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System/Activities TCFD Alignment/Plan

TCFD Report

After becoming TCFD supporter in 2020, we aim to fully engage in disclosing actual and potential financial impact caused by climate change, complying with regulations, and setting reduction target.

TCFD Recommendations

TCFD is an organization established by the International Financial Stability Board (FSB) that recommends companies to identify risks and opportunities related to climate change and disclose their financial impact.

Governance - Governance related to climate risk and opportunities , Strategy - Actual and potential impact on business caused by climate-related risks and opportunities, strategy and financial implications , Risk Management - Procedure to identify, assess, and manage climate-related risks , Targets and Metrics - Metrics and targets used to assess and manage climate-related risks and opportunities Governance - Governance related to climate risk and opportunities , Strategy - Actual and potential impact on business caused by climate-related risks and opportunities, strategy and financial implications , Risk Management - Procedure to identify, assess, and manage climate-related risks , Targets and Metrics - Metrics and targets used to assess and manage climate-related risks and opportunities

TCFD Alignment Approach

To respond to growing demand of international stakeholders, KT&G is actively participating in tackling climate change. Also, we are committed to increasing disclosure on how we are addressing the effects of climate change by establishing management system that complies with TCFD recommendations. We will continue updating TCFD alignment status to effectively communicate with internal and external stakeholders.

1. Governance - Improve governance for climate-related risk/opportunities management and oversight Strengthen the role of the Board of Directors, executives and working-level organizations in managing climate change and ESG issues 2. Strategy - Demonstrate climate-related risk and opportunities Analyze financial impact of climate-related risks and opportunities on business, strategy Analyze resilience of strategies according to various scenarios (below 2℃, 1.5℃) / 3. Risk Management Establish process for identifying and managing physical/transition risks and opportunities due to climate change Integrate climate-related risk and opportunities management process to company’s risk management framework / 4. Targets & Metrics Disclose quantitative indicators to manage climate-related risk and opportunities Set reduction targets and monitor performance to tackle climate change 1. Governance - Improve governance for climate-related risk/opportunities management and oversight Strengthen the role of the Board of Directors, executives and working-level organizations in managing climate change and ESG issues 2. Strategy - Demonstrate climate-related risk and opportunities Analyze financial impact of climate-related risks and opportunities on business, strategy Analyze resilience of strategies according to various scenarios (below 2℃, 1.5℃) / 3. Risk Management Establish process for identifying and managing physical/transition risks and opportunities due to climate change Integrate climate-related risk and opportunities management process to company’s risk management framework / 4. Targets & Metrics Disclose quantitative indicators to manage climate-related risk and opportunities Set reduction targets and monitor performance to tackle climate change

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