TCFD Index

Climate and nature-related risk management and responses to TCFD and TNFD

The Bridgestone Group supports the Task Force on Climate-related Financial Disclosures (TCFD) and its recommendations, recognizes climate-related risks and opportunities identified in accordance with the TCFD framework, and is working to reflect and disclose such information in its business strategies. The Group formulated long term environmental vision and mid-term targets toward achieving carbon neutrality and contributing to the realization of a circular economy in light of climate-related risks and opportunities. The Group is working to reduce the risks of transition to a decarbonized society by reducing CO₂ emissions throughout its value chain, while at the same time reducing physical risks through adaptive measures such as diversifying natural rubber supply sources through initiatives to commercialize guayule.

Furthermore, in addition to its past participation in the Business for Nature and the Japan Business Initiative for Biodiversity (JBIB) , the Group began participating in the Task Force on Nature-related Financial Disclosure (TNFD) Forum in March 2022. The Group recognizes risks and opportunities related to its impact and dependence on nature and is currently assessing multiple nature-related scenarios in light of the global trend toward nature-positive world.

Status of adoption of TCFD recommended disclosures

The following index provides links to the Bridgestone Group’s disclosures on recommendations of the Task Force on Climate-related Financial Disclosure (TCFD).

Governance

Recommended disclosures	Risks and opportunities identified by the Bridgestone Group/Status of the Group’s response	Risks and opportunities identified by the Bridgestone Group/Status of the Group’s response
Board of Directors’ oversight of risks and opportunities	The Board of Directors receives and reviews regular reports on the status of sustainability initiatives, including achieving carbon neutrality and contributing to a circular economy.	Our response to the CDP Questionnaire “Climate Change” 2022, C1.1a, C1.1b
Management’s role in assessing and managing risks and opportunities	The Global Executive Committee (Global EXCO), the highest level of corporate management, approves and manages the progress of mid-long term strategies, targets and action plans, including achieving carbon neutrality and contributing to a circular economy.	Our response to the CDP Questionnaire “Climate Change” 2022, C1.2, C1.2a Annual Securities Report, 4. Status of corporate governance Operational integration, Integrating sustainability across the Bridgestone Group

Strategy

Recommended disclosures	Risks and opportunities identified by the Bridgestone Group/Status of the Group’s response	Link
Risks and opportunities over the short-, medium-, and long-term	Physical risks and opportunities related to climate change Risks of stronger typhoons and increased frequency of flooding and drought, which pose the risk of interrupting business activities. Risks related to the procurement of raw materials as a result of changing rainfall patterns leading to poor harvesting of natural rubber. Risk of lower demand for winter tires due to reduced snowfalls. Opportunities to commercialize natural rubber derived from guayule, which grows in arid regions. Risks due to poor harvesting of natural rubber derived from Para rubber trees, which are found predominantly in tropical regions. Risks and opportunities of transition to a decarbonized society Risk of adverse effects on operating results and financial position, such as limitations on business activities and increased costs, if R&D expenses required to meet the rapidly changing needs of society and customers do not produce sufficient results when systems and regulations to combat climate change are introduced (for example, carbon taxes, CO₂ emission reduction obligations and emissions trading systems, systems and regulations related to low-fuel consumption performance of tires, systems and regulations related to recycling used tires, etc.). Opportunities associated with changes in competitive factors due to changes in mobility needs (for example, increased demand for tires for electric vehicles, increased demand for tires and solutions that help customers reduce CO₂ emissions). Opportunities to commercialize the recycling business resulting from increased regulation around the recycling of used tires.	Our response to the CDP Questionnaire “Climate Change” 2022, C2.1, C2.3, C2.3a, C2.4, C2.4a, C3.1, C3.1a, C3.3 Annual Securities Report, 2. Business risks
Impact on businesses, strategy, and financial planning
Resilience of the organization’s strategy taking into consideration different climate-related scenarios	The Group is assessing risks and opportunities based on multiple climate-related scenarios. It has already begun to address the important risks and opportunities identified and will continue to do so on a regular basis.	Our response to the CDP Questionnaire “Climate Change” 2022, C3.2a

Recommended disclosures

Risks and opportunities identified by the Bridgestone Group/Status of the Group’s response

Link

Risks and opportunities over the short-, medium-, and long-term

Physical risks and opportunities related to climate change

Risks of stronger typhoons and increased frequency of flooding and drought, which pose the risk of interrupting business activities.
Risks related to the procurement of raw materials as a result of changing rainfall patterns leading to poor harvesting of natural rubber.
Risk of lower demand for winter tires due to reduced snowfalls.
Opportunities to commercialize natural rubber derived from guayule, which grows in arid regions. Risks due to poor harvesting of natural rubber derived from Para rubber trees, which are found predominantly in tropical regions.

Risks and opportunities of transition to a decarbonized society

Risk of adverse effects on operating results and financial position, such as limitations on business activities and increased costs, if R&D expenses required to meet the rapidly changing needs of society and customers do not produce sufficient results when systems and regulations to combat climate change are introduced (for example, carbon taxes, CO₂ emission reduction obligations and emissions trading systems, systems and regulations related to low-fuel consumption performance of tires, systems and regulations related to recycling used tires, etc.).
Opportunities associated with changes in competitive factors due to changes in mobility needs (for example, increased demand for tires for electric vehicles, increased demand for tires and solutions that help customers reduce CO₂ emissions).
Opportunities to commercialize the recycling business resulting from increased regulation around the recycling of used tires.

Impact on businesses, strategy, and financial planning

Resilience of the organization’s strategy taking into consideration different climate-related scenarios

The Group is assessing risks and opportunities based on multiple climate-related scenarios. It has already begun to address the important risks and opportunities identified and will continue to do so on a regular basis.

Our response to the CDP Questionnaire “Climate Change” 2022, C3.2a

Risk Management

Recommended disclosures	Risks and opportunities identified by the Bridgestone Group/Status of the Group’s response	Link
Risk identification and assessment process	The Group strives to comprehensively and appropriately address risks across the operation, including climate-related risks, while considering the business scale, characteristics of business and region of each Group company. The Group is currently assessing ways to improve its management of business strategy risks directly related to the execution of the Mid-Long Term Business Strategy by setting up a dedicated annual risk management process under the direct leadership of the Global EXCO, while operational risks related to day-to-day operations are overseen by the Chief Risk Officer (CRO), who is responsible for overall risk management and formulating risk response plans. Identifying potential risks faced by each region and the Group as a whole on an annual basis; clarifying ownership for those risks not only for the Group as a whole, but also for each business, SBU and division; and implementing risk management in an autonomous and continuous manner.	Annual Securities Report, 2. Business risks Business Continuity (BCP), Risk Management Our response to the CDP Questionnaire “Climate Change” 2022, C2.2
Risk management process
Integration into the organization’s overall risk management

Metrics and Targets

Recommended disclosures	Risks and opportunities identified by the Bridgestone Group/Status of the Group’s response	Risks and opportunities identified by the Bridgestone Group/Status of the Group’s response
Metrics used to assess risks and opportunities	Establishing targets and regularly monitoring CO₂ emissions (CO₂ emissions reduction in scope 1 and 2, and the reduction contribution of CO₂ emissions throughout the lifecycle and value chain of the Bridgestone Group’s products and services) as one of the metrics for assessing and managing climate-related risks and opportunities. Including climate-related risks and opportunities in investment decisions and reinforcing them, such as CO₂ emission costs and reduction benefits from internal carbon pricing.	Our response to the CDP Questionnaire “Climate Change” 2022, C6.1, C6.3, C6.5 ESG Data
Greenhouse gas (GHG) emissions
Targets and performance against targets used to manage climate-related risks and opportunities	Setting long term environmental vision (2050 and beyond) and mid-term target (2030) to achieve carbon neutrality and contribute to a circular economy; evaluating and disclosing performance every year.	Our response to the CDP Questionnaire “Climate Change” 2022, C4.1, C4.1a Long-Term Environmental Vision (2050 and beyond): Contribute towards carbon neutral Annual Securities Report, 1. Management policy, management environment and issues to be addressed, 2. Business risks ESG Data