Climate Change Initiatives (Disclosure Based on TCFD Recommendations) Governance The Board of Directors formulates policies on dealing with issues concerning sustainability and regularly reviews their implementa-tion status. With regard to issues concerning sustainability, the Board of Directors oversees the Sustainability Committee, chaired by the president and chief executive officer and comprising execu-tive officers appointed by the Board of Directors.For these issues, we positioned the environmental field in par-ticular as an important area to be tackled by management and established the Environment Committee, chaired by an executive officer in charge of environmental activities. The Environment Committee meets three times a year to discuss policies concerning the environment and vision for the future, assess Environmental Plan 2050, and conduct annual reviews of how each operating division has performed against its targets. The committee reports its findings to the Board of Directors at least twice a year. Climate Change-Related Risks and Opportunities In our scenario analysis, which assumes physical risks based on a 1.5°C and a 2°C scenario, we have classified and identified the major risks and opportunities for our businesses associated with the transition to a low-carbon society as regulatory, information disclosure, technological, market, reputational, and customer risks. In addition, we have evaluated the importance of climate change-related risks based on whether they are likely to materialize in the short term (0–3 years), medium term (3–6 years), or long term (6+ years), and the resulting estimated scale of the subsequent finan-cial impact.In May 2019, Yamaha Motor announced its support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Since then, we have been taking steps to track and manage climate change-related opportunities and risks that could affect our business in order to incorporate adaptive and mitigative climate change measures into our business strategies.As environmental regulations tighten and the move to decarbonization accelerates around the world, the Company revised the CO2 emissions targets in the Yamaha Motor Group Environmental Plan 2050 (hereinafter, “Environmental Plan 2050”) first formulated in fiscal 2018. We are now moving forward at an even faster pace with initiatives aimed at achieving carbon neutrality.Board of DirectorsPresident, chief executive officer and representative directorSustainability CommitteeEnvironment CommitteeSustainability Promotion Meeting26Toward Sustainable GrowthYamaha Motor Co., Ltd. Integrated Report 2021Important Environmental and Societal Issues• Strengthening of measures to address climate change• Improvements in energy efficiency• Promotion of water safety• Reduction of pollutants and waste materials• Introduction of industrial processes using clean technologies and emphasizing efficient resource use• Sustainable use of natural resources• Promotion of protection and recovery of land ecosystems• Halting of deforestation• Protection and recovery of marine ecosystemsAction ThemesLow-carbon societyResource recyclingA society in harmony with natureRisksShort termCosts for addressing regulations may increase significantly, with each country and territory moving to tighten motorcycle emission standards and the U.S. introducing more stringent EPA and CARB emission standards for marine engines.Short to medium termAs the pace of electrification in the mobility field accelerates, it may result in shortages of the metals needed in storage batteries, such as nickel and cobalt, thereby driving up procurement costs.Short to long termClimate change may trigger abnormal weather events, including forest fires, droughts, extreme temperature changes, storms, and snowfall, destroying the ecosystems of the oceans, mountains, and forests where our products are used.Medium termRising demand in India, Africa, and other regions may increase CO2 emissions from the distribution of goods, and the introduction of carbon taxes may increase logistics costs.Long termHeightened environmental awareness may lead to decreased sales of products that use fossil fuels, while the introduction of carbon taxes may increase manufacturing costs.Long termIncreased consumption of resources accompanying the economic growth of emerging markets may heighten procurement risks, including a shortage of resources and cost increases.OpportunitiesShort to medium termSales of models with improved fuel economy may increase. In emerging economies, motorcycles may be widely adopted as an inexpensive means of transportation with minimal social infrastructure costs.Short termLightweight and compact low-speed mobility vehicles (land cars) may be widely adopted as a means of transportation that helps minimize use of social infrastructure resources and related costs.Short to long termIncreased awareness of the need to conserve the natural environment may trigger growth of the outdoor market where people seek and cherish interactions with nature.Medium termMotorcycle and marine rental businesses may grow.Long termElectric models may be widely adopted.Long termIn terms of engineering, manufacturing, and marketing, ultra-compact mobility vehicles that are small, lightweight, and resource-saving may be incorporated into social infrastructure.