We are working to disclose information on the financial impact of climate change-related risks and opportunities in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
◇Climate change countermeasures (initiatives) Response to TCFD recommendations
As the effects of climate change become apparent in all regions of the world, efforts to realize a decarbonized society are gaining momentum worldwide.
In 2015, the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21) adopted a new international framework, the Paris Agreement, to reduce greenhouse gas emissions from 2020 onwards. , we have set a goal of reducing greenhouse gas emissions by 46% from fiscal 2013 levels by fiscal 2030, and net zero greenhouse gas emissions by 2050.
From the perspective of the three elements of ESG (Environment, Social, and Governance), the Group strives to solve social issues that change with the times while achieving business growth. We aim to create a better society and continuously improve corporate value while meeting the expectations of our various stakeholders, including business partners and local communities.
We recognize that responding to climate change is an important issue for the Group, and we are working to reduce greenhouse gases and save energy.
Going forward, we will continue to expand our disclosure of climate change-related information in line with the TCFD recommendations and promote sustainable business activities that reduce environmental impact.
◇Measures for governance related to climate change
The Group recognizes that responding to climate change risks, including global environmental problems, is one of the most important issues facing the world.
With regard to responding to climate change risks, under the supervision of the Board of Directors, the Group Risk Management Committee, chaired by the President and Representative Director, analyzes and responds to Group-wide risks, including those related to climate change.
In the event that a situation occurs or is likely to have a significant impact on the management of the Group, the Group Risk Management Committee shall promptly take the necessary initial response and minimize damage and impact. , and will be installed in December 2021 for the purpose of preventing those occurrences.
With regard to risks related to climate change, the Group Risk Management Committee receives climate change risk review reports from members of the ESG Promotion Project TCFD, deliberates and considers them within company-wide risk management, and responds to identified risks and opportunities. We are promoting initiatives such as examining countermeasures and reducing CO2 emissions.
The Board of Directors receives reports twice a year on important matters deliberated by the Group Risk Management Committee, and formulates policies and action plans for responding to climate change risks.We will continue to review and supervise.
◇Scenario analysis for climate change-related risks and opportunities
Our group is exemplified in the TCFD recommendationsWe conducted a scenario analysis based on the risks and opportunities brought about by climate change. In scenario analysis, it is necessary to select and set scenarios for multiple temperature zones, including scenarios of 2°C or less. Two scenarios were selected for the 4°C scenario.
◇ Business scenarios for transition risks/opportunities and physical risks/opportunities
Transition Risks/Opportunities: Decarbonization Scenario (1.5°C)
Transition risks and opportunities were examined based on a decarbonization scenario in which various regulations related to the transition to a low-carbon economy are introduced to achieve the 1.5°C target.
In the decarbonization scenario, there will be an increase in costs due to the introduction of a carbon tax due to the tightening of environmental regulations by the government, an increase in costs such as price increases due to an increase in demand for renewable energy, and an increase in resource procurement costs due to the implementation of measures to combat global warming on a global scale. It is assumed.
On the other hand, in order to reduce the environmental impact toward the realization of a decarbonized society, we are promoting the reduction of CO2 emissions per store through the introduction of energy-saving equipment and solar power generation at each store.
In addition, in order to respond to the expansion of ethical ecology, we aim to increase the ratio of environmentally friendly private brand products to 13% by 2030, and we will continue to develop environmentally friendly products.
In terms of logistics, we will also promote efforts to reduce CO2 emissions from the logistics side by promoting a pharmaceutical distribution optimization model and improving efficiency and productivity through white logistics. Regarding risks such as increased resource procurement costs on the procurement side, we will continue to provide customers with products of stable quality without interrupting the supply chain, based on the cooperation and mutual trust of each business partner.
Physical Risks and Opportunities: Global Warming Scenario (4°C)
In terms of physical risks and opportunities, we anticipate that there will be a certain level of demand for the pharmaceuticals sold at our stores in response to chronic health damage caused by rising temperatures. Suspension of store activities and disruption of supply chains due to the occurrence of natural disasters are major risks. In addition, in order to avoid the suspension of business activities due to disasters and rising temperatures, it is necessary to invest in equipment such as air conditioning and disaster countermeasures, and the increase in insurance premiums due to the frequent occurrence of natural disasters also places a burden on store operations.
In order to respond to major disasters including climate change risks, we have formulated a BCP (Business Continuity Plan) system on a company-wide basis and are prepared to continue operations even in the event of an emergency.
We will continue to review our BCP system on a regular basis while keeping an eye on technology innovation.
Impact of carbon tax introduction
Regarding the financial impact of climate change risks, one possibility is the introduction of a carbon tax in line with strengthened government environmental regulations.
Therefore, we estimated the impact of introducing a carbon tax in 2030 and 2050 in the 4°C scenario and the 1.5°C or lower scenario, assuming GHG emissions are the same as in fiscal 2020.
In addition, the calculations were based on scenarios from the International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA), as well as current carbon prices (emissions trading scheme, carbon tax, energy tax).
In addition, since there are plans to reduce GHG emissions in the future through the introduction of renewable energy sources, etc., this impact is expected to be reduced by the time the carbon tax is actually introduced.
◇ Climate change-related risk management
As the basis of its risk management system, our Group has established crisis management regulations, appointed management personnel for each individual risk, and built a risk management system in accordance with these regulations.However, in the event that an incident that has a significant impact on our Group's management occurs or is likely to occur, we established the Group Risk Management Committee in December 2021 and built a new company-wide risk management system with the aim of taking prompt and necessary initial responses, minimizing damage and impact, and preventing such occurrences.
The Group Risk Management Committee collects and analyzes information on risks surrounding the Group, including concerns about risk occurrence and the status of occurrence, selects priority risks that require response, and implements responses to control risks.
We also position risks related to climate change as one of the major risks facing the entire company, and in order to understand and evaluate the impacts of climate change, we conduct scenario analysis based on the TCFD framework and identify climate change risks and opportunities.
The identified risks and opportunities will be deliberated and discussed under a promotion system centered on the Group Risk Management Committee, and the status of risk management and judgment of significant risks will be reported and recommendations made to the Board of Directors.
In the event that an incident occurs or is likely to occur that will have a significant impact on the management of our group, we will establish a Group Risk Management Committee to take prompt and necessary initial measures to minimize damage and impact, and to prevent such incidents from occurring.
Climate change-related indicators and targets
Climate change and environmental issues (responding to TCFD recommendations)
Our group recognizes that climate change is an urgent social issue, and is working to reduce greenhouse gas emissions and conserve energy. In order to realize a sustainable society, we have set a goal of "reducing CO2 emissions per store by 46% in fiscal 2030 compared to fiscal 2013" for Scope 1 and 2, taking into consideration the level of CO2 emission reduction required by SBT (Science Based Targets). We will also set targets for Scope 3 for categories that we consider to be particularly important and continue to reduce them.
GHG (Greenhouse Gas) Scope 1 and Scope 2 Emissions
GHG emissions for fiscal year 2023 were 3,424t for Scope 1 (direct emissions from business operations) and 275,368t for Scope 2 (indirect emissions from electricity consumption).
*1. Due to a review of calculation methods aimed at improving the accuracy of acquired data, data from previous years has been revised retroactively.
*2.GHG emissions are calculated only for our group's store operations division.
*3.From fiscal year 2023, GHG emissions from offices and company vehicle use will be added to "Scope 1 + Scope 2 (stores only)" to calculate the total company-wide GHG emissions (Scope 1 + Scope 2).
*4. The number of stores is the number of stores at the end of the Group's fiscal year for the GHG emissions calculation period.
*5. Average emissions per store are calculated by "Scope 1 + Scope 2 (stores only)" / "number of stores."
*1. Categories 8, 10, 11, 12, and 15 are either not applicable or emissions could not be calculated.
*2. The figures and calculation methods for all categories are currently under review.
*3. The collection period for fiscal year 2023 is from March 2023 to February 2024.
