Disclosure Based on TCFD Recommendations

3-4℃ scenario

While policies and regulations such as the strengthening of climate change measures, as well as transition risks related to technology, market, and reputation, are considered limited, the Company assumes that acute risks from increasingly severe extreme weather events and chronic risks from rising temperatures and the expansion of water-stressed areas may arise. Referring to the recovery costs of ¥770 million incurred in FY2019, when the Company suffered the greatest damage from heavy rains subject to special heavy rain warnings over the past decade, the Company estimated the potential financial impacts that could occur in the future.

• Physical risks (acute)

  Due to the decline in forest disaster prevention functions caused by loss of biodiversity, the Company recognizes potential risks such as increased costs for disaster preparedness and recovery of communication facilities like base stations due to the frequent and severe natural disasters exacerbated by global warming. This includes impacts on procurement due to disruptions in the value chain, business opportunity losses, and potential neighborhood damage caused by affected facilities. The Company used its past costs as benchmarks to examine potential financial impacts that may occur in the future.
  As a result, although recovery costs, including labor, are relatively contained, the Company recognizes that given the nationwide deployment and substantial asset base of its telecommunications infrastructure, particularly base stations, the financial impact of disasters is expected to be significant. Also, even if measures are taken to strengthen telecommunications facilities, primarily high-risk facilities, it is difficult to completely eliminate the risks of increasingly frequent and severe climate disasters. The Company considers these to be long-term risks with a high likelihood of occurrence, and if they occur on a large scale, they could disrupt telecommunications services and create social responsibility.

  To address this, the Company used flood inundation area data from the Ministry of Land, Infrastructure, Transport and Tourism and conducted a physical risk assessment for all outdoor base stations, excluding rooftop installations. As a result, the Company confirmed particularly high risks in coastal and river areas in the Kanto and Chugoku-Shikoku regions. For example, when Typhoon No. 19 occurred in October 2019, record-breaking rainfall caused river flooding and landslides over a wide area, including the Kanto region, leaving more than 100 people dead or missing. Many of the Company's base stations also suffered extensive damage, including flooding and power outages, resulting in areas where communications were unavailable.
  As an adaptation measure for flood damage, which is expected to become more likely due to the increasing frequency of typhoons and linear precipitation zones, the Company invested approximately ¥1.4 billion in FY2025 and formulated and implemented the following main plans to reduce the risk of equipment damage and ensure stable service continuity during widespread power outages. As a result, no incidents leading to major area outages occurred in FY2025. The Company is also enhancing redundancy in its core network and working to secure telecommunications service environments during disasters.

  • Deployment of portable base stations
  • Battery replacement and maintenance
  • Deployment of portable generators

• Physical risks (Chronic)

  The Company examined several factors, including increased costs linked to higher air conditioning usage, revenue losses from shop closures in response to rising flood risks associated with sea level rise and weather-related disasters, potential procurement impacts from semiconductor supply delays caused by floods, droughts, and other water stress linked to climate change and biodiversity loss, and impact on securing water for cooling servers at data centers. The Company anticipates increased power demand at its data centers driven by the spread of AI. Based on cost estimates derived from the correlation between power use records at the Company's facilities and temperature data, the Company expects a certain impact. As response measures, the Company will continue to transition to energy-efficient equipment, improve the efficiency of power use by utilizing AI and IoT, and expand online shops.

1.5℃ scenario

While acute or chronic physical risks from climate change that would impact the Company's business are not expected to arise, the Company examined the potential impacts of tightened policies and regulations, including climate change measures, as well as transition risks related to technology, market, and reputation.

• Transition risks (Market / Reputation)

  As demands on companies for ambitious targets to meet the goals of the Paris Agreement increase year by year, the Company examined the potential impacts on sales, share price, and brand image if the Company's initiatives are deemed insufficient, as well as the business impacts associated with economic effects caused by the depletion of natural capital and social instability.
  As a result, the Company recognizes that enhancing corporate value through initiatives such as proactive information disclosure based on the TCFD recommendations, promoting activities that contribute to carbon neutrality, clarifying its commitment to low-carbon management through external disclosure, contributing to CO2 reductions across society, and encouraging behavioral change through initiatives such as online fundraising is a priority. Accordingly, the Company endorsed the TCFD in April 2020 and established "Contributing to the global environment with the power of technology" as one of its material issues.
  In the long term, raw material costs may increase due to resource depletion and rising market demand. To effectively use resources, the Company has set KPIs under its material issues for the number of used mobile phones collected for reuse or recycling, the recycling rate of decommissioned base station communications equipment, and the recycling rate of industrial waste, and monitors these KPIs.
  Furthermore, the expansion of low-carbon and decarbonization markets, along with shifts in customer behavior and preferences, is expected to increase investment costs for providing decarbonization services, such as procuring renewable energy. However, these changes also present opportunities for the Company.

• Transition risks (Policy and law)

  The Company assessed the potential impact under a scenario in which policies and regulations related to climate change measures, such as taxes for global warming countermeasures and the Act on Promotion of Global Warming Countermeasures, are tightened and a carbon tax of approximately ¥30,000 per t-CO2 equivalent is imposed in FY2030. Although the Company believes the likelihood of this occurring in Japan at present is low, it would have a certain financial impact if it occurred. As a mitigation measure, the Company is working toward transitioning 100% of the electricity used in its business activities to carbon-neutral electricity*1 by FY2030. In parallel, the Company is expanding the use of renewable energy to achieve this target, including by entering into long-term Power Purchase Agreements, or PPAs*2, for renewable energy. In June 2023, the Company announced its commitment to achieve net zero by FY2050 for all greenhouse gas emissions related to business activities on a consolidated Group basis, including Scope 1, 2 and 3 emissions across the supply chain.
  Through these initiatives, the Company aims to reduce the financial impact of future increases in carbon prices, and considers the impact of this risk to be limited. The Company will continue to monitor trends in carbon levy systems and related laws and regulations in Japan and overseas, while also working to reduce greenhouse gas emissions.

  [Notes]

  1. *1
     Electricity with a zero emission factor
  2. *2
     Power Purchase Agreement

• Transition risks (Technology)

  With advances in technologies that contribute to decarbonization, such as energy conservation, resource conservation, AI, and IoT, investment costs for facilities and services that use these technologies are expected to increase. In addition, delays in responding to new technologies could lead to a decline in service competitiveness or loss of business opportunities. The Company continuously monitors technological trends and works to maintain and enhance competitiveness by promoting the introduction and use of technologies that contribute to decarbonization through collaboration with strategic alliance and co-development partners.
  The Company continues to proactively disclose information through CDP, an international non-profit organization, in order to enhance the transparency of environmental information, including climate change information. For specific examples of climate-related risks in business activities, please also refer to the Company's response to the CDP questionnaire below.

  2025 CDP Corporate Questionnaire 2025 (C3.1 Disclosure of risks)

Risk response measures, opportunities

Actions taken to reduce business risk can also be significant business opportunities. It is said that by utilizing cutting-edge technologies such as AI, IoT, and Big Data, and by analyzing vast amounts of environmental data through AI's learning function, it is possible to predict the impact on the global environment. The use of cutting-edge technology in environmental issues is attracting attention around the world because it enables the Company to take various countermeasures based on such predictions. The Company will work to reduce environmental burden by making maximum use of its strengths in cutting-edge technologies such as AI and IoT and synergies with Group companies. Please note that some of the Company's climate action-related businesses, such as reuse of mobile phone devices, sales of disaster prevention water circulation systems, and smart buildings, are positioned as sustainable economic activities that are aligned with the EU Taxonomy. Supported by growing social needs, these businesses generated sales of ¥93.0 billion in FY2025, and the Company sees them as growth opportunities that contribute to enhancing corporate value over the medium to long term. The Company will continue to strategically advance these businesses.
Examples of the Company's initiatives are provided below.

• "Smart buildings" to improve energy efficiency through the use of data

  The Company is working to develop smart buildings and smart cities that use operational data collected from sensors installed in urban spaces and buildings in real time to create user-optimized spaces and improve energy use efficiency. In FY2025, the Company generated annual sales of approximately ¥11.0 billion through the provision of this service.

• Zero CO2 emissions: "Shizen Denki"

  The Company offers "Shizen Denki," a household plan designed as an environmentally friendly service that contributes to climate change measures. "Shizen Denki" is defined as achieving a virtually 100% renewable energy ratio and zero CO2 emissions by combining non-fossil certificates designated as renewable energy, and aims to realize a prosperous society through the spread of renewable energy.
  Internally, the Company also conducts on-site briefing sessions at renewable energy power plants, including hydropower plants, to improve employees' knowledge of renewable energy and environmental value. The Company also conducts on-site briefings at renewable energy power plants (hydropower plants) for employees and works to enhance their knowledge of renewable energy and environmental value.
  In FY2025, through the provision of "Shizen Denki," the Company generated annual revenue of approximately ¥1.97 billion and achieved a CO2 emissions reduction effect of approximately 44,000 t-CO2.

• Household electricity-saving service, "Eco Denki App"

  The Company provides the "Eco Denki App" free of charge to customers who use SoftBank Denki. The app encourages customers to save electricity through a smartphone app. Customers can check the amount of electricity saved and PayPay Points earned on the day after they save electricity, and the app supports customers' continued energy-saving behavior through rankings, campaigns and other features. The number of households using the "Eco Denki App" was approximately 1.2 million in FY2025, and the plan for FY2026 is approximately 1.3 million households.

• "Cloud Carbon Management" to support decarbonization management

  This is a cloud service that calculates and visualizes GHG emissions and is based on Zeroboard, a cloud service that calculates and visualizes GHG (greenhouse gas) emissions developed and provided by Zeroboard, Inc. and optimized with the aim of integrating with corporate solutions provided by the Company. By leveraging the knowledge and expertise that Zeroboard possesses in decarbonization, the Company aims to contribute to corporate clients' decarbonization management and the realization of a sustainable society. At the same time, the Company will actively utilize "Cloud Carbon Management" within the Company to enhance the accuracy of GHG emission calculations, reduce labor efforts, and strengthen the Group's overall initiatives towards carbon neutrality.

• "HELLO CYCLING," an IoT-based bicycle sharing system

  OpenStreet Corp., a Group company of the Company, provides an environmentally friendly shared mobility service that allows people to use mobility as a means of transportation without owning mobility vehicles. Through the bike-sharing platform "HELLO CYCLING" and the multi-mobility sharing service "HELLO MOBILITY," the company is developing "Multi-Mobility Stations" that allow for the rental of bicycles, scooters, and ultra-compact EVs from a single location in collaboration with municipalities and partner companies. This initiative not only improves the convenience of urban transportation but also contributes to achieving a low-carbon society by supplying part of the electricity used for each vehicle with renewable energy. Moving forward, the Company will aim to promote the use of electric mobility powered by renewable energy and continue working towards a society that coexists with the global environment.

• "HAPS," a stratospheric communication system unaffected by natural disasters

  The Company is advancing initiatives toward the commercialization of the stratospheric communication system "HAPS (High Altitude Platform Station)", which provides communication networks from the stratosphere, approximately 20 kilometers above the ground. This system will enable the establishment of stable internet connectivity in areas and regions where communication networks are not well-developed, such as mountainous regions, remote islands, and developing countries. Additionally, because it is unaffected by ground-based disturbances, it can provide a stable communication network, which is expected to contribute significantly to rescue and recovery efforts during large-scale natural disasters. In January 2022, the Company issued ESG bonds (HAPS Bonds) with funds specifically allocated for the HAPS project, raising ¥30.0 billion.

• Building a distributed AI data center

  The Company believes that the development of a next-generation society in which AI coexists with people and autonomously collaborates with other AI will require the construction of next-generation social infrastructure capable of generating and processing massive amounts of data. Today's data centers are concentrated in urban areas, and if data processing continues to increase, the risk of power outages in urban areas will rise. To address this, the Company plans to deploy Brain Data Center locations with large-scale computational capabilities across Japan. In 2024, the Company began construction of the Hokkaido Tomakomai AI Data Center in Tomakomai, Hokkaido, which will be equipped with large-scale computational infrastructure and is scheduled to open in FY2026.

• Nationwide deployment of optoelectronic coupling networks

  With an eye on Beyond 5G/6G, the Company aims to meet the growing demand for data communications while achieving carbon neutrality. The Company completed the nationwide rollout of an All optical communication network using Fujitsu's next-generation optical transmission equipment in October 2023. The all-optical network that the Company has completed nationwide utilizes optical technology across all areas of the communication network. By connecting with all-optical technology-compatible equipment and applying water-cooling transponder technology, the Company has reduced power consumption by up to 90% compared to conventional systems*. In addition, even when connected to conventional facilities, the latest photoelectric conversion technology has achieved a power consumption reduction of approximately 50%^* compared to conventional systems^*, making this an environmentally friendly network that can demonstrate high power efficiency in any connection environment. The new system also improves communication performance, using a pair of optical fibers to achieve high-capacity, high-speed transmission of up to 48.8 Tbps, approximately twice the speed of conventional systems^*.

  [Note]

  1. *
     Comparison with conventional systems: Comparison with equipment conventionally used by SoftBank

• Implementation of an internal carbon pricing (ICP) scheme

  To drive its climate-change initiatives, the Company expanded its internal carbon pricing (ICP) framework in FY2024. The scope covers Scope 1 and 2 emissions. The Company set an implicit carbon price of ¥18,000 per t-CO2 for certain capital investments that can deliver CO2 emission reduction effects, thereby encouraging the introduction of equipment that further promotes decarbonization.

• Statement of the Company's stance on carbon-credit utilization

  The Group supports the Paris Agreement and aims to achieve net-zero greenhouse gas emissions across its entire value chain by 2050. Guided by SBTi recommendations, the Group prioritizes maximizing reductions in Scope 1-3 emissions. For residual emissions, the Group is exploring offset measures through insetting and the use of carbon credits. Regarding carbon credits, the Group emphasizes quality when procuring and generating credits, and has summarized a utilization stance that also takes into account impacts and co-benefits for biodiversity, local communities, and human rights.

Scope 1 and 2 emissions reduction

• Energy-saving measures using the latest technology

  • Promote energy efficiency in telecommunications facilities
  • Smart building of offices using AI and IoT
  • Nationwide deployment of optoelectronic coupling networks using next-generation optical transmission equipment
  • Improving energy consumption efficiency through the construction of ultra-distributed computing infrastructure (xIPF)
  • Introduction of eco-friendly vehicles

• Transition to carbon neutral electricity

  • Gradual transition to carbon-neutral electricity for use in business activities
  • Promote distributed AI data centers
  • Realization of local production for local consumption of energy

Scope 3 emissions reduction

• Collaboration with stakeholders

  • Implementing emissions reduction guidelines for business partners
  • Collaborative emissions reduction with business partners (Category 1 and 2)
  • Provision of energy-saving products and services
  • Implementation of measures to reduce product redeliveries

Others

• Utilization of cutting-edge technologies and offsets

  • Realization of low-environmental-impact communication infrastructure "HAPS"
  • Considering the use of neutralization credits and CCUS (Carbon Capture, Utilization, and Storage) as measures for residual emissions

Impact and responses related to the emissions reduction roadmap

For the emissions reduction roadmap and response measures prepared as a transition plan to achieve the net-zero target, the Company has identified the positive and negative impacts that each response may have on society. The Company has also considered response measures for impacts that could become issues.

[Notes]

1. *1
   Power Purchase Agreement: a power sales agreement and long-term procurement contract for renewable energy
2. *2
   Electricity with a zero emission factor
3. *3
   AI Energy Management System: a system equipped with an AI-based power demand forecasting function that optimally controls charging and discharging
4. *4
   Carbon Dioxide Removal: initiatives to remove and fix CO2 from the atmosphere

Stakeholder engagement related to the emissions reduction roadmap

To achieve the emissions reduction roadmap, the Company collects opinions and knowledge through dialogue with the value chain, industry organizations and related initiatives, government agencies, public institutions, and civil society.

Obtained SBT net-zero certification

The Company's greenhouse gas emission reduction targets, including Scope 3, have been certified by the international climate change initiative SBTi (Science Based Targets initiative) as scientifically based "SBT (Science Based Targets)".
For more information on SBT targets, please click here.