Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Society
• Governance

Environmental Achievements

• Energy-saving through productivity improvement (remote working/realization of efficient working style based in multiple offices)
• Recycling (usage of environmentally-friendly materials, recycling of packing materials)

Social Achievements

• Personnel-related: utilization of human resources (setting a target percentage on our global staffs ratio/creating a support system for learning multiple languages)
• Society contribution: utilization of KT Zepp Yokohama

Governance Achievements

• IR: creation of integrated reports

Climate Goals & Targets

Environmental Challenges

• Launch of some titles postponed to the next fiscal year
• Challenging financial environment
• Delay in commissioned development cases

Mitigation Strategies

• IP licensing-out title Romance of the Three Kingdoms Senryaku-ban greatly contributed, resulting in surplus of 2.1billion yen in operating income against the plan
• Gain on securities sold had been realized. Extraordinary gain had been posted from the sale of a portion of our real estate for rent.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environment
• Society
• Governance
• SDGs

Climate Goals & Targets

Environmental Challenges

• Severe situation caused by the global coronavirus (COVID-19) pandemic

Mitigation Strategies

• Flexibly adapting to environmental changes and creating new business models

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Implemented energy-saving measures in offices, including the adoption of district heating and cooling systems and LED lighting; reduced paper usage through paperless meetings, electronic manuals, and DX initiatives; implemented server virtualization and systematization to suppress power consumption; planted greenery in company buildings.
• Donation to environmental organizations (Yamaka Ornithological Institute, Keidanren Nature Conservation Fund).

Social Achievements

• Continued academic promotion, community contribution, and disaster relief activities; implemented various employee training programs; promoted diverse work styles with remote work and hybrid work systems; achieved 100% maternity leave return rate and 80% parental leave acquisition rate; maintained low employee turnover rate (4.2%); implemented initiatives to support work-life balance; promoted diverse career paths; contributed to regional revitalization through tie-ups with local governments; implemented initiatives to address game addiction and gacha problems.
• Supported human resource development in overseas subsidiaries.

Governance Achievements

• Built a corporate governance system in line with the Prime Market; responded to the Corporate Governance Code; strengthened the board of directors' functions by adding one more outside director; visualized and documented management policies and strategies; enhanced IR activities to promote dialogue with shareholders and investors; implemented measures to improve the free float ratio.

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: TCFD

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Capital-i Awards “BEST DEALS OF 2021”

Environmental Metrics

ESG Focus Areas

• Diversity and Inclusion
• Business Continuity Planning (BCP)
• Sustainability
• Human Capital
• Climate Change

Social Achievements

• Increased the number of female managers annually towards a target.
• Extended childcare short-time work system and implemented training for management on diversity and inclusion.
• Increased the number of foreign and mid-career employees in management positions.

Governance Achievements

• Established a Nomination and Remuneration Committee with a majority of independent outside directors.
• Established a special committee composed solely of independent outside directors to monitor transactions with controlling shareholders and protect minority shareholder interests.
• Regularly holds board meetings (at least twice a month) with full attendance of all auditors to ensure information exchange and shared understanding.

Climate Goals & Targets

Environmental Challenges

• Potential climate change-related risks and opportunities impacting business activities and profits.
• Developing guidelines for investment in human capital and intellectual property.

Mitigation Strategies

• Implemented server diversification and established a BCP basic group regulation to ensure business continuity in case of unforeseen events due to climate change.
• Collecting necessary data to improve information disclosure on climate change-related risks and opportunities.
• Working on establishing basic guidelines for investment in human capital and intellectual property, with regular reports to the board of directors.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN SDGs, ESG

Environmental Metrics

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• SDGs
• ESG
• Human Capital
• Climate Change
• Intellectual Property
• Information Security

Environmental Achievements

• Calculation of Scope 1, 2, and 3 greenhouse gas emissions starting in fiscal year 2023.
• Scope 1: 127 t-CO2, Scope 2: 5,225 t-CO2, Scope 3: 51,635 t-CO2 (FY2023)

Social Achievements

• Established Sustainability Committee, CSuO, and Sustainability Promotion Office in October 2023.
• Implemented engagement surveys to measure employee engagement starting in FY2023.
• Introduced a partnership system in April 2024 that treats same-sex partners the same as spouses in internal regulations.
• Conducted training for managers on diversity and LGBTQ+ awareness in domestic group companies.

Governance Achievements

• Established a Sustainability Committee in October 2023.
• Established a Sustainability Promotion Office in October 2023.
• Strengthened internal control systems.

Climate Goals & Targets

Environmental Challenges

• Achieving growth and profitability.
• Responding to changes in the market environment (platform diversification, technological innovation, user preference changes).
• Short-term fluctuations in performance due to product release timing.
• Risks associated with overseas business expansion (legal regulations, political and social situations, exchange rate fluctuations).
• Management of personal information.
• Protection of intellectual property rights.
• Legal regulations in the amusement business.
• Holding of securities.
• Information system risks.

Mitigation Strategies

• Promoting the creation and expansion of global IPs.
• Strengthening digital fields such as smartphone games and download sales.
• Effective use of overseas development companies and detailed management of project profits and losses.
• Improving development processes to enhance quality, meet deadlines, and manage budgets effectively.
• Careful management of user personal information.
• Protecting intellectual property rights and taking firm action against infringement.
• Adapting to changes in the legal framework.
• Safe and efficient management of cash and highly liquid securities.
• Proper management of information systems.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Social Achievements

• Increased base pay and improved employee welfare, resulting in a 2.2 billion yen increase in employment costs.

Governance Achievements

• Gradual transition to the next generation of younger management.
• Selection and appointment of executive officers and managing executive officers, selecting members of the next generation of management.
• Review of the governance system (in progress).

Climate Goals & Targets

Environmental Challenges

• Lower than expected sales of console and mobile titles launched in FY2023 and repeat sales of titles from FY2022.
• One title delayed to FY24.
• Lower than planned high-profit ratio royalty sales from collaborative titles.
• Higher than expected outsourcing costs for some titles.
• New titles did not reach sales targets.
• Decrease in operating profit due to lower sales and decreased high-margin royalty sales.

Mitigation Strategies

• Actively recruiting and training new graduates.
• Implementing a system and development management that corresponds to the AAA level.
• Promoting the development of games that are highly acclaimed by users and the media.
• Rebuilding the internal quality control and review system.
• Streamlining the CG production environment and check system.
• Forming and expanding a community and strengthening “spread” capabilities.
• Using AI in some development processes.
• Automating debugging and quality control.
• Establishing a global marketing setup.
• Establishing a new organization, “AAA Studio,” to consistently launch major titles in the future.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Sustainability
• SDGs

Social Achievements

• Base salary increase for eight consecutive years
• Highest-standard starting salary in the industry
• Creation of an environment that increases employee engagement

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities