TNFD-Aligned Disclosure

The PPIH Group supports the daily lives of local communities and provides enjoyable shopping experiences, guided by the corporate principle of "The Customer Matters Most."
The PPIH Group is committed to resolving important environmental and social issues (materiality) through our core business of general retailing. We aim to achieve both the realization of a sustainable society and the enhancement of medium- to long-term corporate value through ongoing dialogue with stakeholders.
In an era of rapid change, the PPIH Group has strengthened its response to ESG (Environmental, Social and Governance) issues under its medium- to long-term management plan, "Visionary 2025/2030." Under its long-term management plan, "Double Impact 2035," we continue to advance these initiatives, with the aim of simultaneously realizing a sustainable society and enhancing corporate value.
In the nature-related domain, the PPIH Group has identified key priority areas, including "addressing climate change," "sustainable product procurement and responsible sales with consideration for human rights and the environment," and "addressing social and environmental issues across the supply chain," and advancing a range of related initiatives. In accordance with our "Basic Sustainability Policy," the PPIH Group is committed to addressing environmental and social challenges through our core business as a general retail operator. To operationalize this commitment, we have established our "Environmental Policy," "Human Rights Policy," "Sustainable Procurement Policy," and "Supply Chain Code of Conduct." Through these frameworks, we aim to reduce our environmental footprint by incorporating sustainability --including climate change, prevention of environmental pollution, and impacts on biodiversity-- while placing strong emphasis on respect for human rights throughout the supply chain.

In recent years, alongside climate change, nature-related issues such as biodiversity loss, land-use change, and water resources have gained increasing importance in ensuring business continuity. As a general retailer handling a wide range of products, including food, daily necessities, and apparel, and operating numerous stores, the PPIH Group both depends extensively on nature capital and generates impacts on nature across our value chain, from raw material sourcing to product supply and store operations. In particular, as strengthening of private brand (PB)/OEM products and the food segment is positioned as a core component of the PPIH Group's growth strategy, the relationship with nature in production and sourcing regions of the raw materials is becoming increasingly material from a sustainability management perspective. Based on this recognition, the PPIH Group, with reference to the TNFD (Taskforce on Nature-related Financial Disclosures) framework, identified and assessed its dependencies on and impacts on nature arising from our business activities. We also advanced the analysis of nature-related risks and opportunities, while strengthening our risk management practices. Positioning the enhancement of corporate brand value, as set out in our long-term management plan "Double Impact 2035," as a key pillar of our growth strategy, the PPIH Group promotes information disclosure and engages proactively with stakeholders, thereby contributing to the realization of a sustainable society.
The PPIH Group continues to uphold its corporate philosophy and action guidelines set forth in "The Source," and remains committed to pursuing the dual objective of contributing to society through our business activities while achieving sustainable growth.

This disclosure applies a double materiality approach, considering both:
-the financial impacts of nature on the PPIH Group's business activities (financial materiality), and
-the impacts of the PPIH Group's business activities on nature (impact materiality).

Within the PPIH Group's operations, the scope of this disclosure is defined as the domestic retail business, which represents approximately 80% of our consolidated revenue.
The assessment scope covers:
-direct operations (in-store retail activities), and
-the value chain of major products handled in domestic stores, from raw material sourcing through to disposal and recycling.
Within this scope, we have assessed our dependencies and impacts on nature. Based on these assessments, we identified and disclose nature-related risks and opportunities associated with in-store retail operations, as well as those related to product value chains--particularly in upstream processes such as raw material sourcing and extraction, where dependencies and impacts have been identified as significant.

A location-based analysis was conducted across 666 domestic retail store locations^*1, considering the surrounding natural environment of each store. Given the nature of retail operations, our direct dependencies and impacts on nature capital at store level were assessed as relatively limited. A screening analysis was conducted based on spatial proximity to Protected Areas (PAs)^*2 and Key Biodiversity Areas (KBAs)^*3. Through this analysis, priority locations for management were identified, including those with higher potential exposure to nature-related risks and impacts.

*1 As of January 28, 2026, when the LEAP assessment was commenced.

*2 PA：Protected Area. Areas are legally designated and managed for conservation purposes, such as national parks and wildlife reserves.

*3 KBA：Key Biodiversity Area. Sites identified as contributing significantly to the global persistence of biodiversity.

The PPIH Group has advanced scenario analysis and disclosures in line with the Task Force on Climate-related Financial Disclosures (TCFD) since February 2022. Our business activities are supported by the benefits of nature--including soil, water resources, climate conditions, and ecosystems--and are therefore closely linked to nature capital, including climate. Recognizing that climate change and nature capital are interrelated and mutually influential, this disclosure seeks alignment with climate-related disclosures under the TCFD framework. Further integration of TCFD and TNFD disclosures is being considered to enhance the comprehensiveness of our environmental disclosures.

At this stage, the assessment does not apply explicit time horizons. The analysis has been conducted primarily based on the operational characteristics and geographical conditions of the PPIH Group's domestic retail business. The incorporation of time horizons is under consideration, taking into account the PPIH Group's long-term management plan, Double Impact 2035.

The PPIH Group conducts its business activities as a general retailer while engaging with a wide range of stakeholders, and places strong emphasis on dialogue with customers, business partners, employees, shareholders and investors, as well as local communities and municipalities. In product sourcing, based on the PPIH Group Sustainable Procurement Policy and the PPIH Supply Chain Code of Conduct, human rights and environmental risks are identified and managed through ongoing engagement and monitoring. Grievance mechanisms are in place to address potential adverse human rights impacts, with appropriate investigations and remediation processes implemented as necessary. Retail stores serve as key points of engagement with local communities. The PPIH Group has been promoting engagement with residents and future generations through initiatives such as outreach programs conducted at stores to enhance understanding of environmental conservation activities and environmentally responsible product choices. Education programs related to marine ecosystems and environmental issues are also provided through activities such as aquarium maintenance in collaboration with vocational school students and the operation of mobile aquariums. Through these efforts, the Group seeks to raise awareness and contribute to the reduction of indirect negative impacts on nature associated with consumer behavior.

With respect to sustainability initiatives, including climate change and nature-related issues, the Sustainability Committee, under the supervision of the Director, Managing Executive Officer and CAO in charge, plans and formulates countermeasures and reflects them in the business activities of Group companies.
The Sustainability Committee reports to the Board of Directors at least once a year on the progress of sustainability initiatives and the status of target achievement.
The Sustainability Committee is chaired by the Executive Officer and Head of the IR Headquarters and meets once a month. It receives reports from subcommittees of subordinate organizations on responses to sustainability issues, including climate change and nature-related issues, and is responsible for target setting, progress management, and monitoring. In addition, the Committee holds regular meetings with external experts with specialized knowledge in sustainability management, including Mr. Hidemi Tomita, Representative Director of the Sustainability Management Institute, to establish a framework that enables initiatives to be advanced from a professional perspective.
Of the 15 Directors, 9 possess skills related to ESG and diversity.

The PPIH Group, as a general retail operator, provides a wide range of products and services to customers on a daily basis, while engaging with diverse business partners across our supply chain in Japan and overseas, as well as maintaining a substantial workforce. The PPIH Group places strong emphasis on ongoing dialogue with a broad range of stakeholders, including customers, business partners, employees, shareholders and investors, as well as local communities and municipalities. Through such engagement, we seek to understand stakeholder expectations and concerns and believe that building relationships of trust and collaboration contributes to the realization of a sustainable society.
In light of these business characteristics, we have established the "PPIH Group Human Rights Policy" to promote respect for the human rights of all stakeholders involved in our business activities. The PPIH Group is committed to complying with applicable laws and regulations and to respecting internationally recognized standards, including the Universal Declaration of Human Rights, the International Covenants on Human Rights, the ILO Core Labor Standards, and the UN Guiding Principles on Business and Human Rights.

For the PPIH Group, the supply chain established through product sourcing constitutes the foundation of our business. Accordingly, addressing potential issues related to human rights, labor practices, and occupational health and safety throughout the supply chain is recognized as a key management priority (Materiality 3: Sustainable Sourcing and Responsible Sales). To this end, the Group has established the "PPIH Group Sustainable Procurement Policy" and "PPIH Group Supply Chain Code of Conduct", through which we promote responsible sourcing practices that take human rights and environmental considerations into account across the entire supply chain.
The "Supply Chain Code of Conduct" stipulates requirements relating to respect for human rights, management of occupational health and safety, environmental protection including climate change and biodiversity, and contributions to local communities. The PPIH Group requires business partners involved in private brand (PB) and OEM products, as well as new suppliers, to express their support for the "Sustainable Procurement Policy" and to submit a written pledge to comply with the "Code of Conduct". In addition, the PPIH Group implements due diligence processes, including supplier engagement, self-assessment questionnaires (SAQs) and third-party audits to identify human rights risks across the supply chain. Where issues are identified, the PPIH Group engages in dialogue with relevant partners and provides follow-up support to promote corrective actions, thereby ensuring continuous stakeholder engagement and improvement across the supply chain.
The PPIH Group has established grievance mechanisms, including a dedicated hotline, to receive reports and consultations related to actual or potential adverse human rights impacts. We carefully review all consultations and reports received and, where necessary, undertake appropriate investigations and implement corrective measures. Through these mechanisms, the PPIH Group strives to enhance the effectiveness of our human rights risk management across our business activities and supply chain.

The implementation of the Group's human rights policies, grievance mechanisms, and engagement activities with business partners and other stakeholders is monitored by management, primarily through the Sustainability Committee and the Compliance Committee. Key initiatives and progress are reported to the Board of Directors. The Board oversees the integration of human rights considerations into the Group's business activities and supply chain management and provides direction and guidance on policies and measures as necessary.

The PPIH Group's business is built on providing a diverse range of products, including food and daily consumer goods, to customers, and inherently depends on nature-derived resources such as agricultural, livestock, and marine products. These resources are supported by the benefits of nature (ecosystem services), including soil, water resources, climate conditions, and ecosystems. In addition, the PPIH Group's value chain encompasses a wide range of activities, from raw material sourcing and logistics to store operations, the provision of products and services, and ultimately disposing and recycling. Across each of these stages, dependencies on nature exist, while impacts on nature also arise through activities such as resource extraction, land use, greenhouse gas emissions, and the generation of wastewater and waste.
Considering these relationships with nature, the PPIH Group recognizes the importance for sustainable business growth is to systematically identify and manage our dependencies and impacts on nature, as well as recognizing the resulting risks and opportunities, across the entire value chain.

The Group operates a diverse portfolio of businesses, including domestic and international retail operations, as well as distribution, real estate, and financial services. The scope of this assessment has been defined as the domestic retail business, which is one of the PPIH Group's core businesses. The assessment covers: direct operations, namely in-store sales activities, as well as the value chains of key products sold in domestic stores.

For the domestic retail business, the PPIH Group identified and assessed nature-related dependencies and impacts by distinguishing between:
-our direct operations, namely in-store sales activities (hereafter referred to as "retail store operations"); and
-the value chains of key products (hereafter referred to as "product value chains").
Key products were classified into seven categories and 34 groups based on raw materials and manufacturing processes. For each category, the corresponding value chain was mapped, and an assessment was conducted using the ENCORE^*4 tool. (For further details on the assessment process, please refer to the section "Risk and Impact Management.")

*4 ENCORE：A tool used to assess the materiality of a company's dependencies on and impacts on nature by sector.

Based on the ENCORE analysis, we found that, within the domestic retail business, dependencies and impacts on nature are most significant in the upstream stages of the product value chains, particularly in raw material extraction and harvesting. In contrast, dependencies and impacts associated with direct operations, namely retail store operations, were assessed as relatively limited.
Significant dependencies and impacts were identified particularly in the following upstream sectors:

While the following dependencies and impacts were identified in retail store operations, it has been confirmed to be relatively limited compared to those across the overall domestic retail business.

For retail store operations classified as direct operations, a total of 666 locations (stores) across Japan were included in the assessment scope. Using IBAT^*5, we assessed the nature conditions within a 5 km radius of each store location based on three criteria: biodiversity importance, ecosystem integrity, and rapidly declining of ecosystem integrity.

*5 IBAT：a biodiversity risk analysis tool provided by the IBAT Alliance, involving organizations such as the United Nations Environment Program (UNEP).

*6 PA： among the protected areas identified by IBAT, certain categories--such as common fishery right areas, special green conservation districts, suburban special green conservation districts, and greening areas--were excluded from the scope of analysis, as their conservation objectives and regulatory characteristics were deemed to have limited relevance to the assessment of nature-related issues associated with retail store operations.

*7 STAR：the Species Threat Abatement and Restoration. A metric that quantifies the potential contribution of threat abatement and restoration activities to reducing global species extinction risk.

Based on the above assessment of dependencies and impacts, the direct dependencies and impacts on nature capital associated with current retail store operations are assessed as relatively limited. However, given the importance of proximity to areas of significance for biodiversity conservation, a screening of sites was conducted based on the distance from each store to Protected Areas (PA) and Key Biodiversity Areas (KBA). As a result, 30 locations with 0 km proximity to either a PA or KBA were identified as sites requiring further review (hereinafter referred to as "priority sites"). In addition, 4 locations (two in Fukuoka Prefecture, one in Aichi Prefecture, and one in Aomori Prefecture) with 0 km proximity to both a PA and a KBA were identified as sites requiring management attention (hereinafter referred to as "key sites").
For these key sites, a detailed desktop review was conducted, including an assessment of the characteristics of the relevant PA and KBA, as well as major species inhabiting the surrounding areas. The results confirmed that no significant impacts on nature or biodiversity attributable to current store operations have been identified, and that nature-related risks associated with the locations of these key sites are not considered significant at present.
While the dependencies and impacts on nature capital associated with retail store operations are assessed as relatively limited, due consideration will be given to the surrounding natural environment when establishing new stores or when operational changes occur at priority or key sites. Ongoing information gathering and monitoring of environmental conditions at these locations will also be conducted.

Seven product categories were assessed for the product value chain. Based on the ENCORE assessment results, scores were assigned to each stage of the value chain--from raw material sourcing to manufacturing, distribution, sales, disposal, and recycling. These scores were then averaged and aggregated by product category to derive an overall assessment. As a result, among the seven product categories, the overall average value chain score was highest for "Food and Beverages," followed by "Apparel and Household Goods (Textiles)." In addition, across all seven product categories, the "raw material extraction and harvesting" stage consistently showed the highest average score within the value chain.
Additionally, we conducted a more detailed analysis of the drivers of nature-related dependencies and impacts at this upstream stage. Based on these findings, we identified nature-related risks and opportunities associated with raw material sourcing, taking into account the characteristics of each product category. These insights form an important basis for the PPIH Group's future response strategies.

Based on the above analysis, raw material sourcing in the upstream product value chain is recognized as a critical area closely linked to the PPIH Group's nature-related risks and opportunities and is therefore of fundamental importance in shaping future management responses.

Based on the assessment of nature-related dependencies and impacts in both retail store operations and in the product value chains, the PPIH Group identified and assessed nature-related risks and opportunities within its domestic retail business. In parallel, we evaluated response measures for the identified risks and opportunities and assessed the potential negative and positive impacts of these risks and opportunities on our business.

Based on the assessments of dependencies and impacts, as well as analyses of nature-related risks and opportunities in line with TNFD, the PPIH Group recognizes the management of nature-related issues as an important consideration in our medium- to long-term business operations. In direct operations, including retail store operations, we promote initiatives to reduce environmental impacts associated with energy use, and also resource circulation. At the same time, across product value chains--particularly in upstream activities such as raw material sourcing in the food and beverage sector, where future business expansion is anticipated, including private brand/OEM products--we recognize the potential for nature-related risks arising from dependencies and impacts on nature capital. Further identification and assessment of these related issues are considered necessary.
In advancing these efforts, the PPIH Group recognizes the importance of conducting assessments that take into account the characteristics of raw material production processes and sourcing regions. We will progressively enhance the granularity of analyses and expand the scope of assessment.
Through these initiatives, we are strengthening our understanding and management of nature-related issues and are working to integrate nature-related considerations into business operations and decision-making processes.

For this disclosure, the domestic retail business--one of the PPIH Group's core businesses--has been selected from its diverse operations as the scope of assessment. The value chain of the domestic retail business spans activities from raw material sourcing and logistics to store operations, the provision of products and services, and disposing and recycling. To capture the interfaces with nature across these activities, the scope of assessment includes the following:

Based on the scope defined above, we conducted an assessment using the TNFD-recommended LEAP approach to identify and evaluate dependencies and impacts on nature, as well as the associated risks and opportunities.

Using IBAT, the PPIH Group conducted a location-specific analysis of the natural environment within a 5 km radius of all 666 retail store locations in Japan. The analysis considered three criteria: biodiversity importance, ecosystem integrity, and rapidly declining ecosystem integrity. Given that retail store operations do not involve significant water abstraction or direct discharge into rivers or other water bodies, "physical water risk" was excluded from the assessment criteria. Specifically, the analysis was conducted using Protected Areas (PA), Key Biodiversity Areas (KBA), and the Species Threat Abatement and Restoration (STAR) metric as key indicators. Locations with 0 km to either a PA or KBA were identified as sites requiring further review (hereinafter referred to as "priority sites"), and locations with 0 km to both PA and KBA were designated as sites of management importance (hereinafter referred to as "key sites") (*).
For these key sites, in addition to the initial analysis conducted using IBAT, a detailed desktop assessment was carried out utilizing the Environmental Impact Assessment Database System (EADAS) ^*8 provided by the Ministry of the Environment, Japan, as well as publicly available information on the natural environment and biodiversity from relevant local authorities. This analysis covered the characteristics of the relevant PAs and KBAs, as well as major species inhabiting the surrounding areas.

*8 EADAS: Environmental Impact Assessment Database System. A database provided by the Ministry of the Environment, Japan, that supports environmental impact assessments by enabling centralized access to information on the natural environment across Japan, including data on natural parks, wildlife protection areas, vegetation, and the distribution of material species.

(*)Among the Protected Areas (PA) identified by IBAT, certain categories--such as common fishery right areas, special green conservation districts, suburban special green conservation districts, and greening areas--were excluded from the scope of analysis, as their conservation objectives and regulatory characteristics were deemed to have limited relevance to the assessment of nature-related issues associated with retail store operations.

The PPIH Group evaluated dependencies on and impacts on nature using ENCORE. For retail store operations, the sector classification "non-specialized retail trade" was applied.
For product value chains, key products were classified into seven categories and 34 groups based on raw material characteristics and manufacturing processes. For each product category, the entire value chain, from raw material sourcing to manufacturing, distribution, sales, and end-of-life treatment (disposal and recycling), was mapped and relevant sectors were identified. ENCORE assessments were then conducted for each sectors. Based on the results, dependencies and impacts on nature were analyzed across both retail store operations and product value chains.

Based on the ENCORE assessment results, the PPIH Group identified priority operational risk drivers and conducted further assessment of nature-related risks and opportunities in line with TNFD categories.
For retail store operations, risks and opportunities were identified based on dependencies and impacts rated as Medium or above in the ENCORE assessment, added with the consideration of business materiality and stakeholder interest. For product value chains, the assessment focused on upstream activities, particularly raw material extraction and harvesting, where the scores for dependency and impact were highest. Risks and opportunities were identified for items that showed assessment results as High or above.
The PPIH Group assessed the potential negative and positive impacts of identified risks and opportunities on its business, and evaluated countermeasures to mitigate risks and capturing opportunities.

For identified risks and opportunities, the PPIH Group examined relevant metrics and targets for monitoring and management and advanced preparations for disclosure.

In the PPIH Group, the Compliance Promotion Headquarters manages risk incidents that occur mainly at stores and other business locations. Information relating to risk incidents is collected, and risk responses and countermeasures are determined in coordination with relevant departments. Stores and business locations implement these measures based on such guidance and instructions.
For climate change-related risks, the Sustainability Committee identifies and evaluates risks, considers and promotes countermeasures, conducts management activities, and shares information with the Compliance Promotion Headquarters.

The PPIH Group is also considering integrating nature-related risks beyond climate change into its enterprise-wide risk management framework in the same manner.

The PPIH Group has established the following metrics in relation to nature-related issues.