Climate-Related Information Disclosure
(Disclosure Based on TCFD Recommendations)

In addition to our efforts to address climate change, we recognize the importance of information disclosure, and we continue to disclose information in line with the spirit of the TCFD (Task Force on Climate-related Financial Disclosures) Recommendations, which the Bank of Kyoto Group endorsed in October 2021.

Governance

Please refer to “Governance System Concerning Sustainability.”

Strategy

Risks and opportunities

We believe that climate change will have a significant impact on social and economic activities and may have a significant impact on our business activities. The Group has identified the impact on our customers’ assets and businesses and on the Group’s assets and businesses as a result of dividing climate change-initiated events into physical events (physical risks) and events related to economic and social transitions (transition risks) and analyzing the effects. On the other hand, we recognize that efforts to mitigate impact events that may occur to our customers’ assets and businesses represent a business opportunity for the Group. The recognized risks and opportunities are as follows.

Factor	Risk	Occurrence phenomena	Impact		Response risk	Opportunity
Climate change	Physical risk	Natural disasters due to torrential rain, etc.	Damage to customer assets	Deterioration of collateral value Deterioration of customers’ business performance	Credit risks	Increased consulting opportunities Increased financing opportunities
			Damage to the Group’s assets	Suspension of the Group’s business	Operational risks	–
	Transition risk	Legal system changes and strengthened regulations Changes in the supply-demand balance Technological conversion	Unable to respond to additional cost incurred	Deterioration of customers’ business performance	Credit risks	Increased consulting opportunities Increased financing opportunities

Scenario analysis

The results of the physical and transition risk scenario analysis based on the TCFD Recommendations are as follows. For physical risks, the impact of flood damage was analyzed, taking into consideration the frequency of occurrence and the degree of impact. For transition risks, the power sector and the automotive sector were the subject of the analysis due to their high greenhouse gas emissions and the significant impact on business associated with the transition to a decarbonized society. In each analysis, the impact on the Group’s financials was limited. Scenario analysis is conducted under certain assumptions, and we will continue to work to expand the scope and sophistication of our analysis.

	Physical risk	Transition risk
Scenario	RCP 8.5 scenario (4℃ scenario) according to the Intergovernmental Panel on Climate Change (IPCC)	NZE scenario of the International Energy Agency (IEA) (1.5℃ Scenario)
Subject	Business loan recipients (excluding large companies)	Business loan recipients belonging to the power and automotive sectors
Analysis method	Estimate the financial impact and collateral value impact on the target customer in the event of flooding based on hazard map data, and calculate the increase in credit costs	Estimate the change to the financials of the target customer, taking into consideration the effect of the introduction of a carbon tax, etc. based on the transition scenario, and calculate the increase in credit costs from the transition in debtor classification
Analysis period	Until 2050
Analysis result	Additional credit costs that may be incurred: Up to ¥6.1 billion	Additional credit costs that may be incurred: ¥4.8 to ¥10.7 billion cumulative

Carbon-related assets

We recognize the four industry groups that are considered vulnerable to climate change, namely “energy,” “transportation,” “materials and buildings,” and “agriculture, food, and forest products,” and have identified the loans to these industries.

	Energy	Transportation	Materials and buildings	Agriculture, food, and forest products
Percentage*	1.7%	3.0%	20.2%	3.2%

• *
  Balance of loans to the four industry groups as a percentage of the Bank of Kyoto’s total loans and bills discounted

〈Examples of subject industries〉

Energy	Transportation	Materials and buildings	Agriculture, food, and forest products
Coal, oil, and gas Electricity (excluding renewable energy)	Air transportation Maritime transportation Land transportation Automotive	Metals and mining Chemicals Building materials and capital goods Real estate management and development	Beverages and food Agriculture Paper manufacturing and forestry

Risk management

We recognize that risks arising from climate change may materialize as risks in each risk category, such as credit risk and operational risk, as previously mentioned risks and opportunities, and may affect the Group’s performance and financial condition. The Group has established a system to manage risks assessed by risk category in an integrated manner and to manage various risks arising from climate change within the framework of integrated risk management.
We have also established an Environmental Policy for all corporate activities and a Policy on Loans and Investments for Achieving a Sustainable Society for investments and loans, which are our main business sector, to reduce risk by proactively addressing environmental issues, including climate change, through our business activities and environmental conservation activities.

Indicators and targets

We have set “carbon neutrality by FY2050” as a long-term climate change-related target, and are working on the following two immediate targets for FY2030.

[Sustainable finance target]
Execute ¥2 trillion in financing between FY2020 and FY2030

We define “sustainable finance” as “finance (lending and investment) that contributes to the resolution of environmental, social, and economic issues by increasing positive impacts while reducing negative impacts.” To further accelerate our efforts toward achieving carbon neutrality through sustainable finance, and based on our successful track record, we raised our target amount from ¥1 trillion to ¥2 trillion in April 2026. In addition to green and sustainable finance (loans and bonds) in line with international standards, we have introduced loan programs and products such as the Sustainability Linked Loan (Kyoto Version) and Kyogin Sustainability Linked Loan — Seven Targets, which are for SMEs, in order to support their efforts to realize a sustainable society from a financial perspective.

[GHG emissions reduction target]
Reduce by 80% compared to FY2013 by FY2030 (Scopes 1 and 2)

In addition to continuing initiatives such as switching to energy-efficient equipment and conserving electricity, we are switching the electricity used at each sales location, including the Bank of Kyoto head office, to carbon-free electricity derived from renewable energy sources generated in Kyoto Prefecture. As a result, we reached our original 50% target level ahead of schedule in FY2024.
Based on this, we have raised our reduction target to 80% compared to FY2013 and are working towards realizing a carbon-neutral society.

Calculation of greenhouse gas emissions under the GHG Protocol

The Group is working to expand the scope of measurement of greenhouse gas (GHG) emissions resulting from its business activities, and in April 2024 we introduced C-Turtle® FE, a GHG emissions calculation tool provided by NTT DATA Japan Corporation, to calculate GHG emissions based on the GHG Protocol^*. We are working to further reduce the Group’s Scope 1 (direct emissions from fuel combustion and production processes) and Scope 2 (indirect emissions from electricity, heat, and steam use) associated with the Group’s energy use through further promotion of energy conservation and the introduction of renewable energy. For Category 1 (purchased goods and services) and Category 2 (capital goods) of Scope 3, we used the total emissions allocation method based on emissions intensity by supplier, in order to perform a calculation that incorporates our suppliers’ reduction efforts. We will continue to promote decarbonization initiatives in cooperation with our suppliers and demonstrate high supplier engagement, thereby contributing to the achievement of net zero across society as a whole.
Moreover, Scope 3 Category 15 (GHG emissions of the borrower), which accounts for the majority of total GHG emissions, can be calculated using either the top-down method, which estimates GHG emissions based on the financial data of the borrower, or the bottom-up method, which calculates GHG emissions based on the actual emissions of the borrower. We recognize the need to increase the ratio of calculations based on the bottom-up method in order to improve data quality, which is considered important in the PCAF standard, and we are working on calculations that enable customers to visualize their reduction efforts. We recognize that regional financial institutions are expected to play a role in realizing decarbonization throughout the region by using the results of these calculations to help customers calculate and reduce their emissions, and we will continue to provide tools to help customers calculate their GHG emissions and provide post-calculation reduction support.

• *
  GHG Protocol: An international standard used to calculate and report GHG emissions

Group GHG emissions (FY2025; Final Values)

Calculation item		Details		Calculation result (t-CO2)		Percentage (%)
Scope 1		Emissions from gas and gasoline use		1,466		0.02
Scope 2		Emissions from electricity use		5,097		0.05
Scope 3				9,464,654		99.93
	Category 1		Purchased goods and services		11,278		0.12
	Category 2		Acquired capital goods		5,231		0.05
	Category 3		Fuel and energy-related activities		6,243		0.07
	Category 4		Upstream transportation and distribution		N/A		―
	Category 5		Waste generated in operations		146		0.00
	Category 6		Business travel		412		0.00
	Category 7		Employee commuting		1,665		0.02
	Category 8		Upstream leased assets		N/A		―
	Category 9		Downstream transportation and distribution		N/A		―
	Category 10/11/12		Processing, use, and end-of-life treatment of sold products		N/A		―
	Category 14		Franchises		N/A		―
	Category 15		Investments		9,439,679		99.67

• Notes:
  Scopes 1 and 2 emissions are calculated for the entire Group.
  The calculations for Scope 3 (excluding Category 15) were performed for the Company and the Bank of Kyoto.
  “N/A,” indicates that, due to the nature of the business, there are no emissions for that item, or that calculations were performed under other items.
  For Category 15, calculations were performed for listed shares and corporate bonds, business loans, and project finance of the Bank of Kyoto. The coverage ratio of the calculation results against the subjects is 93.1% on a balance basis.
  Category 13 is not calculated.
  For the emissions referred to above, we obtained third-party assurance from SOCOTEC Certification Japan.
  The total value for Scope 3 represents the aggregated result of each category, including decimal values. Due to rounding, however, the total for each category does not add up to the aggregated result.

Scope 3 Category 15 calculation results by industry

Industry		Emissions (t-CO2)	Carbon intensity (t-CO2/JPY mn)	Data quality score (DS) weighted average
Energy	Oil and gas	157,496	3.33	2.35
	Coal	―	―	―
	Power utilities	604,609	4.91	2.39
Transportation	Air cargo	4,617	2.62	4.00
	Passenger air transportation	50,309	5.34	1.43
	Marine transportation	123,883	5.08	1.11
	Rail transportation	47,328	0.46	1.81
	Truck services	302,605	4.31	3.15
	Vehicles and parts	164,897	1.03	1.76
Materials and buildings	Metals and mining	737,926	8.88	2.34
	Chemicals	635,209	3.05	2.44
	Construction materials	146,121	5.53	2.30
	Capital goods	2,749,078	2.02	2.52
	Real estate management and development	136,231	0.23	3.14
Agriculture, food, and forest products	Beverages	56,153	0.82	1.66
	Agriculture	43,999	7.52	3.80
	Processed foods and meats	305,340	4.21	3.37
	Paper and forest products	217,716	4.68	2.65
Other		2,956,160	1.03	2.68
Total		9,439,679	―	2.62

• Note:
  Calculated based on the balance of the Bank of Kyoto’s investments and loans subject to the calculation as of March 31, 2026.

Calculation formula for Category 15

About emissions calculation methods

Data quality score (DS)

The PCAF standard, which was the calculations were based upon, defines the data quality scores as shown in the table below to evaluate the quality of estimated emissions.

DS	Emissions calculation method	Type of emissions
Score1	Emissions reported by target company/project (with third-party certification)	Reporting basis emissions
Score2	Emissions reported by target company/project (without third-party certification)
	Energy consumption of target company x Emissions intensity	Estimated emissions based on activity indicators
Score3	Production volume of target company x Emissions intensity
Score4	Revenue of target company x Emissions per revenue in the relevant sector	Estimated emissions based on financial indicators
Score5	Investment/loan balance x Emissions per asset in the relevant sector
	Investment/loan balance x Emissions per revenue in the relevant sector x Asset turnover ratios in the relevant sector

Further promoting regional decarbonization through collaboration with business partners who are leading the way

The 9.44 million tons of Category 15 emissions of the Group are broken down into 2.14 million tons based on actual measurement values (primary data use) and 7.30 million tons based on estimated values (secondary data use).
We will continue to play a role in promoting regional decarbonization, which is expected of regional financial institutions, by obtaining cooperation from leading companies that have already calculated emissions and encouraging companies that have not yet done so to calculate their emissions and promote reduction measures that take into account the types of businesses of our customers.

“Breakdown of Category 15 calculation results”

Third-party assurance of greenhouse gas emissions

Since FY2024, to ensure transparency and accuracy of information related to GHG emissions, the Group has obtained third-party assurance from SOCOTEC Certification Japan for its actual emissions generated for the fiscal year.
The Group is working to reduce the environmental impacts of its business activities in order to achieve the GHG emissions reduction target that was revised upward in April 2026. Based on highly reliable and transparent data obtained through third-party assurance, we will deepen our engagement with our customers and contribute to the realization of a decarbonized society.

[Certificate of Assurance Regarding Actual Emissions]

• FY2025
• FY2024

Further promotion of energy conservation (reduction of scopes 1 and 2 emissions)

The basis for reducing Scopes 1 and 2 emissions is energy conservation, which we believe is also important from an economic rationality standpoint. In addition to promoting environmentally conscious office activities, we are also actively investing in the energy conservation of equipment. Furthermore, the Kyoto Financial Group MUKOU Building, which has obtained Net Zero Energy Building (ZEB) certification, houses ZET-BASE KYOTO, an office space for decarbonization-related startups established by Kyoto Prefecture, demonstrating our commitment to regional decarbonization.
Moving forward, we will continue to implement environmentally conscious initiatives in all aspects of our business activities to build a sustainable society, and contribute to the realization of carbon-neutral communities by giving back to the local community the knowledge and expertise we have cultivated.

Two types of ZEB	ZEB certified buildings
ZEB*1	Kyoto Financial Group MUKOU Building (Mukomachi Branch / Higashi-Mukomachi Branch)
ZEB Ready*2	Katsura Branch, Nishikatsura Branch, Ogura Branch, Shugakuin Branch, Takano Branch, Hyakumanben Branch

• *1
  Buildings that have achieved a reduction of 100% or more in primary energy consumption through energy savings and energy creation.
• *2
  Buildings that have achieved a reduction of 50% or more in primary energy consumption through energy savings.

Kyoto Financial Group MUKOU Building

In addition to saving energy by increasing the insulation of the exterior walls, installing highly efficient air conditioners, and LED lighting, we are working to create energy with 152 solar panels (total output: 80 kW) installed on the roof, walls, and carport of the building.

Sustainability Management Seminar

Since 2024, we have been holding the Sustainability Management Seminar for small and medium-sized enterprise managers, sharing concrete examples of sustainable management practices and promoting decarbonization throughout the region.
At the seminar held in February 2026, Shimadzu Corporation and SCREEN Holdings participated in a panel discussion, and there was an explanation of support measures for decarbonization management, including subsidies from Kyoto Prefecture. In addition, the case of Kyoto Jushi-Seiko Co., Ltd. was introduced as an example of initiatives by a small and medium-sized manufacturing company in Kyoto, sharing concrete and practical know-how for companies aiming to reduce their environmental impacts.