Weathernews : Sustainability Report 2024

Sustainability Report

2024

Contents

Strengthening ESG, the foundation of the Group's management

02 Governance

Material issues

Environment

03

Corporate governance for ESG management Board members

Officer compensation

The landscape photographs on the cover, table of contents, and pages were provided

by our supporters (users).

Contributing to a sustainable global environment

Reduction of environmental impact in business activities

Social

Human resource strategy to accelerate business development

04 Compliance, integrity, and risk management

06

Financial data

Non-financial data

Policies and endorsed initiatives

08 Corporate outline / Stock information

11

13

15

16

19

20

22

23

Mitigation

Using weather data to mitigate the impacts of climate change

Technological Innovation

and Partnerships

Making weather information

accessible to everyone

Aiming for the realization of a sustainable society, in April 2021, the Weathernews Group compared the seriousness of various social issues with its own business operations and corporate philosophy to identify four material issues (materiality) that it would focus on.

In identifying these material issues, we enlisted the help of outside experts, made use of the United Nations Sustainable Development Goals (SDGs), and referred to the Global

Reporting Initiative (GRI), the UN Global Compact, and the SDG Compass published by the World Business Council for Sustainable Development (WBCSD).

We plan to revise these material issues as appropriate in accordance with changes in the perspectives of our various stakeholders, international frameworks, and our own policies.

Promoting climate change adaptation and mitigation through our services

Contributing to climate change mitigation by leveraging the weather

In response to the growing seriousness of climate change, we provide solutions that leverage the weather and enable companies to both maximize their business profits and reduce their environmental impact through our core weather forecasting technology and big data analysis. We contribute to the global environment by supporting the sustainable growth of companies confronting the weather and climate.

Optimum Ship Routing (OSR), our optimal ship route recommendation service Our Optimum Ship Routing (OSR) service analyzes the fuel and speed performance characteristics of individual vessels and suggests the optimum route and engine speeds while leveraging the wind and waves. By providing the routes that are the safest and shortest in terms of voyage days, OSR assists in the 24-hour-a-day, 365-day-a-yearmanagement of vessel operations.

OSR not only makes it possible to avoid stormy weather risks, but also to plot voyages that minimize CO2 emissions by optimizing fuel consumption as well as voyages that will arrive on time and on schedule as required by the contract of carriage. OSR meets the diversifying needs of the maritime transport industry, including safety, economy, environmental friendliness, and punctuality, and more and more companies around the world are adopting its use. The use of OSR has contributed to an annual reduction of approximately 2.80 million tons of CO2 (results from June 2023 to May 2024).

We also offer Carbon Intensity Monitoring (CIM), a service that converts fuel consumption reductions achieved through OSR into CO2 reductions which are then recorded and visualized. We anticipate that through objective data, these services will promote industry-wide reductions in CO2 emissions and help combat global warming.

Users can check the expected CO2 emission reductions and the CII

(Carbon Intensity Indicator; a rating system for fuel consumption performance) for a selected route.

The management screen for our services for oceangoing vessels, including the OSR optimal route recommendation service.

Our electrical power supply/demand and electricity generation forecasting services Being able to predict electricity demand based on correlation analysis of the air and apparent temperatures, and the amount of solar power that will be supplied based on solar radiation forecasts, can lead to greater energy efficiency and the curtailment of greenhouse gasses.

We provide a service that supports power supply and demand planning utilizing an electrical power demand forecasting model we developed with proprietary AI technology. Based on weather data obtained from some 27,000 locations across Japan as well as approximately 200,000 daily weather data and firsthand reports received from supporters nationwide, we forecast localized electricity demand with a high degree of accuracy, supporting electricity and gas companies in Japan and overseas in providing a stable supply of energy and also aiding the efficient management of energy resources, energy conservation, and cost optimization.

How CIM works

CO2 emissions monitoring service

Ship owners and ship management companies

Reduce CO2 emissions by selecting environmentally- focused routes and optimizing speed

Improve environmental performance

We also provide a service that supports the estimation and management of renewable energy generation. The greatest disadvantage of solar, wind, hydropower, and other forms of renewable energy is their lack of stability, because their supply fluctuates depending on weather conditions. By formulating more precise power generation forecasts, we support the overall optimization of energy as well as power sales planning, and promote the use of renewable energies.

Environment

An overview of our services for power companies. Weathernews provides comprehensive services that support the stabilization and optimization of electricity supply and demand.

Climate tech services

To meet the diverse needs of companies regarding climate change countermeasures, we launched our climate tech business in June 2022 and began providing the following services.

Climate change risk analysis service (Climate Impact)

This service provides quantitative analysis of the risks associated with the growingly severe and more frequent natural disasters caused by climate change and calculates the financial impacts as concerns corporate production bases and other locations. It can also be used when incorporating climate change impact measures into business continuity planning and management, and when engaging in the consideration of capital investments that take climate risks into account.

Our services also support the prevention of food waste

We also offer a product supply and demand planning support service for the retail market. Distribution, including the distribution of goods to retail stores, is deeply affected by weather conditions. Extreme weather events can lead to increased waste and opportunity losses, and economic losses due to supply chain disruptions are a concern in the retail market.

Climate pattern analysis

Analysis of changes in the frequency of occurrence and expected recurrence of weather elements such as rain and wind by climate change scenario for individual locations over time up to the year 2100.

Analysis components

Climate risk analysis

Analysis of changes in the risks of flooding, storm surges, and other events caused by the effects of climate change for each climate change scenario for individual locations over time up to the year 2100.

Analysis components

Financial impact analysis

Analysis of the financial impact of physical risks on individual locations as climate patterns and climate risks change over time up to the year 2100.

Analysis components

FloodingsurgesStorm Etc.

In addition, in Japan, the Act on Food Loss Reduction Promotion, which came into force in 2019, requires distributors to take more measures to prevent food waste.

We provide year-round, round-the-clock support in this area by predicting future risks based on our proprietary inventory optimization engine, PASCAL, which forecasts how consumers will act in response to the weather. This service is currently being used by more than 60,000 retail establishments worldwide, as well as a wide variety of businesses with supply chain concerns, including apparel companies, manufacturers, and food service companies.

Climate risk monitoring service

Weather data

1-km mesh historical weather forecasts covering temperature, rainfall, wind speed, and pressure; 1-km mesh weather forecasts

Business data

Past foot traffic, brick-and-mortar location data, sales and events schedules

Calendar information

Days of the week, national holidays, events (seasonal events)

AI foot traffic prediction model

Past data input for machine learning

＋

Reflection of weather forecast around brick-and-mortar locations to improve prediction accuracy

Foot traffic

prediction data

Automatic distribution to each location

Supermarkets,

drugstores, apparel shops, restaurant chains, etc.

Shift management

optimization

Improved product demand forecasting and automated ordering quantity accuracy

when considering conceptual measures to address climate risks.

Our strength is in our two-tier total support, which involves analyzing climate risks decades into the future and backcasting from there to monitor current risks.

Web Weathernews receives Minister of the Environment Award for Climate Action (December 21, 2023)

Reduction of greenhouse gas emissions

In order to contribute to the realization of a decarbonized society, we have set a target for reducing the greenhouse gas emissions from our business activities and achieving net zero Scope 1 and 2 emissions by 2030. Our Sustainability Committee, established in June 2021, is analyzing our current situation and making improvements to reduce our greenhouse gas emissions.

Reduction of Scope 1 and 2 emissions

Most of the greenhouse gas emissions from our business activities are associated with the use of electricity in our offices and other locations. To this end, we measure and calculate the greenhouse gas emissions of our offices in Japan and overseas, as well as those of our emergency power generation facilities, and we are working to switch to renewable energy sources as well as to optimize and conserve energy at our data centers.

Reduction of Scope 3 emissions

With our sights fixed on the goal of achieving carbon neutrality by 2050, we are aiming to reduce our Scope 3 emissions by 25% compared to 2022 levels.

For data on Scope 1, 2, and 3 emissions, see Non-financial Data (p. 20).

Considerations for a recycling-oriented society

In order to make appropriate and efficient use of energy and resources, the Weathernews Group is working to reduce its environmental impact with a focus on the following items.

Promotion of renewable energy use

We are promoting the use of green energy to reduce the environmental impact of our business activities, and since April 2023, the Global Center, our headquarters located in Makuhari, Chiba City, has been effectively powered by renewable energy. As a result, from April 2023 to March 2024, the percentage of the Group's electricity consumption that came from renewable energy sources reached 82.8%.

Reduction of paper usage

We have reduced the amount of paper we use thanks to such factors as the digitization of internal application documents (introduced in FY05/2016) and contracts (FY05/2023), as well as the introduction of remote work (expanded from FY05/2021) due to the COVID-19 pandemic. In the fiscal year ended May 31, 2024, paper consumption at domestic sites, particularly at our headquarters, had decreased by 76.3% compared to the fiscal year ended May 31, 2017.

Number of sheets printed

(Sheets)

3,000,000

2,000,000

2,740,621

2,586,001 2,452,284

2,207,224

Environment

Contributions to biodiversity conservation

Weathernews supports the international community's goal of realizing a nature-positive world, and is promoting initiatives in line with items from the National Biodiversity Strategy and Action Plan of Japan 2023-2030 such as visualizing the status of biodiversity and recognizing the value of and actions for biodiversity. We are also engaging in analysis based on the TNFD Recommendations.

Visualizing the status of biodiversity

In November 2005, we launched Weather Report, which allows individual supporters to post photos and videos of weather, nature, and animals, and today, our users continue to share an abundance of weather as well as seasonal nature and animal images and videos. We have also implemented seasonal projects to identify changes in biodiversity and ecosystems over the years that make use of the contributions of individual supporters, such as the Sakura Project cherry tree blossom front tracker, and a survey of the black cicada's habitat.

Through activities such as these, we contribute to the recognition of the value of and actions for biodiversity (changing individual behavior)1 and, by conducting them on an ongoing annual basis, we also contribute to the improvement of basic surveys and monitoring of biodiversity.2

1 The National Biodiversity Strategy and Action Plan of Japan 2023-2030, Targets toward 2030, Basic Strategy 4. 2 The National Biodiversity Strategy and Action Plan of Japan 2023-2030, Targets toward 2030, Basic Strategy 5.

Donations made through Charity Weather Report

Charity Weather Report is a charity project in which individual supporters can post photos of the sky on the Weathernews app, answer questionnaires, and "Like" reports to receive

points which can then be converted to one yen per point that we donate to organizations supporting forest conservation and disaster relief.

During the period from November 1 to 7, 2023, points worth 1,450,637 yen were collected and donated to the Japanese Red Cross Society as disaster relief aid.

Supporting Challenging SHIRASE, a global environmental event on biodiversity

Since May 2010, we have been utilizing SHIRASE as a symbol of our concern for the global environment. Moored at Funabashi Port, SHIRASE is Japan's third Antarctic research vessel and was active from 1983 to 2008.

Since September 2013, SHIRASE has been managed and operated by the WNI WxBunka Foundation (Weather Culture Creation Center), a general incorporated foundation established by Weathernews' founder. In addition to cooperating in the display of materials on the global environment and biodiversity onboard SHIRASE, we also dispatch lecturers and assist in the operation of hands-on lectures on weather phenomena, titled "Sorayomi Kyoshitsu," held as part of the interactive Challenging SHIRASE event organized by the foundation.

Collaboration with external organizations

Endorsement of the Keidanren Initiative for Biodiversity Conservation

In addition to participating in the Keidanren Nature Conservation Council, we endorse the aims of the Keidanren Declaration for Biodiversity formulated by Keidanren, and have participated in the Keidanren Initiative for Biodiversity Conservation since July 2023.

Participation in the Biodiversity Chiba Company Network

The Biodiversity Chiba Company Network is an initiative that aims to contribute to the mainstreaming of biodiversity through corporate initiatives on biodiversity in collaboration with Chiba Prefecture, educational institutions, and other supporting members. Weathernews has participated since May 2023.

To save sailors' lives and also to protect the future of this planet-that is Weathernews Group's dream, and we have many employees who share in this dream and who have a variety of dreams of their own as well. The dreams that our employees want to achieve at

moving and changing.

1 The weather is ever-changing-Change and grow

We value the spirit of being the "first penguin," the one who takes the initiative and jumps in before anyone else. To confront the ever-changing weather, climate, and business environment without fear of failure, we support our employees in developing the basic and specialized skills needed to transform our management strategies and business models. We also aid our employees in designing their own careers through such means as the creation of objective evaluation systems and the enhancement of reskilling programs.

Human resource circulation and support

We proactively adopt systems to encourage the growth of individuals and organizations. The 360-degree feedback system introduced in the fiscal year ended May 31, 2024 reviews and provides feedback on the management skills, leadership, and expertise of managers and supervisors from multiple perspectives, including those of their superiors and team members, to promote their own growth as well as team-wide changes. In addition, an internal recruitment system encourages employees to take the initiative in their own career planning and apply to open internal roles and positions. We have also introduced a system that allows employees who have reached a certain age to choose early retirement or retirement from managerial positions to promote the sustainable growth of organizations as well as the incorporation of new blood.

Evaluation system operation

To support the growth of every employee, we emphasize transparency and objectivity in our evaluation systems. In the fiscal year ended in May 31, 2024, we made preparations for the introduction of a job description system to clarify roles and responsibilities. This system will first be implemented for managers and supervisors. Job descriptions will be made available to all employees, aiding future prospective managers and supervisors in making their career plans. In addition, departmental business plans, based on group-wide business plans, as well as sales-plan-based departmental structures and quarterly results are cross checked between departments, with matrix management evaluation used to ensure evaluation transparency. We also have a system in place to encourage the growth of employees hired as new graduates by intensively monitoring their performance during their first three years of employment.

Enhancement of training and reskilling programs

The Group actively invests in training to help employees improve their skills and develop their careers, in turn improving our own competitiveness. Our level-specific training fosters specialized knowledge and leadership skills appropriate to each position, while our company- wide training includes education on the Code of Conduct, compliance, risk management, and mental health. Through these means, we have established a system to ensure compliance with laws and regulations as well as to appropriately prevent and manage risks.

New employee training covers a wide range of topics, from basic knowledge of our corporate culture and businesses to practical business operations, helping recent hires to quickly get up to speed and become effective workers. In addition to this, in recent years we have been focusing on reskilling programs for English and IT literacy to encourage employees to learn on their own. For the fiscal year ended May 31, 2024, we optimized the content of company-wide

training programs, converting them into level-specific training and individual reskilling programs.

A group photo taken during new employee training by the sea in

Kujukuri in Chiba Prefecture where our headquarters is located.

Social

2 The weather is dynamic-Maximize your potential

The Group aims to maximize each employee's potential for success by taking a broad view of the range of employee individuality and abilities. We flexibly update working styles in line with the changes our employees experience in their lives as well as their growth so that they can maximize their output. We also invest in creating an environment which enables employees to focus more on their work, and in supporting the physical and mental health they need to be productive.

Updating working styles

As part of our efforts to create systems that enable every employee to better demonstrate his or her abilities, we reviewed our job category definitions and defined two types of positions: general positions, in which employees take the initiative in adapting to changes in the business environment and organizational roles, and expert positions, in which an employee's role changes in accordance with changes in their employment contract. In addition, we updated our remote work rules to allow full remote work and remote work from distant locations, depending on conditions, so that employees can continue to contribute and be productive in a greater variety of circumstances. Turning to our leave system, we started allowing leave for volunteer purposes on a trial basis in response to the Noto Peninsula Earthquake. Employee feedback provided confirmation that there was demand for programs that supported volunteering, and in turn we made the system permanent to increase opportunities for employees to exercise their desire to help others in times of need.

Investments in improving the working environment

In the fiscal year ended May 31, 2024, we introduced an AI chatbot to handle internal human resources inquiries. Through this, we have created an environment which enables the employees who operate our services during nights and holidays to ask questions 24 hours a day, 365 days a year. It has also streamlined administrative procedures, allowing employees to focus more on their work. In addition, in order to improve ease of working both in real and remote locations, we are building a system that makes it easier to catch up on the latest information by sharing recordings of company-wide meetings and sharing information via chat tools. We are also investing in the creation of additional small meeting rooms and private booths in our headquarters office to create an environment that makes it easier to concentrate.

Mental and physical health support

The Weathernews Group believes that creativity is the sum result of first-rate employees making the most of their strengths, and that their physical and mental health is one of the most important foundational factors for this. Our "Pit in Spot" health committee provides a mechanism for cross-team consultation, supports self-management, and promotes internal community activities. In addition, two occupational physicians are available to provide support for both physical and mental health. Of particular note is the WNI Health Office, a counseling service which offers a wide range of support for work and private concerns in order to prevent mental health issues before they occur. The office also provides help to returning workers and handles questions and concerns regarding management from those in leadership positions. The results of stress checks and medical examinations are monitored and analyzed over time in cooperation with occupational physicians, with relevant feedback being

provided to individuals and teams.

Close-up

Weathernews introduces volunteer leave system

On June 1, 2024, Weathernews introduced a volunteer leave system. This system, based on our own corporate philosophy of seeking to help people in times of crisis, aims to expand opportunities for every employee to give back to local communities and society. When this system was first introduced on a trial basis in February 2024, more than 10% of the employees working at our headquarters took part in volunteer activities in areas affected by the 2024 Noto Peninsula Earthquake. Based on these results, we officially introduced a system that allows employees to take up to five days of volunteer leave per year in order to make it easier to engage in volunteer activities. Since the establishment of the Weathernews Group, we have contributed to disaster prevention and mitigation through our businesses in the domains of weather and climate, and this system will expand the Group's contributions to local communities.

Dismantling and removing the concrete block wall of a home damaged in the Noto Peninsula Earthquake

Food distribution and a disaster relief vehicle dispatched by Weathernews