the surrounding natural environment to determine its interface with nature. Each facility is assessed based on the following five criteria defined by the TNFD using data generated with external tools and other methods.

Through evaluations carried out on facilities of in-scope businesses, it was established that some Leisure Business facilities (resorts, hotels, golf courses, etc.) are situated in areas of high biodiversity importance and ecosystem integrity. It was also found that all facilities fall within areas classified as having low to moderate levels of rapid decline in ecosystem integrity, water physical risk, and ecosystem services delivery importance.

Many of the facilities operated by in-scope businesses are located in Tokyo, and forming ecological networks^* in such urban areas is important for preserving local biodiversity. To assess facilities located within Tokyo's 23 wards, Tokyo Tatemono referenced the Green Master Plans established by each municipality to calculate proximity to the core greenery areas of each district. This was conducted as an additional evaluation to determine the Group's potential contribution to the ecological network.
Among the facilities of in-scope businesses assessed, particularly those in Chuo, Chiyoda, and Minato Wards, it was found that many were located in close proximity to core green spaces, and that the creation of new greenery could significantly contribute to the city's ecological network.

* An ecological network refers to a concept in which core areas, designated as key biodiversity zones due to their favorable natural conditions, are interconnected by corridors to enable the movement and dispersal of wildlife between them. It is also believed that the establishment of buffer zones as necessary to reduce external influence on core areas and corridors is another important element for the success of ecological networks.

Tokyo Tatemono has identified dependencies and impacts on nature within in-scope businesses and evaluated their scale. This evaluation divides the supply chain of in-scope businesses into upstream and direct operation/ downstream categories, and uses the TNFD-recommended tool ENCORE^* to assess each separately. The results of this evaluation are presented in heat maps, using color gradients to indicate the scale of dependencies and impacts on nature.

* ENCORE is an abbreviation of Exploring Natural Capital Opportunities, Risks and Exposure. It is a tool developed by the UN Environment Programme World Conservation Monitoring Centre (UNEP-WCSC) and other organizations for assessing the scale of impact and dependencies that companies have on nature.

Across all in-scope businesses, direct operations and downstream activities were commonly evaluated as having a high dependency on cultural services. Many office buildings and for-sale condominiums either have green spaces on the premises or are built facing greenery nearby. The visibility of greenery in and around such facilities, along with opportunities to engage with nature through recreational activities such as forest bathing and walking, is expected to provide various physical and psychological benefits. These benefits reflect a functional dependency on nature. Across all in-scope businesses, upstream procurement of construction materials has been commonly evaluated as having a high degree of dependency and impact on nature. The procurement of food used in hotels operated by the Commercial Properties Business and Leisure Business has also been evaluated as having a high degree of dependency and impact on nature in many respects.

Tokyo Tatemono has identified nature-related risks and opportunities within in-scope businesses. This identification process was also carried out separately for upstream and direct operations/downstream categories within the supply chains of in-scope businesses.

Tokyo Tatemono has designated the conservation of natural capital and biodiversity as the primary response strategy for facilities found to be located in areas of high conservation importance and ecosystem integrity during the evaluation for interfaces with nature. These facilities consist of a set of Leisure Business sites (resort hotels, golf courses, etc.) outside of urban areas.
Facilities similarly found to be located in areas with high potential to contribute to the ecological network, such as those in the Chuo, Chiyoda, and Minato wards of Tokyo, have designated not only the conservation but also the creation of natural capital and biodiversity as their primary response strategy.

To centrally manage risk throughout the Group, Tokyo Tatemono established its Risk Management Committee chaired by the President. The Risk Management Committee develops the Group's annual risk management plan, evaluates and analyzes critical operational risks (high-priority risks), formulates preventive and response measures, and regularly monitors the implementation of risk management efforts. In addition, we have established a unified risk management structure consisting of the general managers of each department as the Risk Management Officer responsible for managing risk within their respective departments, and the President as the Chief Risk Management Officer, who centrally oversees company-wide risk.
Furthermore, by adopting the principles of the Three Lines Model, we aim to maintain and enhance the effectiveness of our risk management efforts. Details of the risk management framework are available in the Tokyo Tatemono Group Sustainability Report under Risk Management.
Sustainability-related risks, including nature-related risks, are managed by the Sustainability Committee in coordination with relevant departments, and key matters regarding implementation status are reported to the Risk Management Committee. Important matters such as the risk management structure, policies, and annual plans, as well as the status of risk management efforts, are submitted and reported to the Board of Directors. The Board oversees the effectiveness of the Group's overall risk management, including sustainability-related risks such as those related to nature.

Tokyo Tatemono Group has established indicators for the conservation of natural capital and biodiversity, which are used for monitoring and target setting. Many of these indicators are aligned with TNFD disclosure indicators.