Taskforce on Nature-related Financial Disclosures (TNFD)

The Brother Group recognizes the key social issues of climate change, resource depletion, environmental pollution, and destruction of the ecosystem as business risks for the Brother Group and is solving these issues over the long term as a company that uses energy and resources to provide products using natural origin items such as paper, thread and cloth. As the basis of this philosophy, the Brother Group has established the following policies.

• Brother Group's Environmental Policy
• Brother Group's Biodiversity Conservation Policy
• Brother Group's Paper Product Procurement Policy

In February 2025, the Brother Group expressed its support for the framework of the Taskforce on Nature-related Financial Disclosures (TNFD), joined the TNFD Forum, and registered as a TNFD Adopter.

1. Application of materialities
   In assessing nature-related impacts based on TNFD, the Group applies a double materiality approach that takes into consideration two axes: "the impact of the environment and society on our company" and "the impact of our company on the environment and society."
2. Scope of disclosure
   The assessment this time was conducted in accordance with the LEAP approach^*1 recommended by TNFD, targeting products and direct operation facilities in all Brother Group businesses.^*2 In assessing our products, we have recognized that nature-related issues arise not only in our direct operations but also in our upstream and downstream value chains. For the assessment of facilities, we decided to conduct it for a total of 17 facilities, including manufacturing facilities in Japan and overseas as well as our headquarters in Japan, that are expected to have particularly high dependency and impact on nature among direct operations. As a specific assessment approach for products, we used ENCORE^*3 to identify impact drivers on nature (impact factors) and dependence on ecosystem services, and then we qualitatively assessed their importance. For manufacturing facilities, we used GIS^*4 data to organize biomes^*5 and selected areas requiring attention (sensitive locations) in accordance with the TNFD criteria.

1. An integrated approach to assessing nature-related issues, including contacts with nature, dependencies on nature, impacts, risks, and opportunities, and consists of four phases: Locate, Evaluate, Assess, and Prepare.
2. Printing & Solutions Business, Machinery Business, Domino Business, Nissei Business, Personal & Home Business, Network & Contents Business, and new business
3. Exploring Natural Capital Opportunities, Risks and Exposure: An analytical tool for understanding the impact and dependence on nature
4. Geographic Information System: A technology that comprehensively manages and processes data containing location-related information (spatial data) using geographical location as a reference, displays it visually, and enables advanced analysis and rapid decision-making
5. A type of ecosystem. Defined by the types of plants that form under average rainfall and temperature

1. Areas with nature-related issues
   Assessments were conducted for a total of 17 facilities, including manufacturing facilities in Japan and overseas as well as our headquarters in Japan, based on the four criteria of "importance of biodiversity," "integrity of ecosystems," "importance of ecosystem services," and "physical risks to water," to identify sensitive locations. We plan to conduct more detailed analyses regarding these facilities in the future.
2. Integrate other sustainability-related disclosures
   In 2020, the Brother Group endorsed the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and analyzed and disclosed the risks and opportunities that climate change may present to its businesses. The Group aims to integrate the climate-related financial disclosures and the nature-related financial disclosures in the future.
3. Considered timeframe
   [Short-term] 1 to 2 years, based on the fiscal year
   [Mid-term] 3 to 4 years, including the medium-term management strategy
   [Long-term] 5 years or more, including the long-term Group vision
4. Engagement with indigenous people, local communities and affected stakeholders
   The Brother Group has formulated its Human Rights Global Policy, respects the human rights set forth in the International Bill of Human Rights and the International Labor Organization (ILO) Declaration on Fundamental Principles and Rights at Work, and works towards the advancement of human rights, based on the Guiding Principles on Business and Human Rights endorsed by the United Nations Human Rights Council. Moreover, regarding human rights due diligence, the Group requests its main business suppliers to take measures to respect human rights, with the aim of achieving responsible procurement throughout its supply chain.

• Respect for Human Rights

The Brother Group has established a Sustainability Committee, chaired by the Representative Director & President, to globally promote management with an emphasis on sustainability, including activities to address materiality issues. The Sustainability Committee has five subcommittees, including the Environment & Climate Change Subcommittee, which addresses environmental issues such as climate change and biodiversity, and the Responsible Value Chain Subcommittee, which promotes respect for human rights and creation of a safe working environment, each of which is responsible for managing progress toward its targets and promoting its activities. The person in charge of a subcommittee regularly reports the status of its activities to the Sustainability Committee, and the President as the chairman, or a person designated by the President, reports on activities to the Board of Directors at least once a year.
When it becomes necessary to formulate or revise important matters regarding climate-related environmental risks or environmental issues, they are examined by subcommittees as well as the Sustainability Committee, deliberated at the Strategy Meeting, and then resolved by the Board of Directors. The Board of Directors provides guidance and supervision on the content of the matters and strives to strengthen the company-wide promotion system. In addition, to increase the effectiveness of the Group's efforts to address climate change, executive compensation is linked to the degree of achievement of key targets.

• Promotion of Management with an Emphasis on Sustainability

Brother Industries, Ltd. Governance Structure (as of June 25, 2025)

• Environmental Management Framework
• Brother Industries, Ltd. Governance Structure

Business-based assessment results and issues

In this assessment, we first classified and organized our business activities into upstream, direct operations, and downstream. We then created heat maps to identify impact drivers on nature (impact factors) and dependency on ecosystem services, using ENCORE. As a result, we confirmed our dependencies and/or impacts on the following: water use in resin production and water use and land use in metal and paper production in the upstream business activities; disaster prevention functions to mitigate pollution and floods in direct operations; and pollution through waste processes, land use and water use in the production of paper used for our products in the downstream activities. Among these dependencies and impacts identified, for "paper," which is essential for the use of printers, our company's main products, and for "paper" and "minerals," which are essential for the production of all our products, we plan to conduct a detailed analysis as a top priority to identify risks and opportunities and consider countermeasures.

<Heat map (dependence on nature)>

<Heat map (impact on nature)>

Facility-based assessment results and issues

This time, we conducted analyses for the 17 facilities listed below.

First, we organized the types of biomes of each facility, referring to IUCN Global Ecosystem Typology 2.0, which is an example provided in the TNFD framework.

We then conducted assessments based on the four criteria of importance of biodiversity, integrity of ecosystem, importance of ecosystem service provision, and physical risks to water, and we identified sensitive locations. Going forward, we will conduct in-depth analyses of these facilities while broadening our scope to assess other facilities and value chains of our Group.

The Brother Group regards important social issues such as climate change, resource depletion, environmental pollution, and ecosystem destruction as business risks. As such, the Brother Group Environmental Vision 2050 makes it clear that we will strive to resolve these issues on a long-term, ongoing basis.
In FY2022, the Brother Group established a Sustainability Committee chaired by the president to promote sustainability and risk management, to identify and assess priority risks and opportunities and provide appropriate response instructions. The Environment & Climate Change Subcommittee, established under the Sustainability Committee, identifies key issues, determines and implements appropriate countermeasures, and monitors progress on a regular basis.

• Risk Management

The Brother Group discloses the following TNFD core disclosure metrics and additional disclosure metrics. We will also continue to consider and prepare for the disclosure of core disclosure metrics that have not yet been disclosed.

Core disclosure metrics

Additional disclosure metrics

• Material balance [PDF/240KB]

Core disclosure metrics to be disclosed in the future

C1.0, C1.1, C2.0, C2.2, C2.4, C3.1, C4.0, C5.0, C7.0, C7.1, C7.2, C7.3, C7.4