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Equity ResearchJune 12, 2025 Global | Sustainability & Transition Strategy If You Call Yourself An Energy TransitionInvestor... Japan has more companies with near-term SBTi targets than any othercountry by a large margin. Our analysis of earnings call transcripts shows thatsince 2021, there have been 555 references to decarbonization by JapaneseIndustrials stocks alone, led by Kawasaki Heavy Industries (7012.t), LIXIL GroupCorp (5938.T), and Mitsubishi Heavy Industries (7011.T). So why is it that energytransition investors spend 95% of their time thinking about the US and Europe? Sincethe announcement of Japan's Green Transformation(GX)Policy—the mostunderappreciated climate policy in the world (seehereandhere) — the number of Japanesecompanies with near-term science-based targets has increased by 5.5X.To begin February 2023,there were 298 Japanese companies with near-term SBTi targets set. Japan announced its GXPolicy on February 10, 2023. By the end of 2023, there were 708 Japanese companies with near-term SBTi targets set. At the end of 2024, there were 1399 Japanese companies with near-termSBTi targets set. Through June 10, 2025, there are now 1,653 Japanese companies with near-termSBTi targets set — a 5.5X increase since the announcement of the GX policy and far more than anyother country. Japan is significantly ahead of its global peers in setting near-term science-based targets acrosskey industrial sectors — particularly in Electrical Equipment, Construction, and CommercialServices — highlighting an important alignment between Japan's heavy and transitionalindustries and Japan's transition finance policy framework.In contrast, the UK and US each havetheir highest number of companies with near-term science-based targets in Professional Services.A few key sectors to note: Aniket Shah, PhD * | Head of Sust. &Transition Strategy(212) 323-3976 | ashah14@jefferies.com •Electrical Equipment and Machinery:Japan has 375 companies with science-based targets,the most of any sector. This compares to 70 companies in China, 40 in Germany, 26 in theUK, and 22 in the US.•Construction and Engineering:Japan has 219 companies with near-term science-basedtargets vs. 118 in the UK, 15 in the US, 12 in China, and 10 in Germany.•Trading Companies and Distributors, and Commercial Services and Supplies:Japan has130 companies with near-term science-based targets vs. 58 in the UK, and 18 each in the US,Germany, and China.•Professional Services:The UK and US have the most companies with near-term science-based targets set in the Professional Services sector, with 284 and 144, respectively. Japanhas only 58 companies with near-term SBTi targets set for Professional Services. Matthew Spring, CFA * | Sust. & TransitionStrategy Associate+1 (212) 738-5297 | mspring@jefferies.com Charles Boakye, CFA * | Sust. & TransitionStrategist(212) 336-6649 | cboakye@jefferies.com Carina Elfving * | Sust. & Transition StrategyAssociate+1 (212) 336-7238 | celfving@jefferies.com Yujin Kim * | Sust. & Transition StrategyAssociate+1 (212) 778-8314 | ykim4@jefferies.com Japanese stocks have discussed decarbonization over 2,000 times on earnings calls & filingssince 2021, led by Japanese Industrials stocks.Japanese Industrials stocks have discusseddecarbonization in transcripts and filings 555 times since 2021, led by Kawasaki Heavy Industries(7012-JP), LIXIL Group Corp (5938-JP), and Mitsubishi Heavy Industries (7011-JP). In terms ofnumber of references to decarbonization in transcripts and filings, Industrials is followed byConsumer Discretionary, Information Technology, and Materials — Energy and Utilities discussdecarbonization the least. Our analysis looks at all earnings call transcripts and filings for stockson the Tokyo Stock Exchange, looking for commentary related to green transformation, GX,decarbonization, emissions, climate, and the Green Innovation Fund. Luke Sussams ^ | Sust. & Transition Strategist44 (0)20 7548 4404 | lsussams@jefferies.com Jacqueline Murdock ^ | Sust. & TransitionStrategy Associate+44 (0)20 7548 4165 | jmurdock@jefferies.com Ana Zotovic ‡ | Sust. & Transition StrategyAssociate+1 (416) 847 7399 | azotovic@jefferies.com If you call yourself an energy transition investor... you have to spend more time analyzing Japan.See inside: for each sector, we show the companies with the highest number of references inearnings calls and filings to decarbonization and GX, along with if the stock has a near-term SBTitarget set. Japanese Companies Are Ready For the EnergyTransition Japanese Stocks Have Discussed DecarbonizationOver 2,000 Times on Earnings Calls & Filings Since2021 Company Valuation/Risks For Important Disclosure information on companies recommended in this report, please visit our website at https://javatar.bluematrix.com/sellside/Disclosures.action or call 212.284.2300. Analyst Certification: I, Aniket Shah, PhD, certify that all of the views expressed in this research report accurately reflect m